We are frequently asked about the tax consequences of receiving a judgment or settlement in a lawsuit.  Damages received as the result of a breach of contract or property damage have always been, and continue to be, taxable.  For personal injury actions, however, the tax consequences have changed quite a bit over the last 20 years. Prior to 1996, if someone received an award for personal injuries, other than punitive damages, all amounts received were not taxable and/or were excluded …

Taxation of Litigation Awards and Deductibility of Attorneys’ Fees Read More »

You owe the IRS money.  You know you owe the IRS money.  You may have even set up an installment agreement with the IRS that you have been faithfully paying for a while.  But the next thing you know, your phone is blowing up, and your mailbox is overflowing with unsolicited ads from any number of the thousands of “tax resolution” or “tax relief” companies around the country. The messages take many forms.  Some seem to be nice and helpful …

Beware of Tax Resolution Companies Read More »

The IRS recently began sending letters to virtual currency owners, notifying them of potential failures to include, or correctly report, virtual currency transactions on their income tax returns.

Effective July 25, 2019, the Commissioner of the IRS agreed to temporarily suspend its “Passport Certification Program” for all taxpayers with cases pending with the Taxpayer Advocate Service (“TAS”). Generally, the Passport Certification Program authorizes the IRS to notify the State Department of taxpayers with “seriously delinquent tax debt,” which is: A legally enforceable federal tax liability of an individual; which has been assessed; is greater than $52,000; and for which a Notice of Federal Tax Lien has been filed …

Cases Pending with the Taxpayer Advocate Service Are Temporarily Suspended from Passport Certification Read More »

The Taxpayer Advocate Service (TAS), created by Congress in 1996, is designed to be a “safety net” for taxpayers who are experiencing problems with the IRS.  The TAS’s mission is to make sure taxpayers’ rights are protected when they’re up against a government agency that many Americans find intimidating, if not downright terrifying.  Lately, however, TAS’s effectiveness has been hampered by an increasing case load and the resulting delays. Since its inception, TAS has helped millions of taxpayers resolve problems, …

Taxpayer Advocate Service: Excessive Case Load Is Causing Delays Read More »

Estate planning is a wonderful way to love your family and completing a plan often brings relief.   There are several threats however, that you must be aware of so that your estate plan does not fail when you need it the most. #1 Avoiding One-Size-Fits-All Planning The first rule of thumb is to make sure your estate plan is custom written for you.  Each and every family is unique with different needs.  For example, if your family has conflict and …

Five Big Threats to your Estate Plan Read More »

If you are a partner in a partnership, you should be aware there are new rules starting with partnership taxable years that begin after December 31, 2017.  The new regime replaces the provisions of the Internal Revenue Code known as the TEFRA procedures, which still govern partnership audits for taxable years beginning before December 31, 2017, and may also be applicable for audits by states that have not adopted the new federal procedures. The new rules cover all partnerships, including …

The New Partnership Audit Rules Read More »

Virtual currency has risen in popularity over the last several years, not only for investment, but for use in paying for goods and services.  Unlike the U.S. dollar, the IRS does not treat virtual currency (also called “digital currency” and “cryptocurrency”) as currency.  It is treated as property, even though it can be used as a form of payment. That means that if you have had any transactions beyond your initial purchase of virtual currency—you have traded it for other …

Taxation of Cryptocurrency Read More »

Lately there has been a lot of mainstream and social media attention surrounding people who traditionally get a tax refund but are not this year.  Some are finding they actually owe money.  Understandably, these reports are causing anxiety and anger among a large portion of the taxpaying public who feel cheated after being promised a tax reduction.  Much of this is based on a misunderstanding of how the 2017 Tax Act worked. Many taxpayers believe that because their refund is …

What Happened To My Refund? Read More »

Many taxpayers are wondering how the recent government shutdown might affect their ongoing matters with the IRS.  The most immediate question seems to be whether and how it will affect the upcoming income tax filing deadlines for all taxpayers.  For now, the filing deadlines have not been extended.  But there are also taxpayers with ongoing tax controversies with the IRS, including but not limited to: audits, appeals, Tax Court cases, Federal Tax Liens, levies, and other collection issues. The IRS …

How the Government Shutdown Affects the IRS Read More »