Category: Taxes
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Unlicensed tax preparers
Key points of unlicensed tax preparers: There are about 500,000 unlicensed tax preparers in the U.S. IRS is concerned about fraud and incompetence among tax preparers. There is no implication that all unlicensed preparers are problematic. We need these unlicensed tax preparers in our economy. Other tax preparers – attorneys, CPAs and EAs – are…
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Tax provisions of the infrastructure bill
Why are we discussing this? The infrastructure bill passed the Senate this month with a strong majority support but is not yet law. What tax provisions are included? Cryptocurrency broker reporting is the hot topic. The bill also includes a longer tax filing extension after disasters. (This is important because we expect to see more natural…
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The bitcoin conversation
Text message from Facebook friend: “Quick question: what are your thoughts on bitcoin? My sons keep telling me I need to get into. My accountant at present advises not. I only ask as I know you are a fountain of knowledge in the accounting world and just wanted to learn your opinion. Thanks!” Me: “What…
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What to do if you receive a ‘Notice of Intent to Levy’ from IRS
Beginning tomorrow, the IRS intends to dramatically increase the number of aggressive enforcement action notifications. Thousands will receive these scary notices within the week. Collections using new technology and aggressive techniques will likely continue to ramp up over the next few years. If you receive a collection notice, I strongly recommend: don’t panic, most tax…
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Shockingly poor IRS customer service (and what to do about it)
We knew from earlier IRS statements that about one million tax returns from 2019 remain unprocessed and I’ve covered that in earlier blog posts. Many of these are paper filed returns. But now we hear that 16 to 17 million tax returns for 2020 are backlogged and many of these people are waiting for refunds.…
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What’s the difference between a tax preparer and a tax adviser?
A tax preparer looks at the facts and tries to determine the appropriate reporting usually at the time of rushing through the tax season preparing multiple client tax returns. A tax adviser looks at the tax theory that most benefits the client and then looks at the facts, regulation and case law history for evidence…
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Relief from post-pandemic tax stress
One of the most important concepts in U.S. taxation today is the principle that the government cannot levy against taxpayer assets in the case of economic hardship. Never has this been more important than in this post-pandemic environment. The IRS is dramatically increasing aggressive tax collection practices that, in many cases, are causing stress to…
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Five types of tax transcripts (and when to use them)h
Tax transcripts are a common tool used to solve tax problems. There are five different types. The type we use depends on the situation. 1) Tax Return Transcript – shows you tax return as filed, including most line items including your adjusted gross income (AGI) from your original Form 1040-series tax return as filed, along…
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Tax accounting for PPP loans in small S corporations
Income PPP loans are not taxable income but of course must be recorded in the company’s bookkeeping. The question is how to record these transactions for correct tax treatment. Their isn’t just one ‘correct’ way to do this but actually several options listed by AICPA under IAS20. (My information comes from third party coverage in…
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IRS guidance on reporting 2020 unemployment compensation
Update: The issue is now resolved in tax filing software. The American Rescue Plan Act of 2021 (P.L.117-2) includes a provision allowing taxpayers with income under $150,000 to exclude $10,200 of 2020 payments from their taxable income. But the details on how to claim this tax benefit are not clear at this time. IRS urges…