May 30, 2011

Free Tax Web Sites

Here is a partial listing of websites making available excellent resources to do your own federal tax research for free.

Tax Links
Tax Sites
Tax Talent

Federal Tax Law
Internal Revenue Code
Joint Committee on Tax'n
Joint Economic Committee
Senate Finance Committee
House Ways & Means Com.
Congressional Budget Office

Executive Branch
Treasury Department
Office of Tax Policy
DOJ Tax Division
Public Rulings
• Private Rulings
... Actions on Decisions
... Appeals Settlement Guidelines
... Chief Counsel Bulletins
... Exempt Org. Field Memoranda
... General Counsel Memoranda
... Information Letters
... Field Service Advisories
... Private Letter Rulings
... Technical Advice Memoranda
Internal Revenue Manual
Tax Forms and Publications

Tax Court
GPO Access

May 26, 2011

Tax And Business Topics Discussed

These Tax Topics contain general individual and business tax information. The same information is elaborated upon at the IRS website.

IRS Help Available Topic 100
IRS Services – Volunteer Tax Assistance, Toll–Free Telephone, Walk–in Assistance, and Outreach Programs Topic 101
Tax Assistance for Individuals with Disabilities and the Hearing Impaired Topic 102
Tax Help for Small Businesses and Self-Employed Topic 103
Taxpayer Advocate Service – Your Voice at the IRS Topic 104
Armed Forces Tax Information Topic 105
Tax Relief Disaster Situations Topic 107

IRS Procedures Topic 150
Your Appeal Rights Topic 151
Refund Information Topic 152
What To Do if You Haven't Filed Your Tax Return Topic 153
Forms W-2 and Form 1099–R (What to Do if Not Received) Topic 154
Forms and Publications – How to Order Topic 155
Copy of Your Tax Return – How to Get One Topic 156
Change of Address – How to Notify IRS Topic 157
Ensuring Proper Credit of Payments Topic 158
Prior Year(s) Form W-2 (How to Get a Copy of) Topic 159
Form 1099–A (Acquisition or Abandonment of Secured Property) and Form 1099–C (Cancellation of Debt) Topic 160

Collection Topic 200
The Collection Process Topic 201
Tax Payment Options Topic 202
Refund Offsets: For Unpaid Child Support, And Certain Federal, State, and Unemployment Compensation Debts Topic 203
Offers in Compromise Topic 204
Innocent Spouse Relief (Including Separation of Liability and Equitable Relief) Topic 205
Dishonored Payments Topic 206

Alternative Filing Methods Topic 250
Substitute Tax Forms Topic 253
How to Choose a Tax Return Preparer Topic 254
Self-Select Pin Signature Method for Online Registration Topic 255

General Information Topic 300
When, Where, and How to File Topic 301
Checklist of Common Errors When Preparing Your Tax Return Topic 303
Extensions of Time to File Your Tax Return Topic 304
Recordkeeping Topic 305
Penalty for Underpayment of Estimated Tax Topic 306
Backup Withholding Topic 307
Amended Returns Topic 308
Roth IRA Contributions Topic 309
Coverdell Education Savings Accounts Topic 310
Power of Attorney Information Topic 311
Disclosure Authorizations Topic 312
Qualified Tuition Programs (QTPs) Topic 313

Which Forms to File Topic 350
Which Form – 1040, 1040A, or 1040EZ? Topic 352
Decedents Topic 356

Types of Income Topic 400
Wages and Salaries Topic 401
Interest Received Topic 403
Dividends Topic 404
Business Income Topic 407
Capital Gains and Losses Topic 409
Pensions and Annuities Topic 410
Pensions – The General Rule and the Simplified Method Topic 411
Lump–Sum Distributions Topic 412
Rollovers from Retirement Plans Topic 413
Rental Income and Expenses Topic 414
Renting Residential and Vacation Property (formerly Renting Vacation Property and Renting to Relatives) Topic 415
Farming and Fishing Income Topic 416
Earnings for Clergy Topic 417
Unemployment Compensation Topic 418
Gambling Income and Expenses Topic 419
Bartering Income Topic 420
Scholarship and Fellowship Grants Topic 421
Social Security and Equivalent Railroad Retirement Benefits Topic 423
401(k) Plans Topic 424
Passive Activities – Losses and Credits Topic 425
Stock Options Topic 427
Traders in Securities (Information for Form 1040 Filers) Topic 429
Exchange of Policyholder Interest for Stock Topic 430
Canceled Debt – Is it Income or Not? Topic 431

Adjustments to Income Topic 450
Individual Retirement Arrangements (IRAs) Topic 451
Alimony Paid Topic 452
Bad Debt Deduction Topic 453
Moving Expenses Topic 455
Student Loan Interest Deduction Topic 456
Tuition and Fees Deduction Topic 457
Educator Expense Deduction Topic 458

Itemized Deductions Topic 500
Should I Itemize? Topic 501
Medical and Dental Expenses Topic 502
Deductible Taxes Topic 503
Home Mortgage Points Topic 504
Interest Expense Topic 505
Charitable Contributions Topic 506
Miscellaneous Expenses Topic 508
Business Use of Home Topic 509
Business Use of Car Topic 510
Business Travel Expenses Topic 511
Business Entertainment Expenses Topic 512
Educational Expenses Topic 513
Employee Business Expenses Topic 514
Casualty, Disaster, and Theft Losses (Including Federally Declared Disaster Areas) Topic 515

Tax Computation Topic 550
Standard Deduction Topic 551
Tax and Credits Figured by the IRS Topic 552
Tax on a Child's Investment Income Topic 553
Self–Employment Tax Topic 554
Alternative Minimum Tax Topic 556
Tax on Early Distributions From Traditional and Roth IRAs Topic 557
Tax on Early Distributions From Retirement Plans, Other Than IRAs Topic 558

Tax Credits Topic 600
Earned Income Credit Topic 601
Child and Dependent Care Credit Topic 602
Adoption Credit Topic 607
Excess Social Security and RRTA Tax Withheld Topic 608
Retirement Savings Contributions Credit Topic 610
First-time Homebuyer Credit — Purchases Made In 2008 Topic 611
First-time Homebuyer Credit — Purchases Made In 2009 And 2010 Topic 612

IRS Notices Topic 650
Notices – What to Do Topic 651
Notice of Underreported Income – CP-2000 Topic 652
IRS Notices and Bills, Penalties and Interest Charges Topic 653

Basis of Assets, Depreciation, and Sale of Assets Topic 700
Sale of Your Home Topic 701
Basis of Assets Topic 703
Depreciation Topic 704
Installment Sales Topic 705

Employer Tax Information Topic 750
Social Security and Medicare Withholding Rates Topic 751
Form W-2 – Where, When, and How to File Topic 752
Form W-4 – Employee's Withholding Allowance Certificate Topic 753
Employer Identification Number (EIN) – How to Apply Topic 755
Employment Taxes for Household Employees Topic 756
Form 941 and 944 – Deposit Requirements Topic 757
Form 941 – Employer's Quarterly Federal Tax Return and Form 944 – Employers Annual Federal Tax Return Topic 758
A New Tax Exemption and Business Credit are Available for Qualified Employers Under "The HIRE Act" of 2010 Topic 759
FICA Tax Refunds for "Medical Residents" – Employee Claims Topic 760
Tips – Withholding and Reporting Topic 761
Independent Contractor vs. Employee Topic 762
The "Affordable Care Act" of 2010 Offers Employers New Tax Deductions and Credits Topic 763

Electronic Media Filers – 1099 Series and Related Information Returns Topic 800
Who Must File Electronically Topic 801
Applications, Forms, and Information Topic 802
Waivers and Extensions Topic 803
Test Files and Combined Federal and State Filing Topic 804
Electronic Filing of Information Returns Topic 805

Tax Information for Aliens and U.S. Citizens Living Abroad Topic 850
Resident and Non–Resident Aliens Topic 851
Foreign Tax Credit Topic 856
Individual Taxpayer Identification Number (ITIN) — Form W–7 Topic 857
Alien Tax Clearance Topic 858

Tax Information for Residents of Puerto Rico Topic 900
Is a Person With Income from Puerto Rican Sources Required to File a U.S. Federal Income Tax Return? Topic 901
Credits and Deductions for Taxpayers With Puerto Rican Source Income That is Exempt From U.S. Tax Topic 902
Federal Employment Tax in Puerto Rico. Topic 903
Tax Assistance for residents of Puerto Rico. Topic 904

May 23, 2011

Topics for California Businesses

The IRS has an informative online resource for business owners in California counties of Los Angeles, Orange and Ventura that is worth reviewing before starting a new business. It is also a good review for existing businesses. Below is a list of topics covered by the IRS:

Business Forms and Pubs
This is a list of IRS Tax Publications for Business.

Small Business Resources
This page provides you links to sites that have specific information dealing with Small Business

Starting a Business
If you’re considering starting a business, then start here. This section provides links to everything from a checklist for a new business to selecting a business structure and more.

Operating a Business
This section is packed with the information you need to operate your business. Learn about operating a business with employees, business deductions and tax credits, filing and paying taxes, recordkeeping, and choosing an accounting method.

Online Internal Revenue Bulletins
The online Internal Revenue Bulletin (IRB) is the authoritative instrument of the IRS for announcing all substantive ruling necessary to promote a uniform application of tax law.

IRS Notices and Letters
This page provides links to topics found in the category of IRS Notices.

Employer ID Numbers (EINs)
A full explanation about the EIN, also known as a federal tax identification number.

Avoiding Problems
This section provides links to resources to help the small business owner create a recordkeeping system, get the latest on the cash vs. accrual accounting methods, and tips on understanding their IRS notice.

Employment Taxes
The subject of employment taxes is not as formidable when you consult our comprehensive resources.

Closing a Business
There is more involved in closing your business than just locking the doors. This section provides procedures for getting out of business, including what forms to file and how to handle additional revenue received or expenses you may incur.

Appeal a Tax Dispute
The Office of Appeals is independent of any other IRS office. Our mission is to settle tax disagreements without having to go to Court and a formal trial.

Audit Technique Guide
The Market Segment Specialization Program focuses on developing highly trained examiners for a particular market segment. A market segment may be an industry such as construction or entertainment, a profession like attorneys or real estate agents or an issue like passive activity losses.

Community Based Outlet Programs
The IRS and local community organizations across the country are working together to increase the availability of tax forms, publications, and other tax materials. After joining the appropriate program, we will send you free copies of material (CD-ROM or paper) that can be used to provide tax information to your employees or the public.

Coordinated Issue Papers - LB&I
The IRS works to identify, coordinate, and resolve complex and significant industry wide issues by ensuring uniform application of the law through the issuance of coordinated issue papers. Although these papers are not official pronouncements on the issues, they do set forth the Service's current thinking.

Federal Payment Levy Program
Certain federal payments (OPM, SSA, federal employee salaries, and federal employee travel) disbursed by the Department of the Treasury, Financial Management Service (FMS) may be subject to a 15 percent levy through the Federal Payment Levy Program (FPLP) to pay your delinquent tax debt. Find out your appeal rights and how to resolve any dispute.

Information for the Tax Exempt Bond Community
Tax Exempt Bonds (TEB) provides specialized information and services to the municipal finance community, including tailored educational programs which focus on bond industry segments; pro-active education and outreach products which address non-compliance trends; and compliance programs devised to foster voluntary resolution of tax law infractions.

Internal Revenue Bulletins Picklist
Link to new IRB picklist.

IRM Part 4 Index
This section of the Internal Revenue Manual (IRM) discusses information reporting and record keeping for businesses.

Internal Revenue Manual (IRM)
The Internal Revenue Manual (IRM) and the Chief Counsel Directives Manual (CCDM) contain the policies, procedures, instructions, guidelines, and delegations of authority which direct the operation and administration of the Internal Revenue Service. Topics include tax administration, personnel and office management, and others.

IRS Non-Retaliation Policy
IRS has a zero-tolerance policy for retaliation and has had one in place since 1998.

Join "e-News For Tax Professionals"
The IRS e-News For Tax Professionals is an electronic mail service designed to provide general news for tax professionals, access to resources on the Web site and a section for local news and events specific to each State, The District of Columbia and International.

Main Index of Tax Topic Categories
An online version of our voice-response system. This area contains helpful tips and pointers to relevant resources for taxpayers.

Market Segment Understandings (MSU)
The MSU Program, first introduced in 1993, is a means of enhancing tax compliance while reducing taxpayer burden. This Program envisions that the IRS and taxpayers in particular market segments, work together to improve tax compliance in those areas through educational efforts and other collaborative approaches rather than through traditional audit techniques.

Procedures, Regs, Rulings FAQs

Qualified Intermediaries (QI)
A Qualified Intermediary (QI) is any foreign intermediary (or foreign branch of a U.S. intermediary) that has entered into a qualified intermediary withholding agreement with the IRS. A QI is entitled to certain simplified withholding and reporting rules.

Research Tax Credit - Internal Use Software

Tax Calendar
This tax calendar has the due dates for the current tax year that most taxpayers will need. The tax calendar is designed primarily for employers, however the calendar has important due dates for all types of businesses and for individuals.

Tax Code, Regulations and Official Guidance
The place to start for researching publicly accessible versions of the Internal Revenue Code, Treasury (Tax) Regulations, or other forms of official IRS tax guidance.

Small Business Tax Workshops and Webinars
These workshops are designed to help the small business owner understand and fulfill their Federal Tax responsibilities. Self-study formats are available online in both English and Spanish at the IRS online classroom. Webinars are designed to provide presentations on key topics.

May 9, 2011

Pursuing Frivolous Tax Arguments: The Penalties

Taxpayers filing returns with frivolous positions may be subject to the accuracy-related penalty under Internal Revenue Code section 6662 (twenty percent of the underpayment attributable to negligence or disregard of rules or regulations) or the civil fraud penalty under Internal Revenue Code section 6663 (seventy-five percent of the underpayment attributable to fraud) or the erroneous claim for refund penalty under Internal Revenue Code section 6676 (twenty percent of the excessive amount). Additionally, late filed returns setting forth frivolous positions may be subject to an addition to tax under Internal Revenue Code section 6651(f) for fraudulent failure to timely file an income tax return (triple the amount of the standard failure to file addition to tax under Internal Revenue Code section 6651(a)(1).

For a more detailed discussion, read the article posted by the IRS.

May 5, 2011

Frivolous Arguments In Collection Due Process Cases

This is the second in a three part series of frivolous tax arguments.

Under Internal Revenue Code Sections 6320 (pertaining to liens) and 6330 (pertaining to levies), the IRS must provide taxpayers notice and an opportunity for an administrative appeals hearing upon the filing of a notice of federal tax lien and prior to levy. Taxpayers have the right to seek judicial review of the IRS’s determination in these proceedings. Internal Revenue Code Section 6330(d). These reviews can extend to the merits of the underlying tax liability, if the taxpayer has not previously received the opportunity for review of the merits, e.g., did not receive a notice of deficiency. IRC Section 6330(c)(2)(B). A face-to-face administrative hearing concerning a taxpayer’s underlying liability will not be granted if the hearing request raises solely frivolous arguments. The Tax Court will impose sanctions pursuant to Section 6673 against taxpayers who seek judicial relief based upon frivolous or groundless positions.

Discussed below are some of the more common frivolous tax arguments raised in collection due process cases.

A. Invalidity of the Assessment

Contention: A tax assessment is invalid because the taxpayer did not get a copy of the Form 23C, the Form 23C was not personally signed by the Secretary of the Treasury, or Form 23C is not a valid record of assessment
Contention: A tax assessment is invalid because the assessment was made from a substitute for return prepared pursuant to section 6020(b), which is not a valid return

B. Invalidity of the Statutory Notice of Deficiency

Contention: A statutory notice of deficiency is invalid because it was not signed by the Secretary of the Treasury or by someone with delegated authority
Contention: A statutory notice of deficiency is invalid because the taxpayer did not file an income tax return

C. Invalidity of Notice of Federal Tax Lien

Contention: A notice of federal tax lien is invalid because it is unsigned or not signed by the Secretary of the Treasury, or because it was filed by someone without delegated authority
Contention: The form or content of a notice of federal tax lien is controlled by or subject to a state or local law, and a notice of federal tax lien that does not comply in form or content with a state or local law is invalid

D. Invalidity of Collection Due Process Notice

Contention: A collection due process notice (Letter 1058, LT-11 or Letter 3172) is invalid because it is not signed by the Secretary or his delegate
Contention: A collection due process notice is invalid because no certificate of assessment is attached

E. Verification Given as Required by I.R.C. § 6330(c)(1)65

Contention: Verification requires the production of certain documents

F. Invalidity of Statutory Notice and Demand

Contention: No notice and demand, as required by I.R.C. § 6303, was ever received by taxpayer
Contention: A notice and demand is invalid because it is not signed, it is not on the correct form (such as Form 17), or because no certificate of assessment is attached

G. Tax Court Authority

Contention: The Tax Court does not have the authority to decide legal issues

H. Challenges to the Authority of IRS Employees

Contention: Revenue Officers are not authorized to seize property in satisfaction of unpaid taxes
Contention: IRS employees lack credentials. For example, they have no pocket commission or the wrong color identification badge

I. Use of Unauthorized Representatives

Contention: Taxpayers are entitled to be represented at hearings, such as collection due process hearings, and in court, by persons without valid powers of attorney

J. No Authorization Under I.R.C. § 7401 to Bring Action

Contention: The Secretary has not authorized an action for the collection of taxes and penalties or the Attorney General has not directed an action be commenced for the collection of taxes and penalties

May 2, 2011

Frivolous Tax Arguments

Promoters of frivolous schemes encourage people to make unreasonable and outlandish claims to avoid paying the taxes they owe. The IRS has a list of frivolous legal positions that taxpayers should avoid. These arguments are false and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or IRS guidance.

This is the first in a series of three articles addressing frivolous tax arguments in general:

A. The Voluntary Nature of the Federal Income Tax System

Contention: The filing of a tax return is voluntary
Contention: Payment of tax is voluntary
Contention: Taxpayers can reduce their federal income tax liability by filing a “zero return
Contention: The IRS must prepare federal tax returns for a person who fails to file
Contention: Compliance with an administrative summons issued by the IRS is voluntary

B. The Meaning of Income: Taxable Income and Gross Income

Contention: Wages, tips, and other compensation received for personal services are not income
Contention: Only foreign-source income is taxable
Contention: Federal Reserve Notes are not income
Contention: Military retirement pay does not constitute income

C. The Meaning of Certain Terms Used in the Internal Revenue Code

Contention: Taxpayer is not a “citizen” of the United States, thus not subject to the federal income tax laws
Contention: The “United States” consists only of the District of Columbia, federal territories, and federal enclaves
Contention: Taxpayer is not a “person” as defined by the Internal Revenue Code, thus is not subject to the federal income tax laws
Contention: The only “employees” subject to federal income tax are employees of the federal government

D. Constitutional Amendment Claims

Contention: Taxpayers can refuse to pay income taxes on religious or moral grounds by invoking the First Amendment
Contention: Federal income taxes constitute a “taking” of property without due process of law, violating the Fifth Amendment
Contention: Taxpayers do not have to file returns or provide financial information because of the protection against self-incrimination found in the Fifth Amendment
Contention: Compelled compliance with the federal income tax laws is a form of servitude in violation of the Thirteenth Amendment
Contention: The Sixteenth Amendment to the United States Constitution was not properly ratified, thus the federal income tax laws are unconstitutional
Contention: The Sixteenth Amendment does not authorize a direct non-apportioned federal income tax on United States citizens

E. Fictional Legal Bases

Contention: The Internal Revenue Service is not an agency of the United States
Contention: Taxpayers are not required to file a federal income tax return, because the instructions and regulations associated with the Form 1040 do not display an OMB control number as required by the Paperwork Reduction Act
Contention: African Americans can claim a special tax credit as reparations for slavery and other oppressive treatment
Contention: Taxpayers are entitled to a refund of the Social Security taxes paid over their lifetime
Contention: An “untaxing” package or trust provides a way of legally and permanently avoiding the obligation to file federal income tax returns and pay federal income taxes
Contention: A “corporation sole” can be established and used for the purpose of avoiding federal income taxes
Contention: Taxpayers who did not purchase and use fuel for an off-highway business can claim the fuels tax credit
Contention: A Form 1099-OID can be used as a debt payment option or the form or a purported financial instrument may be used to obtain money from the Treasury