Archive for Ronald Cappuccio

Are You Married For Tax Purposes?

Marriage Penalty – if you are Married on December 31, you are Married for Tax Purposes –

You are married for tax purposes as of December 31. So, if you were married on or before December 31, 2013, you would be single (or head of household) depending upon the circumstances for the 2012 tax year, but you would be Married for 2013. Even if you were married on December 31. 2013, you are married for the entire year.

As a married person. you may file jointly with your husband or wife, or as married filing separately.

You may not file as single or head of household. Read More

Written by | Posted in Individual • IRS • Tax Deductions • TaxConnections

Scam IRS Calls!

I am getting many calls from clients and potential clients saying the are getting calls from the “IRS” and are given strange numbers to call. These are scam telephone calls trying to get personal information such as bank account information, social security numbers, dates of birth, etc., so they can take money from your accounts and use this information as part of identity theft rings. One typical sign of the scam fraud is the caller stating “you were going to jail”.

You will Never Get a Call from IRS without First Receiving a Letter

In fact, you will never get a call from the IRS threatening you in any way about jail, criminal matters or demanding that you give them information over the phone right away. Before you get such a call, you will get a written notice from the IRS. These notices will demand Read More

Written by | Posted in Individual • IRS

New Jersey Division of Taxation Closes Restaurant – Leaves Employees And Customers Stuck

New Jersey Division of Taxation Seizes Melange Cafe

As the holidays approach, we renew our quest for a delicious meal that awakens the palate served in a relaxing atmosphere far removed from the hustle and bustle of garish chain restaurants serving mediocre food slapped on a plate. As the town of Haddonfield, New Jersey brings to life its Christmas shopping season filled with candlelit streets, we are left without its shining star, Melange @ Haddonfield café. Why? Because Chef Joe Brown did not have an attorney that understood his need to be a chef – and his struggles as a restaurateur. After owning Melange Café in Cherry Hill, NJ and achieving much success, Chef Joe Brown opened his Melange @ Haddonfield in 2008, eventually focusing full time on Read More

Written by | Posted in Small Business • State And Local Tax (SALT)

NFL Superstar Freddie Mitchell Duped Into Tax Fraud

After taking a plea deal and receiving 37 months in prison for playing a role in a tax fraud scam, Freddie Mitchell presented medical documentation stating he has chronic traumatic encephalopathy (CTE), a possible result of his 8 documented concussions. CTE can have symptoms of memory loss, motor skills impairment, depression, aggressive behavior and confusion. As it is in the research stages, not everyone agrees that CTE can be properly diagnosed unless postmortem. Mitchell clearly states that he did not want a plea deal and yet took one anyway on his attorney’s advice.

This scam involved more than NFL Superstar Freddie Mitchell. It involved an Internal Revenue Service agent making promises while clearly trying to defraud the government. It involved an NFL player with a big ego (something found commonly in professional sports) that had more Read More

Written by | Posted in Tax Fraud/Evasion/Crimes

Do It Now: Small Business Tax Planning 2013 Expirations (And Large Businesses Too!)

Expiring in 2013

The tax credit for Research and Development (R&D) is set to expire in 2013. Even if you are not a technology company, this credit could apply to your business. New processes and developments could count toward this credit. Check with a qualified tax attorney. This credit has been extended before, but why hope and wait to see if it will be extended again?

Drastic Changes in the Section 179 Deduction

Waiting until the new year to buy a new truck for your business? Don’t. Need new servers and computers? Waiting for the after Christmas sales? If you snooze, you lose. Your items must be purchased and used/installed before the end of 2013 to potentially qualify for the Read More

Written by | Posted in Specialty Tax Incentives

Columbus Day – Taxes, The Government Shutdown And ObamaCare

TaxConnections Picture - Columbus ShipToday is Columbus Day. Growing up it was an important holiday but now Columbus is being derided for all of his various faults. My son, who is in the 8th grade and has an extremely inspiring history teacher, came home and told me that “Mrs. M does not think we should celebrate Columbus Day.” He went on to tell me that Leif Erickson actually discovered America and that Columbus spread disease and tortured Native Americans.

What he didn’t say was that Columbus also demanded tribute from the Indians, stole their gold, enslaved some of the Indians and brought them back to Spain as objects of curiosity. He also didn’t discuss the brutality and all of the other negative things that can be brought up about Columbus. Thank heavens!

Those who pooh-pooh Columbus bring up the fact that most educated Europeans in the late 15th century knew that the world was a sphere and not flat. But the fact was, like the great inventors and explorers of humanity, Columbus took theoretical knowledge and applied it. Yes, there were some professors in the universities of the time talking about astronomy and geography, and postulating a variety of theories. Columbus took that theory and said that he was going to discover a shorter route from Europe to India to get at the spices, gold and other valuable items less expensively and safer than going around the Cape of Africa. While the intelligentsia was simply talking, Columbus was doing.

Leif Erickson, obviously a great Viking explorer, went from Northern Europe to North America more than 400 years before Columbus. He simply went home and did nothing about it. On the other hand Columbus, not only the adventurer and Read More

Written by | Posted in Federal • Tax Education • United States

IRS Temporarily Not Issuing Tax Liens And Levies During Shutdown

TaxConnections Blogger Virginia La Torre Jeker reminds to file extensionThe IRS has finally announced that it will stop the automatic issuing of federal tax liens, levies and executions during the government shut down. Unfortunately, many automatic levies have been issued by the IRS and there is no one in the IRS to talk to or negotiate with to set up installment agreements or take other actions to remove the levy. This results in great hardship for taxpayers.

The IRS has been issuing notices, some dated October 7, 2013, even though the office was to be shut down by October 1, 2013. It is hard for me to believe that this was not designed to have maximum impact upon taxpayers. In fact all the IRS services that normally assist taxpayers, whether its at a service center, or on the telephone, as well as the normal collection and auditing function, have been terminated during the shutdown. This intentional design clearly is to put a maximum negative impact upon taxpayers.

Because of the complaints, the IRS is now issued a revised listing of its operations during the government shut down where it indicates that it is stopping to send future tax liens and levies until that section of the IRS reopens. Unfortunately Read More

Written by | Posted in IRS • United States

US Government Crushes Beanie Babies Founder

TaxConnections Picture - Uncle Sam ShakedownThe IRS is at it again going after famous people to make big publicity splashes about their criminal prosecutions. This time, it involves 69-year-old H. Ty Warner, the inventor of Beanie Babies the craze of the 90s, for having Swiss bank accounts. The Department of Justice and IRS love to attack popular and well-known people in order to demonstrate that the government uses force against people who are “tax evaders”.

I am not arguing that Mr. Warner did not violate US tax law, but the Government once again is using the prosecution of a famous person such as Mr. Warner (previously Lauryn Hill, Wesley Snipes, Leona Helmsley, etc) to show that it will use the full force of the government to collect taxes.

The really sad part of this is that if Mr. Warner were a citizen of almost any other country, earning income in a foreign country would not be considered taxable. The US is one of only 2 countries that taxes of foreign earnings of its citizens. None of the news articles and commentary mentioned this very important fact. I am sure there are celebrations at the Department of Justice and the IRS about the great publicity and “deterrent effect” that they are getting with this prosecution. But no one is thinking about the real ultimate deterrent, that of encouraging businesses and successful business owners to stay away from the US, give up their citizenship, or form entities in any other country for tax and business reasons.

This is very sad!

In accordance with Circular 230 Disclosure

Written by | Posted in United States

Biggest IRS Things To Remember During Government Shut Down

TaxConnections Blogger Ronald Cappucio posts about Government Shut DownThe IRS is scaling back operations during the Government Shutdown

These are the things to remember:

1. FILE all tax returns on time.

2. PAY all tax deposits and balances on time. For example, the October 15 extension date for filing Individual returns still applies.

3. The IRS computers will be generating notices, levies, and other tax actions and the websites should be working.

4. AUDITS will be delayed until after the shutdown.

5. Some COLLECTION activities will be delayed.

6. All TIME DEADLINES remain in effect. If you have a letter stating you must respond in 30 days, 90 days, etc, and you do not, you will lose your appeal rights when the IRS does reopen.

Here is an excerpt for RIA Checkpoint:

Government shutdown forces IRS to scale back operations Read More

Written by | Posted in Federal • IRS • United States

IRS “Beating a Dead Horse” – Trying To Regulate Tax Preparers

TaxConnections Blogger Ronald Cappucio posts about a law passed in 1884 affecting Tax PreparersTalk about beating a dead horse! Yes, that is the Internal Revenue Service’s position before the courts as to why it can regulate and control tax return preparers. The district court properly struck down the IRS’s attempt to control tax preparers as being outside its authority under law. Congress has never authorized the IRS to control tax return preparers, and frankly it is a truly bad idea. Why should the IRS be permitted to regulate and control tax return preparers that are supposed to represent taxpayers who are truly adversarial to the IRS?

In an attempt to show that they have authority to regulate tax return preparers, the IRS argued before the appellate courts yesterday that a law from the year 1884 concerning the regulation of representatives of the people whose horses  were killed or lost in the civil war gives every government agency the right to regulate and control any paid person that has anything to do with the agency. That would include tax return preparers. The Obama administration is presenting this ludicrous argument in a continued attempt to expand government and the authority of the Executive branch of government.

Our Constitution establishes that Congress makes the laws and the Executive administers the laws. Unfortunately the Executive branch keeps usurping Congress’s power, even if it means beating a dead horse. It would be very simple for Congress to amend the Internal Revenue Code to authorize the IRS to regulate paid tax return preparers. It could be as simple as one sentence. Congress has not done this and in my opinion should not do this, nevertheless the IRS is spending millions of dollars of taxpayers money to fight for this non-statutory expansion of its authority.

In accordance with Circular 230 Disclosure

Written by | Posted in Federal • Individual • IRS • United States

Innocent Spouse Relief May Get Faster… Or Maybe Not

TaxConnections Picture - Marriage CelebrationIRS provides updated guidance for equitable innocent spouse relief requests

RIA, a large Tax Publisher, reported on revisions to Innocent Spouse relief requests. It has been extremely difficult (if not practically impossible) for married couples still living together to have one spouse qualify under the “innocent spouse” relief provisions. Even in situations where one spouse has illegal earnings, or has a huge increase in tax due to a business audit, the IRS almost always rejects the Innocent Spouse claim. The main argument is the spouse “benefited” from the income and higher life style and therefore should have known of the misreported income or expenses.

In addition to the usual denial of relief, the extremely long time for the IRS to process the requests, makes it costly and annoying. Supposedly, there will be a “streamlined” request. Usually, when the IRS announces such “reforms” they really do not mean much for most taxpayers. In this case, I think this may
benefit taxpayers who are current in tax filings but can claim abuse or some other type of coercion. Short of that, I do not think this will do much. Read More

Written by | Posted in IRS

Deadline for Reversing 2012 Roth Conversions Is Closing

TaxConnections Picture - VaultIf you converted a traditional IRA into a Roth account last year and are now unhappy with the results, you can reverse the conversion as long as you get it done by October 15th. Here’s what you need to know as this deadline rapidly approaches!

Reversal Basics

When you converted your traditional IRA into a Roth IRA last year, the transaction was treated as a distribution from the traditional IRA followed by a contribution of the distributed amount to the Roth account. So the conversion triggered a 2012 federal income tax bill (and maybe a state income tax bill, too) based on the traditional IRA’s value on the conversion date.

However, 1 taxpayer-friendly aspect of the Roth conversion drill is that individuals who use the calendar year for tax purposes have until October 15th of the year following the conversion year to reverse a conversion. For example, you have until October 15th of this year to reverse a 2012 conversion. That October 15, 2013 deadline applies whether or not you extended your 2012 Form 1040. Read More

Written by | Posted in United States
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