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Tag Archive for eBook

Can You Claim Losses on Deposits Held In Insolvent Financial Institutions And Ponzi-Type Investments?

If you suffered a loss on deposits you had with an insolvent financial institution, or in a ponzi-type investment scheme, all may not be totally lost.

You may be able to claim a deduction for losses on deposits in insolvent financial institutions, and the IRS affords you a number of choices of how to deduct these losses:

• You can treat the loss as a non-business bad debt, and deduct it as a short-term capital loss on Schedule D.
• You can deduct the loss as a casualty loss on Schedule A.
• You can deduct the loss as an ordinary loss under the “miscellaneous deductions subject to a 2% limit” section of Schedule A. Read more

The Concept of Being Married, But Considered Unmarried For Tax Purposes

The general rule for married taxpayers filing their tax returns is that they can only file Married Filing Jointly (MFJ) or Married Filing Separately (MFS). There is, however, a very important exception to this rule. If you are married and separated from your spouse, under tax law you may be considered unmarried if certain conditions are met. This means that you could qualify to use the Head Of Household filing status instead of MFS, and will not be subject to the disadvantages associated with the MFS filing status.

Under tax law, you can be considered unmarried if you meet all the following tests:

• Obviously, you must intend to file a separate return from your spouse.
• You must have paid more than half the costs of keeping up a home for the tax year. Read more

If The IRS Sends You A Bill That You Can’t Pay… Please Don’t Have A Heart Attack!

A few years ago, a client came to me almost at the point of a nervous breakdown. He had been recently audited by the IRS and subsequently received a tax bill in the mail for over $180,000! After briefly perusing the documents he brought in, I quickly realized that something was significantly amiss with this tax bill. So I advised him not to panic, but to leave his documents with me. After comparing the audit adjustments with his documents, I decided that we had to go and pay the IRS a visit.

A couple weeks later, we were sitting down with the officer who had conducted the audit and his manager, and after reviewing the audit adjustments together, the amount originally assessed was eventually cut in half. The audit officer, who appeared to be a rookie, had apparently done a very poor job. Read more

Wanted! Tax Professionals With Books And eBooks

If you have ever thought of writing a book or an eBook on a tax topic, please let us know. We are now accepting submissions from the tax community to promote their tax books/eBooks at www.taxconnections.com. It takes a great deal of effort to write a book/eBook on a tax topic and more effort to promote it to an interested audience. TaxConnections promotes our members books and publications to our built in interested readers of tax knowledge and expertise.

We promote our members publications exclusively, so if you are a current or budding author please join TaxConnections as a member today at https://www.taxconnections.com/membership/tax-professionals. The first ten tax professionals to register for an annual membership will have the option of being a quoted tax expert in a series of articles we Read more

Own Your Own Insurance Company

In conjunction with the great people at TaxConnections, we’ve published a new eBook on captive insurance titled “Who Should Form a Captive Insurance Company?”. You can buy a copy HERE. Cost: $4.98.

To help potential captive owners determine if they should form a captive, I’ve written the “10 questions,” one of which is:

Am I able to actually negotiate the coverage terms with my current insurance carrier, or, do they hand me a policy to sign?

Read more

Who Should Form A Captive Insurance Company?

I’m pleased to announce that, in conjunction with the great people at the TaxConnections website, we’ve published a new book on captive insurance titled “Who Should Form a Captive Insurance Company?”.  You can buy a copy HERE.  Cost: $4.98.

To help potential captive owners and professionals determine if forming a captive is the right decision for them, I’ve written the “10 questions” one of which is, “Have I started an asset protection plan?”

The phrase “asset protection” is bandied about a great deal. There are websites that claim to provide “asset protection” advice and services, various companies who continually tell us about the importance of asset protection and numerous books that help Read more

A View of The IRS Through Corporate Insider Eyes – Corporate Tax Audit Survival – Part 6

Reference Cliff Jernigan's eBook Corporate Tax Audit SurvivalThis is Part [6] of a series of a Chapter in the eBook “Corporate Tax Audit Survival – A View of The IRS Through Corporate Insider Eyes” by Cliff Jernigan.

You can download the entire eBook here.

Sample From Chapter 4: “I am From Mars”

Because of my experiences in the private sector, I sometimes had difficulty fitting into the IRS fabric.

One example of this involved the high-profile debate about whether stock options should be expensed for financial statement purposes. This issue was extraordinarily intense during the 2003-2004 time period, with the Financial Accounting Standards Board (FASB) arguing that stock options should be reflected as an expense on the financial statements while industry argued that they should be reflected as an item on the balance sheet. Most employees in the high-technology sector agreed that they should be reflected as an item on the balance sheet, and I strongly supported the high-technology position.

This topic has no bearing on the filing of a corporate tax return. For tax return purposes, stock option exercises usually are treated as an income tax expense.

My colleagues in the IRS often would argue about this issue over lunch or at other meetings. Almost universally they Read more

A View of The IRS Through Corporate Insider Eyes – Corporate Tax Audit Survival – Part 5

Reference Cliff Jernigan's eBook Corporate Tax Audit SurvivalThis is Part [5] of a series of a Chapter in the eBook “Corporate Tax Audit Survival- A View of The IRS Through Corporate Insider Eyes” by Cliff Jernigan.

You can download the entire eBook here.

Sample From Chapter 4: “The System”

One of my first IRS assignments was to co-manage a project associated with updating the corporate tax return filing system.

Together with another LMSB executive, I met with a group of IRS employees who had been detailed to a design team for this purpose. An outside consulting firm had been hired to assist the IRS team.

The design team and outside consultant had been discussing options for several weeks. Every wall of the meeting room was plastered with large sheets of paper listing the pros and cons of the project. I asked if they had arrived at any conclusions, and they said they had gotten so mired down in the project details that they were having trouble making any recommendations.

The group asked us to review a report that they were writing to management. We suggested they compose an executive summary to the document in order to help crystallize their thinking. They went back to work and returned with a ten-page executive summary for a 50-page report. Furthermore, the report contained no conclusions. They simply had not been able to identify the major issues. Read more

A View of The IRS Through Corporate Insider Eyes – Corporate Tax Audit Survival – Part 4

Reference Cliff Jernigan's eBook Corporate Tax Audit SurvivalThis is Part [4] of a series of a Chapter in the eBook “Corporate Tax Audit Survival – A View of The IRS Through Corporate Insider Eyes” by Cliff Jernigan.

You can download the entire eBook here.

Sample From Chapter 4: “Big Brother”

When I first engaged the IRS voice messaging system, I was stunned by the message: “Welcome to the IRS voice messaging system. Unauthorized use of this facility could result in civil and criminal penalties.” After this admonition, I was almost afraid to use the IRS phone system.

A few days later I received an email message warning me that I could be disciplined if I did not pay my government credit card bill on time. I thought, “Am I working with a bunch of deadbeats?”

Shortly thereafter I received a sternly-worded message telling me there would be severe consequences, including possible termination of employment, if I incurred estimated tax payment penalties for underpayment of estimated taxes or if I made a mistake on my federal income tax return. I thought, “Am I working with a bunch of tax cheats?” Read more

A View of The IRS Through Corporate Insider Eyes – Corporate Tax Audit Survival – Part 3

Reference Cliff Jernigan's eBook Corporate Tax Audit SurvivalThis is Part [3] of a series of a Chapter in the eBook “Corporate Tax Audit Survival – A View of The IRS Through Corporate Insider Eyes” by Cliff Jernigan.

You can download the entire eBook here.

Sample From Chapter 4 “Acronymphobia”

The Internal Revenue Service (IRS) is an agency that thrives on the use of acronyms. In fact, acronyms flourish to their greatest heights at the Large and Mid-Size Business Division (LMSB) headquarters in the Mint Building in Washington D.C., where “Mintspeak” crops up in every discussion.

In one of my first meetings, I sat among several IRS career employees in the Mint Building. The discussion leader started by saying that we were meeting on the “ABC issue for the DEF area of the GHI problem.” I raised my hand and said, “Excuse me, would you mind telling me what the ‘ABC issue for the DEF area of the GHI problem’ is?” The leader courteously explained the three acronyms to me while the others in the room squirmed in their chairs. I thanked him.

The leader went on. “The GHI problem has a connection to the JKL and MNO and PQR problems, which we need to solve PDQ.” I raised my hand again and said, “Excuse me, would you mind telling me what ‘JKL’ and ‘MNO’ and ‘PDQ’ stand for? And what is ‘PDQ’?” The leader explained the acronyms, and the old-timers rolled their eyes. Read more

A View of The IRS Through Corporate Insider Eyes – Corporate Tax Audit Survival – Part 2

Reference Cliff Jernigan's eBook Corporate Tax Audit SurvivalThis is Part [2] of a series of a Chapter in the eBook “Corporate Tax Audit Survival- A View of The IRS Through Corporate Insider Eyes” by Cliff Jernigan.

You can download the entire eBook here.

Sample From Chapter 4: “Spy/Traitor/Disbelief”

When I showed up for work my first day at my San Jose office, I was met by a very nice group of IRS employees. I could tell they wondered what a corporate person was doing in their midst. They were friendly, but in a decidedly reserved way. I sensed some of them thought of me as a corporate spy.

I was joining the Service as the highest ranking IRS employee in the San Jose region. The person designated as the Commissioner’s Representative for my building gave me a pass to be able to enter into the secured office areas. I saw file cabinets full of confidential corporate taxpayer information. For someone who had spent most of his career opposing the IRS, it seemed strange being here. I felt like the fox that was being asked to guard the hen house.

Just a few miles away, my former corporate tax colleagues were talking about me, wondering if I had become a traitor among them. Would I be turning over the secrets of the corporate community? Would I be someone they would want to talk to again? Frankly, I had been out of the corporate tax department world for several years at this time and was hardly in a position to give away corporate tax department secrets. Nonetheless, the tax community was concerned. Read more