Understanding What “Tax-Free” Really Means in Business Sales Now, I know what you are thinking nothing is “tax-free.” Yes, that is correct. Generally, tax-free in tax planning is a tax deferral. Also, the tax deferral discussed in this article applies to capital gains. It does not apply to ordinary income items from the sale of the business, includ...
Introduction Many business owners find the appeals process for Texas Comptroller sales tax audits daunting. The best way to resolve contested issues in an audit is directly with the auditor. However, when you are unable come to an agreement with the auditor, there are various channels available to taxpayers to pursue a more favorable result. The pu...
Introduction Many people consider becoming “real estate professionals” to diversify income and to create tax losses from rental property to offset against earned income. I must preface with what I learned in my days in the tax law program—"do not let the ‘tax tail’ wag the dog.” You should arrange your business affairs in a manner that is tax effic...
An assessment is the IRS’s formal recording of a tax liability on a taxpayer’s account. Once a liability has been assessed, the IRS is authorized to begin collection efforts, such as sending bills, filing liens, and issuing levies. Tax and penalty assessments can arise in a number of ways. Perhaps a taxpayer never filed a return, so the IRS filed a...
What is the TFRP? The Trust Fund Recovery Penalty (TFRP) allows the IRS to hold certain individuals personally liable for the unpaid employment taxes of a business. Under Section 6672 of the Internal Revenue Code, any person who is required to collect and pay over any tax and fails to do so may be liable for a penalty equal to the amount of tax tha...
Overview Over the past decade, the IRS has ramped up enforcement on foreign asset reporting. Failure to do so can lead United States taxpayers down a dark road of hefty civil penalties and even potential criminal exposure. Though we have already discussed at length the FBAR and Form 8938, this article will take a deeper dive into one of the most co...
Overview The Texas Voluntary Disclosure Program (VDP), administered by the Texas Comptroller of Public Accounts, allows businesses and individuals to report and pay previously unpaid or underpaid taxes voluntarily. This program incentivizes compliance by offering significant benefits, such as penalty waivers and, in most cases, interest waivers, fo...
What is reasonable cause? The IRS imposes penalties for various infractions, including late filing, late payment, and accuracy-related penalties. Generally, taxpayers must demonstrate that their error or omission was due to reasonable cause for the IRS to grant a penalty abatement. Part 20 of the Internal Revenue Manual (IRM) provides a definition ...
Everything to Know About Service Sales Tax in Texas Navigating Texas sales tax on services is vital for businesses to stay compliant and avoid penalties. The Wilson Firm specializes in guiding clients through Texas tax regulations. Texas collects approximately $47 billion in sales tax annually, with services accounting for about 20% of taxable reve...
Written by Jack Naranjo Understanding IRS Penalties for Late or Unfiled Foreign Asset Reports At the urging of the Taxpayer Advocate Service and practitioners, the IRS has ended its practice of automatically assessing penalties at the time of filing for late-filed Forms 3520 to report foreign gifts and inheritances. Also, by the end of the year, th...
