Houston Tax Attorney: Tax Relief Blog

The Last Filed Rule Overruled? IRS Collections Now Uncertain

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Taxpayers will often file tax returns that do not report all of their allowable deductions and credits, with the intent of going back and filing amended returns once they are able to determine the correct deductions and credits.  Can the IRS base its collection analysis on the originally-filed but incorrect tax returns?  The court recently […]

Avoiding an IRS Wage Levy by Change to Contractor Status

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Can you avoid an IRS wage levy by having your employer change your status from that of an employee to a contractor?  The court addressed this in Hudiak vs. United States, No. MJG-11-1271 (D. Md. 2018) by ordering the taxpayer to make installment payments to the IRS despite the change in employment status. The Facts & […]

IRS Cannot Collect Taxes Discharged in Bankruptcy

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In Internal Revenue Service v. Murphy, No. 17-1601 (1st Cir. 2018), the taxpayer discharged his unpaid taxes in bankruptcy.  The IRS continued to try to collect the discharged tax debt.  The case is a must read for taxpayers who find themselves in this same situation. The Facts & Procedural History The taxpayer in Murphy filed Chapter […]

Can I Deduct My Clothing Costs?

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Can you take a deduction for clothing?  What if you purchase the clothing for work and would not otherwise have purchased the clothing?  What if the clothing is only worn at work?  This is a common dispute that comes up on audit with the IRS.  The Farolan v. Commissioner, T.C. Summary Opinion 2018-28, case provides […]

The Ins and Outs of the IRS’s Bank Deposit Analysis

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The IRS almost always checks for unreported income when it audits an income tax return. The IRS does this by analyzing the deposits made in the taxpayer’s bank accounts. But what if a deposit was not taxable, as in the case of an amount received for a third party and paid out to a third […]

Deducting Mileage for Business With Minimal Activities

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Can you deduct car and truck expenses, such as mileage, if your business has minimal activities?  The court addressed this in Samadi v. Commissioner, T.C. Summary Opinion 2018-27, which provides an opportunity to consider the question. Facts and Procedural History The facts and procedural history for the case are not unusual.  The taxpayer obtained a real […]

Can the IRS Take Property Purchased in a Business Name?

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If you owe the IRS back taxes but want to buy real estate or some other type of property, can you form a legal entity and use it to acquire property and thereby put the property is beyond the IRS’s reach? The court recently addressed this in United States v. Jones, No. 8:17-cv-2389-T-24 AEP (M.D. […]

IRS Refuses to Enforce Lien, Leaving Taxpayer Without Recourse

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If the IRS has a superior lien on real estate, it should enforce its lien and apply the sales proceeds to reduce the taxpayer’s unpaid taxes. But what if there is a junior lien that acquires the real estate first? Can the IRS work out a deal with the junior lien holder and divert a […]

About the IRS Certificate of Discharge

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The IRS’s lien for unpaid taxes attaches to all property owned by the individual. This can prevent the individual from selling or transferring their property or refinancing the property. There are several potential remedies that can help in this situation. One of these remedies is the IRS certificate of discharge. The IRS Certificate of Discharge […]