The IRS Audit Blog

Archive for February, 2009

Question: I am an American living in Germany. How do I file my income taxes for 2007…do I pay only SS tax in the US?

I am an American citizen only, not a German citizen. As far as I know, I have to pay the 15% Social Security tax in the US or 19% Social Security tax inGermany. But the bottom line is I must pay into a least one system or the other for SS tax.

I am also self employeed in Germany so I think I file a 1040 with a Schedule D for foreign income in the US and then file a self employment income tax form with Germany.

I have asked the IRS, but I get different answers depending on who answers the phone that day. Is there a tax consultant anywhere out there that knows both German and American tax law?

I am trying to be proactive for the 2007 tax year so that I am not hit with big surprises from the US or Germany on April 15, 2008. I would really appreciate any links or information you may have as I want to pull my hair out with all this bureaucracy.

Answer: You must report all your world wide income, including the income in Germany on Form 1040. You must report all your self employment income on 1040. For the self employment income, you complete Schedule C.

If you have to pay taxes in Germany, which should be normally true, and if U.S. has a tax treaty with Germany (true for majority of countries), then you will fill Form 1116 to claim Foreign Tax credit on line 47 of Form 1040.
(In short, though you will declare your foreign income to IRS, claim credit for taxes paid in the foreign country and thus in most of the cases you will be paying no taxes or little on this income to the IRS).

Also if on April 15, 2008 you are out of the U.S., you get automatic extension of 2 months to file your return. In other words, due date for you is June 15, 2007. However, taxes must be paid by April 15, 2008, else interest will be charged.

For more information read IRS publication 54: Tax Guide for U.S. Citizens and Resident Aliens Abroad.

Tax experts find little fault with Wyclef Jean

As musician Wyclef Jean tearfully denied recent allegations that he misappropriated funds from his Yele Haiti charity, experts on non-profits said they couldn’t find serious wrongdoing, except for a lapse of discipline in filing his taxes.

Ron Paul Las Vegas Tea Party Part One

Question: I’m being audited and I’m stuck! What do I do?

In 2006 my tax return was completed by a crooked tax preparer and I got a lot of money back in my return. At the time I was nieve and figured that she what she was doing, but eventually I realized that she didn’t know what she was doing. I never fixed my taxes, and now my 2006 Virginia state return is being audited. If I get audited for my Federal taxes too I could be looking at thousands of dollars in penalties. What should I do? Should I hire an attorney or accountant? I’m freaking out about this because I know I don’t have documentation for all of the erroneous crap that the tax preparer put on my tax return years ago.
I meant to say that I figured she (knew) what she was doing.
I’m not sure. I need to check my tax return and see if she signed it. I will check it now.
I just reviewed the tax return. She didn’t sign it

Answer: Did she sign your tax return as the person who prepared it? If yes then she is liable, if no, get a tax lawyer now.

This tax season, know the available deductions for homeowners

Search for new homes, condos, and other real estate in Washington, D.C., Maryland and Virginia. Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site.

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Question: economic stimulus payment?

I got a letter from IRS by mail about the eligibility for the stimulus payment but never received a check. I live overseas and I need to find a way to contact them to find out about the check. Couldn’t find an e-mail address on their site to contact them.
First I thought I dont qualify because my income is not taxable. I was surprised when a colleaque got a $ 300 check sent to him here. The only difference is that he has a family of 4…I am single. Could that be the reason he got a check and I did not?

Answer: Follow this link and see what it says about your stimulus payment, if it says you received it then you will need to call the IRS.

http://www.irs.gov/individuals/article/0,,id=185471,00.html

Wyclef’s Funny Money, Part II

During a briefly teary defense of himself yesterday, Wyclef Jean again reminded listeners that he spent a couple of days in Haiti “carrying dead bodies on the street.” If anyone had missed his tweets, Jean added, “I was the one carrying little girls to the morgue.”

G Edward Griffin – Science and Politics of Cancer 9 of 9

Tax Tip: Ten tax topics for taxpayers with tots & teens

Got Kids? They may have an impact on your tax situation. Listed below are the top 10 things the IRS wants you to consider if you have children. In most cases, a child can be claimed as a dependent in the year they were born.

Labor Leaders Pissed Off At Obama New Health Care Tax

Question: united state court cases?

1. This court case gave the federal court system the power of judicial review.

2. This court case determined that everyone be afforded the right to an attorney when accused of a criminal act.

3. This court case limits citizens (students) protection against unlawful searches and seizures.

4.This court case strengthened the students’ freedom of expression in schools.

5.this court case declared that claves were property without rights.

6.This court case gave school administrators the authority to censor school newspapers.

7.This court case struct down states power to tax us banks and strengthened the “necessary and proper” clause.

Answer: 1. Judicial review was there, but Marbury v. Madison is what you want
2. Only if there is possible jail time…
3. Not a case, but the Patriot Act limiting the 4th Amendment
4. No case, 1st Amendment
5. Huh?
6. Huh? That’s been repealed
7. U.S. v. Maryland

Weldon reviews budget

WELDON — The Weldon Town Board of Commissioners took steps toward a budget for fiscal year 2010-11 Tuesday by meeting to go over the proposed draft budgets for police and public works at Town Hall in Weldon.

Dr. Francis A. Boyle on The Alex Jones Show 1/3: The Art of War