The IRS Audit Blog

Archive for December, 2009

Question: Donations and tax deductions?

Can I donate items of clothing $500.00 one day and then again totaling $500.00 in the same year? The clothing and shoes I am donating are very nice and expensive. It seems like I can not because of this link I read.

You cannot take a deduction for household goods donated after August 17, 2006, unless they are in good used condition or better. A household good that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. See Deduction over $500 for certain clothing or household items, later.

Deduction over $500 for certain clothing or household items. You must include with your return a qualified appraisal of any single item of clothing or any household item that is not in good used condition or better, that you donated after August 17, 2006, and for which you deduct more than $500. See Household Goods and Used Clothing, earlier.

http://www.irs.gov/publications/p561/ar02.html#d0e556

Answer: You can’t just split the donations across days. The $500 is for the year.

Also, be aware that you can only deduct the amount the items would be sold for at a thrift shop, even if they are very nice, and expensive.

The Savvy Senior: Tax help for lower-income seniors

Dear Savvy Senior: What are the 2009 IRS minimum filing requirements for seniors? My income was very low last year, and I’m thinking I may not have to file tax returns this year. What can you tell me?

Publication 17

Question: Federal Tax sent to wrong address- any insight?

Hey Guys,

I just wanted your opinion. I made a mistake by sending my Federal Tax Return to Harrisburg instead of the usual PA IRS.

What do you think will happen?
Should I call them or do you think they will return my tax forms to my home address?

Answer: They’ll most likely return them to you, and then you can send them to the correct address.

Halle Tecco: Not For-Profit, Not Non-Profit, But Somewhere In Between

B Corp is allowing entrepreneurs like this to transcend the bifurcation of how we used to classify organizations, and find a comfortable structure somewhere in between.

The Au Pairs – Come Again (Urgh! A Music War)

Question: How do I notify the IRS of my new address?

My Step Dad did my tax forms for me and he didn’t realize that the address on my W-2s were my old address. Now I believe that my refund was sent to that address – and maybe sent back to the IRS. I have no idea how to let them know my current address, even though I did a change-of-address form with the post office. I found and 8822 change of address form for the IRS, but I don’t know if that will back track to my refund check that’s floating around somewhere. I tried calling and hung up after being on hold for 56 minutes. Is there an effective way to get this done that maybe would include getting in touch with a live person?

Help!

Answer: Take the Form 8822 to your local IRS office,(get phone number from the IRS website you could call them first if you prefer and maybe they can change the address while you are the phone with them.
or trying calling 1-800-829-1954
You should of stayed on the line you were the next call in line.

www.irs.gov

Tax preparers to face new regulation, IRS scrutiny

The IRS plans to require tax preparers to pass a test and register with the government to better police a largely unregulated industry used by most taxpayers.

How to Track Your Tax Refund

Question: IRS FEIN SS-4 Form “reason for applying” question?

On IRS Form SS-4 Question #9 is ‘Reason for applying’. If I select ‘Started new business’, then I am required to provide a type of business. First I thought I need to specify legal entity type (e.g. Corp.), but that was asked in Q. 8a. What exactly should I provide here? Form instructions are silent on this.

Thanks.

Answer: It’s just asking for the nature of the business – e.g. widget manufacturing

Household-help tax deadline Feb. 1

Did you hire someone to help around the house? Then you could have some tax housekeeping to do by Feb. 1.

Question: Do I have to do anything special to report tips to the IRS?

I work for Domino’s and was wondering if when tax season comes I have to fill out anything special in regards to tips. Domino’s reports all of my tips to the IRS and takes taxes directly out of my paycheck for tips. Will I have to pay additional taxes on my tipped earnings or has Domino’s taken care of everything for me? Obviously I have kept all of my driver’s slips for each delivery which include the amount of the delivery, tip received, and whether it was a credit card transaction in case I get audited, but is this all I have to do? Thanks.

Answer: If you reported all your tips to your employer, you don’t have to do anything. The tips will be included on your W-2.

Forensic Audit Report Released

Your taxes could have been affected due to poor record keeping in the Elmira city school district.

How to Avoid an IRS Tax Audit : How to Report Business Losses on Schedule C Tax Form