The IRS Audit Blog

Archive for June, 2010

MUKILTEO: Red-Light Camera Petition Certified For Ballot

Mukilteo voters could get to decide whether the city must first get public approval for the cameras.

Help writing a CV, tips & advice for job seekers everywhere!

Question: LLC or Partnership question?

myself and a partner are opening a small business and we got an LLC with both of us listed on there. when applying for a tax ID # the IRS said they were going to classify us as a partnership but we could contest it by filling out one of 2 forms. I am not sure what to do here. if we should contest this for tax purposes or let them classify us as a partnership. we weren’t planning on having an accountant for at least the first year.

Answer: A LLC can be a proprietorship, a partnership or a corporation.
You are not a proprietorship and from the information provided, you are not a corporation.
For articles on your U.S. tax return, http://taxipay.blogspot.com/2008/04/list-of-articles.html

This is a Backgrounder On Social Security

Groups such as the American Association of Retired Persons (AARP) have proposed to “fix” Social Security by raising the $90,000 cap on the amounts of salaries and wages that are subject to the Social Security payroll tax.

IRS Pursues Lottery Winner Cheated by Tax Scammers

Question: Car donation: no deduction if sold “for parts” by the charity?

We recently donated a car with a private sale FMV of around $1700. The charity (Special Olympics) sent a 3rd-party shop to pick up the car; they gave us a ‘provisional’ receipt (Form1098) for $500, and told us that they would send us the adjusted one once the car sells. We just found out from them that they have decided to sell the car “for parts”, and they claim that this means we cannot deduct any more than the value of $500 already on the temporary 1098 which they gave us when they picked the car up.

Is this correct? I have looked at the IRS publication 526, and cannot find any special rules governing value in a “for parts” sale. We are feeling very screwed at this point — the shop has our car and title, and we’re only getting the deduction of $500 (which translates to probably $200 in our pockets). We feel like the car has essentially been stolen from us.

Is the only solution here to never donate a car? Anyone else have any similar experience? Advice? Thanks.

Answer: I suspect they only got $500 (or less) for the parts. Otherwise they would give you a 1098-C showing the amount they received.

They would be inclined to do so because a) they are required to and b) it is generally in their best interest to keep donors happy by providing them with the larger tax deduction.

Of course there is the possibility that they were too lazy to account for it.

BusinessWise: Social Security and divorce

You may be eligible to receive Social Security benefits based on your ex-husband’s work, if you are not entitled to a higher Social Security benefit on your own record. You can receive benefits if you meet certain criteria.

Donate a Vehicle to Charity Tax Deduction 2009, 2010.mov

Question: Dissolution of LLC and the IRS?

I filed a dissolution of my business with the state and received the certificate. I did not have any profits or loss for 2009. What forms do I need to send in to the IRS? FYI -I file as a sole proprietor under my social #.
Should I wait till the end of the year to file?

Answer: It will all go on your 1040

Self employed? 5 steps to scoring a mortgage

While getting a loan as a W-2 employee may be cheaper and easier than if you’re self-employed, you don’t have to go running back to your cubicle to qualify for a mortgage . Some lenders may be concerned that you won’t earn a steady enough income to make your monthly payments, and others may simply not want to deal with the additional paperwork that can be involved in providing a mortgage to a …

Schedule C Profit or Loss from Business

Question: Question about IL CPA accounting courses requirement.?

I need four accounting hours to sit for the IL CPA. I need an audit course. I want to take the course online or through correspondence.

Are there any four hour audit courses, or one hour accounting courses? I only see three hour auditing courses.

Any other ideas?

Answer: I’m pretty sure I have taken a 4 hour auditing course at Ohio State. Where are you looking at? There are thousands of universities, one of them must have a 4 hour auditing course…good luck!

Treasurer’s actions raise more and more questions

Beaufort County Treasurer Joy Logan continues to offer interesting insights into her operation.Thi

Liberty Tax Service