The IRS Audit Blog

Question: Tax return question: how do I deal with the employee business expense deduction?

I’m an employee of a private employment agency in the US and I was sent to Europe for five weeks of work at a foreign firm. My airfare and housing was paid directly by the US agency. I was paid directly to my NY bank. I paid for all my own meals and other expenses but I received in cash $100 a week from the foreign firm (which did not cover my meal expenses).
From my reading of IRS Publication 463, the meal cost is deductible but it seems I don’t have to use my actual receipts or memory and can use the Fed per diem rate. But that rate is $170 A DAY!
Does that mean I can deduct $6800 for my 40 days there? That seems insane and doesn’t include laundry, taxis, telephone, etc.
I’m a little nervous to put this down.
I’ll add a sub-question: 2 weeks into the 6 week assignment I flew back to my tax-home for 1.5 days for a family wedding. I went right back to work the next day. Is the airfare deductible as a travel expense?

Answer: Yes, you can claim the per diem, however, you said that you received $100 in cash per week from the foreign firm. So if you are going to claim the full per diem for meals, then you need to claim the $100 in cash per week you received as income as well. The alternative is to reduce the per diem deduction claimed by the amount of cash you received. Also, you need to use just the meals and incidentals portion of the daily per diem. You cannot claim the housing portion of the daily per diem as your housing was paid by the US agency. The per diem rate is the amount that the IRS allows you to claim that you do not need to show receipts for. If your actual expenses exceeded that, then you can claim actual expenses, but you have to be able to support it with receipts if the IRS questions it. Also, note that the meals and incidentals per diem does not include travel expenses that you incurred, such as taxis. So you would be able to claim that as well.

2009 tax law changes provide saving opportunities

In 2009, numerous new and expanded deductions and credits came into being for a broad cross-section of taxpayers: College tax benefits for parents and students; energy credits for homeowners who are going green; and even tax breaks for home buyers and car buyers.

Question: Capital Gains tax?/?

My father is in a nursing home, and my mother is deceased. An attorney set it up so that half of the proceeds from the sale of my fathers house would go to the nursing home, and the other half would be split by my brother and I. My father never set up a will or trust. The house has now sold, and my brother and I should both receive $125,000. each. Is this money subject to capital gains tax? Is there a way or circumventing it if it is? No one has lived in the house for several years. I have my own primary residence elsewhere, as well as my brother his. The state is New York. Thanks in advance……!!1

Answer: You won’t pay tax on the money.

Your father might.

1. He sold the house for $500K and presumably had a gain. (When your mom died, her portion of the house was stepped up.)
2. If your father lived in the house and then moved to the nursing home, the time in the nursing home counts towards the sale of home exclusion. That will allow $250K to be excluded on his taxes.

Since the value of the gifts to you and your brother are more than $12,000 each, your father will have a gift tax form filed to calculate the tax on the rest of the gift. If he hasn’t made lifetime gifts of more than $1M (including these gifts), he won’t have to actually pay anything at this time.

Data mining helps New York catch tax cheats

John Berry / The Post-Standard BILL COMISKEY,a former Mafia prosecutor, helped collect a record-setting $3 billion in tax revenue his first year as deputy commissioner of the Office of Tax Enforcement for the New York State Department of Taxation and Finance.

New York Tax Attorney – Sean Chi offers advice on Reducing Your Tax Debt

Question: If your Ex claims the children as dependants is there an IRS release form you need to sign?

Answer: Who ever has custody gets to claim them. If there is joint custody , it should of been decided in the divorce. If it isn’t usually the person they live with more claims them. All else fails, there is an IRS form for one parent to give up there rights to claim the child/children 1 year at a time!

Abbott Reports Double-Digit Sales and Earnings Growth in Fourth Quarter; Issues Strong Earnings Outlook for 2010

ABBOTT PARK, Ill., Jan. 27 /PRNewswire-FirstCall/ — Abbott (NYSE: ABT) today announced financial results for the fourth quarter ended Dec.

Investing & Personal Finance Tips : Who Has to File 1099 IRS Form?

Question: street address for a payment to the IRS.?

I want to send my payment to a street address in Ohio.

Answer: There are many different addresses, depending on what state you’re in and what form you are sending with your payment. Look in the instructions for the form, they’ll have the address.

Don’t count on finding an address in Ohio.

Two Ohio Men Arrested After High Speed Chase in South Charleston Area

A high speed chase Tuesday evening that stretched from Interstate 64 to the Riverwalk Plaza in South Charleston ended with two men from Ohio facing charges.

I.R.S.Seniors in Dayton, Ohio Drill Team Competition

Question: Why would I receive an IRS Form 668-C in the mail?

I received an IRS form 668-C in the mail. It said it had something to do with a levy? I rent my apartment…and have rented it for the past 2.5 years. I called the Revenue Officer and of course she’s out till after the holidays. The letter also has my landlord’s information on it. Should this be directed to him? What is this all about and why would I receive this?
It says nothing about sending rent to the IRS. It just says the current resident owes $11,813.70 to the US. I pay my taxes and always have through work. And file my taxes every year on time. Why would I be aheald accountable?

Answer: A Form 668-C is a Final Demand after service of a levy. Before you get that, you should have been served with a Form 668-A Notice of Levy because the revenue officer is assigned a delinquent tax account on your landlord and is attempting to collect it. Did you get that and either ignore it or believe your landlord telling you it was taken care of it? It obviously wasn’t. You are obligated to send your rent payment to IRS. If you don’t, the government can sue you for the amount you should have paid plus a 50% penalty. If you want, you can make your check payable to the landlord and IRS can overstamp it.

Microchip Technology Exceeds $1 Billion Annual Net Sales Run Rate Based on Its Revenue for the Third Fiscal Quarter 2010

CHANDLER, Ariz.—-Microchip Technology Incorporated , a leading provider of microcontroller and analog semiconductors, today reported results for the three months ended December 31, 2009 as summarized in the following table: GAAP % ofRevenue Non-GAAP1 % ofRevenue Revenue $250.1 million $250.1 million Gross Margin $146.0 million 58.4% $147.6 million 59.0% Operating Income $72.6 million 29.0% $82 …

What do you do if an IRS employee shows up at your door