The IRS Audit Blog

Question: Can anyone tell me the correct Title and Section of the US Code?

Here is an excerpt from an article from Apple.com on the statute of limitations for the IRS’ collection of back taxes:

The IRS has 10 years to collect outstanding tax liabilities. This is measured from the day a tax liability has been finalized. A tax liability can be finalized in a number of ways. It could be a balance due on a tax return, an assessment from an audit, or a proposed assessment that has become final. From that day, the IRS has ten years to collect the full amount, plus any penalties and interest. If the IRS doesn’t collect the full amount in the 10-year period, then the remaining balance on the account disappears forever. The statute of limitations on collecting the tax has expired.

What is the statute number?

Answer: 26 USC 6501(a) gives three years from the date a return was filed for the IRS to collect a balance due. However, once the IRS actually makes an assessment of taxes (generally about 6 to 8 months after the return is filed), 26 USC 6502(a) gives ten years from the date of the assessment for the IRS to collect the taxes.

For more specific information on your tax problem, contact a tax attorney in your state. For a referral, contact your local or state bar association.

John Bullis: What is the ‘statute of limitations?’

A part of the tax law is the “statute of limitations.” That is the limit of how long a tax return is open for audit by IRS or for amendment by the taxpayer.

Audit Preparation – Statute of Limitations for Audits

Question: Does anyone know how to wave the $800 LLC Tax Fee (in California) for first year small business owners?

Where do I download or find the form from the state or IRS?

Answer: The minimum franchise fee in CA is strictly a state issue; the IRS has no involvement with it. I’ve never heard of CA waiving it.

Tax fraud behind bars

Florida has achieved a new No. 1 ranking, but it’s not one to brag about: It leads the nation with the most prison inmates filing fraudulent tax returns.According to the Treasury Department, of the nearly 45,000 phony tax return claims filed in 2009 by prisoners, 8,777 of them (about 20…

The 411 for Your Form 1040

Question: Why do I want an auditor possition?

I have an interview for an auditing position. They always ask this question “why did u decide to become an auditor?”. I’m having difficult time answering this one because I really don’t care whether its tax or auditing position I juts want to get a job and then I’ll see if I like it or not. Obliviously I can not give such an answer. What do you think I should answer though? Thanks

Answer: You like working with numbers, have good attention to detail, like to get things done properly and are structure dependent.

State Faults Holland District’s Budget Practices

The Holland Central School District has enjoyed a full piggybank of reserve money over the years, something state auditors feel is a detriment to the community’s tax base. An audit compiled by the Office of New York State Comptroller examined the district’s budgetary practices for the last five years and stated the administration and School Board “did not prepare reasonable budgets” from the …

Download TurboTax Deluxe Federal e-File State 2010 for free

Question: When a bankruptcy discharged debts should a bank send a IRS 1099 as debt forgiven and show it as income?

My company filed for and was discharged in bankruptcy in Aug 2006. Bank of America sent an IRS 1099 showing they forgave the debt in Aug of 2007. They showed an amount of over $8,000.00 as income due to the “forgiveness”. I called them and they refused to correct the 1099 and said it was my problem not their’s and advised that I just throw it away since the company no longer exists and I will NOT be filing a return on it. The Company was an “S Corp” so when it existed the money flowed through to me personally. Should B of A have sent this a year late? Should I just throw it away (doen’t sound smart to me)? Is there an IRS form that I can fill out to correct the error if there was one. Didn’t bankruptcy discharge and eliminate this debt without them forgiving it? By the way B of A continued to send collection notices many times after the discharge, so this seems to be a stabdard with them.

Answer: The bank was correct in sending you a 1099-C. They cancelled the debt and you were the person not paying it back.

The bank was incorrect in telling you to throw the 1099-C away. When you file your tax return, you will postpone the 1099-C cancellation of debt income by filing a form 982. If you have remaining assets the form has you write them down in value. When you sell these at a later date, you may have taxable ordinary income then.

If you total your remaining assets (not only business, but all personal ones as well) by their book value and compare that to your total liabilities, you only reduce the book value to the point it equals the liabilities. Any further COD is permanently eliminated.

IRS tax workshops March 26

Taxpayers who may have difficulty scheduling a visit to an IRS Taxpayer Assistance Center during normal weekday business hours can visit the IRS offices located in Seattle, Everett, Bellevue and Tacoma on Sat., March 26 between the hours of 9 a.m. and 2 p.m.

IRS Tax Problem Help – Forms,website information

Springs man’s claim to have Obama records sets birthers abuzz

A Colorado Springs “birther,” retired Air Force Col. Gregory Hollister, has Internet blogs abuzz with what may be an illegal foray into an online Social Security data base and how he obtained a copy of President Barack Obama ‘s draft registration from 1980.”Col. Greg Hollister,…

Mayor of City Rialto Elvin Meek Palau Last Will Fraud Part One