The IRS Audit Blog

Posts Tagged ‘youtube’

Manchin wants changes to state vehicles

CHARLESTON, W.Va. (AP) — Gov. Joe Manchin wants legislation to increase oversight of the states fleet of roughly 7,000 vehicles. Legislative audits last year found that West Virginia spends between $60 million to $70 million annually on the fleet, bu…

Lillian Axe – Misery Loves Company (Stereo)

TROUBLESHOOTERS: Tax Preparer Complaint

Tax time is upon us, but one Newschannel 9 viewer says a local tax preparer never did the work she was hired to do and now she is no where to be found. She called on our Troubleshooter Team for help. Luis and Dolores Lopez are small business owners. When it came time to file their 2008 income taxes, they decided to go with someone they thought would be knowledgeable about new tax credits for …

New York prowling for tax cheats

New York tax officials have stepped up enforcement efforts, resulting in criminal cases against tax scofflaws in the Rochester area and across the state.

Comprehensive Annual Financial Reports Exposed [Alex Jones] YT LINK – 2:04:12]

Question: IRS audit advice?

If I am having problems working with my IRS auditor would I be better off pushing the file to appeals court? Does it look bad for an auditor not to close out the file. Just looking for some helpful hints to use to get the auditor to work with me.

Answer: If you are not able to reach an agreement with the Revenue agent, you can ask for a conference with their manager. If it is not resolved then, you can take it to Appeals. The Appeals office is fair and impartial. Unlike the Revenue Agent, they are not rated to any degree by how much they bill out in tax assessments. However, they may hold you to the same standard of evidence. Depending on how much money is involved, it is probably a good idea to go to Appeals if you feel you have valid proof and legal basis.

Find the Right Tax Pro Pronto!

The best $59.99 I ever spent to save my sanity was on a standard two-drawer vertical filing cabinet. Without it, I — like the average taxpayer — would probably spend close to 33 hours preparing my itemized return every year, including 14.6 hours slogging through tax records. Ooof.

Question: Difference between EIN and Texas Tax registration application?

I am a programmer by trade, but I am looking forward to starting a small business and operating online completely using a web-store. And I want to keep everything legal. So I have a few questions:

1. What is the difference between EIN (aka federal tax identification number) that is issued by IRS vs Sales tax permit that is sold by the state of Texas? Which one do I need and what is the purpose for each? Do I have to use both of these to pay different taxes?

2. Do I have to charge tax to customers who are not in my state (Texas)? Or do I only charge it for customers in Texas? If I sell to someone in California, who pays the tax to the state of California?

3. Where do I go to register the name of my business?

4. Is it necessary to form a corporation? Or can I operate without forming one?

my major concern is #1. I see the two forms and don’t know the difference between the two and what purpose each of them serve. Do I pay both federal and state taxes???

Answer: 1. You’ve partially answered your own question here. One is Federal and one is State. Two different jurisdictions

The Federal EIN is a Federal Employer Identification Number. You need an FEIN if you have employees or if your business is organized as anything other than a Sole Proprietorship or Single-Member LLC. Partnerships (and Multi-Member LLCs) and all Corporations or LLCs that elect to be taxed as Corps require an FEIN. That said, you may wish to get an FEIN anyway as you can use it in lieu of your SSN in your business operations. Scattering your SSN to the winds is risky. It’s much less risky with an FEIN.

The TX State Sales Tax Permit authorizes you to collect and render State Sales Tax in TX. TX levies Sales Tax on all tangible personal property delivered in the State of TX and on most labor services performed for customers in TX.

2. You charge Sales Tax on all tangible personal property delivered in TX and labor for services delivered in TX or TX customers. Most data processing services are taxable so if that’s what you’re providing then you must collect and render TX Sales Tax. Here’s a link to a FAQ on TX Sales Tax: http://window.state.tx.us/taxinfo/sales/faq_permit.html#permit1

3. You generally need a business license. Those are normally issued at the City or County level. If you will trade under an assumed name, you’ll also need to file a DBA cert with the County Clerk’s office.

4. Forming a corp (or an LLC) is a waste of time and money for most small businesses. Both can provide some limited protection from claims against your personal property but this shield is NOT absolute. They also complicate tax return preparation costs and depending upon the type of Corp or LLC may result in higher total tax costs. Although TX does not have an income tax, TX does levy franchise fees on TX LLCs and foreign (i.e. formed in any other State) LLCs with a business presence in TX.

Most small businesses do fine as a Sole Proprietorship. You add 2 or 3 Schedules to your individual income tax return and you’re done in most cases; no separate tax returns are required. A good general liability insurance policy will protect both the business assets AND your personal assets and may cost you less in the long run. A Corp or LLC might provide some protection for your personal assets but provides NO protection for the business’ assets.

If you operate as a Sole Proprietorship in TX you only pay Federal income taxes. There are no income taxes in TX, however if you form an LLC or Corp there may be franchise fees that will need to be paid.

Consult with a local attorney who specializes in small business issues for guidance on the best way to organize your business and consult with a local CPA or EA who specializes in small businesses for information on the tax implications of the various legal entitities that you might organize your business as. Then you can make an informed decision as to what is best for your situation.

Jackson Hewitt(R) Offers 25% Savings on Company’s New Online Tax Preparation Service

Jackson Hewitt Tax Service® announces a 25% discount* off the cost of its new online tax preparation product, Jackson Hewitt® Online.  The discount offer begins today and runs through April 15, 2010.  The 25% discount applies to Federal returns prepared using the Deluxe and Premium packages and State returns for all packages on Jackson Hewitt Online.  The Basic Federal return is always free …

IRS Is Ruining My Life