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D was a self-employed accountant. He earned substantial income in the current year, against which he decided to deduct a net operating loss (NOL) carryover from a prior year against his SET. The IRS denied the treatment and imposed the SET on his current-year income from self-employment. Held: For the IRS. An NOL carryforward can reduce current-year [...]
ET, an employer, received an IRS order to garnish a portion of Al’s wages and ET complied. Al sued both the IRS and ET, claiming, among other things, the ET breached its contract with him by not paying full wages earned. Held: For the employer. The code makes employers immune from liability for complying with an IRS [...]
Y was sole owner and officer of a firm. The business faltered, and he fell behind on the payroll taxes, making partial payments and sometimes full quarterly payments. The IRS assessed him personally for all unpaid taxes plus interest and penalties. Y claimed that the IRS overstated the amount due because it misapplied his payments, [...]
W, a partner in a CPA firm, decided to incorporate as an S corp with W as sole-owner-employee. W then made his corporation the partner in the CPA firm so that it received the CPA firm’s profit distributions. The S corp paid W a salary of $2,000/month and another $175,000/year that W characterized as “profit [...]
D and her husband were equal owners and sole corporate officers of a business. After they separated, they continued to run the business. The firm failed to pay most of its employment tax withholding. After she and her husband settled, the IRS assessed D for the unpaid amounts personally as a responsible person. D said [...]
“The IRS has initiated a new examination program for small businesses in the past year. This is affecting all examinations of small businesses if they use any electronic accounting software.” As a QuickBooks®consultant, I am here to help you understand the issues and assist the small business client in preparing for the examination. ‘The typical [audit] [...]
S took depreciation deductions for his buildings (rental properties) but not land. The basis (depreciable cost) of each building was based on allocation of value to the buildings v. the land made by his tax preparer. The IRS disputed the allocations and reduced the deductions, claiming too little value was allocated to the land. Held: [...]
In terms of employment taxes, this depends on whether you are a “responsible person”.” Although this case involves a company owner/president, if you are a responsible person, you could find yourself in a similar fix. The case: G was the president and treasurer of a corporation primarily run by him, his wife, their son and [...]
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