Showing posts from September, 2013

IRS Beating a Dead Horse trying to regulate Tax Preparers

Talk about beating a dead horse!  Yes, that is the IRS position before the courts as to why it can regulate and control tax return preparers.  The district court properly struck down the IRS attempt to control tax preparers as being outside its authority under law.  Congress has never authorized the IRS to control tax return preparers, and frankly it is a truly bad idea.  Why should the IRS be permitted to regulate and control tax return preparers that are supposed to represent taxpayers who are truly adversarial to the IRS?

In an attempt to show that they have authority to regulate tax return preparers, the IRS argued before the appellate courts yesterday that a law from the 1880s concerning the regulation of representatives of the people who lost their horses horses when they were killed by the government gives every government agency the right to regulate and control any paid person that has anything to do with the agency.  That would include tax return preparers.  The Obama admini…

Innocent Spouse Relief may get faster....or maybe not

IRS provides updated guidance for equitable innocent spouse relief requests
RIA, a large Tax Publisher, reported on revisions to Innocent Spouse relief requests. It has been extremely difficult (if not practically impossible) for married couples still living together to have one spouse qualify under the "innocent spouse" relief provisions. Even in situations where one spouse has illegal earnings, or has a huge increase in tax due to a business audit, the IRS almost always rejects the Innocent Spouse claim. The main argument is the spouse "benefited" from the income and higher life style and therefore should have known of the misreported income or expenses. 
In addition to the usual denial of relief, the extremely long time for the IRS to process the requests, makes it costly and annoying. Supposedly, there will be a "streamlined" request. Usually, when the IRS announces such "reforms" they really do not mean much for most taxpayers. In this case,…

If your 2012 Roth IRA was a conversion, you have until October 15 to reverse it

If you converted a traditional IRA into a Roth account last year and are now unhappy with the results, you can reverse the conversion as long as you get it done by October 15. Here's what you need to know as this deadline rapidly approaches. Reversal Basics When you converted your traditional IRA into a Roth IRA last year, the transaction was treated as a distribution from the traditional IRA followed by a contribution of the distributed amount to the Roth account. So the conversion triggered a 2012 federal income tax bill (and maybe a state income tax bill, too) based on the traditional IRA's value on the conversion date. 
Please see further details here.
Before you make this decision, call your tax lawyer!
Ronald J. Cappuccio, J.D., LL,M.(Tax) Counsellor at Law 856 665-2121