Tax Law Blog | IRS Tax Attorneys

Every year, the Internal Revenue Service adjusts the standard mileage rate for automobile use for business purposes or charitable activities, or for moving or medical expenses.

For 2007, the standard mileage rates are:

• 48.5 cents a mile for business use.
• 20 cents a mile for medical or moving expenses
• 14 cents a mile for driving in charitable activities.

For 2008, the standard mileage rates will be:

• 50.5 cents a mile for business use.
• 19 cents a mile for medical or moving expenses.
• 14 cents a mile for driving in charitable activities.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The standard rate for medical and moving purposes is based on the variable costs as determined by the same study.

Runzheimer International, one of the nation’s largest travel-management consulting firms, conducted the study for the IRS.
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For assessment of additional taxes, the statute of limitation runs generally three years from the date you file your return. If you’re looking for an additional refund, the limitations period is generally the later of three years from the date you filed the original return or two years from the date you paid the tax. So for your 2006 return (filed in 2007), the three-year rule expires in 2010. For the return you file in 2008, the statute of limitations expires in 2011.

There are some exceptions:

• If you don’t report all your income and the unreported amount is more than 25% of the gross income actually shown on your return, the limitations period is six years.

• If you’ve claimed a loss from a worthless security, the limitations period is extended to seven years.

• If you file a fraudulent return or don’t file at all, the limitations period never begins to run. The IRS can, in fact, get you at any time.

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Steve Bennett, president and CEO of Intuit, the maker of the TurboTax software program, reports this one:

A client gave away his house to a local fire department to burn up in a training exercise. So far, so good. It appears to be a legitimate, allowable charitable contribution that was made to an appropriate organization.

But here’s the kicker: The value of the property actually went up once the house was removed.

Because the value increased, sorry, there could be no deduction.

More on this story.

What a bummer, huh? Find a Tax Lawyer at the tax law directory.

Currently, the US Tax Court has ruled that it has jurisdiction to review cases where the IRS’s failure to abate employment taxes that were/are excessive in amount, assessed after the expiration of the statute of limitations on assessment, erroneously or illegally assessed.

Enough Said.

If you have Tax Legal Matters worry no more. Arrange for a free consultation with the National Tax Firm of Kenneth Sheppard.

Many people discover that too much tax has been paid when they complete the required information or tax return. For example, when you complete your personal income tax return - after taking into account the available exclusions, exemptions, deductions and credits - you may discover that more tax has been paid than what was due to the government. On the tax return, there is a place for you to tell the government that you want a refund of the excess tax that they collected. After reviewing the return, if the government agrees that too much tax was paid, the government will cut a check for the excess and send this check to you.

In general, a claim for credit or refund of an overpayment of tax must be filed within 3 years from the time the tax return was filed or 2 years from the time the tax was paid (whichever is later). If no return was filed, the claim must be made within 2 years form the time the tax was paid. There are longer periods with respect to net operating loss, capital loss carrybacks, bad debts and worthless securities.

If you believe that too much tax has been collected from you, don’t sleep on your rights - file a claim or a credit or refund today.
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If you need a Chicago Tax Lawyer Contact Horowitz & Weinstein Today.

Under current law, age no longer matters. If the property sold was your principal residence for at least two out of the last five years, then you can exclude from tax as much as $250,000 in gain (and $500,000 on a joint return).

Your age is irrelevant, and you can take the gain exclusion every two years if you qualify. By the same token, if your property appreciates by $250,000 to $500,000 every two years, give me a call. I could use your help in finding a new house.

If you owe the IRS money this could not be the case.

If you’re married, you can always file “Married Filing Separately.” That normally results in your paying more in taxes. But in some situations, it can be to your advantage.

For example, if one spouse has substantial medical or miscellaneous deductions, those deductions are subject to the 7.5% and 2% floors respectively. That is, only medical expenses over 7.5% of adjusted gross income and miscellaneous deductions over 2% of adjusted gross income are deductible. If I had $10,000 in income and my spouse had $90,000 in income, the first $7,500 in medical expenses and the first $2,000 in miscellaneous expenses aren’t allowed.

But if I filed as “Married Filing Separately,” the disallowance would only apply to the first $750 in medical expenses and the first $200 in miscellaneous itemized expenses. The potential availability of $8,550 ($7,500 plus $2,000, less the sum of $750 and $200) in additional deductions could offset the bracket and other limitations of filing separately.

Do it both ways, and see which gives you the lowest total tax. You can change your filing status annually.

I should add a caveat on this filing myth. If you’re married, you normally can’t file as single or head of household. But let’s say you’re married but separated, and you have a child. There’s a special rule that will let you file as a head of household.

You can qualify as an “abandoned spouse” if your spouse didn’t live with you for the last six months of the year and you have a child living with you who qualifies as your dependent. If so, you can file as head of household rather than jointly or married filing separately.

Run the numbers and see which produces the lowest tax bill.

Our tax code is complicated and changes with painful regularity. Many of the old rules are remembered and distorted into myths. Don’t get caught in the trap of using the wrong rules. That can cost you big!

If you need a Chicago Tax Lawyer visit Horowitz & Weinstein.

If you negotiate an installment plan that is not backed by the proper legal documentation, the IRS can continue to levy and lien your property and assets.

It is important that any agreement you enter into with the IRS is signed both by the company and by an IRS official.

You need the assistance of an IRS Lawyer.

The IRS will file a lien against a business when they continue to be ignored.

A business has 30 days to protest the action. If you disagree with the placement of the lien, you can protest the action with the Manager of the Revenue Officer placing the lien. This must be done within the requisite time frames. If you still disagree, an appeal to the IRS Appeal’s Office and then to the U.S. Tax Court and further to U.S. District Court may be filed. If you choose to go further with protesting the lien, it is strongly recommended that you retain counsel familiar with the IRS Code and rules and procedures in appearing before the requisite courts. Time is of the essence. You must adhere to the guidelines or you will lose your rights to protest.

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Do you need help preparing your tax return, or should you try to do it yourself? The following quiz can help give you an idea of how well you understand tax concepts and current tax laws. There are 25 questions, and each question is worth four points.

When you finish, you’ll see your score and the correct answers to any questions you missed.

Click Next to begin.

If you need the Assistance of a National Tax Attorney be sure to call 1 (877) 505-9455 to scheduel your free consultation.