Tax Law Blog | IRS Tax Attorneys

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.

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.

Charity, as I hope everyone remembers, begins with a tax deduction. If you didn’t have the cash to contribute in 2007, I hope you charged it. And, likewise, if you don’t have the cash when it comes time to contribute in 2008, go ahead and charge it. The deduction is allowed in the year of the charge, not when you actually pay the bill.

Get a receipt from the charity to which you made a donation, and, if you’re still worried about documentation, get the credit card company to send you their record of the transaction.
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Nontaxable Interest

Interest earned on bonds issued by a state, territory, municipality or any political subdivision is free from federal taxes. These are generically called municipal bonds, and their tax benefit increases in value as your marginal tax rate goes higher. (In other words, the bonds are worth more to you as your overall income rises.)

Assume you’re in the 35% bracket, the top rate through the year 2010. A 5% tax-free rate becomes the equivalent of a taxable rate of 7.69%. In the 15% bracket, the taxable equivalent is only 5.88%. If you check out this page at investinginbonds.com, you can compare taxable and tax-free yields. Compare the after-tax rates on alternative investments of equivalent risk.

Car Pulling
Commuting to work? Bring a friend — and his wallet. If you form a carpool to carry passengers to and from work, any dollars received from these passengers aren’t included in your income.

Commuting costs are generally not deductible. But if you establish a carpool and you’re reimbursed in amounts sufficient to cover the cost of your repairs, gas and similar items used in connection with operating your car to and from work, then you’ve converted personal nondeductible expenses into excludable income.

Selling Your Home

Under a tax law enacted in 1997, if your house was your principal residence for two of the last five years, you can exclude as much as $250,000 in gain($500,000 on a joint return) when you sell it.

You don’t have to reinvest the money, and you can claim the exclusion every two years. (If you’ve got $500,000 in gain every two years, I want to meet your real estate agent and go shopping!)

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If you need IRS legal representation in Chicago, Visit Horowitz & Weinstein. Or you can visit the National Tax Firm of Kenneth Sheppard.

Hard Money is the Informal term referring to contributions to political campaigns, committees and parties that are regulated by federal election law, limited in scope, and subject to public disclosure. Individuals are permitted to contribute a maximum of $2,000 to a federal candidate per election, $5,000 to a political action committee per year, and up to $25,000 to a national political party per year.

Additionally, individuals are limited to $95,000 in contributions every two years ­.  $37,500 to candidates and $57,500 to national parties and federal PACs.

The Internal Revenue Service is adept at using leverage to intimidate, coerce and bluff taxpayers and their representatives into adverse collection and examination determinations based upon weak legal authority and incomplete or insufficient facts.  The  IRS  will “roll-over” taxpayers and weal representatives who are not familiar with taxpayer rights and lack of knowledge about the nuances of the tax law.  The  IRS  enforced collection actions are extreme, and they mostly abuse the intent of the Congress not to refrain from collection actions that create an economic hardship within the meaning of §6343 of the Internal Revenue Code.

The IRS agent is both “prosecutor” and “jury.” The IRS agent raises issues and comes to conclusions that are presumed to be correct under present law. Also, taxpayers, not the IRS agent, must prove the accuracy of their deductions.

This leverage against a taxpayer applies even if the agent uses incorrect or incomplete facts or makes determinations on erroneous or flawed argument and law. It is not unusual for the IRS to tax extreme positions on the factual and legal issues. The agent can be sloppy and incompetent and still get a large and unjustified tax deficiency. The raw power of the agent’s position and presumption of correctness is intimidating to taxpayers and intimidating to the representatives of the taxpayer who do not have the skill or ability to identify and advocate the factual and legal issues for their clients.  The “intimidation” of the IRS agent is used as a tool to close cases quickly.

Contact Ken Sheppard to Fight the IRS the the RIGHT WAY!

Canadians who file their income-tax returns electronically are more likely to cheat, a newly released report suggests. An internal analysis by the Canada Revenue Agency found individuals who sent their tax returns through the Internet — the so-called Netfile option heavily promoted by Ottawa — were more likely to understate the amount of taxes owed. …

The department analyzed random returns from the 2005 taxation year, which were filed in 2006, estimating about 15% of returns were non-compliant. That translated to about $569 million in taxes owed, but not declared. But closer examination showed Canadians who sent in paper returns — attaching receipts — were more likely to comply with tax laws. …

The report also found Canadians who use tax software to prepare their returns appear to be more likely to cheat. Analysts examined tax returns filed to the agency on paper, separating them into those prepared with the help of tax software and those prepared by hand. ‘‘Software users … do demonstrate a significantly higher non-compliance rate as compared to non-software users,’’ they concluded.
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Certain purchases exempt from state tax; second tax holiday comes in October

The back-to-school tax holiday runs from July 31 through Aug. 3. Certain school supplies including clothing, footwear, computers and computer-related accessories are exempt from state sales tax during this time.

From Oct. 2-5, the purchase of energy- or water-efficient products with a sales price of $1,500 or less per product, purchased for noncommercial home or personal use, will be exempt from state sales tax.

During this period, products with the “Energy Star” designation and WaterSense products will be exempt from the state sales and use tax. For a list of WaterSense products, go to www.epa.gov/watersense.
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As we all know that taxes play a major role in everyone’s life and they are equally important to be considered. We all know that there certain kind of taxes that are been charged by the federal government as well there are certain tax deductions and tax exemption that are also enjoyed by the people.

It should also be taken into consideration that if you are an eligible student for tuition, education and textbook tax credits, than you can benefit a lot while filing your tax returns. Student should also be cautious while filing their tax returns. A Canadian student gets a tax slip which is known as Tuition and Education Amount Certificate. There are various tax slips like T2202, T2202A, TL11A or TL11C depending on the institute and the course. This tax slips have to be inputted into the tax returns to gain the tax credits. So it should be understood by students that going college can provide you with the fortune and if you do not input these tax slips into the tax return than this would cost hundreds of dollars every year.

Sometimes when people go to some independent tax specialist than they do not know what to do with this educational tax slips or sometimes it is overlooked. So people should be aware about this and how to use the tax slips in the appropriate manner to gain the tax benefit. There are some simple tips that can avoid you making such kind of mistakes:

- You should get the print out of your tax return. This can be obtained by your tax preparer.
- As most of the tax software programs prints the tax summary page, you should make sure that you show the unused tuition, education and textbooks amount in it.
- You should also make sure that in Line 323 your tuition, education and textbooks amount are mentioned.
- To make sure that your tax credits are carried forward every year you should monitor your letter of assessment.
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