I've found myself needing to specifically clarify what the definition of statutory employee means for IRS employment tax purposes. Statutory employees include: 1. full-time life insurance agents, 2. certain agent or commission drivers, 3. traveling salespersons, and 4. certain homeworkers. Statutory employees do not owe self employment tax on these earnings,...
Generally speaking IRS regulations provide that debt incurred to acquire the interest of a spouse or former spouse in a residence, incident to divorce or legal separation, may be treated as acquisition indebtedness under IRC Sec. 163 (mortgage interest deductions) without regard to the treatment of the transaction under IRC...
IRS Tax Treatment of Incentive Stock Options Forms 3921, 6251, 8949. Incentive stock options (ISO) are compensation to employees in the form of stock rather than cash. With an ISO, the employer grants to the employee an option to purchase stock in the employer's corporation, or...
Having spent way too much time dissecting a balance sheet today I thought it might be a good idea to put out a cash basis balance sheet basic overview post. What is a Balance Sheet? A balance sheet is a snapshot at a specific point in time...
Here are 5 things I learned through experience regarding TFRP: 1. An IRS Revenue Officer makes a determination to "assess" or "not assess" the Trust Fund Recovery Penalty (TFRP). Bankruptcy does not stop the Assessment Statute even though it can stop the Collection effort. One of...
The IRS announced new policies and programs to help taxpayers pay back taxes and avoid tax liens. The changes include: Tax Lien Thresholds The IRS will significantly increase the dollar thresholds when liens are generally filed. The new dollar amount is in keeping with inflationary changes since the...
The Treasury Inspector General for Tax Administration released a report today dated February 3rd 2012 titled Criminal Investigation Can Take Steps to Strengthen Oversight of Its Undercover Operation. This audit was conducted as a follow up to an audit in tax years 2001 and 2002 - 10 YEARS AGO....
One of the frequent questions coming across my desk ...
The US Tax Court case of David A. Gates, et ux. v. Commissioner 135 serves as best I can tell as precedent. Under §121, if married taxpayers own and use property as their principal residence for at least two of the five years ending on the date of sale, they can...
Reporting back pay is not as straight forward as one imagines. If you issued back pay you should report it on IRS Form W-2 (in boxes 1, 3, and 5) for the year payment is made. If any punitive damages are involved in a settlement they should be reported...