An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship. Furthermore, the IRS will consider your unique set of facts and circumstances: Ability to pay;... Read More

Generally, rental activities are passive activities even if you materially participated in them. However, if you qualified as a real estate professional, rental real estate activities in which you materially participated aren’t passive activities. For this purpose, each interest you have in a rental real estate activity is a separate activity, unless you choose to... Read More

IR-2020-220, September 23, 2020 WASHINGTON — During Small Business Week, September 22-24, the Internal Revenue Service wants individuals to consider taking the home office deduction if they qualify. The benefit may allow taxpayers working from home to deduct certain expenses on their tax return. The home office deduction is available to qualifying self-employed taxpayers, independent contractors... Read More

Under the BBA partnership rules, after an IRS partnership audit is completed, the general rule is that an imputed underpayment is imposed on the partnership rather than on the partners. This liability is computed by netting all adjustments and multiplying by highest individual tax rate (39.6%), unless partnership can show rate should be lower. IRC... Read More

IR-2020-203, September 8, 2020 WASHINGTON — Later this month, the Internal Revenue Service will start mailing letters to roughly nine million Americans who typically don’t file federal income tax returns who may be eligible for, but have not registered to claim, an Economic Impact Payment. The letters will urge recipients to register at IRS.gov by October... Read More

IR-2020-199, September 1, 2020 WASHINGTON- The IRS announces the launch of the Bi-Partisan Budget Act (BBA) Centralized Partnership Audit Regime webpage. The Centralized Partnership Audit Regime replaces the Tax Equity and Fiscal Responsibility Act (TEFRA) and the electing large partnership rules. The centralized partnership audit regime, or BBA, is generally effective for tax years beginning... Read More

IR-2020-66, April 9, 2020 WASHINGTON — To help taxpayers, the Department of Treasury and the Internal Revenue Service announced today that Notice 2020-23 (PDF) extends additional key tax deadlines for individuals and businesses. Last month, the IRS announced that taxpayers generally have until July 15, 2020, to file and pay federal income taxes originally due on... Read More

From the IRS newsroom IR-2020-55, March 12, 2020 WASHINGTON — The Internal Revenue Service today announced the release of final regulations that increase the Offer in Compromise application fee to $205 and provide an additional way for the IRS to waive the Offer in Compromise application fee for low-income taxpayers, based on their adjusted gross... Read More

To encourage payment of withheld income and employment taxes, including social security taxes, railroad retirement taxes, or collected excise taxes, Congress passed a law that provides for authority for the IRS to assess the Trust Fund Recovery Penalty (TFRP). These taxes are called trust fund taxes because the business holds the employee’s money in trust... Read More