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Boston Tax Law Blog

Keeping records of business expenses for deduction purposes

One of our recurring themes in this blog is the importance of record keeping for tax compliance.

After all, the quality of your records – or lack thereof – can be crucial in many different types of tax controversies. In this post, we will provide a reminder of why these records are so important.

Not getting your tax refund? Consider your options

A tax refund is your money, not the government's. But sometimes the government does not give the money back the way it should.

When that happens, you don't have to wait passively for a response. In this post, we will explain how you can take action to get the refund you have coming to you.

The IRS’s list of tax scams to avoid during year's filing season

Tax season is one of the most stressful times of the year for many Massachusetts residents. In order to make filing taxes a lot easier, many people turn to tax professional for help. However, one way to make tax season even more stressful is by falling for a scam.

Scams are in full force this time of year as criminals try to steal the personal information and tax refunds of unsuspecting taxpayers. The IRS recently released its annual list of the ‘dirty dozen’ tax scams to watch for this year, including:

Cancelled debt on a home mortgage, part 1: Is it taxable income?

Technically, when some or all of your mortgage debt is cancelled in a foreclosure or short sale, the amount of cancelled debt is supposed to count as income.

But is this really how the IRS expects you to handle things, when you have a debt cancellation on your home mortgage? In this two-part post, we will answer that question.

Third-party payroll services: outsourcing and tax liability

As the owner or operator of a small business, you face multiple pressures. Marketing your product or service effectively, driving revenue growth and managing employees are only some of the many demands on your time and attention.

Given these demands, it makes sense for many businesses to use a third-party provider to handle payroll services and tax compliance tasks. In this post, we will discuss some of the considerations to keep in mind in using such providers.

What reports must be filed for foreign assets and income?

Last week we concluded a two-part overview on the taxation of foreign accounts and income. In this follow-up post, we will get even more specific about reporting requirements.

But what is it that you may actually have to file? In this post, we want to remind you of the multiple reporting requirements that apply to offshore income and assets.

Offshore update, part 2: Can Uncle Sam tax foreign earnings?

In the first part of this post, we sketched the evolving compliance landscape for offshore accounts and income. With the Foreign Account Tax Compliance Act (FATCA) taking effect, U.S. account holders with foreign assets find themselves under more scrutiny than ever before.

In this part of the post, let's look at an aspect of offshore compliance that is often overlooked: the foreign earned income exclusion.

Offshore update, part 1: foreign banks feeling FATCA pressure

Boris Johnson, the flamboyant mayor of London, has quietly agreed to pay substantial U.S. taxes on the sale of his home in the U.K.

This constitutes what political pundits might call a "flip-flop." After all, only a few months ago Johnson was denouncing the imperial overreach of U.S. taxes on expatriates. Though he has dual citizenship, Johnson hasn't lived in the U.S. since he was five years old -- and claimed it was therefore unfair to tax him. We wrote about this in our November 26 post last year.

The IRS sometimes goes after the wages of those with tax debts

For most people, their paychecks from work are their financial lifeblood. Receiving such wages is often an essential part of a person's ability to meet the various expenses they incur as a part of everyday life. Thus, one could imagine how alarming a person would find it if the amount of their wages that actually went to them suddenly dropped significantly. This situation is one that individuals who have a federal tax debt may find themselves in.

This is because wage garnishment is one of the tactics the Internal Revenue Service is allowed to use to collect back-due taxes a person owes. This tactic involves redirecting a person's wages from work away from the person and towards the tax debt.

Tax preparers, part 2: credentials and legal responsibility

In the first part of this post, we began discussing the importance for millions of taxpayers of choosing the right tax preparer. As we noted, a very basic place to start is with making sure that the preparer has a Preparer Tax Identification Number (PTIN).

But there are several other factors to keep in mind as you choose a preparer to work with. In this part of the post, we will discuss the various credentials that different types of preparer have. We will also discuss consequences for the taxpayer that can result from fraud by a preparer.

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