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Boston Tax Law Blog

How much is artwork worth for estate tax purposes?

Valuations on artwork are frequently too low or too high. An IRS review from 2011 to 2015, found that 58 percent of the works of art reviewed had been valued incorrectly.

Taxpayers were prone to underestimate the value when art was gifted or left in a bequest. On the other hand, when artwork is donated the value was often overestimated for charitable contribution write offs. When the Service raises questions it can lead to a protracted court battle.

Extension is now automatic if the FBAR filing deadline is missed

If you are required to file a Report of Foreign Bank and Financial Accounts, known as an FBAR, and also called FinCEN Form 114, you may think you have plenty of time to meet this year's deadline -- if you think the filing date is June 30. 

FBAR filing date has changed 

But the annual due date for FBAR filings was recently changed to the same date that individual income tax returns are due, normally April 15. (This year the due date was April 18 for FBARs and federal returns.) The previous FBAR due date of June 30 was confusing and hard to remember because it was different than other federal tax deadlines and if you missed it, there was no possibility of an extension, which leads to the next piece of good news. 

Unresolved back taxes can lead to an empty bank account

On tax day, an acquaintance shared via Facebook that she had received a letter from the IRS that included a significant tax bill. Federal tax debts can add up for a number of reasons and can follow you for a long time.

The sale of an investment property required in divorce could come with a significant tax bill based on the capital gains. Growing up rich and fewer acting gigs was how a celebrity recently hit with an IRS bank levy explained her tax difficulties.

ACA compliance issues may lead to an IRS audit

The Affordable Care Act does not appear to be going anywhere this year. More failure to comply exchange notices are being sent from health insurance marketplaces to companies.

Fail to act on these notices, and an IRS compliance audit could be on the horizon with thousands of dollars in corresponding penalties. What are the ACA employer-contribution rules? How should a company respond?

Can you write off a loss on the sale of investment property?

If you are making money off the sale of investment property you will probably owe capital gains. The adjusted basis on the property will be very important – remember to add capital improvements which minimize the amount of gain you realized.

On the other hand, if you had a property with an underwater mortgage and decided to rent it, you may have to take a loss to finally sell. Can you deduct the loss on your taxes?

Taxes and the sharing economy: 3 FAQs

If you're providing services in the sharing economy, you are probably very focused on the money-making opportunities. This is true whether you're renting out your house, driving for Lyft or Uber, or providing some other on-demand service arranged over an online platform.

You may not realize, however, just how tricky the tax obligations that come with this income can be.

Here are three FAQs to help you get started.

How to request a six-month filing extension from the IRS

Tax day is quickly approaching. This year, you have a few extra days with the April 18 deadline.

Depending on your circumstances you might not have enough time to meet the deadline. Unfiled returns can become a serious liability. While you might not have a return postmarked by April 18, you can avoid the larger of two penalties by requesting a six-month extension.

New Large Business & International tax compliance campaigns

Under continual budgetary pressure and shrinking numbers, the IRS has needed to identify new ways to ensure compliance. Campaigns focusing on certain issues are one way they are planning to stretch limited resources.

How will these new campaigns work? Are traditional audits being replaced? Who is being targeted? What are some of the issues of concern? When do they start? We'll answer these questions in this post.

3 tax tips from Fortune 500 companies

A recent report by the Institute of Taxation and Economic Policy is calling a number of Fortune 500 companies to task. The report alleges that a number of these companies paid nothing in taxes in recent years.

Not a penny.

The companies are pushing back, stating that the report is inaccurate and misleading. One of the companies, General Electric, told Accounting Today that the report was deeply flawed and that in actuality it had paid "$32.9 billion in cash income taxes worldwide, including the U.S." over the last ten years.

How serious is a lien related to “trust fund taxes?”

A recent news headline suggested Ivanka Trump had been hit with a tax lien for non-payment of taxes. This was misleading.

With some investigative work, Forbes unwound who the lien was actually filed against. In January, the New York State Department of State Tax Warrant Notice System filed a tax warrant against Madison Avenue Diamonds LLC T/A Ivanka Trump Fine Jewelry. This company is actually owned by a separate party who is allowed to use the Ivanka Trump brand through a licensing agreement. The approximate $5,000 tax warrant related to unpaid sales taxes.

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