A settlement award for bad tax advice is taxable, IRS attorneys say. A couple who participated in an abusive tax shelter sued the accounting firm that promoted the transaction to them for malpractice due to improper tax advice. The parties settles the lawsuit, and the couple excluded the payment they received, claiming the amount was [...]
Read More A Settlement Award for Bad Tax Advice is Taxable, abusive tax shelter, accounting firm, AGI, bad tax advice, improper tax advice, Income Tax Planning, Income Tax Preparation, IRS, nontaxable return of capital, Schedule A, Service, Tallahassee Tax Service, TallyTaxMan, TaxGuidance is leaking out on the penalty tax that uninsured people will soon owe. The levy takes effect in 2014, and will start being collected on tax returns for 2014 that are filed with IRS in 2015. The fee is the greater $95 or 1% of income above the amount that triggers the requirement to [...]
Read More 2014, 2015, Income Tax Planning, Income Tax Preparation, IRS, IRS' Proposed Reglations, Tallahassee Tax Service, TallyTaxMan, Tax, tax return, uninsured childrenNo. Like most things in the IRS tax code, there are exceptions to forgiven debt being taxable. If you have debt discharged in a bankruptcy, then it is not taxable. If the creditor erroneously mails you a form 1099-C, then it is still not taxable. Another issue is insolvency. If you [...]
Read More 1099-C, Bankruptcy, Income Tax Planning, Income Tax Preparation, IRS tax code, Tallahassee Tax Service, TallyTaxMan, TaxThe Tax Court has held that a portion of a taxpayer’s disability retirement payments was not excludable from income. The disability retirement payments were taxable because the payments were based upon the taxpayer’s length of service with his employer. Generally, retirement payments are excludable from an individual’s gross income if the payments are received under [...]
Read More Disability, disability retirement, Disability Retirement Payment, Gross Income, Income Tax Planning, Income Tax Preparation, law enforcement, medical disability leave, payment, service retirement, Tallahassee Tax Service, TallyTaxMan, Tax, work-related injuries, workmen's compensation