Thursday, December 31, 2015

Tuesday, December 22, 2015

IRS Scams! Be very careful!

Subject:  IRS reminds tax preparers to remain vigilant and alert to new phishing scams

Earlier this year, the IRS warned tax professionals to be on the lookout for continuing attempts to compromise various types of personal data.

It has come to our attention that there are a few new phishing scams to obtain e-services information, and one is in the form of an email. These scams are asking e-services users to update their e-services information.

E-services will never ask you to do this. If you receive an email or requests like this, do not click on the links or take any other action.

It is important to keep in mind the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. Never click on strange emails or links seeking updated information. has information that can help you protect yourself from email scams.

Monday, December 21, 2015

Even the College Business Professors Get it Wrong!!

These are very basic mistakes that under normal circumstances, could lead an IRS auditor to suspect the intent to commit fraud.  He was very lucky CID did not get involved.

 Code Section 162—Business deductions—travel and meals and entertainment expenses—substantiation.
Adjunct business professor/owner of 2 consulting businesses was denied deductions for 1 business's travel and meals and entertainment expenses: taxpayer didn't provide receipts; credit card statements that he offered didn't show name or account number; and he didn't record meals on his calendar or keep receipts for any meals under $75, and instead offered only self-generated spreadsheets or other unsubstantiating documents. Also, his testimony was inconsistent and otherwise unpersuasive when considering he was claiming to have been on different business trips at same time and admitted to claiming meal expense deductions both by specific items and at per diem rates without showing he didn't duplicate expenses. Moreover, he didn't explain how expenses claimed for this business were distinguishable from those already allowed for his other business. (John H. Besaw v. Commissioner, (2015) TC Memo 2015-233, 2015 RIA TC Memo ¶2015-233 )

 Code Section 274—Business deductions—wage expenses—substantiation—business purpose.
Adjunct business professor/owner of 2 consulting businesses was denied deductions for 1 business's alleged wage payments to independent contractors who included his daughter: taxpayer failed to prove he made payments in amounts claimed or that they were ordinary and necessary business expenses. Notably, while he claimed that he established payments via his testimony and corroborating Forms 1099-MISC and bank statements, he didn't even offer any Forms 1099-MISC for 1 of years at issue, didn't explain mismatch of amounts claimed for other year, didn't offer into evidence any Schedules C from his daughter or other alleged contractor showing they reported supposed payments as income, and didn't identify any specific withdrawals in bank records that would reflect payments at issue. Moreover, he admitted he was financially supporting daughter during years at issue. (John H. Besaw v. Commissioner, (2015) TC Memo 2015-233, 2015 RIA TC Memo ¶2015-233 )