Sep 202012
 
IRS Treatment Of Forgiven Student Loan Debt Causing Concerns

In the wake of the housing market collapse, many people have become familiar with the concept of cancellation of debt (COD) income.  The basis for COD income is found in IRC § 61(a)(12) which states that gross income includes “income from the discharge of indebtedness.”  Understanding the logic of this provision can be tricky.  When a loan is given, neither the lender nor the borrower have any gain or loss.  The lender has no loss because it expects to be repaid and the borrower has no gain because it expects to have to repay loan.  Thus, at this point, there More…

Feb 172012
 
IRS Releases 2012 List Of The  “Dirty Dozen” Tax Scams

Once again, tax season is upon us and the IRS has issued the annual “dirty dozen” tax scams. Topping this year’s list is identity theft.  In response to growing identity theft concerns, the IRS has declared its intent to embark on a comprehensive strategy that is focused on preventing, detecting and resolving identity theft cases as soon as possible.  In addition to the law-enforcement crackdown, the IRS has stepped up its internal reviews to spot false tax returns before tax refunds are issued and has been working to help victims of the identity theft refund schemes. The entire list is More…

Dec 232011
 
New Form 1099 Rules For 2012

The IRS will implement new rules in 2012 that will likely affect most businesses.  Changes have been made to the reporting rules for IRS form 1099, the form used to report various types of income other than wages, salaries, and tips (for which Form W-2 is used instead).  This form generally applies to independent contractors and business suppliers, and does not affect those who are full-time employees. The new regulations will require the issuance of 1099 forms for nearly all payments over $600 to a business’ suppliers, not just those payments made to independent contractors.  This includes items like commissions, More…