How to repair errors that occur in an accountant's everyday tax practice
Article Abstract:
Certified public accountants (CPAs) who face errors in performance must address basic issues such as informing insurance carriers, notifying clients, measuring responsibility, and assessing the tax effects of reimbursing losses of clients. The CPA should never admit liability without the consent of the insurance carrier, otherwise any expense incurred by the CPA will be at his or her own expense. When tax liability is understated, there is typically no liability for the taxes since the client owes the taxes regardless of the error. Overpayments can generally be adjusted through filing an amended return for the last three years. The CPA must sometimes reimburse a penalty or tax imposed on clients, raising questions about the payment's deductibility to the CPA and client tax liability for the reimbursement payment.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1987
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Related-party sales can produce unexpected tax results
Article Abstract:
The IRS keeps a watchful eye on related-party sales transactions. The agency is wont to examine a taxpayer when business owners engage in transactions with their businesses, such as when they receive salaries, enter into leases, or sell or exchange property with the business. After a close scrutiny, the IRS may re-characterize capital gain as ordinary income, disallow recognition of losses, and reject installment reporting for sales or exchanges between closely held businesses and their owners. Taxpayers would benefit if they study the Internal Revenue Code, which has provisions containing facts and circumstances tests for sales and exchanges between related parties. If specific conditions are present, these provisions becomes effective automatically.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1997
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Installment agreement terminations restricted by TBOR
Article Abstract:
The author discusses provisions in the Taxpayer Bill of Rights which limits the discretion of the IRS to terminate tax collection installment agreements.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1997
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