Author Archives: redsoxbuff

Losing money on your sideline business? The IRS may be coming after you.

I’ll try to be as clear as possible on this: If you make a pretty good living but also file a Schedule C that regularly loses money, the IRS has been told to come after you.

The Treasury Inspector General for Tax Administration (TIGTA) put out a report in mid-2016 saying that the IRS should turn its guns toward high-income individuals with money-losing Schedule C’s. The report concluded that of the money-losing Schedule C’s it reviewed, fully 88 percent “showed an indication that the Schedule C businesses were not engaged in for profit.”

The report, which has been written about in Forbes and by tax geek maven Paul L. Caron on his TaxProf blog, has a title which really tells you all you need to know: Opportunities Exist to Identify and Examine Individual Taxpayers Who Deduct Potential Hobby Losses to Offset Other Income.

OK, you’ve been warned. Here’s a link to the TIGTA press release, which you can use to connect to the report.

Trump’s tax plan benefits — Trump. Surprised?

Now we know what Donald Trump, the presidential candidate who won’t release his own tax returns, wants to do about taxes: Cut them for people like himself. His August speech in Detroit outlined his plans, which fall in line with what House Republicans, including zombie-eyed granny-starver Paul Ryan (thanks to Esquire’s Charles P. Pierce )have… Continue Reading

IRS excels at beaurocratese when it screws up

If you sent in an employment tax payment at the April 18 deadline, you did what you were supposed to.  But the IRS sent out notices to many filers that the deposits were late. How did the IRS characterize its own screw-up?  Like this: “Many taxpayers who made employment tax deposits on Monday, April 18,… Continue Reading

Don’t believe everything you read about the tax code — even in the New York Times

Reporting in 2014 on a proposed tax overhaul that went nowhere, The New York Times  referred to “the 70,000-page federal tax code.” People, I come bearing good holiday tidings:  The federal tax code is nowhere near that long. As Andrew L. Grossman, an attorney with the Congressional Joint Committee on Taxation, points out in Slate,… Continue Reading