Tax Organizer - brief format
An employee is someone who:
Is told where to work
Is told when to work
Is told what work to do
Uses employer's tools, equipment or supplies
May be hired and fired at the employer's discretion
is paid a salary or by the hour rather than on the job basis
Does not have risk of operaeting loss
Credit for dependents attending kindergarten through 12th grade at an Iowa school. Select article for details. In addtion, items required by school for entrollment are included, such as the list a school may provide as required items the first day of school (or ongoing). It would be best to keep the documented list with accompanying receipts.
The standard Meal/Snack Rates increased slightly for 2012. For 2011 breakfast was $1.19, lunch/dinner $2.22 and Snacks $.66. For 2012 the rates are breadfast $1.24, lunch/dinner $2.32 and snacks $.69
If you would like a copy of your tax return sent to a bank or someone else please Select Consent to Disclose Tax Return Information, print the form and return to us via e-mail or fax. We will assist with your request as soon as possible.
Need help with preparation of 1099's? Select 1099's for questionnaire to let us know information so we can be of assistance. just print the questionnaire and return the completed information to use via e-mail or fax.
Select for form for us to assist you with 1099 preparation. Just print form, complete and forward to Collins Cosnulting Service.
1099
Select job related expenses deductible job related expenses. (uniforms are deductible if required by employer and not suitable for ordinary wear - For example, Rocky Wolverine's work boots were disallowed when he wore them to the IRS audit) There is a deduction of 2% of income from the total of these expenses (and you must itemize), so small amounts will not create a tax deduction.
Safety equipment, small tools and supplies needed for the job
Uniforms required by the employer that are not suitable for ordinary wear (Military uniforms are only deductible if regulations prohibit their off-duty wear)
Protective clothing such as hard hats, safety shoes or glasses not suitable for continuouse usage as ordinary clothing
Physical examinations required by employer
Dues of porfessional organizations or chambers of commerce
Subscriptions to professional journals
Employment agency fees or costs to search for a new job
Certain business use of home
Certain educational expenses
Certain meals and entertainment
Vehicle Expense - not travel back and forth to metro area work place
Tax Preparation fees
Selcted Lawsuite settlements for list of awards and info about taxability
Personal Injury Exempt
Class Action award (consumer) Exempt
Civil Rights Taxable
Punitive damages Taxable
Contract claims Taxable
Slander/Defamaton Taxable
Backpay Taxable
interest Taxable
Emotional distress Taxable
Mental Anguish Taxable
Loss of reputaton Taxable
Other Awards Taxable
Select Disaster Losses to review computation of a disaster loss. The IRS indicates a claim must be filed with insurance company or FEMA to get a tax deduction. Appraisals before and after loss will be helpfull if audited.
Determine cost or other basis of property before the disaster
less fair market value after the disaster
less amount reimbursed by insurance or other reimbursements
less $100
less 10% of your income
net Casualty Loss
or the second method is the actual cost of repairing the property to original condition before the loss which can only be done when the property is actually repaired.
Thus small losses will get no tax deductions (such as insurance deductibles). If you disagree with insurance companies value, sorry, but the IRS will probably ue the same amounts as the insurance company.
You generally have 2 years to replace the property involved in the disaster for which you may receive funds from insurance companies or others. The replacement period ends 2 years after the close of the 1st tax year in which the gain was realized (4 years for personal residences and livestock). If property is not replaced, the reimbursement is generally taxable income.
Select Travel heading for list of required proof to deduct these business expenses
Date the expense took place
Place the expense was incurred
Business purpose of the expense
Business relationship (for entertainment and gifts)
Amount of the expenses
All lodging expenses require receipts - there is not a per diem rate
All entertainment or meals require a receipt for over $75 per meal
Promotional or closing gifts for customers are limited for tax deduction purposes to $25 per year per customer
Proof is to be timely documented. The last day of the year, the day before your tax appointment or after receiving an audit letter is not timely doccumented.
We've heard for many years, social security may not be around when I need it. Select Social Security to find list of what does my social security/self employment tax really get me.
Retrirement benefit for you as early as age 62
Retirment benefit based on my account for your spouse, if married for at least 10 years
Disability benefit for you at any age
Disability benefit for your spouse as early as age 50 if married for at least 10 years
income benefits for your children under age 18 if you become deceased, disabled or drawing retirement benefits
income benefits for your spouse if there is a child in your home under age 16 and you become deceased, disabled or drawing retirement benefits
Lifetime medical benefits for you at age 65 or earlier if disabled
Lifetime medical benefits for your spouse at age 65 or earlier if disabled
income for your dependent parents if you become deceased, disabled or retired
Death benefit for your spouse upon your death
Items to review before trying to get out of paying social security
Horrible things happen if you are determined to be operating a hobby. Losses are not deductible, no office in home deduction, no reduction in social security taxes, sales are added to income, expenses are deducted as an itemized deduction reduced by 2% of total income. The overall impact is paying taxes on additonal income rather than a tax write-off. Select Business or hobby for what the Internal Revenue looks at to determine if business or hobby.
Must illustracte a profit motive, such as making a profit 3 out of 5 years
And/or business organiztion factors such as a separate checking account, business name, separate set of accounting records, business license, separate phone and/or fax line, stationery, business cards, advertising or marketing, existence of a business plan and growth of asset values.
Review the time and effort extended by the taxpayer thru regular time spent each day or week on this business activity, new ideas, plans or concepts to make a profit, regular meetings with customers, reasonable profit-oriented efforts similar to successful competitors, or losses due to circumstances beyound the taxpayer's control.
Other factors such as history of profit-making activiities in other ventures, reasonable expertise or knowledge, and dependency on the activity for income.
Select Depreciation Schedule for a list of various equipment and properties with the current length they are depreciated. This is after applicable Bonus or first year depreciaiton.
Select standard mileage rate for a list of standard mileage rates for the last 6 years. For 2012 the business reate remains at $.555 per mile but the medical rate decreases to $.23 and charitable to $.14.
Select Charitable Contributions to find a list of normal Charitable Contributions that are deductible and those that are not. Remember donations of over $250 at one time or in one day requires a receipt to reflect the charity's name, amount and date and must be dated before the due date or actual filing date of the tax return. A cancelled check is not adequate. ALL deductilbe contribtuions must be substantiated with a receipt.
The are some tricky rules about who can claim the College Tuition and related expenses based on who is eligible to claim the student and who actually pays for the tuition. In some cases the tuition may not be deductible by anyone.
Several free online calculators are available to help you weigh option of whether it is better to purchase or rent a home.
The Internal Revenue Service is looking toward automated solutions to cover the recent workforce reductions implemented by the Trump Administration, Department of the Treasury Secretary Bessent told a House Appropriations subcommittee.
The Internal Revenue Service is looking toward automated solutions to cover the recent workforce reductions implemented by the Trump Administration, Department of the Treasury Secretary Bessent told a House Appropriations subcommittee.
During a May 6, 2025, oversight hearing of the House Appropriations Financial Services and General Government Subcommittee, Bessent framed the current employment level at the IRS as “bloated” and is using the workforce reduction as a means to partially justify the smaller budget the agency is looking for.
“We are just taking the IRS back to where it was before the IRA [Inflation Reduction Act] bill substantially bloated the personnel and the infrastructure,” he testified before the committee, adding that “a large number of employees” took the option for early retirement.
When pressed about how this could impact revenue collection activities, Bessent noted that the agency will be looking to use AI to help automate the process and maintain collection activities.
“I believe, through smarter IT, through this AI boom, that we can use that to enhance collections,” he said. “And I would expect that collections would continue to be very robust as they were this year.”
He also suggested that those hired from the supplemental funding from the IRA to enhance enforcement has not been effective as he pushed for more reliance on AI and other information technology resources.
There “is nothing that shows historically that by bringing in unseasoned collections agents … results in more collections or high-end collections,” Bessent said. “It would be like sending in a junior high school student to try to a college-level class.”
Another area he highlighted where automation will cover workforce reductions is in the processing of paper returns and other correspondence.
“Last year, the IRS spent approximately $450 million on paper processing, with nearly 6,500 full-time staff dedicated to the task,” he said. “Through policy changes and automation, Treasury aims to reduce this expense to under $20 million by the end of President Trump’s second term.”
Bessent’s testimony before the committee comes in the wake of a May 2, 2025, report from the Treasury Inspector General for Tax Administration that highlighted an 11-percent reduction in the IRS workforce as of February 2025. Of those who were separated from federal employment, 31 percent of revenue agents were separated, while 5 percent of information technology management are no longer with the agency.
When questioned about what the IRS will do to ensure an equitable distribution of enforcement action, Bessent stated that the agency is “reviewing the process of who is audited at the IRS. There’s a great deal of politicization of that, so we are trying to stop that, and we are also going to look at distribution of who is audited and why they are audited.”
Bessent also reiterated during the hearing his support of making the expiring provisions of the Tax Cuts and Jobs Act permanent.
By Gregory Twachtman, Washington News Editor
A taxpayer's passport may be denied or revoked for seriously deliquent tax debt only if the taxpayer's tax liability is legally enforceable. In a decision of first impression, the Tax Court held that its scope of review of the existence of seriously delinquent tax debt is de novo and the court may hear new evidence at trial in addition to the evidence in the IRS's administrative record.
A taxpayer's passport may be denied or revoked for seriously deliquent tax debt only if the taxpayer's tax liability is legally enforceable. In a decision of first impression, the Tax Court held that its scope of review of the existence of seriously delinquent tax debt is de novo and the court may hear new evidence at trial in addition to the evidence in the IRS's administrative record.
The IRS certified the taxpayer's tax liabilities as "seriously delinquent" in 2022. For a tax liability to be considered seriously delinquent, it must be legally enforceable under Code Sec. 7345(b).
The taxpayer's tax liabilities related to tax years 2005 through 2008 and were assessed between 2007 and 2010. The standard collection period for tax liabilities is ten years after assessment, meaning that the taxpayer's liabilities were uncollectible before 2022, unless an exception to the statute of limitations applied. The IRS asserted that the taxpayer's tax liabilities were reduced to judgment in a district court case in 2014, extending the collections period for 20 years from the date of the district court default judgment. The taxpayer maintained that he was never served in the district court case and the judgment in that suit was void.
The Tax Court held that its review of the IRS's certification of the taxpayer's tax debt is de novo, allowing for new evidence beyond the administrative record. A genuine issue of material fact existed whether the taxpayer was served in the district court suit. If not, his tax debts were not legally enforceable as of the 2022 certification, and the Tax Court would find the IRS's certification erroneous. The Tax Court therefore denied the IRS's motion for summary judgment and ordered a trial.
A. Garcia Jr., 164 TC No. 8, Dec. 62,658
The IRS has reminded taxpayers that disaster preparation season is kicking off soon with National Wildfire Awareness Month in May and National Hurricane Preparedness Week between May 4 and 10. Disasters impact individuals and businesses, making year-round preparation crucial.
The IRS has reminded taxpayers that disaster preparation season is kicking off soon with National Wildfire Awareness Month in May and National Hurricane Preparedness Week between May 4 and 10. Disasters impact individuals and businesses, making year-round preparation crucial. In 2025, FEMA declared 12 major disasters across nine states due to storms, floods, and wildfires. Following are tips from the IRS to taxpayers to help ensure record protection:
- Store original documents like tax returns and birth certificates in a waterproof container;
- keep copies in a separate location or with someone trustworthy. Use flash drives for portable digital backups; and
- use a phone or other devices to record valuable items through photos or videos. This aids insurance or tax claims. IRS Publications 584 and 584-B help list personal or business property.
Further, reconstructing records after a disaster may be necessary for tax purposes, insurance or federal aid. Employers should ensure payroll providers have fiduciary bonds to protect against defaults, as disasters can affect timely federal tax deposits.
IR-2025-55
A decedent's estate was not allowed to deduct payments to his stepchildren as claims against the estate.
A decedent's estate was not allowed to deduct payments to his stepchildren as claims against the estate.
A prenuptial agreement between the decedent and his surviving spouse provided for, among other things, $3 million paid to the spouse's adult children in exchange for the spouse relinquishing other rights. Because the decedent did not amend his will to include the terms provided for in the agreement, the stepchildren sued the estate for payment. The tax court concluded that the payments to the stepchildren were not deductible claims against the estate because they were not "contracted bona fide" or "for an adequate and full consideration in money or money's worth" (R. Spizzirri Est., Dec. 62,171(M), TC Memo 2023-25).
The bona fide requirement prohibits the deduction of transfers that are testamentary in nature. The stepchildren were lineal descendants of the decedent's spouse and were considered family members. The payments were not contracted bona fide because the agreement did not occur in the ordinary course of business and was not free from donative intent. The decedent agreed to the payments to reduce the risk of a costly divorce. In addition, the decedent regularly gave money to at least one of his stepchildren during his life, which indicated his donative intent. The payments were related to the spouse's expectation of inheritance because they were contracted in exchange for her giving up her rights as a surviving spouse. As a results, the payments were not contracted bona fide under Reg. §20.2053-1(b)(2)(ii) and were not deductible as claims against the estate.
R.D. Spizzirri Est., CA-11
The IRS issued interim final regulations on user fees for the issuance of IRS Letter 627, also referred to as an estate tax closing letter. The text of the interim final regulations also serves as the text of proposed regulations.These regulations reduce the amount of the user fee imposed to $56.
The IRS issued interim final regulations on user fees for the issuance of IRS Letter 627, also referred to as an estate tax closing letter. The text of the interim final regulations also serves as the text of proposed regulations.These regulations reduce the amount of the user fee imposed to $56.
Background
In 2021, the Treasury and Service established a $67 user fee for issuing said estate tax closing letter. This figure was based on a 2019 cost model.
In 2023, the IRS conducted a biennial review on the same issue and determined the cost to be $56. The IRS calculates the overhead rate annually based on cost elements underlying the statement of net cost included in the IRS Annual Financial Statements, which are audited by the Government Accountability Office.
Current Rate
For this fee review, the fiscal year (FY) 2023 overhead rate, based on FY 2022 costs, 62.50 percent was used. The IRS determined that processing requests for estate tax closing letters required 9,250 staff hours annually. The average salary and benefits for both IR paybands conducting quality assurance reviews was multiplied by that IR payband’s percentage of processing time to arrive at the $95,460 total cost per FTE.
The Service stated that the $56 fee was not substantial enough to have a significant economic impact on any entities. This guidance does not include any federal mandate that may result in expenditures by state, local, or tribal governments, or by the private sector in excess of that threshold.
T.D. 10031
NPRM REG-107459-24
The Tax Court appropriately dismissed an individual's challenge to his seriously delinquent tax debt certification. The taxpayer argued that his passport was restricted because of that certification. However, the certification had been reversed months before the taxpayer filed this petition. Further, the State Department had not taken any action on the basis of the certification before the taxpayer filed his petition.
The Tax Court appropriately dismissed an individual's challenge to his seriously delinquent tax debt certification. The taxpayer argued that his passport was restricted because of that certification. However, the certification had been reversed months before the taxpayer filed this petition. Further, the State Department had not taken any action on the basis of the certification before the taxpayer filed his petition.
Additionally, the Tax Court correctly dismissed the taxpayer’s challenge to the notices of deficiency as untimely. The taxpayer filed his petition after the 90-day limitation under Code Sec. 6213(a) had passed. Finally, the taxpayer was liable for penalty under Code Sec. 6673(a)(1). The Tax Court did not abuse its discretion in concluding that the taxpayer presented classic tax protester rhetoric and submitted frivolous filings primarily for purposes of delay.
Affirming, per curiam, an unreported Tax Court opinion.
Z.H. Shaikh, CA-3
