How the Section 121 Principal Residence Gain Exclusion Works Section 121 of the Internal Revenue Code can allow qualifying taxpayers to exclude a certain amount of gain from the sale of a principal residence, making the exclusion an important consideration in income tax planning related to a home sale. When the IRS questions whether the exclusion a...
Challenging a Property's Appraised Value in Texas A property's appraised value can directly affect the amount used to determine property tax obligations. When a property owner disputes that valuation, Texas law provides procedures for challenging the appraisal. Depending on the stage of the dispute, a property tax matter may proceed beyond the admi...
What Happens During a Texas Sales and Use Tax Audit? A Texas sales and use tax audit may involve a review of a taxpayer's records and transactions to determine whether the correct amount of tax was reported and paid. Depending on the issues under review, the audit can create potential additional tax exposure for a business. When disputed issues ari...
When the IRS Does Not Properly Credit Federal Tax Withholding Federal income tax withholding reported on Form W-2 generally represents amounts withheld from an employee's wages and applied toward the employee's federal income tax obligations. When those amounts are not properly credited to a taxpayer's account, the IRS may show an outstanding balan...
When an IRS Error Leads to an Incorrect Gift Tax Assessment An IRS error related to a gift tax return can result in a taxpayer's account reflecting a liability that should not be due. Even when the source of the assessment is identified, the IRS may still need to make the appropriate account adjustment before the liability is removed. Challenging a...
Challenging a Texas Sales Tax Assessment A taxpayer who disagrees with a Texas Comptroller tax assessment may have options to challenge the determination through the administrative process. A redetermination proceeding allows a taxpayer to dispute an assessment before it becomes final. Addressing Business and Personal Tax Liability Our client came ...
How Innocent Spouse Relief Can Affect Tax Liability When spouses file a joint federal tax return, both are generally responsible for the tax liability associated with that return. Federal tax law provides certain forms of relief that may limit a qualifying taxpayer's responsibility for particular joint tax liabilities. Eligibility depends on the ty...
Correcting a Tax Liability Caused by a Return Error An error on a federal tax return can result in an IRS account reflecting a liability that does not accurately reflect what the taxpayer owes. Depending on the type of error, an amended return may be used to correct information reported on the original return. Processing the amended return is an im...
IRS Ends Automatic Penalties for Late Form 3520 Filings The IRS recently implemented an important change affecting taxpayers required to report foreign gifts, inheritances, and certain foreign trust transactions using Form 3520. Previously, when taxpayers filed Form 3520 late, the IRS automatically assessed penalties even when a reasonable cause ex...
What Is an IRS National Research Program Audit and How It Works When the IRS National Research Program, or NRP, is a type of audit designed to collect data about taxpayer compliance. Unlike standard audits that are triggered by specific issues, NRP audits are often randomly selected and used to improve IRS enforcement models. Despite their research...
How Sale-Leaseback Transactions Work in Commercial Real Estate Sale-leaseback transactions are a common structure in commercial real estate where a property owner sells real estate to an investor and leases it back for continued business operations. This structure allows operating companies to unlock capital tied up in real estate while maintaining...
How IRS Bank Levies Impact Nonprofits and Religious Organizations When federal tax liabilities remain unpaid, the IRS may take enforcement action to collect the balance. One of the most disruptive tools is a bank levy, which allows the IRS to seize funds directly from a taxpayer’s bank account. For nonprofit and religious organizations, a bank levy...
How IRS Wage Levies Work and Impact Taxpayers When federal income tax liabilities remain unpaid, the IRS may take enforcement action to collect the outstanding balance. One of the most aggressive collection tools is a wage levy, which allows the IRS to garnish wages directly from a taxpayer’s employer. An IRS wage levy can result in a significant p...
How IRS Bank Levies Affect Businesses With Payroll Tax Debt When federal tax liabilities remain unpaid, the IRS may take enforcement action to collect the outstanding balance. One of the most severe collection tools is a bank levy, which allows the IRS to seize funds directly from a business bank account. For businesses, a bank levy can immediately...
IRS Penalties Can Significantly Increase Tax Liability When taxpayers fail to file tax returns or pay taxes owed timely, the IRS may assess substantial penalties and interest in addition to the underlying tax liability. Common assessments include late filing penalties, late payment penalties, and accrued interest. In certain situations, taxpayers w...
Offer in Compromise Used to Resolve Significant IRS Tax Debt Taxpayers facing substantial IRS liabilities may qualify for an Offer in Compromise when paying the full amount would create financial hardship. Our client owed approximately $305,000 in federal tax liabilities and sought a resolution that would avoid prolonged IRS collection activity. Af...
Fraudulent Tax Filing Results in IRS Liability Identity theft and fraudulent tax return filings can create serious IRS issues for taxpayers when returns are filed using stolen Social Security numbers. In this case, a fraudulent tax return was filed using our client’s Social Security number to claim a large refundable credit. As a result, the IRS as...
Texas Sales Tax Audit Leads to Significant Penalty Assessment Texas sales tax audits conducted by the Texas Comptroller can result in substantial additional tax assessments, penalties, and interest for businesses. When disputes arise over audit findings, taxpayers may challenge the assessment through a Redetermination Hearing to seek adjustments an...
How Sale-Leaseback Transactions Work in Commercial Real Estate Sale-leaseback transactions are a common structure in commercial real estate where a business sells its property to an investor and then leases it back to continue operating at the same location. For investors, these transactions can provide stable rental income supported by an operatin...
Structuring Business Acquisitions for Tax Efficiency and Multistate Operations Business acquisitions often involve complex legal and tax considerations, especially when the target company operates across multiple states. Buyers must evaluate transaction structure, financing, tax consequences, and regulatory compliance to ensure the deal aligns with...
