June 2017 Tax & Business Alert

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IN DOWN YEARS, NOL RULES CAN OFFER TAX RELIEF

A net operating loss (NOL) occurs when a business’s operating expenses and other deductions for a particular year exceed its income. Companies (or owners) may be able to snatch tax relief from this revenue defeat. This article describes the NOL rules and some strategies for navigating them. A sidebar looks at how NOLs work in relation to the alternative minimum tax.

 

ASKING THE RIGHT QUESTIONS ABOUT LONG-TERM CARE INSURANCE

Unfortunately, many people require long-term care at some point in their lives. To hedge against this considerable financial risk, insurers offer long-term care coverage. This article asks a couple of important questions about these policies, including how to determine whether you really need one and when to buy.

 

RENTING OUT YOUR VACATION HOME? ANTICIPATE THE TAX IMPACT

When buying a vacation home, the primary objective is usually to provide a place for many years of happy memories. But some might also view the property as an income-producing investment and choose to rent it out when not using it. This article examines how the IRS treats income and expenses associated with a vacation home.

 

THOUGHTS AND MUSINGS ON FAMILY BUDGETING

Simplicity is the key to a successful family budget. But every budget needs to cover all necessary items. This brief article provides food for thought on what to include in a family budget.

IRS summons for Coinbase records challenged

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Three Republicans on U.S. congressional tax-writing committees have written to the IRS commissioner about the IRS’s issuance of a John Doe summons to Coinbase Inc. for records on an estimated 500,000 active U.S. customers who used digital currency from 2013 through 2015. They said the IRS didn’t provide a “reasonable basis” for the belief inherent in the summons that the individuals failed to comply with tax laws, and the demand will produce “millions of pages” of records with personally identifiable information.

The IRS should help taxpayers understand the law

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A national taxpayer advocate recently testified before the Ways and Means Oversight Subcommittee on proposals to reform IRS operations in the House Republican tax reform blueprint. One suggestion: to focus not only on the percentage of calls that the IRS answers but also on “the range of services we want the tax administrator to provide.” The advocate said the IRS “today answers only ‘basic’ tax-law questions during the filing season and doesn’t answer tax-law questions during the other 8½ months of the year.”

Timely tax filing is crucial

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If a tax refund claim is denied, the taxpayer may file a refund lawsuit, within two years of the date the IRS mails the disallowance notice. In one case, a corporation received a refund that should have included (but didn’t) substantial interest due to the lateness of the refund. The corporation then filed a refund suit to recover the interest, but not within the two-year limit. The U.S. District Court rejected the claim, stating that, outside of the two-year limit, the court lacked jurisdiction.