Articles Posted in Tax Law Problems

Congress passed H.R. 3151, a bipartisan bill known as the Taxpayer First Act (TFA), in June 2019. The president signed it into law on July 1. Title I of the new law, entitled “Putting Taxpayers First,” improves procedures for assisting taxpayers and handling appeals. Title II, entitled “21st Century IRS,” improves identity theft protections and directs the agency to make technological upgrades. This bill replaced an earlier version, H.R. 1957, which had been introduced in March. A series of media reports in April led to criticism of several provisions in the first bill. Those provisions were removed in the reintroduced bill.

Office of Appeals

Section 1001 establishes the Internal Revenue Service Independent Office of Appeals (IOA) to “resolve Federal tax controversies without litigation.” The TFA identifies three main goals for the office:
1. Fairness towards both taxpayers and the IRS;
2. Consistent enforcement of tax law, along with “voluntary compliance” by taxpayers; and
3. “[P]ublic confidence in the [IRS’s] integrity and efficiency.”

Taxpayers who receive a notice of deficiency can request a referral to the IOA. If the IRS denies the request, the TFA requires it to provide written notice to the taxpayer explaining the reasons for the decision and explaining the procedure for filing a protest.
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Federal tax law is complicated, to put it lightly. Taxpayers routinely find themselves having difficulty understanding various provisions of tax laws and regulations. Congress has tried to help by creating the Taxpayer Bill of Rights (TABOR), which identifies ten key rights, and which serves as a directive to the Internal Revenue Service (IRS) Commissioner and all IRS employees.

The Taxpayer Bill of Rights

1. Information

Taxpayers have a right to know what tax laws and regulations affect them. To the greatest extent possible, the IRS has a duty to explain the Internal Revenue Code (IRC) and IRS regulations. It has met this duty through a truly impressive volume of publications, including instructions for every tax form.

2. Quality Service

This involves the right to prompt, polite, and helpful interactions with the IRS.
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Taxes are a huge problem for those who are working in the marijuana industry. That’s because high tax bills frequently hit cannabis businesses. Often, marijuana excise taxes are being assessed along with the regular business taxes. Although some business owners of marijuana are fighting back, they usually lose.

One of the marijuana tax law problems is the IR Code Section 280E. It is a part of a tax rule that prevents businesses in the industry from writing off those standard business deductions. As a result, it created a high tax rate.

Cannabis is a controlled substance. Although the marijuana tax law denies any deductions, it allows cannabis business to continue to deduct a portion of their expenses which are covered by the Cost of Goods Sold (COGS). To maximize their deductions, marijuana business owners allocate their expenditures to COGS.

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