Volume 6, Number 1 Tax Tidbits Avoid IRS Problems And Save Taxes With These Simple Resolutions Resolutions should be manageable and concrete. Here are six that actually can have an impact on how likely the IRS is to bother you. Any one of them could calm your nerves and fatten your wallet in 2016: 1. I Will Pay Attention to Each Form 1099. It’s almost time for these little tax reports to show up in your mail, so get ready. Each one bears your Social Security Number and will be matched to your tax return. Pay attention to them—the IRS sure does. 2. I Will Consider Taxes Before Signing Agreements. Leases, purchase agreements, settlement agreements, employment agreements, independent contractor agreements, and more. You name it, they have tax consequences. They needn’t be mega-transactions for the tax dollars to be significant. Consider taxes before signing, since that’s when you can still make changes. 3. I Will Keep Good Records. Few people like keeping tax records, and playing catch up is the worst. For personal records or business, get organized. Keep a copy of each check, each payment, signed contract, lease, invoice and receipt, and the like. Good records make tax compliance and tax controversies vastly easier. What’s more, if you have good records, the chances are that you are less likely to need to haul them out. If you don’t have records, the IRS seems more likely to ask for them. Call it karma. 4. I’ll Deal With Notices Promptly. Many tax lawyers and accountants make more money because clients tend not to deal with glitches and even major problems promptly. Often, tax professionals could achieve a better result if they were brought in earlier. For example, if you fail to respond to an IRS 90-day letter, it’s no longer possible to go to Tax Court. Instead, you’ll need to file a refund claim and then go to District Court or Claims Court. So if you get a notice and the IRS wants an answer within 30 days, hire someone right away, or deal with it yourself—within 30 days. 5. I Won’t Fight Over Pennies. We all like to be right, but consider whether it makes sense to argue over small amounts with the IRS. Everyone has a different threshold for what amount is inconsequential. Don’t invest time when inconsequential money is at stake. In some cases you can risk other issues arising. Complain about $67 and you could end up owing thousands. 6. I Will Run Numbers. Just because you can claim a deduction doesn’t always mean you should. There may be no way to know if you’re getting a tax benefit from a deduction without running numbers, whether you do your own return or have a preparer. Running multiple scenarios is especially helpful with AMT. Any of these six resolutions is likely to help your tax posture. And, if you can keep all six, your 2016 might be your most tax efficient year ever.	Click on any headline below to read more: Top Stories of January 2016 TAX RETURNS Why You Should Never Ask, Where's My IRS Form 1099? IRS Forms 1099 match your Social Security Number to payments, and the IRS gets a copy of every one. But don't ask for one if you do not receive it.  TAX EVASION To IRS, 'Willful' Means Penalties Or Jail Simple tax mistake or willful misconduct? Criminal tax evasion or civil tax fraud cases can turn on subtle differences, so be careful. Man Releases Live Chickens At Tax Collector's Office In Lively Protest A man's release of a flock of live chickens showed an Oregon tax collector the man was unhappy, but what tax protests are subject to extra penalties?  Supermodel Bar Refaeli's Alleged Tax Evasion On Gifts: Must You Report Yours? If a supermodel must report 'gifts' as income, how about the rest of us? What gifts are tax-free and what must be counted as income?  Michael 'The Situation' Sorrentino's Accountant Admits Tax Fraud Conspiracy The looming tax evasion trial of Mike 'The Situation' Sorrentino just got more complicated, with his accountant pleading guilty.  FOREIGN ACCOUNTS As Offshore Banks Agree To U.S. Tax Evasion Deal, Account Holders Must Deal With IRS Banks everywhere are handing over account details to the IRS. With FATCA and compliance efforts at an all-time high, account holders are scrambling.  Foreign Banks Pay To Avoid Tax Evasion Charges As More Americans Disclose Offshore Accounts With FATCA and the U.S. inroads into foreign banks everywhere, global bank transparency is the new normal. IRS warns to disclose before it is too late.  PASSPORTS AND Debt Collectors 2016 Brings IRS Power Over Passports, Use Of Private Debt Collectors IRS has more power this year, over whether you can travel and over assigning your IRS debt to collection agencies.  Tax Double Whammy: IRS Can Revoke Passports And Uses Collection Agencies With private debt collectors rounding up tax debts and the IRS having power of your passport and travel, 2016 could be a perfect storm for tax delinquents.  IRS CONTROVERSY More Calls To Impeach IRS Chief Over Targeting, Bonuses, Obstruction As another tax season looms, some Republicans still want IRS Chief John Koskinen out.  Wesley Snipes Sues IRS Over Abusive $17.5M Tax Bill, False Promise Of 'Fresh Start' Wesley Snipes is still fighting with the IRS over a $24 million tax bill it sent just as he was coming out of prison.  NONPROFIT ORGANIZATION TAXES House Oversight Probes Hillary Speech Fees To Clinton Foundation The House Oversight Committee still isn't satisfied with Clinton speech fee disclosures. Millions of dollars is no rounding error, and the "whose fee is it" shell-game doesn't impress the Committee Chair.  TAX LEGISLATION Obama Executive Action? Tax Hikes Could Be Next President Obama has stretched executive authority with immigration and gun law changes. And he is "very interested" in executive action on taxes too.  5 Things To Know About Year-End's Massive Tax Bill Businesses got buckets of tax benefits from Congress's year-end PATH Act. Here are five that every business person should know.  New Law Says Money For Wrongful Convictions Is Tax Free A wrongful conviction is tragic, and exoneration is a glorious event. The tax law finally will allow exonerees to keep their monetary awards when compensated for years wrongfully behind bars.  GAMBLING TAXES Winner Of $1.3 Billion Powerball May Face Suits By Friends, Co-Workers, Family Winning the lottery can mean claims by friends, family, and co-workers, so be careful what promises you make and to whom. The tax rules can make the situation even worse.
@ 2016 Wood LLP.  Visit our website www.WoodLLP.com. 333 SACRAMENTO STREET   |   SAN FRANCISCO, CA 94111   |   TEL 415-834-1800   |   FAX 415-834-1888 If you no longer wish to receive the Wood LLP Tax Alert, please reply to this email or click here. If you have received this communication by mistake, please return it (and any attachments) by replying to the sender and deleting it in its entirety from your computer. It may be protected under attorney-client and/or work product privileges, and may be used only by the intended recipient. Please consider the environment.