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New IRS Online Tool to Check Tax-Exempt Organization Status

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The IRS website now offers a search tool that allows users to search for tax exempt organizations and check information about their federal tax status and filings. The new tool combines three former search sites into one, making it a quick and efficient way to search for organizations that:

  • Are eligible to receive tax-deductible charitable contributions
  • Have had their tax-exempt status automatically revoked because they have not filed Form 990 series returns or notices annually as required for three consecutive years
  • Have filed a Form 990-N annual electronic notice

The Exempt Organizations Select Check webpage can be accessed at Tax-Exempt Organization Status

Form 8938: Statement of Specified Foreign Assets

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The IRS has added Form 8938 to the individual 1040 tax return, taking another step to collect tax on unreported interest on overseas accounts. In addition to the risk of a third party disclosing the taxpayer’s foreign accounts to the IRS, this form now puts an affirmative duty on the taxpayer to disclose his foreign accounts. The sanctions for not completing and attaching the form (when required) include numerous severe civil penalties and potential prosecution followed by a term in federal prison. If you fail to file Form 8938 or fail to report a specified foreign financial asset, the statute of limitations for the tax year may remain open for all or part of your income tax return (Form 1040) until three years after the date you filed Form 8938. [Read more…] about Form 8938: Statement of Specified Foreign Assets

Three Common IRS Audit Red Flags You Can Avoid

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No one likes to get audited. It probably ranks somewhere between a root canal and having your e-mail account hacked on the misery scale.  While only about 1% of all individual tax returns are selected, certain factors can bring your return under the IRS radar. Some may be unavoidable, such as the nature of your business, but here are a few red flags you can avoid: [Read more…] about Three Common IRS Audit Red Flags You Can Avoid

New In 2011: IRS Adds 1099 Questions

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If your business paid $600 or more in 2011 to a landlord, accountant, lawyer or any other entity that requires a Form 1099 , you should be aware of an important change in the 2011 individual and corporate business tax returns. The IRS has added two questions to the business income tax returns (both to the Schedule C on the 1040 and the Forms 1120 and 1065): [Read more…] about New In 2011: IRS Adds 1099 Questions

Mortgage Interest Deduction: It’s All About Equitable Ownership

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The harsh economic environment, and stricter lending policies, have led many to fail to qualify for traditional lending. A popular solution has been to tap into the creditworthiness of parents or other family members, with the understanding that the occupant of the home will be responsible for the monthly mortgage payment. The question that arises from this arrangement is whether the mortgage interest expense can be deducted by the occupant of the home, even though he is not legally responsible for paying the mortgage. [Read more…] about Mortgage Interest Deduction: It’s All About Equitable Ownership

Spouse Has Tax Problems? IRS Lets You Have Your Cake and Eat it Too

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Normally, there are several reasons for a couple to file as married joint. One significant advantage is having lower tax brackets than those filing separate. For example, if you file jointly, you will receive a $10,000 refund. For simplicity’s sake, let’s say each spouse earned 50% of the total income. Filing separately will only get you $3,000 each. Sounds like filing joint is a no brainer right? [Read more…] about Spouse Has Tax Problems? IRS Lets You Have Your Cake and Eat it Too