IRS providing tax relief for victims of severe Indiana storms

The IRS announced on April 18, 2023 that March 31/April 1 Storm victims in parts of Indiana now have until July 31, 2023 to file various federal individual and business tax returns and make tax payments.

Other Areas Having Extended Deadlines:

The IRS announced on April 3, 2023 that March 31 Storm victims in parts of Arkansas now have until July 31, 2023 to file various federal individual and business tax returns and make tax payments.

The IRS announced on January 10, 2023 that California storm victims have until May 15, 2023 to file various federal individual and business tax returns and make tax payments. Subsequently on January 13, 2023 the California Franchise Tax Board (“FTB”) announced that California storm victims also have until May 15, 2023 to file various California individual and business tax returns and make tax payments.  Then on February 24, 2023 the IRS announced that their extended deadline for eligible California storm victims would now be extended to October 16, 2023.

The IRS announced on January 19, 2023 that Storm victims in parts of Georgia and Alabama now have until May 15, 2023 to file various federal individual and business tax returns and make tax payments.

The IRS announced on March 24, 2023 that the December 23 to December 28, 2022 Storm victims in parts of New York now have until May 15, 2023 to file various federal individual and business tax returns and make tax payments.

The IRS announced on March 28, 2023 that March 24 and 25 Storm victims in parts of Mississippi now have until July 31, 2023 to file various federal individual and business tax returns and make tax payments.

The IRS announced on April 10, 2023 that March 31 Storm victims in parts of Tennessee now have until July 31, 2023 to file various federal individual and business tax returns and make tax payments.

IRS Tax Relief Details

The IRS is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA), as qualifying for individual assistance.

For California – Currently, relief is available to affected taxpayers who live or have a business anywhere in Colusa, El Dorado, Glenn, Humboldt, Los Angeles, Marin, Mariposa, Mendocino, Merced, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Bernardino, San Diego, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tehama, Ventura, Yolo, and Yuba counties.

For Georgia – Currently, relief is available to affected taxpayers who live or have a business anywhere in Butts, Henry, Jasper, Meriwether, Newton, Spalding and Troup counties in Georgia.

For Alabama – Currently, relief is available to affected taxpayers who live or have a business anywhere in Autauga and Dallas counties in Alabama.

For New York – Currently, relief is available to affected taxpayers who live or have a business anywhere in Erie, Genesee, Niagara, St. Lawrence and Suffolk counties in New York.

For Mississippi – Currently, relief is available to affected taxpayers who live or have a business anywhere in Carroll, Humphreys, Monroe and Sharkey counties in Mississippi.

For Arkansas – Currently, relief is available to affected taxpayers who live or have a business anywhere in Cross, Lonoke and Pulaski counties in Arkansas.

For Tennessee – Currently, relief is available to affected taxpayers who live or have a business anywhere in Cannon, Hardeman, Hardin, Haywood, Lewis, Macon, McNairy, Rutherford, Tipton and Wayne counties in Tennessee.

For Indiana – Currently, relief is available to affected taxpayers who live or have a business anywhere in Allen, Benton, Clinton, Grant, Howard, Johnson, Lake, Monroe, Morgan, Owen, Sullivan and White counties in Indiana.

The current list of eligible localities is always available on the disaster relief page on IRS.gov.  The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area.

The additional relief postpones until May 15, 2023 (Georgia, Alabama and New York) or October 16, 2023 (California) or July 31, 2023 (Mississippi, Arkansas, Tennessee and Indiana), various tax filing and payment deadlines, including those for most calendar-year 2022 individual and business returns. This includes: individual income tax returns, originally due on April 18, 2023 (May 15, 2023 per the previous IRS announcement); various business returns, normally due on March 15^th and April 18^th of 2023; and returns of tax-exempt organizations, normally due on May 15, 2023.

Among other things, this means that eligible taxpayers will also have until May 15, 2023 (Georgia, Alabama and New York) or October 16, 2023 (California) or July 31, 2023 (Mississippi, Arkansas, Tennessee and Indiana) to make 2022 contributions to their IRAs and health savings accounts.

In addition, farmers who choose to forgo making estimated tax payments and normally file their returns by March 1, 2023 (May 15, 2023 per the previous IRS announcement) will now have until May 15, 2023 (Georgia, Alabama and New York) or October 16, 2023 (California) or July 31, 2023 (Mississippi, Arkansas, Tennessee and Indiana), to file their 2022 return and pay any tax due.

The May 15, 2023 (Georgia, Alabama and New York) or October 16, 2023 (California) or July 31, 2023 (Mississippi, Arkansas, Tennessee and Indiana) deadline also applies to the estimated tax payment for the fourth quarter of 2022, originally due on January 17, 2023. This means that taxpayers can skip making this payment and instead include it with the 2022 return they file, on or before May 15, 2023 (Georgia, Alabama and New York) or October 16, 2023 (California).

The May 15, 2023 (Georgia, Alabama and New York) or October 16, 2023 (California) or July 31, 2023 (Mississippi, Arkansas, Tennessee and Indiana) deadline also applies to 2023 estimated tax payments, normally due on April 18^th, June 15^th and September 15^th of 2023. It also applies to the quarterly payroll and excise tax returns normally due on January 31^st, April 30^th and July 31^st of 2023.

FTB Tax Relief Details

On March 10, 2023 the FTB announced that it too would follow IRS allowing taxpayers impacted by 2022-23 winter storms to have an extension to October 16, 2023 to file individual and business tax returns and make certain tax payments.  This includes:

• Individuals whose tax returns and payments are due on April 18, 2023.
• Quarterly estimated tax payments due January 17, 2023, March 15, 2023, April 18, 2023, June 15, 2023, and September 15, 2023.
• Business entities whose tax returns are normally due on March 15 and April 18.
• Pass-through entity (PTE) elective tax payments due on March 15, 2023 and June 15, 2023.

However, the postponement of time to file and pay does not apply to residents and businesses located in the following 7 counties: Imperial, Kern, Lassen, Modoc, Plumas, Shasta, and Sierra.

Residents and businesses located in the above 7 counties must file and pay by the normal established deadlines. This includes:

• Individuals whose tax returns and payments are due on April 18, 2023.
• Quarterly estimated tax payments due January 17, 2023, March 15, 2023, April 18, 2023, June 15, 2023, and September 15, 2023.
• Business entities whose tax returns are normally due on March 15 and April 18.
• PTE elective Tax payments due on March 15, 2023, and June 15, 2023.

Tax Planning Tip

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the current year (2022).

Be sure to write the FEMA declaration number on any return claiming a loss.  That number being: “FEMA-3591-DR” for California or “FEMA 4685-DR” for Georgia or “FEMA 4684-DR” for Alabama or “FEMA “4694-DR” for New York or “4697-DR” for Mississippi or “4698-DR” for Arkansas or “4701-DR” for Tennessee or “4704-DR” for Indiana.

When filing a California return claiming a loss, be sure to write the name of the disaster in blue or black ink at the top of your tax return to alert FTB.

Importance To Preserve Records

Keep in mind that the IRS has up to three years to select a tax return for audit. The FTB has up to four years to select a tax return for audit. In some cases this period is extended to six years. When a taxpayer is selected for audit, the taxpayer has the burden of proof to show that expenses claimed are properly deductible. Having the evidence handy and organized makes meeting this burden of proof much easier.

Essential Records to Have for a Tax Audit

If you are getting ready for a tax audit, one of the most important things to do is gather and organize your tax records and receipts. There’s a good chance that you have a large amount of documents and receipts in your possession. No matter how organized you are, it can be a daunting task to collect the right pieces and make sure that you have them organized and handy for the audit conference.

We have seen many tax audits that hinge on whether or not the taxpayer can provide proper documentation for their previous tax filings. A tax lawyer in Orange County or elsewhere can make sure that the documentation is complete and proper.  By submitting this to your tax attorney in advance of the audit, your tax attorney can review your documentation and determine if there are any gaps that need to be addressed before starting the dialogue with the IRS agent.

So what are the most essential tax records to have ahead of your audit? Here are a few must-have items:

• Any W-2 forms from the previous year. This can include documents from full-time and part-time work, large casino and lottery winnings and more.
• Form 1098 records from your bank or lender on mortgage interest paid from the previous year.
• Records of any miscellaneous money you earned and reported to the IRS including work done as an independent contractor or freelancer, interest from savings accounts and stock dividends.
• Written letters from charities confirming your monetary donations from the previous year.
• Receipts for business expenses you claimed.
• Mileage Logs for business use of vehicle.
• Entertainment and Travel Logs for business

Tips On Reconstructing Records

Reconstructing records after a disaster is important for several reasons including insurance reimbursement and taxes. Most importantly, records can help people prove their disaster-related losses. More accurately estimated losses can help people get more recovery assistance like loans or grants.

Whether it’s personal or business property that has been lost or destroyed, here are some steps that can help people reconstruct important records.

Tax records

Get free tax return transcripts immediately using the Get Transcript on IRS.gov or through the IRS2Go app.  Tax return transcripts show line-by-line the entries made on your Federal income tax returns.  The most three recent tax years are available.

Financial statements

People can gather past statements from their credit card company or bank. These records may be available online. People can also contact their bank to get paper copies of these statements.

Property records

• To get documents related to property, homeowners can contact the title company, escrow company or bank that handled the purchase of their home or other property.
• Taxpayers who made home improvements can get in touch with the contractors who did the work and ask for statements to verify the work and cost. They can also get written descriptions from friends and relatives who saw the house before and after any improvements.
• For inherited property, taxpayers can check court records for probate values. If a trust or estate existed, taxpayers can contact the attorney who handled the trust.
• When no other records are available, people should check the county assessor’s office for old records that might address the value of the property.
• Car owners can research the current fair-market value for most vehicles. Resources are available online and at most libraries. These include Kelley’s Blue Book, the National Automobile Dealers Association and Edmunds.

Develop And Implement Your Backup Plan

Do not wait for the next disaster to come for then it may be too late to retrieve your important records for a tax audit or for that matter any legal or business matter. And if you do get selected for audit and do not have all the records to support what was claimed on your tax returns, you should contact an experienced tax attorney who can argue the application of your facts and circumstances to pursue the least possible changes in an audit.

The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Orange County (Irvine), Los Angeles and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.  Also if you are involved in cannabis, check out what a cannabis tax attorney can do for you.  And if you are involved in cryptocurrency, check out what a bitcoin tax attorney can do for you.

New IRS Commissioner Unveils 2023 Strategic Operating Plan – Warning the IRS Is About to Go “Beast Mode”

Danny Werfel was sworn in as the 50^th IRS Commissioner on April 4, 2023. Given the $80 billion in new funding that the IRS is receiving under the Inflation Reduction Act, one of his first tasks is to produce the IRS’s strategic operating plan on how it will spend these funds.  Commissioner Werfel promised “real world improvements for every taxpayer, every tax professional, and every IRS employee.”

Democrats claim this “investment” of additional funding to the IRS will yield more than $200 billion in revenue.  They are looking to the IRS to come down hard on taxpayers with Senators Schumer and Manchin stating that it is time for the agency to go into “beast mode”.  The Inflation Reduction Act earmarks $45.6 billion for “enforcement,” including “litigation,” “criminal investigations,” “investigative technology,” “digital asset monitoring” and a new fleet of tax-collector cars.

Given Congress’ expectations, it should be no surprise that the Commissioner stated, “It makes sense to focus our initial Inflation Reduction Act implementation efforts exclusively on increasing our capacity to assess compliance of high-income and high-wealth individuals, complex partnerships and large corporations.”

The Joint Committee on Taxation, Congress’s official tax scorekeeper, says that “78% to 90% of the money raised from under-reported income would likely come from those making less than $200,000 a year. Only 4% to 9% would come from those making more than $500,000.”  So it makes sense that the main targets will by necessity be the middle- and upper-middle class because that’s where the government believes the money is.

It is reported that a particular audit target will be “pass throughs” including Subchapter S and LLC businesses that file under the individual tax code. With the proliferation of States legalizing cannabis, it would not be surprising for the IRS to increase audits for this industry too.  Democrats keeping their promise not to raise individual tax rates, have resorted to increasing audits as a way of increasing tax revenues.

2023 IRS Strategic Operating Plan

On April 6, 2023 the IRS unveiled its Strategic Operating Plan, an ambitious effort to transform the tax agency and dramatically improve service to taxpayers and the nation during the next decade.

The 150-page report to the Secretary of the Treasury outlines the agency’s historic plans to make fundamental changes following funding from last year’s Inflation Reduction Act.

The plan makes clear that the resources to be deployed over the short and long term will be used to:

• Rebuild and strengthen IRS customer service activities, putting an end to long wait times on the phone, adding capacity to the in-person taxpayer assistance centers around the country, and providing new online tools for those who want to engage with the IRS digitally.
• Add capacity to unpack the complex filings of high-income taxpayers, large corporations and complex partnerships, addressing a growing chasm between the number of experienced compliance personnel at the IRS who audit high-income, high-wealth tax filings for compliance (about 2,600 employees) and the roughly 30,000 individuals making more than $10 million a year, 60,000 large corporations and 300,000 large partnerships and S corps.
• Update various outdated systems in IRS core operations to help ensure the agency has the most modern and robust security in technology to protect taxpayer data.

The plan is organized around five objectives:

1. Dramatically improve services to help taxpayers meet their obligations and receive the tax incentives for which they are eligible.
2. Quickly resolve taxpayer issues when they arise.
3. Focus expanded enforcement on taxpayers with complex tax filings and high-dollar noncompliance to address the tax gap.
4. Deliver cutting-edge technology, data and analytics to operate more effectively.
5. Attract, retain and empower a highly skilled, diverse workforce and develop a culture that is better equipped to deliver results for taxpayers.

Each objective will be accomplished through specific initiatives outlined in the plan. The plan contains 42 initiatives designed to achieve IRS goals, each of which includes multiple key projects and milestones to measure progress. The plan covers more than 190 key projects and more than 200 specific milestones. The IRS will identify additional projects and milestones as work continues. The IRS also expects that the number of projects and milestones will grow significantly over time as the plan evolves to meet the needs of the nation and tax administration.

Importance To Preserve Records

Keep in mind that the IRS has up to three years to select a tax return for audit. For California taxpayers, the Franchise Tax Board has up to four years to select a California State Income Tax Return for audit. In some cases these 3 and 4 year periods are extended to six years. When a taxpayer is selected for audit, the taxpayer has the burden of proof to show that expenses claimed are properly deductible. Having the evidence handy and organized makes meeting this burden of proof much easier.

Essential Records to Have for a Tax Audit

If you are getting ready for a tax audit, one of the most important things to do is gather and organize your tax records and receipts. There’s a good chance that you have a large amount of documents and receipts in your possession. No matter how organized you are, it can be a daunting task to collect the right pieces and make sure that you have them organized and handy for the audit conference.

We have seen many tax audits that hinge on whether or not the taxpayer can provide proper documentation for their previous tax filings. A tax lawyer in Orange County or elsewhere can make sure that the documentation is complete and proper.  By submitting this to your tax attorney in advance of the audit, your tax attorney can review your documentation and determine if there are any gaps that need to be addressed before starting the dialogue with the IRS agent.

So what are the most essential tax records to have ahead of your audit? Here are a few must-have items:

• Any W-2 forms from the previous year. This can include documents from full-time and part-time work, large casino and lottery winnings and more.
• Form 1098 records from your bank or lender on mortgage interest paid from the previous year.
• Records of any miscellaneous money you earned and reported to the IRS including work done as an independent contractor or freelancer, interest from savings accounts and stock dividends.
• Written letters from charities confirming your monetary donations from the previous year.
• Receipts for business expenses you claimed.
• Mileage Logs for business use of vehicle.
• Entertainment and Travel Logs for business

Appealing Results Of An IRS Tax Audit

Now if your IRS tax audit is not resolved, the results may be challenged. After the Revenue Agent has concluded the tax examination, the agent will issue a copy of the examination report explaining the agent’s proposed changes along with notice of your appeals rights. Pay attention to the type of letter that is included as it will dictate the appeals process available to you.

The “30-day letter”

The “30-day letter” gives you the right to challenge the proposed adjustment in the IRS Office Of Appeals. To do this, you need to file a Tax Protest within 30 days of the date of the notice. The Appeals Office is the only level of appeal within the IRS and is separate from and independent of the IRS office taking the action you disagree with. Conferences with Appeals Office personnel are held in an informal manner by correspondence, by telephone, or at a personal conference.

The “Notice Of Deficiency”

If the IRS does not adopt your position, it will send a notice proposing a tax adjustment (known as a statutory notice of deficiency). The statutory notice of deficiency gives you the right to challenge the proposed adjustment in the United States Tax Court before paying it. To do this, you need to file a petition within 90 days of the date of the notice (150 days if the notice is addressed to you outside the United States). If you filed your petition on time, the court will eventually schedule your case for trial at the designation place of trial you set forth in your petition. Prior to trial you should have the opportunity to seek a settlement with IRS Area Counsel and in certain cases, such settlement negotiations could be delegated to the IRS Office Of Appeals. If there is still disagreement and the case does go to trial, you will have the opportunity to present your case before a Tax Court judge. The judge after hearing your case and reviewing the record and any post-trial briefs will render a decision in the form of an Opinion. It could take as much as two years after trial before an Opinion issued. If the Opinion is not appealed to a Circuit Court Of Appeals, then the proposed deficiency under the Opinion is final and your account will be sent to IRS Collections.

IRS Area Counsel are experienced trial attorneys working for the IRS whose job is to litigate cases in the U.S. Tax Court and look out for the best interests of the Federal government. So to level the playing field, it would be prudent for a taxpayer to hire qualified tax counsel as soon as possible to seek a mutually acceptable resolution without the need for trial, and if that does not happen, to already have the legal expertise in place to vigorously defend you at trial.

What Should You Do?

You know that at the Law Offices Of Jeffrey B. Kahn, P.C. we are always thinking of ways that our clients can save on taxes. If you are selected for an audit, stand up to the IRS by getting representation. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Orange County (Irvine), the San Francisco Bay Area (including San Jose and Walnut Creek) and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income. Also if you are involved in cannabis, check out what a cannabis tax attorney can do for you and if you are involved in crypto-currency, check out what a Bitcoin tax attorney can do for you.

IRS providing tax relief for victims of severe Mississippi storms

The IRS announced on March 28, 2023 that March 24 and 25 Storm victims in parts of Mississippi now have until July 31, 2023 to file various federal individual and business tax returns and make tax payments.

Other Areas Having Extended Deadlines:

The IRS announced on January 10, 2023 that California storm victims have until May 15, 2023 to file various federal individual and business tax returns and make tax payments. Subsequently on January 13, 2023 the California Franchise Tax Board (“FTB”) announced that California storm victims also have until May 15, 2023 to file various California individual and business tax returns and make tax payments.  Then on February 24, 2023 the IRS announced that their extended deadline for eligible California storm victims would now be extended to October 16, 2023.

The IRS announced on January 19, 2023 that Storm victims in parts of Georgia and Alabama now have until May 15, 2023 to file various federal individual and business tax returns and make tax payments.

The IRS announced on March 24, 2023 that the December 23 to December 28, 2022 Storm victims in parts of New York now have until May 15, 2023 to file various federal individual and business tax returns and make tax payments.

IRS Tax Relief Details

The IRS is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA), as qualifying for individual assistance.

For California – Currently, relief is available to affected taxpayers who live or have a business anywhere in Colusa, El Dorado, Glenn, Humboldt, Los Angeles, Marin, Mariposa, Mendocino, Merced, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Bernardino, San Diego, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tehama, Ventura, Yolo, and Yuba counties.

For Georgia – Currently, relief is available to affected taxpayers who live or have a business anywhere in Butts, Henry, Jasper, Meriwether, Newton, Spalding and Troup counties in Georgia.

For Alabama – Currently, relief is available to affected taxpayers who live or have a business anywhere in Autauga and Dallas counties in Alabama.

For New York – Currently, relief is available to affected taxpayers who live or have a business anywhere in Erie, Genesee, Niagara, St. Lawrence and Suffolk counties in New York.

For Mississippi – Currently, relief is available to affected taxpayers who live or have a business anywhere in Carroll, Humphreys, Monroe and Sharkey counties in Mississippi.

The current list of eligible localities is always available on the disaster relief page on IRS.gov.  The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area.

The additional relief postpones until May 15, 2023 (Georgia, Alabama and New York) or October 16, 2023 (California) or July 31, 2023 (Mississippi), various tax filing and payment deadlines, including those for most calendar-year 2022 individual and business returns. This includes: individual income tax returns, originally due on April 18, 2023 (May 15, 2023 per the previous IRS announcement); various business returns, normally due on March 15^th and April 18^th of 2023; and returns of tax-exempt organizations, normally due on May 15, 2023.

Among other things, this means that eligible taxpayers will also have until May 15, 2023 (Georgia, Alabama and New York) or October 16, 2023 (California) or July 31, 2023 (Mississippi) to make 2022 contributions to their IRAs and health savings accounts.

In addition, farmers who choose to forgo making estimated tax payments and normally file their returns by March 1, 2023 (May 15, 2023 per the previous IRS announcement) will now have until May 15, 2023 (Georgia, Alabama and New York) or October 16, 2023 (California) or July 31, 2023 (Mississippi), to file their 2022 return and pay any tax due.

The May 15, 2023 (Georgia, Alabama and New York) or October 16, 2023 (California) or July 31, 2023 (Mississippi) deadline also applies to the estimated tax payment for the fourth quarter of 2022, originally due on January 17, 2023. This means that taxpayers can skip making this payment and instead include it with the 2022 return they file, on or before May 15, 2023 (Georgia, Alabama and New York) or October 16, 2023 (California).

The May 15, 2023 (Georgia, Alabama and New York) or October 16, 2023 (California) or July 31, 2023 (Mississippi) deadline also applies to 2023 estimated tax payments, normally due on April 18^th, June 15^th and September 15^th of 2023. It also applies to the quarterly payroll and excise tax returns normally due on January 31^st, April 30^th and July 31^st of 2023.

FTB Tax Relief Details

On March 10, 2023 the FTB announced that it too would follow IRS allowing taxpayers impacted by 2022-23 winter storms to have an extension to October 16, 2023 to file individual and business tax returns and make certain tax payments.  This includes:

• Individuals whose tax returns and payments are due on April 18, 2023.
• Quarterly estimated tax payments due January 17, 2023, March 15, 2023, April 18, 2023, June 15, 2023, and September 15, 2023.
• Business entities whose tax returns are normally due on March 15 and April 18.
• Pass-through entity (PTE) elective tax payments due on March 15, 2023 and June 15, 2023.

However, the postponement of time to file and pay does not apply to residents and businesses located in the following 7 counties: Imperial, Kern, Lassen, Modoc, Plumas, Shasta, and Sierra.

Residents and businesses located in the above 7 counties must file and pay by the normal established deadlines. This includes:

• Individuals whose tax returns and payments are due on April 18, 2023.
• Quarterly estimated tax payments due January 17, 2023, March 15, 2023, April 18, 2023, June 15, 2023, and September 15, 2023.
• Business entities whose tax returns are normally due on March 15 and April 18.
• PTE elective Tax payments due on March 15, 2023, and June 15, 2023.

Tax Planning Tip

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the current year (2022).

Be sure to write the FEMA declaration number on any return claiming a loss.  That number being: “FEMA-3591-DR” for California or “FEMA 4685-DR” for Georgia or “FEMA 4684-DR” for Alabama or “FEMA 4694-DR” for New York or “4697-DR” for Mississippi.

When filing a California return claiming a loss, be sure to write the name of the disaster in blue or black ink at the top of your tax return to alert FTB.

Importance To Preserve Records

Keep in mind that the IRS has up to three years to select a tax return for audit. The FTB has up to four years to select a tax return for audit. In some cases this period is extended to six years. When a taxpayer is selected for audit, the taxpayer has the burden of proof to show that expenses claimed are properly deductible. Having the evidence handy and organized makes meeting this burden of proof much easier.

Essential Records to Have for a Tax Audit

If you are getting ready for a tax audit, one of the most important things to do is gather and organize your tax records and receipts. There’s a good chance that you have a large amount of documents and receipts in your possession. No matter how organized you are, it can be a daunting task to collect the right pieces and make sure that you have them organized and handy for the audit conference.

We have seen many tax audits that hinge on whether or not the taxpayer can provide proper documentation for their previous tax filings. A tax lawyer in Orange County or elsewhere can make sure that the documentation is complete and proper.  By submitting this to your tax attorney in advance of the audit, your tax attorney can review your documentation and determine if there are any gaps that need to be addressed before starting the dialogue with the IRS agent.

So what are the most essential tax records to have ahead of your audit? Here are a few must-have items:

• Any W-2 forms from the previous year. This can include documents from full-time and part-time work, large casino and lottery winnings and more.
• Form 1098 records from your bank or lender on mortgage interest paid from the previous year.
• Records of any miscellaneous money you earned and reported to the IRS including work done as an independent contractor or freelancer, interest from savings accounts and stock dividends.
• Written letters from charities confirming your monetary donations from the previous year.
• Receipts for business expenses you claimed.
• Mileage Logs for business use of vehicle.
• Entertainment and Travel Logs for business

Tips On Reconstructing Records

Reconstructing records after a disaster is important for several reasons including insurance reimbursement and taxes. Most importantly, records can help people prove their disaster-related losses. More accurately estimated losses can help people get more recovery assistance like loans or grants.

Whether it’s personal or business property that has been lost or destroyed, here are some steps that can help people reconstruct important records.

Tax records

Get free tax return transcripts immediately using the Get Transcript on IRS.gov or through the IRS2Go app.  Tax return transcripts show line-by-line the entries made on your Federal income tax returns.  The most three recent tax years are available.

Financial statements

People can gather past statements from their credit card company or bank. These records may be available online. People can also contact their bank to get paper copies of these statements.

Property records

• To get documents related to property, homeowners can contact the title company, escrow company or bank that handled the purchase of their home or other property.
• Taxpayers who made home improvements can get in touch with the contractors who did the work and ask for statements to verify the work and cost. They can also get written descriptions from friends and relatives who saw the house before and after any improvements.
• For inherited property, taxpayers can check court records for probate values. If a trust or estate existed, taxpayers can contact the attorney who handled the trust.
• When no other records are available, people should check the county assessor’s office for old records that might address the value of the property.
• Car owners can research the current fair-market value for most vehicles. Resources are available online and at most libraries. These include Kelley’s Blue Book, the National Automobile Dealers Association and Edmunds.

Develop And Implement Your Backup Plan

Do not wait for the next disaster to come for then it may be too late to retrieve your important records for a tax audit or for that matter any legal or business matter. And if you do get selected for audit and do not have all the records to support what was claimed on your tax returns, you should contact an experienced tax attorney who can argue the application of your facts and circumstances to pursue the least possible changes in an audit.

The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Orange County (Irvine), Los Angeles and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.  Also if you are involved in cannabis, check out what a cannabis tax attorney can do for you.  And if you are involved in cryptocurrency, check out what a bitcoin tax attorney can do for you.

IRS and FTB providing tax relief for victims of severe winter storms, flooding, and mudslides in California

New announcement extends tax deadlines to October 16, 2023.

The IRS announced on January 10, 2023 that California storm victims have until May 15, 2023 to file various federal individual and business tax returns and make tax payments. Subsequently on January 13, 2023 the California Franchise Tax Board (“FTB”) announced that California storm victims also have until May 15, 2023 to file various California individual and business tax returns and make tax payments.

The IRS announced on January 19, 2023 that Storm victims in parts of Georgia and Alabama now have until May 15, 2023 to file various federal individual and business tax returns and make tax payments.

New announcement extends tax deadlines to October 16, 2023.

The IRS announced on February 24, 2023 that Storm victims in the areas designated by the Federal Emergency Management Agency (FEMA) encompassed in the IRS’ prior announcements, as qualifying for individual assistance, will not have until October 16, 2023 to file various federal individual and business tax returns and make tax payments.

IRS Tax Relief Details

The IRS is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA), as qualifying for individual assistance.

For California – Currently, relief is available to affected taxpayers who live or have a business anywhere in Colusa, El Dorado, Glenn, Humboldt, Los Angeles, Marin, Mariposa, Mendocino, Merced, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Bernardino, San Diego, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tehama, Ventura, Yolo, and Yuba counties.

For Georgia – Currently, relief is available to affected taxpayers who live or have a business anywhere in Butts, Henry, Jasper, Meriwether, Newton, Spalding and Troup counties in Georgia.

For Alabama – Currently, relief is available to affected taxpayers who live or have a business anywhere in Autauga and Dallas counties in Alabama.

The current list of eligible localities is always available on the disaster relief page on IRS.gov.  The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area.

The additional relief postpones until October 16, 2023, various tax filing and payment deadlines, including those for most calendar-year 2022 individual and business returns. This includes: individual income tax returns, originally due on April 18, 2023 (May 15, 2023 per the previous IRS announcement); various business returns, normally due on March 15^th and April 18^th of 2023; and returns of tax-exempt organizations, normally due on May 15, 2023.

Among other things, this means that eligible taxpayers will also have until October 16, 2023 to make 2022 contributions to their IRAs and health savings accounts.

In addition, farmers who choose to forgo making estimated tax payments and normally file their returns by March 1, 2023 (May 15, 2023 per the previous IRS announcement) will now have until October 16, 2023, to file their 2022 return and pay any tax due.

The October 16, 2023 deadline also applies to the estimated tax payment for the fourth quarter of 2022, originally due on January 17, 2023. This means that taxpayers can skip making this payment and instead include it with the 2022 return they file, on or before October 16, 2023.

The October 16, 2023 deadline also applies to 2023 estimated tax payments, normally due on April 18^th, June 15^th and September 15^th of 2023. It also applies to the quarterly payroll and excise tax returns normally due on January 31^st, April 30^th and July 31^st of 2023.

FTB Tax Relief Details

On March 10, 2023 the FTB announced that it too would follow IRS allowing taxpayers impacted by 2022-23 winter storms to have an extension to October 16, 2023 to file individual and business tax returns and make certain tax payments.  This includes:

• Individuals whose tax returns and payments are due on April 18, 2023.
• Quarterly estimated tax payments due January 17, 2023, March 15, 2023, April 18, 2023, June 15, 2023, and September 15, 2023.
• Business entities whose tax returns are normally due on March 15 and April 18.
• Pass-through entity (PTE) elective tax payments due on March 15, 2023 and June 15, 2023.

However, the postponement of time to file and pay does not apply to residents and businesses located in the following 7 counties: Imperial, Kern, Lassen, Modoc, Plumas, Shasta, and Sierra.

Residents and businesses located in the above 7 counties must file and pay by the normal established deadlines. This includes:

• Individuals whose tax returns and payments are due on April 18, 2023.
• Quarterly estimated tax payments due January 17, 2023, March 15, 2023, April 18, 2023, June 15, 2023, and September 15, 2023.
• Business entities whose tax returns are normally due on March 15 and April 18.
• PTE elective Tax payments due on March 15, 2023, and June 15, 2023.

Tax Planning Tip

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the current year (2022).

Be sure to write the FEMA declaration number on any return claiming a loss.  That number being: “FEMA-3591-DR” for California or “FEMA 4685-DR” for Georgia or “FEMA 4684-DR” for Alabama.

When filing a California return claiming a loss, be sure to write the name of the disaster in blue or black ink at the top of your tax return to alert FTB.

Importance To Preserve Records

Keep in mind that the IRS has up to three years to select a tax return for audit. The FTB has up to four years to select a tax return for audit. In some cases this period is extended to six years. When a taxpayer is selected for audit, the taxpayer has the burden of proof to show that expenses claimed are properly deductible. Having the evidence handy and organized makes meeting this burden of proof much easier.

Essential Records to Have for a Tax Audit

If you are getting ready for a tax audit, one of the most important things to do is gather and organize your tax records and receipts. There’s a good chance that you have a large amount of documents and receipts in your possession. No matter how organized you are, it can be a daunting task to collect the right pieces and make sure that you have them organized and handy for the audit conference.

We have seen many tax audits that hinge on whether or not the taxpayer can provide proper documentation for their previous tax filings. A tax lawyer in Orange County or elsewhere can make sure that the documentation is complete and proper.  By submitting this to your tax attorney in advance of the audit, your tax attorney can review your documentation and determine if there are any gaps that need to be addressed before starting the dialogue with the IRS agent.

So what are the most essential tax records to have ahead of your audit? Here are a few must-have items:

• Any W-2 forms from the previous year. This can include documents from full-time and part-time work, large casino and lottery winnings and more.
• Form 1098 records from your bank or lender on mortgage interest paid from the previous year.
• Records of any miscellaneous money you earned and reported to the IRS including work done as an independent contractor or freelancer, interest from savings accounts and stock dividends.
• Written letters from charities confirming your monetary donations from the previous year.
• Receipts for business expenses you claimed.
• Mileage Logs for business use of vehicle.
• Entertainment and Travel Logs for business

Tips On Reconstructing Records

Reconstructing records after a disaster is important for several reasons including insurance reimbursement and taxes. Most importantly, records can help people prove their disaster-related losses. More accurately estimated losses can help people get more recovery assistance like loans or grants.

Whether it’s personal or business property that has been lost or destroyed, here are some steps that can help people reconstruct important records.

Tax records

Get free tax return transcripts immediately using the Get Transcript on IRS.gov or through the IRS2Go app.  Tax return transcripts show line-by-line the entries made on your Federal income tax returns.  The most three recent tax years are available.  

Financial statements

People can gather past statements from their credit card company or bank. These records may be available online. People can also contact their bank to get paper copies of these statements.

Property records

• To get documents related to property, homeowners can contact the title company, escrow company or bank that handled the purchase of their home or other property.
• Taxpayers who made home improvements can get in touch with the contractors who did the work and ask for statements to verify the work and cost. They can also get written descriptions from friends and relatives who saw the house before and after any improvements.
• For inherited property, taxpayers can check court records for probate values. If a trust or estate existed, taxpayers can contact the attorney who handled the trust.
• When no other records are available, people should check the county assessor’s office for old records that might address the value of the property.
• Car owners can research the current fair-market value for most vehicles. Resources are available online and at most libraries. These include Kelley’s Blue Book, the National Automobile Dealers Association and Edmunds.

Develop And Implement Your Backup Plan

Do not wait for the next disaster to come for then it may be too late to retrieve your important records for a tax audit or for that matter any legal or business matter. And if you do get selected for audit and do not have all the records to support what was claimed on your tax returns, you should contact an experienced tax attorney who can argue the application of your facts and circumstances to pursue the least possible changes in an audit.

The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Orange County (Irvine), Los Angeles and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.  Also if you are involved in cannabis, check out what a cannabis tax attorney can do for you.  And if you are involved in cryptocurrency, check out what a bitcoin tax attorney can do for you.

IRS providing tax relief for victims of Georgia and Alabama severe winter storms

The IRS announced on January 19, 2023 that Storm victims in parts of Georgia and Alabama now have until May 15, 2023 to file various federal individual and business tax returns and make tax payments.

IRS Tax Relief Details

The IRS is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA), as qualifying for individual assistance. Currently, relief is available to affected taxpayers who live or have a business anywhere in Butts, Henry, Jasper, Meriwether, Newton, Spalding and Troup counties in Georgia and Autauga and Dallas counties in Alabama.

The current list of eligible localities is always available on the disaster relief page on IRS.gov.  The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area.

The tax relief postpones various tax filing and payment deadlines falling on or after January 12, 2023, and before May 15, 2023, additional time to file through May 15, 2023. As a result, affected individuals and businesses will have until May 15, 2023 to file returns and pay any taxes that were originally due during this period. This includes 2022 individual income tax returns due on April 18, 2023 as well as various 2022 business returns normally due on March 15, 2023 and April 18, 2023. Among other things, this means that eligible taxpayers will have until May 15, 2023 to make 2022 contributions to their IRAs and health savings accounts.

In addition, farmers who choose to forgo making estimated tax payments and normally file their returns by March 1, 2023 will now have until May 15, 2023 to file their 2022 return and pay any tax due. The May 15, 2023, deadline also applies to the quarterly estimated tax payments, normally due on January 17, 2023 and April 18, 2023. This means that individual taxpayers can skip making the fourth quarter estimated tax payment, normally due January 17, 2023, and instead include it with the 2022 return they file, on or before May 15, 2023.

The May 15, 2023 deadline also applies to the quarterly payroll and excise tax returns normally due on January 31, 2023. In addition, penalties on payroll and excise tax deposits due on or after January 12, 2023, and before January 27, 2023, will be abated as long as the tax deposits are made by January 27, 2023.

Tax Planning Tip

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the current year (2022).

Be sure to write the FEMA declaration number on any return claiming a loss.  That number being: “FEMA 4684-DR” for Alabama or “FEMA 4685-DR” for Georgia.

Importance To Preserve Records

Keep in mind that the IRS has up to three years to select a tax return for audit. The FTB has up to four years to select a tax return for audit. In some cases this period is extended to six years. When a taxpayer is selected for audit, the taxpayer has the burden of proof to show that expenses claimed are properly deductible. Having the evidence handy and organized makes meeting this burden of proof much easier.

Essential Records to Have for a Tax Audit

If you are getting ready for a tax audit, one of the most important things to do is gather and organize your tax records and receipts. There’s a good chance that you have a large amount of documents and receipts in your possession. No matter how organized you are, it can be a daunting task to collect the right pieces and make sure that you have them organized and handy for the audit conference.

We have seen many tax audits that hinge on whether or not the taxpayer can provide proper documentation for their previous tax filings. A tax lawyer in Orange County or elsewhere can make sure that the documentation is complete and proper.  By submitting this to your tax attorney in advance of the audit, your tax attorney can review your documentation and determine if there are any gaps that need to be addressed before starting the dialogue with the IRS agent.

So what are the most essential tax records to have ahead of your audit? Here are a few must-have items:

• Any W-2 forms from the previous year. This can include documents from full-time and part-time work, large casino and lottery winnings and more.
• Form 1098 records from your bank or lender on mortgage interest paid from the previous year.
• Records of any miscellaneous money you earned and reported to the IRS including work done as an independent contractor or freelancer, interest from savings accounts and stock dividends.
• Written letters from charities confirming your monetary donations from the previous year.
• Receipts for business expenses you claimed.
• Mileage Logs for business use of vehicle.
• Entertainment and Travel Logs for business

Tips On Reconstructing Records

Reconstructing records after a disaster is important for several reasons including insurance reimbursement and taxes. Most importantly, records can help people prove their disaster-related losses. More accurately estimated losses can help people get more recovery assistance like loans or grants.

Whether it’s personal or business property that has been lost or destroyed, here are some steps that can help people reconstruct important records.

Tax records

Get free tax return transcripts immediately using the Get Transcript on IRS.gov or through the IRS2Go app.  Tax return transcripts show line-by-line the entries made on your Federal income tax returns.  The most three recent tax years are available.

Financial statements

People can gather past statements from their credit card company or bank. These records may be available online. People can also contact their bank to get paper copies of these statements.

Property records

• To get documents related to property, homeowners can contact the title company, escrow company or bank that handled the purchase of their home or other property.
• Taxpayers who made home improvements can get in touch with the contractors who did the work and ask for statements to verify the work and cost. They can also get written descriptions from friends and relatives who saw the house before and after any improvements.
• For inherited property, taxpayers can check court records for probate values. If a trust or estate existed, taxpayers can contact the attorney who handled the trust.
• When no other records are available, people should check the county assessor’s office for old records that might address the value of the property.
• Car owners can research the current fair-market value for most vehicles. Resources are available online and at most libraries. These include Kelley’s Blue Book, the National Automobile Dealers Association and Edmunds.

Develop And Implement Your Backup Plan

Do not wait for the next disaster to come for then it may be too late to retrieve your important records for a tax audit or for that matter any legal or business matter. And if you do get selected for audit and do not have all the records to support what was claimed on your tax returns, you should contact an experienced tax attorney who can argue the application of your facts and circumstances to pursue the least possible changes in an audit.

The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Orange County (Irvine), Los Angeles and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.  Also if you are involved in cannabis, check out what a cannabis tax attorney can do for you.  And if you are involved in cryptocurrency, check out what a bitcoin tax attorney can do for you.