Business Law

Business Law News 2017, ISSUE 2

How To Respond To IRS Notices

Robert W. Wood

Robert W. Wood is a tax lawyer with www.WoodLLP.com, and the author of numerous tax books, including Taxation of Damage Awards & Settlement Payments (www.TaxInstitute.com). This discussion is not intended as legal advice.

Everyone must pay federal income taxes. Yet exactly how much you owe, and on exactly how much, is famously complex. All tax returns must be signed under penalties of perjury. That means you have to do your best to report everything fully and honestly. But the grey areas are legion.

For example, exactly when is something income, even though you physically don’t have it? What type of proceeds qualifies for long term capital gain rather than ordinary income rates? Which losses are full write-offs, and which ones are limited to offsetting gains? What assets can be written off all at once, and what assets must be capitalized and written off ratably over many years?

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