If there is an hour designation associated with the element, the total number of hours for each listed element appear in the Hours column of the report.
One needs to know a few of the basics of the U. The history of income taxation in the United States is nearly as old as the United States itself. George Washington 's administration levied the first taxes based on income.
But there were three later major developments in the income tax law in the United States that made it a permanent fixture in U.
The first major development occurred when Congress created the Office of the Commissioner of Revenue in The second major development came after the Civil War and various financial and economic crises of the late nineteenth century with the Sixteenth Amendment of the U.
Constitution, ratified in This amendment states that "The Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.
The third major development came in the middle of World War II. InCongress enacted a law that required employees to withhold taxes owed by their employees from the employees' wages and salaries.
Besides mandated withholding, Congress provided the IRS with an extensive array of powers to persuade the American people to meet their tax obligations.
Tax returns must be: Accurate Filed Paid on time The IRS has a variety of ways to choose which returns to audit, but only a relatively small number of individual taxpayers are actually selected for audits.
The audit is used in turn to determine whether the taxpayer paid the proper amount of tax. Audits are also used to uncover fraud. The taxpayer bears the burden of proof during an audit. That is, the taxpayer must prove to the IRS that the information the taxpayer reported on the income tax return is true and correct.
Whether taxpayers need outside assistance such as an accountants or an attorneys when they are faced with an audit depends on their particular circumstances. If their tax matters are fairly simple, they may be able to handle the audit entirely on their own. But if the tax issues are complex or if they do not fully understand taxes, it is a good idea for them to hire a professional to assist them.
Types of Audits Some audits are fairly routine, and some result in only minor changes for the taxpayer.
Some audits do result in additional taxes, penalties, or interest that the taxpayers must pay, but some audits do result in refunds. These results come from any of three basic types of audits:. In these cases, the IRS will send a letter requesting an explanation or additional information.
Note that an "Automatic Adjustment Notice," simply states that a taxpayer owes a certain amount of additional tax. These are usually the result of a calculating error. Here, a taxpayer appears at an IRS office with all receipts and crucial documents ready for the audit.
The IRS schedules field audits at the taxpayer's home or business. This is the usual form of audit for small businesses and for businesses operated from the home.
In some audit situations, a taxpayer may not need to actually meet in person with an IRS agent. These kinds of audits are conducted entirely by mail sometimes known as "correspondence audits".
In an audit by mail, a taxpayer is commonly requested to justify or explain some part of a tax return by providing additional information through the mail.
If taxpayers are asked to provide documents to the IRS through the mail, they must send copies, as the IRS may misplace the originals. It is also a good idea to use certified mail, return receipt requested, to mail documents to the IRS. This method will provide proof that the response was mailed by the deadline the IRS gave the taxpayer.The reason that the couple should not file under the status married filing separately is because the tax rates are higher than the tax rates for those filing under the status married filing jointly.
Also, there several deductions, credits, and exclusions that are allowed for the .
example of the tax research memo by Terry_Pandy. Therefore, they are not subject $25 limit for business gifts, provided they fit into one of these categories: items that cost $4 or less, have your name clearly and permanently imprinted on them, and.
signs, display racks, or other promotional material to be used on the business premises of the recipient. The Worldwide VAT, GST and Sales Tax Guide is part of a suite of premier tax guides published each year by Ernst & Young.
The advice or a complete explanation of the tax mat-ters referred to and is subject to changes in the law and other applicable rules. Also, this publi-. Oil and gas taxation in the United StatesDeloitte taxation and investment guides 3 A foreign corporation is generally subject to federal income tax on its income effectively connected with its U.S.
trade Oil and gas taxation in the United States Deloitte taxation and investment guides 4. Discuss Magdalena's tax facts with your team. Complete the federal income tax return for Magdalena. Prepare a ,word memo to Magdalena with an overview of her tax position this year and tax planning considerations for next year you, as her tax advisors, will present to her at your next scheduled meeting.