Friday, January 28, 2011

IRS offers new Interactive tax assistant, new free search for tax law questions

IRS offers new Interactive Tax Assistant, new free search for Tax Law questions, and offers a down-loadable copy of your research!

The Internal Revenue Website (IRS), has always had an excellent search box, located on the upper right hand corner of the IRS website, within their own site for individuals, tax professionals, and Tax Law practitioners  , The Interactive Tax Assistant is a Tax Law Resource tool that goes beyond a simple How To Search. This is geared more toward the Tax Professional, Tax Lawyer, CPA, Enrolled Agent, and possibly IRS staff could make use of this friendly tool. 

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This new toy for the Tax People among us. Us nerds, who wait anxiously, during February to get our ink-stained, paper-cut fingers, on the new Publication 17. (It is easily accessible on the www. website, and down-loadable in PDF format today. The Pub 17 as it is loving called is still available in paper, and on disc too

When Congress completes creating Tax Law Changes for the prior and upcoming tax years, it is when Tax Professionals come to life. Like bats in a cave, sleeping during the day, it appears there is not even a heartbeat among them. April 15, hails the end of the tax season. There are the extension filers and trouble cases that go through a good part of the year, but then it settles down to a mere trickle. Then, the second week of February comes, and it is on.

Then, the sounding bell rings through Tax-dom, "Congress has recessed, Congress has recessed, we may begin filing!"

The madness begins, and with many new tax law changes during this historical 2010-2011 session, we are seeing many breaks for businesses who withhold and match FICA for employees. Employees themselves are getting big relief. It is a huge break across the board. 

This year Tax Professionals will be held responsible for collecting and verifying every legal deduction taken. In years past, a CPA, or Tax preparer could have relied on the, "assume they are telling the truth rule", but so many Tax Professionals helped their clients fudge, that new rules came into affect.

Bars and Restaurants, IRS Audit Protection and Survival Guide

The Interactive Tax Assistant tool, from the IRS, offers an easy and reliable source of research, that can take the pressure off of the Tax Pro, while assisting the Taxpayer/Client in having their books, K-1's, LLC's, Estate Tax Changes, and more. There are many US Taxpayers who have been able to bully an accountant, or preparer into doing his will, more than what the Tax Code says. This takes the pressure off. 

Another benefit that can be seen with this tool, are for a client's benefit. While preparing the books of a Company, Partnership, LLC or any other entity, if there are deductions or credits that are "red flags" or often get audited, while the Tax Pro knows this a legitimate expense or claim, this would appear to be a very helpful tool. 

Surviving an IRS Tax Audit

When pre-answering questions that may be asked in an Audit or a Letter from the IRS, requesting more information in a tax matter this could be a time and worry saver all the way around. 

This blog has always been at the basic level, and on a higher professional level there are probably many other ways this tool can be implemented. 

Review of Tool - 

  • Search must be by legal language or positioning phrases of Tax code or law.
I had a legal question that I needed to know for a close friend. It was in regards to the taxability of   an insurance settlement of an Estate of a Deceased descendant. 

On my first try, I used the standard Search criteria used for Google searches. 
Q. Is income from an Estate settlement taxable?
A. Came up with the topic of Income types, statuses; the basics of Income definition as they are applied to status, etc.

My next step, was to search closer to the subject, using regular search methods.
Q. Taxable Income from an Estate settlement.
A. Again, I got types of income, and a few other partially related topics.

Federal Income Tax: Code and Regulations--Selected Sections (2009-2010)

Then, I asked in the wording used in Tax Code.
Q. Estate, taxes, settlements
A. Estate information came up the first time, When I returned to redo my process for this blog post, only standard information for types of income came up, but it quickly linked me to the information I was seeking.

The IRS has advanced with technology, and is helping taxpayer, take more responsibility in their taxes, while offering more tools for a subject, that makes the standard non-tax-nerd, roll their eyes to the back of their head, and leave. Way to go y'all. Thanks for making it a little easier.