Taxable Talk

The IRS and the US Department of the Treasury issued their "Priority Guidance Plan". A total of 254 projects are mentioned. The ones that the IRS has highlighted are:

—Additional legal requirements for tax shelters;
—Guidance on how to report distributions from Roth IRAs;
—Guidance on impact of a 2.5 month grace period for flexible spending accounts on HSAs;
—Regulations under Section 529 regarding qualified tuition programs for higher education;
—How charities should report automobile donations they receive; and
—Legal requirements to withhold on the winner's prizes at poker tournaments

As part of my ongoing series on online gambling and taxes, I will include a piece on taxes and poker tournaments. That article will appear in a couple of weeks.

Today, August 15th, is the deadline for individuals who filed extensions to actually file their 2004 Federal tax returns. A second extension is available (until October 17th), but you need to have a reason (and have the IRS accept the reason); use Form 2688 to file for the second extension. For Californians, your extension to file is for six months; you need not file your State return until October 17th.

Next year, the automatic Federal extension will be for six months.

It's not a good thing for you when the Tax Court begins its opinion with "...[the petitioner] seeks to deduct expenses by relying mostly -- if not quite entirely -- on doctored receipts and implausible testimony." The opinion includes such gems as a flood that didn't occur, a receipt dated on the top as 1999 but at the bottom 1996 (and the seller says 1996), "...the next two deductions at least sound valid...." Needless to say, the petitioner didn't do well.

Case: Obot v. Commissioner