The Making Work Pay Tax Credit

Information for Individuals

Check Your Withholding

How will the Making Work Pay tax credit affect you?

Most wage earners will benefit from larger paychecks in 2009 and 2010 as a result of the changes made to the federal income tax withholding tables to implement the Making Work Pay tax credit. However, some people may find that the changes built into the withholding tables result in less tax being withheld than they prefer.

If you’re not eligible for the Making Work Pay tax credit, withholding changes could mean a smaller refund next spring. A limited number of people, including those who usually receive very small refunds, could in some situations owe a small amount rather than receiving a refund. Those who should pay particular attention to their withholding include:

Pensioners (see more information under Pensioners, below)

Married couples with two incomes

Individuals with multiple jobs

Dependents

Some Social Security recipients who work

Workers without valid Social Security numbers

The Making Work Pay tax credit, normally a maximum of $400 for working individuals and $800 for working married couples, is reduced by the amount of any Economic Recovery Payment ($250 per eligible recipient of Social Security, Supplemental Security Income, Railroad Retirement or Veteran’s benefits) or Special Credit for Certain Government Retirees ($250 per eligible federal or state retiree) that you receive. If you are affected by this reduction, you should review your withholding to ensure that sufficient funds have been withheld to meet your tax obligation.

If you wind up owing tax because too little was taken out of your paychecks during 2009, you may qualify for special relief on a penalty that sometimes applies.

If you believe your current withholding is not appropriate for your personal situation, you can perform a quick check using the IRS withholding calculator. If you are not familiar with the withholding calculator, watch this IRS how-to video for instructions. When you have determined your correct withholding, make any adjustments by filing a revised Form W-4, Employee’s Withholding Allowance Certificate, with your employer.

Pensioners

Pensioners do not qualify for the Making Work Pay credit, unless they receive earned income. However, because the 2009 and the 2010 withholding tables also apply to pensioners, the IRS has provided pension plans with an optional adjustment procedure. If you are a pensioner with questions about your withholding, contact your pension plan administrator.

If desired, pensioners can adjust their withholding by filing Form W-4P, Withholding Certificate for Pension or Annuity Payments.

Self-Employed

Self-employed individuals can also benefit now from the Making Work Pay tax credit by evaluating their expected income tax liability, allowing for this tax credit if they are eligible, and making the appropriate adjustment in the amount of their regularly scheduled estimated tax payments.

Your 2009 Tax Return

Information on completing your tax return if you’re claiming the tax credit is available.

Information for Employers

For 2010: Notice 1036 contains the 2010 withholding tables, which reflect reduced withholding resulting from the Making Work Pay credit. The notice also includes information about an optional procedure permitting administrators of pension plans to offset the withholding reduction.

For 2009: In February 2009 the IRS issued updated withholding tables to help employers implement the withholding adjustments required by the Making Work Pay credit. More details are available in Publication 15-T.

In May 2009, the IRS subsequently issued an optional adjustment procedure allowing plan administrators to offset the February 2009 withholding reduction for some pension recipients.

Questions and Answers

If you have questions about the Making Work Pay provision, these questions and answers  might help.

General Information

In 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act will provide a refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers filing joint returns.

This tax credit will be calculated at a rate of 6.2 percent of earned income and will phase out for taxpayers with modified adjusted gross income in excess of $75,000, or $150,000 for married couples filing jointly.

For people who receive a paycheck and are subject to withholding, the credit will typically be handled by their employers through automated withholding changes. These changes may result in an increase in take-home pay. The amount of the credit will be computed on the employee’s 2009 income tax return filed in 2010 and the employee’s 2010 tax return filed in 2011. Taxpayers who do not have taxes withheld by an employer during the year can also claim the credit on their 2009 and 2010 tax returns.

It is not necessary to do anything to get the automatic withholding change. However, an employee with multiple jobs or a married couple whose combined income places it in a higher tax bracket should consult the IRS withholding calculator and, if necessary, submit a revised Form W-4, Employee’s Withholding Allowance Certificate, to ensure enough tax is withheld. Publication 919, How Do I Adjust My Tax Withholding? provides additional guidance for tax withholding including a special Making Work Pay worksheet.

The IRS Reminds Tax-Exempt Organizations of All Sizes to File the Form 990 on Time to Preserve Their Tax Exempt Status

Here is IR-2010-10, Jan. 21, 2010

WASHINGTON — The Internal Revenue Service today reminded tax-exempt organizations to make sure they file their annual information form on time. In 2010 the tax-exempt status of any non-profit that has not filed the required form in the last three years will be revoked.

The Pension Protection Act of 2006 requires that non-profit organizations that do not file a required information form for three consecutive years automatically lose their Federal tax-exempt status. This requirement has been in effect since the beginning of 2007.

A list of revoked organizations will be available to the public, as well as state charity and tax officials on this website.

If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status. Any income received between the revocation date and renewed exemption may be taxable.

Small non-profit organizations with annual receipts of $25,000 or less can file an electronic notice, Form 990-N ( e-Postcard). They will need only a few basic pieces of information to file: the organization’s employer identification number, its tax year, legal name and mailing address, any other names used, an Internet address if one exists, the name and address of a principal officer and a statement confirming the organization’s annual gross receipts are normally $25,000 or less.

Tax-exempt organizations with annual receipts above $25,000 are required to file the Form 990 or the Form 990-EZ annually. Private foundations file Form 990-PF. Churches and integrated auxiliaries of churches are not required to file Form 990-series returns or notices.

Form 990-series returns and e-Postcards, are due by the 15th day of the 5th month after an organization’s tax year ends. For more information visit the relevant page on this web site.

Haiti Relief Donations Qualify for Immediate Tax Relief

IR-2010-12, Jan. 25, 2010

WASHINGTON — People who give to charities providing earthquake relief in Haiti can claim these donations on the tax return they are completing this season, according to the Internal Revenue Service.

Taxpayers who itemize deductions on their 2009 return qualify for this special tax relief provision, enacted Jan. 22. Only cash contributions made to these charities after Jan. 11, 2010, and before March 1, 2010, are eligible. This includes contributions made by text message, check, credit card or debit card.

“Americans have opened their hearts to help those affected by the Haiti earthquake,” said IRS Commissioner Doug Shulman.” This new law provides an immediate tax benefit for the many taxpayers who have made generous donations.”

Taxpayers can benefit from their donations, almost immediately, by filing their 2009 returns early, filing electronically and choosing direct deposit. Refunds take as few as ten days and can be directly deposited into a savings, checking or brokerage account, or used to purchase Series I U.S. savings bonds.

The new law only applies to cash (as opposed to property) contributions. The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti. Taxpayers have the option of deducting these contributions on either their 2009 or 2010 returns, but not both.

To get a tax benefit, taxpayers must itemize their deductions on Schedule A. Those who claim the standard deduction, including all short-form filers, are not eligible.

Taxpayers should be sure their contributions go to qualified charities. Most organizations eligible to receive tax-deductible donations are listed in a searchable online database available on IRS.gov under Search for Charities. Some organizations, such as churches or governments, may be qualified even though they are not listed on IRS.gov. Donors can find out more about organizations helping Haitian earthquake victims from agencies such as USAID.

The IRS reminds donors that contributions to foreign organizations generally are not deductible. IRS Publication 526, Charitable Contributions, provides information on making contributions to charities.

Federal law requires that taxpayers keep a record of any deductible donations they make. For donations by text message, a telephone bill will meet the recordkeeping requirement if it shows the name of the donee organization, the date of the contribution and the amount of the contribution. For cash contributions made by other means, be sure to keep a bank record, such as a cancelled check, or a receipt from the charity showing the name of the charity and the date and amount of the contribution. Publication 526 has further details on the recordkeeping rules for cash contributions.

This year’s special Haiti relief provision is modeled on a 2005 law that, in the wake of the Dec. 26, 2004, Indian Ocean tsunami, allowed taxpayers to deduct donations they made during January 2005 as if they made the donations in 2004.

How to Choose a Tax Return Preparer and Avoid Preparer Fraud

Here is FS-2010-3, January 2010

Taxpayers who decide they need assistance when preparing a tax return should choose a tax preparer with care and caution. Even if a return was prepared by an outside individual or firm, taxpayers should remember that they are legally responsible for what they file with the Internal Revenue Service.

Most return preparers are professional, honest and provide excellent service to their clients, but some engage in fraud and other illegal activities. Return preparer fraud involves the preparation and filing of false income tax returns by preparers who claim inflated personal or business expenses, false deductions, unallowable credits or excessive exemptions on returns prepared for their clients.

Preparers may, for example, manipulate income figures to fraudulently obtain tax credits, such as the Earned Income Tax Credit. In some situations, the client, or taxpayer, may not even know of the false expenses, deductions, exemptions and/or credits shown on his or her tax return.

However, when the IRS detects a fraudulent return, the taxpayer — not the return preparer — must pay the additional taxes and interest and may be subject to penalties.

The IRS Return Preparer Program focuses on enhancing compliance in the return-preparer community by investigating and referring criminal activity by return preparers to the Department of Justice for prosecution. The IRS can also assert appropriate civil penalties against unscrupulous return preparers.

Also to combat fraud, IRS Commissioner Doug Shulman recently made a series of recommendations with the twin goals of increasing taxpayer compliance and ensuring uniform and high ethical standards of conduct for tax preparers.

While most preparers provide honest service to their clients, the IRS urges taxpayers to be careful when choosing a preparer –– as careful as they would be choosing a doctor or lawyer. Even if someone else prepares a tax return, the taxpayer is ultimately responsible for all the information on the return. For that reason, taxpayers should never sign a blank tax form. And they should review the return before signing it and ask questions on entries they don’t understand.

Helpful Hints When Choosing a Return Preparer

Be cautious of tax preparers who claim they can obtain larger refunds than other preparers.

Avoid preparers who base their fee on a percentage of the refund.Use a reputable tax professional who signs the tax return and provides a copy.

Consider whether the individual or firm will be around to answer questions about the preparation of the tax return months, or even years, after the return has been filed.

Check the person’s credentials. Only attorneys, certified public accountants (CPAs) and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared.

Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.

Reputable preparers will ask to see receipts and will ask multiple questions to determine whether expenses, deductions and other items qualify. By doing so, they are trying to help their clients avoid penalties, interest or additional taxes that could result from an IRS examination.

Tax evasion is a risky crime, a felony, punishable by five years imprisonment and a $250,000 fine.

* Incarceration may include prison time, home confinement, electronic monitoring or a combination.

Some return preparers have been convicted of or have pleaded guilty to felony charges.

Examples for Return Preparer Fraud

The following case summaries are excerpts from public record documents on file in the court records in the judicial district in which the legal actions were filed.

Former Owner of Triad Business Services Sentenced for Tax Fraud Conspiracy

On Nov. 2, 2009, in Washington, D.C., Henderson Joseph, the former owner of Triad Business Services, was sentenced to 36 months in prison, followed by three years of supervised release, and ordered to pay a $50,000 fine. Joseph pleaded guilty in January 2009, in connection with a massive tax fraud conspiracy in which Triad Business Services sought over $500,000 in fraudulent tax refunds for its clients. According to court documents, Joseph masterminded a scheme to file fraudulent refunds for hundreds of clients by falsifying itemized deductions and credits on the clients’ individual tax returns.

Former Tax Preparer Sentenced for $1 Million Tax Fraud

On Oct. 16, 2009, in Kansas City, Donald Bushnell, a former tax preparer, was sentenced to 36 months in prison for fraudulently preparing nearly 300 tax returns that falsely claimed more than $1 million in business losses for his clients. Bushnell prepared 272 false and fraudulent federal tax returns from Jan. 9, 2001, to June 6, 2005, for a total tax loss of approximately $1,088,720. Bushnell’s criminal conduct caused dozens of taxpayers to incur substantial costs, ranging between $200 and $400 per return, for interest and penalties.

Daughters of California Return Preparer Each Sentenced to 72 Months in Federal Prison

On Oct. 5, 2009, in Riverside, Calif, Karen Denise Berry of San Bernardino, Calif., and Carla Denine Berry of Rialto, Calif., the daughters of a patriarch of an income tax preparation business, were each sentenced to serve 72 months in federal prison and three years of supervised release. They were also ordered to pay $14 million in restitution to the IRS. Their father, Matthew Carl Berry, a Rialto tax return preparer, was previously sentenced to serve 108 months in federal prison, 36 months on supervised release, and ordered to pay over $15 million in restitution to the IRS, after having been previously convicted at trial on charges that he conspired with others to defraud the Internal Revenue Service and filed false personal income tax returns for the years 2001, 2002, and 2004. Karen Denise Berry and Carla Denine Berry, along with their father, Matthew Berry, were found guilty of conspiring with Ivan Taylor Johnson, of San Bernardino, Calif., and Valerie Madel Dixon, of Rialto to impede and obstruct the lawful functions of the Internal Revenue Service. Karen Berry and Carla Berry pleaded guilty before trial to various charges including conspiracy to defraud the IRS, aiding and assisting in the preparation of false tax returns, and subscribing to a false tax return. According to court papers, the false returns Berry prepared for clients, in conjunction with the returns prepared by Karen Berry, Carla Berry, Johnson and Dixon, caused losses of more than $45,000,000 in tax revenue to the IRS. Johnson and Dixon previously pleaded guilty to charges contained in the indictment. Johnson was sentenced to 35 months imprisonment followed by three years of supervised release and ordered to pay restitution to the IRS in the amount of $19,034,901. Dixon was sentenced to five years probation, including 10 months home detention, and ordered to pay restitution to the IRS of $19,034,901.

Florida Tax Preparer Sentenced to 30 Months for Tax Fraud

On Aug. 6, 2009, in Orlando, Fla., Jean Marie Boursiquot was sentenced to 30 months in prison and ordered to pay $149,456 in restitution. Boursiquot pleaded guilty on May 21, 2009 to his role in a conspiracy to defraud the government. According to court documents, Boursiquot ran his own tax preparation company and prepared tax returns and amended tax returns for transient Haitian immigrants in Florida. Boursiquot had the IRS mail him the refund checks directly and deposited the checks into his business account. In 2002, Boursiquot received nearly $400,000 from the IRS and pocketed more than $250,000 of the money that was intended for his clients. In 2003, Boursiquot received more than $500,000 from the IRS and kept more than $400,000 of his client’s money. Boursiquot did not file a tax return for the 2002 tax year and on his 2003 tax return he only claimed $41,341 in income.

Tax Preparers Sentenced to Prison for Filing False Returns

On June 23, 2009, in Riverside, Calif., Matthew Carl Berry, of Rialto, Calif., was sentenced to nine years in prison after having been previously convicted on charges that he conspired with others to defraud the government and filed false personal income tax returns for the years 2001, 2002 and 2004. In addition to prison, Berry was ordered to pay $15,418,393 in restitution to the Internal Revenue Service and to spend three years on supervised release following his release from prison. In addition to the conspiracy charges, the jury found Berry guilty of willfully filing false income tax returns with the IRS for the 2001, 2002 and 2004 tax years.

Louisiana Tax Preparer Sentenced for Preparing False Tax Returns

Dec. 11, 2008, in Shreveport, La., Clementine Rainey, a former tax preparer for Quick Tax in Shreveport, was sentenced to 21 months in prison and ordered to pay $111,000 in restitution for preparing false tax returns.  Rainey pleaded guilty August 22, 2008, to one count of aiding the preparation of false returns.  According to court documents, she admitted to preparing and filing false individual income tax returns for taxpayers for the years 2005 through 2007 by submitting fictitious W-2 employer and wage information.

Two Kenyan Women Sentenced for $15 Million Tax Fraud Conspiracy

On Nov. 13, 2008, in Kansas City, Loretta Wavinya and her sister, Lillian Nzongi, were sentenced to prison terms of 168 months and 70 months, respectively, for their roles in a multi-million dollar conspiracy to defraud the IRS. The Kenyan nationals lived in the Kansas City area and were involved in a wire fraud scheme that involved stealing the identities of hundreds of victims, primarily nursing home residents, which were used to seek more than $15 million in fraudulent federal tax refunds. Wavinya, a tax preparer and radiology technician who visited patients on-site at multiple nursing homes, pleaded guilty in June 2008 to using stolen identities to file more than 540 fraudulent federal tax returns using the names of more than 500 identity theft victims. The conspirators filed up to six state tax returns simultaneously with each federal return, causing a loss to at least 27 states.

Reporting Suspected Tax Fraud Activity

Tax fraud or abusive return preparers can be reported to the IRS on Form 3949-A, Information Referral. This form is available as a download from the IRS Web site at IRS.gov or by calling (800) 829-3676 to order by mail. The completed form, or a letter detailing the alleged fraudulent activity, should be sent to Internal Revenue Service, Fresno, CA 93888.

The mailing should contain specific information about the individual or business, the activity, when the alleged violation took place, the amount of money involved, how the reporter became aware of it and any other information that might be helpful to an investigation. The identity of the person filing the report is not required but it could be helpful in an investigation and it can be kept confidential.

Rewards based on the amount of additional tax, penalties and interest owed can be made to individuals who report fraud. IRS Form 211, Application for Award for Original Information, can be used to claim a reward.

The IRS’ Whistleblower Office will make the final decision about whether an award will be paid and for how much. Award amounts are based on the value of the information you provided compared with the amount of additional tax, penalties and interest collected by the IRS.

Following the Yellow Brick Road I received an e-mail from my friend JD Gershbein of Owlish Communications.

JD invited me to post an answer in LinkedIn Answers to his Question:

“What is your 2010 New Year’s resolution specific for LinkedIn?”

A thought provoking question and definitely an invitation to consider my trip down the Yellow Brick Road to B2B and B2C Social Networking.

From the beginning, on line social networking has been a learning experience for me.

First, as I started down the Yellow Brick road I decided that I would like to learn about online networking while maintaining and staying true to who I am in traditional networking.

I wanted to and still am learning about online networking specifically on LinkedIn.

My resolution for 2010 in this area is to continue to learn and keep abreast of the new features and applications available on LinkedIn.

Second, as I started down the Yellow Brick road I decided that I would explore how I can contribute to others’ success.

My resolution for 2010 in this area is to continue to explore creative ways that I can contribute to others’ success.

Third, as I started down the Yellow Brick road I decided that I would initiate, develop, and nurture long lasting business relationships beneficial to all parties involved and our respective networks.

My resolution for 2010 in this area is to continue to seek out professionals with whom to network in this fashion.

My conclusion:

My 2010 New Year’s resolution specific for LinkedIn is to continue down the Yellow Brick Road learning, contributing, and networking.

What is your 2010 New Year’s resolution specific for LinkedIn?

Looking forward to your comments!

http://tinyurl.com/yzv5obx

1. Introduction
2. Background
3. Misuse of the Law
4. Questions and Answers

Introduction

The IRS is providing information about abusive Home-Based Business schemes to help taxpayers avoid the pitfalls of these schemes:

• These schemes are abusive because they manipulate and misinterpret tax laws.
• The public should not be fooled by home-based business schemes that claim taxpayers can deduct most, or all, of their personal expenses as business expenses.
• Taxpayers should be wary of promoters who claim otherwise.
• The IRS and other federal agencies are aggressively pursuing and successfully prosecuting promoters of schemes and scams, including abusive home-based business schemes.
• Participating in these schemes can result in repayment of taxes owed with interest and penalties, and possibly imprisonment and fines.
• Even innocent taxpayers involved in these schemes can face a staggering amount of back interest and penalties.
• Taxpayers involved in one of these schemes should correct any improper tax return filings.

Background

Most taxpayers with small businesses accurately report their income and expenses. However:

• Schemes involving inflated business expenses, deduction of personal expenses and misuse of purported home-based businesses have become prevalent.
• The IRS has become aware of several abusive tax schemes, which involve taxpayers erroneously deducting personal living or family expenses. Examples of these schemes are:
  • Bogus home-based businesses: taxpayers attempt to create the appearance of having a home-based business – where none actually exists – and deduct personal, living or family expenses.
  • Legitimate home-based businesses: taxpayers have a legitimate business operated from their home but erroneously attempt to deduct personal living expenses.
• These schemes have gained popularity due to aggressive marketing by promoters who sell such schemes as a means to reduce taxes.
• These schemes are abusive because they manipulate the interpretation of the tax laws.
• Some promoters market a package, kit or other materials that claim to show taxpayers how they can avoid paying income taxes but the arguments used have no merit.
• Abusive promoters typically advise taxpayers to maintain detailed records of their activities and the expenses they incur; however, detailed records do not convert personal, living or family expenses into deductible business expenses.
• Expenses must be “ordinary and necessary” in relation to a legitimate business activity, and satisfy all other requirements in order to be deductible business expenses on a tax return.
• Taxpayers should beware of claims that are too good to be true and seek independent professional tax advice.

Misuse of the Law

The IRS has uncovered a number of schemes that claim to allow deductions for personal living expenses. Taxpayers should consider these points before investing in a possible abusive scheme:

• Any investment scheme or promotion that claims to allow a federal income tax deduction for normal personal expenses should be considered highly suspect
• A business must truly exist prior to claiming expenses
• In order to be deductible, the expenses must be ordinary and necessary expenses paid or incurred in carrying on a trade or business
• Personal, family and living expenses are not deductible business expenses
• Forming an S corporation, partnership, or any other pass-through entity does not cause personal, living and family expenses to become deductible; nor do incorporation, the existence of board minutes, and partnership agreements authorizing personal, living or family expenses cause these expenses to become deductible

Examples of misuse of the law:

• TRAVEL – Deducting travel, meals, and entertainment under the guise that everyone is a potential client.
• AUTO – Excessive car and truck expenses when the asset has been used for both business and personal use.
• PAYMENTS TO FAMILY MEMBERS – Deducting payments to family members for routine household tasks that are not ordinary and necessary to the operation of the business, such as taking out the trash, mowing the lawn, washing the car, answering the telephone, etc. Also payments to family members that are excessive in relation to the services performed.
• BUSINESS USE OF HOME – Abusive promoters often advise taxpayers to deduct excessive costs associated with the operation of the home. The promoters claim that the “exclusive use” restriction can be avoided by placing business-related items in each room of the house. A deduction for the business use of a home is limited to that area of the home that is used regularly and exclusively for business purposes (Internal Revenue Code Section 280A). For example, merely placing a calendar or file cabinet in a room does not satisfy the “regular and exclusive business use” requirement.
• EDUCATION EXPENSES – Some schemes advise taxpayers that they may claim up to $5,250 per year in educational expenses for each family member. There are specific requirements that preclude virtually all investors in this scheme from qualifying for this deduction (Internal Revenue Code Section 127).
• MEDICAL REIMBURSEMENT PLANS – Abusive promoters assert that taxpayers can make their family’s medical expenses 100 percent deductible merely by employing their family member(s). In order for the medical expenses to be deductible under a self-insured medical reimbursement plan, a bona fide employer-employee relationship must exist. In addition, the plan has to meet other requirements (Treasury Regulation Section 1.105-11).
• RECORD KEEPING – Taxpayers in these schemes are advised to maintain detailed records of all expenses incurred. The existence of such records does not negate the requirement that expenses be “ordinary and necessary” in relation to a legitimate business activity. The expenses must also satisfy any other deductibility requirements (Internal Revenue Code Section 274).

Questions and Answers

Q. What happens when a promoter is investigated?

A. The government may file suit against the promoter to stop him or her from promoting the scheme. The court has ordered home-based business promoters to turn over to the government a list of their clients who purchased and/or participated in the abusive tax avoidance scheme.

Q. Can an individual avoid being subject to penalties if they relied on their return preparer or someone else who promoted the abusive scheme?

A. Reliance on the advice of a promoter does not guarantee avoidance of penalties. See Tax Court case Peete v Commissioner TC MEMO 2004-31. (PDF)

Q. Is it wrong to deduct costs associated with businesses, including home-based businesses?

A. The law allows individuals to claim legitimate business expenses. In order to be deductible, expenses must be ordinary and necessary expenses paid and incurred in carrying on a legitimate trade or business.  A business must truly exist prior to claiming business-related expenses.

Q. Can certain personal living expenses be deducted in connection with a business?

A. Any promotion that claims a person can deduct what would normally be personal expenses should be considered highly suspect.  Non-deductible personal living expenses cannot be transformed into deductible business expenses.  Forming an S Corporation, partnership, or any other pass-through entity does not cause personal, living and family expenses to become deductible. Incorporation, the existence of board minutes, and partnership agreements authorizing personal, living or family expenses do not cause these expenses to become deductible either.

Q. What should a person do who has deducted business expenses on a return that are actually non-deductible personal expenses?

A. File an amended return.  If the amended return results in additional tax owed, the taxpayer may also be subject to interest and penalties.  However, amending a return may reduce the amount of penalties and interest eventually owed.  For additional guidance on amending returns, seek the advice of a trusted tax professional, call the IRS at (800) 829-1040 or visit Amended/Corrected Tax Return Frequently Asked Questions on IRS.gov.

Q. What if a person does not amend their return?

A. If the return is audited, the possible penalties, interest, and legal costs associated with an abusive tax promotion can be significant.  Criminal sanctions may also apply including: criminal penalties, imprisonment, and fines. This is in addition to the tax due and fees paid for the promotion.  Contact the Internal Revenue Service at (800) 829-1040, if there are additional questions.

Q. How can the public report information to the IRS on promotions or promoters?

A. Contact the Internal Revenue Service at (866) 775-7474 or e-mail the Tax Shelter Hotline at irs.tax.shelter.hotline@irs.gov.

Q. How does a person who invested in an arrangement involving a home-based business abusive tax promotion get their money back?

A. A person’s ability to obtain any money paid with respect to a promotion is between the taxpayer and the person or entity paid.  If the person or entity has filed for bankruptcy protection, the taxpayer may consider filing a claim in the bankruptcy proceeding.

Webinars
To help you get started using your account or to learn more about the features and functionality that LinkedIn offers, you can attend free online presentations.
Here is the link to the Training Resources page on LinkedIn:
http://learn.linkedin.com/training/
Have you attended any LinkedIn training Webinars or e-learning modules?
What has your experience been?
Looking forward to your comments!