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Make Sure Your W-
Now that the President has signed the $1.35 trillion Tax Relief Act into law, your withholding is going to change starting on July 1st. Some people will be caught in a trap that might mean penalties come April. That means it's time to revisit your W-
Business Tax Credits Are Worth Their Weight In Gold
Don’t overlook the real opportunities to cut your tax bill by taking advantage of business tax credits. Tax credits such as the Work Opportunity Credit and the Welfare-
Watch Out For Tax-
That Are Subject To The Alternative Minimum Tax
It comes as a surprise sometimes to taxpayers that part of their tax-
What Should You Look For When You're
Considering The Tax Effects Of A Particular Fund?
One important consideration to think about: how often does the fund turn over its investments? If the fund sells and reinvests often, chances are you’ll have a fair amount of short-
Funds that hold on to their investments for at least a year before sale distribute those gains as long-
Employ Your Under 18-
The law provides a significant opportunity for family businesses. As a parent who owns a family business, you can shelter $4,400 per child (for 2000) from income and social security taxes by employing your child (that is, as long as you pay them reasonable wages for the services they provide—and if your kids are like most teenagers, they’ll make sure of that!)
Sale of Mutual Funds
Plan your sale of your mutual fund shares before dividend payments.
If you have a gain on your shares, you’ll pay capital gains tax rates (20% or 10%, depending on your regular tax bracket) on your profits, and you won’t have to pay your ordinary income tax rates on the dividend payout. Your ordinary income tax rates (28%, 31%, etc.) apply to all of your dividends.
What if you have a loss on your fund? That’s certainly a likely scenario the way the market’s been behaving. Sell your fund anyway if it makes sense for other reasons. Why? You’ll minimize your capital loss because the sales price of the fund usually drops by the amount of the dividend payment. U. S. TAX COURT
WASHINGTON, DC
About the United States Tax Court:
The U.S. Tax Court is a Federal court of record established by Congress under Article I of the Constitution of the United States. Congress created the Tax Court to provide a judicial forum in which affected persons could dispute tax deficiencies determined by the Commissioner of Internal Revenue prior to payment of the disputed amounts. The jurisdiction of the Tax Court includes the authority to hear tax disputes concerning notices of deficiency, notices of transferee liability, certain types of declaratory judgment, readjustment and adjustment of partnership items, review of the failure to abate interest, administrative costs, worker classification, innocent spouse relief, and review of certain collection actions.
The Tax Court is composed of 19 presidentially appointed members. Trial sessions are conducted and other work of the Court is performed by those judges, by senior judges serving on recall, and by special trial judges. All of the judges have expertise in the tax laws and apply that expertise in a manner to ensure that taxpayers are assessed only what they owe, and no more. The Tax Court is located at 400 Second Street, N.W., Washington, D.C. 20217, and maintains one field office in Los Angeles, California. Although the Court is physically located in Washington, the judges travel nationwide to conduct trials in various designated cities. Trials are conducted before one judge, without a jury, and taxpayers are permitted to represent themselves if they desire. Taxpayers may be represented by practitioners admitted to the bar of the Tax Court. A case in the Tax Court is commenced by the filing of a petition. In deficiency cases, the petition must be timely filed within 90 days (150 days if the notice of deficiency is mailed to a taxpayer outside the United States) after the date of the mailing of the deficiency notice. A $60 filing fee must be paid when the petition is filed. Once the petition is filed, payment of the underlying tax ordinarily is postponed until the case has been decided.
In deficiency disputes involving $50,000 or less for each year involved, taxpayers may elect to have their case conducted under the Court's simplified small tax case procedure. Trials in small tax cases generally are less formal and result in a speedier disposition. However, decisions entered pursuant to small tax case procedures are not appealable.
Cases are calendared for trial as soon as practicable (on a first in/ first out basis) after the case becomes at issue. When a case is calendared, the parties are notified by the Court of the date, time, and place of trial.
The vast majority of cases are settled by mutual agreement without the necessity of a trial. However, if a trial is conducted, in due course a report is ordinarily issued by the presiding judge setting forth findings of fact and an opinion. The case is then closed in accordance with the judge's opinion by entry of a decision stating the amount of the deficiency or overpayment, if any.
FREQUENTLY ASKED QUESTIONS
1. How do I begin a case?
A case is commenced by filing a petition. The Tax Court's Rules of Practice and Procedure provide detailed instructions concerning the preparation and filing of a petition. A pre-
2. How do I get a copy of the Rules of the Tax Court?
A copy of the Rules may be obtained for $14.00 by writing to the Administrative Office, United States Tax Court, 400 Second Street, N.W., Washington, D.C. 20217, and enclosing a check or money order for that amount. Please do not send cash. Also see RULES.
3. How do I get admitted to the bar of the Tax Court?
Application forms and other necessary information for admission will be furnished upon written request addressed to the Admissions Clerk, United States Tax Court, 400 Second Street, N.W., Washington, D.C. 20217.
4. What is the procedure for filing a petition?
A petition may be mailed or hand-
5. When should I file my petition?
For petitions which dispute a notice of deficiency, the petition must be filed no later than 90 days (150 days if the notice is addressed to a person outside the United States) after the date the notice of deficiency was mailed by the Internal Revenue Service. To be timely filed, the petition must be actually received within the statutory time period for filing the petition, or mailed within the time period by either U.S. Certified or Registered mail, or received in an envelope which bears a U.S. Postal Service postmark within the time period, or sent within the time period using certain approved services offered by "designated private delivery service companies". NOTE: The time period for filing a petition is set by law and cannot be extended by the Court.
6. What should I attach to my petition?
The notice of deficiency, (or other document issued by the Internal Revenue Service which is the basis for jurisdiction) should be attached to the petition. Tax returns and documents in the nature of evidence should NOT be attached to the petition. You will have an opportunity to submit such documents at a later time.
7. How do I know if you received my petition?
Within 1 to 2 weeks after filing your petition you will receive a Notification of Receipt of Petition from the Tax Court providing your docket number and other important information about your case.
8. What does it cost to begin a case?
There is a $60.00 filing fee charged by the Tax Court for beginning a case. The fee should accompany the petition. See Rule 20(b), Tax Court Rules of Practice and Procedure.
9. Do I need an attorney?
You may represent yourself in Tax Court. Only you can decide whether or not you need legal assistance. If you decide that you need legal assistance, the Tax Court will recognize only persons who are admitted to the bar of the Court.
10. How many copies do I file?
In most cases, for pleadings (a petition, answer, or reply) one original and two copies must be supplied; for other documents (for example, a motion), one original and four copies must be supplied. For cases being processed under the small tax case procedures, one original and two copies are needed. If part of a consolidated group, an additional copy is needed for each docket number in excess of one. See Rule 23(b), Tax Court Rules of Practice and Procedure.
11. How do I obtain copies of documents filed in a case?
The Tax Court is a court of public record and most files are available for viewing in the Public Files Section located at the Tax Court. You may also request that particular documents be copied by writing to the Copywork Section, United States Tax Court, 400 Second Street, N.W., Washington, D.C. 20217. There is a fee for copywork.
12. Are cases decided by the Tax Court appealable?
Decisions entered in regular cases are appealable to the United States Courts of Appeals; however, decisions entered pursuant to the simplified small tax case procedures are not appealable.
13. What is the procedure for appealing a decision of the Tax Court?
To appeal a decision, a timely Notice of Appeal must be filed with the United States Tax Court, 400 Second Street, N.W., Washington, D.C. 20217, and must be accompanied by the appropriate fee. For additional information, see Rules 190 through 192, Tax Court Rules of Practice and Procedure, and Rules 3(e), 13, and 14 of the Federal Rules of Appellate Procedure. NOTE: Decisions entered pursuant to simplified small tax procedures are not appealable.
14. What is the Tax Court's mailing address?
Mail to the Court should be addressed to:
United States Tax Court
400 Second Street, N.W.
Washington, D.C. 20217
15. What are the Tax Court's hours of operation?
The Tax Court is open from 8:00 a.m. to 4:30 p.m. (EST), on all days, except Saturdays, Sundays, and legal holidays in the District of Columbia.