Lowrance Law, LLC

irs_logo_5A comprehensive list of questions and answers on the impact of the current government shutdown on IRS and tax administration has been published by the American Institute of CPAs Tax Section. The Question & Answer page was created to help practitioners working to complete tax returns by the October 15 filing deadline.

The organization said it “has urged the IRS to consider the substantial burden imposed on taxpayers (and practitioners) by the inability to communicate with and obtain information from the IRS.” The AICPA Tax Executive Committee “is currently considering whether it is appropriate to advocate for a legislative solution to provide for an additional extension of time to file tax returns.” The Q&A page can be accessed at http://bit.ly/1byGpvU.

The government shutdown is having a severe impact on every slice of the US economy. US government employees are not being paid, and many workers live paycheck to paycheck. The Congress should do their job instead of bickering among themselves over health care for all Americans.

Some of the Questions presented are the following:

Will individual taxpayers still need to file by October 15th or can the IRS extend due dates?
Will the IRS provide an expedited or automatic abatement of penalties for late-filed tax returns?
Will the practitioner hotline remain open during a government shutdown?
Will examinations continue during a government shutdown?

There are many other excellent questions. Read the original article.

Bill Lowrance
Lowrance Law LLC



The IRS has spoken. It has has no current plans to increase the standard mileage rate of 51¢ per mile for business miles driven, despite the big boost in gasoline prices.

Simplified deduction method. The optional mileage allowance for owned or leased autos (including vans, pickups or panel trucks) is 51¢ per mile for business travel after 2010. (The 2011 rate for using a car to get medical care or in connection with a move that qualifies for the moving expense deduction is 19¢ per mile, 2.5¢ more per mile than the 16.5¢ for 2010.) ( Rev Proc 2010-51, 2010-51 IRB 883 )

The mileage allowance deduction replaces separate deductions for lease payments (or depreciation if the car is purchased), maintenance, repairs, tires, gas, oil, insurance, and license and registration fees. The taxpayer may, however, still claim separate deductions for parking fees and tolls connected to business driving. ( Rev Proc 2010-51 )

The standard mileage rate may not be used for a purchased auto if: it was previously depreciated using a method other than straight-line for its estimated useful life; a Code Sec. 179 expensing deduction was claimed for the auto; the taxpayer has claimed the additional first-year depreciation allowance; or the taxpayer depreciated it using MACRS under Code Sec. 168.

A taxpayer who uses the mileage allowance method for an auto he owns may switch in a later year to deducting the business connected portion of actual expenses, so long as he depreciates it from that point on using straight-line depreciation over the auto’s remaining life. The depreciation deductions would still be subject to the Code Sec. 280F dollar caps. ( Rev Proc 2010-51 )

Additionally, employers may reimburse employees who are required to provide their own cars for business use at a rate that doesn’t exceed the standard mileage rate. A mileage rate that doesn’t exceed the standard mileage rate is treated as made under an accountable plan if the mileage is properly substantiated (time, place, mileage, and business purpose).

I handle IRS problems for my clients. If you get a letter from the IRS, and you are worried or have questions, send me an e-mail or, if urgent, call me.

Bill Lowrance
Lowrance Law LLC
McLean, VA


Got A Letter From The IRS? What To Do?

April 13, 2011

The IRS just sent out IRS Tax Tip 2011-73. The notice gives you the IRS view of what to do if you receive a letter from the IRS. Read this over and do not panic. If you need assistance with the IRS, please contact me at 703 506 1600. I handle audits, examinations and litigation […]

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Divorce Tax 101 – What You Need to Know About Taxes & Divorce

March 31, 2011

On March 22, 2011 I gave a lecture for the Fairfax Bar Association (Fairfax Bar) Tax and Family Law Section at the Fairfax County Courthouse on key issues of Divorce Taxation that supplied Continuing Legal Education Credit for all Virginia attorneys present. The event was very well attended. My presentation on divorce taxes, which may seem […]

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Special Sales Tax Deduction for Car Purchases 2009

October 7, 2009

The IRS is reminding everyone that there are special, limited deductions for state and local sales and excise taxes paid on the purchase of new cars, light trucks, motor homes and motorcycles. The deduction is available on new vehicles purchased from Feb. 17, 2009, through Dec. 31, 2009. In states that don’t have a sales […]

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