Internal Revenue Bulletin 2. Internal Revenue Service. The principal author of these regulations is Shannon K. Castaeda, Office of Associate Chief Counsel Procedure and Administration. Adoptions of Amendments to the Regulations. Accordingly, 2. 6 CFR Part 3. PART 3. 01PROCEDURE AND ADMINISTRATIONParagraph 1. The authority citation for part 3. Authority 2. 6 U. Oct/16/2000746872/600/400/0/121015-A-CE999-010.JPG' alt='Chief Counsel Irs Honors Program' title='Chief Counsel Irs Honors Program' />Were the Partner You Need in Solving Your Tax Problems. It seems as if everywhere you look a tax consultant, usually some outofstate, faceless firm, is promising. Daily paper. Local, state, and wire news and commentary. Photo galleries, business and obituaries. Two Equifax executivesChief Information Officer David Webb and Chief Security Officer Susan Mauldinare retiring in the wake of a security breach that. KPIX 5 CBS San FranciscoConnect With Us At KPIX 5 PROGRAM GUIDE KPIX 5 TV Schedule WATCH A Glimpse Inside The Working KPIX 5 Newsroom Breaking News Send news tips. Chief Counsel Irs Honors Program' title='Chief Counsel Irs Honors Program' />Government Service. Served with the Office of Chief Counsel, Internal Revenue Service in the following positions Health Care Counsel 20102013 and Deputy Division. S. C. 7. 80. 5 Par. Section 3. 01. 7. Adding an entry for 3. Adding entries to 3. A through F and d. Revising the entries for 3. Revising the section heading for 3. Adding entries for 3. The additions and revisions read as follows 3. Table of contents. Administrative proceeding and administrative proceeding date. First letter of proposed deficiency that allows the taxpayer an opportunity for administrative review in the Office of Appeals. Reasonable administrative costs. A In general. B Special factor. C Limited availability. D Local availability of tax expertise. E Difficulty of the issues. F Example. d Pro bono representation. In general. 2 Requirements. Nominal fee. 4 Payment when representation provided for a nominal fee. Requirements. 6 Hourly rate. Examples. 3. Prevailing party. In general. b Position of the Internal Revenue Service. Examples. d Substantially justified. In general. 2 Position in courts of appeal. Examples. 4 Included costs. Examples. 6 Exception. Presumption. e Amount in controversy. Most significant issue or set of issues presented. In general. 2 Example. Net worth and size limitations. Individuals. 2 Estates and trusts. Others. 4 Special rule for charitable organizations and certain cooperatives. Special rule for TEFRA partnerships. Determining net worth. Determination of prevailing party. Examples. 3. Effectiveapplicability dates. Qualified offers. In general. b Requirements for treatment as a prevailing party based upon having made a qualified offer. In general. 2 Liability under the last qualified offer. Liability pursuant to the judgment. Qualified offer. 1 In general. To the United States. Specifies the offered amount. Designated at the time it is made as a qualified offer. Remains open. 6 Last qualified offer. Qualified offer period. Interest as a contested issue. Reserved. e Examples. Effective date. 3. Administrative costs incurred in damage actions for violations of section 3. Bankruptcy Code. a In general. Prevailing party. Administrative proceeding. Costs incurred after filing of bankruptcy petition. Time for filing claim for administrative costs. Effective date. Par. Section 3. A, d1i and ii and d2 introductory text to read as follows 3. Exhaustion of administrative remedies. A Requests an Appeals office conference in accordance with 6. The party follows all applicable Internal Revenue Service procedures for contesting the matter including filing a written protest or claim, requesting an administrative appeal, and participating in an administrative hearing or conference orii If there are no applicable Internal Revenue Service procedures, the party submits to the Area Director of the area having jurisdiction over the dispute a written claim for relief reciting facts and circumstances sufficient to show the nature of the relief requested and that the party is entitled to the requested relief, and the Area Director denies the claim for relief in writing or fails to act on the claim within a reasonable period after the claim is received by the Area Director. For purposes of paragraph d1ii of this section, a reasonable period is ar. Good Tickle Games more. Section 3. 01. 7. Revising paragraph a. Removing the semicolon at the end of paragraph c3iB and adding a period in its place, and adding a sentence at the end of the paragraph. Adding a sentence at the end of paragraph c3iE. Revising paragraph c3iiC, adding paragraph c3iiiC. Adding a sentence at the end of paragraph c7. Revising paragraph e. The additions and revisions read as follows 3. Requirements and procedures for recovery of reasonable administrative costs. Introduction. Section 7. Internal Revenue Service. Paragraph b of this section lists the requirements that a taxpayer must meet to be entitled to an award of reasonable administrative costs from the Internal Revenue Service. Paragraph c of this section describes the procedures that a taxpayer must follow to recover reasonable administrative costs. Paragraphs b and c apply to requests for administrative costs regarding all administrative proceedings within the Internal Revenue Service. B For costs incurred after January 1. United States has lost in courts of appeal for other circuits on substantially similar issues, the taxpayer must provide, for each such case, the full name of the case, volume and pages of the reporter in which the opinion appears, the circuit in which the case was decided, and the year of the opinion E This statement must identify whether the representation is on a pro bono basis as defined in 3. Specifically, the statement must direct whether payment should be made to the taxpayers representative or to the representatives employer. C For costs incurred after January 1. If a special factor is claimed based on specialized skills and distinctive knowledge as described in 3. Why the specialized skills and distinctive knowledge were necessary in the representation 2 That there is a limited availability of representatives possessing these specialized skills and distinctive knowledge and3 How the representatives education and experience qualifies the representative as someone with the necessary specialized skills and distinctive knowledge. C In cases of pro bono representation, time records similar to billing records, detailing the time spent and work completed, must be submitted for the requested fees. Period for requesting costs from the Internal Revenue Service. To recover reasonable administrative costs pursuant to section 7. Internal Revenue Service with respect to all tax, additions to tax, interest, and penalties at issue in the administrative proceeding is mailed or otherwise furnished to the taxpayer. For purposes of this section, interest means the interest that is specifically at issue in the administrative proceeding independent of the taxpayers objections to the underlying tax, additions to tax, and penalties imposed. The final decision of the Internal Revenue Service for purposes of this section is the document that resolves the taxpayers liability with regard to all tax, additions to tax, interest, and penalties at issue in the administrative proceeding such as a Form 8. For purposes of this section, if the 9. Saturday, Sunday, or a legal holiday, the 9. Saturday, Sunday, or a legal holiday as defined by section 7. Top Tax Write Offs That Could Get You in Trouble With the IRSBy Kristin Edelhauser Entrepreneur. Related Articles in  Finance Tax. From guard dogs to Las Vegas style showgirl costumes, theres no limit to what people will try to write off at tax time for the sake of their business. But where do you draw the lineWhich write offs youre trying to write off go too far We assembled a team of three leading tax attorneys to get their advice on how far is too far in the land of tax write offs. Our team of experts include Cliff Ennico, a Connecticut based business attorney who specializes in advising small businesses and entrepreneurs Donna Le. Valley, a tax attorney and contributing editor to the J. K. Lasser annual tax guide and Alvin S. Brown, a tax attorney who formerly worked with the office of the chief counsel of the IRS for more than 2. Tax Write Off Travel Expenses. Heres a write off thats sometimes difficult deciding just where to draw the line. Can you deduct the cost of going to see a Cirque du Soleil show in Las Vegas if youre treating your client The answer is yes, as long as you can justify it as a business expense. And what if your spouse goes along on the trip As long as theyre a partner or employee of your business and attended conventions or meetings on the trip you took together, then his or her travel and 5. Expert Opinion You can deduct travel expenses, and 5. Cliff Ennico. How to Do It Right Heres a tip from Donna Le. Valley that will come in handy on your next business trip Grab an envelope from the stationary drawer of your hotel room and put all your receipts from that trip in it. Label the envelope with a name and date to help you remember that trip. The more accurate your records are, the more likely theyll be accepted and validated by the IRS if you become involved in an audit situation. Tax Write Off Cell Phone Bill. If you use a cell phone as part of your business, this could be a big deduction for you. So dont make the mistake of mixing business with pleasure by sneaking too many personal calls onto your cell phone bill. Expert Opinion Because of the way a cell phone can be used, its come under scrutiny, so people need to keep good records and keep their actual telephone bill so they can demonstrate that a majority of the calls were business calls, explains Le. Valley. How to Do It Right Take a look at your cell phone bill to make sure you receive an itemized report. Because cell phones are considered listed property, you need to keep detailed records of their use. In the case of a land line, its a good idea to have a separate phone number for your business since the IRS wont let you allocate the cost of a single phone in your home to your home office. Tax Write Off Home Office. Home office deductions used to be a big red flag for an audit back in the 1. These days, you just need to use the deduction with caution. A basic rule of thumb to follow Anything thats unusual and disproportionate to your level of income is something the IRS will check out, Alvin Brown says. So how do you determine your actual home office space This is the area in your home dedicated solely to the running of your business. Once you figure out the percentage of your home office compared to your overall home, then you can go back to your heating bills, electric bills and all other bills that go to supporting your home, and figure out the amount you can deduct for running your business. Expert Opinion Dont measure your home office space yourself. When you do, you almost always shortchange yourself, says Ennico. How to Do It Right Its a good idea to have a contractor measure your space professionally. They can provide you with a letter stating the exact square footage of your home office space should you need to substantiate it with the IRS. Tax Write Off Home Office Computer. As our experts pointed out before, its not a good idea to mix your business world with your personal life. So they recommend never using your home office computer for personal tasks if you can help it. Expert Opinion If this is the only computer in your house, youll have to calculate the percentage of total time you use it for business purposes, suggests Ennico. How to Do It Right Ideally, your best option is to purchase a laptop and dedicate it to being your personal computer. This way you can avoid any messy situations come audit time. Tax Write Off Rent. Wondering if you can still take the home office deduction if youre a renter The answer is yes. But you need to know the right way to go about it. Expert Opinion If your landlord is an individual or unincorporated business, such as a partnership or LLC, says Ennico, you may have to send IRS Form 1. January of each year showing how much of your rent youre deducting. How to Do It Right To ensure that you handle this deduction appropriately, its a good idea to check with your accountant for details. Tax Write Off Personal Expenses. This is a category business owners can easily get into trouble with if theyre not careful. The bottom line is, you simply cant deduct services of a purely personal nature that arent related to your business. For instance, you cant deduct such homecare services as gardening, landscaping and tree removal simply because you work out of a home office. Expert Opinion People start to get in trouble when they try to make personal expenses business expenses, says Le. Valley. How to Do It Right If in doubt as to whether an expense is deductible for your business, Le. Valley recommends getting a second opinion. I think that even if youre very capable and even if youve had some experience on your own, Le. Valley says, its always good to get what I call a financial checkup every once in a while. Tax Write Off Guard Dog. In order for a dog to qualify as your companys guard dog, it helps, says Ennico, if youre a little afraid of the animal yourself picture a Rottweiler, Pit Bull or German Shepherd. How To Install Epel Repository On Red Hat there. Believe it or not, this is a legit write off if taken correctly. Expert Opinion Ennico points out how to use it Youll only be able to deduct that portion of his or her total time devoted to guard dog duty. How to Do It Right Though it may seem rather obvious, your dog most also be guarding your inventory. Another interesting tidbit Though you can deduct expenses relating to the dog, you cant deduct the dog itself. But you can depreciate it over its expected lifespan as determined by a local breeder. Who wouldve thought Tax Write Off Work Related Uniforms or Costumes. The dos and donts of this tax write off are fairly simple If the costume or uniform is something you could wear outside your job, you shouldnt write it off. If, however, its obvious you can only wear it for the duties of your specific job, then it qualifies as a write off. So a new suit wouldnt qualify since you can wear it other places outside of your work environment. What about a clown suit, you say Thats a different matter. Expert Opinion Le. Valley urges taxpayers to go for the write off if its a legit expense. If the expense is real, take it, she says. It may be strange, it may be large, but whatever it is, if its real, be prepared to substantiate it but dont be afraid to do it. How to Do It Right A perfect example of some rather unusual clothing you can write off involves a Las Vegas showgirl who was trying to write off the tight, sequined costumes she purchased for her performances.