Abatement of Interest

The Internal Revenue Service has sent you a notice indicating that you not only owe unpaid taxes but that they have assessed interest on that liability. The good news is that under certain circumstances, you are entitled to an abatement of interest on income, estate, gift, generation-skipping, and some excise taxes. The tax law permits a reduction if the interest assessment was due to an unreasonable error or delay by an IRS officer or employee performing a ministerial or managerial act.

Personal Service Corporations Formed to Evade Taxes

A corporation whose employees/owners provide personal services in the fields of accounting, actuarial science, architecture, consulting, engineering, health, and the performing arts is a personal service corporation. An employee/owner is defined by the Internal Revenue Service as an individual who owns, either directly or indirectly, more than 10 percent of the outstanding stock of the corporation on any day of the tax year.

Energy Conservation Subsidies

If you received subsidies from a public utility for the purchase or installation of an energy conservation measure in your residence, you are not required to include the amount of the subsidy in your gross income when preparing your federal income tax return. The subsidy may be provided to you either directly or indirectly by the utility in order to qualify for this exclusion from income.

Taxation of Commissions

Generally, commissions are taxed in the same way as other forms of compensation. They are taxable in the year that they are credited to your account and you are entitled to draw on them. The question of whether or not you actually withdraw them is irrelevant so long as they are subject to your withdrawal.

Employer Identification Numbers

An Employer Identification Number (EIN) is a nine-digit number that the Internal Revenue Service assigns to identify taxpayers that are required to file various business tax returns. EINs are used by employers, sole proprietors, corporations, partnerships, nonprofit associations, trusts, estates of decedents, government agencies, certain individuals, and other business entities.