Individual Flashcards

1
Q

What does constructively received mean for a cash basis taxpayer?

A

Cash Basis taxpayers should report income for the year in which it was ACTUALLY or CONSTRUCTIVELY received: Income is constructively received if payment is credited to their account, set apart for them or otherwise made available so that they can draw upon it an ANY TIME.

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2
Q

What is the process of appeals for and audit?

A
  • Taxpayer does not agree with IRS adjustments:
  • Letter stating they have right to appeal within 30 days to IRS Appeals Office.
  • If not requested, a Notice of Deficiency is issued, giving the taxpayer 90 days to petition the US Tax Court
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