Best Financial Advisors in Beaumont, TX

Business owners can deduct ordinary and necessary expenses on their tax returns but they must be able to substantiate them. If the IRS disallows them and an owner wants to challenge the tax agency, the taxpayer bears the burden of proving there were errors in the IRS determinations. In one case, a consultant reported gross business income of $174,956 and business expenses of $174,829, which produced a taxable income of $127. The IRS disallowed most of his claimed expenses. In U.S. Tax Court, rather than attempting to demonstrate errors by the IRS, the taxpayer focused on “frivolous and groundless” arguments. The court ruled he was liable for the additional tax and penalties. (TC Memo 2022-7)...