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Friday, July 20,2012

Legally Speaking

Issues concerning criminal tax evasion

by John Alan Cohan - Contributing Columnist
Most individuals who fail to file tax returns, or underreport income or take inflated tax deductions may end up being assessed a “fraud” penalty, which enhances the tax liability but does not proceed into the criminal arena.

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Friday, May 11,2012

Legally Speaking

by John Alan Cohan - Contributing Columnist
The case was Garbini v. Commissioner IRS. Mr. Garbini, of Myrtle Creek, Oregon, listed his occupation as a rancher, and his wife indicated she was a housewife. Both taxpayers were retired during the two taxable years in issue, and for Mr. Garbini this was a full time venture.

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Friday, March 23,2012

LEGALLY Speaking

Treating two activities as one for tax purposes

by John Alan Cohan - Contributing Columnist
Sometimes a farm, livestock or horse activity may be closely connected to one’s principal occupation, with certain tax advantages. If two activities are treated as one, deductions and income from each activity can be aggregated in deciding whether the taxpayer has the requisite profit motive under the IRS hobby loss rule.

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Friday, December 16,2011

GUEST opinion

by John Alan Cohan - Contributing Columnist
Wheat is an amazing crop…which is why we grow it in Oklahoma. Given the slightest opportunity, wheat responds very well under adverse conditions. In late October, the prospects for wheat pasture seemed all but lost with most wheat planted late and dry. It was noted, however, that with timely rains, a decent wheat crop could still develop.

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Friday, December 9,2011

LEGALLY speaking

by John Alan Cohan - Contributing Columnist
Mr. and Mrs. Harold Kahla of Tomball, TX, were denied farm deductions of $2,658,774 for their cattle and deer ranches, even though Mr. Kahla was knowledgeable about livestock farming and was highly successful in other businesses. They owned 300 head of cattle.

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Friday, August 26,2011

LEGALLY speaking

by John Alan Cohan - Contributing Columnist
Under the IRS hobby loss rule, if you have losses in connection with any farming activity, whether livestock, horses, or crops, the IRS may suspect that the activity is engaged in as a hobby rather than a business, particularly if there is a history of losses.

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Friday, November 5,2010

LEGALLY speaking

by John Alan Cohan - Contributing Columnist
After about 30 years handling tax audits, appeals and U.S. Tax Court cases, it seems to me that the IRS is taking a more aggressive approach against people in various industriesincluding livestock and horse activities. If you are audited by the IRS and you have a history of losses with little or no profits, the following advice pertains to you.

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Friday, September 10,2010

LEGALLY speaking

by John Alan Cohan - Contributing Columnist
Most of the problems with hobby loss audits involve people who have a history of losses with their ranch, farm or horse venture. The IRS tends to say that the activity is not conducted as a business, so that the tax losses are disallowed. This can be a substantial tax payment for quite a few taxpayers.

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Friday, August 6,2010

LEGALLY speaking

by John Alan Cohan - Contributing Columnist
In hobby loss audits, the IRS sometimes views various types of ranching activities as a means of generating tax losses, rather than a profitoriented venture. That was the issue in the Tax Court case, Ralph Wesinger, Jr., v. Commissioner of Internal Revenue.

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Friday, June 25,2010

LEGALLY speaking

by John Alan Cohan - Contributing Columnist
Many years ago, a federal court defined the word profit as the advantage or gain resulting from the investment of capital, or the acquisition of money beyond the amount expended; a pecuniary gain.

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