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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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Friday, March 26,2010

LEGALLY speaking

by John Alan Cohan - Contributing Columnist
The accuracy and businesslike nature of records is something that the IRS has been scrutinizing more and more in recent years. The IRS expects all taxpayers to maintain canceled checks, invoices, credit card statements and similar items needed to substantiate amounts claimed as business deductions and to help prepare ones tax returns.

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Friday, February 5,2010

LEGALLY speaking

by John Alan Cohan - Contributing Columnist
The American wind power industry grew substantially in 2009 and at this point, almost 2 percent of the countrys electricity is produced from wind turbines. Many of these turbines are on farm and ranch properties all over the country. I have received many inquiries from people who have been approached by wind turbine developers.

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Friday, January 22,2010

LEGALLY speaking

by John Alan Cohan - Contributing Columnist
Excessive business deductions by livestock or general farmers, or horse owners or for that matter, most any other businesstrigger IRS audits.

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Thursday, December 24,2009

LEGALLY speaking

by John Alan Cohan - Contributing Columnist
The Internal Revenue Service (IRS) has been cracking down on individuals and small businesses including farmers, ranchers and horse ownerswith increased tax audits and aggressive tactics to collect taxes. The tactics include an increased volume of audits, and more bank levies and liens on real property.

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Friday, August 21,2009

LEGALLY speaking

by John Alan Cohan - Contributing Columnist
Most of tax law is in grey areas. For instance, reasonable people, including those within the IRS bureaucracy, will disagree on what constitutes an ordinary and necessary business expensea big area of tax deductions. Another area concerns whether litigation proceeds to compensate for damages to farm or ranch property constitute taxable income.

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Friday, July 17,2009

LEGALLY speaking

by John Alan Cohan - Contributing Columnist
A tax case, Mullins v. U n i t e d States, decided in the U.S. District Court in Knoxville, TN, considered an individual who owned and operated a cattle-raising operation who claimed he was entitled to deduct losses over a period of years.

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Friday, June 12,2009

LEGALLY speaking

by John Alan Cohan - Contributing Columnist
In a lengthy decision, the Tax Court recently underscored the difficulties taxpayers have in convincing the IRS that family-run farms are engaged in for profit. The case, Smith v. Commissioner, T.C. Memo 2007-368, ruled on two families limited partnerships, involving a cow and dairy farm, a cutting horse operation, and dog breeding.

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Friday, June 5,2009

LEGALLY speaking

by John Alan Cohan - Contributing Columnist
Enforcement action by the Internal Revenue Service (IRS) has actually increased in recent months in the farming, horse and livestock fields, partly due to the need for the government to raise revenue, and partly due to an increase in taxpayers failing to file tax returns or failure to pay taxes owed.

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