Definitions–Tax Turtles and Body Materials

Image source: Betta.1 (Own work) [GFDL ( or CC BY-SA 3.0 (], via Wikimedia Commons

This week the court discussed tax turtles in one case and decided in another not to figure out how to allocate basis in the human body, or the holding period for human-body parts, or the character of the gain from the sale of those parts.

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Decisions — Cutting off the Deadline

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In the days of the American Civil War, deadlines had consequences–prisoners were shot on sight if they crossed a marked boundary known as the “deadline.” The effect of deadlines in tax law is generally less serious, and can often be mitigated by extensions.

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Definition — Adding Up the Mileage

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However many business miles you have to go before you sleep, you probably know you can claim a tax deduction for each of them using the standard mileage rate. But do you know the rules?

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Decisions — School Math Day

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Writer Ambrose Bierce defined a day as a period of twenty-four hours, mostly misspent. In tax law, thanks to “timing rules,” misspending during those twenty-four hours can mean the difference between benefiting from a credit or losing it.

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Definition — Standing Alone

Image Source: Solitary Seagull © Charles Shapiro Dreamstime Stock Photos

The annual accounting concept is a familiar part of tax law. Under internal revenue code section 441, you compute your taxable income on the basis of your taxable year. When completing your return, you look at events on an annual basis, using the facts as they exist at the end of the year covered by the return. Each taxable year is a separate unit, and the future is left to take care of itself.

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Definition — Estimating the Penalty

Dart Board

When you think of getting a penalty abated, you probably immediately think of “reasonable cause.” That’s the term for requesting relief from tax code penalties when you exercise ordinary care in complying with tax law, and your actions were not due to willful negligence.

However, reasonable cause is not a pass for escaping all penalties in the tax code.

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Decisions — Hindsight

Image source: FDA photo illustration by Michael J. Ermarth, Public domain via Wikimedia Commons

If you make a mistake on your tax return, you should file an amended return within the required time period (Treasury regulation 1.451-1(a)). That seems clear enough.

But is it? How familiar are you with amended returns?

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Definition–Innocent or Injured?

Image source: Kevin Fillips (Own work) [CC-BY-3.0 (], via Wikimedia Commons

Perry Mason was able to solve the case of the Injured Innocent. Of course, Mr. Mason never had to deal with tax law, where spouses are either innocent or injured, but generally not both.

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Definition — Loving Your Preparer

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Circular 230 is the Treasury department document that governs practice before the IRS.

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Decisions–Carrying On

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In order to deduct ordinary and necessary business expenses paid or incurred during a taxable year, you must be carrying on a trade or business. That’s internal revenue code section 61(a), and it sounds deceptively simple.

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Useful Tax Law Links

US Tax Code- Cornell University Law School Legal Information Institute. Searchable. - Office of the Law Revision Counsel. Searchable. Downloadable.

US Tax Court - TC Opinions, Memorandum Opinions, Summary Opinions. Searchable. Downloadable.

Treasury Regulations - Government Printing Office provides the Federal Tax Regulations. Searchable. Downloadable.

Other Official US Tax Guidance - US Internal Revenue Service. Searchable. Downloadable.

Useful Downloads by Taxing Lessons

Foreign Earned Income Exclusion - free PDF - Graphic of Internal Revenue Code Section 911

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