Seattle, Wash. – April 5, 2012 – Today Avvo, Inc., the web’s largest expert-only health and legal Q&A forum and directory (http://www.avvo.com/), announced a 205% increase in tax-related questions submitted to the Q&A forum between January and March, compared to the previous six months. Looking back at the past three years, the number of questions during this time period has increased on average by 182%.
Of all the thousands of tax-related questions asked and answered on the site, the most common involve:
Tax liens and withdrawal of liens
"One of the major problems I see in my practice is the lack of understanding that people have regarding how to handle a form 1099-C which is used to report income from the cancellation of debts,” said E. Martin Davidoff, CPA, Esq. “If a debt is forgiven, it is not necessarily taxable, but the form needs to be dealt with and not ignored. To determine whether or not the debt is taxable, one should see a competent tax professional or review IRS publication 4681 (http://www.irs.gov/pub/irs-pdf/p4681.pdf). Generally, if the cancellation of debt is due to bankruptcy, cancellation on certain residential mortgages, or you remain insolvent after the cancellation, it will not be taxed. Use form 982, as indicated by publication 4681, to report such exclusions.”
"File as soon as you can, consider getting expert help to do so and be aware that the IRS is more aggressive in their audits this year," said Dan Lively, tax attorney with The Lively Law Group. "For business owners in particular, make sure all 1099's are prepared, keep documentation for all items of income and expense and keep all sales and payroll tax filings current and paid."
Areas of the United States asking the most tax questions:
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