Finance Tax Time

The Internal Revenue Service has certified the 2006 Toyota Highlander Hybrid as being eligible for the clean-burning fuel deduction. This certification means that taxpayers who purchase one of these hybrid vehicles new during calendar year 2005 may claim a tax deduction of up to $2000 on Form 1040.

Under Working Families Relief Act of 2004, which was signed into law in October of 2004, the clean-burning fuel deduction is limited to up to $2,000 for certified vehicles first put into service in 2005 and $500 for vehicles placed in service in 2006. No deduction will be allowed after 2006.

Federal Law allows individuals to claim a deduction for the incremental cost of buying a motor vehicle that is propelled by a clean-burning fuel. By combining an electric motor with a gasoline-powered engine, these hybrid vehicles obtain greater fuel efficiency and produce fewer emissions than similar vehicles powered solely by conventional gasoline-powered engines.

This one-time deduction must be taken in the year the vehicle is originally used. The taxpayer must be the original owner. Individuals do not have to itemize deductions on their tax return to claim this deduction. This benefit can be taken as an adjustment to income on the Form 1040.

The amount of the deduction for the Toyota Highlander Hybrid was set after the manufacturer, Toyota Motor Sales, U.S.A., Inc. documented for the IRS the incremental cost related to the vehicle’s electric motor and related equipment.

A $2,000 tax deduction? I’m off to my local Toyota dealer!

Richard A. Chapo is with http://www.businesstaxrecovery.com - recovery of business taxes through tax help and tax relief. Visit http://www.businesstaxrecovery.com/articles to read more business tax articles.

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Every year, the IRS announces that it is holding unclaimed tax refunds. Taxpayers have a limited time to claim the $2 billion dollars the IRS is currently holding.

Three years is a magical number when it comes to tax returns. It refers to the statute of limitations on certain tax issues such as when an audit can occur, when refunds can be claimed and when amended tax returns can be filed. The IRS is currently holding $2 billion dollars in unclaimed tax refunds for the 2002 tax year and taxpayers must file their claims by April 17, 2006 or lose the refunds forever.

Approximately 1.7 million people are due refunds out of the $2 billion dollars currently held by the IRS. These people have refunds due because they failed to file tax returns for 2002. This occurred most likely because people felt they did not make enough money to warrant filing a tax return. By failing to file, however, they have left $570 on average with the IRS.

If a taxpayer fails to claim the tax refund by filing a tax return for 2002, the money will default to the federal government. Importantly, there is no penalty associated for filing late if a taxpayer is due a tax refund. This is common misconception among non-filers.

One group of taxpayers that almost always has a large percentage of non-filers is military personnel. Obviously, it is a bit hard to file from Afghanistan, but now is the time to do so for 2002. Members of the military that failed to file in 2002 are owed an average of $749 per taxpayer.

The IRS releases demographic on the areas in the United States where refunds are due. To this end, California and Texas are the states where the most individuals are due refunds while Idaho has only 6,200 people due a refund.

Nobody finds filing taxes an exciting prospect. The pain is much less, however, is you know you are due a refund. If you failed to file in 2002, you might be throwing away a nice little chunk of change.

Richard A. Chapo is with http://www.businesstaxrecovery.com - recovery of business taxes through tax help and tax relief. Visit http://www.businesstaxrecovery.com/articles to read more business tax articles.

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There was once a song about battling the law and losing. Fortunately, battling the IRS is possible and sometimes inevitable.

Battling the IRS

There comes a time when many Americans must take action against the IRS. The IRS can come down swiftly and without mercy against taxpayers for issues ranging from simple mistakes to genuine tax evasion. When such a situation occurs, usually in the form of an audit and followed by possible federal prosecution, it becomes necessary to stand up to the IRS. As many experts will tell you, knowing the right steps to take and doing things the right way can actually make battling the IRS prove to be a very valuable thing.

Every year, honest, tax-paying Americans worry that their income tax return will end up being audited by the IRS. In fact, the number of audits has increased quite significantly in recent years, lending its hand even further to the worry and stress. Audits can lead to major fees and even criminal prosecution. Needless to say, such a situation can become ugly very quickly.

However, many Americans don’t realize that they can fight the IRS. And, not only can they fight, but often times they can emerge with some sort of victory. In fact, recent studies have shown that over 41% of Americans who took their cases to the IRS’s appeals division won at least some degree of relief, while others had their penalties wiped out completely. Not only this, but countless numbers of other Americans have fought cases against the IRS in district courts and also emerged victorious.

What this means for the average American is that the IRS shouldn’t worry you too much. Obviously, an audit can be very scary and can occur at any time. However, as long as you did file your taxes in honesty, they are many venues you can look to for help. Just do some research, online or offline, and find a good tax lawyer to represent you. Whatever steps you take, do NOT talk to the IRS yourself. Your statements are evidence against you and you may inadvertently provide evidence the IRS has no right to obtain.

You will be surprised at your own chances of defeating the IRS and having your penalties reduced or even eliminated. Battling the IRS is something that can prove to be a very valuable tool for many Americans looking for tax relief.

Richard A. Chapo is with BusinessTaxRecovery.com - providing information on taxes.

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