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Calvin Bomar received his LL.M. in Taxation from New York University, and was an attorney for the I.R.S. Office of Chief Counsel. He has extensive experience as a tax attorney, and is co-founder of the Atlanta law firm Bomar & Phipps, LLC.
Income Tax Exclusion for Service in Combat Zone We receive frequent questions from members of the U.S. armed forces about exclusions from income while they are serving in a combat zone. If you serve in a combat zone as an enlisted person or as a warrant officer (including commissioned warrant officers) for any part of a month, all your military pay received for military service that month is excluded from gross income. For commissioned officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received. To answer the most common question posed to us about this, the exclusion will (unfortunately) not protect your lottery winnings from taxation.
IRS increases optional standard mileage rates The Internal Revenue Service has announced an increase in the optional standard mileage rates. The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as provided in Rev. Proc. 2007-70. Although the IRS normally only updates the mileage rates once a year in the fall for the next calendar year, it implemented this increase in recognition of the increased fuel prices that Taxpayers are currently facing.
Taxpayers not required to file a 2007 income tax return may be eligible for a stimulus relief payment if they file Even Taxpayers who are not required to file a return may want to, since they may be eligible for a stimulus payment (if they have at least $3,000 in qualifying income), as long as they file their 2007 income tax return by Oct. 15, 2008. The easiest way to do this for someone not required to file is usually Form 1040A.
Phishing Scams using IRS Name and Promising Refunds are on the Rise. The IRS has published several warnings lately about increasing internet phishing scams using the IRS name and logo. "Phishing" (an intentionally misspelled version of "fishing" (for information)) is a scam where someone fraudulently sends an e-mail to trick the potential victim into revealing personal data that can be used to steal the victims' identity and assets. Once the identity thief has someone's personal data, they will use it to use to empty the victim's accounts, run up charges on the victim's credit cards, apply for new credit cards and/or obtain loans. I have even seen cases where the thief rented an apartment or bought a car.
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