The Schedule C Hobby Loss Exam
Author: Eric L Green
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
We all handle IRS exams, but what do you do when the IRS believes your client’s “business” is not a business at all? This program will review the Hobby Loss rules under IRC 183 and what practitioners should do before and during the exam to help save those claimed losses.
Publication Date: August 2021
Topics Covered
- Exam Notice
- Case Study
- Ethical Concerns
- First Steps for Preparing for the Exam
- The Client Interview and the Business Tour
- Section 183—The Hobby Loss Rules
- Appeals
Learning Objectives
- Identify hobby loss rules
- Recognize how to explain the nine factors the IRS uses to determine if an activity is a business or hobby
- Identify things the practitioner can do with clients to bolster their case that the activity is not a hobby
- Recognize who bears the burden of proving the taxpayer engaged in the activity with an actual and honest objective of realizing a profit
- Identify which IRC limits deductions to the income generated by a hobby
- Recognize what is not one of the nine relevant factors the IRS will look to regarding the hobby vs. business determination
- Describe how many days before trial a qualified offer is available anytime from appeals, based on IRC §7430
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
