Cancellation of Certain Student Loans

The general rule is that if you are responsible for making loan payments and the loan is forgiven, you are required to include the amount of the cancelled loan in your gross income for federal income tax purposes. However, under certain circumstances, a forgiven student loan may be entitled to tax-free treatment.

Substantiation Requirements for Employee Expenses

The Internal Revenue Service considers certain employee expenses to be particularly susceptible to abuse. Therefore, in order to claim a deduction for travel, entertainment, business gifts, or the use of certain listed property such as automobiles, an employee must substantiate the expenditure with adequate records or sufficient evidence corroborating the taxpayer's own statements. This documentation must show the amount, time, place, and business purpose of the expense. The IRS has placed an additional substantiation requirement for entertainment and gift deductions. The taxpayer claiming the deduction must be prepared to show the business relationship of the expense.

Energy Conservation Subsidies

If you received subsidies from a public utility for the purchase or installation of an energy conservation measure in your residence, you are not required to include the amount of the subsidy in your gross income when preparing your federal income tax return. The subsidy may be provided to you either directly or indirectly by the utility in order to qualify for this exclusion from income.

Slavery Reparation Tax Refund Scam

When the IRS receives a reparations claim related to slavery, it notifies the taxpayer that the claim has no basis in law. It offers the taxpayer the opportunity to rescind the frivolous claim or to file a corrected tax return without the imposition of a penalty. However, if the taxpayer insists on pursuing the reparations claim, he or she could face a penalty of up to $500.

General Litigation

Under certain circumstances, a taxpayer is entitled to recover the reasonable litigation or administrative costs that he or she paid to defend his or her position to the Internal Revenue Service or to the courts.