We’re about a fourth of the way through the list of positions not to take on your individual tax return per the IRS’ recent notice. Remember, the penalties for doing so can be $5000 per instance. Next on the list:
4. Wages, tips, and other compensation received for the performance of personal services are not taxable income or are offset by an equivalent deduction for the personal services rendered, including an argument that a taxpayer has a “claim of right” to exclude the cost or value of the taxpayer’s labor from income or that taxpayers have a basis in their labor equal to the fair market value of the wages they receive, or similar arguments described as frivolous in Rev. Rul. 2004-29, 2004-1 C.B. 627, or Rev. Rul. 2007-19, 2007-14 I.R.B. ___ .
Psst, remember: This is a list of positions NOT to take!!
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