Recent Blog Posts
Will the Department of Labor Enforce Worker Misclassification Rules?
The relationships between businesses and the people who work for them can take many forms. In addition to situations where employers hire employees who work for them directly, some businesses may work with independent contractors who may fill specific roles, complete short-term projects, or handle unique tasks. In some cases, the lines between employees and independent contractors can become blurred. When disputes arise about a worker’s status, the U.S. Department of Labor (DOL) may become involved, and it may take steps to enforce the Fair Labor Standards Act (FLSA).
Worker misclassification can be a serious concern for business owners. In addition to penalties that may apply if employees are not paid correctly for the work they have performed, employers may also encounter tax law issues. An attorney who understands the applicable laws can provide guidance for business owners, helping to resolve disputes, make sure workers are classified correctly, and minimize potential penalties.
IRS Makes Changes to Criminal Voluntary Disclosure Practice
U.S. taxpayers may face serious concerns in cases where they have not disclosed income to the IRS or have not paid taxes as required. While some taxpayers may face civil penalties related to the non-payment of taxes, others may face criminal prosecution. Because of the consequences that may apply, some taxpayers may be hesitant to come forward, report undisclosed information to the IRS, and pay the taxes, penalties, and interest that they owe.
To address this issue, the IRS has created its Criminal Voluntary Disclosure Practice (VDP). This program allows taxpayers voluntarily to disclose information and correct outstanding issues while minimizing the potential penalties that may apply. However, some of the features of the VDP may have kept some taxpayers from using this program due to concerns that they could potentially still face criminal prosecution. To address this issue, the IRS has made some changes to the VDP that are meant to ease taxpayers’ concerns.
New Cryptocurrency Regulations May Affect Taxes on Stablecoins
As more and more people buy, sell, and trade cryptocurrencies, the United States government is looking to implement new regulations that provide oversight for these markets. Recently, Congress passed the GENIUS Act, which puts new regulations in place related to stablecoins. While many of these regulations apply to issuers of stablecoins, people who own and trade these cryptocurrencies will need to understand how their tax obligations may be affected.
When addressing legal concerns related to cryptocurrency taxes, it is important to work with an attorney who has a strong understanding of the tax laws that apply in these situations. A skilled lawyer can help address any potential penalties that may apply when cryptocurrency transactions have not been reported correctly while also working with taxpayers to make sure they maintain compliance with the applicable tax laws.
Should Nannies or Caregivers Be Classified as Independent Contractors?
Employers need to address a variety of tax issues, including filing the proper forms with the IRS for their employees and withholding payroll taxes. In some cases, employers may try to avoid some of these issues by classifying their employees as independent contractors. Families who hire nannies or others who provide in-home care may treat these workers as independent contractors in order to simplify the process of filing and paying taxes. However, doing so could lead to penalties for worker misclassification.
Because of the potential issues that could arise if nannies or other household employees are misclassified, families can work with an attorney to make sure they are meeting all of their legal requirements. A lawyer with experience in tax law can also address potential penalties and help families take steps to resolve these issues while minimizing their financial losses.
What Gig Economy Workers Need to Know About Managing Taxes
The gig economy has provided flexibility for many workers, as well as a variety of new opportunities for earning income. Rideshare drivers, freelance designers, and many other gig workers enjoy the ability to work on their own terms, but with this flexibility comes a unique set of tax responsibilities. Determining what forms to file, what information to submit, and when taxes must be paid can be overwhelming, especially for those who are unfamiliar with tax law. An experienced tax attorney can help gig workers navigate these challenges, respond to inquiries from the IRS when necessary, and avoid potential penalties.
Keeping Records: What Gig Workers Need to Track
Proper recordkeeping is critical for anyone earning income in the gig economy. The IRS requires gig workers to report all income, but it also allows them to deduct certain business-related expenses. To do this accurately, it is important to maintain detailed records throughout the year.
When Will the IRS Silent Lien Apply to Federal Tax Debts?
When the IRS determines that a taxpayer has a tax debt, it may use multiple different methods to collect the amount owed. The claim that the IRS has against a taxpayer’s assets is known as a silent lien, and it could lead to collection actions taken by the IRS to satisfy the debt. For taxpayers with tax debts, it is important to understand when the IRS silent lien will apply, when a tax lien may become public, and what effects liens will have.
An attorney with experience addressing issues related to tax law can provide guidance on how to address silent liens and other issues related to tax debts. With legal representation, taxpayers can determine what steps they can take to reduce the amount they may be required to pay or have liens lifted before they can affect their credit or cause other financial issues.
How Does U.S. Residency Affect Income Taxes and Transfer Taxes?
Citizens of the United States have a number of tax obligations. Residents of the United States who are not citizens also have a number of tax obligations, but in some cases, confusion may arise regarding whether a non-U.S. citizen is considered to be a resident for tax purposes. The way residency is determined is different for income taxes than for transfer taxes, which include gift taxes and estate taxes. It is crucial to understand these differences so that taxes are correctly paid while avoiding penalties imposed by the IRS.
Because of the complexity of U.S. tax laws, foreign citizens who spend time in the United States or own property in the United States can easily become involved in tax disputes that could lead to penalties or even criminal charges for tax evasion. Working with an attorney who has a strong understanding of the applicable U.S. tax laws can ensure that the right approach is taken when filing tax returns and when responding to IRS queries or tax audits and resolving tax disputes.
What Tax Concerns Need to Be Addressed When Starting a Business?
Starting a new business can be exciting, but it can also be very complicated. Owners of small businesses and other types of companies will need to address a variety of complex financial and legal issues, including those related to federal and state taxes. From selecting a business structure to understanding state-specific tax obligations in California, there are several crucial steps that a new business owner must take. An experienced attorney can provide guidance in these situations, helping business owners meet their legal requirements and avoid costly mistakes.
Choosing a Business Structure
During the business formation process, an owner will need to determine how their business will be structured. The type of business entity will determine how the business will be taxed and how profits and losses will be reported, and it can also affect a business owner’s personal liability. Common structures include:
How Will the No Tax on Tips Act Affect Employers?
During the 2024 presidential campaign, Donald Trump promised to eliminate taxes on the tips earned by certain workers, such as restaurant servers or hair stylists. Since Trump assumed office for his second presidential term, Congress has taken steps to fulfill this promise. If new laws are passed eliminating taxes on tips, this may affect both employees who earn tips and employers who are required to withhold payroll taxes.
Understanding how changes to the law may affect employment taxes will be important for small businesses and other employers. Small business owners and other employers can consult with a tax attorney to make sure they are meeting their legal requirements and will be taking the correct steps to avoid potential penalties or other tax consequences.
Tax Reform Bill May Affect Employee Retention Tax Credit Claims
For many businesses in the United States, keeping up with changes to tax laws can be a complex matter. Different types of tax credits may be available to certain taxpayers, but claiming improper credits could lead to penalties. One issue that has gained attention recently is the Employee Retention Tax Credit (ERTC). A proposed change to the law may affect businesses that have outstanding ERTC claims, and it may also increase the window of time in which the IRS can perform tax audits related to these claims.
Because of the changes that may be made to tax laws, businesses and other taxpayers may need legal help as they determine how to respond to IRS audits, whether they are eligible for certain credits, and how they can avoid or minimize penalties. A skilled attorney who has a strong understanding of these laws can provide guidance and legal representation, working to ensure that taxpayers can minimize their tax burdens.




