John D. Teter Law Offices



1361 South Winchester Boulevard, Suite 113
San Jose, CA 95128

Recent Blog Posts

When Do Taxes Apply to Corporate Stock Repurchases?

 Posted on May 14, 2024 in Taxation Law

San Jose Tax LawyerCorporate stock repurchases, also known as buybacks, are a common way for companies to return value to their shareholders. While repurchases can be beneficial for both a company and its shareholders, they also come with tax implications. The Inflation Reduction Act of 2022 created an excise tax that applies to corporate stock repurchases, and the IRS has provided guidance on how this tax will be calculated and the requirements that will apply to taxpayers. To ensure that these rules will be followed correctly, corporations and affiliates that engage in stock buybacks can work with an attorney who has a strong understanding of the applicable tax laws.

Understanding the Excise Tax on Stock Repurchases

Under the Inflation Reduction Act corporations are now subject to a 1% excise tax on the net value of stock they repurchase. This tax applies to stock repurchases performed after December 31, 2022.

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What Is the Difference Between IRS Assessed Penalties and Deficiency Penalties?

 Posted on May 01, 2024 in Tax Audits

San Jose, CA tax attorneyDealing with the IRS can be stressful even in the best of situations. The requirement to pay taxes can cause financial difficulties for taxpayers, and the possibility of making mistakes on tax returns or other tax forms may lead to issues such as tax audits, as well as the requirement to pay penalties or interest. Because of the complexity of tax laws and the many opportunities for errors, understanding the best ways to address these issues can be difficult. It is important to understand the difference between assessed penalties and deficiency penalties. An experienced attorney can help taxpayers navigate the complexities of tax laws, appeal incorrect assessments, determine when penalty abatement may be available, and address other tax-related concerns.

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How Do Work-Life Referral Services Affect Taxes for Employers?

 Posted on April 24, 2024 in Employment Taxes

San Jose, CA business tax attorneyIn many modern workplaces, employees struggle to maintain the proper balance between their professional responsibilities and personal lives. They have a variety of needs, including managing care for children or elderly family members, determining their eligibility for government benefits, and navigating the healthcare system to ensure that they can receive the proper medical treatment.

To address these issues, employers may provide work-life referral services as part of their benefits packages. It is important for employers to understand the tax implications of these benefits. An attorney with experience in tax law can provide guidance for employers, ensuring that they handle employment tax issues correctly.

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Are Health and Wellness Expenses Tax-Deductible?

 Posted on April 18, 2024 in Tax Audits

San Jose, CA tax audit lawyerBecause of the high costs of taxes in the United States, taxpayers will often be looking to utilize any deductions or credits that may be available. Unfortunately, this may leave some people vulnerable to tax scams in which they are encouraged to claim inappropriate deductions. The IRS has noted that some companies are encouraging people to claim deductions for health and wellness expenses. 

While there are some legitimate medical expenses that are deductible, claiming inappropriate deductions could lead to tax audits or IRS penalties. An attorney with experience in tax law can help address these situations and ensure that a taxpayer takes the correct steps to respond to the IRS and avoid or minimize penalties.

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How to Respond to IRS Investigations of Erroneous Employee Retention Credit Claims

 Posted on April 14, 2024 in Employment Taxes

San Jjose, CA tax law attorneyThe Employee Retention Credit (ERC) was created by the IRS to address financial difficulties faced by employers in 2020 and 2021 due to the pandemic. It provided credits for payroll taxes paid by employers who met certain criteria. However, some employers claimed this credit erroneously. Some promoters of tax return preparation services have encouraged employers to claim these credits even when they were ineligible to do so. These cases have included claims made in 2022 or subsequent years, even though the ERC only covered the tax years of 2020 and 2021. Now, the IRS is taking action to recover claims that were paid out incorrectly, and some employers may be unsure about whether they will be required to repay the IRS for the credits they received.

Because of the large amounts of money that may be involved in these cases, employers may be concerned about their ability to make payments to the IRS. Taxpayers who have received letters from the IRS about erroneous ERC claims or those who have been audited can work with an attorney to determine their best options and minimize the potential penalties they may face.

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IRS Focuses Tax Collection Efforts on High-Income Taxpayers

 Posted on March 19, 2024 in Taxation Law

Blog ImageDuring tax season, which occurs from the beginning of each year until the date that annual tax returns are due (most commonly April 15th), many taxpayers are focused on collecting their financial information and filing the proper forms with the Internal Revenue Service (IRS). While failing to file tax returns can result in penalties, some taxpayers fail to do so because they may owe taxes, because they have failed to file forms correctly in the past, or because they are unsure about their obligations. 

Due to budget cuts, the IRS has not taken extensive action to address unfiled tax returns over the past several years. However, due to an increase in funding after the passage of the Inflation Reduction Act in 2022, the agency is now taking action to ensure that taxpayers meet their legal obligations. These efforts will focus on high-income taxpayers, who may be contacted by the IRS and informed of delinquent tax returns that must be filed. Taxpayers who are concerned about potential penalties can work with an attorney to understand their requirements and the steps they can take to minimize their financial losses.

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When Do Beneficial Ownership Information Reports Need to Be Updated in California?

 Posted on March 06, 2024 in Employment Taxes

Blog ImageBusinesses must meet a variety of legal requirements as they establish organizational structures, pay taxes, and file reports with government organizations. One recent change to the law has put new requirements in place in which certain types of businesses must report information about beneficial ownership to the Financial Crimes Enforcement Network (FinCEN). In addition to understanding when these reports need to be filed initially, business owners and corporate officers will also need to understand when updates will need to be made. To avoid potential penalties and ensure that legal concerns will be handled correctly, small businesses, large corporations, and other types of organizations can work with an attorney who has experience in these matters.

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What Are the Penalties for Beneficial Ownership Non-Reporting in California?

 Posted on February 28, 2024 in Taxation Law

Blog ImageCompanies in the United States and around the world are involved in a complex web of business operations and financial transactions. Because there are many opportunities for potential tax evasion or other schemes that may violate regulations, the laws of the United States require some companies to report beneficial ownership information. This helps to maintain transparency while ensuring that the IRS and the U.S. Department of the Treasury will have the necessary information to investigate and prosecute potential financial crimes.

Certain companies are required to file a Beneficial Ownership Information Report (BOIR) with the Financial Crimes Enforcement Network (FinCEN). Failure to comply with these reporting requirements can lead to significant penalties, including both civil and criminal consequences. Understanding these penalties is essential for any business entity, including small businesses or large corporations. An experienced attorney can provide invaluable assistance in navigating the complex legal landscape surrounding these regulations.

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When Do Businesses Need to Report the Receipt of Cash and Digital Assets?

 Posted on February 15, 2024 in Taxation Law

Blog ImageFor business owners, it is important to understand the reporting obligations that apply when receiving cash and digital assets. To ensure that taxes can be assessed correctly, the IRS requires businesses to report certain cash transactions, and transactions involving digital assets may need to be reported as well. Failure to comply with these requirements can result in penalties. An attorney who has experience addressing small business tax issues can provide guidance in this area, ensuring that a business owner takes the correct steps to report transactions, respond to tax audits, and avoid penalties.

Cash Transactions

The IRS requires businesses to report any cash transactions that exceed $10,000 in a single transaction or a series of related transactions. This includes any payments received by a business for goods or services, to address debt obligations, when exchanging cash, or to place in escrow or trust funds. It is important to note that these reporting requirements do not only apply to cash but also to other forms of currency, such as money orders, cashier's checks, traveler's checks, and bank drafts.

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Do I Need to Report Cryptocurrency Income on My Tax Return?

 Posted on February 12, 2024 in Taxation Law

Blog ImageIn recent years, cryptocurrencies such as Bitcoin, Ethereum, and Ripple have gained significant popularity and value. As more people participate in cryptocurrency transactions or receive digital assets as income, the question of whether these assets need to be reported on tax returns has become increasingly important. For those who have questions about their reporting requirements or who may be concerned about penalties for failure to report crypto transactions, an attorney who understands the applicable tax laws can provide invaluable guidance.

Taxation of Cryptocurrency

The IRS treats cryptocurrency and other digital assets as property for tax purposes, which means that they are subject to capital gains tax rules similar to stocks and other investments. Any income or gains derived from buying, selling, or trading cryptocurrencies may be taxable. When virtual currency or other digital assets are received as income, they must be reported on a tax return, and income taxes will apply.

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