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Recent Blog Posts

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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What Business Owners Need to Know About the Corporate Transparency Act

 Posted on January 31, 2024 in Taxation Law

Blog ImageThere are numerous issues related to taxes and government regulations that businesses will need to address on an ongoing basis. It is not always easy to keep up with new laws that place requirements on different types of businesses, but it is crucial to address these issues correctly to avoid potential penalties. 

The Corporate Transparency Act is one law that recently went into effect, and it requires certain businesses to report ownership information to the Financial Crimes Enforcement Network (FinCEN). An attorney who provides assistance to small businesses and other types of companies can help ensure that this information is reported correctly while working with business owners to avoid potential penalties.

Beneficial Ownership Information Reports

Under the Corporate Transparency Act, certain types of companies are required to file a Beneficial Ownership Information Report (BOIR) with FinCEN. These reports provide information about a company’s owners or the personnel who maintain control over a company’s operations. 

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When Can Taxpayers Claim Commercial Clean Vehicle Credits?

 Posted on January 18, 2024 in Taxation Law

Blog ImageAs the push for a greener future continues, many businesses are exploring ways to reduce their carbon footprints. One way to accomplish this is by investing in commercial clean vehicles. These vehicles run on alternative fuels or have advanced energy-saving technologies that help minimize emissions and promote sustainability.

To incentivize businesses to make environmentally friendly choices, the IRS offers tax credits for purchasing and using commercial clean vehicles. These tax credits can provide significant financial benefits, making it more affordable for businesses to transition to cleaner transportation options. However, understanding when and how these credits can be claimed is essential to ensure compliance with IRS regulations. An experienced attorney can provide guidance on what tax credits may be available and what steps businesses can take to minimize their tax burdens.

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IRS Launches Voluntary Disclosure Program for Erroneous Employee Retention Credits

 Posted on January 16, 2024 in Employment Taxes

Blog ImageThe COVID-19 pandemic caused significant financial problems for many businesses due to forced closures and other issues that limited their ability to generate revenue and pay wages to employees. In response, the IRS created the employee retention credit (ERC), which allowed employers to receive credits on payroll taxes so that they could continue paying wages to employees

While this option was available in 2020 and 2021, some employers continued to claim employee retention credits in the subsequent years. While the IRS has performed tax audits of some employers and imposed penalties for erroneous ERC claims, it has also recognized that many of these claims occurred because employers received incorrect advice from tax return preparers or other parties. To address these concerns and help employers address issues related to ERC claims, the IRS has created a voluntary disclosure program.

Addressing concerns related to ERC claims and other tax issues can be a complex process. To ensure that they will be able to respond to tax audits, make any required payments to the IRS, and limit potential penalties, businesses may want to consider working with an attorney who has experience handling employment tax issues, IRS penalties, and other related matters.

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Can Businesses Face Tax Penalties for Worker Misclassification?

 Posted on January 04, 2024 in Employment Taxes

Employee Tax ClassificationWorker classification is a common issue that affects businesses across many different industries. Although treating workers as independent contractors may provide some benefits for employers, incorrectly classifying employees as independent contractors can result in serious legal and financial consequences. Employers who are concerned about potential tax penalties related to worker misclassification may want to consult with an attorney to determine what steps they can take to protect themselves.

Determining Employee vs. Independent Contractor Status

The distinction between employees and independent contractors is crucial, because it can affect whether an employer will be required to provide certain benefits to workers, and it can also determine how taxes will be applied to the compensation a worker receives. The Internal Revenue Service (IRS) provides guidelines to help determine how a worker should be classified:

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Will Capital Gains Taxes Be Applied to Cryptocurrency Transactions?

 Posted on December 18, 2023 in Employment Taxes

cryptocurrency tax attorneyIn recent years, cryptocurrency has gained significant popularity as a form of investment, as well as a way to pay for products and services and a method that employers may use to pay wages to their employees. As more people and businesses embrace cryptocurrencies like Bitcoin, Ethereum, and Litecoin, questions arise regarding the tax implications of virtual currency transactions. One common concern is whether capital gains taxes will be applied to cryptocurrency transactions. An attorney who has experience addressing tax laws related to virtual currency can address concerns about taxation to help confirm that these issues will be addressed correctly.

The Tax Treatment of Cryptocurrency

The Internal Revenue Service (IRS) treats cryptocurrency as property for federal tax purposes rather than as traditional currency. This means that any transaction involving the purchase, sale, or exchange of cryptocurrency may have tax consequences similar to those associated with stocks or real estate.

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Preparing for Upcoming Changes to Estate and Gift Tax Exclusions

 Posted on December 08, 2023 in Taxation Law

San Jose Tax AttorneyFor people who earn large incomes or own valuable assets, taxes can be a significant issue. Individuals and married couples with large estates may be concerned about the taxes that will apply when transferring assets to children, grandchildren, or other loved ones. While estate taxes may apply when assets are inherited by beneficiaries following a person’s death, strategies may be used to reduce the value of an estate and minimize the taxes that must be paid. However, changes to the federal estate and gift tax exclusion that will take place in the next few years may affect these strategies. An attorney with experience in tax law can provide guidance on how these changes may affect tax planning strategies.

Reduction of the Federal Estate and Gift Tax Exclusion in 2026

When Congress passed the Tax Cuts and Jobs Act of 2017, the federal estate tax exclusion was increased significantly. While the basic exclusion amount (BEA) had previously been set at $5 million (adjusted for inflation), it was doubled under the new law. In 2023, the BEA is $12.92 million. However, the increased exclusion is set to sunset after 2025. Starting on January 1, 2026, it will revert to $5.49 million.

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Can Foreign Companies Face IRS Penalties Related to Transfer Pricing?

 Posted on November 30, 2023 in Taxation Law

Untitled---2023-11-30T084339.156.jpgThere are a number of schemes that U.S. taxpayers may use to attempt to minimize the taxes they are required to pay to the Internal Revenue Service (IRS). While some schemes are legitimate, making use of opportunities provided under the tax laws, others are considered to be illegal, and they could result in tax audits by the IRS to identify misreported income or assets, address underpaid taxes, and assess penalties for nonpayment of taxes or failure to file the correct forms and reports. For international businesses or U.S. businesses that own foreign subsidiaries, transfer pricing is one area that may be under scrutiny by the IRS.

Transfer pricing is a complex area of tax law that deals with the pricing of goods, services, and intellectual property transferred between related entities within multinational corporations or between U.S. parents and controlled foreign corporations (CFCs). During audits, the IRS may take steps to determine the appropriate prices for these transactions to ensure they reflect fair market value.

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IRS May Change Reporting Requirements for Digital Asset Transactions

 Posted on November 22, 2023 in Taxation Law

Untitled---2023-11-22T105615.109.jpgDigital assets such as cryptocurrency and NFTs have gained significant popularity in recent years. As more people and businesses engage in digital asset transactions, it is important to understand the tax law implications and the reporting requirements set forth by the Internal Revenue Service (IRS). The IRS has issued notice that it may be implementing new rules affecting digital asset transactions. Owners of virtual currency or other digital assets may want to consider consulting with an attorney who has experience in this area to ensure that they meet all requirements put in place by the IRS and are taking the correct steps to avoid potential tax penalties.

What Are Digital Assets?

Digital assets are virtual or electronic representations of value that can be digitally traded or transferred. Some of the most well-known types of digital assets are cryptocurrencies such as Bitcoin, Ethereum, and Litecoin. These decentralized forms of currency operate using blockchain technology. Non-fungible tokens (NFTs), which use the blockchain to recognize ownership of assets such as images, videos, or music, are also considered digital assets.

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