Posted on April 14, 2024 in Employment Taxes

The 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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 Posted on March 19, 2024 in Taxation Law

During 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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 Posted on March 06, 2024 in Employment Taxes

Businesses 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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 Posted on February 28, 2024 in Taxation Law

Companies 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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 Posted on February 15, 2024 in Taxation Law

For 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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 Posted on February 12, 2024 in Taxation Law

In 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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 Posted on January 31, 2024 in Taxation Law

There 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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 Posted on January 18, 2024 in Taxation Law

As 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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 Posted on January 16, 2024 in Employment Taxes

The 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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 Posted on January 04, 2024 in Employment Taxes

Worker 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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