Employee vs. Independent Contractor – Ten Tips for Business Owners
IRS Tax Tip
If you are a small business owner, whether you hire people as independent contractors or as employees will impact how much taxes you pay and the amount of taxes you withhold from their paychecks. Additionally, it will affect how much additional cost your business must bear, what documents and information they must provide to you, and what tax documents you must give to them.
For taxes and fees they each administer, the California State Board of Equalization (BOE) and the Employment Development Department (EDD) have extended relief to qualifying taxpayers and fee payers who have been affected by wildfires in the counties of Los Angeles, Monterey, and Placer. Both agencies have recently extended similar relief for those affected by wildfires in Santa Cruz and Yuba counties, as reported.
An individual who was the chairman, president and CEO (“the CEO”) of a company that resold long distance telephone service had to pay the IRS an assessed penalty plus interest. The term “markup,” in the context of the litigation, referred to the margin between the price at which the company purchased long distance minutes and the higher price at which it resold them. The assessed penalty amount represented the portion of the Code Sec. 4251 communications excise tax collected by the company from its customers on the markup.
In the court’s previous opinion (2006-2 USTC 70,261), it held that the company had an obligation to pay over to the IRS any monies it collected for long distance telephone service even if that service was improperly taxed. Here, the “overwhelming evidence,” indicated that the company did in fact collect the Code Sec. 4251 tax on the markup but failed to remit it to the IRS. Further, the CEO was a responsible person for purposes of Code Sec. 6672. In addition to being the company’s CEO, he was its founder, at times its controlling shareholder, and for a period of time signed many of its checks. Finally, the CEO acted willfully in failing to pay the Code Sec. 4251 tax to the IRS; therefore, he was personally liable for the unpaid taxes. He both knew of his obligations to remit the tax collected on the markup and showed a reckless disregard of the company’s tax responsibilities by failing to do so.
September 2009 – The federal “Cash for Clunkers” program has generated a lot of interest among consumers and we have received many inquires about the tax implications of this popular program. As a result, we are clarifying state tax rules for people who trade in their used vehicle under the “Cash for Clunkers” program.
The “Cash for Clunkers” program, Federal law, H.R. 2346, The Consumer Assistance to Recycle and Save Program, allows qualifying consumers to receive a $3,500 or $4,500 voucher from the federal government when they trade in qualifying old vehicles and purchase or lease a new one. This federal law provides the value of the voucher received by the consumer is not considered as gross income of the purchaser for purposes of the federal income tax.
Source: Dow Jones
WASHINGTON -(Dow Jones)- The Internal Revenue Service might scrutinize mortgage interest data more closely to help catch tax cheats, after prompting from an IRS auditor.
SOURCE: CBS
IRS to Receive Unprecedented Amount of Information in UBS Agreement
WASHINGTON — The Internal Revenue Service and the Department of Justice today announced the successful negotiation of an agreement that will result in the IRS receiving an unprecedented amount of information on United States holders of accounts at the Swiss bank UBS.
As a result of this agreement, the IRS will receive substantially all of the accounts that it was interested in when it initiated the John Doe summons against UBS.
Kentucky Severe Storms and Flooding Victims May Qualify for IRS Disaster Relief
Indianapolis — Victims of recent severe storms flooding in Kentucky may qualify for tax relief from the Internal Revenue Service.
Following severe storms, flooding and straight-line winds on Aug. 4, 2009, the President declared Jefferson county a federal disaster area qualifying for individual assistance.
California – Personal Income Tax: 2009 Tax Rate Schedules, Exemption and Other Amounts Released
According to figures obtained from California Franchise Tax Board’s Tax Practitioner Liaisons Office, there will be decreases in the indexed 2009 California personal income tax rate schedules, return filing thresholds, standard deduction amounts, itemized deduction limitation amounts, personal exemption amounts, credit amounts, and alternative minimum tax exemption amounts. These figures are based on the negative 1.5% inflation rate, as measured by the California Consumer Price Index (CCPI) for all urban consumers from June of 2008 to June of 2009.
Tax Rate Schedules
Watchdog Growls At IRS‘ Audits By Mail
Source: forbes.com
A new report from the Treasury Inspector General for Tax Administration lends support to growing complaints about the Internal Revenue Service’s big audit-by-mail program.
Tax Relief Blog