2009

Court won’t allow IRS to collect trust fund payroll taxes more than once. Individual was personally liable for back taxes of corporation under IRC 6672. IRS must credit trust fund recovery penalties already collected from others. January 2009 Report ---> click here to view --->   IRS appeals officer committed no abuse of discretion in rejecting offer-in-compromise. Determination to proceed with levy not abuse of discretion. IRS entitled to judgment as a matter of law. January 2009 Report ---> click here to view --->   Worker performed services for energy company as employee, not independent contractor. Tax court says individual is not IC thus not liable for self-employment tax. Court believed worker's duties were akin to supervisory employee and that job was not temporary. February 2009 Report ---> click here to view --->   IRS memo says qualification for federal employment tax interest-free adjustment depends on case facts. IRC 6205 interest-free adjustment not automatic, depends on nature of taxpayer conduct. Finding of accuracy-related penalty may, or may not, indicate taxpayer knowingly under-reported liability which would bar interest-free adjustment. February 2009 Report ---> click here to view --->   IRS holds doctor personally liable for courier and messenger firm's back payroll taxes. His courier and delivery sideline business causes $1 million heartache. Doctor was sole shareholder and president. March 2009 Report ---> click here to view --->   Firm treated property claim adjuster as independent contractor. Property insurance claim adjusting firm's refund suit dismissed. District court determined that it lacked jurisdiction. Firm failed to pay the entire amount of FICA tax in dispute before filing its claim. March 2009 Report ---> click here to view --->   California Overnight use of independent contractor parcel delivery drivers upheld by state trial jury. Workers (drivers) sued firm for various violations of law including overtime, paystub violations and unlawful business practices. Jury, trial judge, and court of appeal all agree that allegations of lawsuit lacked merit, subject workers are independent contractors and not employees. April 2009 Report ---> click here to view --->   Medical clinic must pay IRS for failure to honor levy in connection with payee (medical doctor). The healthcare company paid the doctor (with IRS debts) in spite of the notice of levy. IRS determined, and court agreed, employee or independent contractor status may not matter for this type of levy, payments fell within definition of “wages or salary” subject to the levy. April 2009 Report ---> click here to view --->   IRS and tax court say doctor was employee not independent contractor. Doctor was common law employee of medical practice. He must deduct his personal business expenses as unreimbursed employee expenses subject to the two-percent limitation. May 2009 Report ---> click here to view --->   Massage therapists may obtain California certification under new law. Local ordinances and regulations pre-empted if therapist has certification. Wording of new law is neutral on independent contractor versus employee issue. May 2009 Report ---> click here to view --->   Massage therapists may obtain California certification under new law. Local ordinances and regulations pre-empted if therapist has certification. Wording of new law is neutral on independent contractor versus employee issue. May 2009 Report ---> click here to view --->   Massage therapists may obtain California certification under new law. Local ordinances and regulations pre-empted if therapist has certification. Wording of new law is neutral on independent contractor versus employee issue. May 2009 Report ---> click here to view --->  Massage therapists may obtain California certification under new law. Local ordinances and regulations pre-empted if therapist has certification. Wording of new law is neutral on independent contractor versus employee issue. May 2009 Report ---> click here to view --->  Massage therapists may obtain California certification under new law. Local ordinances and regulations pre-empted if therapist has certification. Wording of new law is neutral on independent contractor versus employee issue. May 2009 Report ---> click here to view --->   IRS and tax court agree, social worker counseling children with behavior problems is independent contractor. Worker is liable for self-employment tax (Form 1040, Schedule SE). Inability to pay does not excuse non-payment of tax liabilities. June 2009 Report ---> click here to view --->   IRS and tax court agree, temp agency liable for huge back employment tax bill. Firm had over 250 clients. Workers paid by check were treated as employees but not those paid in cash. Agency paid over $14 million in cash to workers but paid no employment tax. June 2009 Report ---> click here to view --->   IRS and court agree, consultant is independent contractor. Individual paid by firm was not statutory employee (full time life insurance salesman) under IRC 3121 (d) (3). As independent contractor, worker had self-employment income and was liable for self-employment tax (Form 1040, Schedule SE). July 2009 Report ---> click here to view --->   IRS and court agree, claimed cash payments to workers without sufficient evidence are not deductible. Mortgage broker claimed tax deductions for cash fees paid to outside workers. Workers recruited loan customers. July 2009 Report ---> click here to view --->   IRS fact sheet helps workers determined to be employees and not independent contractors. What if worker filed a Schedule C? What if worker is getting tax bills related to past incorrect returns? These questions and more answered. August 2009 Report ---> click here to view --->   Belief in independent contractor status was in bad faith, IRS and tax court agree. A 20 percent accuracy-related penalty for underpayment was upheld. Husband and wife wrongly reported “wages” on Schedule C. August 2009 Report ---> click here to view --->   Courier industry association sued California Unemployment Insurance Appeals Board to invalidate a precedent decision holding couriers and messengers to be employees and not independent contractors. Association asserted that Board erroneously affirmed an EDD assessment of back employment tax and penalties against a courier firm (not a party) and should not have designated its decision as “precedent.” Appellate court affirmed lower court’s decision upholding validity of so-called Precedent Tax Decision. September 2009 Report ---> click here to view --->   American Express card used to pay employment taxes results in non-dischargeable credit card debt. Bankruptcy court granted judgment to creditor in adversary proceeding against debtor. Debtor used credit card to pay employment taxes and penalties owed by his business. Employment taxes are a nondischargeable tax debt. September 2009 Report ---> click here to view --->   Worker misclassification adds to tax gap according to Congressional Research Service. Size of problem is hard to quantify. Government effort to attack misclassification would be expensive. October 2009 Report ---> click here to view --->   Cardboard packaging salesman is not independent contractor. Schedule C business deductions denied. IRS and Tax Court agree on common-law employee status. Accuracy-related penalties for unsubstantiated deductions imposed; salesman failed to properly account for other expenses. October 2009 Report ---> click here to view --->   Sales representative is neither statutory independent contractor [IRC 3508] nor statutory employee [IRC 3121 (d) (3)], IRS and Tax Court agree. Deductions for business use of her home were denied. She can deduct expenses to the extent of her income, but she reported no income. November 2009 Report ---> click here to view --->   Corporation owner / officer not liable as a matter of law for back trust fund employment taxes; court denies IRS motion for summary judgment. IRS attorneys tried to take case away from jury; argued issues were so clear that judge should rule. Judge found that it wasn't clear that the person had enough control over the company's financial affairs. November 2009 Report ---> click here to view --->   IRS reminds auditors that employers must obtain TIN numbers from independent contractors or face backup withholding liability. Failure of employer to get either social security number or Federal EIN can lead to disastrous tax liability. Current backup withholding rate is 28%, scheduled to go up to 31 percent in 2011. December 2009 Report ---> click here to view --->   Back trust fund employment tax assessed against individual not dischargeable in bankruptcy, debtor admitted. Individual debtor was assessed pursuant to IRC 6672 that exposes business owners to liability. Bankruptcy court erred by not abstaining to hear adversary proceeding in this “no asset” Chapter 7 matter. December 2009 Report ---> click here to view --->

[ Page updated: Sunday, December 27, 2009 ]