How to Challenge Payroll Taxes

How To Challenge Payroll Taxes

Payroll tax disputes can be more difficult to resolve with the IRS than some other types of taxes. This is largely due to the IRS’s notice of deficiency process. The IRS’s notice of deficiency is the final notice the IRS sends before it assesses or records a tax as being due. The notice is required…

Worker Reclassification: Degree of Control

Worker Reclassification: Degree Of Control

The Groundhog Day movie from the 90’s starring Bill Murray portrays a news anchorman who lives the same day over and over again. He is stuck in a loop. Each day starts the same way. Bill tries to alter his conduct and he interacts with different people throughout the movie. The other characters act and…

Does an Author Pay Self-Employment Tax on Royalties?

Raising A Tax Issue For The First Time In Court

Taxpayers are free to structure payments for services rather than for something other than services. This can save self-employment taxes. But can a taxpayer carve out part of their service income by asserting that some part of the income is not from a business? The Slaughter v. Commissioner, T.C. Memo. 2019-65, case addresses this in…

LLC Cannot Use Crewman’s Exemption for Employment Taxes

Raising A Tax Issue For The First Time In Court

Can a U.S. citizen who owns and operates a vessel outside of the U.S. avoid paying U.S. employment taxes for its crewmen by using a foreign legal entity? The court considered this issue in DAF Charters LLC v. Commissioner, 152 T.C. 14, for a single member LLC formed in the U.S. that was owned by…

Credit for Employment Taxes Reported in Error for Another Entity

Credit For Employment Taxes Reported In Error For Another Entity

If employment taxes are paid by one legal entity but incorrectly reported to the IRS for another legal entity, can the entity that paid the taxes get credit for the payment? The IRS said ‘no;’ the U.S. Tax Court said ‘yes.’ The case is E.C.C.B.A. v. Commissioner, T.C. Memo. 2018-55. Facts & Procedural History The case…

Court Says Employer Entitled to Worker’s IRS Records

Court Says Employer Entitled To Worker’s Irs Records

When the IRS determines that independent contractors are taxed as employees, it is up to the employer to show that the IRS determination is incorrect. One way to do this is to show that the workers paid tax even though the employer did not withhold the tax. In Mescalero Apache Tribe v. Commissioner, 148 T.C.…

The Disqualified Employment Tax Levy

The Disqualified Employment Tax Levy

The IRS is generally required to give taxpayers notice of its intent to levy (or take) their property prior to it actually levying on the property.  Congress recently amended the Code to provide the IRS with a new type of tax levy.  This new levy is referred to as a “disqualified employment tax levy” and…

Taxes & Limited Liability Companies

Taxes & Limited Liability Companies

The Limited Liability Company or LLC is a legal entity formed with the state. Once formed, taxpayers have the ability to determine how the LLC is taxed for Federal income tax purposes. This presents a number of issues that have to be considered for LLC owners. Income Taxes & LLCs The IRS regards a single…