Properly classifying workers remains a major problem

Worker misclassification is a perennial issue for the Internal Revenue Service and state taxing authorities due to the perception that many employers are not properly classifying their workers.

By avoiding labeling their workers as employees, employers also avoid paying minimum wages, overtime, payroll taxes, worker’s compensation, unemployment, Social Security contributions, health benefits, paid leave, 401(k) benefits and unpaid leave under the Federal Family and Medical Leave Act. And workers have some benefits to being considered independent contractors, such as the ability to deduct certain business expenses that are not available to employees, the ability to set up their own retirement plans, and the fact that they are not subject to withholding. Of course, many workers want to be considered employees so they can get the benefits due employees, such as vacation pay, overtime pay and health insurance.

Read more: https://www.accountingtoday.com/news/properly-classifying-workers-remains-a-major-problem?brief=00000158-5504-dc42-a1fe-55d7045f0000

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IRS heats up compliance enforcement...

...on passport holders with tax debt

In the past decade, Congress and the IRS have made numerous efforts to close the international tax gap.  This is the amount of taxes the Treasury loses each year from U.S. taxpayers abroad not reporting income, paying taxes, or filing tax returns.

In recent years, the IRS has tried to close the international tax gap with the Foreign Account Tax Compliance Act (FATCA) and a series of offshore voluntary disclosure programs—all aimed at enforcing proper reporting of foreign financial accounts and overseas income.

Read More: http://www.journalofaccountancy.com/newsletters/2017/jul/irs-compliance-enforcement-passport-holders-tax-debt.html

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IRS Warns That Pay On Disability Is Often Taxable: Here's How To Tell

What is taxed and what isn’t can be confusing. In the case of disability pay, whether it is taxed or not usually depends on who paid for the disability insurance coverage. Perhaps your employer paid and you were covered as a fringe benefit. In that case, when you are disabled and the coverage kicks in, the benefits you receive are taxable. However, what if you paid for your disability insurance yourself, with after-tax dollars? In that case, the payments you later receive on disability are tax-free.

Read More: https://www.forbes.com/sites/robertwood/2017/07/05/irs-warns-that-pay-on-disability-is-often-taxable-heres-how-to-tell/#309487a0648f

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IRS Rejects Minister Tax Write-Offs For Lack Of Profit Motive

The U.S. Tax Court has agreed with the IRS that a minister and author could not deduct business expenses. Why? He was not engaged in a trade or business for profit. To top it off, the reverend also wasn't allowed any deductions under the more liberal hobby loss rules, because he had no gross income from these activities. The case is Lewis v. Commissioner, involving a minister and author named Willie Lewis. He occasionally performed weddings, attended meetings, and conducted seminars. On his 2011 tax return, he claimed business expenses from these activities. The IRS said no, assessed more taxes, and added penalties. So Mr. Lewis went to Tax Court.

Read More: https://www.forbes.com/sites/robertwood/2017/07/06/irs-rejects-minister-tax-write-offs-for-lack-of-profit-motive/#2deb9b75673d

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When It Comes To Tax Time, Who Is A Dependent?

Today is my son's eighth birthday, and naturally, I spent the morning thinking back to the countless ways he's enriched my life. There was that first dependency exemption in 2009. And then that much-needed dependent care credit in 2011. And who can forget the child tax credit of 2014? Great times, all.

Read More: https://www.forbes.com/sites/anthonynitti/2017/06/02/when-it-comes-to-tax-time-who-is-a-dependent/#3a55d98e716b

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Worst Taxes? Paying Someone Else's

Paying taxes is rarely satisfying or something you look forward to. Besides, it is almost an article of faith that it is perfectly legal--and just plain smart--to arrange your affairs so you pay as little as possible. But if you think that paying taxes can't get any worse, you would be wrong. The least satisfying of all taxes would be paying taxes that are not even yours. It is as if no one is going to give you any credit, and you are only stuck with someone's else's taxes because you were at the wrong place at the wrong time. That might be how some people view some 'responsible persons' who are stuck paying their employer's taxes. Let's start with the basics.

Read More: https://www.forbes.com/sites/robertwood/2017/06/08/worst-taxes-paying-someone-elses/#5bbef73b4c2e

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'Soup Nazi' Tax Evasion Case Holds Lessons For Every Business

Robert N. Bertrand, CFO of the Soupman, Inc. chain made famous with Seinfeld’s Soup Nazi character, has been indicted for tax crimes. The indictment alleges 20 counts of failure to pay Medicare, Social Security, and federal income taxes. Soupman, Inc. is based in Staten Island, and licenses the name and recipes of Al Yeganeh, the “Soup Nazi” character from Seinfeld. No crime has yet been proven, but the charges are quite serious.

Read More: https://www.forbes.com/sites/robertwood/2017/05/24/soup-nazi-tax-evasion-case-holds-lessons-for-every-business/#58cce8ac4596

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