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Sacramento Tax Law Blog

Number of Awards to Whistleblowers Quadruples

The IRS receives confidential information daily from what we in the profession call "The X Factor" - ex-spouses, ex-employees, ex-friends. These are people with whom you may have confided your tax shenanigans, who are sore, and turn you in to the IRS. Those who are bold enough to attach their names to the complaint may receive a reward if the IRS is able to collect taxes based on the information disclosed.

New Two-Stage E-mail Scam Targets Tax Professionals

The IRS Security Summit issued a warning to tax professionals about a new e-mail scam by cybercriminals posing as potential clients. Scammers are sending phishing e-mails in two parts, beginning with a standard solicitation for services followed by a second email with an embedded web address or PDF attachment with an embedded web address. When the tax professional thinks they are accessing a new client's tax information, in reality they are opening up their system for the scammer to collect personal information for illegitimate use.

National Taxpayer Advocate Urges Simplification and Federal Tax Reform

National Taxpayer Advocate Nina Olson recently released her 2016 annual report to Congress recommending that the IRS continue its improvements to becoming service-oriented and that the tax code be significantly simplified. According to data the Taxpayer Advocate Service (TAS) analyzed, taxpayers collectively spend about six billion hours per year complying with filing requirements, "the equivalent of three million full-time workers."

Court Finds Comcast Entitled to $3 Million Refund, But Owes Tax on a $1.5 Billion Termination Fee

In December a three-judge California appellate panel affirmed a superior court ruling finding that Comcast lacked a unitary relationship with OVC, Inc., and was therefore entitled to a $3 million refund. However, the court also affirmed the trial court's holding that Comcast owed tax on a $1.5 billion termination fee.

IRS Publishes Inflation Adjustments for 2017

The Internal Revenue Service (IRS) has released the inflation adjustments for specific tax figures for calendar year 2017. Highlights include:

EDD E-File and E-Pay Now Mandatory for Certain Employers

Effective January 1, 2017, employers with 10 or more employees are required to electronically file and pay their EDD employment tax returns, wage reports, and payroll tax deposits. All other employers will be subject to this requirement effective at the start of 2018.

Reminder: California Sales Tax Rate Cut

As of January 1st, your dollar will go a little further as California reduces its sales tax rate by 0.25%. Actual sales tax rates vary by county and city. To look up the current sales tax rate where you live, click here.

New Laws for Business Owners and Government Agencies - Expanded Smoking Prohibitions, All-Gender Restrooms, Prohibition on Travel, and Increase to Minimum Wage

For employers, the new year brings many new laws regarding worker benefits, hiring practices, and workplace protections. In addition to ensuring workers are properly classified, employers should also be aware of the increase to California's Minimum Wage, the identification of restroom facilities, smoking prohibition, and rights to refuse to travel.

IRS Takes Action to Enforce Taxation of Virtual Currency

If you engage in virtual currency transactions, be sure that you have reported them! Many people are not aware that any U.S. taxpayer who has engaged in transactions involving digital currency must report any income received from such sources.

Federal Installment Agreement Fees Will Change in 2017

The Internal Revenue Service (IRS) proposed a revised schedule of fees for installment agreements made on or after January 1, 2017. The changes increase the highest possible fee to $225 (up from $120), but reduces fees for certain types of agreements.

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