When I left the California EDD's Legal Office over two years ago, I predicted that the "rideshare" software application companies, Uber and Lyft, would soon come under scrutiny for worker classification issues. My prediction was correct. For the past few months, developments have occurred in two federal wage and hour lawsuits involving these two companies, and centering on issues of worker classification.
An estimated 40 percent of small businesses outsource payroll tasks to third-party payers, delegating the responsibility to withhold and pay over Federal employment taxes to the IRS. Unfortunately, some third-party payers withhold the tax through payroll, but instead of paying it to the IRS, they pay it to themselves! This scam may go undetected for a lengthy period of time before the employer becomes aware of the problem, particularly if the defrauding third party is sophisticated in presenting copies of documents that purport to prove the tax has been paid. Ultimately, when the IRS contacts the employer for the payment of tax, the employer suffers a great hardship because although the money was expended, the tax is still unpaid and due.
The Department of Justice has released the results of its ongoing efforts to identify and extinguish the practices of fraudulent tax return preparers and tax scheme promotors. In the press release, the DOJ describes its most recent activities in stopping violations of federal tax laws by professionals along with an update on injunctions obtained against hundreds of tax-return preparers.Click here to read the results from the Department of Justice.
Almost 40 million tax refunds worth nearly $125 billion have been issued as of Feb. 20, according to Internal Revenue Service statistics released today. The average refund is $3,120.
On March 11, 2015, the IRS reported that it has refunds totaling $1 Billion due to taxpayers who did not file a 2011 federal income tax return. California leads the nation with the most refunds due, with over 103,000 taxpayers failing to file their 2011 return.
"Self-employed" individuals include sole proprietors and independent contractors. The Self-employment income can include income you received for part-time work. This is in addition to income from your regular job. According to the IRS, there are a few things to keep in mind in reporting income. (http://www.irs.gov/uac/Are-You-Self-Employed-Check-Out-These-IRS-Tax-Tips)
There are two forms used to report self-employment income in addition to your 1040, the Schedule C, Profit or Loss from Business, or Schedule C-EZ, Net Profit from Business. Schedule C-EZ may be used if you had expenses less than $5,000 and meet other conditions. Individuals may have to pay self-employment tax as well as income tax if you made a profit. Self-employment tax includes Social Security and Medicare taxes. Use Schedule SE, Self-Employment Tax, and file with your income taxes.
Each year, the Internal Revenue Service ("IRS") compiles an annual list of the common scams taxpayers may come across. Such scams tend to peak during filing season as taxpayers are preparing their own returns or hiring someone to prepare it for them. This year, in order to raise consumer awareness, the IRS is released one Dirty Dozen scam per day. Here are the final six scams about which the IRS is warning taxpayers:
More than one million people earned money in 2013 but did not file a California State Income Tax Return and they will be hearing from the Franchise Tax Board (FTB).
Each year, the Internal Revenue Service ("IRS") compiles an annual list of the common scams taxpayers may come across. Such scams tend to peak during filing season as taxpayers are preparing their own returns or hiring someone to prepare it for them. This year, in order to raise consumer awareness, the IRS is releasing one Dirty Dozen scam per day. Here are the first six scams about which the IRS is warning taxpayers:
After helping taxpayers hide assets in offshore bank accounts for more than 10 years, Bank Leumi entered into an agreement with the Department of Justice in which it will pay the United States $270 million as a penalty and will make a full and complete disclosure of its U.S. Taxpayer-held accounts. As recently as 2011, Bank Leumi admits to taking affirmative and extensive steps to assist U.S. Clients in concealing assets offshore including secretly meeting with U.S. Clients in hotels, parks and coffee shops, using nominee corporate entities in Belize and other foreign tax jurisdictions, hiding the true account owner identities, providing mail hold services to make account detection more difficult, and assisting clients who had accounts at UBS and other financial institutions undergoing criminal investigation by the Department of Justice in moving funds to other secret accounts.For more information, click here.