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Becoming an Independent Contractor

If you have ever thought of becoming an independent contractor, the following are some considerations to make before starting on what is essentially your own business:

· Independent contractors can generally choose how often and when they work.

· Independent contractors can make themselves available to hire bidders, increasing their profitability.

· Independent contractors can take advantage of applicable business income tax deductions and credits.

· Independent contractors should establish a bona fide business presence for several reasons:

o In order to take legitimate business tax deductions and credits.

o In order to advertise, thus increasing clientele and profitability.

o In order to establish a trusted presence in a professional field. Because of employment tax exposure, some businesses may only work with contractors who have separately-established businesses. In fact, if you are not properly established as a bona fide contractor, you could end up costing the business(es) you contract with significant cost in taxes and penalties for "misclassification." (For more information on worker classification: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee, and http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee. )

$20 Million Refunds Issued but not Delivered

The FTB issued over $20 million in refunds to nearly 47,500 taxpayers that were returned to the FTB as undeliverable. The refunds ranged from $1 to $50,000. To see if you are due a refund, following the instructions provided by the FTB.  For more information, visit the FTB's website.

Credit Suisse Pays $2.6 Billion to the DOJ, IRS and New York State in Fines and Restitution

After years of investigation by U.S. law enforcement authorities, and a plea of guilty for conspiracy, Credit Suisse AG was sentenced on November 21, 2014 for conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other documents with the IRS. Credit Suisse admitted to operating an illegal cross-border banking businesses purposefully assisting thousands of U.S. clients in opening and maintaining undeclared accounts and in concealing offshore assets and income from the IRS. Credit Suisse acknowledged doing this for decades prior to and through 2009. Credit Suisse will now provide a complete disclosure of its cross-border activities, including account information regarding clients and other banks with which it operated to maintain secrecy for clients from the United States.

Foreign Financial Institutions Deadline is December 5

Those FI's seeking to obtain QI status to be effective for the calendar year 2014 must submit their Form 14345 and Form SS-4 no later than the close of business December 5th, 2014. All applications received after that date will be effective for calendar year 2015.

Challenges Predicted for the 2015 Tax Filing Season

Internal Revenue Service Commissioner, John Koskinen, and The National Taxpayer Advocate, Nina Olson, spoke to an audience of tax professionals at the AICPA National Tax Conference in Washington, DC on November 4, 2014. Both presented a dismal tax filing season for taxpayers seeking assistance and guidance from the IRS, including a prediction by Commissioner Koskinen of over 30 minute hold times for phone service. Among the reasons cited for the anticipated challenges this tax filing season:

Tax Court rejects proposed addition to tax for fraudulent failure to file

In Kernan v. Commissioner, T.C. Memo. 2014-228, the Tax Court sustained the IRS's proposed deficiencies and additions to for tax years 2001 through 2006 due to the taxpayer's failure to file income tax returns. However, the Court rejected the IRS's proposed penalties for fraudulent failure to file these same returns.

During the years at issue, the taxpayer sold income tax avoidance products and performed paralegal functions, and deposited the income from these activities into a personal checking account. However, the taxpayer didn't file tax returns to report this income.

U.S. District Court Dismisses Tea Party Lawsuit Against the IRS

On October 23, 2014, U.S. District Court Judge Reggie Walton dismissed two lawsuits against the Internal Revenue Service (IRS). True the Vote, an offshoot of the Tea Party-Affiliated King Street Patriots, sued the IRS claiming the IRS targeted conservative tax-exempt groups by providing greater scrutiny to their applications for tax-exempt status and delaying approval of tax-exempt status. The Court did not rule on the merits of the lawsuit, but stated "unless an actual, ongoing controversy exists in this case, this court is without power to decide it." Since the IRS is no longer screening tax-exempt applications based on political leanings, the governmental conduct is no longer an impact on the plaintiffs in the case. True the Vote received its tax exempt status from the IRS after the lawsuit was filed, and sot its complaint is now moot. Click here to read the full opinion.

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Law Office of Williams & Associates, P.C.
3600 American River Drive, Suite 135
Sacramento, CA 95864


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Phone: 916-488-8501
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San Francisco, CA 94104

Toll Free: 800-684-7147
Phone: 415-659-7995
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