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December 2016 Archives

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.

FTB Announces 2016 Inflation Adjustments to "Bright-Line Nexus" Thresholds

California Rev. and Tax Code section 23101 defines what it means to do business in California, including a sales threshold for taxpayers not physically located in the state. A taxpayer is considered to be doing business in California "if it actively engages in any transaction for the purpose of financial or pecuniary gain or profit" where any one of a number of conditions are satisfied, including having $54,771 in real and tangible personal property (originally $50,000), $54,771 in payroll (originally $50,000), and $547,711 in sales (originally $500,000) in the state for taxable year 2016.

Shareholder Loans and Your California Payroll Tax Audit

Although it is common practice for corporate officers to take shareholder loans from company coffers, weak or inconsistent recordkeeping can turn this into a serious problem during California payroll tax audits - undocumented loans are often picked up by state tax agencies as unreported "wages." In order to avoid scrutiny, or a possible tax assessment for failure to report wages, businesses must make sure that their shareholder loans are defensible as bona fide loans, and not advances on payments for services rendered, i.e. wages.

Update on Rules for Internet-Based Service Providers

Businesses on the cutting edge of technology may kick off the new year with a "sharing economy" workforce approach. Businesses that use a web-based approach to offering services, including the rental of tangible personal property, may qualify for the benefits related to this relatively new classification. Be aware of the IRS' requirements and the related rules for the best business practices and for preparedness in the event of an audit.

New Tool Allows Federal Taxpayers to Access Account Information Online

The Internal Revenue Service (IRS) launched a new, web-based tool to assist taxpayers with simple balance inquiries. The new feature is one part of the IRS' plans to build a wider platform for taxpayers to more quickly and securely access various aspects of their account information online. A rigorous identity authentication process is required for all new users of this tool.

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