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Posts tagged "business"

Legislators Seek to Limit Impact of Wayfair Decision through New House Bill

On September 13, 2018, a bill was introduced in the U.S. House of Representatives "to prohibit States from retroactively imposing a sales tax collection duty on a remote seller," among other purposes. H.R. 6824, also called the Online Sales Simplicity and Small Business Relief Act of 2018, seeks to limit the impact of the recent Wayfair decision, which eliminated the need for a business to be physically present in a state in order to have economic nexus in that state.

State and Local Tax Deductions Available to Businesses

The Internal Revenue Service (IRS) announced this week that business payments to charities that result in state or local tax credits will be deductible expenses in most cases.  This is unlike the manner in which the IRS has said it will treat payments that individuals make to charities (details here).  For more information on SALT deductions available to businesses, click here.

Sales Taxes have Caught Up with the Times

In a 5-4 decision, the Supreme Court ruled today that states may now require online retailers to collect sales taxes from consumers, regardless of where the business is located or the product is delivered. In 1992, the same court ruled that a business had to have some kind of "physical presence" or "nexus" in order to be required to collect sales tax in a state. With the increased use of online shopping, however, it turns out not all taxpayers report non-taxed purchases to the states in which they reside. In fact, an estimated $33.9 billion goes uncollected in sales taxes each year, costing states a significant sum. Additionally, internet shopping tax-free has hurt the brick-and-mortar stores that already have higher operational costs due to a physical presence in a state, since they must collect sales tax on taxable transactions.

Pilot Program to Fix Wage and Hour Problems

The U.S. Department of Labor (DOL) recently launched the Payroll Audit Independent Determination (PAID) program, which is designed to quickly resolve unintentional minimum wage violations under the Fair Labor Standards Act (FLSA) without penalty to qualified participants. Workers will benefit by swiftly receiving back wages that are owed, and employers can get into compliance without paying penalties. Employers must act quickly, however, since the pilot program is scheduled to end in about six months.

Employment Tax Crimes Can Lead to Significant Prison Time

The Department of Justice recently reminded taxpayers that evading personal or business-related tax obligations can lead to "substantial fines and penalties, and even long prison sentences." Last month, the husband-and-wife owners of a Tennessee staffing company were sentenced to 75 months and one year, respectively, of prison time for failure to pay over $2.8 million in employment-related taxes and withholdings, and for filing false employment tax returns.

IRS Failed to Notify Most Victims of Employment Identity Theft

The Treasury Inspector General for Tax Administration (TIGTA) recently released a report finding that the Internal Revenue Service (IRS) has failed to notify the majority of individuals they found to be victims of employment identity theft.  When an identity thief uses another individual's information to obtain employment, the victim may have taxes computed based on income they did not personally earn, and may experience other difficulties.  The IRS has a computer-based process to notify victims of the issue, but due to a programming error related to a decision to notify only newly identified victims, the IRS failed to notify over 450,000 individuals for processing year 2017.  In addition, over 15,000 individuals who did receive notice (13.5 percent of the total group notified) were not actually victims of employment identity theft.

Opening a Cannabis Business in California? Learn Your Compliance Requirements!

The California Secretary of State recently launched a new online portal, cannabizfile, for those interested in establishing a cannabis-related business. You will find information on topics including registering your business, trademark, or service mark; searching for business records; licensing; and registering and paying taxes with various state agencies.

Do You Claim Losses or Deductions from Your S Corporation? You May Be Audited!

The IRS Large Business and International division (LB&I) is rolling out a series of campaigns focused on specific compliance issues. The division analyzed extensive data as well as suggestions from IRS compliance employees and the tax community to improve large business compliance activities.

Mid-Market Related Party Transactions May Lead to Audit

The IRS Large Business and International division (LB&I) is rolling out a series of campaigns focused on specific compliance issues. The division analyzed extensive data as well as suggestions from IRS compliance employees and the tax community to improve large business compliance activities.

Senate Committee on Finance Tackles Business Tax Reform

The United States Senate Committee on Finance held a hearing on September 19, 2017, to address business tax reform goals. Chairman Orrin Hatch focused his opening remarks on the need to reduce corporate tax rates to remain competitive in the international market and to reduce the burden on the American working class. He recommended allowing businesses to deduct dividends paid as a way to offset what he interpreted as double-taxation, since investors are also taxed on dividends received. He also stressed the need to find a way to reduce the tax burden on pass-through entities such as sole proprietorships, LLCs, and partnerships.

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