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The Dire Consequences of “Accidentally” Incorporating

The Dire Consequences of “Accidentally” Incorporating

Online legal services make it seem very easy to start and incorporate a business. But, through the eyes of the IRS, the difference between a sole proprietorship and a corporation is more dramatic than just being able to add “Inc.” to your business name. A Michigan tax case involving a small family business illustrates this point. What started with an innocent mistake by a well-meaning son ended in thousands of dollars of back taxes owed by a widowed business owner. 

How the IRS Weighs “Reasonable” Versus “Reckless” When Payroll Taxes Go Missing

How the IRS Weighs “Reasonable” Versus “Reckless” When Payroll Taxes Go Missing

At face value, it seems the IRS has a very low barrier to personally penalize a member of business management when payroll taxes withheld from employee paychecks (called trust fund money) aren’t submitted to the IRS. Time after time, the IRS seems to win these cases. What it really comes down to is whether the stakeholder knowingly and recklessly disregarded the risk of non-payment. It’s why a Seinfeld icon and soup mogul was recently on the hook for back taxes (read that story here) and why tax practitioners rarely seem optimistic when the IRS claims a trust fund penalty is due. However, a recent case shows there is light at the end of the tunnel and that light is called “reasonable belief.”

Boston Bruins Just ICED THE IRS IN TAX COURT!

Boston Bruins Just ICED THE IRS IN TAX COURT!
The Boston Bruins professional hockey team just won a huge victory, only it wasn’t on the ice rink. Instead, it was in Tax Court. In a recent surprise ruling (see  Jacobs v. IRS, 148 T.C. No. 24

), the Tax Court ruled that the owners of the team  may deduct the entire cost of away game pregame meals as a qualifying de minimis fringe benefit.

Why “Pleading the Fifth” Doesn’t Work in Tax Cases

  • 11 July 2017
  • Author: Alexander Carr
  • Number of views: 1387
  • 0 Comments
Why “Pleading the Fifth” Doesn’t Work in Tax Cases
From corporate leadership to government officials, it seems invoking the Fifth Amendment and declining to provide information during legal proceedings has

become popular. But if you assume the tactic can be used as a defense for not filing taxes, think again.

Steven Bankler Featured in New Book on Changing the Face of Accounting

Steven Bankler Featured in New Book on Changing the Face of Accounting
We’re thrilled to announce that Steven Bankler is featured in Ian Welham’s new book entitled Changing the Face of Accounting: Forward Thinking Conversations About Reinventing the CPA Field. Welham dedicated an entire chapter to Steven, featuring an interview that highlights the many ways in which Steven Bankler, CPA, Ltd. does things differently from typical CPA firms

Now’s the Time to Fix Rollover Mistakes

Now’s the Time to Fix Rollover Mistakes
If you filed an extension on last year’s income tax return and haven’t finalized yet, you have a unique opportunity to undo some of the decisions you made when it comes to your retirement savings. You can no longer make contributions or fulfill your required minimum distributions (if you’re 70½ or older), but you can make other changes

Monitoring Adjusted Gross Income (AGI) to Minimize Taxes

Monitoring Adjusted Gross Income (AGI) to Minimize Taxes
For most business owners, determining income from one year to the next can be tricky. Interest, dividends, alimony, pensions and annuities, rental property income, royalties, income from the sale of assets and business income can all raise your annual gross income and, therefore, your taxes. That’s why it’s important to monitor your Adjusted Gross Income (AGI). AGI is gross income minus certain “above the line” deductions (retirement account contributions, self-employed health insurance

and domestic production activities, just to name a few) and it can lower your tax liability. Your AGI is a primary figure on which other deductions are computed.

No Soup for You! Seinfeld Icon in Serious Payroll Tax Trouble

No Soup for You! Seinfeld Icon in Serious Payroll Tax Trouble
Remember the “Soup Nazi” from the Seinfeld television show? Thanks to its popularity on the show, that small soup shop turned into Soupman, Inc. and its CFO, Robert N. Bertrand, was recently indicted on 20 counts of failure to pay both payroll and federal income taxes. You could

say he’s in very hot…soup? His story is a cautionary tale of what can happen when you fail to pay or try to avoid (using “independent contractors” who are actually employees or paying non-reported “wages”) payroll taxes.

How Do You Know It’s REALLY the IRS Knocking?

How Do You Know It’s REALLY the IRS Knocking?
Tax scams are a dime a dozen these days. Recently we’ve warned about phone and email scams as well as how to determine whether the letter you receive from a third-party tax collector is legitimate. Now the IRS is warning about a lesser-known but even more invasive scam. This one involves IRS impersonators visiting your home or office in person and demanding payment.

Clearing the PATH for Business Property Tax Breaks

Clearing the PATH for Business Property Tax Breaks
While President Trump’s new administration works vigorously to unravel many of the programs put in place by President Obama, the Protecting Americans from Tax Hikes (PATH) Act of 2015 remains intact. In fact, the IRS only recently released guidance for those interested in taking advantage of laws like Section 179 for real estate improvements (see Revenue Procedure 2017-33).
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