In response to the financial crisis caused by COVID-19, the newly enacted CARES Act has created a new payroll-related form of relief for employers. Coined The Employee Retention Credit, this relief measure allows eligible employers to obtain a refundable credit against the employer-only portion of social security taxes (or Railroad Retirement Tax Act taxes).
Almost every year April 15 is known as the date when federal and state income tax filings are due. This rule is generally true, except for during 2020. The Internal Revenue Service (IRS) recently announced that it is extending the deadline to both file and pay federal income taxes to July 15, 2020. The move is designed to help provide some relief to taxpayers as we navigate the current coronavirus pandemic.
The Internal Revenue Service (IRS) recently announced plans to increase visits to a certain group of taxpayers. The agency’s focus includes those who meet the following criteria: 1) earnings of over $100,000 annually, and 2) failure to file income tax returns.
Cryptocurrency exchanges, such as Coinbase and Uphold, have begun issuing Forms 1099-Ks, Payment Card and Third Party Network Transactions, to customers. If you receive a 1099-K from a cryptocurrency exchange, then you can be assured that the IRS is fully aware of your reportable cryptocurrency transactions. This is because cryptocurrency exchanges are required to send 1099-Ks to: (1) customers during any tax year who had payments exceeding $20,000 and engaged in more than 200 transactions in the exchange, and (2) the IRS. Omitting 1099-K information from your tax return will automatically flag your return for underreporting and subject you to IRS penalties.
In December of 2019, the Internal Revenue Service (IRS) added two new "Frequently Asked Questions" (FAQs) on its webpage regarding the responsibilities and reporting obligations for charitable organizations that received donations in the form of virtual currencies.1 One of these FAQs imposes an appraisal requirement for large donations of virtual currencies-increasing already existing concerns that such a requirement will discourage charitable giving.
Holiday decorations are stored away, New Year's celebrations are over. Now it is time to move on to the next season of the year: tax season.
On January 6, 2020, the Internal Revenue Service (IRS) released its Fiscal Year 2019 Whistleblower Report. Although the report shows a decline in awards made as compared to last year, potential whistleblowers should note that the report clearly portrays an overall trend that the IRS is increasingly motivated in today's mandatory tax whistleblower program. An important takeaway for potential whistleblowers is the report's emphasis that the number one reason for IRS rejection of whistleblower submissions was due to submissions lacking in specificity-51% of total closures were due to allegations that were not specific, not credible, or speculative. In other words, whistleblowers should understand that their best chance of success is a skillfully drafted submission with specifics which are presented in the clearest way possible.
The "Gig Economy"-independent workers paid for a task or project (i.e., a "gig")- isn't new, but it has grown exponentially over the last decade, especially with the help of smartphone-based technology. Companies like Uber, Airbnb or TaskRabbit have made it very attractive and easy for independent workers to receive payment for performing a specific gig. However, many of the companies providing the services and the individuals performing them don't fully understand their tax obligations in the gig economy.
Celebrations have finished. The new year is here. Now it is time to get back to business. One important consideration when transitioning back to work after the holiday season: tax dates. Due dates will vary depending on the tax form in question. This piece will focus on two of the more common forms, the individual tax return and estimated tax payments for small businesses.
On November 20, 2019, the IRS posted a series of Frequently Asked Questions (FAQs) which includes much needed guidance regarding rental real estate in the context of the Qualified Business Income (QBI) deduction under Internal Revenue Code (IRC) §199A.1 A few of the particularly noteworthy FAQs include: (1) when rental real estate is treated as a trade or business; (2) when a rental real estate enterprise is eligible to rely upon the Revenue Procedure 2019-38 safe harbor; and (3) whether the income, gain, deduction and losses are from the rental QBI if the real estate is rented to a C corporation.