Tag Archive for Employment Tax

Double Trouble! Employment Taxes & The Trust Fund Recovery Penalty

Lord, hou schulde God approve that you robbe Petur and gif is robbere to Poule in ye name of Crist?”

John Wycliffe, Selected English Works, c. 1380

In medieval England, the Christian Peter and Paul were two peas in a pod. They were both apostles and both martyred in Rome. They even shared the same feast day (June 29). So, the idea behind the phrase “robbing Peter to pay Paul” is that the victim and payee are similar in wisdom and stature (to borrow a phrase). The modern-day equivalent is taking a cash advance from one credit card to make the minimum payment on another one, assuming that they both have a similar interest rate. Read More

Written by | Posted in 2016 Tax Changes • 2016 Tax update • Income Tax • TPR Compliance • TRP Compliance • Trust Extensions • Trust Fund Penalty

5 Payroll Tax Mistakes To Avoid

If you have at least one employee, you are responsible for payroll taxes. These include withholding federal (and, where appropriate, state) income taxes and FICA tax from employees’ wages as well as paying the employer share of FICA tax and federal and state unemployment taxes. The responsibility is great and the penalties for missteps make it essential that you do things right.

1. Misclassifying workers

Perhaps the hottest audit issue today is misclassifying workers. There’s incentive to treat workers as independent contractors rather than employees because payroll taxes and employee benefit costs are high; a company’s only tax responsibility for an independent is Read More

Written by | Posted in Small Business • Tax Tips

Employee or Independent Contractor For Tax Purposes?

Taxation is just one of many areas of law involved in disputing a workers status as either an employee or an independent contractor for the purposes of payroll taxes. Because of recent improvements in the exchange of information between federal and state agencies, one investigation into a workers status may trigger another. Or, a dispute by one worker can domino into additional disputes by other workers. If a business owner misclassified a workers status a number of years ago, it could be found responsible for significant federal and state employment tax deficiencies and penalties, as well as a variety of benefits if the worker sues and is ultimately determined to be an employee.

The IRS use the following list of 20 factors to examine the nature of the relationship between a business and a worker and make a determination between employee or Read More

Written by | Posted in Corporate

Trends In Employment Law And Employment Tax

Among our business tax clients, we are seeing a rise in wage and hour litigation, either ancillary to, or independent of, their tax issues. In fact, recently I was giving a presentation to a group of business owners regarding this very issue, and one of the attendees told me that his business headquarters had been visited by the Department of Labor, Wage and Hour Division (DOL/WHD) that very day with a demand for records. What we are seeing at our law office could be coincidental; but, I believe it is the product of both an enhanced enforcement environment at both the federal and state levels, and a highly aggressive labor and employment law plaintiff’s bar. As the former Secretary of Labor, Hilda Solis, said in 2009, “Make no mistake, the DOL is back in the enforcement business.” Solis has since been replaced by Thomas E. Perez, but there is no indication that the DOL is easing its Read More

Written by | Posted in Corporate • Individual • IRS