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Employment taxes

Final, temporary & proposed regs explain new PEO voluntary certification program

Final, temporary & proposed regs explain new PEO voluntary certification program

IR 2016-74 T.D. 9768, “Certified Professional Employer Organizations; Final and Temporary Regulations.” Proposed Regs [REG-127561-15], “Certified Professional Employer Organizations; Notice of Proposed Rulemaking and Notice of Proposed Rulemaking by Cross-Reference to Temporary Regulations.” IRS has issued final and temporary regs implementing a new voluntary certification program for professional employer organizations (PEOs), which was authorized by […]

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No Tax Court jurisdiction in worker classification case because there was no IRS audit

No Tax Court jurisdiction in worker classification case because there was no IRS audit

B G Painting, TC Memo 2016-62 The Tax Court has held that IRS’s determination that a taxpayer’s worker was its employee, in response to the employee’s request for that determination under IRS’s SS-8 program, did not meet the criteria necessary to provide the Tax Court with jurisdiction over the taxpayer’s petition to review IRS’s determination. […]

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Employers in Two States & Virgin Islands Could Pay Higher FUTA Rates in 2016

Employers in Two States & Virgin Islands Could Pay Higher FUTA Rates in 2016

California, Ohio, and the Virgin Islands have outstanding federal unemployment loan balances as of Mar. 28, 2016. Employers in these jurisdictions will pay 2016 federal unemployment tax (FUTA) at a higher rate than employers in other areas if the loans are not repaid by Nov. 10, 2016. Background. Employers pay FUTA tax at a rate of 6.0% […]

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IRS: Cash reimbursements to reflect retroactive transit benefit increase may be taxable

IRS: Cash reimbursements to reflect retroactive transit benefit increase may be taxable

Program Manager Technical Advice 2016-001 In Program Manager Technical Advice (PMTA), IRS has concluded that: a) where transit passes are readily available, cash payments from employers to employees, to reflect retroactive legislation that increased the amount of the exemption for qualified transportation fringe benefits, are taxable compensation; and b) an employee’s maximum excludible qualified transportation […]

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Tax Court – Notice of worker misclassification is treated like deficiency notice for CDP purposes

Tax Court – Notice of worker misclassification is treated like deficiency notice for CDP purposes

Hampton Software Development LLC, TC Memo 2016-38 The Tax Court has held that — for purposes of the rule in Code Sec. 6330(c)(2)(B) that permits a taxpayer to challenge the existence or amount of his tax liability at a collection due process (CDP) hearing if he did not receive a statutory notice of deficiency — […]

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Entire functional group moved to another subsidiary, so successor employer rule applied

Entire functional group moved to another subsidiary, so successor employer rule applied

PLR 201611007 In a Private Letter Ruling, IRS has concluded that a transfer of both all of the non-revenue-producing employees that performed a particular function for two of a taxpayer’s subsidiaries, and all of the assets used by those employees, to another of the taxpayer’s subsidiaries, met the Code Sec. 3121(a)(1) rule allowing the successor […]

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U.S. government signals more businesses liable as joint employers

U.S. government signals more businesses liable as joint employers

(Reuters) – More U.S. companies could be classified as “joint employers” of workers employed by a staffing agency or contractor and held liable for labor violations tied to those staff, the U.S. Labor Department said in guidance published Wednesday. Joint employment has emerged as a major issue in franchising, contracting, temporary staffing and other arrangements […]

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Procedure for employers to deal with retroactive increase in excludible 2015 transit benefits

Procedure for employers to deal with retroactive increase in excludible 2015 transit benefits

Notice 2016-6, 2016-4 IRB In a Notice, IRS has provided guidance on how employers should handle the retroactive 2015 increase, by the Consolidated Appropriations Act, 2016 (the Act, P.L. 114-113), in the monthly exclusion for employer-provided transit and vanpooling benefits under Code Sec. 132(f)(2)(A), from $130 to $250. IRS clarifies how the increase applies for […]

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IRS provides guidance on revised Employee Plans determination letter program

IRS provides guidance on revised Employee Plans determination letter program

Notice 2016-3, 2016-3 IRB In anticipation of the elimination of the 5-year remedial amendment cycle system for individually designed plans under the Employee Plans determination letter program, effective Jan. 1, 2017, IRS has announced guidance with respect to Cycle A elections made by controlled groups and affiliated service groups; expiration dates on determination letters issued prior […]

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Tax Court – Hollywood set builder was independent contractor entitled to schedule c deductions

Tax Court – Hollywood set builder was independent contractor entitled to schedule c deductions

Quintanilla, TC Memo 2016-5 The Tax Court has held that a set builder who worked on approximately 150 commercials with a variety of production companies over a 2-year span was an independent contractor who properly claimed business deductions on Schedule C.  Click here for the Opinion of the Court. Background. The issue of whether a worker […]

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IRS changes litigation position on Tax Court’s employment status jurisdiction

IRS changes litigation position on Tax Court’s employment status jurisdiction

Chief Counsel Notice 2016-002 In a Chief Counsel Notice (CCN), IRS has advised Counsel attorneys of a change in IRS’s litigation position concerning the scope of the Tax Court’s jurisdiction under Code Sec. 7436. This change was prompted by two Tax Court decisions which concluded that, based on IRS having made a determination, regardless of […]

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IRS to apply Code’s church audit restrictions to church employment tax inquiries, audits

IRS to apply Code’s church audit restrictions to church employment tax inquiries, audits

RS Small Business/Self Employed Division Memo “IRC section 7611 Procedures Relating to Employment Tax Examinations of Churches (Dec. 17, 2015). In a memo, IRS’s Small Business/Self Employed (SB/SE) division has changed its instructions to its examiners, telling them to apply procedures in Code Sec. 7611, which restrict IRS inquiries and examinations involving churches’ tax-exempt status […]

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2016 version of Circular E reflects PATH Act changes

2016 version of Circular E reflects PATH Act changes

With the ink barely dry on the “Protecting Americans from Tax Hikes (PATH) Act of 2015,” signed into law on December 18, IRS has already begun updating its publications to reflect this new law. Case in point: Publication 15 (Circular E), Employer’s Tax Guide for use in 2016, has already been updated to reflect two […]

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Updated Publication 15-B reflects numerous changes for 2016

Updated Publication 15-B reflects numerous changes for 2016

Publication 15-B, Employer’s Tax Guide to Fringe Benefits, for use in 2016. IRS has recently released an updated version of Publication 15-B, Employer’s Tax Guide to Fringe Benefits, for use in 2016. It reflects a number of changes, including several from the newly enacted “Protecting Americans from Tax Hikes (PATH) Act of 2015.” Publication 15-B contains detailed […]

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IRS to begin contacting employers whose payroll tax payments decline or are late

IRS to begin contacting employers whose payroll tax payments decline or are late

In a News Release, IRS has announced that it has launched a new initiative, the Early Interaction Initiative, under which it will seek to identify employers who appear to be falling behind on their payroll tax payments, before an employment tax return is filed. The new IRS initiative will monitor deposit patterns and identify employers […]

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Court clarifies Supreme Court rule that IRS precisely spell out withholding requirements

Court clarifies Supreme Court rule that IRS precisely spell out withholding requirements

Netjets Large Aircraft, Inc., (DC OH 11/12/2015) 116 AFTR 2d ¶ 2015-5420 A district court has interpreted a Supreme Court decision as requiring that IRS provide withholding and collection agents with precise and not speculative guidance as to their withholding or collection obligations and has held that IRS did not meet that requirement with respect […]

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TIGTA report says some employers avoid penalty for failure to file correct wage documents

TIGTA report says some employers avoid penalty for failure to file correct wage documents

TIGTA Report: Employers Who Do Not Comply With Requests to Provide Complete and Accurate Wage Documents Are Not Always Assessed Penalties. A new audit by the Treasury Inspector General for Tax Administration (TIGTA) found that IRS didn’t always assess penalties under Code Sec. 6721 against employers that fail to respond to IRS’s requests to resolve […]

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Employers in three states and the Virgin Islands will have higher FUTA rates in 2015

Employers in three states and the Virgin Islands will have higher FUTA rates in 2015

2015 Department of Labor FUTA credit reduction schedule. The U.S. Department of Labor (DOL) has released a schedule that shows the states that, because they have had an outstanding federal unemployment insurance (UI) loan for at least two years, are subject to the federal unemployment tax (FUTA) credit reduction on 2015 federal Form 940, Employer’s […]

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Principal financial officer of smaller reporting company was subject to comp deduction limit

Principal financial officer of smaller reporting company was subject to comp deduction limit

Chief Counsel Advice 201543003 In a Chief Counsel Advice (CCA), IRS has ruled that the principal financial officer (PFO) of a “smaller reporting company” for Security and Exchange Commission (SEC) reporting purposes, was a covered employee under Code Sec. 162(m)(3) for purposes of the $1 million compensation deduction limit. Background. Subject to certain exceptions, Code Sec. […]

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Employee loses suit against employer who failed to file for available FICA refund

Employee loses suit against employer who failed to file for available FICA refund

Reuss vs. Orlando Health, Inc., (DC FL 10/21/2015) 116 AFTR 2d ¶ 2015-5361 A district court has dismissed a case brought by a medical resident who was treated as an employee by the hospital for which he worked; the resident sued the hospital for failing to take advantage of an IRS offer to refund FICA […]

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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