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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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Tax Tips for those who make money in the gig economy

Tax Tips for those who make money in the gig economy

As reported in the LA Times (from the NY Times): Since losing her job in advertising during the financial crisis, Dina Scherer has spent her days helping women cultivate their own personal styles — finding flattering color palettes, editing closets and taking customers on shopping excursions. As a one-woman enterprise, she can be considered a […]

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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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Supreme Court won’t review denial of offset relief to misclassified employee

Supreme Court won’t review denial of offset relief to misclassified employee

Karagozian, (CA 2 3/2/2015) 115 AFTR 2d 2015-990, cert denied 10/19/2015 The Court of Appeals for the Second Circuit, affirming the Tax Court, has held that an employee who underpaid his 2008 income tax and overpaid his 2002-2008 FICA tax, as a result of his employer misclassifying him as self-employed, couldn’t use the equitable recoupment […]

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No intentional disregard where taxpayer sent W-2s to employees but not to SSA

No intentional disregard where taxpayer sent W-2s to employees but not to SSA

John C. Hom & Associates, Inc., TC Summary Opinion 2015-49 In a summary opinion, the Tax Court has held that where an owner-president of a small corporation failed to file the corporation’s Forms W-2 with the Social Security Administration (SSA), but sent Forms W-2 to his employees and believed he sent them to SSA, the […]

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Company not required to file information returns for payment made for freight hauling services

Company not required to file information returns for payment made for freight hauling services

Legal Advice Issued by Field Attorneys 20151002F In Legal Advice issued by Field Attorneys, IRS has concluded that a motor freight carrier company (Company) that paid independent operators to haul freight on Company’s trailers was not required to file information returns under Code Sec. 6041and was not a broker as defined in Code Sec. 6045. […]

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Tax Court had jurisdiction to determine entitlement to Sec. 530 employment tax relief

Tax Court had jurisdiction to determine entitlement to Sec. 530 employment tax relief

American Airlines, Inc. (2015), 144 TC No. 2 The Tax Court has concluded that, based on IRS having made a determination, it had jurisdiction to determine whether the taxpayer was entitled to relief under Sec. 530 of the Revenue Act of 1978 with respect to remuneration paid to the taxpayer’s foreign flight attendants by its […]

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TEFRA Doesn’t Apply to Employment Tax Examinations or Worker Classification Proceedings

TEFRA Doesn’t Apply to Employment Tax Examinations or Worker Classification Proceedings

Legal Advice Issued by Field Attorneys 20145001F   In Legal Advice Issued by Field Attorneys (LAFA), IRS has concluded that the unified partnership audit rules under the Tax Equity and Fiscal Responsibility Act of ’82 (TEFRA, (P.L. 97-248)), as codified in Code Sec. 6221 – Code Sec. 6234 , don’t apply to employment tax examinations […]

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IRS Disagrees With Tax Court Ruling On Employment Status Jurisdiction; Issues Guidance

IRS Disagrees With Tax Court Ruling On Employment Status Jurisdiction; Issues Guidance

IRS’s Office of Chief Counsel has issued guidance on when to issue a Notice of Determination of Worker Classification (NDWC) under Code Sec. 7436 and how to handle docketed Tax Court cases when employment taxes are involved. This guidance was issued in light of a Tax Court opinion, SECC Corporation, (2014) 142 TC No. 12, […]

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IRS proposes new approach to determine employee’s status for employer mandate purposes

IRS proposes new approach to determine employee’s status for employer mandate purposes

Notice 2014-49, 2014-40 IRB In a Notice, IRS has proposed an approach to the application of the look-back measurement method, which is a method that may be used to determine if an employee is a full-time employee for purposes of the Affordable Care Act’s (ACA’s) employer shared responsibility provisions under Code Sec. 4980H, in situations […]

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FedEx drivers in California held to be employees

FedEx drivers in California held to be employees

Alexander v. FedEx Ground Package System, Inc. (CA 9 08/27/2014) Click here for the text of Alexander v. FedEx Ground Package System, Inc. The Court of Appeals for the Ninth Circuit, reversing a district court, has held that FedEx drivers in California are employees, not independent contractors, in an action brought by them under the […]

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Attorney’s spouse engaged to handle difficult client was an independent contractor

Attorney’s spouse engaged to handle difficult client was an independent contractor

Jones, TC Memo 2014-125 In a case dealing with somewhat unusual facts, the Tax Court held that the wife of an attorney supplied services for his law firm as an independent contractor, as she had claimed, and not as his employee, as IRS had contended. The services at issue amounted to hand-holding a difficult, eccentric […]

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Tax Court – Group home manager for business serving adults with disabilities was employee

Tax Court – Group home manager for business serving adults with disabilities was employee

In Atig Rahman, TC Summary Opinion 2014-35. the Tax Court has concluded that a worker hired by a business that provided home and other care services to adults with disabilities was an employee. Although the firm treated him as an independent contractor, the Court’s analysis of the work relationship indicated that he was a common […]

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IRS issues information letter on common law/statutory employers and employer agents

IRS issues information letter on common law/statutory employers and employer agents

IRS has issued Information Letter 2013-0031, on common law employers, statutory employers, and employer agents. Common law employers. Whether a person is an employer for employment tax purposes is determined under the common law rules. Guidelines for determining whether an employer-employee relationship exist are found in three substantially similar sections of the Employment Tax Regulations: […]

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Employers Continue to Classify Workers as Independent Contractors, Despite IRS Determinations to the Contrary, TIGTA Finds

Employers Continue to Classify Workers as Independent Contractors, Despite IRS Determinations to the Contrary, TIGTA Finds

Employers Continue to Classify Workers as Independent Contractors, Despite IRS Determinations to the Contrary, TIGTA Finds. Despite a program allowing employers and workers to seek determinations from the Internal Revenue Service (IRS) of whether workers are employees or independent contractors, many employers continue to misclassify millions of workers as independent contractors instead of employees.  When […]

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Equitable recoupment, mitigation no help to misclassified employee

Equitable recoupment, mitigation no help to misclassified employee

The Tax Court decided in Karagozian v. Commissioner, T.C. Memo 2013-64, that an employee who underpaid his 2008 income tax, and overpaid his 2002-2008 FICA tax, as a result of his employer misclassifying him as self-employed, couldn’t use the equitable recoupment or mitigation doctrines to offset his underpayment with any of the previous year overpayments. […]

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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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Member CA Bar Member Orange County Bar US Tax Court Attorney