A few missed payments on a 401(k) loan, even though the delinquency was the employer’s mistake, didn’t stop the IRS from collecting tax and penalty on a deemed distribution. This is “borrower beware” tax law. Missed Payments on 401(k) Loan Result in Deemed Distribution (Louelia Salomon Frias and Mervyngil Salomon v. Comm., TCM 2017-139) Louelia Frias […]

Law requires reporting of all income including that from illegal activity. Tax expert Vern Hoven breaks down what the IRS and court cases say about deductions and reporting related to medical marijuana sales.  To stay current on topics like this and potential changes from the Trump administration, sign up for the industry’s most comprehensive tax update. Make

Divorce settlement, so what’s the first thing we need to know? In a divorce, if the division of the marital assets is a non-taxable event, that’s what quotation 10-41 says. Now, the problem is when it says it’s a not-taxable event, it’s treated like a gift. Most certainly it isn’t a gift. They like each

Don’t stop reading this important Tax Court decision because the charity deduction is so big – none of my clients donate that much – or because the taxpayer claimed outrageous FMV on the donated property – I’d never let my client get that greedy. Instead, read to the end to find out that the Tax Court disallowed the

Vern Hoven addresses top scams aimed at tax preparers including phishing scams, phone scams and identity theft. You’ll learn how to protect yourself and your clients. To stay current on topics like this and potential changes from the Trump administration, sign up for the industry’s most comprehensive tax update. Make sure you and your clients are prepared for

In a recent decision, the Tax Court provided relief to an employer who misclassified workers as independent contractors. If your client is facing a big employment tax bill, this case may provide help in minimizing the taxes due. Court Says That IRS Can Provide Info on Taxes Paid by Reclassified Workers((Mescalero Apache Tribe v. Comm.,

Estate planning is not just for the ultra-rich. But their mistakes, when they have plenty of money to pay for the best advice, make a dramatic starting point for a discussion about transferring family assets to the next generation. Prince died Apr. 21, 2016 without a will, although his estate is valued at as much

How to Begin to Prepare Your Clients for Changes to the Health Care Law.The House of Representatives passed its version of a repeal and replacement of Obamacare. The American Health Care Act is now in the Senate and it will be a long, arduous effort until the Senate passes a replacement bill. And then, it’s on to reconciliation.

Payroll/HR Department receiving email from CEO/CFO requesting list of all employees’ W-2s probably is new W-2 phishing. Cyber criminals are using various spoofing techniques to disguise an email to make it appear as if it is from an organization executive to an employee in the payroll or human resources department requesting a list of all employees

The promised repeal and replacement of Obamacare (the Affordable Care Act) is in writing. Paul Ryan, Speaker of the House, introduced the American Health Care Act (AHCA) on March 7, 2017. The bill has a long way to go before it is law. But during our busy tax season, clients will have questions on how

How Long Are Corporate Extensions? The Code Says Five Months, but the IRS Says Six Months! Hurray! The IRS has reassured the public that it knows what it is talking about in the 2016 instructions for Form 7004. Apparently, the IRS has been getting inquiries from preparers who are wondering if the instructions for Form

As a result of the President’s executive order on January 20, 2017, the IRS recently confirmed here that “silent” returns will be processed, both electronically and on paper. A silent return is the term the IRS is using to refer to individual returns where: The box on Form 1040, Line 61 indicating full year coverage

Were you busy meeting a new IRS deadline for Forms W-2 and 1099- Miscellaneous Income? IRS says making a small mistake on income or withholding doesn’t require a correction. 2016 Forms W-2 and 1099-Miscellaneous Income (if there is an entry on box 7 for Nonemployee compensation) were due to the IRS by January 31, 2017.

A Dozen Talking Points 1. Review law changes for 2016 tax returns. Some provisions from 2015 legislation take effect in 2016. 2015 laws with 2016 tax provisions included: • Trade Bill • Highway Bill • Bipartisan Budget Act of 2015 • FAST Act • PATH Act (extender legislation) 2. Review “What’s New for 2016″ section

 Nonprofit Schools, Hospitals, and Tribal Casinos Are New Targets of Dangerous W-2 Phishing Scam (IR-2017-20) Payroll/HR Department receiving email from CEO/CFO requesting list of all employees’ W-2s probably is new W-2 phishing.Cyber criminals are using various spoofing techniques to disguise an email to make it appear as if it is from an organization executive to an employee in the

The 21st Century Cure Act has passed Congress and the President has just approved and signed. The legislation provides for an exception from group health plan requirements for qualified small employer health reimbursement arrangements. Beginning in 2017, a small employer may again reimburse employees for individual health insurance premiums without fear of the onerous $100 per day

Overtime and the White Collar Exemption – DOL Overtime for White Collar Workers, Overview and Summary of Final Rule Fair Labor Standards Act. The Fair Labor Standards Act (FLSA) provides American workers the right to a minimum wage and time-and-a-half pay for more than 40 hours of work in a week. The FLSA rules apply

Did your dead-broke client receive an IRS audit letter? If so, ask for a collectability determination. If your client has piled up medical bills or credit card debt or business losses and has no ability to pay additional taxes, an IRS audit can be halted. Throughout an IRS tax examination, examiners are expected to follow

Two significant last minute changes will affect your clients: A federal judge enjoined nationwide implementation of the Department of Labor Overtime Regulations. The IRS issued Notice 2016-70 granted a delay for Form 1095 reporting to individuals. Department of Labor Overtime Regulations Delayed Indefinitely. Federal Judge Amos L. Mazzant of the U.S. District Court for the Eastern

President-elect Donald Trump has proposed eliminating estate taxes. If there is a repeal, or when there is a repeal, will estate planners be out of a job? Of course not—estate planning is not only about tax. It includes how the estate is divided, whether the estate is big or small. Estate planning mistakes by the

My Business Client Received a Bill from the IRS for Violating the ACA Employer Mandate.What Now?…and why did he call me instead of his payroll provider or his insurance broker? Employer notifications are on the way for the 2015 year if any full-time employee of the business received a premium assistance credit.A penalty applies if

Tax planning often includes a recommendation to the small business owner that he or she pay wages to their minor children. Wages to the kids may mean (1) using the child’s standard deduction to provide some tax free money, (2) shifting income from the parent’s high tax bracket to the child’s lower bracket, (3) saving

On August 18, 2016 FASB issued Update 2016-14, Presentation of Financial Statements of Not-for-Profit Entities.This represents the culmination of the first phase of FASB’s project on Not-for-Profit Entities and represents the first major revision since the issuance of FASB 116 and 117 in 1993. The provisions reflected in this update are effective for annual periods

Dennis Hastert, Speaker of the United States House of Representatives from 1999 to 2007, pleaded guilty to federal criminal charges of structuring financial transactions to conceal payments to an individual whom he had abused more than three decades earlier, when Hastert worked as a high school wrestling coach. On June 22, 2016, Mr. Hastert began

On July 20, the IRS released a draft of the 2016 Form 8867 – Paid Preparer’s Due Diligence Checklist. In our tax practice, we have been completing the Form 8867 for several years as part of our compliance requirements when claiming the earned income credit (EIC) on a client’s return. Beginning for 2016 returns, new legislation requires

Reprinted with permission of Estates and Trusts Make Taxable Gifts The client may contemplate making taxable gifts in excess of their available federal gift tax exemption because the effective federal gift tax rate is less than the effective estate tax rate. While no gift tax is payable on funds used to pay gift tax, estate tax is

Reprinted with permission of Estates and Trust Plan for IncapacityMany techniques we discuss require that the dying client him or herself, or someone authorized to act on their behalf, take actions. If not already completed, the client should execute a durable power of attorney (POA), which is effective on execution, authorizing an agent to make gifts

Late as usual, Congress finally extended almost 60 expiring tax provisions to December 31, 2014. Sen. Ron Wyden, chairman of the Senate Finance Committee, who voted against the bill, criticized passage, saying that “with this stop-and-go tax extender bill, Congress is turning in its tax homework 11 months late and expecting to earn full credit.”