Archive for March, 2014


March 25th, 2014 No comments

How many taxpayers utilize all of the financial services provided by their CPAs during the tax preparation season or when considering financial decisions that are directly related to tax planning?

You may be interested in the article published in USA Today on January 31, 2014. The article discussed President Obama’s proposed MyRAs. While the MyRA may not be of immense interest to most taxpayers, I found the article of immense interest because the author, John Waggoner, spoke about the retirement crisis we have in this country and said that “A large number of people who have worked all their lives can look forward to living in near-poverty when they retire.” If his gloom for the future was not alarming, he said that “it’s already happening” in that Read more…

Categories: Retirement News Tags:


March 18th, 2014 No comments

Whether you are a consumer who makes purchases on the Internet or a seller of goods whose customers find you on the Internet, you need to know how, the 500-pound gorilla, is reacting to the pressure of various states to collect sales taxes on its sales.

States have been challenging Amazon’s position that since it does not have any physical presence in their states, Amazon need not collect sales tax from its customers. The retailers in the states where Amazon does not collect sales tax argue that it places them at a competitive disadvantage since they are required to collect the sales tax on taxable purchases made at their stores. If the consumer deliberately or inadvertently fails to pay the use tax (a tax required to be paid if no sales tax is paid by the ultimate consumer), the state loses tax revenues and its retailers are losing sales.

Amazon has agreed to begin collecting sales tax Read more…

Categories: State Tax News Tags:


March 11th, 2014 No comments

Taxpayers who do not use a tax professional for tax preparation, tax planning or tax debt relief  and who have depended upon IRS assistance to prepare their own tax returns or to resolve their IRS past due tax debts may find that more of a challenge this year. USA Today reported that “Though the IRS has more work, more taxpayers and a more complex tax code to administer, Congress has carved almost $1 billion out of the agency’s budget in the past four years.” The National Society of Accountants has reported that:

  • Last year, the IRS only answered 61% of calls from taxpayers seeking to speak with a customer service representative (CSR). The number of calls that were not answered was estimated at 20 million.
  • Taxpayers who did get through had to wait on hold approximately 17.6 minutes before speaking with a CSR.
  • Millions of taxpayers visit IRS walk-in sites each year for assistance. Ten years ago, the IRS answered some 795,000 tax law questions in the sites during the filing season. Last year, it handled about 110,000 tax law questions during the filing season – a reduction of 86 percent.
  • Last year, the IRS received about 8.4 million letters from taxpayers responding to proposed adjustments to their tax liabilities. As of the end of the fiscal year, 53 percent of taxpayer letters in the IRS’s “adjustments” inventory were considered “over age” (generally, more than 45 days old). That compares with “over age” percentages of 12 percent ten years earlier and 28 percent in FY 2010.
  • The IRS recently announced it will only answer “basic” tax law questions on its telephone lines and in its walk-in sites during the upcoming filing season and it will not answer any tax law questions after the filing season, including questions from the millions of taxpayers who obtain filing extensions and prepare their returns later in the year.
  • Since FY 2010, the IRS’s training budget has been cut from $172 million to $22 million.

Taxpayers need to understand that when the IRS gives taxpayers incorrect verbal advice and a return is prepared incorrectly resulting in an IRS assessment for additional taxes, interest and penalties, that Read more…



March 4th, 2014 No comments

A tax professional often learns when providing tax preparation or tax planning services to a business owner that the owner has misclassified employees as independent contractors. Workers classified as employees receive a Form W-2, Wage and Tax Statement, whereas workers classified as independent contractors receive Form 1099-MISC, Miscellaneous Income. Employers generally prefer to classify a worker as an independent contractor to avoid paying employment taxes (FICA and Medicare) and employee benefits, and to avoid complying with a myriad of employer rules including the recently enacted Patient Protection and Affordable Health Care Act (Obama Care).

The IRS and the U.S. Department of Labor (DOL) have audit programs to identify employers who may be misclassifying workers. The determination between employee and independent contractor is based on Read more…

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