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September 2011 Archives

Factors that may trigger an IRS audit of a California taxpayer

In our last post we discussed the IRS' special wealthy taxpayer audit team and the fact that wealthy California taxpayers are many times more likely to be the subject of an IRS audit. Although a taxpayer's income or wealth can make an IRS audit more likely, there are a variety of specific factors that may raise a "red flag" with the IRS and make an audit imminent.

IRS more likely to audit wealthy Orange County residents

We have extensively discussed small business payroll taxes and offshore bank accounts in previous posts, including the related tax issues that may arise for Orange County residents. Often taxpayers who have offshore bank accounts or own businesses that have payroll tax obligations are wealthier than the typical California taxpayer. These successful individuals are unfortunately much more likely to become the target of an IRS audit according to some reports.

GAO report criticizes tax evasion whistleblower program

The U.S. Government Accountability Office recently released a report indicating the Internal Revenue Service's federal-tax whistleblower program needs significant improvements. Congress enacted the tax whistleblower program in 2006 for cases involving tax evasion of over $2 million. The GAO report suggests that the IRS' program is inefficient, slow and difficult for citizens to navigate.

New Voluntary Worker Classification Settlement Program announced by IRS

It is easy for small Southern California businesses to incur payroll tax debt. Many small businesses slip into payroll tax debt issues in these hard economic times and many business owners find themselves overwhelmed by the interest and penalties associated with unpaid payroll taxes. An experienced California tax attorney can bargain with the IRS to reduce payment terms, extend payment arrangements and make arrangements so that a business can remain open while repaying its tax liability.

Outcry arises over clergy tax breaks

At a time when some politicians are calling for an end of the home mortgage interest deduction, there is a class of California taxpayers who do not have to worry about taxes on their homes at all. An old provision in the tax code provides that clergy members get to live tax-free in homes that are wholly owned by their churches.

Feds obtain Swiss bank data in tax evasion investigation

In a previous post we discussed HSBC's decision to cease some services to United States clients amid a tax evasion probe that has already resulted in huge fines against Swiss banks. The Swiss banks were fined for aiding alleged tax evasion schemes by taxpayers in Orange County and throughout the country. We also discussed the Offshore Voluntary Disclosure Initiative, which had its deadline extended until the end of last week.

IRS to small business owners: don't leave money on the table

The IRS and the Department of Health and Human Services will conduct a new round of outreach to small business owners in Orange County and throughout the country. The outreach efforts will target small business owners that may not be aware of whether they qualify for the Small Business Health Care Tax Credit. This tax credit was a part of last year's Affordable Care Act.

Tax tips for California employers that outsource payroll

There are many Orange County businesses that struggle during these tough economic times. The response of many California businesses to financial pressures during the recession varies. Some businesses lay off workers whereas other businesses delay vendor, contractor or rent payments to make ends meet. There is also a subset of Orange County businesses which are beginning to delay payroll tax payments in order to avoid folding.