Publications

Publications

Publications

Words of Wisdom —Always File on or Before the Deadline TEST

By: Steven Walker

Taxpayers should always file their tax return on or before the due date and confirm with their tax return preparer that the return was timely filed.  This means obtaining a copy of the electronic receipt that the accountant received after filing the return.  Many taxpayers fail to do this and assume that the accountant timely filed the return.  If, however, for some unexpected reason, the return was not timely filed (e.g., the return preparer mistakenly failed to transmit the return, or the IRS never received the return), the taxpayer may be faced with a late filing penalty.  The amount of...
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IRS and Virtual Currency TEST

By: Steven Walker

IRS Has Begun Sending Letters to Virtual Currency Owners Advising Them to Pay Back Taxes, Files Amended Returns; Party of IRS' Larger Efforts The Internal Revenue Service has begun sending letters to taxpayers with virtual currency transactions that potentially failed to report income and pay the resulting tax from virtual currency transactions or did not report their transactions properly.  Last year the IRS announced a Virtual Currency Compliance Campaign to address tax noncompliance related to the use of virtual currency through outreach and examinations of taxpayers. Virtual currency is an ongoing focus area for IRS Criminal Investigation. Taxpayers who do...
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California Supreme Court Finds Workers are Employees and Not Independent Contractors, Decision Has Significance for Businesses and May Impact Employment Tax Audits TEST

By: Steven Walker

In Dynamex Operations West, Inc. v. Superior Court (Ct.App. 2/7 B249546, Los Angeles County Super Ct. No. BC332016), the California Supreme Court issued a critical decision on the question whether an individual worker should correctly be classified as an employee, or instead, as an independent contractor.  The court held that it was appropriate to look to a standard, commonly referred to as the "ABC" test, to distinguish employees from independent contractors.   Under this test, an employer's failure to prove any one of the three prerequisites will be sufficient in itself to establish that the worker is an employee for purposes...
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IRS Announces New Compliance Campaigns TEST

By: Steven Walker

On April 16, 2019 the IRS Large Business and International division (LB&I) announced the approval of three additional compliance campaigns. Two of these campaigns, the Captive Services Provider Campaign and the Loose Filed Forms 5471 Campaign, are of importance to our clients and are explained in further detail below. Captive Services Provider Campaign The section 482 regulations and the OECD Transfer Pricing Guidelines provide rules for determining arm’s length pricing for transactions between controlled entities, including transactions in which a foreign captive subsidiary performs services exclusively for the parent or other members of the multinational group. The arm’s length price...
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IRS Updated Voluntary Disclosure Practice TEST

By: Steven Walker

On November 20, 2018, the IRS issued a Memorandum addressing the process for all voluntary disclosures (both domestic and foreign) following the close of the Offshore Voluntary Disclosure Program on September 28, 2018.  In March 2019, the IRS released new Form 14457, Voluntary Disclosure Practice Preclearance Request and Application.  The updated guidance and new form are important for taxpayers seeking to participate in the IRS voluntary disclosure program. The objective of the voluntary disclosure practice is to provide taxpayers concerned that their conduct is willful or fraudulent, and that may rise to the level of tax and tax-related criminal acts,...
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Is Your Client the Subject of an FBAR Examination? TEST

By: Steven L. Walker

The Tax Insider, American Institute of Certified Public Accountants (AICPA)

January 31, 2019

Has a client received a letter from the IRS asking to schedule an appointment to examine the client's compliance with the requirement to file FinCEN Report 114, Report of Foreign Bank and Financial Accounts (FBAR)? Although an FBAR examination is not an income tax examination, the client may be liable for penalties for failure to comply with 31 U.S.C. Section 5314.
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Recent Developments – IRS Enforcement Priorities TEST

By: Steven Walker

Steven L. Walker recently attended the 34th Annual National Institute on Criminal Tax Fraud and the Seventh Annual National Institute on Tax Controversy, sponsored by the ABA Section of Taxation and ABA Criminal Justice Section.  The conference, which is held in Las Vegas, Nevada each year, provided an excellent update on IRS enforcement efforts and priorities and insight into key issues and areas where the IRS is pressing.  Below are a few key issues for taxpayers to watch out for in 2019. IRS Campaigns The IRS Large Business and International has announced several LB&I Approved Campaigns, and they can be...
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Income Taxation of Trusts in California TEST

By: Filip Babic

The Tax Insider

July 26, 2018

Recently, in a closely watched case, the California Superior Court in San Francisco rejected the Franchise Tax Board’s long-standing approach to the taxation of trusts.  The court determined that all income, including California-source income, is subject to the apportionment formula set forth in California Revenue & Taxation Code Section 17743, et seq.
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IRS Closer to Obtaining Virtual Currency Records TEST

By: Steven Walker

The Tax Adviser

January 11, 2018

On Nov. 30, 2017, after a lengthy summons enforcement proceeding, a federal district court issued an order granting in part and denying in part the IRS's petition to enforce the summons. The court's order (Coinbase, Inc., No.17-cv-01431-JSC (N.D. Cal. 11/28/17) (order re: petition to enforce summons) requires Coinbase to produce the following documents for accounts with at least the equivalent of $20,000 in any one transaction type (buy, sell, send, or receive) in any one year during the 2013 to 2015 period: the taxpayer identification number; Name; Birth date; Address; Records of account activity; and All periodic statements.
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2017 Tax Reform – Last Minute Year-End Moves in Light of Tax Cuts and Jobs Act TEST

By: Steven Walker

Congress is enacting the biggest tax reform law in thirty years, one that will make fundamental changes in the way you, your family and your business calculate your federal income tax bill, and the amount of federal tax you will pay. Since most of the changes will go into effect next year, there's still a narrow window of time before year-end to soften or avoid the impact of crackdowns and to best position yourself for the tax breaks that may be heading your way. Here's a quick rundown of last-minute moves you should think about making. Lower tax rates coming. The...
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