Posted in Business & Corporate Law,Tax Law & IRS Defense

The Trust Fund Recovery Penalty (“TFRP”) was created to encourage prompt payment of withheld income and employment taxes such as social security taxes, railroad retirement taxes, or collected excise taxes. Typically, the employee’s money is held “in trust” until the business owner or responsible party makes a tax deposit to the IRS for the amount owed, e.g. tax withheld on IRS Form 941 Employer’s Quarterly Federal Tax Return.

Problems arise when a business owner or person responsible for collecting or paying withholds these taxes from employees but does not pay the same over to IRS. Some businesses may ignore payment because they are struggling to make ends meet or choose to spend the withheld money elsewhere. Other businesses are simply unaware of the tax obligation or the person responsible takes action contrary to what the business is aware of. Either way, the IRS will seek payment from the business and also look to apply personal liability for the TFRP to certain people who are responsible for payment and willfully do not make payment.

Posted in Asset Protection,Probate & Trust Administration,Tax Law & IRS Defense,Wills, Trusts & Estate Planning

Under Florida law, the personal representative of an estate (sometimes also called an executor) and the trustee of a trust are entitled to compensation, as are the attorneys who represent the personal representative and trustee.

Compensation of Personal Representative The personal representative is entitled to a commission from the estate assets, which can be calculated using a percentage of the inventory value of the probate estate assets and the income earned during administration. For a formal probate administration, the following table sets forth what amount is deemed to be reasonable compensation:

Posted in Business & Corporate Law,Real Estate Law,Tax Law & IRS Defense

A legislative bill was recently enacted that may reduce the sales tax rate on commercial leases to 2%. The timing of the decrease depends on the economic recovery of the unemployment compensation trust fund. Once this balance has reached its pre-pandemic level, the sales tax rate will adjust. You may need to periodically consult with your accountant to determine the current tax rate since it is contingent upon the amount in the employment compensation trust fund.

Posted in Asset Protection,Tax Law & IRS Defense

If you do not pay in full when you file your taxes, you will receive a bill notice from the IRS. This bill begins the collection process, which continues until your account is satisfied or until the IRS may no longer legally collect the tax, for example if the collection period has expired. The first notice you receive will be a bill that explains the balance due and demands payment in full. It will include the amount of the tax, plus any accrued penalties and interest, which will continue to accrue.

Posted in Tax Law & IRS Defense

When your tax return does not match data reported to the IRS from third parties, a letter called an IRS Notice CP2000 may be sent to you. It is not a formal audit notification, but it can quickly turn into a deficiency notice if not addressed. CP2000 Notices contain:

• The amounts you reported on your original or processed amended return;
• The amounts reported to the IRS by the payer or 3^rd parties;
• The payer’s name, ID number, the type of document issued (W-2, 1098, 1099), and the tax identification number of the person to whom the document was issued;
• The proposed changes to your income, tax, credits, or payments; and
• A Response form, payment voucher, and an envelope.

Posted in Tax Law & IRS Defense

The CARES Act, enacted by Congress previously this year, includes a special $300 charitable tax deduction, even if you do not itemize your deductions on your taxes. The purpose of this deduction is to help charities that may be struggling due to the COVID-19 pandemic. This new and temporary deduction is only available to taxpayers who make a cash contribution directly to a charity and before the end of the 2020 year.

Posted in Business & Corporate Law,Tax Law & IRS Defense

Closing a business can be a difficult and challenging task. First, before you close your business, find out if tax relief, your local county, or the CARES Act legislation can help you stay open. Also, be sure to consult with your professional team such as an attorney or accountant.

There are typical actions that are taken when closing a business. This blog post focuses on tax responsibilities with the IRS and FL Department of Revenue. It does not address non-tax obligations such as those associated with the vendors, contracts, or the FL Division of Corporations.

Posted in Business & Corporate Law,Tax Law & IRS Defense

On August 8, 2020, the President issued a Memorandum entitled Deferring Payroll Tax Obligation in light of the Ongoing COVID-19 Disaster. The Memorandum authorizes the Secretary of the Treasury to defer certain payroll tax obligations. The purpose of the Memorandum is to produce a targeted action that “will put money directly in the pockets of American workers and generate additional incentives for work and employment.”