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Classifying Employees and Independent Contractors

August 12, 2024October 5, 2016 by Brotman Law

You have hired someone to do work for you. Is that person an employee or an independent contractor?

The answer is important because misclassifying an employee as an independent contractor, whether intentionally or through ignorance, can land you in court and in debt for payroll taxes.

There are several tests from a variety of regulatory agencies that are used to try to determine employment status and occasionally changes are made to the standards. Even if you classified certain of your workers correctly before, you might need to revisit the question to ensure you remain in compliance.

CDTFA Sales Tax Audits, Pt 4: After the Audit

August 12, 2024September 28, 2016 by Brotman Law

Here is the final installment of our four-post series about California Sales Tax and Use Audits. In Part 1, we cover how audits are triggered and companies selected for audit. Part 2 is about how the audit is conducted and the types of documents you may be required to provide. Part 3 gave you some tips for working with an auditor and the type of investigation an auditor may perform.

In Part 4 we take up what happens after an audit is complete, and how an experienced tax attorney can help you through the process of an audit by the California Department of Tax and Fee Administration.

CDTFA Sales Tax Audits, Pt 3: How to Prepare for an Audit

August 12, 2024September 21, 2016 by Brotman Law

Welcome to Part Three in the CDTFA sales tax audit series. In Parts One and Two, we provided an overview of how an audit is conducted and how companies are selected for audit as well as audit procedures and techniques.

Now you will learn how to prepare for an audit, including how to work with an auditor and which records and documents to have ready. You will also read about audit testing and sampling as well as the PAPE program and cut-off techniques.

One note before you begin your preparations: be ready to comply with auditor requests but do not volunteer additional information. Do not sign anything without careful examination because the auditor is unlikely to explain the consequences or agreements; it is up to you to research and clarify what you do not understand.

CDTFA Sales Tax Audits, Pt 2: Audit Procedures and Techniques

August 12, 2024September 14, 2016 by Brotman Law

This post is the second in a four-part series explaining how the California Department of Tax and Fee Administration (CDTFA) performs its audit function, what to expect from an audit, how to prepare for it, and what happens when the audit is complete.

The first post of this series explained the role of the CDTFA and the goals of a sales tax audit. It includes when an audit can occur, how companies are selected for audit, and common audit triggers.

This post takes up how the audit is conducted, what records are requested, and the type of tests auditors use to verify tax filings.

CDTFA Audits, Pt 1: What Is an Audit and How Are Companies Selected?

August 12, 2024September 7, 2016 by Brotman Law

This post in one in a four-part series explaining how the California Department of Tax and Fee Administration (CDTFA) performs its audit function, what to expect from an audit, how to prepare for it, and what happens when the audit is complete.

Common Tax Issues for Small Businesses

August 12, 2024August 31, 2016 by Brotman Law

Small businesses, of which there are thousands in California, spend the highest percentage of time of any business entity preparing and submitting taxes. Federal, state, and local tax requirements are extremely complex and change every year.

Multiple agencies administer different taxes, and each has its own set of rules and methods of payment. It is no wonder that small business owners often have common tax issues and outcomes of inadvertent noncompliance.

California Payroll Tax Problems and the EDD

August 12, 2024August 24, 2016 by Brotman Law

Part of being a business owner is filing and paying payroll taxes for your employees. In California, the Employment Development Department, or EDD, administers these taxes. In addition to receiving tax filings and payments, the EDD also identifies and investigates potential infractions of tax law.

What do you do if you develop tax problems and find yourself on the receiving end of an audit?

Do You Need California Sales Tax Defense?

August 12, 2024August 17, 2016 by Brotman Law

The Board of Equalization is the California public organization that administers the state sales and use tax law and regulations. The BOE also conducts audits, collects unpaid California state sales and use taxes, and administers the state property tax.

There are presumptions of the tax code that the BOE follows in its operation and decision-making process. The BOE presumes:

All sales are taxable unless specifically exempted
Exemptions must be supported by documentation
The taxpayer is responsible for maintaining and providing documentation in case of examination or audit

How FTB Tax Liens Affect Your Credit Report

November 4, 2024August 10, 2016 by Brotman Law

As if taxes were not complicated and frightening enough, the federal and state taxing authorities have a variety of devices in their arsenal to compel payment and stave off penalties.

Tax liens, one of the most common of those devices, can cause trouble not just with your property and bank accounts, but with your credit score and ability to obtain lines of credit.

Federal Payroll Tax: What the IRS Expects from Business Owners

August 12, 2024August 3, 2016 by Brotman Law

If you have employees, you are liable for federal payroll taxes. Some taxes are withheld from your employee’s wages, some you must pay yourself.

The Internal Revenue Service, or IRS, administers payroll taxes as part of its responsibilities. Remaining in compliance means understanding how and when payroll taxes are calculated, filed, and paid.