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California Payroll Tax Audits and Defending Independent Contractors

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Brotman Law

Key Takeaways

  • You may be familiar with or have heard of a twelve-factor test or a three-factor test or a lot of different tests that the EDD supposedly uses to classify independent contractors.
  • Through my years of professional experience and time spent in a lot of California payroll tax audits, I will just tell you that a lot of this stuff is bogus.
  • You must keep in mind that the independent contractor rules are put into place in order to protect employees who are being classified, or misclassified as 1099 workers to avoid payroll taxes.

You may be familiar with or have heard of a twelve-factor test or a three-factor test or a lot of different tests that the EDD supposedly uses to classify independent contractors.

Through my years of professional experience and time spent in a lot of California payroll tax audits, I will just tell you that a lot of this stuff is bogus.

Audits of independent contractors essentially come down to two things:

  1. revenue generation, and
  2. control.

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IRS Offer in Compromise: What to Do When They Are Rejected – Part One

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IRS Offer in Compromise Appeals – Introduction

As a refresher to the reader, an IRS offer in compromise is a tax settlement with the IRS where the taxpayer agrees to pay a specified sum and the IRS agrees to compromise on the remaining liability.

Key Takeaways

  • IRS Offer in Compromise Appeals – Introduction
  • IRS Offer in Compromise Appeals – First Steps
  • IRS Offer in Compromise Appeals – Last Chances at the Offer Specialist Level

Many people have seen the various national tax agencies on daytime television offering to settle your tax debt for pennies on the dollar. However, what is left out of their sales pitch is that nearly eighty percent of IRS offer in compromises are rejected for a variety of reasons. This is not entirely a bad thing, but requires some strategic planning on the part of the taxpayer.

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Virtual Currency Gains Momentum

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Virtual currency is a digital version of “value.” This value functions as a medium of exchange and may be used to purchase goods, services, or stored for investment. Essentially, it’s digital money and is quickly gaining popularity. 

Key Takeaways

  • Virtual currency is a digital version of “value.” This value functions as a medium of exchange and may be used to purchase goods, services, or stored for investment.
  • There are two main forms of virtual currency.
  • Virtual currency that has no equivalent value in real currency is known as convertible currency.

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The Differences Between the Federal System and the State of California

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The Differences Between the Federal System and the State of California

Key Takeaways

  • Internal Revenue Service
  • State of California
  • Representation You Can Count on

As a small business owner, you are used to dealing with the IRS and the state. You file income taxes with the IRS every year and file returns with the state when they are due. Paying tax is paying tax, right? So, why is there such a difference between the way the IRS plays versus the state?

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Real Property Tax Strategies: The 1031 Exchanges

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Real Property Tax Strategies: The 1031 Exchanges

Key Takeaways

  • Benjamin Franklin once said, “Our new Constitution is now established, everything seems to promise it will be durable; but, in this world, nothing is certain except death and taxes.
  • This is indeed a mouthful, but what it primarily means is you can defer the payment of capital gains on the sale of property if you purchase a like-kind property and follow the requirements and properly execute the transaction.
  • Additionally, you must have a qualified intermediary assist you with the transaction.

Benjamin Franklin once said, “Our new Constitution is now established, everything seems to promise it will be durable; but, in this world, nothing is certain except death and taxes.” Franklin may have been correct regarding the certainty of death, but was he correct about the certainty of taxes?

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How to Work with Brotman Law on Your IRS Collections Case

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How to Work with Brotman Law on Your IRS Collections Case

Key Takeaways

  • The biblical tale of David and Goliath is certainly inspiring and does much to instill the belief that you can overcome any opponent, no matter how much they out-size, out-weigh or out-spend you.
  • Unfortunately, this is not a fair comparison to use for someone going nose-to-nose with the IRS.
  • I am not saying that you should just roll over and play dead if the IRS informs you that you owe taxes with penalties and interest tacked on.

The biblical tale of David and Goliath is certainly inspiring and does much to instill the belief that you can overcome any opponent, no matter how much they out-size, out-weigh or out-spend you.

Unfortunately, this is not a fair comparison to use for someone going nose-to-nose with the IRS.

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IRS Offers in Compromise

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Brotman2021 Sam Leticia 1

The government evaluates offers in compromises (OIC) based on what a taxpayer’s reasonable collection potential (RCP) is. Remember, an offer in compromise is an agreement between the taxpayer and the government to forgive a past tax liability in exchange for future compliance. 

Key Takeaways

  • Looking at Income and Expenses
  • “Ordinary and Necessary” Living Expenses
  • Different Types of Offers in Compromise 
  • Other Payment Options

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Brotman Law Featured in Inc. Magazine - Fastest Growing Law Firm in California