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California Tax Guide for Marijuana Businesses and Proposition 64: The Adult Use of Marijuana Act

August 12, 2024November 16, 2016 by Brotman Law

On Tuesday, California voters passed historic legislation by voting to allow the recreational use of marijuana in California. Regardless of your opinion about marijuana use, the legislation will have a huge impact on the state of California and its citizens and will bring a large source of new taxable revenue into the state. Because of the complexity surrounding the tax laws surrounding the new measure, I have put together a rough guide of issues for marijuana businesses and California citizens to be aware of.

What’s the Difference Between a Tax Lien and a Tax Levy?

August 12, 2024November 9, 2016 by Brotman Law

Taxpayers often confuse the terms tax lien and tax levy and do not understand the difference in actions represented by these concepts. While liens and levies can both be filed by the IRS and the California Franchise Tax Board (FTB) and there are many similarities to when they are issued and how they can be removed, liens and levies are terms for very different actions.

What Happens When You Miss Your Tax Extension Deadline?

August 12, 2024October 26, 2016 by Brotman Law

October 17, 2016, was the last day you can file California State or Federal income tax returns if you were granted the six-month extension in April. It is not the time to panic, but it is definitely time to move quickly if you have not completed your 2015 tax return and payment.

As long as you did so by October 17, you will be allowed to file electronically. However, if you are planning to file an amended return, you must mail it; neither the state nor the IRS allows electronic filing of amended returns.

Keep in mind that any unpaid taxes from 2015 have been accruing penalties and interest since April 18, 2016. You cannot file for another extension; you must file a return.

What Happens If You Misclassified a Worker?

August 12, 2024October 19, 2016 by Brotman Law

What does the employment classification of workers have to do with payroll tax audits?

Everything.

When the Employment Development Department of the State of California decides to audit, the classification of your workers is the auditor’s sole concern. Additionally, the IRS often adopts the results of the EDD audit to use in assessing federal penalties.

For this reason, it is critical to classify your workers properly and supply only the information the auditor asks for, nothing more.

What Are Your Payroll Tax Responsibilities?

August 12, 2024October 12, 2016 by Brotman Law

In a previous post, we talked about the difference between independent contractors and employees. One of the biggest differences, and one that often drives intentional worker misclassification, is that employers must withhold and pay payroll taxes for employees whereas they do not for independent contractors.

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.