strategies-init Archives - Page 17 of 74

IRS Prioritizes More Delinquent, High-Income Taxpayers

July 5, 2026March 24, 2021 by Brotman Law

Imagine yourself working as an IRS agent. Your department is in charge of identifying delinquent, high-income taxpayers who gross $200,000 or more per year in your state.

Key Takeaways

Imagine yourself working as an IRS agent. Your department is in charge of identifying delinquent, high-income taxpayers who gross $200,000 or more per year in your state.
Looking at a computer spreadsheet, you verify several names and socials of small business owners whose gross pay tops out at about $300,000 annually. Each taxpayer owes the government between $70,000 to a $150,000 in back taxes from 2016-2019.
On another spreadsheet, five very wealthy taxpayers who work in different fields are listed. Three out of five have c-level titles connected to large corporate subsidiaries, one is a best-selling author, and one owns a sports team.

Taxpayers, the IRS and Cryptocurrency

July 5, 2026March 17, 2021 by Brotman Law

Tesla made waves when it announced in an SEC filing on February 8, 2021 that it purchased $1.5 billion worth of bitcoin. Tesla also announced that it will start accepting bitcoin as payment for its products, which makes it the first major automotive manufacturer to do so.

Key Takeaways

The popularity of bitcoin has risen with its value. This rise in popularity has piqued the interest of the IRS.
If interested in the basics of cryptocurrency, the tax status of virtual currency, and why contacting legal experts in the field is a taxpayer’s best bet moving forward, the following information will help you understand more about this digital economy.
Virtual currency, often called cryptocurrency, or “crypto” for short, has been around since 2009. Bitcoin was created to be a peer-to-peer direct payment system that allowed users to transfer funds to each other without using a bank.

Know about Tax Debt before Filing for Bankruptcy

July 5, 2026March 12, 2021 by Brotman Law

Filing for bankruptcy may feel like accidentally stepping off a cliff – it’s not something most people can mentally prepare themselves for in advance.

Key Takeaways

Filing for bankruptcy may feel like accidentally stepping off a cliff – it’s not something most people can mentally prepare themselves for in advance.
When it happens and you find yourself falling, it’s difficult to know if you’ll hit rocks below and suffer permanent damage. Alternately, you could plunge into a lake, bob to the surface and have an easy swim to shore.
Then there are the issues that accompany the decision to file such as tax consequences. The debtor must try to satisfy not just the creditors, but often federal and/or state tax collectors.

Establishing Residency or Domicile in California Can Be Taxing

July 5, 2026March 3, 2021 by Brotman Law

Robert Wood, tax expert and frequent contributor to Forbes.com, wrote that “many would-be former Californians have unrealistic expectations about establishing residency in a new state. They may have a hard time distancing themselves from California, and they may not plan on California tax authorities pursuing them.”

Key Takeaways

Guidance Questions of Facts
Temporary or Transitory Purposes
What About Domicile?

Can Internal Revenue Code Section 1202 Benefit You?

July 5, 2026February 26, 2021 by Brotman Law

There is a generous tax benefit that only select taxpayers qualify for. Not well known, it is called ‘‘qualified small business stock,’’ or QSBS for short, and is found in Section 1202 of the Internal Revenue Code. Titled the “Partial Exclusion for Gain from Certain Small Business Stock,” it allows taxpayers to exclude gain from certain stock.

Key Takeaways

There is a generous tax benefit that only select taxpayers qualify for.
The original language of the section allowed taxpayers to not include 50% of any gain from sale or exchange of qualified small business stock held more than five years from gross income.
In the case of qualified small business stock acquired in 2010 and beyond, 100% shall be substituted for 50% in § 1202(a)(1). (§ 1202(a)(4)).

California FTB Knocking Harder on Business Doors

May 25, 2026February 22, 2021 by Brotman Law

We are now more than a year removed from the first reported COVID-19 case in the United States. Since then, government-forced shutdowns have rocked hundreds of thousands of businesses. When the catastrophic news hit, most business owners made the health and safety of themselves and their employees priority one.

Key Takeaways

Business concerns including taxes do not just evaporate with terrible news, however.
To help take some of the burden off of your shoulders I’ve written this article to walk you through the tax collections process for California businesses.
It will also notify the business whether there are outstanding tax issues and if so, allows a reasonable time for the business entity to comply.

Offers in Compromise, The IRS and COVID-19

July 5, 2026February 17, 2021 by Brotman Law

Back taxes can be a sore subject – one that never makes anyone smile – except perhaps in the movies. In the first season of the The Kominsky Method, an American comedy-drama on Netflix, an aging but still debonair Michael Douglas plays a once successful actor now Hollywood acting coach named Sandy Kominsky, who finds himself neck-deep in tax debt.

Key Takeaways

The Offer in Compromise
COVID-19 Pre-July 15, 2020
COVID-19 Post-July 15, 2020
As the Pandemic Continues, so might IRS Relief Initiatives

The State of FTB Tax Collections for Individuals

July 5, 2026February 8, 2021 by Brotman Law

“Whether you agree that raising taxes during an economic recession is bad for the economy or not, state and local governments should be doing everything in their power to bid Congress to provide more direct aid. This would minimize the need for tax increases or spending cuts,” wrote Michael Mazerov in Tax Notes.

Key Takeaways

“Whether you agree that raising taxes during an economic recession is bad for the economy or not, state and local governments should be doing everything in their power to bid Congress to provide more direct aid.
In previous articles, I touched on tax liability issues that predominantly covered taxpayers owing money to the IRS. The citizens of California could also owe taxes to the California Franchise Tax Board (FTB).
What does the FTB collections process look like for individuals in California and how has COVID-19 impacted these policies.

Owning a Business & Owing Taxes in the Present-Day Pandemic

July 5, 2026February 3, 2021 by Brotman Law

“Time and the hour run through the roughest day,” wrote William Shakespeare over four centuries ago. Had he lived during our present-day plague, what might he have written? Indeed, 2020 was a very challenging year for everyone. Outside of individual health risks, most businesses were sorely impacted.

Key Takeaways

Automatic Extensions Have Passed
How COVID-19 is Impacting Taxes
The New and Improved State Nexus
A Tax Debt Vaccination

Now for Some Good News: An Employee Retention Tax Credit

July 5, 2026January 29, 2021 by Brotman Law

Today is one of the most challenging times to be a business owner in recent memory. In order to help business owners and incentivize companies to keep employees on the payroll, the IRS introduced the Employee Retention Credit.

Key Takeaways

Today is one of the most challenging times to be a business owner in recent memory.
To break this down, I will use two companies to illustrate the different rules and applications of the Employee Retention Credit.
The Employee Retention Credit “is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees after March 12, 2020, and before January 1, 2021.