Archive for Audits & Administration
Where is my federal tax refund?
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While we can all debate the wisdom of having paid or withheld enough taxes to be receiving a refund, the fact is when we do get a federal tax refund it sure is nice to have it arrive.
The Internal Revenue Service has been kind enough to offer a schedule of when you can generally expect your 2009 tax refund based on your filing date. The schedule covers your filing of your refund tax return all the way through the extended due date of October 15, 2010.
To review the refund timing chart or print your own copy use the following link. Read More→
IRS Announces Extensive Employment Tax Audits; Is your contractor really an employee?
Posted by: | CommentsAs you can imagine, with the economy still reeling and tax collections dropping the importance of the governments’ oversight of our system of taxes becomes ever more critical. From both the federal and state levels we continue to read about new and improved compliance measures being put in place. Take one of the recent announcements at the end of 2009 from the IRS as an example.
The IRS has announced it will conduct intensive employment tax audits under its National Research Program (NRP) starting in 2010. This is a multi-year program with random audits scheduled to begin in February 2010. The IRS has said it will audit U.S. companies under this program. The NRP is a study and data collection project that helps the IRS update its noncompliance estimates and update its computer-based audit programs. “Normal” audits do not yield as valuable compliance data as random audits because the IRS, in normal audits, is intentionally targeting the taxpayers they believe have noncompliance problems. NRP audits on the other hand, are random to allow the IRS to statistically measure the total amount of noncompliance in a specific area. The IRS then uses this data to update its computers and estimates of the tax gap—the difference between total taxes owed and the amount actually paid by taxpayers.
The NRP audits are also much more intense and less targeted than a typical audit. The NRP audits allow the IRS to identify where the compliance problems lie in a specific population and to better target tax returns for audit in the future.
The goal of the employment tax audit program is to gather information in five categories: Read More→
The state of California is getting even more aggressive at collecting all the taxes the law allows — no matter how small. Use tax is the latest way for the state to look for cash. The Legislature has enacted strict new registration and filing requirements for businesses with gross income of $100,000 or more.
Use tax is like sales tax but you pay it directly to the state, rather than to the retailer. The rule of thumb is: You owe use tax if what you bought would have been subject to sales tax if you purchased it at a local store and you did not pay California sales tax. You generally owe California use tax when you use, store, or consume — in California — tangible personal property purchased from an out-of-state vendor. If the vendor does not collect the California tax on the purchase, the purchaser must pay the tax directly to the state. If you don’t report and pay your use tax in a timely manner, such as with your income tax return, the state will assess penalties and interest. Read More→
IRS to simplify, or try too, taxpayer notices
Posted by: | CommentsIf you’ve ever received a letter or notice from the IRS you know first-hand how confusing and confounding the information presented can be. All this while it has generally been my experience that the IRS really is not trying to confuse things with 
how they structure their correspondence — quite the opposite actually. The IRS really is doing what it can wrestling with implementing wildly complex tax laws created not by their doing, but by the doing of our legislators in Washington — while at the same time trying to be clear and concise to the taxpayer.
To this dilemma there just may be a little hope on the horizon. Read More→
You’re being audited and you’re missing records, now what?
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So you’re facing an audit and your records, or a portion of them, have gone missing. Or, you’re just a normal entrepreneur chasing from one project to another and your record keeping habits were just, well, not habits at all. You may not be able to produce receipts, bills or other written documentation for all the items on your tax return. That’s when you must turn to reconstructing your records or gathering together the best proof you have for the IRS.
The law does not require perfect record keeping habits—it’s just simpler that way. It’s perfectly legal to reconstruct your records in any way to provide adequate evidence that what you claimed on your return was, in fact, accurate. Read More→
Play It Safe With Your Home-Based Employees
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An increasing number of employees work exclusively or part-time from their home – but home is where most accidents happen. Employers still retain some duty of care responsibility for their home-based employees so it becomes an essential part of any at-home work agreement to factor in a safe workspace that minimizes the chances of accident and compensation claims.
In general, while the expectation is that an employee should be exposed to no more risk than they would be in the office or workshop, in reality an employer has little control over the home situation. Nor is it entirely clear just exactly how occupational safety and health or compensation laws cover this subject. Read More→
