Category Archives: Business Tax

Taxpayers The IRS Is Targeting This Year

Out of the millions of tax returns that are filed with the IRS each year, a certain percentage are inevitably flagged and chosen to be audited. In some cases, this is because the taxpayer filing the return is already being investigated for tax fraud or other crimes, while other returns are merely selected at random. The formula that the IRS uses to flag returns for random audit, known as the Discriminant Function, is a highly classified secret known only to a few. However, there are several types of returns that the IRS tends to focus on in general. Filers with returns that fall into one of these categories must accept that there is a higher probability that they will be audited than other taxpayers. Some of the types of returns that the IRS tends to scrutinize more closely include:

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Online sales taxes back on Senate’s docket

A proposal to allow states to collect online sales taxes will be reintroduced in the Senate on Thursday, with support for the measure growing among Republican and Democratic governors and state legislators. On the heels of President Barack Obama once again tagging a U.S. tax code overhaul as a top priority in his State of the Union… Continue Reading

Guidance issued on additional Medicare tax

The IRS issued proposed regulations concerning the 0.9% Medicare surtax, which takes effect next year (REG-130074-11). The proposed regulations contain guidance for employers and individuals on the implementation of the tax, including the requirement to file a return reporting the tax, the process for employers to make adjustments of underpayments and overpayments of the tax,… Continue Reading

Employers hiring qualified veterans before the end of the year may be eligible for expanded tax credit

Employers who act now may be able to claim an expanded tax credit for hiring certain qualified veterans.  According to the IRS, both for-profit and tax-exempt employers may qualify to receive thousands of dollars through the expanded Work Opportunity Tax Credit (WOTC) should they hire qualified veterans who begin work before January 1, 2013. Read… Continue Reading

Developments in tax reform: a focus on capital gains and corporate tax rate

Looking ahead to the lame duck session of Congress after the November elections and into the new year when the new 113th Congress will be seated and we will have either a second Obama administration or a new Romney administration, there are increasing developments on the expected debate on tax reform. While nothing will happen… Continue Reading

Federal law preempts Alabama statute denying tax deduction for illegal alien employees

The Eleventh Circuit Court of Appeals held that the section of Alabama House Bill 56 that disallowed an employer a state tax deduction for wages and compensation paid to an alien unauthorized to work in the United States was preempted by federal immigration law (United States v. Alabama, No. 11-14532 (11th Cir. 8/20/12)). Thus, Alabama… Continue Reading