Category Archives: Tax Law

Willful Failure to File Tax Return

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crime

Believe it or not, it is a crime to willfully not file your tax return, pay tax or estimated tax, keep records, or supply information required by the laws or regulations. IRC Sec. 7203 makes it a misdemeanor to willfully not carry out the duties listed above. IRC Sec. 7203 misdemeanor is a lesser offence than Section 7201 felony of evading taxes because IRC Sec. 7203 involves the omission of a statutory requirement rather than an actually act of evasion. … Read more →

Tax Law ,

Civil Penalty for Tax Fraud

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fraud

Section 6663 covers the information dealing with the civil fraud penalty and how it is administered. The penalty is equal to 75% of the underpayment of tax that is directly or indirectly due to fraud. The burden of proof rests with the IRS on proving that the underpayment was due to fraudulent activity. Defining Underpayment In this situation, underpayment means the difference between the correct tax liability and the amount of tax reported on the return plus the amount of … Read more →

Tax Law ,

Constructive Dividend IRS

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puzzle

In some situations, a corporation may enter into a transaction that is not typically considered a dividend, but may be considered a dividend by the IRS. Constructive dividends do not need to be formally declared by the corporation or designated as a dividend. All that is required according to the IRS is that a shareholder received some benefit from the corporation that was not paid for or reported on a Form W-2 or 1099. Since any benefit that was given … Read more →

Tax Law ,

How IRS Allocates Tax Return Overpayments

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allocation chart

Allocating Overpayment of Joint & Separate Returns If a married couple file a joint return, each spouse is responsible for their separate interest in the reported income on the joint tax return. In some situations, a spouse may pay the entire balance owed on the joint tax return. If this was to occur, the IRS would not be able to credit the overpayment to a separate tax liability owed by the other spouse for a previous tax year. If however, … Read more →

Tax Law ,

Court Ruling on Health Care for Employers

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Are you a business owner? Confused about the new health care law? Not a problem, we will discuss it here in easy to understand terms. Court Ruling on Health Care for Employers If you have 50 full time employees or an equivalent of such amount you will need to provide healthcare for them. If you have less than 50 you do not need to provide them with health care. However, you are still required to buy health care for yourself … Read more →

Tax Law

How The Healthcare Bill Will Effect Small Businesses

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Debate about the new Health Care Bill once dominated the airwaves and Internet. However, discussion has gone dormant. Better known as “Obamacare,” the legislation has been tweaked since its passage. Health Care Bill Cost Increases Those changes had no impact on most cost increases. So, a question remains unanswered. How much is the Health Care Bill really going to cost you? Small business owners face a variety of mandates. Employers will be required to report the value of an employee’s … Read more →

Tax Law

Some Tips On Dealing With Contract Law

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Contract law is no piece of cake. From interpretation to wording and even consideration problems can all end up in court. Believe it or not, a common court case in contract law is a litigation deciding whether or not a contract even existed. Though such court cases may seem silly, they are extremely common, for good reason. When looking at the situation from afar, it makes sense. Contracts Don’t Need To Be In Writing What you have to realize is … Read more →

Tax Law