On July 4, 2025, President Trump signed into law the so-called “One Big Beautiful Bill Act.” The Act established new above-the-line tax deductions for “qualified tips” and “qualified overtime compensation.” To facilitate...more
In Mennemeyer v. Commissioner,1 the United States Tax Court reminds us that a settlement agreement that is not carefully drafted can have significant tax consequences....more
The One Big Beautiful Bill Act (OBBBA), which was signed into law on July 4, 2025, establishes the pilot program for the “Trump account,” an investment account for U.S. citizens under age 18 with a social security number....more
7/23/2025
/ Employee Benefits ,
Employee Contributions ,
Employer Responsibilities ,
Financial Institutions ,
Income Taxes ,
Investment ,
IRS ,
New Legislation ,
One Big Beautiful Bill Act ,
Retirement Plan ,
Tax Planning
The “One Big Beautiful Bill Act” signed into law on July 4, 2025, makes two important changes to tax reporting requirements that should be of interest to employers....more
The Internal Revenue Service has released new guidance, Rev. Rul. 2025-3, clarifying the application of Section 530 of the Revenue Act of 1978, Section 3509 of the Internal Revenue Code (IRC), and Section 7436 of the IRC in...more
The IRS’s recently released Revenue Ruling 2025-4 provides significant guidance on the employment tax treatment of contributions to and benefits paid under state paid family and medical leave (PFML) programs. This has been an...more
1/23/2025
/ Compliance ,
Corporate Taxes ,
Employee Benefits ,
Employment Tax ,
Family Medical Leave ,
Income Taxes ,
IRS ,
Paid Leave ,
Reporting Requirements ,
State Labor Laws ,
Tax Liability
Every year the IRS National Taxpayer Advocate Service (TAS) issues its Annual Report to Congress that discusses the ten most serious issues taxpayers faced during the past year in their dealings with the IRS, among other...more
The wildfires ravaging various parts of Los Angeles County are truly tragic and expected to cost more than $50 billion in damages, making it the most expensive natural disaster ever in the United States. For employers with...more
Dear Littler,
We’d like to provide gifts to our staff for the holidays but are unsure which types of gifts would trigger tax obligations for our employees. We’d also like to offer donation matching for our employees’...more
The IRS has issued a new fact sheet (FS-2024-22) to address frequently asked questions about educational assistance programs (EAPs), also known as Section 127 plans....more
The IRS recently updated its guidance for completing Form 1099-K, used primarily by “gig” companies providing compensation using payment apps or online marketplaces and for individuals selling goods on online marketplaces...more
In Escano v. Innovative Financial Partners, LLC, a magistrate judge held that the defendants’ decision to withhold funds from a payment required under a settlement agreement when the plaintiff refused to provide a Form W-9...more
1/29/2024
/ Attorney's Fees ,
Employer Liability Issues ,
Employment Litigation ,
Fee-Shifting ,
Form W-9 ,
Internal Revenue Code (IRC) ,
IRS ,
Required Forms ,
Settlement Agreements ,
W-4 ,
Withholding Requirements
As part of the 2017 Tax Cuts and Jobs Act (Act), Congress enacted Internal Revenue Code (Code) section 6050X, which requires government agencies (and certain nongovernmental regulatory agencies) to issue information returns...more
On December 14, 2022, the U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS) signed and published a Memorandum of Understanding for Employment Tax Referrals (the “MOU”). The MOU establishes a system for...more
12/28/2022
/ Corporate Counsel ,
Department of Labor (DOL) ,
Employer Liability Issues ,
Gig Economy ,
Independent Contractors ,
IRS ,
Memorandum of Understanding ,
Misclassification ,
Tax Liability ,
Tax Penalties ,
Wage and Hour
On June 9, 2022, the Internal Revenue Service issued Announcement 2022-13, increasing the optional standard mileage rate for the final six months of 2022 from 58.5 cents per mile to 62.5 cents per mile. The new rate will be...more
On November 10, 2021, the IRS released Revenue Procedure 2021-45, which contains its annual inflation adjustments for over 60 tax provisions, including not only individual income tax rates and deductions, but also many...more
11/10/2021
/ 401k ,
403(b) Plans ,
457(b) Plans ,
Compensation & Benefits ,
Employee Benefits ,
Fringe Benefits ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Retirement Plan ,
Tax Deductions
In Stassi v. Commissioner, the United States Tax Court found that a settlement was not excludable from income as a personal physical injury because the taxpayer failed to demonstrate that her shingles was caused by her...more
In Notice 2020-46, the IRS explains how employees can forgo their paid time off balances to allow their employers to make donations to charities that are assisting individuals impacted by the COVID-19 pandemic....more
On February 26, 2020, the IRS published proposed regulations implementing changes made by the Tax Cuts and Jobs Act of 2017 (TCJA) regarding the elimination of deductions for entertainment and the limitation on food and...more
2/28/2020
/ Business Expenses ,
Business Taxes ,
Corporate Counsel ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Meals-Gifts-and Entertainment Rules ,
Proposed Regulation ,
Tax Cuts and Jobs Act ,
Tax Deductions ,
Tax Planning
Businesses with operations in California have begun to identify options and implement strategies for compliance with Assembly Bill (AB) 5, which imposes the ABC test for identifying whether a worker is an independent...more
10/30/2019
/ 1099s ,
ABC Test ,
Corporate Counsel ,
Corporate Restructuring ,
Employee Definition ,
Employer Liability Issues ,
Employment Tax ,
Freelance Workers ,
Gig Economy ,
Hiring & Firing ,
Income Taxes ,
Independent Contractors ,
IRS ,
Labor Regulations ,
Misclassification ,
Out-of-State Employees ,
Retroactive Application ,
Safe Harbors ,
State and Local Government ,
State Labor Laws ,
Tax Rates ,
Wage and Hour
Dear Littler: My company recently hired a new employee who is giving our human resources department some pushback on submitting his W-4. The HR manager says the employee mentioned something about not being subject to income...more
On September 24, 2018, the IRS issued updated guidance in Notice 2018-71 (the Notice) on Internal Revenue Code section 45S, the business tax credit for employers that provide paid family and medical leave (the Credit). ...more
The IRS has issued FAQs to provide guidance to employers relating to portions of the newly enacted Tax Cuts and Jobs Act of 2017 that created the Paid Family and Medical Leave Tax Credit....more
Dear Littler: I’m in charge of our company’s party-planning committee, but I’m ready to give up my title as Head Elf. We’re working on choosing gifts for employees, and we’d like to raffle off nice prizes for employees and...more
On June 26, 2015, a California appellate court rendered a precedential opinion that should hopefully put to rest the issue of whether an employer must withhold taxes on settlements or judgments made to former employees in...more
7/8/2015
/ Costco ,
FICA Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Lost Wages ,
NLRA ,
Settlement ,
Social Security Act ,
United Airlines ,
Wage and Hour ,
Withholding Requirements ,
Withholding Tax