News & Analysis as of

Internal Revenue Service Employment Tax

The United States Internal Revenue Service is a bureau of the United States Department of the Treasury. The IRS is charged with collecting revenue and enforcing the Internal Revenue Code.  
Ogletree, Deakins, Nash, Smoak & Stewart,...

IRS Issues Guidance on Federal Tax Treatment of State Paid Family and Medical Leave Contributions and Benefits

The Internal Revenue Service (IRS) has released new guidance on the federal income and employment tax treatment of contributions and benefits paid under state paid family and medical leave (PFML) statutes. This guidance also...more

Jackson Lewis P.C.

Employers Who Administer PFML Programs Get Much-Needed Guidance from IRS

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In response to taxpayer and state government requests, including a 2024 letter from governors of nine states imploring the Internal Revenue Service (IRS) to clarify the federal tax treatment of premiums and benefits under...more

Littler

IRS Ruling Clarifies Employment Tax Implications of Paid Family and Medical Leave Programs

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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

McGlinchey Stafford

Is a “Tip” Paid in Cryptocurrency a Tip for Employment Tax Purposes?

McGlinchey Stafford on

Tips are in the news lately. It seems like political strategists on both sides of the aisle have concluded that excluding tips from taxable income is good for votes. One has to wonder if this political promise will go the way...more

McDermott Will & Emery

Weekly IRS Roundup July 29 – August 2, 2024

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of July 29, 2024 – August 2, 2024. ...more

Cole Schotz

Employee Retention Credit Voluntary Disclosure Program to Be Reopened: What You Need to Know

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On July 26, 2024, the IRS announced that they are in the final stages of reopening the Employee Retention Credit (ERC) Voluntary Disclosure Program. The ERC is a credit that was available to certain eligible employers...more

Rivkin Radler LLP

Trust Fund Recovery Penalty & The Closely Held Business

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Depending upon what you read or, perhaps more accurately, depending upon how much you believe of what you read, you may be aware that many closely held businesses are concerned about their future. Most of these survived...more

Fox Rothschild LLP

IRS Identifies Seven ERC Red Flags (and Other ERC Updates)

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The IRS recently issued a news release identifying seven signs that a business’s Employee Retention Tax Credit (the ERC) may be incorrect. The IRS identified these warning signs based on feedback from tax professionals and...more

Dorsey & Whitney LLP

The Special Timing Rule for Taxation of Nonqualified Deferred Compensation

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For an employee who is a U.S. taxpayer, both the employer and the employee are liable for a portion of Social Security taxes and Medicare taxes (collectively referred to as “FICA” taxes) on the employee’s compensation. ...more

Baker Donelson

IRS Launches Employee Retention Credit Voluntary Disclosure Program – Is It Time to Hold or Fold?

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As previously indicated, on December 21, 2023, the IRS launched the latest installment in a series of efforts to claw back pandemic-era tax credits erroneously received by ineligible employers. The Employee Retention Credit...more

Cooley LLP

Limited Partners May Be Subject to Self-Employment Tax

Cooley LLP on

On November 28, 2023, in Soroban Capital Partners LP v. Commissioner, the US Tax Court denied the taxpayer’s motion for summary judgment, holding that whether a limited partner in a state law limited partnership qualifies for...more

Proskauer - Tax Talks

Tax Court Holds That Active Limited Partners of State Law Limited Partnerships May Subject to Self-Employment Tax

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Section 1402(a)(13) of the Internal Revenue Code provides that the distributive share of “limited partners, as such” from a partnership is not subject to self-employment tax.[1] Managers of private equity and hedge funds are...more

Groom Law Group, Chartered

IRS Updates Regulations for Use and Timing of Forfeitures

Over the years, the Internal Revenue (IRS)/Treasury had an item on their annual guidance plan to update the existing regulations on forfeitures. Well, that guidance is finally here in the form of proposed regulations and it...more

DarrowEverett LLP

IRS Response to Israel’s Declaration of War: Relief to Impacted Taxpayers, But Extensions Granted to Its Enforcement Arm

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In IRS Notice 2023-71 (the “Notice”), the Internal Revenue Service (“IRS”) granted a postponement until October 7, 2024 for various time-sensitive filing and payment deadlines for taxpayers affected by the terrorist attacks...more

Morgan Lewis

US Tax Court Will Weigh In on Self-Employment Tax for Limited Partners

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Private equity, hedge fund, and other investment fund sponsors should be aware that there continue to be significant developments in the Internal Revenue Service's (IRS’s) audit campaign with respect to the potential...more

McGlinchey Stafford

IRS Proposes New Program for Service Industry Employers to Avoid Paying Tax on Employee Unreported Tips

McGlinchey Stafford on

The Internal Revenue Service (IRS) is proposing a new voluntary program, referred to as the Service Industry Tip Compliance Agreement (SITCA) program, for employers in service industries to avoid paying the employer’s share...more

Kohrman Jackson & Krantz LLP

Common Mistakes New Business Owners Make & How to Fix Them

Starting a new business? The U.S. Bureau of Labor Statistics indicates that 20% of new businesses fail in the first two years, 45% in the first five years. As daunting as those figures may seem, there are measures you can...more

Fox Rothschild LLP

The Taxman Cometh: How to Handle an EDD Audit [Click Here if You Received an “Inquiry Regarding Records,” a “Preaudit...

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The EDD is aggressively pursuing unemployment tax audits aimed at evaluating potential independent contractor misclassification. Presumably due to the overwhelming financial burden the pandemic imposed, the EDD is pursuing...more

Foster Garvey PC

Disregarded Entities Under the Check-the-Box Regulations Are Not Disregarded for All Tax Purposes

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More than 25 years ago, effective January 1, 1997, Treasury issued what have been called the “Check-the-Box” regulations (the “Regulations”). The Regulations ended decades of battles between taxpayers and the IRS over entity...more

Freeman Law

Section 530 and IRS Employment Tax Audits: Worker Classification and Relief

Freeman Law on

Worker Classification and Section 530 Relief - Employers are required to pay employment taxes to the IRS. Generally, these payments consist of two portions: the employee’s portion of FICA and income taxes and the employer’s...more

Harris Beach Murtha PLLC

IRS Issues Guidance on the Tax Treatment of Employer Leave-Based Programs to Aid Victims of the Further Russian Invasion of...

On May 19, 2022, the IRS issued Notice 2022-28 (available at here), which provides guidance under the Internal Revenue Code (the “Code”) on the federal income and employment tax treatment of cash payments made by employers to...more

Freeman Law

Tax Court in Brief | Treece Financial Services Group v. Comm’r/Treece Investment Advisory Corp. v. Comm’r | VCSP and IRS...

Freeman Law on

Tax Litigation:  The Week of April 18th, 2022, through April 22nd, 2022 Sezonov. Comm’r, TC Memo. 2022-40| April 20, 2022 | Marvel, J. | Dkt. No. 26650-17 Bindel v. Commissioner |April 20, 2022 | Urda, P. | Dkt. No. 9552-19...more

Freeman Law

Tax Court in Brief | Pediatric Impressions Home Health, Inv. v. Comm’r | Common Law Employees, Section 530 Relief, and Penalties

Freeman Law on

Tax Litigation: The Week of April 11th, 2022, through April 15th, 2022 The REDI Foundation, Inc. v. Comm’r, T.C. Memo. 2022-34 |April 11, 2022 |Nega, J. | Dkt. No. 23715-18 Mihalik v. Comm’r | April 13, 2022 | Gustafson, D....more

Freeman Law

The Tax Court in Brief - September 2021 #3

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Tax Court Litigation: The Week of September 13 – September 17, 2021 - Donna M. Sutherland v. Comm’r, No. 3634-18, T.C. Memo 2021-110 | September 16, 2021 | Lauber | Dkt. No. 3634-18 - Short Summary: This is an...more

Rivkin Radler LLP

Are The Feds Getting Ready To Kick Your “S”?

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Report Card- A couple of weeks ago, the Treasury Inspector General for Tax Administration (“TIGTA”) released a report that presented the results of its review to determine whether the IRS’s “policies, procedures and,...more

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