October 2008 Archives

Independent Contractor or Employee Brochure Release by IRS

October 30, 2008,

The Internal Revenue Service (IRS) has released IRS Publication 1779 with guidance for workers to help them determine whether they are employees or independent contractors. Interestingly IRS Publication 1779, which is only two pages does not specifically mention the 20 factor test set forth in IRS Revenue Ruling 87-41, 1987-1 C.B. 296. Instead it groups various factors into three categories—Behavioral Control, Financial Control and Relationship of the Parties. For example under the category Behavioral Control it states that “if you receive extensive instructions on how work is to be done this suggests you are an employee.”

While the publication appears to be aimed at workers rather than employers, an employer could be lulled into a false sense of security by relying on the publication since among other things it fails to mention that even though an employer does not actually exercise control, if the employer maintains the legal right to control the worker those workers may well be employees.

Nor does the publication mention that Section 530 of the Revenue Act of 1978 also known as the “safe harbor rules” allows employers to treat individuals as independent contractors even if they do not qualify under the common law rules. For more information on that topic see our article Independent Contractor Treatment for Workers is Broadly Available.

If you are an employer and the IRS or the California Employment Development Department (EDD) has challenged your treatment of workers as independent contractors, or you have other payroll tax problems, contact the tax problem attorneys at Brager Tax Law Group for assistance.

Las Vegas Real Estate Broker Pleads Guilty to Impersonating IRS Agent

October 20, 2008,

A Las Vegas real estate broker pleaded guilty to tax evasion and impersonating an IRS Agent on September 29, 2008 before U.S. District Judge Roger L. Hunt. Michael Sabo owed approximately $95,000 in federal income tax and several tax liens had been placed on real property he owned. In order to release the tax liens, Sabo pretended to be an IRS Agent and signed and filed fraudulent tax lien releases with the Clark County Recorder’s Office. In response to the filing of false tax lien releases, the County released three tax liens from the property totaling $97,000. Sabo was able to avoid payment of his federal taxes and sold the property.

Sabo faces up to three years in prison and a $250,000 fine for impersonating an IRS Agent and up to five years in prison and a $250,000 fine for tax evasion.

If you have been accused of tax evasion contact the IRS tax attorneys at Brager Tax Law Group, A P.C.

California BOE Sales Tax Audit Program

October 13, 2008,

On Nov. 7th I will be speaking at the at the 2008 Annual Meeting of the California Tax Bar on Sales and Use Tax Audits: A Guide for Tax Professionals. My co-panelist will be Robert Tucker, a tax specialist from the California State Board of Equalization (SBE or BOE). We will be discussing how to handle a sales tax audit including procedural rules and tips for dealing with the SBE.

The 2008 Annual Meeting of the California Tax Bar runs from Nov. 6 through 2008, and attracts hundreds of tax attorneys, and tax accountants from around the state. Additional topics include:

Criminal Tax Investigations
Offshore Enforcement
California Tax Litigation
SBE New Rules for Tax Appeals
Federal and California State Trust Fund Recovery (TFRP) Penalties

and much more.

For more information see http://www.calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=11620.

UCLA Tax Controversy Institute Taxpayer Advocate Panel

October 13, 2008,

On Oct. 28th I will be moderating a tax controversy panel at the 2008 UCLA Tax Controversy Institute. The panel will include Steve Sims, Taxpayer Advocate, Franchise Tax Board, Todd Gilman, Taxpayer Advocate, State Board of Equalization, Michelle Mosley, Taxpayer Advocate, Employment Development Department, Dorothea T. Curran, Local Taxpayer Advocate, Internal Revenue Service (Los Angeles).

Other tax panels include:

Innocent Spouse
Independent Contractor Audits and
Criminal Tax Audits

If you would like to attend contact UCLA at www.uclaextension.edu/taxcon08