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Originally published by GP Solo Magazine for the American Bar Association. Written by Lauren Suarez and Allison D.H. Soares. April 15 symbolizes a lot of things to various lawyers, depending on whether you are a solo practitioner, a midsize firm, a partner in a large, national firm, or merely an individual just coming out of law school trying to decide whether to incorporate and hang your own shingle.  As we look back at the impact the previous presidential administration had on the profession of law as a whole, one of the most crucial pieces of legislation of the Trump…
2020 was a challenging year for many business owners. The ongoing global pandemic not only brought on a health crisis, but an economic crisis to match. While many companies were able to stay open because they were deemed to be essential workers, many others struggled to maintain their day-to-day operating costs on their own and turned to the government’s SBA PPP and EIDL programs for support.    SBA informed lenders Tuesday, May 4th that the PPP general fund was out of money. The remaining funds ($8 billion) are set aside for community financial institutions (CFIs).  CFIs work with businesses in…
No one wants to find themselves under audit. Whether from IRS, EDD CFTB, or other government agencies, audits are stressful and time-consuming. When it comes to facing an audit, how you react at the start of the audit can make all the difference.  Some business owners feel that it is an overreaction to call a lawyer, or, that that is somehow an admission of guilt. In cases of government audits, it is wise to bring in qualified counsel at the start of the audit to prevent the audit from expanding to other areas beyond the initial scope. The importance cannot…
One important aspect of being a business owner is ensuring that you keep up with changing laws and regulations that may be applicable to your business. There are consistent changes and updates being made to various legal requirements and ignoring those changes or failing to recognize them could result in negative consequences for your business.  One ruling that business owners should be sure to maintain awareness of is the need to complete and file Form 5472.  Who must file Form 5472?  Form 5472 must be filed by any business owner that has a foreign owner or foreign shareholders of 25%…
Late in 2020 IRS announced that they intended to increase audits of small businesses by 50%. This news came as a shock to many small business owners who were still attempting to recover from the economic downturn brought on by the COVID-19 pandemic. While many businesses have struggled to hold on, and others closed their doors permanently there were a handful of industries whose revenues actually increased despite their early concern that they would be negatively impacted. While IRS tax audits are daunting, there are ways to protect yourself from the negative outcomes of an audit including fees, penalties, and…
If you are a CPA, here are 4 things to help your client reduce the risk of an EDD, IRS, or SBA audit: 1. Confirm that your client’s 1099-K (provided by a merchant processor) does not report gross proceeds from credit card sales that are higher than the amount you are reporting as “gross receipts” on a business income tax return.  If there is a difference, you may consider adding a statement to explain a legitimate difference. For instance, chargebacks and returns are not subtracted from the amount of “gross proceeds” on the 1099-K form. 2. If you have a…
If you are a CPA, here are 5 things to help your client reduce the risk of an EDD, IRS, or SBA audit: 1: Confirm that your client’s 1099-K (provided by a merchant processor) does not report gross proceeds from credit card sales that are higher than the amount you are reporting as “gross receipts” on a business income tax return.  If there is a difference, you may consider adding a statement to explain a legitimate difference. For instance, chargebacks and returns are not subtracted from the amount of “gross proceeds” on the 1099-K form. 2: If you have a…
As a result of the ongoing global pandemic, IRS has elected to extend the 2020 tax submission deadline to May 17, 2021. Following last year’s deadline extension to July 15, it was predicted early on that this would likely be the case.  As the original deadline has recently passed and the extended deadline draws near, taxpayers are once again in a position to ensure that their information is submitted correctly in a timely manner to avoid the possibility of an IRS tax audit.  The financial challenges imposed upon many businesses and individuals in the past year + make the possibility…
Tax season brings on additional stress for many. First, the hurry to get your information prepared and submitted for review by IRS. Then follows the thoughts of whether or not your information was submitted correctly or whether you’ll be faced with an audit.  Ideally, your taxes will be submitted correctly the first time. That being said, if you recognize an error in your return, you should attempt to submit an amended return as soon as possible. While it’s best to fix any mistakes yourself before IRS discovers them, you still may not be 100% safe from a potential audit.  While…
Need to review 1099 classification criteria? CLICK HERE: How do you minimize the risk of an EDD Audit? There is no way to eliminate the risk of a government agency audit, audits are performed on a number of criteria, from a site sweep in which contractors are randomly audited by EDD to an unemployment claim from a 1099 worker who unwittingly files on your company. In whatever scenario, it is best to have all your ducks in a row when EDD audits. One of the first areas of scrutiny will be the status of your workers. If your workers…