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General contractors who hire unlicensed workers and unlicensed subcontractors put themselves at risk for potential criminal action by the local District Attorney (DA) and they risk receiving a stop work order from California Contractor State Licensing Board (CSLB) if and when that agency performs a site sweep.   A site sweep occurs when and one of several government agencies, including CSLB, Employment Development Department (EDD), and the California Labor Commissioner, target a specific local area in which construction is being performed and physically show up on the active site to conduct a site inspection.    During a site inspection, workers…
The Internal Revenue Services (IRS) works swiftly when taxpayers fail to pay taxes on time, or at all. Failure to pay or late payment of taxes triggers an IRS notification to you or your business of noncompliance, and outlines the necessary steps to rectify that noncompliance. When those warnings are not acted on, further consequences and penalties ensue. Non payment of taxes can have  serious implications for you and your property in the form of a tax lien on your property.  Learn more about what tax liens are and how to avoid them here:  What is a Tax Lien? According…
When determining whether your workers should be classified as employees or independent contractors, it’s critical to ensure that you are closely following the Employment Development Department’s (EDD) strict guidelines.  On the simplest level, proper classification is determined by whether or not the principal, or employer, holds the “right of control.” What is “Right of Control?” Right of control is determined by who holds the “right to control the manner and means” by which work is performed.  A corporate administrative assistant, for example, reports directly to an executive who manages their work. Likely they work a classic Monday through Friday, 9…
Paying taxes is required for the workforce and for businesses. No one wants to pay more taxes than required, but purposefully avoiding these payments can open your business up to criminal tax liability. While there are legal loopholes to pay fewer taxes, often framed as tax avoidance, there are also serious offenses when you choose to evade paying your taxes.  There are different forms of tax manipulation, some of which are federal offenses and can land you in a criminal audit by IRS. IRS criminal audits can lead to hefty fines or worse–– prison time. With a 90% conviction rate
Anytime you file taxes, there is a chance that your tax return might be audited by the Internal Revenue Service (IRS). The agency conducts standard procedures to find any errors or discrepancies among taxpayers. The audit process is meticulous and, should you find yourself under the scrutiny of IRS, will require detailed information from you.  In the article below, you’ll learn about the audit process and frequently asked questions surrounding IRS audits. Why was I selected for an Audit? There are different reasons you may be flagged for IRS audits. Some are due to random checks; however, you have a…
In mid-May, the U.S Treasury Department announced that they would require any transfer of $10,000 or more to be reported to the Internal Revenue Service (IRS). This update comes in response to growing concerns with regard to cryptocurrency compliance.  While many forms of crypto trading were designed to be hidden or virtually invisible, IRS is far from blind to these transactions. It is suspected that a significant amount of money is laundered through crypto transactions and tax evasion occurs through illegal crypto investing and trading.  IRS’s initial response to the rise in the use of cryptocurrencies includes training and developing…
In early May of this year, the Biden Administration officially made the decision to revoke the previously adjusted Trump era ruling on independent contractor classification.    Earlier this year, in January 2021, the Trump administration took advantage of the opportunity to implement final changes to the Department of Labor (DOL) before leaving office. The “final rule” that they implemented stood largely unchanged from the original ruling which established a tiered test to determine employee versus contractor status as part of the Fair Labor and Standards Act (FLSA).    The updated proposal established a two-part analysis to determine whether a worker’s…
  Over the past year businesses flocked to the Small Business Administration (SBA) to submit applications to receive their share of the federally allocated Paycheck Protection Program funding.    PPP loans were distributed to businesses struck hard by the ongoing coronavirus pandemic. Their intended use was to help keep workers employed by providing funding to support their ongoing paychecks following mass layoffs at the forefront of the pandemic.    Since their initial rollout, it has been discovered that many businesses wrongly claimed PPP loans, resulting in millions of dollars of fraudulent claims.    As of May 31, SBA…
While nobody wants to be responsible for paying any more taxes than is absolutely necessary, it’s critical to remain aware of the fine line between getting creative with your tax responsibilities in a legal way, and taking it too far into tax evasion or avoidance. The latter should be avoided if you don’t want to land yourself as the subject of a government audit, or even in prison.    In 2019, IRS declared a tax gap of $441 billion, representing the difference between the amount of taxes that should have been collected, and how much was collected.     Despite this…
In March 2021, the current administration and congress were able to enact the American Rescue Plan, the plan provides cash payments to individuals and included tax law changes benefitting lower-income individuals and families. The American Rescue Plan tax changes are temporary (expiring at the end of 2021) remedies targeted at those affected by the economic downturn caused by COVID-19. They include:  A child tax credit of $3,600 per child under age 6 and $3,000 per child ages 6 through 17 is fully refundable and payable in advance. It will revert for 2022 to $2,000 per child under age 17 unless…