On February 28, 2023, the United State Supreme Court issued its opinion in a highly watched case concerning the maximum penalty that may be imposed for a “non-willful” violation of the Report of Foreign Bank and Financial Account (FBAR) requirements.  Under the Bank Secrecy Act, all U.S. persons with accounts at foreign institutions with an aggregate balance above $10,000 at any point during the year must annually report certain information about the accounts on an FBAR.  The statute imposes a …

Supreme Court Issues Important FBAR Penalty Decision Read More »

Over the last several years, few issues have been higher on the IRS’s priority list than what have been termed “Syndicated Conservation Easements.”  These tax strategies generally involve taxpayers purchasing in interest in a partnership that either owns or purchases real property over which it grants a “conservation easement” restricting some level of development on the real property.  The partnership then allocates a portion of the total charitable deduction to the partners to claim on their tax return that far …

Significant Syndicated Conservation Easement Ruling Read More »

In August 2022, President Biden authorized $80 billion in funding to the Internal Revenue Service over the next ten years. The funding is based on estimates in a U.S. Department of Treasury report from May 2021, outlining the President’s proposed initiatives to increase tax compliance and the funding required to implement them.  It includes modernizing current technology, increasing data analytics use, and hiring agents to enforce civil and criminal tax laws.  It’s estimated 87,000 new employees will be hired across …

IRS Hiring New Employees with Portion of $80 Billion Funding Read More »

Federal law requires employers who pay wages to employees to withhold and remit employment taxes to the IRS.  In addition, employers must timely file IRS Forms 941 (or Forms 943 or 944, if applicable) to report their employment taxes.  Employers who fail to comply with either requirement can face significant civil penalties for non-compliance.  Business owners, and employees hired by the employer to file and pay its employment taxes, may also be at risk for having to pay the employees’ portion of …

Unpaid Payroll Taxes and Potential Criminal Prosecution Read More »

Under the Tax Cuts and Jobs Act of 2017, Congress limited individuals’ deduction for state and local taxes to $10,000. Since, many states have experimented to reduce this limitation’s burden on their residents. Colorado’s attempt to lessen the impact on small business owners—the “SALT Parity Act”—was signed into law on June 23, 2021. Beginning January 1, 2022, “flow-through entities” (i.e., businesses taxed as partnerships or S-Corporations) may elect to be taxed at the entity level. By doing so, the entity’s …

Colorado’s State Tax Deduction Work-Around Read More »

The Trust Fund Recovery Penalty (“TFRP”) relates to employment taxes (IRS Form 941) due by an employer to the IRS for wages paid to its employees.  It is the employees’ portion of income tax, Social Security, and Medicare, withheld by the employer from employees’ wages.  Although referred to as a penalty, it is a tax. When an employer does not make required federal tax deposits for employment taxes, it incurs a tax liability comprised of the Trust Fund and non-Trust …

What is the Trust Fund Recovery Penalty? Read More »

 The IRS’s automated computer system generates certain types of notices to taxpayers, based on parameters programmed in the system and information entered and which is specific to a taxpayer.  For example, when a taxpayer files a tax return with a balance due, once the return is processed, the automated system automatically begins to generate collection notices.  The system, however, is not set-up to account for outside events, specifically the backlogs and issues that have been caused as a result of …

IRS Suspends Some Automated Notices Read More »

The IRS was struggling to manage a high workload with fewer resources before the Covid pandemic, but its delays have greatly increased as a result of the months’ long shutdown from the pandemic in 2020.  The IRS acknowledged 2021 as one of the most challenging years it has had, but with the backlog (including millions of unprocessed income tax returns) and the return filing season having opened on January 24, 2022, this year will be plagued by even more delays. …

More IRS Delays in 2022 Read More »

A Q&A guide to remote sellers’ exposure to sales and use tax in Colorado after the US Supreme Court’s decision in South Dakota v. Wayfair, Inc. in 2018.

If you have outstanding income tax liabilities with the Colorado Department of Revenue (the “Department”) and cannot pay them in full, the payment options are limited.  They also vary from those accepted by the Internal Revenue Service for payment of the same or most other types of taxes. The Department does not have any type of temporary hardship status when a taxpayer is not showing the ability to make pay its outstanding income tax liabilities, even when that person is …

Colorado Department of Revenue: Payment Options for Individual Income Taxes Read More »