IRS Offers Help to Hurricane Victims

IRS Offers Help to Hurricane Victims

The Internal Revenue Service has recently released information on tax relief that is available to victims of Hurricanes Harvey, Irma, and Maria. In general, the IRS is now providing relief to individuals and businesses anywhere in Florida, Georgia, Puerto Rico and the Virgin Islands, as well as parts of Texas. Because this relief postpones various tax deadlines, individuals and businesses will have until Jan. 31, 2018 to file any returns and pay any taxes due. Those eligible for the extra time include: Individual filers whose tax-filing extension runs out on Oct. 16, 2017. Because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief. Business filers, such as calendar-year partnerships, whose extensions ran out on Sept. 15, 2017. Quarterly estimated tax payments due on Sept. 15, 2017 and Jan. 16, 2018. Quarterly payroll and excise tax returns due on Oct. 31, 2017. Calendar-year tax-exempt organizations whose 2016 extensions run out on Nov. 15, 2017. A variety of other returns, payments and tax-related actions also qualify for additional time. See the disaster relief page on IRS.gov for details on these and other relief the IRS has offered since these hurricanes began hitting in August. The IRS also continues to closely monitor the aftermath of these storms, and additional updates for taxpayers and tax professionals will be posted to be IRS.gov. Besides extra time to file and pay, the IRS offers other special assistance to disaster-area taxpayers. This includes the following: Special relief helps employer-sponsored leave-based donation programs aid hurricane victims. Under these programs, employees may forgo their vacation,...
Hurricane Charity Scams on the Rise

Hurricane Charity Scams on the Rise

With many victims of the most recent natural disasters still dealing with the devastating effects on their homes and businesses, good hearted people are looking to donate and help in any way possible. The IRS has recently issued information to help protect taxpayers from criminals who want to take advantage of charitable people. If you’re currently searching for a way to donate, unfortunately, there are things you should be aware in order to avoid fake charity scams. While there has been an enormous wave of support across the country for the victims of the hurricanes people should be aware of criminals who look to take advantage of this generosity by impersonating charities to get money or private information from well-meaning taxpayers. Such fraudulent schemes may involve contact by telephone, social media, e-mail or in-person solicitations. Criminals often send emails that steer recipients to bogus websites that appear to be affiliated with legitimate charitable causes. These sites frequently mimic the sites of, or use names similar to, legitimate charities, or claim to be affiliated with legitimate charities in order to persuade people to send money or provide personal financial information that can be used to steal identities or financial resources. IRS.gov has the tools people need to quickly and easily check the status of charitable organizations. The IRS cautions people wishing to make disaster-related charitable donations to avoid scam artists by following these tips: Be sure to donate to recognized charities. Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of...
Wage Theft and Worker Mis-classification: Part 3

Wage Theft and Worker Mis-classification: Part 3

In the second part of our blog series on the lawsuits filed by the Labor Commissioner’s Office, we covered a Chula Vista restaurant, La Querencia, who deprived their workers of their hard-earned pay and was ordered to pay over $274,000. You can review our last blog post here: (http://bit.ly/2y3MUuX). With information provided to us from the State of California Department of Industrial Relations’ new release, the Labor Commissioner’s Office has cited a Jack in the Box franchise operator $903,084. The franchise’s owner, Nor-Cal Venture Group, Inc., misclassifed 40 managers as exempt and denied them overtime pay. This case is an great example on how important it is for employers to be aware of overtime protection laws along with how to correctly classify their employees. Nor-Cal Venture Group, Inc. owns 26 Jack in the Box franchises in California, most of the which are in the greater Sacramento area. The Labor Commissioner’s Office opened an investigation after receiving a complaint and found that 40 employees were misclassified as exempt. As managers, they were required to work a minimum of 45 hours per week with no overtime, regardless of how many hours they worked. “For these employees, being misclassified as managers resulted in being paid less then minimum wage,” said Labor Commissioner Julie A Su. “That’s not an acceptable way of doing business in California, and my office will continue to enforce labor laws that uphold that wage floor.” Managers who spend less than half of their work time on managerial duties must be paid overtime. Investigators determined that the 40 workers were performing the same duties as other employees. The citations...
Wage Theft and Worker Mis-classification: Part 2

Wage Theft and Worker Mis-classification: Part 2

In our latest blog post, we talked about the lawsuit against Calcrete Construction, Inc., a construction company which committed multiple wage theft and worker mis-classification violations for which the Labor Commissioner’s Office is seeking $6,300,338 from. To review the information we covered, you can click here for last week’s blog post: (http://bit.ly/2whkuJs). Today’s post will cover the case against a Chula Vista restaurant, La Querencia, filed by the Labor Commissioner’s Office. In a new release from the State of California Department of Industrial Relations, La Querencia is cited for more than $274,000 in penalties and back wages for several wage left and labor law violations. Dorantes Inc., doing business as La Querencia, is ordered to pay $164,688 to six workers who worked an average of nine hours per day, five days a week without breaks, and were paid on average less than $6 per hour. La Querencia was also fined $110,150 in civil penalties, workers’ compensation penalties and wage statement penalties. “Honest business owners in California should not have to complete with businesses that skirt the law and deprive their workers of their hard-earned pay,” said Labor Commissioner Julie A. Su. The Labor Commissioner’s Office launched a complaint-based investigation at the Mexican restaurant in January and found that the owner under-reporting the number of workers employed there. The owner claimed only five employees, but investigators found 14 workers employed. Investigators in February cited LA Querencia $21,000 for failing to carry adequate workers’ compensation insurance coverage. An audit of the restaurant revealed that La Querencia mangaement denied six workers meal or rest breaks, and paid them a straight rate of...
Wage Theft and Worker Mis-classification: Part 1

Wage Theft and Worker Mis-classification: Part 1

In the last few weeks there have been 3 large scale documented cases published on how the Labor Commissioner is cracking down on companies mis-classifying employees and committing wage theft violations. Over the course of the next few blog posts, we will be discussing the cases against a Glendale construction company, a Chula Vista restaurant, and even a Jack in the Box franchise owner. These cases are excellent examples on how important it is to correctly classify your employees and be aware of minimum wage and overtime protection laws. What is Wage Theft? When an employer does not pay their employees according to the law, that is wage theft. Wage theft occurs when an employer does not pay workers overtime, pays less than minimum wage, or neglects to offer employees the opportunity to take breaks. What is Worker Misclassification? Employee misclassification happens when an employer incorrectly labels workers as independent contractors, rather than as employees, or an employee exempt from overtime because they are paid a salary. When employees are misclassified as independent contractors, they lose rights to workers’ compensation coverage, family leave, unemployment insurance, and the right to organize or join a union. They lose protection against employer retaliation and may not have access to employer-provided health insurance coverage and pension plans. Misclassified workers are not subject to California minimum wage and overtime protection laws. An employee classified as exempt is not entitled to overtime pay, but this is taken into consideration in the amount of salary they must be paid to truly be exempt. Just because an employee is classified as exempt from overtime doesn’t mean it...
Tax Court Slams the Brakes on Vehicle Deduction Claim

Tax Court Slams the Brakes on Vehicle Deduction Claim

Do you claim deductions for your vehicle? If you do, make sure to keep a detailed log of your of all your businesses trips. There are many taxpayers who have tried and failed to take advantage of these deductions, including the recent example of Katrina Taylor. Ken Berry, from Accountingweb.com, reviews the case and discusses what we can learn from this misguided taxpayer’s mistakes. Katrina Taylor et vir v. Commissioner, TC Memo 2017-99, the taxpayer committed a multitude of sins – including errors, omissions, and inflated expenses – that brought upon her downfall. Katrina Taylor’s husband operated a recycling business in West Virginia. At the same time, she operated a long-term care billing business. Taylor claimed that she sought out healthcare providers, mainly nursing homes and hospitals, and offered to review their customer accounts. Then she allegedly proposed to prospective clients that if she collected on any past-due accounts, they would pay her a percentage of the amount collected. Taylor also worked full-time at a hospital. During the tax years in question, Taylor included her business income and expenses, consisting mostly of alleged car and truck expenses, on the Schedules C for her husband’s recycling business. Those Schedules C did not indicate which income and expenses were attributable to which business. Subsequently, the IRS disallowed the couple’s deduction for car and truck expenses. So the taxpayer took her case to the Tax Court. At trial, the couple produced spreadsheets showing that Taylor made 144 distinct trips between their home and prospective client sites. Each entry had a date, a destination, beginning and ending odometer readings, total miles driven, and...

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