Monthly Archives: September 2011

Employee or Independent Contractor?

Is the person working for you an employee or independent contractor?  This question comes up often. Typically start-up businesses will want to treat as many workers as possible as independent contractors, so they don’t have to deal with payroll taxes, and other fringe benefits. However, is this approach correct?  The IRS would rather has every worker treated as an employee as they would receive more payroll taxes which include social security and medicare. Also the employer is required to withhold federal and state income taxes and remit them to the government.  Well this topic has been discussed often.  For a starting point, review the IRS website at,,id=99921,00.html.  This will provide you with a brief understanding of the issue and links to other related areas. Continue reading

Registered Tax Preparers

As a CPA, it always shocked me when I reviewed a tax return that wasn’t prepared in accordance with the applicable tax law.  I’m not talking about a mistake on the application of laws.  I’m saying that I saw fraudulent tax returns.  Let me given you an example.  A client referred a taxpayer to us to assist in an IRS issue.  I met with the taxpayer and found out that the IRS wanted the refund back that it gave her.  In order to determine if the IRS notice was correct, we reviewed the tax return.  The IRS was stating that the taxpayer shouldn’t have taken a deduction for mortgage interest and for a large amount of charitable deduction. Continue reading

Are those emails from the IRS real?

Many of our clients and I’m sure a lot of other taxpayers have received emails from the IRS.  Well, I’m here to tell you ignore them.  They are not real.  The IRS does not make initial contact with any taxpayer or tax advisor through email.  The IRS has been communicating this statements since 2006.  Read the link to the IRS website below.  The IRS does have email, but they barely even use it with tax professionals due to these sorts of issues and for security purposes. Continue reading