Tax News Tap House Roundup - January 29

January 29, 2020

This is a roundup of tax news and opinion. Opinions found at the link are those of the authors of the linked item, not of your bloggers or of Eide Bailly. “$” means link may be behind a paywall.

University town businessman with sales tax problems also has federal tax challenges - David Mullen, Ames Tribune.

The former owner of some Ames, Iowa hangouts who recently was brought up on charges of failing to remit sales taxes has some other tax issues, according to the Ames Tribune:

The former owner of three popular Ames Main Street businesses who is facing fraudulent charges in Story County for various tax violations, also is awaiting sentencing in federal court after he pleaded guilty last fall to failing to withhold employment taxes over a four-year period.

This is more evidence that the IRS has become more likely to bring criminal charges when employers withhold taxes but don’t turn them over to the IRS:

Beginning in 2012... the owner of DG’s Tap House, Corner Pocket and Olde Main Brewing Co., failed to “withheld employment taxes, including federal income taxes and Federal Insurance Contributions Act (FICA) taxes, from those employees’ wages,” at DG’s Tap House and Corner Pocket, according to court documents.

When you collect sales taxes or withhold taxes from employee paychecks, that’s no longer your money. If you “borrow” it to use in the business, the best you can hope for is to pay it back later with painful penalties and interest. If you are behind on your state taxes, get help. And, as this case shows, jail time is a possibility. 

IRS Refund Fraud Progress May Be Undermined by Database Thefts - William Hoffman, Tax Notes ($). "The IRS has made great strides in reducing incidents of stolen identity refund fraud, but its efforts may be undercut by breaches at unsecured private databases and by a new wave of identity theft schemes."

IRS Intensifies Hunt For Crypto Tax Cheats - Robert Wood, Forbes. "Taxpayers may think they will not be caught, but the risks are growing, and the best way to avoid penalties is to disclose and report as accurately as you can. Taxpayers may think that the IRS may penalize them, but might assume that they do not need to worry about criminal exposure. Yet violators can face large penalties or even criminal investigation."

Valuation Abuse In Conservation Easements - Rare Or Pervasive? - Peter Reilly, Forbes. “As it turns out, syndicated conservation easements have been a thing for the last few years. Enough so that DOJ has launched a major assault on Ecovest, one of the largest operators and Senator Grassley is calling for an IRS crackdown and the IRS seems to be responding.”

State Taxes 2020 Will Be About the Coasts Chasing Money Away - William Hays Weissman, Tax Notes ($). "If individuals think moving out to avoid California’s onerous taxes is enough, they should think again; California has been pursuing individuals who live and work entirely outside California too."

State Corporate Income Tax Rates and Brackets for 2020 - Janelle Cammenga, Tax Policy Blog.  "Forty-four states levy a corporate income tax. Rates range from 2.5 percent in North Carolina to 12 percent in Iowa."

Tracking State Tax Policy Is Hard; A New Resource Helps You Prepare For Policy Debates In All 50 States - Richard Auxier, Tax Vox. "That’s why we created a new resource for anyone who cares about state tax and budget policy: State Fiscal Briefs." From the Iowa version: “Per the US Census Bureau, Iowa’s combined state and local direct general expenditures were $31.3 billion in FY 2017 (the most recent year census data were available), or $9,964 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $9,449.”

Did you know? Eide Bailly specialists can help you determine whether your business is filing in too few states, or in too many. Visit our NEXUS: FILING REQUIREMENT COMPLIANCE page to learn more!

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