Let’s Talk About Tax

The new "economic reality" test issued by the U.S. Department of Labor provides additional clarity and important worker protections, but it went into effect quickly—on March 11, 2024—leaving employers scrambling to ensure that their workers are properly classified.

The U.S. Supreme Court will hear another tax case in the upcoming 2023-2024 session. This one, Moore v. United States, is a doozy...

In August 2021, we published a short blog post on how the Internal Revenue Service and the Minnesota Department of Revenue determine worker classification for tax purposes. However, the risk of misclassification discussed in that post extends well beyond payroll taxes. It applies to unemployment insurance, workers’ compensation, fair labor and wage laws, third-party lawsuits, and much more.

It is another brisk morning walk to work. Leaves swirl about and black coffee warms your body as the autumn wind blows. Once inside, you take the elevator all the way up before walking down the hall to your office. You just closed the quarterly books, so your morning is busy preparing to report financials. Despite the chaos, you are calm and in control. You then open an email from your general counsel, and all calm is shattered.

The Supreme Court accepted United States v. Bittner for certiorari on June 21, 2021, and the case will be argued on Tuesday, November 02, 2022.

Since the beginning of the pandemic, Minnesota’s nexus waiver policy provided that the state will not assert nexus for business income tax or for sales and use tax purposes “solely because an employee is temporarily working from home due to the COVID-19 pandemic.”

Under IRC § 6330, a taxpayer is entitled to a “collection due process” (CDP) hearing before the IRS Appeals Office can take any enforced collection action.

The two most troubling sales tax issues for companies tend to be related to software and direct mail. Direct mail is especially difficult, as there are numerous issues to untangle, and a robust understanding of the facts is critical.

Most employers or retirement plan administrators are required to file annual informational returns with the U.S. Department of Labor called Form 5500, Annual Return/Report of Employee Benefit Plan.

If you are into Foreign Bank Account Reports (FBARs), your concern about penalties for failing to comply with those FinCEN 114 reporting rules just took an exciting, and perhaps fearsome, turn.

For years, remote workers had been complicating state tax compliance for companies. When the U.S. Supreme Court’s decision in Wayfair came out in June 2018, many believed that the decision’s economic nexus standards would reduce complexity surrounding remote workers.

With a changing planet and generous federal tax incentives, renewable energy projects are increasing in both number and size. So naturally, states want their fair share of tax revenue.

Many business owners, especially owners who are thinking of selling their business, wonder if an ESOP is a good ownership transition option for them. The answer is not always easy to determine but an ESOP is something that should be explored.

Having spent more than a decade working with taxpayers and Department employees on sales and use tax audits and refund requests, I find that responding to documentation requests from the Department can either be an exercise in pragmatism or an exercise in preventing auditors from murdering a taxpayer’s business by a thousand cuts. The reality is that accumulating and providing documentation is easier for some taxpayers than for others. Similarly, the requirements laid out by some states, or by some auditors, are more burdensome than by others.

One of the largest sources of stress for a taxpayer with significant federal tax debts is whether the IRS can take his or her house. For many taxpayers, the family residence is the most important source of their wealth. In addition, it is not just their house, but their home—a source of happiness and joy and family community. The prospect of losing a home therefore not only threatens financial loss, but it is often emotionally taxing as well.

Many 501(c)(3) organizations receive a property tax statement on a newly acquired property and ask: "As a 501(c)(3) organization, aren't we exempt from property tax?"

This week, we turn to international transactions that involve licenses or the provision or performance of e-commerce services.

As I ask organizations, big and small, what sales and use tax issues cause them the biggest headaches, the answers are overwhelmingly the same – taxability and apportionment of both software and direct mail. I’m going to save direct mail for another day. But for those who are unconcerned about your organization’s treatment of software, I’m here today to read you the riot act.

Yes, taxpayers can opt out! While the monthly payments of the enhanced child tax credits, passed last spring by Congress as part of the American Rescue Plan, are helpful to many American families, they could actually create issues for others, with some taxpayers actually owing money to the federal government next year if they were to receive such tax credits now.

Companies that hire independent contractors are not obligated to withhold income taxes or employment taxes (such as Social Security and Medicare) or pay the employer share of employment taxes and unemployment insurance. But, just because an employer labels its workers “independent contractors,” as opposed to “employees,” doesn’t make it so.

Since 1959, taxpayers have been relying on a federal law—Public Law 86-272—to protect them from having to file state income tax returns in states where the taxpayers’ in-state activities are limited to just soliciting sales of tangible personal property. On August 4, 2021, the Multistate Tax Commission (MTC) member states voted 20-0 to revise the MTC’s “Statement of Information” regarding Public Law 86-272 in an attempt to eviscerate the federal law’s protections.

When is a brokerage not a brokerage? According to a recent Private Letter Ruling released by the IRS, the answer might surprise you.

The story can apply directly to issues currently facing Minnesota taxpayers. Said directly, we will have “unpredictable elements” in life. And, while those elements can be insurmountable when surfacing on their own schedule, we can have a positive impact when exercising deliberate foresight.

Could the latest amendment to the Tax Cuts and Jobs Act of 2017 mark the return of the “three martini lunch”? Maybe, at least through 2022.

To alleviate burdens on taxpayers and their representatives, the IRS allowed temporary use of electronic signatures for a limited number of tax forms.

The process that organizations go through during the preparation, deal, and integration phases of an M&A transaction are fraught with tax issues. Learn how Fredrikson & Byron can help.