Business Law Journal

Taxation issues around virtual currencies have abounded since the inception of these so called “digital dollars,” such as Bitcoin, Ethereum, and Monero.  Though a single Bitcoin may no longer be valued at nearly $20,000 as it was in late 2017, the overall increase in value of many virtual currencies has created an incentive for holders of these virtual currencies to donate amounts of virtual currency to charitable organizations, for the same reasons appreciated property is often donated generally.  However, until recently, there was little to no IRS guidance in place for charitable organizations receiving donations of virtual currency.

Many employers outsource some or all of their payroll and related tax duties to third party payroll service providers.  These related tax duties may include withholding, reporting, and paying over certain employment (i.e. FICA, Medicare, SDI) and income taxes to the Internal Revenue Service (IRS) and California Employment Development Department (EDD).

Recently, both the Internal Revenue Service (IRS) and California Franchise Tax Board (FTB) have issued news releases encouraging taxpayers to plan ahead and to withhold the correct amount of taxes from their paychecks in 2018 to account for recent changes in federal tax law. 

Worker classification is an ongoing issue for most employers. Unfortunately, misclassification of workers can result in substantial liability for employers, with such liability arising in many different ways.  

Individuals impersonating IRS officials are out there, using their best efforts to intimidate people into paying a fake tax bill.  Scams take many shapes and forms, such as phone calls, letters, and emails.  Some scammers may even threaten to arrest or deport their would-be victim if they don’t pay.  The IRS continually updates its website (www.irs.gov) with information on the most current scams and how to report them.  Here is an overview of how and when the IRS contacts taxpayers.

For a variety of reason, a business may desire to change its form of entity (e.g. convert from a limited liability company to a corporation) or change its state of organization (e.g. converting from a California corporation to a Nevada corporation) or merge with another entity.  In the past, if a nonprofit organization wanted to enact changes similar to these, it often was required to submit a new application for tax exemption with the IRS, which can be burdensome.