Government Shutdown Does Not Affect October 15th Tax Filing Deadlines

By:  Amanda Wilson

As a result of the government shutdown, IRS operations are extremely limited and most IRS personnel have been furloughed.  During this shutdown, the IRS will not be processing tax refunds.  However, taxpayers should not view this shutdown as impacting their tax filing obligations.  Specifically, taxpayers that filed an extension for their personal income tax returns should still file by the October 15th deadline.  For more information, please see IRS Operations During Lapse in Appropriations. read more

IRS Provides Administrative Guidance to Employers in the Wake of Its Recognition of Same-Sex Marriage

By:  Amanda Wilson

Last month, the IRS announced that same-sex marriages would be recognized as marriages for federal tax purposes.  It is important to recognize that this position extends beyond individual income tax consequences and can impact employers as well. A number of income tax and employment tax provisions exclude from gross income and wages certain employee benefits provided to the spouse of an employee.  Before last month, the IRS took the position that benefits paid to same-sex spouses of employees did not qualify for these exclusion provisions.  The IRS has now changed its position and has stated that this change can be applied retroactively.  As a result, employers may find themselves in the situation of having overpaid employment taxes for employees that have a same-sex spouse.  The IRS has issued Notice 2013-61 to provide guidance to employers on how to deal with this situation.  Employers that have employees with same-sex spouses should be aware of this notice and consider how it may apply to them. read more

Small business owners – is your compensation reasonable?

By Amanda Wilson

If you are an employee of a company for which you are also an owner, you should consider reviewing your current compensation for its reasonableness.  It is very common for small businesses to be formed as Subchapter S corporations.  In these types of business, owners are also often employees of the business.   The owners may be willing to take a smaller salary because they will eventually receive the business profits anyway.  If this describes your business, be careful.  The Internal Revenue Service continues to focus on whether compensation paid to employee owners is fair and reasonable when auditing small businesses, particularly S corporations. read more