Washington has a confusing set of tests for determining whether an out of state business must pay B & O tax to this state on sales of tangible personal property delivered here or for services rendered. First, a “physical presence” nexus standard has historically applied to businesses engaging in sales of tangible personal property either at… CONTINUE
IRS Announces A New Payroll Tax Initiative
IRS recently announced a new “initiative” (July 31, 2015 e-mail for tax professionals), to make early contact with employers who are falling behind in their payroll taxes. According to the announcement, when it appears an employer may owe a balance at the end of the quarter, Revenue Officers will be in contact before the quarterly… CONTINUE
Big 2015 Penalty Increases for Late Filing of Washington State Business Taxes
The Washington State Legislature has just enacted substantial increases to payments for businesses that pay taxes late. Beginning August 1, 2015, if a return is not paid by the due date the 5% penalty is increased to a whopping 9%! If the tax is not paid by the end of the second month the penalty… CONTINUE
Settlement Options with IRS and Washington State When Your Business Closes
When a business fails and closes it often has unpaid federal and Washington State taxes. Usually there isn’t much in the way of federal income taxes (Washington State has no income tax) but even if there are unpaid income taxes those will not normally be a serious issue if the business has operated as an… CONTINUE
Footnote in IRS Manual Shows How to Save Money on Tax Penalty.
I recently had a conversation with a colleague concerning an IRS trust fund penalty case he had and was pleased that he had success with a little known footnote in the Internal Revenue Manual (IRM) which may save money for a company officer who would otherwise be liable for a payroll trust fund recovery penalty… CONTINUE
Pre-Audit Consultation – Well Worth the Money
In an earlier article we discussed how our office persuaded the Washington Department of Revenue Appeals Division that our client had correctly reported its B & O tax as a wholesaler, and had no obligation to collect sales tax, even though it had not been able to obtain reseller permits from the out of state… CONTINUE
INTEREST RATES for STATE EXCISE TAXES for CALENDAR YEAR 2015
Clients who are appealing a state tax audit to the Department of Revenue’s appeals division sometimes ask me whether they should pay the items in the audit report that they do not dispute. They reason that this will save interest and it may improve their position before the appeals division. Unless I am asked to… CONTINUE
Taking a Washington State Reseller Permit not the Only Way to Qualify for Wholesale Reporting
It is the position of the Department of Revenue that a taxpayer must have taken a Washington State reseller permit (or, before January 1, 2010, a resale certificate) from its customer to qualify its reporting for B & O as wholesale. Rule 102 provides that: The seller has the burden of proving that the buyer… CONTINUE
What is Washington State’s Enhanced Voluntary Disclosure Program?
There has been talk recently about the Department of Revenue (DOR) “Enhancements” to its Voluntary Disclosure Program (hereafter referred to as “Program”). That talk suggests that something new is available to businesses wishing to avail themselves of the benefits of voluntary disclosure. In appropriate circumstances voluntary disclosure may well be beneficial, but the fact… CONTINUE
IRS 1099-K Increases Risk of Washington State Sales Tax Audit
In 2008 Congress enacted legislation requiring institutions processing credit cards for businesses that take cards in exchange for goods or services to give such businesses a IRS 1099-K form annually, and to furnish the IRS with a copy of the form. Section 6050W (which was added to the Internal Revenue Code by the Housing… CONTINUE