Understanding the IRS Trust Fund Recovery Penalty (TFRP): What Business Owners Need to Know By Tax Solutions USA | taxsolutionsatx.com When running a business, managing payroll taxes is one of the most important and often misunderstood responsibilities. If your business fails to pay employment taxes withheld from employees’ wages, the IRS doesn’t just hold the… Read More

Three primary penalties apply when a taxpayer does not: File a return by the due date (Code Sec. 6651(a)(1)); Pay the tax reported on the return by the due date (Code Sec. 6651(a)(2)); Pay tax assessed by notice and demand by the IRS (Code Sec. 6651(a)(3)). These apply to income, gift, and estate tax returns,… Read More

The VCSP is an IRS program that allows businesses to voluntarily reclassify workers as employees for future tax periods, offering partial relief from past federal employment taxes. Eligibility Requirements: To qualify, the taxpayer must: Have consistently treated workers as nonemployees. Filed all required Forms 1099 for the past three years. Not be under current audit… Read More

Selling Property at a Loss: Related-Party Rules If you’re considering selling property at a loss, be aware of IRS rules restricting loss deductions in transactions between certain related parties. In the past, some taxpayers created fake sales between relatives or entities they controlled to generate tax-deductible losses. To prevent this abuse, Congress established a blanket… Read More

TRUST FUND RECOVER PENALTY (100% PENALTY) Sometimes, when businesses get in financial trouble, they are tempted to pay creditors or others instead of paying the government the income and employment taxes it has withheld from employees’ wages. This is a big mistake and can lead to large penalties against business owners or others who are… Read More

Income in Respect of a Decedent (IRD) When a taxpayer dies, certain income they were entitled to but had not yet received is known as Income in Respect of a Decedent (IRD). Due to accounting rules, this income isn’t reported on the decedent’s final tax return but is still taxable. Key Points: Definition: IRD includes… Read More

Transfers of Property Incident to Divorce In general, no gain or loss is recognized when property is transferred between spouses or between former spouses if the transfer is incident to divorce. When this nonrecognition rule applies, the receiving spouse (transferee) is treated as acquiring the property by gift. As a result, the transferee’s basis in… Read More

Federal Tax Treatment of Same-Sex Marriage 1. Joint Tax Returns for Married Couples Under IRC §6013, married couples may file joint federal income tax returns. Marital status is generally determined by state law where the couple resides. 2. Defense of Marriage Act (DOMA) DOMA (1996) defined “marriage” and “spouse” as relationships between men and women… Read More

Interim Final Rule – Beneficial Ownership Reporting, 03/26/2025 The Financial Crimes Enforcement Network (FinCEN) has issued an interim final rule under the Corporate Transparency Act, narrowing the scope of reporting requirements for beneficial ownership information (BOI). Under this rule, only entities previously classified as “foreign reporting companies” must report BOI. Entities previously defined as “domestic… Read More

August 2024 Tax Guide to Deducting Long-Term Care Insurance Premiums Long-term care costs can be substantial, and neither Medicare nor Medicaid provide comprehensive coverage for most people. Long-term care insurance can help protect your finances, and there may be ways to deduct the premiums, depending on your business structure. Here are four key points to…… Read More