Three tax takeaways for Saturday, February 23, 2019

The gig economy consists of online platforms like Uber, Etsy, Lyft, Handy, TaskRabbit, and Grubhub, or running a small business on E-bay, to name a few. A recent Treasury Inspector General for Tax Administration (TIGTA) audit to evaluate the reporting habits of the gig economy yielded numerous problems including: significant general income underreporting by taxpayers, differences between reported income on tax returns and the income reported by payers on form 1099-K, and tax returns “Riddled with mistakes.” On the IRS’ side, there were also problems with their Automated Underreporter Program (AUR) used to identify and evaluate potential violators. AUR employees removed thousands of cases from inventory without proper justification or justification that was inaccurate. It is estimated that about 59% of suspected taxpayers were not selected to be worked. That means that out of the total sample, either the case was not worked or the account was deficient. That is big and the IRS knows it, so expect more attention within this industry.

In a related vein, let me remind everybody what Structuring is. That is when you deposit just under $10,000 of cash into your business account on a regular and recurring basis with the intention of avoiding the bank filing form 8300, Report of Cash Payments. The IRS is now urging banks and businesses that are required to report large cash transactions, that they can now e-file their transaction reports; “It’s fast, easy and free.” Cash businesses represent a special area of concern for the IRS and the audit techniques are interesting to say the least.

The tax laws do not consider emotional distress to be a physical injury or sickness. If you receive damages from a lawsuit that are due to emotional distress, you must include them in your income, unless those damages were to pay for medical care attributable to the emotional distress.

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

Featured Services:

Bookkeeping

Payroll

Taxes

Four Local CPA Offices to Serve You:
Needham, MA
Bonita Springs, FL
Cape Coral, FL
Asheville, NC