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Los Angeles Tax Law Blog

Report: debt linked to depression, anxiety in millennials

It’s no secret that student loan debt creates a financial strain for many Americans. It’s believed that the total amount of student loan debt triples the amount of credit card debt in the United States.

Few people are more encumbered by this trend than millennials. The Federal Reserve revealed that overall debt for people between 19 and 29 years old has reached its highest level since the Great Recession. Between student loans, stagnant working wages, and a rising cost of living, young Americans often find themselves in a difficult financial place.

Could you be personally liable for employee misclassification?

Business owners and executives often look to CPAs and other experts when they need help classifying their employees. They know the IRS and state governments have been paying more attention to employee misclassification, and they rely on your advice to stay clear of legal problems. But what happens if you make a mistake?

Under the Trust Fund Recovery Penalty (TFRP), the IRS can hold individuals personally responsible for actions that shortchange certain taxes. These include the payroll taxes a business might avoid by paying its workers as independent contractors rather than employees.

Bankruptcy may help your tax debt situation

One of the greatest displays of strengths in a human is the ability to ask for help. This is no less true when managing your personal debt. Bankruptcy is a way for you to ask for help in getting your debt under control. While medical bills and job loss are two common reasons people file for bankruptcy, back taxes are another reason you may wish to file for bankruptcy.

This is because you may be able to have your past-due taxes erased, or discharged, in a Chapter 13 bankruptcy. Filing for Chapter 13 bankruptcy allows you to reorganize your debt into more palatable payments and stop harassment from your creditors.

The Worst Tax Scams The IRS Knows About

It's the season for the IRS to start identifying scammers as they emerge from hiding to make life more difficult for both tax preparers and taxpayers alike. While it is true that tax scams can pop up almost anytime of the year, the time directly following tax filings is the most prevalent time for these scammers to appear. Check out some of the worst tax scams that have been sweeping the country.


Pre-Litigation Alternatives to Resolving Tax Disputes

Although both the federal District Courts and the U.S. Tax Court are judicial forums for resolving tax disputes, there are many opportunities for reaching a favorable resolution before this stage. Specifically, the Internal Revenue Service offers administrative options, such as appeal filed with the Office of Appeals.

Should you be considered an employee or contractor?

Tax season may have passed for this year, but it’s never too late to start thinking about next year. If you’re like most people, you probably prefer not to think about your taxes until you’re required. Yet, taxes are important, and this is especially true for independent contractors.

Sometimes it’s hard to know whether you’re an employee or an independent contractor. If you wonder if you’re self-employed, the IRS considers you an independent contractor if you have only have control over the process of your work but not the end result of the work itself. The IRS will likely consider you an employee of the company paying you if it dictates what work you do and how you do it.

What differences will the new tax law bring?

The new Tax Cut and Jobs Acts, also known as TCJA, has changed expensing, tax credits, deductions, and depreciation for business tax filers. There have also been recent changes that were designed to affect individual taxpayers that have had ramifications for how businesses file their taxes as well. Both businesses and individual who report self-employment income should review these changes to determine how it will affect their business situation. 


Do safe harbor provisions for an IRS payroll audit apply to you?

If the IRS determines that your contractors qualify as employees, your business could face fines and legal penalties. One way to avoid these penalties is qualifying for Section 530 relief, a "safe harbor" provision for employers of contractors.

Know your rights during an IRS audit

Receiving notice that you have been selected for an Internal Revenue Service audit is not a cause for panic. You have rights as a taxpayer, even during an audit, and understanding those rights can help you better navigate the audit process.

An IRS audit is an examination of your financial information to verify that it was reported correctly on your tax forms. You might have been selected for an audit as part of a random check, if something on your tax return did not fit an expected pattern or if you had transactions with others who have been selected for audit.

Employers may be eligible for new paid family leave tax credit

The 2017 Tax Cuts and Jobs Act created a credit for some employers, and the IRS has finally issued guidelines businesses can use to apply for this paid family leave credit.

Businesses who paid family or medical leave to employees during 2018 and 2019 may qualify. During this same time, employers who set up or updated their paid family leave policies could also receive a retroactive credit.

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Law Offices of Robert T. Leonard, APC

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