In March, the IRS officially rolled out a Fast Track Settlement program (FTS) for small businesses and self-employed individual taxpayers. The FTS for small businesses is in effect for businesses that file Form 1040, Schedules C, E, F or Form 2106. Moreover, it applies to small businesses with assets less than $10 million. The IRS claims that the FTS can resolve disputes "within 60 days after acceptance into the program."
The IRS has many tools at its disposal to enforce the collection of unpaid tax debts, among them liens, levies, and even asset seizure. Beginning in late March, the IRS, in conjunction with the State Department, will have yet other weapon in its arsenal. Very shortly, the IRS will be forwarding the State Department information regarding individuals who have substantial tax deficiencies. Upon receipt of this information, the State Department can deny a taxpayer's passport application or renewal or place other restrictions on the taxpayer's passport.
The universal right of same-sex couples to marry their partners has been the law of the land since June 26, 2015. Even before the Supreme Court ruled in favor of marriage equality, hundreds of thousands of same-sex couples were legally married in many states. In the present, approximately one million Americans are wed in same-sex unions.
Spouses can be more than life partners. Spouses can also be business partners, or have an employer-employee relationship. Spouses involved in business together must be mindful of the various tax considerations.
For more than a year now, marriage equality has been the law of the land. While some states had recognized same-sex marriages, the 2015 Supreme Court case of Obergefell v. Hodges struck down the federal Defense of Marriage Act (DOMA) and recognized same-sex marriage rights across the United States. Along with marriage equality, same-sex couples have the right to make a number of important financial decisions.
Currently, partnerships are considered pass-through entities for taxation purposes. As a result, when a partnership is audited, the partners themselves are responsible for any unpaid tax liabilities, penalties and interest. However, with the rise of multi-tiered partnerships, the IRS found significant lack of compliance among partnerships. Furthermore, the IRS was auditing fewer partnerships relative to other types of business entities.
The IRS recently announced it will begin using private debt collectors to collect certain types of tax debts. The IRS has contracted with four private collection agencies that will focus their efforts on the following types of tax debts:
Half of all states and the District of Columbia have legalized the use or sale of marijuana, either for medicinal purposes or in some cases recreational and medicinal purposes. Despite these changes to state laws, marijuana is still classified as a Schedule I drug under federal law. This tension between state and federal laws has created serious and perhaps unintended tax consequences for marijuana dispensaries.