Texas sales and use tax are structured to prevent the same tax from being collected more than once on a taxable transaction. However, under Texas law, the Comptroller may pursue both the seller and purchaser for tax arising from the same transaction.[1] The law limits the Comptroller to collecting the tax only once.[2] However, courts have held tha...
Everything to Know About the VDP If you've ever worried about unreported income, offshore accounts, or other tax issues that might lead to serious consequences, the Voluntary Disclosure Program (VDP) could be a lifeline. As a federal tax program administered by the Internal Revenue Service (IRS), the VDP allows taxpayers to come forward voluntarily...
Choosing the Best IRS Payment Plan for Your Tax Debt Two of the most common payment options for delinquent tax debts are installment agreements and offers in compromise. Let’s discuss theses options below, along with the key considerations for choosing which route might be best in a taxpayer’s particular case. If you owe the IRS, and are considerin...
Overview of the Voluntary Disclosure Program The IRS Voluntary Disclosure Program (“VDP”) provides taxpayers who have willfully failed to report income, assets, or other tax-related information an avenue to resolve their noncompliance with the IRS. In order to be eligible, taxpayers must have willfully violated the tax law and must make a disclosur...
IRS Offshore Compliance Options for Foreign Asset Reporting Many tax practitioners and taxpayers have noticed increased enforcement in the international tax space. It’s always better to correct failures in filing foreign information returns or FBARs before receiving a letter from the IRS. Based in The Woodlands and serving the Greater Houston area,...
Why Businesses Face IRS Payroll Tax Audits IRS payroll tax audits often begin long before businesses realize a compliance issue exists. Payroll reporting errors, worker classification disputes, inconsistent filings, and other employment tax issues can all increase the risk of IRS scrutiny. Understanding what triggers an IRS employment tax audit can...
What Are the IRS Hobby Loss Rules? Generally, taxpayers may deduct “ordinary and necessary” business expenses under Sections 162 and 212 of the Internal Revenue Code. Many taxpayers believe that they can deduct their expenses related to their passions, similar to how one may deduct expenses related to a business. However, Section 183 limits this de...
Overview of Disclosure Requirements This is the second part of a two-part article. In Part 1, we briefly covered several international disclosure forms that must be submitted by certain U.S. taxpayers (including nonresident aliens that meet the “substantial presence test”) in connection with international accounts or transactions, including: FBAR/F...
Why Recordkeeping Matters for NIL Athlete Business Expenses Name, Image, and Likeness (“NIL”) has transformed college athletics into a significant commercial marketplace. Athletes such as Angel Reese have demonstrated that a college athlete’s name, image, and likeness can support major endorsement and sponsorship opportunities. With that earning po...
How Audit Preparation Helps Protect Your Business Receiving an IRS payroll audit notice can quickly disrupt business operations and create significant financial concerns for employers. Preparing payroll records, reviewing worker classifications, and identifying compliance issues early can help businesses respond more effectively if an audit occurs....
Understanding the Difference Between Tax Evasion and Tax Avoidance Reducing taxes legally is a common goal for Texas businesses and individuals, but many taxpayers are unclear where lawful tax planning ends and illegal tax evasion begins. Tax avoidance uses legal strategies to reduce tax liability, while tax evasion involves fraud, concealment, or ...
Understanding the Texas Franchise Tax Many business owners are surprised to learn that the State of Texas franchise tax applies to a wide range of business entities operating in Texas. Although Texas does not impose a personal income tax on individuals, many companies doing business in the state must still file annual franchise tax reports with the...
Why Multi-State Tax Nexus Matters for Texas Businesses Texas businesses increasingly expand operations beyond state lines through e-commerce, remote employees, and online sales, often without realizing that those activities may create tax obligations in other states. However, expanding operations across state lines, hiring remote employees, storing...
Understanding Civil Asset Forfeiture in Texas Many Texans are surprised to learn that law enforcement agencies may seize cash, vehicles, and other property even without a criminal conviction. Under Texas and federal law, civil asset forfeiture allows the government to pursue seized property through a separate legal process independent of any crimin...
Why FATCA Compliance Matters for Texas Taxpayers International tax reporting obligations have expanded significantly for taxpayers with foreign financial assets, offshore accounts, or interests in foreign financial institutions. Under federal tax laws applicable in Texas, individuals and businesses with specified foreign financial assets should und...
Why FBAR Compliance Matters for Texas Taxpayers Texans with foreign financial accounts, offshore accounts, foreign bank accounts, or other specified foreign assets may face significant FBAR filing requirements under federal tax laws. Failure to file an FBAR or properly report foreign financial assets may expose taxpayers to significant civil penalt...
Why Tax Planning Matters in Litigation Cases Litigators often focus heavily on liability, damages, and settlement value while giving limited attention to the tax consequences associated with litigation recoveries and expenses. However, the tax treatment of a judgment or settlement can significantly affect the client’s actual net recovery. In many s...
What is the Trust Fund Recovery Penalty? Under Internal Revenue Code (“IRC” or the “Code”) § 6672, any person required to collect and pay over any tax imposed by the Code who fails to collect such tax or pay over such tax will be liable for a penalty equal to the total amount of the tax not collected or paid over. Several persons may be held jointl...
Why Tax Issues Matter in Divorce Tax issues are frequently overlooked in divorce litigation. Parties often focus on custody disputes and dividing assets, but the tax consequences of those decisions can dramatically alter the true economic outcome of the divorce. This article discusses three very important tax issues that arise in a divorce case and...
Understanding What “Tax-Free” Really Means in Business Sales Now, I know what you are thinking nothing is “tax-free.” Yes, that is correct. Generally, tax-free in tax planning is a tax deferral. Also, the tax deferral discussed in this article applies to capital gains. It does not apply to ordinary income items from the sale of the business, includ...
