An LLC taxed as a partnership with 128 partners failed to file its partnership tax return electronically, resulting in the IRS asserting a penalty of $224,640 under IRC section 6698(a)(1). Partnerships with more than 100 partners are required to file their tax returns electronically under IRC section 6011(e). Williams Parker represented the partnership in connection with a penalty waiver request pursuant to IRS Announcement 2002-3, 2002-1 CB 305 (Jan. 14, 2002). Shareholder Mike Wilson at Williams Parker convinced the IRS that the partnership was entitled to a penalty waiver under the criteria of the Announcement, and therefore the IRS withdrew the entire $226,640 penalty. Information regarding the Announcement criteria and related guidance can be found at irs.gov.
Williams Parker shareholder Mike Wilson recently led a Williams Parker team in the representation of several affiliated taxpayers that were under a combined audit by the Internal Revenue Service (the “Service”) in connection with the taxpayers’ treatment of several thousand workers as partners, instead of as employees or independent contractors, for payroll tax purposes over multiple years. By characterizing their workers as partners, the taxpayers’ took the position that the workers’ compensation was not reportable on Form W-2 or subject to withholding or payroll tax obligations. Instead, the compensation was a guaranteed payment, reportable on the workers’ Schedule K-1, and subject to self-employment tax to be paid by the workers. Not surprisingly, the Service took a very aggressive position regarding the classification of the workers as partners, arguing they were properly characterized as employees. With an exposure for the taxpayers of approximately $16,000,000 of tax, interest, and penalties, Williams Parker was able to settle the four-year dispute with the Service for approximately 12 percent of such amount.
Recently, shareholder John Wagner sat down with the Sarasota Herald-Tribune to discuss business succession planning. In the following brief video, John addresses why and when business owners should consider succession planning and provides tips for getting started.
These materials were presented to the FICPA’s Gulf Coast chapter on January 7, 2014:
Trusts in an Era of Portability: The Not-so-Simple Analysis
Presented by Jeffrey T. Troiano – Williams Parker
Medicare Surtax Planning For Real Estate Investors and Developers
Presented by E. John Wagner, II – Williams Parker
Current Developments on Retirement and Welfare Plans Including Controlled Groups and DOMA
Presented by Carol L. Myers and Edward K. Kim – Williams Parker
2013 New Rules for Mid-Year Changes to 401(k) Safe Harbor Plans
The Sun Capital Case How Does it Impact Your Employee Benefit Plans
2013 Relaxation of Flex Plan Use it or Lose it Rule
IRS Notice 2014-1 Guidance on Same-Sex Marriage Issues for Cafeteria Plans Flexible Spending Arrangements and Health Savings Accounts
Fiduciary Responsibility Beware of Indemnification Agreements
Post-DOMA Developments and Potential Changes to Your Benefit Plans
2013 A Year of Significant Benefit Changes