Recently our firm has received information from clients requesting if an email from the IRS is spam.  Due to the amount of questions I’ve had on this subject, it seems like there is a major spam push in this regard.

These emails said to be from IRS agencies are not new, however this year they seem to be more abundant. One of the newer scams have been directed at  business owners.  These emails are allegedly from the Electronic Federal Tax Payment System (EFTPS).  The email is supposedly a notification letting you know that your tax payment has been rejected and needs to be re-submitted.  Please be aware that the IRS does not solicit tax payments via email.

When you click the links in the scam emails, malware/viruses are loaded onto your computer.  The malware sends information stored on your computer back to the scammer, putting you at risk.

What do you need to know to keep safe?  The IRS will never request financial information, passwords, PINs or any other sensitive information from you via email.  The IRS sends paper notices to taxpayers to discuss tax account information.  Never provide your bank information to someone via email or click links that are suspicious!

If you ever receive one of these scam emails, do not reply.  Do not open any attachments since they might contain malicious code that could infect your computer.  Also, do not click any links provided in the email.  These websites could also give your computer a virus or malware.  Instead, forward the email to phishing@irs.gov.

Constant Motion Creative Media

The Stevenson Law Group would like to congratulate Constant Motion Creative Media, LLC for securing an exclusive contract with Securitas, USA, Inc. (http://www.securitas.com/us/en/), a subsidiary of global security services firm – Securitas, A.B., to provide electronic concierge services to buildings serviced and managed by Securitas throughout the United States.  Constant Motion Creative Media has developed a new proprietary system called SecureConcierge^TM, which provides digital concierge services to high-end residential buildings.  Constant Motion Creative Media has begun launch in San Diego and recently have opened several buildings in the Los Angeles market.  In addition, Constant Motion Creative Media’s platform will be showcased at the world technology summit in Portugal later this year.

Constant Motion Creative Media is a San Diego based advertising and branding agency which specializes in brand development, project development, event planning and design.  This is an energetic team that is poised for rapid growth.  They have a strong client base throughout Southern California.  The founders, Bryant Walker and Steven Picanza are also strong supporters of the Arts and have performed in various San Diego stage productions.

Constant Motion Creative Media has been with the Stevenson Law Group since their inception in early 2010.  Our office provides legal compliance, tax compliance, and business consulting services to Constant Motion Creative Media, LLC.  We are proud to be a part of the Constant Motion Creative Media family and look forward to their continued rise in the tech world.

We invite you to learn more about Constant Motion Creative Media and SecureConcierge^TM by visiting their website at www.constantmotioncm.com.

U4RIK Vodka

Longtime client U4RIK Vodka, a grape based vodka, which has won the Silver at the World Spirits Festival, Best of Class at the New York Spirits festival and a manifold of other world awards will finally be joined in the United States by its award winning sister, U4RIK Tequila.

Today U4RIK’s parent company announced that the U.S. customs has released their U4RIK Silver Tequila for distribution in the United States.  U4RIK Silver Tequila has won top tequila honors at the World Spirits Festival, the premiere industry event, and several other top industry events.

U4RIK Silver Tequila is distilled 7,000 feet above sea level, from the richest 100% True Blue Agave variety.  The estate grown agave pinas are grown for 6 to 8 years, they weigh up to 198 lbs, allowing the agave to grow longer produce richer sugars.  These factors, coupled with the rich red volcanic soil at the top of mountain produces this award winning tequila.  U4RIK Silver is joined by anjeo and resposado level tequilas, for which we are still awaiting approval.

The U4RIK family has been good friends and a member of the Stevenson Law Group family since early 2010.  We provide general business legal advice, contract drafting and enforcement, and tax compliance services for the company.

For more information on U4RIK family of spirits, such as where to buy, please visit their website at www.u4rik.com.

It’s All About the Kids Foundation

It’s All About the Kids Foundation is a San Diego based 501(c)(3) organization that provides mentoring, scholarships, programs and events for San Diego’s less fortunate children.  One such event was the Summer Art program sponsored by another member of the Stevenson Law Group family, Alexander Salazar Fine Art (http://www.alexandersalazarfineart.com/).

This summer an art program was offered to the kids of Chritie’s Place, the Toussaint Academy and Storefront.  Every Tuesday, kids were brought to Alexander Salazar’s state of the art gallery in the heart of downtown San Diego.  One of the highlights of the summer program for the kids was the painting of masks.  One of the kids stated that they found inspiration for their art from Alex’s awesome gallery collection.  Lives were changed and some kids were even inspired to learn more and perhaps pursue art as a vocation.

Programs like this would not be possible without the generous support of the San Diego community and the hundreds of other supporters from outside of San Diego County.  This year is turning out to be a banner fundraising year for the foundation allowing them to provide support, programs and services to even more kids.

The Stevenson Law Group would like to thank clients and friends Mirjam Jaeger (http://www.mirjamjaeger.com/) and Vokab Kompany (www.vokabkompany.com) for their support of the charity.  Your contribution is greatly appreciated.

The Stevenson Law Group provides non-profit corporate compliance, contract drafting and review, program compliance review and other general counsel services to It’s All About the Kids Foundation and their fundraising arm Partying for a Purpose.

The Stevenson Law Group is a business, tax and consulting law firm providing big firm legal representation with the personal attention of boutique practice.  To learn more about our tax resolution, tax compliance (return preparation), corporate compliance, non-profit organization management or general counsel services contact our office at info@stevensonlawgroup.com or call 619-330-9409.

The IRS has determined that a qualified appraisal is one that is conducted by a qualified appraiser in accordance with generally accepted appraisal standards. A qualified appraiser is an individual who:

1. Has earned an appraisal designation from a recognized professional appraisal organization or has otherwise met the minimum education and experience required by the IRS,
2. Regularly performs appraisals for which the individual receives compensation,
3. Demonstrates education and experience in valuing the type of property subject to the appraisal, and
4. Has not been prohibited from practicing before the IRS at any time during the three years prior to the appraisal.

In addition, the appraisal must be made not more than 60 days before the date the appraised property is contributed to a charitable organization, and not later than the time it must be received by the donor.

However, to ensure that you get the full advantage of the value of the appreciated property, it is important to recognize the IRS requirements regarding the appraisal and plan accordingly. We can assist you in planning for your charitable contributions.

For an appointment or more information feel free to contact our office at 619-330-9409 or info@stevensonlawgroup.com.

There is a misconception that you may be able to choose which classification works best for your company. In reality, however, the facts and circumstances impose the worker status. In determining whether the person providing a service is an employee or an independent contractor, you must consider all information that provides evidence of the degree of control and independence. You’ll need to answer these four questions:

1. Does the company control or have the right to control what the worker does and how the worker does his or her job?

2. Are the business aspects of the worker’s job controlled by the payer? Examples include how a worker is paid, whether expenses are reimbursed and who provides tools/supplies.

3. Are there written contracts or employee-type benefits like a pension plan, insurance, vacation pay?

4. Will the relationship continue and is the work performed a key aspect of the business?

Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. No set number of factors makes the worker an employee or an independent contractor and no single factor stands alone in making this determination. The concept is to look at the entire business relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination.

Failure to properly classify a worker in your business will cause significant trouble for your business with the Internal Revenue Service, the Employment Development Department and the California Board of Equalization. An improper classification of an employee as an independent contractor will cause you to pay back payroll taxes and potentially be personally liable for the employer portion of the payroll tax as a penalty, called the Trust Fund Recovery Penalty. We’ll discuss this in a later post, but it will cost significant amounts of money and could cause you to shut down your business.

One major issue we find is when a State Auditor from the Employment Development Department visits a place of business and tells the owner or other key employee that their independent contractors have been reclassified and they need to sign an agreement to such right away or they will shut the business down. DO NOT SIGN! without first consulting an tax attorney or you will be opening yourself to significant costs and penalties.

The Stevenson Law Group has experience in assisting clients in employment tax issues. Our services include:

1. Drafting employment and independent contractor contracts to assist in ensuring your client is properly classified.

2. Advising on the proper procedures and compliance requirements to ensure you can adequately survive an audit.

3. Provide tax opinion letter that may be used to absolve your business of penalties that may be assessed due to tax advice given by our office.

4. Representation before the Employment Development Department, Board of Equalization, Franchise Tax Board or IRS with regard to employment/payroll tax issues.

If you are interested in learning more or for a free consultation please contact our office at (619) 330-9409 or email at info@stevensonlawgroup.com.

Debt reduced through mortgage restructuring and mortgage debt forgiven in a foreclosure may be excluded. To qualify, the debt must have resulted from buying, building or substantially improving your principal residence. It also must be secured by that residence. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualifies for the exclusion.

Proceeds of refinanced debt used for other purposes, such as paying off credit cards, do not qualify for the exclusion. Debt forgiven on second homes, rental property, business property, credit cards or car loans also do not qualify for this tax relief provision. However, these situations may qualify under bankruptcy, insolvency or as qualified business use real property.

In the year your debt is reduced or eliminated, your bank should send you Form 1099-C, Cancellation of Debt.

Generally, corporations have many of the same rights as us citizens. When they face any type of litigation, they basically call upon a business attorney to represent them in a court of law. Jerry Stevenson, Principal of The Stevenson Law Group explains that not every member of an attorney law firm has the knowledge needed for complicated business cases, and that is why having a business attorney is so important. There are several situations where a business attorney would be called upon instead of another member of an attorney law firm. Knowing when to call upon them can save a business a lot of time and grief. There are many intricacies of business law that the layman would not be familiar with, so if your company can afford it, having a business attorney on staff can be really helpful. Jerry Stevenson notes that if you and your company do end up in a difficult legal situation, it is imperative that you contact a law firm and obtain a business attorney. For your benefit, here are some cases where you should go ahead and contact a law firm.

1. Harassment – It would be a good idea to call up an attorney law firm if somebody at your company claims to have been sexually harassed in the workplace. This is one of the cases that a business attorney deals with regularly, so before you do anything at all, make sure they are present. The Stevenson Law Group goes on to explain that sexual harassment can be a complicated issue, so you want a business attorney with experience there with you so that the situation does not get any worse. Other members of an attorney law firm may be qualified to handle this type of case, but they do not specialize in it.

2. Property acquisition – This is an issue that an attorney law firm is necessary for. If a company purchases land or a building, but then there are some environmental or zoning problems that arise, a business attorney will sort that out. The Stevenson Law Group recognizes that there may have been some misrepresentation while the company was in the process of acquiring this property.

3. Fraud – If your company has been accused of fraud, embezzlement, or anything related, drop what you are doing and immediately pick up the phone and dial the number of an attorney law firm. Most likely, you are in some trouble that you absolutely need a business attorney for, so do not waste a precious moment of time, according to Platinum Law Group.

Make sure that when you start your search, you look for an attorney law firm that has a business attorney as a part of their team. When you are speaking to random attorneys you will simply be a waste of your time. Hopefully you are running your company in a lawful manner, but in case you do find yourself in some hot water, you definitely should know who to contact. Business attorneys exist to help companies and corporations whenever they may need it. We aren’t all law experts, so when there’s somebody out there working for us, it makes our lives easier.

The Stevenson Law Group represents clients in various business lawsuits and preventative legal planning. The Stevenson Law Group is prepared to defend your company and zealously protect your future businesses viability. Please contact Kristen Gaske at 619-330-9409 or info@stevensonlawgroup.com for an appointment or for more information.

The IRS has issued regulations [TD 9486] outlining the administration of a 10% excise tax on indoor tanning services that goes into effect on July 1. In general, providers of indoor tanning services will collect the tax at the time the purchaser pays for the tanning services. The provider then pays over these amounts to the government, quarterly, along with IRS Form 720, Quarterly Federal Excise Tax Return.

One question that has not been answered is whether spray tanning is considered tanning services.  The IRS has not issued their position on the definition of tanning services so it may well include all indoor tanning services.  Obviously this excise tax will increase the cost of tanning indoors substantially.  Not only will the ten percent excise tax be included in the tanning services, but the significant cost of compliance will also be included.

The Stevenson Law Group represents clients in audits of excise, sales and use taxation before States and Federal taxing authorities.  The Stevenson Law Group is prepared to defend spray tanning services as an exemption from the excise tax.  Our professionals are able to get an advanced ruling on the issue in order to ensure your tanning business is in proper compliance with this new tax burden.  Please contact Kristen Gaske at 619-330-9409 or info@stevensonlawgroup.com for an appointment or for more information.

In our practice we have had several instances where people have come to us with severe tax issues because of stolen social security numbers.  Stolen social security numbers are mainly used by people working in this country without proper work authorization issued by the bureau of immigration and customs.  ID Theft Claims Lead to Largest Raid in Iowa History.  These stolen identities have been used not only to procure work, but to get credit cards, home loans and other consumer financing.  The problem has become excessively pervasive because of the economic downturn, those under the table workers have lost their jobs and subsequently returned to their home country and defaulted on their loans, including taxes.

Identity theft was first coined as a phrase in the early 1960’s.  It is where someone uses your personal identification without your permission in order to commit fraud.  Whether it be a fraud on an unsuspecting employer or creditor the results are most devastating for the consumer.  There is the potential for loss of creditworthiness at a minimum to the loss of health and personal assets due.

Identity theft is a serious crime. People whose identities have been stolen can spend months or years, and their hard earned money, cleaning up the mess thieves have made of their good name and credit record. In the meantime, victims may lose job opportunities, refused loans, education, housing or cars, or even get arrested for crimes they didn’t commit.

The most common issues we see resulting from identity theft is tax fraud.  Filing a fraudulent tax return is a serious crime.  It can be considered fraud if you underreport your income by more than 40%.

On client of the Stevenson Law Group reported he only made $12,000 in unemployment insurance because he was unemployed for most of the year.  The IRS sent him a letter showing he under reported his income by $60,000 for two years in a row.  That is an 80% under reporting.  The person who used his social security number had filed false tax returns to get all of the money withheld for taxes refunded.  In essence there were no income taxes paid on that income.  He not only faced penalties and interest of about $85,000 but was also threatened with imprisonment for tax evasion and filing fraudulent tax returns.  Through our investigation we were able to find out who had used his social security number to work, but that person had allegedly been laid off and returned to his home country.  The nightmare did not end there, after checking his credit report, our client found over $150,000 in credit card and consumer debt for items he did not purchase or benefit from.

Fortunately, when the police raided the home the person listed as his address about $20,000 of the items were found.  In addition, there were other crimes discovered that were associated with identity theft, drugs and evidence of human smuggling.  Unfortunately for my client the perpetrator was nowhere to be found with my client’s money.  Fortunately he found the Stevenson Law Group and we are helping him through this difficult process.

How do you reduce your chances of becoming a victim?

1. Do not carry your social security card or documents with your SSN around with you.
2. Don’t give businesses your SSN – they don’t need it.
3. Protect and shred your financial information
4. Check your credit every 12 months
5. Protect your passwords – do not answer emails that ask for personal information.  Go directly to the site to see if they need additional information or call the provider.
6. Do not give your personal information over the phone unless there are security measures or you initiated the phone contact.
7. Put a fraud alert on your credit report – this will require people to contact you if you apply for new credit.

What if you are the victim of Identity Theft?

1. Immediately file a police report
2. Contact the Federal Trade Commission at 877-438-4338
3. Contact the three major credit reporting agencies and file a fraud alert on your credit report
4. Close any accounts which have been tampered with .

   Equifax — www.equifax.com 1-800-525-6285

   Experian — www.experian.com 1-888-397-3742

   TransUnion — www.transunion.com 1-800-680-7289

5. Cancel all credit and debit cards and order new ones.

If you are a victim of identity theft or would like more information please contact The Stevenson Law Group at 619-330-9409 or info@stevensonlawgroup.com.

Are you a small business owner?  As a small business owner it is important to ensure you are properly reporting and paying your payroll taxes.  There are three components to payroll taxes that you as a small business owner should be aware of.

1.       Federal Insurance Contribution Act (FICA):  FICA or Social Security taxes are withheld by the employer and reported to the Internal Revenue Service usually on a quarterly basis.  In addition, the employer must match the amount that is owed by the taxpayer.  The amounts withheld from the employee for FICA are consider held in trust for the federal government.  This will be discussed more later.

2.       Federal Unemployment Tax Act (FUTA):  FUTA taxes are paid to the government for payment of unemployment insurance.  This amount is equal to 6.2% of the employee’s wages.  Although this money is to be paid by the employer, there is a credit for any unemployment taxes paid to the state, such as taxes paid the California Employment Development Department.

3.       Income Tax Withholding:  The third tax that must be accounted for by the employer is the employees’ income tax withholding.  This amount is calculated on a scale depending on the filing status and number exemptions claimed by the employee.  The employer is required by law to withhold these taxes from the employee and remit them to the government every quarter through quarterly wage withholding reporting forms.  The money that is supposed to be withheld by the employer for income taxes is also considered held in trust for the government.

The FICA and Income Tax Trust Fund are deemed held by the employer and to be remitted to the federal government every quarter.  The trustee of the funds is not only the employer (whether it be a corporation, partnership or sole proprietor) but also the person responsible for making the payroll.  If the corporation or the person responsible for making the payroll fails to remit these funds to the government at the appropriate time, they may be held personally responsible for the funds that were not remitted.  Additionally, they may be assessed a severe penalty called the trust fund recovery penalty.  The trust fund recovery penalty is a severe penalty to encourage people to make their payments to the government on time.  The amount of the trust fund recovery penalty is equal to 100% of the funds that were to be held in trust.  In addition, the employer may be liable for failure to file and failure to pay penalties.  If the under reporting is substantial enough or there is evidence of purposefully conversion of the trust funds to other business debts, the employer may be held criminally liable for fraud or tax evasion. 

It is important that you as an employer be diligent in making sure you are properly withholding funds from your employees and properly remitting those funds to the federal government.  It is common for clients to have opted to pay their employees as “independent contractors”.  Regardless of what you label a person, if they meet the qualifications of an employee the IRS will deem that person an employee.  The ramifications of having an independent contractor reclassified as an employee are dire.  The IRS will take all of the payments remitted to that employee and consider them income subject to FUTA, FICA and income tax withholding.  You will be held liable for failure to report those wages on your quarterly wage and income filing.  Additionally, you will be held liable for not remitting FICA and FUTA payments to the service.   The amounts you failed to withhold will be considered conversion of trust fund and be subject to trust fund recovery penalty.  For one employee making $10 per hour this could lead to $50,000 worth of penalties and interest.

Starting on February 16^th of this year, the IRS will begin a three year tax audit program focusing on employment taxes.  Starting next week, 8 February, IRS Auditors around the country will be finishing specialized training on auditing payroll accounts of small business and self-employed individuals.  Mary Gorman of the IRS stated that the “audits will include examination of employee/independent contractor status, executive officer compensation, and fringe benefits”.  Michael Baer, 23 DTR G-1 (2010).  The IRS has 6,000 planned audits to be completed in three years.  That does not mean that only 6000 audits will be done.  Local trends will be studied and taken into account.

As a member of Proscenium Counsel our general counsel services will provide you with the counsel on what steps to take to protect yourself from these pitfalls.  In addition, you are eligible for 20 hours of audit defense and discounts on audit defense fees.  The benefit of being a member of Proscenium Counsel is that we take every precaution to reduce your chances of going under audit or having an underpayment in the first place.

If you are interested in becoming a member of Proscenium Counsel and taking advantage of all the benefits it has to offer, please email Jerry Stevenson at info@stevensonlawgroup.com.

On Monday 1 February 2010, the Stevenson Law Group officially launches our new program. The program is called Proscenium Counsel. The goal of the Proscenium Counsel program is to provide general counsel services that are unprecedented and unsurpassed to individuals, medium and small businesses, and nonprofit organizations.

Merriam-Webster’s Dictionary defines “Proscenium” as the front of the building providing the background for a dramatic performance. As a member of Proscenium Counsel independent contractors (like Real Estate Agents) nonprofit organizations and businesses can be comfortable that when those businesses make its striking or dramatic growth the members of The Stevenson Law Group will be there to provide the background and support you need. The prime focus of our service is the Proscenium Counsel member. Our goal is to be a critical member of your management team, someone who knows our client’s business and can anticipate their need for legal advice. We want to be the attorney down the hall. We are not lawyers who speak to our clients once a year for compliance documents.

During the years of experience in both the military and at a large professional services firm, the founder of the Proscenium Counsel Program and The Stevenson Law Group identified a large gap in services between large established businesses and those who qualify for legal aid. The businesses, nonprofit organizations and independent contractors in this gap found that they earned too much to qualify for subsidized legal services and earned too little to afford legal services of the big firms. These businesses and individuals put off necessary legal, operational and financial tasks associated with their business because of the perception that having an attorney on retainer or a General Counsel was too expensive. As a result, they were sometimes hit with large tax burdens from the Internal Revenue Service or held liable for something that their corporation should have protected them against.

As an example, one client had a $500,000 tax debt assessed against their business and them personally by the Internal Revenue Service and the Franchise Tax Board. There were tax liens on the business and personal credit reports, garnishments on their wages, and levies sent to their clients. This caused a substantial disruption in business and ability to make a living. Unfortunately this business owner did not take advantage of the Proscenium Counsel Program. As a member of Proscenium Counsel, the client would have been able to avoid this tax burden through one of the free half-hour consultations, included annual resolution document, and a simple contract, all a benefit of the annual flat fee. This client spent tens of thousands of dollars to rectify the situation with the state and federal taxing authorities. So instead of paying thousands in representation fees having to sell the business to pay the taxes due, they could have paid the flat annual fee and still remained a profitable business.

Members of Proscenium Counsel get the following services:*

• Annual Corporate Compliance Documents: Board and Member/Shareholder Minutes
• Required Meeting Notices
• Statement of Information
• Free half-hour legal consultation, by telephone, with your attorney or agent as appropriate
• IRS/EDD/FTB Audit Protection
• Act as Agent for Service of Process in California
• A 20% discount on legal fees for hourly work and flat fee work.
• Account Receivable Collections
• Contract and Document Review

We are excited to launch this new program and look forward to the new and exciting challenges that will face our clients in 2010.

If you are interested in becoming a member of Proscenium Counsel please contact our office at info@stevensonlawgroup.com or 619-330-9409.

*Subject to the terms and conditions set forth in the Proscenium Counsel Program statement of duties and limitations.