The IRS Fiscal Year 2015 Enforcement and Service Results showed an increase of 18.6% over the previous year for audits of partnerships. That’s the highest audit rate partnerships have experienced since 2006. By comparison, audits of large C corporations decreased by 8.8% in 2015. And under the new rules for audits of partnerships that were  Continue Reading »

Employee stock ownership plans (ESOPs) provide tax-saving opportunities for business owners who want to exit the business and are committed to employee ownership. A business valuation is the first step to determining whether this option makes sense for you. How ESOPs Save Taxes Business owners typically qualify for the current maximum 20 percent maximum federal rate on  Continue Reading »

There have been several significant tax developments that affect Maine small business partnerships in recent months. They also apply to multi-member limited liability companies (LLCs) that are treated as partnerships for federal tax purposes. (For simplicity, we’ll use the terms “partnership” and “partner” to refer to all entities and owners that are affected by the  Continue Reading »

An earnout provision is a contractual arrangement in which the seller receives additional payment in the future if certain financial goals are met, and if you are selling a business, the buyer may want to pay part of the price this way. Basically, part of the price is contingent on the performance of the company  Continue Reading »

If a taxpayer makes a contribution to a charitable organization of $250 or greater, they must substantiate the contribution with a contemporaneous written acknowledgment of the contribution by the done organization, if they want the deduction to be claimed on a tax return. For donations of money, the donee’s written acknowledgment must state the amount  Continue Reading »

Do you remember your first summer job? Whatever your first job may have been, it taught valuable lessons about responsibility and balancing work with family and friends. It also helped keep you out of trouble during the summer, instilled confidence and built up your resume. Unfortunately, there are not enough summer jobs available to meet the  Continue Reading »

The IRS takes a strict position on travel and entertainment (T&E) deductions, and there’s a good chance an agent will take a hard look at those items if you claim them on your tax return and you’re audited. The challenge will be more focused on whether you kept the proper records than whether or not  Continue Reading »

Donations from a will may not actually get to your organization for some time because of probate and estate administration. That raises the issue of what value and what date to use in issuing the official tax receipt. When a will contains a gift in kind to be donated, the timing for when the organization actually receives  Continue Reading »

Employment statistics ended 2015 on a positive note, and many businesses are planning to hire new employees this year. In addition, roughly 242,000 new jobs were added in February and the unemployment rate fell to 4.9%, its lowest level in eight years. Several recent studies indicate that the hiring momentum will continue in 2016. In Maine,  Continue Reading »

The IRS recently published a series of press releases to make tax payers aware of the “dirty dozen” tax scams for this year. The list is not entirely surprising, but it’s important to note that these scams have become increasingly technology-driven in recent years. Taxpayers can use this list to avoid becoming the victim or  Continue Reading »