State Tax Attorneys Serving Maryland, the District of Columbia, Oklahoma, California, Texas, and Virginia

Each state has its own rules, laws and regulations. This often becomes abundantly clear when taxes are claimed as due and owing and the taxpayer is left wondering how this could have happened. For those who operate in more than one state, there is to be a balance with the spirit that every lawful business has the right to thrive.

State taxing authorities are particularly active in recent years, as their revenues have declined. Many state tax issues are parallel to federal issues. Individual states, however, can sometimes take harsher measures to collect on taxes such as withholding driving privileges from those that owe state taxes and unpaid unemployment insurance. Efforts to enforce collection can cause problems in other areas of business. Contact Kundra & Associates for counsel and representation on state, national and international taxation matters.

Employee Misclassification

An area of particular concern to state taxing authorities is a business’ characterization of its workers. As an employer, you may benefit by calling a worker an independent contractor. However, if this is not reasonable under both the IRS and your local state’s definition, you could be charged heavy interest and penalties in addition to the taxes assessed for the failure to withhold and account for the proper payment of taxes.

For example, when a worker is an "employee", a portion of their pay is be withheld and remitted as Federal Tax deposits to account for Social Security, Medicare and voluntary withholding. Depending upon your state, state withholdings may also be required as well and have requirements as to timings regarding when and how to remit.

Independent contractors are responsible for self-employment taxes. There are no such withholding obligations through the employer. A disgruntled worker may be the first to file with the IRS and advise that you have not properly characterized them. Be careful, complete and consistent with how you classify and document your workers.

Domicile

Many states hold that if you were a resident of their state at one point in time, unless you affirmatively establish residency in another state or country, you are still subject to taxes. Often the State will tell you about a liability many years later with consequences extending beyond the specific one for which they initially contacted you. Contact the attorney at Kundra & Associates to discuss issues of domicile and residency.

Contact a lawyer at Kundra & Associates

Attorney Chaya Kundra has over 17 years of experience in the area of tax law. Prior to her private practice, she was at the Office of Financial Enforcement, U.S. Department of Treasury. Her numerous published articles, awards, classes taught, and associations are but an example of her ability to strongly and effectively advocate on your behalf. Contact a business tax collections attorney in Washington D.C.