GOT TAX ISSUES? The R.I. Division of Taxation has scheduled a day in which state and federal tax officials will be available to attempt to address whatever complex matters taxpayers might need help with. “Tax Compliance Day” is planned for Jan. 13.
PROVIDENCE – The R.I. Division of Taxation has scheduled a “Tax Compliance Day” on Monday, Jan. 13, billed as an opportunity to seek resolutions for complex state and federal tax problems.
The event will take place from 10 a.m. to 6 p.m. in Room 110 at Alger Hall at the campus of Rhode Island College, 600 Mount Pleasant Ave., Providence.
While walk-ins are welcome, the division encourages attendees to register ahead of time to ensure the best service. The event is free.
Representatives from the IRS, the R.I. Division of Taxation, and other state and federal agencies will be available.
The division says the representatives may be able to help with issues such as tax status updates; balance resolutions, including payment plans and “offer in compromise” considerations; wage and income transcripts for the Volunteer Income Tax Assistance program to prepare returns; on-site resolution to IRS account issues; free tax preparation as far back to 2017 for both the federal and state personal income tax returns; notarial services; entity status checks; general filing and maintenance information; state-level licensing information; entity reinstatement; and dissolution.
But the division also says taxpayers don’t have to wait until Jan. 13 to address their concerns.
For those with Rhode Island tax filing questions, the Division of Taxation says to visit the Contact Us page to find the contact information of the appropriate tax section.
For those with IRS questions, contact the IRS Providence Taxpayer Assistance Center at (401) 525-4282.
For those who need tax preparation services, get in-person assistance at the nearest Volunteer Income Tax Assistance site near you, or use Free File to file your taxes online for free.
MOUNTAIN VIEW, Calif., Dec. 16, 2024 (GLOBE NEWSWIRE) — LegalZoom (Nasdaq:LZ), a leading online platform for legal services, is pleased to announce a multi-year strategic partnership with 1-800Accountant, a national financial services firm. With this partnership, LegalZoom will offer customers access to year-round, full-service bookkeeping and tax solutions delivered by 1-800Accountant, ensuring small business owners can access tax preparation support that best meets their needs. This collaboration enhances LegalZoom’s ecosystem of products, partnerships and services that support small business owners’ legal, compliance, and business management requirements.
A recent LegalZoom customer survey revealed tax management, liability protection, and legitimacy as key motivations for forming their businesses. As a result, LegalZoom customers frequently cited tax return preparation and advisory as critically important services to support their success, as they struggle to navigate the time consuming, manual, and oftentimes confusing tax preparation process.
“Our partnership with 1-800Accountant provides a timely, meaningful solution for our small business owners as they tackle one of their biggest challenges: tax preparation,” said Jeff Stibel, Chairman and Chief Executive Officer of LegalZoom. “We are dedicated to supporting entrepreneurs at every stage of their journey. By integrating 1-800Accountant’s best-in-class tax services into our ecosystem, we’re offering even more value to our customers and empowering them to focus on what they do best-growing their business.”
1-800Accountant specializes in providing financial expertise to small businesses across all industries. Its full-service bookkeeping and tax solutions are powered by a mix of expert CPAs and technology, providing a streamlined experience which enables business owners to minimize tax management, maximize annual tax savings, and give them peace of mind and time to focus on growing their business.
Brendon Pack, Chief Executive Officer of 1-800Accountant, added, “With this partnership, LegalZoom customers will have access to our year-round expert-led bookkeeping and tax services that can help them identify tax-saving opportunities, file accurate returns, and stay compliant with ever-changing tax regulations. We’re proud to collaborate with LegalZoom to make financial services accessible to every small business owner.”
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This product offering is expected to launch to LegalZoom customers by January 2025. The agreement outlines minimum lead requirements and corresponding minimum annual revenue over the multi-year term.
About LegalZoom
LegalZoom is a leading online platform for business formation in the United States. Driven by a mission to unleash entrepreneurship, LegalZoom delivers comprehensive legal and compliance products and expertise for small business owners through easy-to-use technology. From free business formations to business management solutions and professional advisory services, LegalZoom supports millions of small business owners and their families throughout the entrepreneurial journey. Founded on the belief that everyone should have affordable access to legal and financial expertise, LegalZoom empowers entrepreneurs to make their dream a reality. For more information, please visit www.legalzoom.com.
About 1-800Accountant
1-800Accountant’s mission is to provide financial expertise to small businesses in every state and industry. Its services are powered by a mix of expert CPAs and technology, enabling businesses to minimize tasks while maximizing tax savings. This empowers owners and entrepreneurs to focus on growing their business while 1-800Accountant handles the rest. For more information, please visit www.1800accountant.com.
In the fall of 2023, the Internal Revenue Service announced a pilot program that would allow some Americans to file their taxes directly to the agency — for free. The Direct File service managed to go against at least a half-dozen federal government stereotypes: it was new and novel in a system that loathes change; it allowed people to be more efficient with their time; and the people who used it this past tax season had plenty of good things to say about their experience. In May, the IRS said the program would be expanded and made permanent.
But of course, there are Republicans who would like nothing more than to strangle a popular government initiative in its cradle. In a letter to President-elect Donald Trumpmore than two dozen House GOP members called on him to end the program through executive order once he takes office. If he heeds their request, they’ll have succeeded in ending a successful program before Americans get used to the idea that tax season need not be such a headache.
But of course, there are Republicans who would like nothing more than to strangle a popular government initiative in its cradle.
The letter effort was spearheaded by Reps. Adrian Smith of Nebraska and Chuck Edwards of North Carolina. “Under the guise of offering a convenient “free-to-file” alternative preparation service, the IRS asserts itself as the tax assessor, collector, preparer, and enforcer — all in one — when the program is used,” they fret before hinting that the IRS might actively cheat taxpayers out of their money:
“This is deeply concerning and a clear conflict of interest. The IRS has little incentive to ensure hardworking Americans do not pay more than they owe in taxes and may instead benefit from families and small businesses paying greater amounts than they are required by law. Furthermore, it is highly inappropriate for the IRS to serve as a tax preparer for taxpayers while also being the final enforcer of tax violations.”
This isn’t the first time that these two lawmakers have taken direct fire at Direct File. They introduced a similar bill earlier this year and have joined their colleagues in denouncing the Biden administration’s investment in the IRS despite it being a net savings for taxpayers. It’s also worth noting that the letter writers cc’ed billionaire budget bros Elon Musk and Vivek Ramaswamy, in hopes of putting Direct File in the crosshairs of their cockamamie cost-cutting commission.
It should be said that the program that these Republicans are railing against provides just the bare minimum of service from the IRS. Direct File can only handle filings from people with the most straightforward returns, like taxpayers who only have a single source of income from a W-2 and take the standard deduction. The system can’t process filings from gig economy workers, who companies consider to be self-employed contractors, let alone those in the kind of complex financial situation that would require multiple accountants.
Moreover, even the Direct File system is still wildly inefficient compared to European countries that do much more of the work for their taxpayers than the IRS does for Americans. Though the IRS already has data to show how much you should owe each year, the agency leaves it to you to figure it out if the math lines up. The consequences for getting it wrong are dire, which makes for exactly the kind of system a reasonable person would expect Musk and Ramaswamy’s pro-government efficiency to want to improve.
The more friction in the system, the more visible of a target the IRS becomes for average Americans
But despite all that, the Direct File system is a step in the right direction given the amount of dread people feel over filing their taxes each year. A 2013 Pew Research study found that over half of Americans dislike — or downright hate — doing their taxes each year. Small wonder when the IRS’ own data shows that the average American spends roughly 13 hours preparing their 1040 form each year. Add in the money that many people pay to file both their federal and state taxes together online and you can see how anything that will streamline the process reduce that burden is a major boon for taxpayers.
It feels likely then that Smith and Edwards are trying to ingratiate themselves with wealthier Americans who would stand to benefit more from a less popular IRS. The more friction in the system, the more visible of a target the IRS becomes for average Americans; the more people who are frustrated with the IRS, the better their case for cutting even more taxes for the wealthy. It also doesn’t hurt to be in the good graces of massive tax preparation companies like Intuit, which have spent years and millions of dollars to ensure that filing taxes is as painful a process as possible. Among the reforms they blocked was a plan to go further than Direct File, letting many taxpayers file pre-populated forms for free.
The net effect is that there’s no upside to murdering Direct File ahead of tax season beyond making the federal government less responsive and useful in the eyes of Americans. Republicans can falsely claim that they’re trying to save taxpayers’ money from the clutches of the IRS. It’s clear what they’re really trying to claw back is a massive refund of Americans’ time and energy in the name of making everything a little bit worse.
Tax season is here, and with it comes the familiar rush of deadlines, complex returns, and endless questions from clients.
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Tax season is here, and with it comes the familiar rush of deadlines, complex returns, and endless questions from clients. You know the drill all too well. But what if you had a comprehensive place with tools, guides, and expertise to help you navigate the chaos and stay ahead of the curve? Enter the Thomson Reuters resource hub.
Why tax season resources matter
Our tax season resource hub is your one-stop shop for expert insights, practical tips, and timely updates on the topics that matter most to you. From navigating burnout to optimizing your workflow and minimizing risk, our resources are designed to help you stay informed, efficient, and effective.
These resources are intended to help you with:
Staying informed with the latest tax updates. Tax laws and regulations are constantly evolving. Staying informed about the latest changes is crucial for providing accurate advice and maintaining compliance. Our resources offer timely updates and expert analysis, ensuring you’re always in the know.
Enhancing your efficiency. Efficiency is key during tax season. Our resources include tools and guides that can help you automate routine tasks, manage your stress effectively, and reduce the risk of errors. By optimizing your workflow, you can handle a higher volume of work without compromising on quality.
Improve your client relationships. Strong client relationships are the cornerstone of a successful tax practice. Our resources provide insights into effective communication strategies, client management tips, and ways to add value to your services. By enhancing your client interactions, you can build trust and loyalty.
Help with professional development. Our additional resource page includes webinars, white papers, and events covering a wide range of topics, from technical tax issues to soft skills like leadership.
Key tax season resources available
Comprehensive guides: Detailed guides covering various aspects of tax preparation, planning, and compliance.
Webinars and videos: On-demand webinars and instructional videos featuring industry experts and thought leaders.
Articles and blogs: Insightful articles and blog posts that provide practical tips, how-to’s, and industry news.
How to make the most of these resources
Plan ahead: Start accessing these resources well before the peak of tax season to ensure you’re fully prepared.
Engage continuously: Regularly check for new updates and participate in webinars and forums to stay current with industry trends.
Apply what you learn: Implement the best practices and strategies you discover to improve your services and client satisfaction.
Tax season success starts here
Tax season can be overwhelming, but with the right resources at your disposal, you can navigate this busy period efficiently and confidently. Explore the wealth of information available on our tax season resource page and blog hub to help ensure you have all you need for a smooth tax season.
TUCSON, Ariz. (KVOA) — A Tucson man was sentenced to 30 months in prison for filing false tax returns, the U.S. Department of Justice announced on Dec. 3.
Nour Abubakr Nour, 34, pleaded guilty on Dec. 21, 2023, to aiding in the preparation and presentation of false tax returns.
Nour operated Skyman Tax, LLC, a tax preparation business in Tucson, where he filed at least 27 fraudulent federal income tax returns for clients between 2016 and 2018.
According to the DOJ, Nour falsely reported business income on the tax returns to inflate clients’ refunds. He then used the inflated refunds to pay himself large fees for his services. Nour’s clients were unaware that the returns were fraudulent.
In addition to his prison sentence, Nour was ordered to pay $150,154 in restitution to the U.S. Treasury for the false refunds.
Nearly 30 House Republicans are asking President-elect Donald Trump to stop the IRS free tax filing service, Direct File, on day one of his new administration.
Reps. Adrian Smith, R-Neb., and Chuck Edwards, R-N.C., led the group in penning a letter to Trump on Tuesday, writing that “the program’s creation and ongoing expansion pose a threat to taxpayers’ freedom from government overreach, and its rollout and structural flaws have already come at a steep price.”
Direct File is an online IRS service for people to file federal tax returns for free directly with the tax agency. The IRS piloted the program earlier this year and announced in May that it would be a permanent option for taxpayers, citing positive marks on the tool from the over 140,000 taxpayers who used it to file their taxes.
It’s set to open to eligible taxpayers in 24 states when the upcoming filing season opens, likely putting its debut close to the start of the new administration, as the filing season historically opens in January and February and the inauguration is scheduled for Jan. 20.
Republicans have already tried to cancel the service with bills to prohibit the IRS from continuing its efforts and to block Direct File’s funding. At the same time, billionaire Elon Musk and former presidential candidate Vivek Ramaswamy are reportedly mulling the potential of an IRS tax filing app as part of their advisory work under Trump, although what will happen there isn’t clear.
Trump himself has signaled a new direction for the tax agency by suggesting he will oust current IRS Commissioner Danny Werfel before his term ends in 2027 and replace him with former Rep. Billy Long, R-Mo.
The House Republicans assert that the IRS running Direct File is a “clear conflict of interest” and that “the IRS has little incentive to ensure hardworking Americans do not pay more than they owe in taxes.”
The IRS is bound by the tax laws set by Congress. The tax agency did not respond to a request for comment.
“Under the guise of offering a convenient “free-to-file” alternative preparation service, the IRS asserts itself as the tax assessor, collector, preparer, and enforcer—all in one,” the letter states, asking Trump take action “including but not limited to a day-one executive order” to end the program.
The tax agency isn’t really operating as a tax preparer with the tool, said James McTigue, Jr., director of strategic issues for tax policy and administration at the Government Accountability Office, which has fielded a report on the program.
“The IRS Direct File system allows the taxpayer to prepare his or her own return through a series of questions that are derived from the tax code,” he said. “Ultimately it is the taxpayer who is preparing the tax return.”
The IRS decision to field the tool earlier this year was a marked change from the status quo.
Since the early 2000s, the government had relied on a partnership with commercial tax prep companies to offer most Americans a free tax filing option under the condition that the IRS wouldn’t make its own tool and compete with the tax prep industry, a clause that was removed in 2019.
That program, though, is vastly underused, with only 3% of those eligible using it from 2020 to 2024, according to a Treasury Department watchdog. Millions of Americans pay fees to file their tax returns with software provided by the same companies that were or are part of the program, called Free File.
In 2022, Intuit entered a settlement for pushing Americans toward paid TurboTax products even when they were eligible for free ones. Intuit is no longer part of the program, nor is heavy-hitter H&R Block. Both companies have previously described Direct File as a “solution in search of a problem” in comments to Nextgov/FCW.
Intuit has also come under scrutiny from the Federal Trade Commission for what the FTC called deceptive advertising of free tax filing products that millions of consumers couldn’t use.
Trump’s pick for the IRS backed bills to require the Treasury to continue the Free File program while he was in Congress. The Trump transition team didn’t immediately respond to a question from Nextgov/FCW of whether the incoming White House would cancel the service.
The IRS has said that Direct File won’t replace Free File but instead be an additional option for taxpayers.
The creation of Direct File put the IRS in line with other countries worldwide that offer similar tools, the former National Taxpayer Advocate Nina Olson previously told Nextgov/FCW.
Intuit has long lobbied against a government-run system, as ProPublica has documented. It set a new record for itself in lobbying dollars in 2023, according to Open Secrets. Other tax prep companies and trade associations also increased lobbying spend that year.
Supporters of Direct File say that it saves Americans time and money in tax filing. People spend 13 hours and $270 on filing taxes annually on average, although that varies for individuals, the IRS estimated last year.
That burden means that some people don’t file their taxes and miss out on benefits that are delivered through the tax code, like the Earned Income Tax Credit. Over 9 million people didn’t file returns to get benefits in the 2022 cycle, according to the IRS.
“Direct File is a common-sense digital government service for the 21st century, which would reduce administrative burden for low-income families, and allow them to get their information directly from their government — rather than from private intermediaries who do not have their best interests at heart,” the Coalition for Fair and Free Filing, made up of over 200 organizations, wrote to the IRS in 2023.
The House Republicans, meanwhile, write that the Direct File program wasn’t specifically authorized by lawmakers, calling it “a blatant overstep of constitutional authority,” an argument some Republican state attorneys general have also made.
Werfel told lawmakers earlier this year that the IRS has “a responsibility and an authority to offer taxpayers different approaches for how to meet their tax obligation” when asked about that point earlier this year, noting that not every tool that the IRS offers for taxpayers to meet their obligations is specifically spelled out in law.
The group behind the letter also call the program wasteful and inefficient, saying that it “is not an efficient use of government resources, especially when the private sector offers better tax preparation services at no cost.”
The IRS should promote Free File instead, the Republicans write. The total cost for the Direct File was just over $31 million.
Direct File hasn’t been without its challenges since Democrats included an ask for a report on the feasibility of such a system in their 2022 Inflation Reduction Act.
Direct File doesn’t help people file state taxes, for example, and the tool routes those in states with such taxes to state-side tools to finish out their filing.
The IRS also didn’t fully open Direct File until well into the tax season earlier this year, and the impact of identity proofing requirements on those using the tool is also an open question probed even by Democrats on Capitol Hill that support the tool.
Prepopulation, or the IRS pre-filling Direct File with information it already has, is a tricky subject, too, with some eager to see it used and others wary of its privacy implications.
Werfel called the IRS vision for tax administration nonpartisan when asked about the potential impact of the election earlier this year.
“We also think that it is nonpartisan that taxpayers should have options for how they file and that the broader the menu of options, the better,” he said.
Even if Direct File survives, the IRS will need multi-year funding to keep the program from becoming obsolete. Republicans have tried to slash the billions the IRS got via the Inflation Reduction Act.
PHOENIX — A Tucson man and former tax preparer was sentenced to 30 months in prison for filing false tax returns, authorities announced on Friday.
Nour Nour, 34, ran a tax return preparation business in Tucson, called “Skyman TaxLLC,” where he filed fraudulent federal income taxreturns for his customers.
From 2016 to 2018, he filed no fewer than 27 fraudulent returns, authorities said.
Nour’s scheme worked by falsely claiming extra business income for his clients. His clients would then receive inflated returns, which Nour used to pay himself sizeable “tax return preparation fees.”
His clients did not know he was filing fraudulent taxreturns for them, authorities said.
The 34-year-old will have to pay a fine of more than $150,000 to the United States Treasury for his actions.
The investigation was handled by IRS Criminal Investigation. The United States Attorney’s Office of Tucson managed the prosecution.
Many people think that Internal Revenue Service (IRS) publications are the definitive source of information about how to file your income taxes. Not so. The tax code, the Internal Revenue Code (IRC), is where the actual rules are published. Unfortunately, in addition to being thousands of pages long—as of 2024, the IRC page count was approximately 6,871—the average person can’t easily decipher the IRC.
To fill in the gaps, many secondary sources have been developed to help taxpayers make sense of the rules regarding their income taxes. These sources are intended to help you figure out how much income tax you owe and what tax credits and deductions you are entitled to.
Key Takeaways
The rules governing how income is taxed in the U.S. are incredibly complex.
Many information sources are available to help taxpayers understand the rules about what they are required to pay and what tax credits and tax deductions they may be eligible for.
Two sources are the Internal Revenue Code (IRC) and IRS publications.
You can also call the IRS, consult publications for tax professionals or those written for consumers, hire a tax professional, or get volunteer tax assistance through VITA.
The Internal Revenue Code (IRC) vs. Treasury Regulations vs. Revenue Rulings
The IRC contains the official, legally binding tax rules set forth by the U.S. Congress. Taxpayers can view the tax code online on the Office of the Law Revision Counsel’s website.
Treasury regulations—also referred to as tax regulations—are the U.S. Treasury Department’s official interpretation of the tax code. These are published in Title 26 of the Code of Federal Regulations (26 CFR) and are also available online on the website for the U.S. Government Publishing Office (GPO).
The advantage of consulting these sources is that the government provides them, so taxpayers can be assured that the information they contain is accurate. The disadvantage is that there is a vast amount of information, which can be difficult to understand. Unfortunately, if you don’t interpret a rule or regulation correctly and you make a decision regarding filing your income taxes based on your own misunderstanding, you will still be held liable for any mistakes you make on your taxes.
Revenue rulings are the IRS’s official interpretation of the code as it applies to specific situations. They may be easier for taxpayers to decipher, but they do not have the same legal bearing as the IRC–tax code itself—or the Treasury regulations.
Consult IRS Publications
IRS publications that provide interpretations of the tax code are available, summed up in printed booklets or online on the IRS website (click on “Find forms & instructions,” then check the menu on the left).
The publications are readily available, free, and relatively concise. They are also easier to understand than the tax code itself. However, for some people, the publications are still quite obtuse.
Make a Phone Call to the IRS
While calling the IRS might seem like an ideal solution, the IRS has this disclaimer for taxpayers: “If we should make an error in answering your question, you are still responsible for paying the correct tax.”
Essentially, if they provide the wrong information to you, you’ll still be held responsible. That means that if an audit after the fact determines that you paid less than you should have, even if you did so based on advice from a representative at the IRS, you will still have to pay back taxes and interest.
However, you will not be charged any penalty due to an IRS error. An IRS penalty is an additional amount the IRS sometimes charges to people who have underpaid their taxes. If you do call, take copious notes, including the representative’s name and title, and the time and date of your call.
Consult Texts for Tax Professionals
The publications that are published for an audience of certified public accountants (CPAs), accountants, and tax attorneys are some of the most detailed interpretations of the tax code available. Publishers include CCH and Tax Analysts.
However, these texts can be very expensive, and they are not written for a layperson audience. They are highly technical, and if you aren’t a CPA, accountant, or tax attorney, it may be hard to grasp the content in these expert sources.
Hire a Tax Professional
Most people who are experiencing difficulties with their tax returns will end up consulting a tax professional. Enrolled agents and CPAs are reliable and affordable sources of information. Hiring a professional may save you some time, even if it is an additional expense. To find a tax professional in your area, visit the National Association of Enrolled Agents or the Association of International Certified Public Accountants.
One possible disadvantage of hiring a professional is that if you don’t screen them carefully, you could end up with someone who applies a very liberal interpretation of the tax code to your financial situation. This can cost you dearly if you get audited. Keep in mind, however, that even among the most ethical and knowledgeable tax preparers, different professionals may prepare your returns differently based on their interpretations of the tax code.
The best way to guard against these discrepancies is to choose a professional whose interpretation of the tax code is most in line with your own philosophy of tax obligations. Are you the type who prefers to opt for deductions aggressively and hope for the best, or would you prefer to err on the side of caution? An experienced tax preparer will be able to articulate their stance so you can see if it matches up with your own vantage point. You may also want to ask how much experience the person has with preparing returns similar to yours, especially if your tax situation is unusual.
Seek Volunteer Income Tax Assistance
The IRS has a program for providing assistance to low-to-moderate-income individuals with their tax returns. This program is called Volunteer Income Tax Assistance (VITA). Volunteers trained by the IRS help taxpayers by answering their tax questions and preparing their tax returns. VITA has a special emphasis on helping low-income taxpayers understand any advantages the tax code may include for individuals specifically in their situation, like how to claim the earned income tax credit (EITC) and the child tax credit.
Help is available for free to qualified taxpayers. Individuals typically qualify based on their income; for tax year 2024, if your income does not exceed $67,000, you may qualify for assistance through VITA. The tax preparers that work for VITA are volunteers, and they may not have professional-level tax training, so it’s possible they may not always give correct advice. In addition, their training is typically only intended to help with relatively simple tax returns.
Consult Publications for a Consumer Audience
Numerous consumer publications exist that are intended to educate the average taxpayer about income tax issues and help them take advantage of all the credits and deductions they are entitled to. Some of the most reliable, up-to-date, and widely respected sources include books published by Nolo, J. K. Lasser, and Ernst & Young.
These books are affordable (generally $25 or less) and easy to find in local bookstores and online. While libraries may have copies, they may not be the most recent versions. Of all the credible sources that attempt to interpret the tax code for individual taxpayers, these books are probably the easiest to understand.
The Bottom Line
The rules governing how income is taxed in the U.S. are incredibly complex. In order to fully understand what you are required to pay (and what you aren’t), you should consult the most reliable source of information that you can understand and afford. Finally, if you are ever audited, there’s always a chance you may be required to pay more than you expected. This is yet another good reason for keeping some money in an emergency savings account.
Colorado small businesses claim they are being overcharged on their unemployment insurance taxes.
The issue stems from a glitch in a new state computer system that companies are using to report information on wages and employment to Colorado. The data on wages is used to calculate how much in taxes businesses have to pay into the unemployment insurance fund.
In April, businesses started to receive notices from the state alerting them to interest and penalties owed on unemployment insurance taxes, according to Tricia Petteys, the cofounder of Payroll Vault Franchising in Littleton. Her company provides payroll services to roughly 1,000 small businesses across Colorado. That service includes making sure employees get paid, as well as remitting tax payments to the government.
“We knew we had already made the payments, that there shouldn’t be any balances due, and we were very confused over what was going on,” said Payroll Vault’s tax resolution specialist Jolinda Sumrall.
A customer service representative at Colorado’s labor department told Sumrall there were problems transferring data from previous years into the new computer system. Some of the information got scrambled when it moved over, according to the representative, leading to incorrect Social Security numbers being entered in the system and inflated wages. The erroneous wage data is what’s leading to the state’s demands for interest and penalties, according to Sumrall.
There are errors in data submitted as far back as 2019, according to Sumrall. Roughly 30 percent of the company’s clients are experiencing the problem. The state instructed Sumrall to go in and manually re-enter the correct data.
“I have 300 to 500 of these … I don’t have time to go in and just manually enter in data for certain employers,” Sumrall said.
Sumrall was directed to a different person at the labor department for further assistance. But, according to Sumrall, that employee’s voicemail box was full. Emails went unanswered for weeks. When Sumrall finally got a response, she was essentially told it was the employers’ fault – not the state’s. It was a contentious phone call.
“Our modernized system has different reporting requirements than our old system, including more detailed wage reports,” a spokesperson for Colorado’s labor department said in an emailed statement to CPR. “It isn’t that the system isn’t working properly, it’s that it’s missing the more detailed data that was not provided by employers … in prior quarters.”
The spokesperson added that the department put a number of direct response channels in place since launching the new system, including a help form.
“[Third-party administrators]payroll companies and their clients are encouraged to contact us for support by using the “Contact Us” feature directly in MyUI Employer+ or by calling (303) 318-9100,” the spokesperson said.
Petteys is telling clients not to pay anything.
“We need a solution within Colorado unemployment to fix the problem and to remove any of the premiums owed and the penalties and interest because they do not owe those,” she said. “It’s very upsetting for [businesses] to get these notices .… Maybe you have somebody that has a state contract. And they’re very worried that something in the state contract’s going to get held up .… Clients are pretty upset that they continue to receive these notices.”
The data on wages isn’t the only error that’s cropped up with the new computer system. Colorado’s labor department is also struggling with incomplete data on how many jobs are being created. In March, the U.S. Bureau of Labor Statistics noted that starting late last year, Colorado’s employment numbers were unreliable.
Kinks aren’t uncommon when new information technology systems are rolled out. They’re complicated and cumbersome projects that can take years to implement and cost tens of millions of dollars.
But Colorado’s labor department has kept the problems under wraps, making it difficult for the various groups that rely on the system to understand what’s going on. For instance, the state didn’t tell journalists during a press call earlier this year that the information on employment being presented was pulled in part from incomplete statistics.
There’s no clear timeline for when the kinks are going to be worked out.
“As with any reporting requirement, the accuracy of wage reporting and required adjustments is an ongoing business process regardless of the system in place,” the labor department spokesperson said.
Payroll Vault’s Sumrall escalated the issue to Gov. Jared Polis’ office. A person from Polis’ office told her they are aware of the problems, but that the state labor department isn’t returning their calls, either. A spokesperson for Polis directed CPR to speak with the labor department when asked whether Polis was working on a solution.
“My feeling has been since I’ve been communicating with them is that they really want to keep this kind of quiet … They don’t want people to know what’s going on because it would be very upsetting,” Sumrall said.
Colorado keeps quiet about faulty job data as federal agency calls out the erratic numbers
Colorado officials delay new jobs data, months after the federal government raised a red flag on their reliability
Top 50 accounting firm Cohen & Co., which announced in October that it was getting an infusion of private equity funding from Lovell Minnick Partners, has made its first deal since that investment, picking up Cleveland-based boutique CPA firm Tax and Wealth Management (TWM) Inc.
Financial terms of the deal weren’t disclosed. The transaction is expected to close in early January 2025.
All 15 TWM professionals are expected to join Cohen & Co. once the deal is complete, including founder and president Brian Gothot and two managing directors, Doug Shostek and George Gothot, who will become partners.
Chris Bellamy
“We have known Brian and the work of his TWM team for many years and have tremendous respect for each other, our similar firm cultures and client service philosophies,” Chris Bellamy, CEO of Cleveland-based Cohen & Co., said in a statement. “This is a great strategic fit that will reinforce and build on our private client services specialized to family offices and high-net-worth individuals. TWM’s practice and next-generation leadership will be an integral part of our accelerated growth in these areas.”
Founded by Gothot through a spin-off of a global family office practice, TWM serves individuals and families with complex tax, estate, and financial needs. The firm focuses on custom tax and accounting advisory services to a concentrated group of clients, including family offices and ultra-high-net-worth individuals, as well as corporate executives working internationally.
“The move to join Cohen & Co. is right for us and serves as part of a longer-term succession plan for TWM,” Gothot said. “We’ve been extremely impressed with their leadership team and the firm’s strategic vision. We are excited to join the Cohen & Co. platform and make a meaningful impact together.”
This acquisition is Cohen & Co.’s third in the past 18 months. The firm added BBD’s Investment Management Group in Philadelphia and Szymkowiak & Associates CPAs in Buffalo, NY.
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