In an unusual move, the IRS recently issued Notice 2011-72 determining personal use of employer provided cell phones is not taxable to the employee. Additionally, no record-keeping of usage is required. This is in stark contrast to many other provisions of the Internal Revenue Code that have strict record-keeping and substantiation requirements. Read more
Earlier this year a foreign LLC lost an appeal before the California Board of Equalization because its sole member was a California resident and it was unable to prove that it did not conduct business within California (Appeal of Legend Plus Enterprises, LLC (February 22, 2011) Cal. St. Bd. of Equal. Case No 486026.) If you are a California resident and a member of an LLC formed in another state the LLC may be subject to the CA LLC annual tax even if there is no California source income. At first glance it may seem that the LLC is not subject to the tax since it is an out of state entity. However, the FTB presumes the entity is doing business in California if the LLC has a California member. It is up to the taxpayer to prove otherwise. Read more