Latest news with #taxaudit
Associated Press
a day ago
- Business
- Associated Press
Clear Start Tax Warns: IRS Targets Digital Payments and 1099-K Filers in 2025 Crackdown
New Rules and Lower Thresholds Put Freelancers, Gig Workers, and Online Sellers at Greater Audit Risk IRVINE, CA / ACCESS Newswire / June 9, 2025 / The IRS is tightening its focus on digital payments and third-party transactions in 2025 - and many taxpayers may not be prepared. According to Clear Start Tax, a national leader in tax resolution, individuals receiving income through platforms like Venmo, PayPal, Etsy, and eBay could face new scrutiny as the IRS expands its oversight of 1099-K forms and enforces a much lower reporting threshold. Key IRS Changes Affecting Digital Income in 2025 Under updated IRS rules, third-party payment processors must now issue a 1099-K for total transactions exceeding $600 annually - a steep drop from the previous $20,000 threshold. That change significantly broadens the number of taxpayers who will receive tax documents for digital income they may not have previously reported. Clear Start Tax explains that the new rules aim to reduce underreporting and close the tax gap-but they also put part-time sellers, freelancers, and side-hustlers in the IRS's spotlight. 'The IRS is no longer just looking at traditional income sources,' said the Head of Client Solutions at Clear Start Tax. 'Anyone who uses payment apps or sells online-even casually-could now find themselves facing unexpected tax bills or even audit risk.' Taxpayers Most Likely to Be Affected This shift affects a wide range of Americans, not just full-time business owners. Clear Start Tax identifies the following groups as most vulnerable to missteps or enforcement: Failing to accurately report these earnings or ignoring a 1099-K entirely can trigger IRS notices, penalties, or audits. See if you qualify for relief through the IRS Fresh Start Program by completing a free Tax Relief Survey today. It only takes a few minutes to take the first step toward resolution. Why Documentation Matters More Than Ever Taxpayers receiving 1099-K forms may find themselves confused about how much of that total is truly taxable. Without good recordkeeping, it becomes difficult to separate personal transfers from income, or subtract legitimate business expenses. 'We've seen clients receive 1099-K forms for transactions that weren't income at all,' said the Head of Client Solutions. 'That's why it's critical to keep clear records and respond properly - because the IRS assumes the full amount is taxable unless proven otherwise.' How Clear Start Tax Helps Digital Earners Stay Compliant As these reporting rules evolve, Clear Start Tax provides essential support for taxpayers navigating the new landscape. The firm helps clients: Clear Start Tax emphasizes early intervention as the best way to avoid penalties and keep digital earners on track with IRS expectations. About Clear Start Tax Clear Start Tax is a full-service tax liability resolution firm that serves taxpayers throughout the United States. The company specializes in assisting individuals and businesses with a wide range of IRS and state tax issues, including back taxes, wage garnishment relief, IRS appeals, and offers in compromise. Clear Start Tax helps taxpayers apply for the IRS Fresh Start Program, providing expert guidance in tax resolution. Fully accredited and A+ rated by the Better Business Bureau, the firm's unique approach and commitment to long-term client success distinguish it as a leader in the tax resolution industry. Need Help With Back Taxes? Click the link below: Contact Information Clear Start Tax Corporate Communications Department [email protected] (949) 535-1627 SOURCE: Clear Start Tax press release
South China Morning Post
26-05-2025
- Business
- South China Morning Post
From salaries to side gigs and audits: how to navigate Hong Kong's tax system
The tax filing season in Hong Kong is in full swing, with June 2 marking the deadline for most individuals. Tax audits have come under scrutiny recently after at least 20 journalists raised concerns about 'unreasonable' reviews targeting them and their families. The Inland Revenue Department (IRD) Commissioner dismissed these claims, stressing that assessment procedures were applied uniformly and did not target specific industries or individuals based on their background. The Post provides a guide on what to pay attention to regarding filing requirements, with insights from taxation experts on the recent audit controversy. 1. How to file your tax return and what are the key deadlines? The government issued the Individual Tax Returns for 2024-25 on May 2, 2025, requiring taxpayers to report their salaries, rental income from solely owned properties and profits from sole-proprietorship businesses. The tax return must be filed within one month from the date of issue, or within three months if the taxpayer solely owned an unincorporated business during the year of assessment. An automatic extension of one month will be given for filing the tax return for the year electronically through a service called eTAX. An eTAX account holder can file their taxes online as long as they do not claim an exemption on their income, does not own any sole proprietorship business with gross income of more than HK$2,000,000, has not claimed double taxation relief, or has not obtained an advance tax ruling for that year.
South China Morning Post
24-05-2025
- Business
- South China Morning Post
Hong Kong tax chief dismisses claims reporters singled out for audits
Hong Kong's tax chief has dismissed concerns that at least 20 reporters and their family members are being selectively audited, saying assessment procedures are applied uniformly and do not target specific industries or individuals based on their background. Earlier this week, the Hong Kong Journalists Association (HKJA) raised concerns about the number of reporters and their family members being subject to what they called unreasonable tax reviews for allegedly under-reporting their income. Commissioner of Inland Revenue Benjamin Chan Sze-wai brushed aside the accusations on Saturday, saying: 'Some taxpayers have asked whether the Inland Revenue Department conducts tax audits based on special industries or specific backgrounds. 'I want to emphasise that we absolutely do not do this, nor do we have this practice. Our system treats all taxpayers consistently; all taxpayers have the chance to be invited for a tax audit.' On Wednesday, the HKJA said that at least 20 journalists had been reviewed by the department for salary and profits taxes, and were asked to pay about HK$1 million (US$127,700). After applying to the department for postponement of payment, they were still required to pay about HK$90,000.
The Guardian
22-05-2025
- Business
- The Guardian
Hong Kong authorities trying to disrupt independent press with ‘strange' tax audits
Hong Kong authorities have targeted journalists and media outlets with what are supposed to be 'random' tax audits, in a move the industry union says adds pressure to waning press freedoms. The head of the Hong Kong Journalists Association, Selina Cheng, detailed what she said were 'strange' and 'unreasonable' accusations by Hong Kong's inland revenue department. Requests or audits were made against the association, at least eight independent media outlets, and at least 20 journalists and their family members, including Cheng and her parents, she said at a press conference on Wednesday. Cheng said the tax department had told one journalist that they had to pay a profit tax for a company which they did not run, and had cited a registration number which did not exist. Another company was told it was being audited for profits made during the year before it was even founded. One journalist had their income 'assessed' as double the amount they had actually earned, and was issued a demand for prepayment of tax on the 'underreported' income. 'Does the average news worker have the resources to hire an auditor to handle it?' Cheng asked. 'We are concerned that tax investigations will put a financial and mental strain on media workers, disrupt our reporting and prevent us from focusing our journalistic work.' Among the media outlets listed as targets were InMedia HK and the English-language Hong Kong Free Press (HKFP), and the latter's founder, Tom Grundy. HKFP said it had been 'randomly selected' for a seven-year audit in 2024, and that the IRD had twice requested 'hold sums' which were later reduced to zero after the outlet objected. 'HKFP has always met its tax obligations, paid IRD demands immediately, and ensured meticulous record-keeping since our 2015 inception,' it said. 'The delays involved, and wide scope of these inspections, raise questions about the burden on the taxpayer and tax office resources … Recent scrutiny has diverted resources, manpower and funds away from journalism as we face a fourth year of financial deficit.' In a statement on X, Grundy said the outlet had 'expected this kind of thing years ago', and had been 'obsessive' in its record keeping and financial transparency. 'I'm having to act as a one-man compliance department instead of a journalist,' he said about the 15 month-long process so far. Citing IRD figures, Grundy said the chance of being 'randomly' selected for an IRD audit was about 0.123%. 'The probability drops much further when considering almost all independent media outlets were coincidentally, simultaneously selected.' Aleksandra Bielakowska, advocacy manager at Reporters Without Border Asia-Pacific, said Hong Kong and Chinese authorities were doing everything in their power 'to close remaining media outlets … and make sure there's only one narrative coming from the Chinese Communist party. If they can't put people in jail they'll pressure them and their families to dissuade – or even prevent – them from reporting on the ground', she told the Guardian. Hong Kong's media has come under increasing pressure and persecution since the government crackdown on the pro-democracy movement ushered in a Beijing-designed national security law. Several outlets have been forced to close or relocate, including Apple Daily, whose founder, Jimmy Lai, is on trial for alleged offences under the NSL, and Stand News, whose two former editors were jailed for sedition last year. The Stand News sentencing came just weeks after the HKJA revealed a campaign of 'systemic and organised' harassment of journalists and outlets, many of which Cheng said on Wednesday were also among those questioned by the tax authorities. The harassment included death threats and threatening and defamatory complaint letters being sent to reporters' families and their employers, landlords and neighbours. In the latest Reporters Without Borders' World Press Freedom Index, Hong Kong ranked 140 out of 180 countries, down from 80 in 2021 The IRD has been contacted for comment. In a statement to the Associated Press, it said it did not comment on individual cases but 'the industry or background of a taxpayer has no bearing on such reviews'. Additional research by Lillian Yang
South China Morning Post
21-05-2025
- Business
- South China Morning Post
Hong Kong journalist group slams ‘tax review on 20 reporters, groups'
Hong Kong authorities have reviewed the taxes of at least 20 reporters and their family members for allegedly under-reporting their income and have asked them to prepay about HK$1 million, the city's largest journalism group has said, arguing there was insufficient evidence for the reassessments. The Hong Kong Journalists Association also said on Wednesday that the Inland Revenue Department's moves had inevitably placed extra stress on the reporters and media organisations in a challenging environment, negatively affecting press freedom. According to the association, at least 20 journalists had been reviewed by the department for salaries tax, profits tax or rates, and were asked to pay around HK$1 million (US$128,200). After applying to the department for 'holding over', or postponement of payment, they were still required to hand over around HK$90,000. The association and seven media platforms also had their profits tax and salaries tax reviewed. They were initially asked to pay around HK$700,000 and then about HK$300,000 after applying for holding over. The group argued that the assessments and the audits were not started based on sufficient information, evidence or reasonable grounds. For instance, in some cases, the department had treated all bank transactions – including money transfers – as income and had accused an individual of under-reporting income by citing a business registration number not belonging to him or her, it said.
