Law Office of Camron Hoorfar Says Farewell After Fourteen Years in Business

On September 1, 2022, the Law Office of Camron Hoorfar, P.C. will be the Law Office of Tyler Gibson, P.C.  After fourteen (14) years in business, attorney Camron Hoorfar has sold a portion of his practice to attorney Tyler Gibson.  Attorney Tyler Gibson previously worked for the Law Office of Camron Hoorfar, P.C. for over six (6) years before opening his own law office.  On September 1, 2022, the Law Office of Camron Hoorfar, P.C. will no longer be assisting clients.  Moving forward, the Law Office of Tyler Gibson, P.C. will be able to assist you with your legal needs.  Attorney Tyler Gibson and his team will continue to provide the same great service that you previously received.

Camron would like to thank you for your continued loyalty and patronage over the years.  Camron has greatly valued the relationships that have been built over the past fourteen (14) years.  The Law Office of Camron Hoorfar, P.C. could not have been successful without your support. 

If you would like to contact Tyler, you may call him at 816-524-4949 or email him at Tyler@tgibsonlaw.com.  If you need to contact Camron, you may email him at Choorfar@Hoorfarlaw.com.

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Pandemic Did Not Support Impossibility Defense 

In an action for breach of contract, on a motion for summary judgment, defendant raised the affirmative defense that performance was impossible. That defense requires proof that defendant did “virtually” everything “within its powers to perform its duties under the contract.” The summary judgment record shows no such effort. “Defendants conflated performance pursuant to the Note (repayment of a loan) with running their business in order to repay the Note. The fact that it may have been impossible to operate a valet services business during the COVID-19 pandemic does not render it impossible to perform the terms of the Note.” Note and Guaranty provided attorney fees for enforcement, so the Court of Appeals remands the action to circuit court to determine the amount of the award. 
Premier Valet, LLC, Respondent, v. Premier Valet Services, LLC, and Brian Canavan, Appellants. 
(Overview Summary) 
Missouri Court of Appeals, Eastern District – ED110242

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What you should know about crowdfunding and taxes

Crowdfunding is a popular way to raise money online. People often use crowdfunding to fundraise for a business, for charity, or for gifts. It’s important to know that money raised through crowdfunding may be taxable.

Some money raised through crowdfunding may be considered a gift.
Under federal tax law, gross income includes all income from any source, unless it’s excluded from gross income by law. In most cases, gifts aren’t included in the gross income of the person receiving the gift. Here’s what people involved in crowdfunding should know:

  • If a crowdfunding organizer is raising money on behalf of others, the money may not be included in the organizer’s gross income, as long as the organizer gives the money to the person for whom they organized the crowdfunding campaign.
  • If people donate to a crowdfunding campaign out of generosity and without expecting anything in return, the donations are gifts. Therefore, they will not be included in the gross income of the person for whom the campaign was organized.
  • However, not all contributions to crowdfunding campaigns are gifts and may be taxable.
  • When employers give to crowdfunding campaigns for an employee, those contributions are generally included in the employee’s gross income.

Taxpayers may want to consult a trusted tax pro for information and advice regarding how to treat amounts received from crowdfunding campaigns.

People may receive Form 1099-K for money raised through crowdfunding.
The crowdfunding website or its payment processor must file Form 1099-K, Payment Card and Third Party Network Transactions with the IRS if:

  • The amount raised is more than $600
  • Contributors to the crowdfunding campaign receive goods or services for their contributions.

If a Form 1099-K is filed, the crowdfunding organizer or the beneficiary of the fundraiser will receive a copy, depending on who received the funding directly from the crowdfunding website.

Receiving a Form 1099-K doesn’t automatically mean the amount shown is taxable. However, if the taxpayer doesn’t include the distributions from the form on their tax return, the IRS may contact the recipient for more information. The recipient may need to explain why the crowdfunding distributions weren’t reported.

Recordkeeping for money raised through crowdfunding.
People who run crowdfunding campaigns or receive money from one should keep careful records about the campaign and the disposition of funds for at least three years.

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A Golf Cart Can Be an Exempt Motor Vehicle

Those no longer able to drive cars will be pleased to learn that a golf cart can be exempt as a “motor vehicle,” at least in Oklahoma. Bankruptcy Judge Janice D Loyd of Oklahoma City said that hers was the first opinion in the country to take on the exemption status of a golf cart. Her opinion, however, does not say whether a golf cart would remain exempt if it were actually used to pay golf. She also does not state whether or not a golf cart would be exempt if it were electric-powered.

Want to speak with an attorney? Call our office at 816-524-4949 or click here to schedule a consultation.

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Peculiar Business Owner Pleads Guilty to Tax Evasion

The owner of a Peculiar, Mo., business pleaded guilty in federal court to tax evasion. Jason Rigoli, 42, waived his right to a grand jury and pleaded guilty before U.S. District Judge Stephen R. Bough to a federal information that charges him with one count of tax evasion.

Rigoli, who has owned and operated Granite Construction Services, LLC, since 2006, admitted that he has not filed a federal personal, business, or employment tax return since at least 2013. Rigoli also failed to pay state income taxes, state employment taxes, workers’ compensation taxes and unemployment taxes. As part of his scheme, Rigoli used his business bank accounts for all his personal expenses. Rigoli used proceeds of his tax fraud to pay for travel, restaurant meals, and liquor. Rigoli falsely told IRS agents that he always paid his employees by check. Rigoli also falsely told IRS agents that he paid his employees “by 1099,” when in fact, Rigoli often paid employees with cash and filed no Forms W-2 or Forms 1099 for his employees.

Under the terms of the plea agreement, Rigoli must pay restitution to the IRS in the amount to be determined by the court at sentencing. Rigoli must pay $10,188 in restitution for unpaid employment taxes. The government may argue at the time of sentencing that the attempted loss from Rigoli’s criminal scheme totaled $250,000 to $550,000. Under federal statutes, Rigoli is subject to a sentence of up to five years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

Need to speak to an attorney? Call our office at 816-524-4949 or click here to schedule a consultation.

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Missouri used car salesman hid over $300,000 in commissions from IRS

A used car salesman from Imperial, Missouri, appeared in federal court and confessed to hiding over $300,000 in sales commissions from the IRS. Prosecutors with the U.S. Attorney’s Office for the Eastern District of Missouri said Donald Benck pleaded guilty to three counts of making a false statement on an income tax return. Between 2014 and 2016, Benck recruited acquaintances to collect commissions by check, which they’d cash in and give that money to Benck. His acquaintances would then keep a small fee for themselves. The checks the acquaintances cashed add up to about $326,000 in checks.

Benck’s employer gave 1099 forms to his acquaintances since Benck did not report the income on his tax returns or notify his tax return preparer of the commissions. According to the prosecutors, Benck underreported his income on 1040 forms for 2014-2016. Benck declined to document $31,300 of his income in the 2014 tax year, $131,400 for 2015, and $93,035 for 2016. As a result, the IRS reported a tax loss of $84,092. Benck’s sentencing is set for November 18.

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College students should study up on these two tax credits

Anyone pursuing higher education, including specialized job training and grad school, knows it can be pricey. Eligible taxpayers who paid higher education costs for themselves, their spouse or dependents in 2021 may be able to take advantage of two education tax credits. The American opportunity tax credit and the lifetime learning credit can help offset education costs by reducing the amount of tax they owe. If the American opportunity tax credit reduces the tax to zero, the taxpayer could receive a refund up to $1,000.

To be eligible to claim either of these credits, a taxpayer or a dependent must have received a Form 1098-T, Tuition Statement, from an eligible educational institution. However, there are exceptions for some students. To claim either credit, taxpayers must complete Form 8863, Education Credits, and file it with their tax return.

Here are some key things taxpayers should know about each of these credits.

The American opportunity tax credit is:

  • Worth a maximum benefit of up to $2,500 per eligible student
  • Only available for the first four years at a post-secondary or vocational school
  • For students pursuing a degree or other recognized education credential
  • Partially refundable; Taxpayers could get up to $1,000 back

The lifetime learning credit is:

  • Worth a maximum benefit of up to $2,000 per tax return, per year, no matter how many students qualify
  • Available for all years of postsecondary education and for courses to acquire or improve job skills
  • Available for an unlimited number of tax years

Need tax help? Call our office at 816-524-4949 or click here to schedule a consultation.

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New school year reminder to educators: maximum educator expense deduction rises to $300 in 2022

As the new school year begins, the Internal Revenue Service reminds teachers and other educators that they’ll be able to deduct up to $300 of out-of-pocket classroom expenses for 2022 when they file their federal income tax return next year.

Courtesy of the Internal Revenue Service

This is the first time the annual limit has increased since the special educator expense deduction was enacted in 2002. For tax years 2002 through 2021, the limit was $250 per year. The limit will rise in $50 increments in future years based on inflation adjustments.

For 2022, an eligible educator can deduct up to $300 of qualifying expenses. If they’re married and file a joint return with another eligible educator, the limit rises to $600. But in this situation, not more than $300 for each spouse.

Who qualifies?
Educators can claim this deduction, even if they take the standard deduction. Eligible educators include anyone who is a kindergarten through grade 12 teacher, instructor, counselor, principal or aide in a school for at least 900 hours during the school year. Both public and private school educators qualify.

What’s deductible?
Educators can deduct the unreimbursed cost of:

  • Books, supplies and other materials used in the classroom.
  • Equipment, including computer equipment, software and services.
  • COVID-19 protective items to stop the spread of the disease in the classroom. This includes face masks, disinfectant for use against COVID-19, hand soap, hand sanitizer, disposable gloves, tape, paint or chalk to guide social distancing, physical barriers, such as clear plexiglass, air purifiers and other items recommended by the Centers for Disease Control and Prevention.
  • Professional development courses related to the curriculum they teach or the students they teach. But the IRS cautions that, for these expenses, it may be more beneficial to claim another educational tax benefit, especially the lifetime learning credit. For details, see Publication 970, Tax Benefits for Education, particularly Chapter 3.

Qualified expenses don’t include the cost of home schooling or for nonathletic supplies for courses in health or physical education. As with all deductions and credits, the IRS reminds educators to keep good records, including receipts, cancelled checks and other documentation.

Reminder for 2021 tax returns being filed now: Deduction limit is $250
For those who received a tax filing extension or still need to file a 2021 tax return, the IRS reminds any educator still working on their 2021 return that the deduction limit is $250. If they are married and file a joint return with another eligible educator, the limit rises to $500. But in this situation, not more than $250 for each spouse.

Need tax help? Call our office at 816-524-4949 or click here to schedule a consultation.

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IRS announces interest rate increases for the fourth quarter of 2022; 6% rate applies to most taxpayers starting Oct. 1

The Internal Revenue Service today announced that interest rates will increase for the calendar quarter beginning Oct. 1, 2022.

For individuals, the rate for overpayments and underpayments will be 6% per year, compounded daily, up from 5% for the quarter that began on July 1. Here is a complete list of the new rates:

  • 6% for overpayments [5% for corporations]. (payments made in excess of the amount owed)
  • 5% for the portion of a corporate overpayment exceeding $10,000.
  • 6% for underpayments. (taxes owed but not fully paid)
  • 8% for large corporate underpayments.
Courtesy of the Internal Revenue Service

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.
Generally, for a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points, and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

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Americans’ Credit Card Debt Had the Biggest Jump in More than Two Decades

Americans added an additional $46 billion to their credit card debt during the second quarter amid the ongoing decades-high inflation. Balances saw the most severe increase in over 20 years, according to the Federal Reserve Bank of New York. Credit card debts grew 5.5% from the first to second quarters and 13% year-over-year. The report indicates that Americans are experiencing extreme financial hardship as talk of a potential recession persists and borrowing costs and debts continue to climb. Overall, American’s mortgage and non-mortgage debt increased by $312 billion during the second quarter. This marks the most substantial nominal increase since 2016, according to a New York Fed statement.

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