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Craig Smalley

Craig W. Smalley, MST, EA, is the Founder and CEO of CWSEAPA, PLLC. He has been admitted to practice before the Internal Revenue Service as an Enrolled Agent and has a Master’s Certificate in Taxation from UCLA. In practice since 1994, Craig is well-versed in U.S Tax Law and U.S. Tax Court cases, and specializes in individual, partnership, and corporate taxation for high-net-worth clients; entity structuring and restructuring; and representation before the IRS regarding negotiations, audits and appeals. Craig is currently a columnist for CPA Practice Advisor and AccountingWEB and has had 12 books published. His articles have been featured in publications including the Wall Street Journal, The New York Times, and Christian Science Monitor, and he has been interviewed and appeared as a featured guest on numerous radio shows and podcasts. Craig can be reached at craig@craigwsmalleyea.com.

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Small Business

Asset Protection

Most people know that you can form a limited liability company (LLC), or a corporation to protect their personal assets. However if you use your corporation or LLC as your personal piggy bank, you could get in trouble.

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Small Business

Cannabis Business Accounting: Bad Debts

If you are on the accrual method of accounting, and you recognize income as it is incurred and someone doesn’t pay you, you have a bad debt. However in cannabis you are stymied by Section 280E, which only allows cost of goods sold (COGS) to be deducted.

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Benefits

Another Look at the Tax Effects of the American Rescue Plan of 2021

The good news is the first $10,200 that most taxpayers received in unemployment benefits of up to $10,200 are not taxable for 2020. If you have already filed your tax return for 2020 the IRS is asking you to not file an amendment, as they will take ...

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Firm Management

A New Kind of Cannabis Business: The Legalities of Delta 8 THC

As the Farm Bill states, hemp and any derivative there of is legal. Delta-8 is a derivative of the hemp plant and is therefore legal.

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Employee or Contractor? Have Uber and Lyft Finally Crossed The Line?

The IRS, has very strict rules deeming which people are employees and ones that are not. The tests are rather simple to follow. They all boil down to whether the employer has “control” over the employee.

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Rev Proc 2019-08 – Expansion of Depreciation

With the TCJA, Section 179 was expanded to allow taxpayers to deduct up to $1 million for certain fixed assets, placed in service after 2017. The increase to $1 million under the Act rose the previous deduction that was $500,000.

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Technology

The Effect of Rev. Rul. 2019-9, 2019-14 IRB

The immediate effect of Rev. Rul. 2019-9, would allow for a tax-free distribution of stock and securities to its shareholders, provided the controlling corporation and the active corporation are engaged in an active conduct of trade or business ...

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The New Timing of Income Inclusion Under Section 83(i)

Under TCJA, if a Code Sec. 83(i) election (also called an inclusion deferral election) is made, then the tax year of inclusion is the employee's tax year that includes the earliest of (Code Sec. 83(i)(1)(B)):

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Tax Court Clarifies What Cost of Goods Sold is for Cannabis Companies

In Patience Mutual Assistance Corp, et al, the Tax Court has denied a California medical cannabis company’s deduction for ordinary and necessary expenses, and cost of goods sold (COGS).

TCJA Provides Greater Accounting Changes for Businesses

A business using the accrual method reports income when all events fixing the right to the income have occurred and the amount can be determined with reasonable accuracy. (Reg §1.451-1(a)) The first part of this test (the all events test) is met on ...

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The IRS Can Cause Your Passport to Be Revoked Without Warning

If you don’t pay your taxes, the IRS may revoke your passport. And you might not even know until you get to the airport.

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Firm Management

How Accountants Can Get Started Serving Cannabis Clients

Cannabis is a very close knit community where everyone seems to know everyone. Breaking into the industry is not as easy as you may think. First of all you have to have some sort of angle. For instance, mine is that I have found a way around IRC §280e ...