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Showing 25 posts by Nicholas M. Oertel.

Do I Need a Private Placement Memorandum to Raise Investment Capital?

Handing Over CheckThe short answer is that it depends, but it is usually advisable and sometimes required. Let’s dig deeper.

Initially, let’s discuss what a PPM is. A PPM is a document that discloses information regarding the company that is seeking to raise investment capital. In some ways, it is like a business plan, but with detailed additions for investment risk factors, securities law provisions, and the proposed terms of investment. PPMs go by a variety of names – including confidential information memorandums (CIMs) and offering memorandums. Read More ›

Categories: Crowdfunding, Tax, Venture Capital/Funding

Michigan Sales and Use Tax Audits: What You Need to Know

Sales and Use taxes are basically a 6 percent tax on the sale, use and consumption or storage of tangible personal property in the state of Michigan. Michigan has ramped up its enforcement of these two taxes. In short, Michigan is getting less revenue from its traditional tax basis so the state is really looking to enforce compliance with the sales and use tax more than what they used to. What does that mean for you? It means that you might get audited. Learn more about what you should do if you get audited in the video below.

Categories: Sales Tax, Use Tax

Michigan Other Deductions Manual – A Helpful Resource for Sales and Use Tax Exemptions

The Michigan Department of Treasury has published its Other Deductions Manual (the “Manual”). The Manual provides a listing and analysis of the common sales and use tax exemptions. 

If you are a business subject to Michigan sales or use tax, then the Manual is a helpful resource to have on file.

The Manual can be downloaded by clicking this link.  

Categories: Sales Tax, Use Tax

Online Retailers Beware: Michigan “Click-Through” and Affiliate Nexus

Are you an out-of-state business making Internet sales into Michigan? If so, take notice.

The Michigan Main Street Fairness Act (the “Act”) is now effective. Designed to level the playing field between “brick and mortar” retailers and out-of-state Internet sellers, the Act creates two new tests whereby out-of-state sellers are presumed to have Michigan nexus. 

A quick reminder – if an out-of-state seller has Michigan nexus, then it is required to collect and remit 6 percent Michigan sales tax on all sales to Michigan residents.

Test #1 is the affiliate nexus test. Under the affiliate nexus test, an out-of-state retailer will be presumed to have Michigan nexus (i.e., required to collect and remit 6 percent Michigan sales tax on all Michigan sales) if the seller or an affiliate of the seller:  Read More ›

Categories: Compliance, Sales Tax

Michigan Sales and Use Tax Audits

Every year, the Michigan Department of Treasury audits Michigan businesses for compliance with the Sales and Use tax laws. Oftentimes, those audits result in tax assessments that are disputed by the taxpayer. But, how does a taxpayer navigate the audit process and challenge a tax assessment? Read More ›

Categories: Sales Tax, Tax, Use Tax

Failure to Follow Michigan Tax Requirements Creates Personal Liability for Corporate Officers

A commonly-recognized feature of many business entities is the "shield" that protects officers, members, managers, and partners from personal liability for the business's actions. However, that "shield" does not protect the officers of a company from all liability. Importantly, if a business fails to pay its taxes, then the key officers of the business can be held personally liable for the unpaid taxes of the business. Read More ›

Categories: Compliance, Sales Tax, Tax

Kickstarter and Crowdfunding can provide much needed business funds – and a big tax bill

business fundsKickstarter is a crowdfunding platform for creative projects. Project creators set a funding goal and deadline for their project, and if people like the project, they can pledge money to help make it happen. From movies to books, electronic gadgets to fashion, a wide range of projects raise funds (and in many cases don't raise funds) on Kickstarter. One guy even raised over $50,000 to make potato salad.

While Kickstarter has been a great fundraising platform for a wide range of people who may have had no alternative source of financing, an issue that many people overlook is the tax implications from a successful Kickstarter campaign. Read More ›

Categories: Crowdfunding, News & Events, Tax

Annual Federal Reporting and Filing Obligations of Tax Exempt Entities

Who Must File?

Virtually all tax exempt entities must file an annual return with the IRS. In fact, the presumption is that a tax exempt organization must file unless they fit into one of the IRS's limited exceptions. Several exemptions apply to certain religious organizations, political organizations, and others.

What Must be Filed?

There is no single form common to all tax exempt organizations, but all will file one of the "990-Series Return" forms, including Forms 990, 990-N, 990-EZ, or 990-PF. Supplemental information may be required through any one or more of Schedule A through R too. In general, tax exempt organizations incurring gross receipts less than $50,000 will file Form 990-N, also known as the "e-Postcard." Organizations that do not qualify to use Form 990-N, but who incur gross receipts less than $200,000 and have less than $500,000 in total assets may file either Form 990 or 990-EZ, while those with receipts or assets equal to or greater than the previously mentioned benchmarks must file Form 990. Finally, private foundations must file Form 990-PF regardless of financial status. Read More ›

Categories: Corporate Income Tax, Tax-Exempt Organizations

Your 501(c)(3) Status Has Been Revoked – What Now?

Many nonprofit corporations are exempt from federal income tax pursuant to Section 501(c)(3) of the Internal Revenue Code. Until relatively recently, many of those tax-exempt nonprofits were not required to file annual Form 990 series returns. That all changed with the Pension Protection Act of 2006. Now, all tax-exempt nonprofits are required to file an annual Form 990 series return. If a tax-exempt organization fails to do so for three consecutive years, then its federal income tax exemption is automatically revoked - - no questions asked.

How Do You Know If Your Tax-Exempt Organization Has Lost Its
501(c)(3) Status?

The IRS maintains a list of organizations that have had their 501(c)(3) status revoked.  Read More ›

Categories: Nonprofit, Tax

Restaurant Owner Held Personally Liable for Unpaid Sales and Use Taxes

Plate with moneyOn May 23rd, the Michigan Court of Appeals upheld a tax tribunal decision that held a restaurant owner personally liable for unpaid taxes, even though that owner had minimal involvement in the preparation of those taxes. Griffin, Jr. v. Dep't of Treasury. The restaurant had failed to pay its sales and withholding tax liabilities for four months, resulting in bills for the unpaid taxes, penalties, and interest on the overdue amount. Based on MCL 205.27a, the Department of Treasury sought to hold the restaurant owner personally liable for the tax bill. Why was an individual liable for the unpaid taxes of a business? ›

Categories: Sales Tax, Use Tax