Employment Tax

Employment and payroll tax issues can be challenging for employers as they grapple with attracting and retaining top talent globally. Ogletree’s Employment Tax Group helps clients navigate compliance, audit, and transactional challenges with federal, state, and local payroll obligations to achieve business objectives.

COMPLIANCE ADVICE

Our attorneys provide insight into Internal Revenue Service (IRS) and state taxing authority audit practices, enabling clients to strategically mitigate employment and payroll tax compliance exposure by allocating resources in an informed manner. Our goal is to provide clients with the insight needed to make informed decisions about payroll tax compliance, broad-based fringe benefit offerings, worker classification issues, and issues unique to a globally mobile workforce.

The Employment Tax Group routinely advises on:

Settlement tax reporting and withholding
Taxation of fringe benefits, such as educational assistance programs and paid time off donation policies
Payroll tax issues for domestic and globally remote and mobile employees
Wage repayments from clawbacks and the required payroll corrections
Internal payroll tax reviews for compliance with state and federal laws, including the review of earnings and deductions codes in payroll system implementation
Tax withholding issues for employees with visas
IRS Forms W-2, 1099, 1095-C, and 1042 reporting requirements

TAX AUDITS

Ogletree has assisted clients with IRS and state taxing authority employment tax and benefits audits for several decades. Successful resolution of these audits is critical for employers due to the breadth, depth, and frequency of federal and state employment tax audits, and the magnitude of costs associated with unpaid taxes, penalties, and interest. The Employment Tax Group brings not only deep knowledge of the underlying issues but also extensive experience advocating forcefully on behalf of clients to resolve audits under favorable terms.

ADMINISTRATIVE PROCEEDINGS

We have represented clients in numerous employment tax administrative proceedings before federal, state, and local taxing authorities. These proceedings are diverse in nature and include resolving employment tax issues at any stage in the collections, assessment, or refund process.

MERGERS & ACQUISITIONS

Employment tax considerations in mergers and acquisitions (M&A) are crucial for compliance and financial planning. The Employment Tax Group assists companies before, during, and after the deal in the following ways:

Due diligence review
Successor employer analysis and implementation
Account registration, update, or closure form preparation
Tax credits and statutory election review
Employment tax policy and procedure harmonization

REPRESENTATIVE EXPERIENCE

The Employment Tax Group represents and advises clients from numerous industries and throughout the business lifecycle, from startups through maturity. Below are representative examples of our experience:

Assisted an electronic car manufacturer with reviewing earnings and deductions codes for payroll tax compliance issues.
Reviewed policy documents for a finance and insurance company with more than 55,000 global employees due to concerns over the taxation of company cars and corporate planes to determine whether amounts were being imputed into income appropriately.
Counseled a technology company on the taxation of fringe benefits provided on its corporate campus, including meals, transportation, and childcare services, and provided the company with an analysis of its exposure for failing to impute the value of taxable benefits into employee income.
Resolved state and federal payroll tax notices for a manufacturing company following the implementation of a new payroll system.
Helped a retail company determine eligibility for, and obtain, more than $3 million of tax credits under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Families First Coronavirus Response Act (FFCRA).
Guided a retail company through the IRS’s Voluntary Closing Agreement Process for Employment Tax Issues to remediate the underreporting of group-term life insurance while mitigating the impact on employees.
Advised a technology company on resolving a state tax audit related to income tax withholding due to remote work, deferred compensation, and nonresident business travelers.
Facilitated a healthcare company’s implementation of a remote work policy and ongoing employee communication plan to mitigate state tax and employment risks.
Provided a financial services company with insight on how to withhold Federal Insurance Contributions Act (FICA) taxes on deferred compensation under the special timing rule in order to harvest tax savings under the nonduplication rule.
Helped a technology company achieve payroll tax risk mitigation with respect to its global contractor workforce as part of an initial public offering (IPO) readiness initiative.