Are Private Cooking Lessons Subject to Sales Tax?

 

The NYSDTF received a petition for  an Advisory Opinion whether teaching private cooking, baking, and decorating lessons in people’s homes are subject to sales tax.

The petitioner (a private cooking instructor) inquired if there was a difference for sales tax purposes if: (1) the client provided ingredients to be used during the private cooking lesson, or (2) if the cooking instructor provided the ingredients.  

NYSDTF Analysis: 

Tax Law § 1105(c) imposes sales tax on the receipts from every sale, except for resale, of certain enumerated services. Cooking and baking lessons are not among the services subject to tax. See Tax Law § 1105(c); TSB-A-02(34)S. When Petitioner provides the relevant ingredients, Petitioner is using those ingredients in the provision of a non-taxable service and is not reselling those ingredients to the customer. Therefore, Petitioner should pay any applicable sales tax on the purchase of the ingredients. See 20 NYCRR 526.6(c)(7); TSB-A-01(12)S. Because the ingredients and recipes provided in tangible form are incidental to the service, it does not change the non-taxability of the service. See TSB-A-01(12)S. Therefore, the lump sum charge for providing these lessons is not subject to tax. 

Amended Tax Returns Now Eligible for E-Filing

Taxpayers will soon be able to file amended tax returns electronically

For the first time, taxpayers will now be able to file a Form 1040-X, Amended U.S Individual Income Tax Return electronically.  Making this form electronically fileable has been a long-time goal for the IRS. It will greatly benefit the tax professional community and taxpayers.

The new electronic option will allow the IRS to receive amended returns faster while minimizing errors normally associated with manually completing the form. It will also provide the IRS with more complete and accurate data to help customer service representatives answer taxpayer questions.

When the electronic filing option becomes available, taxpayers will only be able to amend tax year 2019 Forms 1040 and 1040-SR returns electronically. In general, taxpayers will still have the option to submit a paper version of the Form 1040-X and should follow the instructions for preparing and submitting the paper form.

Whether an amended return is filed electronically or manually, taxpayers can still use the “Where’s My Amended Return?” online tool to check the status of their amended return. 

If you discovered you made a tax return mistake will you be required to amend an incorrect tax return? If you need assistance with a tax compliance issue, contact Long Island Tax Attorney Peter Alizio for a complimentary consultation.   

Long Island Professionals (Meetup Group)

Peter Alizio a tax attorney at Alizio Law, PLLC has taken over the reins of Long Island Professionals a meetup group with 3,000+ members. The meetup group will continue to meet for networking over cocktails the last Thursday of every month (once safe to do so).

Long Island Professional members will be encouraged to guest post on our new website longislandbusiness.info to share their knowledge and expertise.

We are looking for posts in the following categories:

• Marketing
• Small Business
• Causes, Non-Profits, & Charities
• Tax & Finance
• Technology
• Human Resources

Please email any questions or comments to Peter Alizio.

Back to Business (Normal Hours)

Alizio Law, PLLC is back to regular business hours utilizing virtual meetings and phone consultations.

Monday        | 9:00 AM - 7:00 PM

Tuesday        | 9:00 AM - 7:00 PM

Wednesday     | 9:00 AM - 7:00 PM

Thursday         | 9:00 AM - 7:00 PM

Friday             | 9:00 AM - 7:00 PM

Phone: (212) 520-2906

Website: aliziolaw.com

Email: info@aliziotax.com

IRS Virtual Settlement Days

IRS allows unrepresented taxpayers to settle tax court cases virtually! 

The Internal Revenue Service Office of Chief Counsel announced the Settlement Days program will continue remotely enabling unrepresented taxpayers to work towards resolving their pending United States Tax Court case despite "stay-at-home" orders in many jurisdictions.  The first two events are for docketed cases with a place of trial in Detroit or Atlanta.  Future events may be scheduled in other cities throughout the United States.

Virtual Settlement Days is a coordinated effort to resolve Tax Court cases by giving taxpayers not represented by counsel the opportunity to receive free tax advice and possible representation from Low-Income Taxpayer Clinics (LITCs) or another pro bono organizations. Taxpayers can discuss their Tax Court case and federal tax issues with members of the IRS Office of Chief Counsel, Appeals and Collections.

The program is geared to help unrepresented taxpayers receive free assistance in discussing a potential fair settlement of their tax disputes in an informal setting without the need for further litigation or a trial in Tax Court. The vast majority of taxpayers participating in previous Settlement Days programs have resolved their cases; most of those who ended up with a liability have been able to enter into an installment payment arrangement.

The Tax Court canceled scheduled trial sessions in a series of Orders issued on March 11, 13 and 23, 2020.  The Tax Court Orders state that it is expected that parties will continue to work together to exchange information and address pending issues. The Settlement Days events accomplish the Tax Court’s goals by allowing the parties to work towards settling case on a remote basis. 

Chief Counsel has scheduled Virtual Settlement Days events for May 2020 for cases docketed on the Detroit and Atlanta Tax Court trial sessions. Chief Counsel has invited more than 100 unrepresented taxpayers to meet with Chief Counsel attorneys or paralegals via WebEx for the two events. The taxpayers will be able to speak with LITC representatives prior to the WebEx meetings. If the taxpayer desires, the LITC representatives will later join the WebEx meetings.

The Detroit Office of Chief Counsel will host its event on Saturday, May 9, in conjunction with the University of Michigan Law School LITC for the Detroit trial session cases. The IRS has invited over 100 Tax Court petitioners.  The cases being selected are from recently canceled Tax Court calendars, as well as other docketed cases not yet set for trial. The event may be extended, if needed, to meet taxpayer’s needs. 

The Atlanta Office of Chief Counsel will host the second event on Thursday, May 21, in conjunction with the North Georgia Low Income Taxpayer Clinic for the canceled Atlanta trial session cases and other docketed cases. The event may extend over several days to accommodate the schedules of the participants. The IRS will focus on inviting unrepresented taxpayers whose cases sessions have been delayed due to Tax Court cancellations.

While docket taxpayers with cases currently under consideration by the IRS Independent Office of Appeals have not been sent invitations to the Detroit and Atlanta events, the IRS encourages those petitioners to contact the Appeals Officer assigned to their case to discuss a resolution. Appeals continue to work cases, including use of virtual conferences. For unrepresented taxpayers who are working with an Appeals Officer and receive an invitation to the event, the IRS will work with them at the event to resolve all their issues.

In addition, IRS Chief Counsel recently prepared a Virtual Settlement Days Best Practice Guide for external use that will be released in advance of the Virtual Settlement Days events. Chief Counsel anticipates that Virtual Settlement Days will be a mainstay of its Settlement Day efforts even after this crisis is over. Chief Counsel released an initial Settlement Days Best Practices Guide in January 2020, which outlined a remote model for the program.