In 2021, Congress enacted the Corporate Transparency Act in an effort to provide law enforcement agencies with the ownership information of business entities doing business in the U.S. This information is to be used to help prevent money laundering, the use of shell companies, and other financial crimes. The Treasury Department’s Financial Crimes Enforcement Network (FinCEN, the same agency that administers the foreign bank account reporting rules) was charged with running this program often called “Beneficial Ownership Information Reporting” (BOI). The program’s rules apply very broadly so nearly all privately held businesses will be required to comply beginning January 1, 2024. FinCEN expects over 32 million entities will be filing their initial reporting in 2024. The program was designed to help prevent financial crimes but the compliance burden is falling on privately held businesses across the U.S. and according to recent surveys, most business owners are completely unaware of this new program. FinCEN has created a guide, Small Entity Compliance Guide, FAQs, and informational videos to help businesses understand and comply with these new rules. (more…)
The SECURE 2.0 Act, enacted in December 2022, made a number of changes to retirement distributions, including the age for receiving required minimum distributions (RMDs), ultimately creating compliance issues for many taxpayers and plan administrators. As a result, in July the IRS provided some relief, issuing Notice 2023-54, relating to certain distributions made in 2023 to individuals that technically were not RMDs as a result of the Act. (more…)
A new issue tops this year’s annual IRS Dirty Dozen list of tax scams. The agency’s 2023 list of common tax-related frauds and abuses begins with a warning about the widespread promotion of ineligible claims for the Employee Retention Credit (ERC). The annual notice also lists a variety of other schemes—more than the promised dozen, in fact—that fraudsters often use to con businesses and individual taxpayers. (To see the entire list, visit IRS Wraps Up 2023 Dirty Dozen List) (more…)
The Small Business Administration recently announced an expansion of the businesses eligible for their Historically Underutilized Business Zone (HUBZone) program. The federal government has established a goal of annually awarding 3% of federal contract dollars to HUBZone certified businesses. Being a HUBZone certified business has other government contracting advantages including bidding on contracts limited to certified businesses, receiving preferential treatment for open contracts; and getting a 10% price evaluation preference in open contract bidding. (more…)
The SECURE 2.0 Act, which was signed into law in late December 2022, contains many provisions that can impact employers, employees, and retirees. We covered the key provisions in a previous article, SECURE Act 2.0 – Helping Employees and Employers With Retirement Savings. Now, we are going to concentrate on how the Act affects employers including new requirements and the potential for increased administration and compliance costs. (more…)
UPDATE March 2, 2023 – Governor Newsom’s office has announced California will conform to the October 16, 2023 tax filing and payments deadline extension. For additional information, please see the news release issued by the FTB: FTB extends filing deadline for taxpayers impacted by 2022-23 winter storms to Oct. 16, 2023
UPDATE February 23, 2023 – IRS postpones until October 16, 2023 tax filing and payment dates for California, Alabama, and Georgia taxpayers living in or having a business in a FEMA declared disaster area. For additional information, please see the news release issued by the IRS: May 15 tax deadline extended to Oct. 16 for disaster area taxpayers in California, Alabama and Georgia
Given the size and complexity of today’s tax code, avoiding disputes with the IRS can be difficult. Even a carefully run business can inadvertently run afoul of a new rule, a revised procedure, or updated guidance.
In recent years, however, some taxpayers dealing with IRS notices or enforcement actions have begun to use the complexity of federal law in their own defense, claiming the IRS itself failed to follow proper procedures when drafting regulations. In several cases, federal courts have agreed with the taxpayers, calling into question the validity of a growing number of IRS rules.
Although these cases involve a variety of tax issues, they have a common element: the taxpayers successfully sued the IRS for violating the Administrative Procedure Act (APA), a 1940s-era law designed to spell out acceptable rulemaking processes for the many new executive branch agencies that were created during the New Deal and World War II. (more…)
Since the IRS first introduced them for the 2021 tax year, Schedules K-2 and K-3 have caused concerns—and confusion—for many partnerships and S corporations. The purpose of the two schedules is to report information related to foreign financial activities, but some pass-through entities found themselves subject to the forms’ requirements—even though they had no foreign interests or concerns. (more…)
The Inflation Reduction Act (IRA), which was signed into law on August 16, 2022, included expanded and extended tax credits and incentives to encourage energy efficient housing, commercial buildings, and vehicles. Our previous blogs discussed incentives for homeowners (A Greener Home Can Save You Green Under the Inflation Reduction Act) and vehicle buyers (Inflation Reduction Act Restructures Alternative Fuel Vehicle Credit). (more…)