Recent IRS warnings and announcements regarding the Employee Retention Tax Credit (ERTC) have raised some businesses’ concerns about the validity of their claims for this valuable, but complex, pandemic-related credit — and the potential consequences of an invalid claim. In response, the IRS has rolled out a new process that certain employers can use to […]
Read More IRS offers a withdrawal option to businesses that claimed ERTCsLarge foreign companies with U.S. subsidiaries, take note: The IRS is looking your way. On Oct. 19, IRS Commissioner Daniel Werfel announced that the tax agency would be sending compliance alerts to about 150 U.S. subsidiaries of foreign corporations the IRS believes don’t pay “their fair share of tax on the profit they earn on […]
Read More Foreign companies with US subsidiaries receive IRS scrutinyOne outcome of the Inflation Reduction Act is the collection of unpaid taxes owed by certain high-income individuals. In Sept. 2023, the IRS announced that it had begun contacting 1,600 taxpayers that collectively owe hundreds of millions of dollars in recognized taxes. Already, $122 million have been collected. Among the individuals, one was ordered to […]
Read More IRS collection activity in the news2024 State Business Tax Climate Index https://bit.ly/471s8J5
Read More 2024 State Business Tax Climate IndexThe rapid distribution of COVID-19 relief funds was a perfect storm for fraud, according to a Government Accountability Office (GAO) report. Most of the nearly $5 trillion in emergency relief spending “went to the intended recipients,” the report stated, but large amounts were siphoned off by fraudsters. A major factor contributing to the fraud was […]
Read More COVID fraudIf the IRS suspects a taxpayer isn’t reporting all income, it may conduct a “bank deposits analysis” to compare deposits with what was reported on a tax return. In one case, the IRS found that a taxpayer had unreported income after conducting a bank deposits analysis. When notified of the unreported income by the IRS, […]
Read More IRS can use bank deposit analysis to determine incomeWith the rising cost of college, many families are in search of scholarships to help pay the bills. If your child is awarded a scholarship, you may wonder about how it could affect your family’s taxes. Good news: Scholarships (and fellowships) are generally tax-free for students at elementary, middle and high schools, as well as […]
Read More Are scholarships tax-free or taxable?Recently, the IRS halted processing of claims for the Employee Retention Credit (ERC), due to a high volume of fraudulent claims. The moratorium is through at least the end of 2023. ERC claims that were already filed are now subject to longer processing, including heightened scrutiny to weed out fraud. The IRS is creating a […]
Read More An Update on the ERC programBusinesses planning to pay employees year-end bonuses can time their payments to reduce tax. For example, if your business operates on the cash basis, you must deduct bonuses in the year they’re paid. So you could pay bonuses either in late 2023 or early 2024, whichever makes the most tax sense. Accrual-basis businesses must pay […]
Read More Timing bonuses for a tax deductionDo you use an automobile in your trade or business? If so, you may question how depreciation tax deductions are determined. The rules are complicated, and special limitations that apply to vehicles classified as passenger autos (which include many pickups and SUVs) can result in it taking longer than expected to fully depreciate a vehicle. […]
Read More Business automobiles: How the tax depreciation rules work
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