US suspends tax treaty with Russia

The United States has formally notified the Russian Federation that it’s suspending elements of an income tax treaty. This is in response to an Aug. 8, 2023, notice by Russia that it wished to suspend parts of the treaty. The suspension is expected to affect the tax obligations and costs of U.S. companies operating in […]

Credit for research activities

The IRS has released a draft of Form 6765, Credit for Increasing Research Activities (also known as the research credit). The agency revised the form to respond to external feedback received during a comment period. Now, the “business component information” section will be optional for qualified small business taxpayers and those with total qualified research […]

Pension early withdrawal penalty exceptions

A provision of the SECURE 2.0 Act allows for exceptions to the additional 10% tax when taking early permissible retirement plan distributions for emergency personal expenses and for victims of domestic abuse. These are distributions taken before age 59½. IRS Notice 2024-55 provides guidance on the provision that went into effect Jan. 1, 2024. It […]

IRS announces plans to deny ERTC claims

The IRS recently announced plans to deny tens of thousands of improperly filed “high-risk” Employee Retention Tax Credit (ERTC) claims. The tax agency will also begin a new round of processing lower-risk, legitimate claims, with initial payments to this group expected to be made later this summer. An IRS review revealed that 10% to 20% […]

The WOTC benefit for employers set to expire

Employers who seek to hire new workers may qualify for a tax benefit, but they shouldn’t wait too long. The Work Opportunity Tax Credit (WOTC) is a valuable federal tax credit that encourages employers to hire from certain groups that face employment barriers. The WOTC is set to expire after 2025, so to qualify, employees […]

Alternative dispute resolution

Taxpayers involved in a tax dispute with the IRS may want to consider mediation. Also known as “alternative dispute resolution,” mediation can help taxpayers resolve issues quickly and with less hassle. The process is voluntary and nonbinding on both parties, not requiring either party to relinquish control. It offers a chance to avoid lengthy appeals […]

IRS error causes improper balance due notices

The IRS is acknowledging that some taxpayers have erroneously received CP14 (Balance Due, No Math Error) notices. Affected taxpayers include those who made electronic or check payments with their 2023 tax returns. CP14 notices may indicate that a taxpayer’s account is “pending,” even if a payment has been received and processed. The IRS has explained […]

Green Energy tax credits

Employers that want to claim “green energy” tax credits made available by the Inflation Reduction Act, take note: The IRS is releasing final regulations and guidance about prevailing wage and apprenticeship (PWA) requirements. In general, businesses must comply with the PWA tests if a worker performs construction, alteration or repair of a qualified facility. However, […]

Educational assistance benefits

Did you know that you can exclude certain educational assistance benefits from your gross income if they’re provided under Section 127 educational assistance programs? Educational assistance benefits include payments for tuition, fees, books, supplies and equipment. They also include certain principal or interest payments on qualified education loans made by employers. Generally, taxpayers don’t have […]

Basis Shifting

The IRS has issued guidance addressing the increasing instances of abusive basis shifting by related-party partnerships. Taxpayers are inappropriately using partnership rules to inflate the basis of underlying assets without affecting the economics of their businesses. The basis-shifting transactions targeted in Notice 2024-54 fall into three groups: 1) transfer of partnership interests to a related […]