Tax Alerts
Tax Briefing(s)

New claims will not be processed until January 2024 at the earliest.

By Mike Giangrande, J.D., LL.M.

The IRS announced today that they have stopped processing all new Employee Retention Credit (ERC) refund claims and will continue their moratorium at least through December 31, 2023. (IR-2023-169)

In IRS Commissioner Werfel’s words:

“The IRS is increasingly alarmed about honest small business owners being scammed by unscrupulous actors, and we could no longer tolerate growing evidence of questionable claims pouring in. … The continued aggressive marketing of these schemes is harming well-meaning businesses and delaying the payment of legitimate claims, which makes it harder to run the rest of the tax system.”

By   Leslie Kaufman August 16, 2023

It's been exactly one year since President Joe Biden signed the Inflation Reduction Act, securing a core part of his domestic agenda with what's by far the most significant climate law in U.S. history. There's been no shortage of numbers attesting to the rapid transformation of the American economy: $86 billion in private investment, 51 new or expanded plants for producing solar panels, 10 new factories for making batteries, more than 100,000 clean-energy jobs.

By Michael Cohn August 02, 2023, 4:32 p.m. EDT 7 Min Read

The Internal Revenue Service hopes to process all of the tax correspondence, notice responses and nontax forms it receives digitally in the next two years in an effort to reduce the amount of time-consuming paper it receives in the mail.

June 29, 2023

The IRS has been sending a special follow-up mailing to taxpayers in several states affected by disasters to reassure them that they have extra time to file and pay their taxes. This new mailing will be sent in the next few weeks to residents in California, Alabama, Arkansas, Florida, Georgia, Indiana, Mississippi and Tennessee which are designated disaster areas that received the CP14 Balance Due collection notices in late May and June from the IRS. While the earlier mailings were sent out as a legal requirement, the current mailings reiterate that taxpayers have until later this year (to October 16th) to timely pay under the disaster declaration. The letter in English and Spanish includes additional information to help taxpayers understand the disaster relief they have received.

By  Greg Stohr June 30, 2023

The U.S. Supreme Court tossed out President Joe Biden's plan to slash the student debt of more than 40 million people, rejecting one of his signature initiatives as exceeding his power.

The justices, voting 6-3 along ideological lines, sided with six Republican-led states that sued to challenge the program, which by one estimate would have cost $400 billion over 30 years.

By  Michael Cohn June 08, 2023, 1:22 p.m. EDT 7 Min Read

Congress' recent move to shift $21.4 billion in funding away from the Internal Revenue Service as a condition for increasing the debt limit isn't deterring the tax agency from moving ahead with its strategic plans to hire more employees, improve taxpayer service and modernize its technology, but it could slow down efforts to close the tax gap and audit more high-income taxpayers and corporations.

And IRS officials are still emphasizing one of their priorities: preventing fraudulent claims for the widely advertised Employee Retention Credit.

By  Michael Cohn April 18, 2023, 10:33 a.m. EDT

The Internal Revenue Service's new commissioner, Danny Werfel, lauded the agency's performance this tax season, thanks to the extra funding from last year's Inflation Reduction Act.

"This marks a special time for the nation with the arrival of the tax-filing deadline," he said during a press conference Monday. "This was a big year for the IRS in many ways. The agency really had its hands full during the pandemic, handling three rounds of stimulus payments and many other changes needed to support our country and our fellow citizens. This is really the first tax season we've had since 2019 where the IRS and the nation were on normal footing, so this was a test of the IRS, and I'm pleased to report that the IRS delivered a solid 2023 filing season by any measure. You can see this progress in every aspect of our operations. The IRS stepped up to help taxpayers in many different ways this tax season. The IRS has answered more calls from taxpayers seeking our help, provided more in-person assistance and offered more online."

The IRS and FTB have extended tax return filing and payment deadlines for those in affected CA counties (all CA counties, except for Lassen, Modoc, and Shasta counties) until October 16th.

Standard Mileage Rates for 2023

Every year, Americans donate billions of dollars to charity. Many donations are in cash. Others take the form of clothing and household items. With all this money involved, it's inevitable that some abuses occur. Current tax law cracks down on abuses by requiring that all donations of clothing and household items be in "good used condition or better."

To our business clients:

To our business clients:

July 1 Change to 2022 Standard Mileage Rates

BONUSES- Just a reminder - holiday bonuses are subject to all payroll taxes.

So that the reporting for this fringe benefit is not so burdensome, the IRS allows employers to include the personal use of business-owned cars during November and December in the following year's W-2s. This means that W-2s for 2022 need to include the value of the personal use of the vehicles from November 1, 2021 to October 31, 2022 and that this value can be calculated now. Those clients using computerized payroll systems which prepare W-2s will have to inform the system of this fringe benefit value which needs to be included in payroll before the end of December.

With certain key exceptions, employers must pay nonunion, non-exempt employees (who are not working an alternative workweek schedule) at least time and one-half pay for: *Hours worked in excess of eight hours in one day, *Hours worked in excess of 40 hours in one workweek, and *The first eight hours worked on the seventh day of work in a given workweek.

All businesses are required to report independent contractors, to whom they will be issuing a 1099-MISC form, to the California Employment Development Department. The information provided will be forwarded to state and local child support agencies to help in their efforts to locate parents who are delinquent in their child support obligations.

California's state-run college saving program, Golden State Scholarshare Trust allows parents and others to put aside tax-deferred money for college.

Amid a growing number of scams and fraudulent activity surrounding the Employee Retention Credit, the Internal Revenue Service will stop processing new claims, effective immediately, at least through the end of the year.

The Department of the Treasury is reaching out to Congress to get the appropriate tools to combat the wave of Employee Retention Credit fraud and other future issues.

The Internal Revenue Service detailed plans on some of the high-income taxpayers that will be targeted for more compliance efforts in the coming fiscal year.

The Treasury Inspector General for Tax Administration is calling on the Internal Revenue Service to improve its training of revenue agents that will be focused on auditing high-income taxpayers.

The IRS has provided additional interim guidance in Notice 2023-64 for the application of the new corporate alternative minimum tax (CAMT). This guidance clarifies and supplements the CAMT guidance provided in Notice 2023-7, I.R.B. 2023-3, 390, and Notice 2023-20, I.R.B. 2023-10, 523, which were issued earlier this year. The IRS anticipates that the forthcoming proposed regulations on the CAMT will be consistent with this interim guidance and that they will apply for tax years beginning on or after January 1, 2024. Taxpayers may rely on the interim guidance for tax years ending on or before the date the forthcoming proposed regulations are published, and for any tax year that begins before January 1, 2024.

Taxpayers may rely on a notice that describes proposed regulations that will address the amortization of qualified research and experimentation (R&E) expenses. Before 2022, R&E expenses were currently deductible, but the Tax Cuts and Jobs Act (P.L. 115-97) replaced the deduction with a five-year amortization period (15 years for foreign research).

Taxpayers may rely on proposed regulations that detail how to satisfy the prevailing wage and apprenticeship (PWA) requirements for bonus amounts that may apply to several energy and business credits. The regs also explain the correction and penalty provisions that allow taxpayers to claim the bonus credits even if they failed to satisfy the PWA tests. Comments are requested.

The IRS has provided guidance on the income tax treatment of payments made by states in 2023 and later years. In IRS News Release 2023-23, February 10, 2023, the IRS clarified the federal tax status of special payments made by 21 states in 2022 that were mainly related to the COVID-19 pandemic, with varying terms in the types of paymentspayment amounts, and eligibility rules.

National Taxpayer Advocate Erin Collins is calling on the Internal Revenue Service to alter how it deals with supervisory review of penalties.

Taxpayers, and the accounting and legal professionals who represent them, need to be prepared as the Internal Revenue Service has begun compliance work on those who own and trade in cryptocurrencies.

The U.S. Supreme Court has granted a petition for certiorari in the case of A. Bittner, CA-5, 2021-2 USTC ¶50,242 . In Bittner, the U.S. Court of Appeals for the Fifth Circuit held that each failure to report a qualifying foreign account on the annual Report of Foreign Bank and Financial Accounts (FBAR) constituted a separate reporting violation subject to penalty. This means that the penalty applies on a per-account basis, not a per-form basis. The Fifth Circuit disagreed with a Ninth Circuit panel that adopted a per-form interpretation ( J. Boyd, CA-9, 2021-1 USTC ¶50,112).

Probably one of the more difficult decisions you will have to make as a consumer is whether to buy or lease your auto. Knowing the advantages and disadvantages of buying vs. leasing a new car or truck before you get to the car dealership can ease the decision-making process and may alleviate unpleasant surprises later.