Anti-Fraud Controls

Does your organization currently have an anti-fraud policy?  If the answer is no, consider this:  according to the Association of Certified Fraud Examiners’ (“ACFE”) 2020 Report to the Nations, organizations lose an estimated 5% of revenue to fraud each year.  Now combine that with the findings that a typical fraud goes undetected for 14 months.  If this worries you, consider building an anti-fraud program at your organization. The risk of fraud can never be 100% mitigated.  Each organization needs to [...]

By |January 25th, 2023|Audit, Digital Forensics and Fraud|

The Employee Retention Credit – Beware of Scammers

The Employee Retention Credit (ERC) is a legitimate, refundable payroll tax credit established under the CARES Act. The ERC was enacted to incentivize businesses to retain employees during a time of economic uncertainty caused by the COVID-19 pandemic. For 2020, eligible employers are allowed payroll tax credits of 50% of wages paid, up to $10,000 per employee, (max $5,000 credit per employee 2020).  For 2021, the credit was increased to 70% of wages paid per employee, per quarter for the [...]

By |January 5th, 2023|Tax|

New Pass-through Entity (PTE) State Taxes

As a result of the Tax Cuts and Jobs Act, individuals are generally limited to deducting $10,000 of state and local taxes if itemizing deductions.  State and local taxes include, individual income taxes, real property taxes, and personal property taxes.  Thus, many owners of pass-through entities, such as Partnerships, LLCs, and S Corporations, are unable to deduct some or all of the state and local taxes on the business income from their passthrough entities. Consequently, many states have recently enacted [...]

By |January 5th, 2023|Tax|

2022 Schedule K-2/K-3 Reporting for Partnership and S Corporation Owners

For 2021, IRS added Schedules K-2 and K-3 for Partnerships and S Corporations.  These schedules are an extension of Schedule K and K-1 reporting items of international tax relevance. New domestic filing exception: According to the IRS’s recently released draft instructions for Form 1065 and 1120S Schedules K-2 and K-3, for tax years beginning in 2022, a domestic partnership can avoid completing and filing Schedules K-2 and K-3 if each of the following criteria are met:   No or limited [...]

By |January 5th, 2023|Tax|

COVID-19 Kansas Retail Storefront Property Tax Relief Act

For certain retail storefronts that were operationally shut down or restricted at their retail storefront by a COVID-19-related order or by an action imposed by Kansas, the COVID-19 Retail Storefront Property Tax Relief Act may be able to provide relief.  The refunds, for property taxes or rent actually paid, are for tax years 2020 and 2021, and are up to $5,000 per year per retail storefront.  The relief program is funded through the Federal American Rescue Plan Act. There are [...]

By |September 12th, 2022|COVID-19, Tax|

Inflation Reduction Act signed by the President

The Inflation Reduction Act (a scaled-down version of the Build Back Better Act that was introduced in the House in September of 2021), a $430 billion climate, health care, and tax package, was signed by the President this afternoon (August 16, 2022).  The bill also allows the Health Secretary to negotiate prices for prescription drugs for Medicare and extends the Affordable Care Act health care benefits for three years through 2025.  Key tax provisions are: Extends the excess business loss [...]

By |August 16th, 2022|Tax|

$434,000 charitable tax deduction lost because of a few missing words

 $434,000 charitable tax deduction lost because of a few missing words         The IRS continues to remind us how rigid the standards are for charitable tax deductions, and that the absence of a few words before filing the tax return can be disastrous.  In a recent Tax Court decision, a widow donated a collection of Native American jewelry and artifacts worth $434,000 to a museum that she and her husband had acquired during their marriage.  She thought she did everything [...]

By |August 1st, 2022|Tax|

Repaying Deferred Self-Employment and Household Employment Tax

The IRS has sent reminder notices for the upcoming due date for payments of deferred self-employment from 2020 tax returns. Payments of the deferred tax are due half by the end of 2021 and the remaining half by the end of 2022. Background:  The CARES Act created a provision allowing employers, including household employers and self-employed individuals, the ability to defer the payment of 2020 Social Security taxes over two years. The IRS has outlined how the self-employed and household [...]

By |December 23rd, 2021|COVID-19, Tax|

Attention Contingency-Fee Attorneys

Attention Attorneys who work on a contingency fee basis. ACTION ITEM – For cash-basis contingency-fee attorneys, consider delaying payment of case expenses until January 1, 2022. One of the provisions in the proposed Build Back Better legislation would allow case expenses to be deducted currently (rather than treating such amounts as loans for tax purposes).  Under current law, attorneys who work on a contingency-fee basis generally must wait to deduct case expenses (costs of discovery, depositions, expert witness testimony, etc.) [...]

By |November 18th, 2021|Tax|

Infrastructure bill headed to President for enactment eliminates Employee Retention Credit

After several stalls in the House, the $1.2 trillion infrastructure bill was passed by Congress very late Friday night (November 5, 2021) and now awaits the President’s signature.  While there are relatively few tax-related provisions in this legislation, more extensive changes are included in the Build Back Better Act (the Reconciliation Bill). One tax provision in the Infrastructure legislation that affects many businesses is the termination of the Employee Retention Credit (ERC) RETROACTIVE to September 30, 2021.  Thus, the ERC [...]

By |November 8th, 2021|Tax|

New Guidance on the Employee Retention Credit Benefits Many Companies

In the recently issued Notice 2021-49 (August 4, 2021), the IRS provides guidance for employers claiming the Employee Retention Credit (ERC). Included in the IRS notice is guidance on the definition of related parties’ wages for purposes of claiming the ERC and whether the wages paid to shareholders and their spouses qualify for the credit.  The notice clarifies that wages paid to a majority owner (one who directly or indirectly owns more than 50% of the entity), are not eligible [...]

By |August 11th, 2021|COVID-19, Tax|

SBA drops PPP Loan Necessity Review

The SBA just informed lenders that the loan necessity review requirement for Paycheck Protection Program (PPP) loans of $2 million or more has been eliminated for both for-profit and not-for-profit borrowers.  Additionally, borrowers are no longer required to submit a loan necessity questionnaire that had been previously requested by the SBA.  Leading up to this, many borrowers had expressed concerns that the loan necessity questionnaire was not reflective on Congress’s intent when the PPP program rolled out in March of [...]

By |July 15th, 2021|COVID-19|
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