IRS suspends processing of ERC claims
In the face of a flood of illegitimate claims for the Employee Retention Tax Credit (ERC), the IRS has imposed an immediate moratorium through at least the end of 2023 on processing new claims for the credit. The reason the IRS cites for the move is the risk of honest small business owners being scammed by unscrupulous promoters who submit questionable claims on their behalf.
IRS Issues Guidance on New Retirement Catch-Up Contribution Rules
In December 2022, President Biden signed the Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act. Among other things, the sweeping new law made some significant changes to so-called catch-up contributions, with implications for both employers and employees.
Tax Relief for Hurricane Idalia Victims
The IRS postponed deadlines to file various individual and business tax returns and make tax payments for taxpayers affected by Hurricane Idalia in Florida and in South Carolina. Affected individuals and businesses in Florida will have until February 15, 2024 to file returns and pay any taxes that were originally due after August 26, 2023 in Florida and August 29, 2023 in South Carolina.
Accounting for Leases and Leasehold Improvements under Common Control Arrangements
In March 2023, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2023-01, Leases (Topic 842): Common Control Arrangements. This ASU includes an optional practical expedient for private companies and certain not-for-profit entities with leasing arrangements under common control. It also includes mandatory updates to the accounting for leasehold improvements when the related leases are with parties under common control. This Client Alert will explain in more detail the accounting impact of ASU 2023-01 on entities with leasing arrangements under common control and the transition options available when adopting the provisions of ASU 2023-01.
New Electronic Filing Requirements for W-2s and Certain Information Returns
Historically, businesses were not required to file information returns electronically unless 250 or more returns of one type were filed. The Internal Revenue Service has now substantially modified the electronic filing threshold for information returns, including Form W-2, that are filed in calendar years after December 31, 2023.
The IRS Warns Businesses about ERC Scams
The airwaves and Internet are inundated these days with advertisements claiming that businesses are missing out on the lucrative Employee Retention Tax Credit (ERC). While some employers do indeed remain eligible if they meet certain criteria, the IRS continues to caution businesses about third-party scams related to the credit. While there is nothing wrong with claiming the credits that you are entitled to, those that claim the ERC improperly could find themselves in hot water with the IRS and face cash-flow problems as a result.
Extension of Federal Tax Deadlines for Taxpayers Impacted by Storms in Illinois
Based on the disaster declaration issued by the Federal Emergency Management Agency (FEMA) for the severe storms and flooding that occurred in parts of Illinois (DR-4728-IL) between June 29, 2023 and July 2, 2023, the Internal Revenue Service (IRS) announced (IL-2023-06) that federal tax filing and payment deadlines falling between the dates of June 29, 2023 and October 30, 2023 have been extended to October 31, 2023 for certain taxpayers, including taxpayers residing in or having their principal place of business located in Cook County, Illinois.
Virtual Currency Lands in the IRS’ Crosshairs
While the value of virtual currency continues to fluctuate, the IRS’ interest in it has only increased, as seen in Operation Hidden Treasure in 2021 and the Inflation Reduction Act in 2022. However, the Fiscal Responsibility Act, enacted in May 2023, will claw back $21.39 billion of that amount by the end of 2025. The IRS’s strategic operating plan for 2023 through 2031 lays out the agency’s intention to ramp up enforcement related to digital assets. If you buy, sell or otherwise engage in transactions involving virtual currency, you need to stay up to date with the latest tax developments.
What’s in the Fiscal Responsibility Act?
President Biden has signed into law the Fiscal Responsibility Act of 2023, thereby finalizing the new debt ceiling agreement that he reached with U.S. House of Representatives Speaker Kevin McCarthy. The FRA suspends the debt ceiling through January 1, 2025, increasing on January 2, 2025, to accommodate the obligations issued during the suspension period. The FRA also makes a variety of changes related to domestic spending, although it falls far short of the cuts included in the Republican bill that the House passed in April.
Social Security’s Looming Crisis: Understanding the Problem and the Proposed Solutions
The future of Social Security is a topic of concern due to the program's impending insolvency. There are several proposals to address the issue, including increasing the payroll tax rate, raising the taxable wage base, adjusting the cost-of-living adjustments (COLAs) and increasing the retirement age. While each proposal has its pros and cons, it is crucial for policymakers to find a solution that ensures the sustainability of Social Security for current and future generations.