Author Archives:
Josh Crisp

The high amount of fraud plaguing the Employee Retention Tax Credit (ERC) program reached a tipping point forcing the IRS to take action. Last month, the agency announced a moratorium on new claims processing through the end of the year. The time is needed to review existing claims more carefully and to implement programs to assist those who may have improperly filed claims. On October 19th, the IRS release Notice IR- 2023-193 which provides guidance for those who wish to withdraw a claim. Depending on the taxpayer’s situations there are different steps which must be followed. Only those that want to completely withdrawal a claim can participate.

The Inflation Reduction Act, which was signed into law on August 16, 2022, includes several provisions designed to help fight the high level of inflation. The purpose was to help meet national climate goals, strengthen energy security, invest in the creation of good paying jobs, and to reduce the costs of energy and healthcare for families. It is filled with dozens of provisions and includes 24 new tax incentives designed to accelerate the deployment of clean energy vehicles, buildings, and manufacturing. This includes both the Used Clean Vehicle and New Clean Vehicle Tax Credits.

Over the last year the IRS has issued several warnings about the number of ineligible Employee Retention Tax Credit (ERTC) claims being submitted. A central issue has been the large amount of misinformation about the program being spread by promoters and marketing companies. Business owners are led to believe that every business is entitled to receive the credit without any discussion about eligibility criteria or what happens if the credit is improperly awarded. What makes the situation worse are the aggressive radio, email and online marketing tactics used. Unfortunately, these bad actors pray on those who have little information about the credit resulting in ineligible claims.  

The IRS announced last week (in IR-2023-169) a moratorium on processing new ERTC claims through the end of 2023. The reason for the change is the increase in the number of ineligible claims that are being filed. It appears many of these are coming from businesses that have been pressured and scammed by aggressive promoters and marketing firms. The agency will continue processing claims received prior to September 14th but cautions it will now take longer due to increased fraud concerns.

In May, Tennessee unanimously passed the Tennessee Information Protection Act (TIPA), outlining new data privacy protections businesses operating in the state must follow. It is similar to regulations already in effect in Utah, Virginia, Iowa, and Colorado. The legislation requires certain protections of personal information including genetic or biometric, demographic, immigration status, sexual orientation, information about minors (under 13), and precise geolocation information. Due to the comprehensive nature of the changes impacted businesses will have two years to achieve compliance.

Fraud in any form is certainly unwelcome. Over the past few years there has been a significant increase in the amount of cyber attacks being perpetrated. In fact, there were over 232,972 individuals that fell victim to phishing attacks of various types in 2021. More specific to tax fraud, there has been a concurrent increase resulting in an average median loss was $278, 325. Given these numbers, the IRS has been working closely with state tax authorities, software companies, tax preparation firms, and payroll processors to defend against identity theft and fraud. A key purpose of the group, known as the Security Summit, is to reduce the amount of fraud through ongoing reporting and education.

Accounting standards may be changing for crypto assets as early as later this year. The Financial Accounting Standards Board (FASB) issued a proposed accounting standards update (ASU) on March 23, 2023 after receiving feedback calling for crypto asset accounting to be prioritized. The goal of the proposed changes is to improve accounting and disclosure for certain crypto assets. The change will provide financial statement users with improved transparency about crypto asset holdings and more information on the potential risks.

Over the past few months, there have been several bank failures which underscore the challenging economic conditions currently faced. While the collapse of Silvergate Capital, Silicon Valley Bank, and Signature Bank were triggered by different conditions, the result was the same for each. The federal government was forced to step in, manage the sale of remaining assets, and provide assurance to accountholders no money would be lost as a result of the failure.  Unfortunately, the scenario repeated itself again on May 1st, when First Republic Bank was seized and sold to JP Morgan Chase. A recurring theme in these failures was the large number of uninsured deposits and short-term demandable liabilities held by each institution. In the end, it was an uninsured depositor run that caused two of these failures.

The dream of a carefree retirement where individuals and families can spend more time together, travel to new places, or simply take it easy is quickly slipping away. The retirement savings gap, the difference between existing savings and future costs, continues to increase. In fact, the median retirement account balance is $3,000 for all working age households, and $12,000 for near retirement households. While Social Security is expected to provide a certain measure of relief, it will not be enough to prevent many from having to work well past the traditional retirement age. The reality is that workers will need to start, or increase retirement savings now, to provide the financial stability needed in the future.

For the second time in two years, certain Georgia individuals and families, will be receiving a special tax refund. On March 15, 2023, Governor Kemp signed House Bill 162 into law which calls for a refund to be issued to those that filed a state tax return in both 2021 and 2022. The refund is possible due to the state’s conservative budgeting and spending over the last year. The refund amount will vary depending on filing status with married filing jointly receiving the largest amount while married filing separately the lowest amount.