The knowledge you need

Starting in 2024, many businesses will be required to report certain information about company ownership to the Financial Crimes Enforcement Network (FinCEN). The new requirement is mandated by the Corporate Transparency Act which passed in 2021. The purpose of the legislation is to make it easier for the federal government to fight tax fraud, money laundering, and terrorist activities financed through domestic companies. Under new rules, new and existing small businesses and limited liability companies are required to disclose information about their beneficial owners. This includes the name, date of birth, and address of each owner along with a unique identifying number from a passport or driver’s license is required.

axpayers who receive payments through providers such as PayPal, Venmo, and Etsy will be happy to learn the IRS has again delayed reporting changes. While the IRS was originally planning to require distribution of the forms for anyone who received $600 in payments or more through these third-party providers, the agency just announced another delay. This means the current payment threshold of $20,000 and 200 transactions will be in place for the current tax year. The higher reporting limits mean many will not be required to pay federal income tax on income earned through these sources.

Earlier this week, in IR-2023-230, the IRS provided additional details on the results of enhanced enforcement efforts. Specifically, there will be 20,000 letters sent to taxpayers notifying them of disallowed ERTC claims. These letters specifically address those ineligible because their entity did not exist during the pandemic, or they did not have any employees during the eligibility period. This illustrates just how pervasive aggressive marketers have become when thousands of claims do not meet the most basic criteria.

As the closing weeks of the year quickly approaches, there are many steps that individuals and families can take to reduce taxes. These steps can not only yield immediate savings but also set up additional opportunities in 2024 and beyond. While tax planning is most effective when conducted on an ongoing basis, there are steps to take now that can have an immediate impact. This includes optimizing gifting strategies, maximizing retirement plan contributions, prepaying university expenses, IRA conversions and tax loss harvesting. To reap the full benefit, it is essential to take action before December 31st.

The Corporate Transparency Act (CTA) was passed to enhance financial transparency and counter illicit financial activities, including terrorist financing and money laundering. As part of the legislation, certain entities are required to report beneficial ownership information to the Federal Crimes Enforcement Network (FINCEN). The purpose of the new report is to help the Department of Treasury more effectively identify where potential criminal behavior is occurring and investigate suspected crimes. The legislation will add new reporting requirements for Atlanta small and mid-sized companies to comply with in 2024 and 2025.

As the end of the year approaches, many executives and high-net-worth individuals are focused on tax-saving strategies. While there are several options available, depending on specific circumstances, making qualified charitable distributions (QCDs) can easily reduce taxable income. Taxpayers who must take required minimum distributions (RMDs) have the option to give up to $100,000 in tax-free gifts to an eligible charity. Payment is facilitated through the transfer of funds from the plan administrator directly to the eligible charity.  

According to the Occupational Fraud 2022: Report to the Nations, tips are one of the most common ways that fraud is identified. This data point reflects the importance of implementing a whistleblower program as part of fraud prevention efforts. Yet many questions often arise about how to effectively manage a hotline. The ACFE recently released  Building a Best in Class Whistleblower Hotline Program, which provides important benchmarking and best practice information.

When the Inflation Reduction Act was passed last year, it called for significant investments in clean energy. It contained dozens of clean energy provisions which included 24 new tax incentives designed to accelerate clean energy investments. While many incentives were designed to benefit companies there were three new tax incentives introduced and updated that benefit individuals. Specifically, the Used Clean Vehicle and New Clean Vehicle tax deductions provide an incentive for purchasing qualified clean energy vehicles. Through the end of 2023, taxpayers interested in claiming the credit need to do so by filing Form 8936 along with the federal tax return. At the start of the new year these rules will change.

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.