The knowledge you need

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.

For years construction companies and contractors have leveraged the Section 45L federal tax credit for the inclusion of energy-efficient systems in new residential construction. Originally passed in 2005, it permitted homebuilders to claim a federal tax credit for energy efficient home construction. Over the years the credit has been updated and modified to extend its value. Most recently, the Inflation Reduction Act (IRA) extended and enhanced the credit to allow homebuilders who construct, reconstruct, or rehabilitate energy efficient homes to receive a credit up to $5,000.  Unfortunately, many home builders have not claimed the credit because of a lack of detailed guidance from the IRS.  The good news is the agency recently released Notice 2023-65 which provides the long-awaited details.

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.

On September 8, 2023, the IRS issued  a news release (IR-2023-166) detailing enforcement priorities over the coming year. Regulators will be shifting attention to high-income earners, partnerships, large corporations, and promoters taking advantage of tax laws. Specifically, the agency will target those groups that have experienced a sharp reduction in audit rates over the past decade. In addition, the IRS will also be relying on Artificial Intelligence (AI) to help detect tax cheating, compliance issues, and to improve case selection.