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August 2022

Simplified Portability Election Relief Procedure Updated, Rev. Proc. 2022-32

The IRS has updated its simplified procedure for estates requesting an extension of time to make a portability election under Code Sec. 2010(c)(5)(A). The updated procedure replaces that provided in Rev. Proc. 2017-34. If the portability election is made, a decedent’s unused exclusion amount (the deceased spousal unused exclusion (DSUE) amount) is available to a surviving spouse to apply to transfers made […]

Qualified Derivative Payment Reporting Under BEAT Rules Deferred Until 2025, Notice 2022-30

The IRS intends to amend the base erosion and anti-abuse tax (BEAT) regulations under Code Secs. 59A and 6038A to defer the applicability date of the reporting of qualified derivative payments (QDPs) until tax years beginning on or after January 1, 2025.

Background

Final BEAT regulations adopted with T.D. 9885 include rules under Code Secs. 59A and 6038A addressing the reporting of QDPs, which are not treated as base erosion payments for […]

IRS Whistleblower Office Director Discusses Significance of Whistleblower Information in Identifying Noncompliance

John Hinman, Director, IRS Whistleblower Office highlighted the importance of whistleblower information in identifying noncompliance and reducing the tax gap in an executive column published by the IRS. Each year, the IRS receives thousands of award claims from individuals who identify taxpayers who may not be abiding by U.S. tax laws. The IRS Whistleblower Office ensures that award claims are reviewed by […]

Senate Dems Call For Filing Extension Due to ITIN Processing Delays

A group of Senate Democrats is calling on the IRS to extend the filing deadline for those unable to file for and receive the advanced child tax credit (CTC) due to the processing backlog of individual taxpayer identification number (ITIN) applications.

In a July 14, 2022, letter to Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig, the Senators, led by Robert Menendez […]

IRS Helps Taxpayers Understand How and Why Agency Representatives May Reach Out, FS-2022-33

The IRS has released a Fact Sheet to help taxpayers understand how and why agency representatives may contact them and how to identify them and avoid scams. Generally, the IRS sends a letter or written notice to a taxpayer in advance, but not always. Depending on the situation, IRS employees may first call or visit with a taxpayer. Further, the […]

AICPA Offers Recommendations on Required Minimum Distribution Proposal

The American Institute of CPAs offered the Internal Revenue Service a series of recommendations related to proposed regulations for required minimum distributions from individual retirement accounts.

The July 1, 2022, comment letter to the agency covered two specific areas: minimum distribution requirements for designated beneficiaries when death of the employee or IRA owner occurs after the required beginning date, and the definition of […]

GAO Issues Report on Stimulus Checks During COVID-19 Pandemic, GAO Report: Stimulus Checks–Direct Payments to Individuals during the COVID-19 Pandemic (GAO-22-106044)

The Government Accountability Office (GAO) issued a report on stimulus checks during the Coronavirus 2019 (COVID-19) pandemic. From April 2020 to December 2021, the federal government made direct payments to taxpayers totaling $931 billion to address pandemic-related financial stress.

Report Findings

Some eligible taxpayers never received payments. Eligible taxpayers can still claim their payments through October 17. There were challenges for the […]

OECD Delays Pillar One of International Tax Reform to Mid-2023

The Organisation for Economic Co-operations and Development (OECD) is delaying the implementation of Pillar One of the landmark agreement on international tax reform.

A new Progress Report on Pillar One, which includes “a comprehensive draft of the technical model rules to implement a new taxing right that will allow market jurisdictions to tax profits from some of the largest multinational enterprises,” will be open to […]

June 2022

Seven-Time Rochester Top Workplaces Recipient Provides Straight Answers, Trusted Solutions

ROCHESTER, NY (MAY 26, 2022) – Ask any CPA what they’ve been up to lately, and the unanimous answer is, “took some much needed R&R and am back at it!” Even though the April 18 tax deadline has passed, the team at Flaherty Salmin CPAs is still busy taking care of their corporate, affordable housing/community development, and personal clients’ needs.

Although […]

May 2022

IRS Provides Information About 2022 Educator Deduction Increase, IR-2022-70

The IRS reminded educators that they will be able to deduct up to $300 of out-of-pocket classroom expenses when they file their federal income tax return for tax year 2022. This is the first time the annual limit has increased since 2002. For tax years 2002 through 2021, the limit was $250 per year. The limit will rise in $50 […]

Letters Going Out to Taxpayers Missing Qualified Opportunity Fund Information, IR-2022-79

Taxpayers who may need to take additional actions related to Qualified Opportunity Funds (QOFs) should begin receiving letters from the IRS in April. Taxpayers who attached Form 8996, Qualified Opportunity Fund, to their return may receive Letter 6501, Qualified Opportunity Fund (QOF) Investment Standard. This letter lets them know that information needed to support the annual certification of investment standard […]

April 2022

2022 Luxury Auto Depreciation Caps and Lease Inclusion Amounts Issued

The IRS has issued the luxury car depreciation limits for business vehicles placed in service in 2022 and the lease inclusion amounts for business vehicles first leased in 2022.

Luxury Passenger Car Depreciation Caps

The luxury car depreciation caps for a passenger car placed in service in 2022 limit annual depreciation deductions to:

$11,200 for the first year without bonus depreciation$19,200 for the […]

AICPA Pushes For More Action On Schedules K-2 And K-3 Reporting

The American Institute of CPAs reiterated its call for the Internal Revenue Service to delay the implementation of the Schedules K-2 and K-3 reporting until 2023 and suspend any penalties against partnerships and S corporations for failing to file Schedules K-2 and K-3 for the 2021 tax year.

The call, outlined in a February 24 letter to Lily Batchelder, assistant secretary of tax […]

IRS Reminds Taxpayers to Conveniently Check Tax Refund Status

The IRS has reminded taxpayers that the fastest and easiest way to check on tax refunds is by using the “Where’s My Refund?” tool (the tool) on IRS.gov or through the IRS2Go mobile app. The IRS encouraged individuals to file a return this year to get child-related tax credits that were expanded by the American Rescue Plan. These include the Child Tax Credit and […]

March 2022

Simplified Return Filing Procedures Let Individuals Claim 2021 Child, Recovery Rebate and Earned Income Credits

Individuals who are not required to file tax returns for 2021 may use simplified procedures to file returns to claim:

The 2021 child credit, which was expanded and increased for 2021. The IRS may have paid up to one-half of an eligible individual’s credit in advance during 2021, but individuals must file returns to claim the remaining credit, plus any additional […]

Further Details Provided on Relief in Preparing Schedules K-2 and K-3

The IRS has provided further details on additional transition relief for certain domestic partnerships and S corporations preparing the new schedules K-2 and K-3 to further ease the transition to these new schedules. Those eligible for the relief will not have to file the new schedules for tax year 2021. The new schedules K-2 and K-3 improve reporting by standardizing […]

February 2022

Low-Income Housing Credit Deadlines Extended

Notice 2022-5

The IRS extended several deadlines related to the low-income housing credit, in response to the continuing coronavirus (COVID-19) pandemic and precautions necessitated by new disease variants. The extensions generally apply to deadlines that occur between April 1, 2020, and December 31, 2022, for the:

10-percent test for carryover allocations,24-month minimum rehabilitation expenditure period (through December 31, 2023),placed in service deadline,reasonable […]

Final Regulations Address Foreign Tax Credit Issues

The Treasury and IRS have issued final regulations affecting taxpayers that claim credits or deductions for foreign income taxes or claim a deduction for foreign derived intangible income (FDII). The regulations finalize 2020 proposed regulations (REG-101657-20) and address:

the disallowance of a foreign tax credit or deduction for foreign income taxes under Code Sec. 245A(d);the determination of oil and gas extraction income […]

January 2022

IRS Guidance on Retroactive Termination of COVID-19 Employee Retention Credit

The IRS has issued guidance for employers on the retroactive termination of the COVID-19 employee retention credit against the employer’s share of Medicare tax. The Infrastructure Investment and Jobs Act (P.L. 117-58) amended Code Sec. 3134 so that for most employers the credit applies only to wages paid before October 1, 2021. If the employer is a recovery startup business, the credit […]

Tax Pros, Taxpayers Advised to Use Secure Online Account and Digital Signature Options

The IRS has reminded tax professionals and taxpayers that they can use digital signatures on a variety of common IRS forms and access a secure online platform to view and make changes to their account. The IRS has balanced the e-signature option with critical security and protection needed against identity theft and fraud. The Service has informed taxpayers that acceptable […]

Taxpayers Requested to Join IRS Identity Protection Personal Identification Number Program

The IRS has reminded taxpayers that they can get extra protection starting in January by joining the Service’s Identity Protection Personal Identification Number (IP PIN) program. The IRS has made recent changes to the program to make it easier for more taxpayers to join. The fastest and easiest way to receive an IP Pin is by using the Get an IP […]

IRS Official Details Enforcement Agenda For High Earners

The Internal Revenue Service is keeping the pressure on high income taxpayers who do not file their taxes as well as other high wealth taxpayers who may otherwise be hiding their earnings to avoid paying taxes.

And while agents are actively pursuing these people, Darren Guillot, Commissioner of the IRS Small Business/Self-Employed – Collection division said the goal is to avoid […]

December 2021

PPP Tax-exempt Income Timing and Basis Adjustment Guidance Issued

The IRS has released additional Paycheck Protection Program (PPP) loan forgiveness guidance. The guidance addresses (1) timing issues; (2) partner and consolidated group member basis adjustments; and (3) filing of amended partnership returns and information statements.

Timing of Tax-exempt IncomeA taxpayer that received a PPP loan may treat tax-exempt income resulting from the partial or complete forgiveness of the PPP loan […]

November 2021

COBRA Extension Guidance Clarified

The IRS issued a notice clarifying the application of certain extensions granted under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) for the election of COBRA coverage and payment of COBRA premiums due to the COVID-19 emergency. The IRS also addressed the interaction of COBRA continuation coverage under the Emergency Relief Notices with the COBRA premium assistance available for […]

IRS Highlights Tax Withholding Estimator

The IRS has reminded taxpayers that the last quarter of 2021 is a good time to check withholding. The IRS’s convenient Tax Withholding Estimator (https://www.irs.gov/individuals/tax-withholding-estimator), will help taxpayers determine if they have too much withheld and how to make an adjustment to put more cash into their own pocket now. About 70 percent of taxpayers over withhold their taxes every year, […]

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