Staying on the Right Side of the Law in Tax Collection Matters
The CPA Journal » Taxation
by Megan L. Brackney, JD, LLM (Tax)
5h ago
Tax advisors are sometimes asked by a client for advice or assistance on what might sound like evasion of payment of taxes. What should CPAs do under such circumstances? The first place to start is with the professional ethics rules. Circular 230 clearly prohibits assisting clients in evading taxes or payment. It states that practitioners can be sanctioned for incompetent and disreputable conduct, including: Willfully assisting, counseling, encouraging a client or prospective client in violating, or suggesting to a client or prospective client to violate, any Federal tax law, or knowingly&nb ..read more
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New Jersey Enacts a Convenience of the Employer Rule
The CPA Journal » Taxation
by Mark H. Levin, CPA, MST
1w ago
On July 21, 2023, New Jersey enacted P.L.2023 c.125 (NJ A4694) creating a “convenience of the employer rule” that applies to individual taxpayers who are nonresidents of New Jersey and who are paid for services performed outside the state by a New Jersey employer but were not required to do so by the employer. Such an employer must withhold New Jersey income tax as though the employee worked in New Jersey. This rule applies only to employees whose state of residence imposes a convenience rule, such as Connecticut, Delaware, Nebraska, New York, and Pennsylvania, or any state that enacts such le ..read more
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Navigating the Unsettled Listed Transaction Landscape
The CPA Journal » Taxation
by Michael Waalkes, JD, LLM (Tax)
1w ago
Due to recent taxpayer-favorable court decisions requiring the Department of the Treasury to use formal notice-and-comment procedures under the Administrative Procedure Act (APA), the process by which the IRS publicly identifies listed transactions has undergone significant changes. It remains unclear whether these changes will ultimately have taxpayer-favorable effects, and CPAs are well advised to closely monitor developments. Background Since the enactment of the American Jobs Creations Act of 2004 (AJCA), careful tax professionals have kept a watchful eye on the latest IRS guidance. Pursu ..read more
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New Jersey Enacts a Convenience of the Employer Rule
The CPA Journal » Taxation
by Mark H. Levin, CPA, MST
3w ago
On July 21, 2023, New Jersey enacted P.L.2023 c.125 (NJ A4694) creating a “convenience of the employer rule” that applies to individual taxpayers who are nonresidents of New Jersey and who are paid for services performed outside the state by a New Jersey employer but were not required to do so by the employer. Such an employer must withhold New Jersey income tax as though the employee worked in New Jersey. This rule applies only to employees whose state of residence imposes a convenience rule, such as Connecticut, Delaware, Nebraska, New York, and Pennsylvania, or any state that enacts such le ..read more
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ICYMI | What CPAs Need to Know about Employee Retention Credit Fraud
The CPA Journal » Taxation
by Christopher M. Ferguson, JD
2M ago
Most taxpayers have likely received a solicitation recently claiming that they may be entitled to thousands of dollars in employee retention tax credits. The solicitations involve the Employee Retention Credit (ERC), a payroll tax credit created by the Coronavirus Aid Relief and Economic Security (CARES) Act that has been credited with preserving millions of jobs during the pandemic. According to the IRS, many of these solicitations are offering credits that are “too good to be true”—in some cases, they are downright fraudulent. The IRS is targeting these ERC schemes aggressively. Within the ..read more
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ICYMI | An Inconvenient Truth about Remote Work
The CPA Journal » Taxation
by Stephen A. Josey, JD
2M ago
The “convenience of the employer” rule for sourcing income to a particular state is anything but convenient for tri-state taxpayers. Most states that levy an income tax look to where an employee’s work is performed in determining whether their income is taxable in that state. For example, if an employee physically works in Colorado, income on wages paid to that employee would be subject to Colorado income tax, regardless of where the employer is located. States that employ the convenience of the employer rule—most famously, New York—do things differently, however. Instead of looking to where a ..read more
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ICYMI | The Impact of the SALT Cap on the Marriage Penalty, Business Entity, and Residency
The CPA Journal » Taxation
by Phillip J. Korb, CPA, CGMA, MST
2M ago
For many years, Congress has passed income tax laws designed to mitigate the so-called “marriage penalty.” The marriage penalty occurs when a married couple with similar incomes incurs a higher tax liability by filing taxes jointly than if they would by filing as two single taxpayers. Examples of such provisions by Congress to attempt to alleviate this burden include lower income tax brackets, increased alternative minimum tax (AMT) exemption amounts, and most notably a higher standard deduction for married taxpayers filing jointly. The SALT Cap and the Marriage Penalty The 2017 Tax Cuts and ..read more
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ICYMI | Current Developments in California, Florida, Indiana, and Pennsylvania
The CPA Journal » Taxation
by Corey L. Rosenthal, JD
2M ago
CPAs need to be aware of current tax developments in key states to properly advise their clients that are doing business in multiple jurisdictions. This article provides an overview of some key developments in California, Florida, Indiana, and Pennsylvania. California: Extension of Filing Deadline for Taxpayers Impacted by Winter Storms California Governor Gavin Newsom extended the California income tax deadlines to file individual and business income tax returns and payments to October 16, 2023, for taxpayers affected by the December and January winter storms. The extension applies to taxpay ..read more
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SALT Round-Up—Key Updates in Several Jurisdictions
The CPA Journal » Taxation
by Corey L. Rosenthal, JD
4M ago
CPAs need to be aware of current tax developments in key states to properly advise clients doing business in multiple jurisdictions. As state and local tax jurisdictions continue to face budgetary and staffing challenges, it is crucial for CPAs to regularly monitor developments in surrounding jurisdictions. This article will address some recent key developments in Maryland, New Jersey, and North Carolina. Maryland On September 19, 2023, the Maryland Comptroller issued a letter to tax practitioners acknowledging a major deficiency in the agency’s process in accurately processing the income tax ..read more
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Overview of the Corporate Transparency Act
The CPA Journal » Taxation
by Ian Buksunski, JD
4M ago
Included as part of the National Defense Authorization Act (NDAA) enacted on January 1, 2021, the Anti-Money Laundering Act of 2020 (AMLA) represents the most significant amendments to the U.S. anti-money laundering (AML) regime in more than two decades. The primary goal of AML laws is to prevent nefarious actors from exploiting the financial system to further their illicit acts. Corporate structures can be a part of this problem by enabling bad actors to conceal illegal sources of funds and launder money through legitimate financial institutions. One of the most significant new additions to t ..read more
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