ICYMI | What CPAs Need to Know about Employee Retention Credit Fraud
The CPA Journal » Taxation
by Christopher M. Ferguson, JD
1M 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
1M 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
1M 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
1M 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
3M 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
3M 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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ChatGPT for Legal and Tax Professionals
The CPA Journal » Taxation
by Garrett L. Brodeur, JD, LLM
4M ago
“The world-altering powers that technology has delivered into our hands now require a degree of consideration and foresight that has never before been asked of us.”— Carl Sagan, Pale Blue Dot: A Vision of the Human Future in Space Since the introduction of ChatGPT in November 2022, artificial intelligence (AI) has taken the legal and accounting professions by storm. The use of AI in legal proceedings has already made headlines (“Lawyer’s AI Blunder Shows Perils of ChatGPT in ‘Early Days,’” Bloomberg Law, May 31, 2023, https://bit.ly/3KkdsvM) and research now suggests that most ..read more
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ChatGPT for Legal and Tax Professionals
The CPA Journal » Taxation
by Garrett L. Brodeur, JD, LLM
5M ago
“The world-altering powers that technology has delivered into our hands now require a degree of consideration and foresight that has never before been asked of us.” — Carl Sagan, Pale Blue Dot: A Vision of the Human Future in Space Since the introduction of ChatGPT in November 2022, artificial intelligence (AI) has taken the legal and accounting professions by storm. The use of AI in legal proceedings has already made headlines (“Lawyer’s AI Blunder Shows Perils of ChatGPT in ‘Early Days,’” Bloomberg Law, May 31, 2023, https://bit.ly/3KkdsvM) and research now suggests that most ..read more
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ICYMI | A Taxpayer Victory in a Statutory Resident Case
The CPA Journal » Taxation
by Mark H. Levin, CPA, MST
5M ago
On February 9, 2023, in a major victory for the taxpayer, the New York State Court of Appeals (New York State’s highest court), denied the motion by the New York State Department of Taxation and Finance to appeal the New York Supreme Court, Appellate Division’s decision annulling the New York State Tax Appeals’ decision in the Matter of Nelson Obus et al (Mo. No. 2022-758). A history of this landmark decision follows. Background On June 30, 2022, in a major victory for the taxpayer, the New York Supreme Court, Appellate Division annulled the New York State Tax Appeals Tribunal’s decision ..read more
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ICYMI | Ensuring Business Activity Classification
The CPA Journal » Taxation
by John K. Cook, JD, LLM
5M ago
In Brief Individuals often contend that their hobbies have a profit motive in order to obtain a more favorable tax outcome. But when such disputes reach Tax Court, the IRS often prevails. With hobby expenses generally non-deductible under the Tax Cuts and Jobs Act, the stakes have become even higher in recent years. The authors take a close look at one recent case and review the relevant regulatory factors; their analysis indicates a taxpayer’s chances of prevailing in court and suggests effective planning, documentation, and legal strategies. *** The IRS frequently disputes taxpayers’ claim ..read more
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