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FinCEN Finalizes BOI Reporting Rule, Digs Heels In On Limited Relief
Treasury’s Financial Crimes Enforcement Network (FinCEN) has finalized its latest beneficial ownership information (BOI) reporting rule, digging its heels in on providing limited relief for certain entities while refusing industry calls to do more.FinCEN first proposed the now final rule last September. Entities created or registered in 2024 now have 90 days to file their initial BOI reports, instead of 30 days. Companies created or registered in 2025 or later still have only 30 days to submit initial BOI reports under the final rule, and those created or registered before 2024 have until 2025. Too Bad, So Sad However, industry …
IRS Again Delays New Form 1099-K Reporting Threshold
By: If you were looking for something to be thankful for in the convoluted information reporting space these days, the IRS has announced in Notice 2023-74 another delay of the new $600 reporting threshold for Form 1099-K. As a result, 2023 will be another transition year for the new, lowered threshold, and reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023.Under the American Rescue Plan Act of 2021 (ARP) (P.L. 117-2), third-party settlement organizations (TPSOs), which include popular payment apps like PayPal and Venmo, were required to report payments of more …
Building a New IRS – Werfel Addresses AICPA National Tax Conference
IRS Commissioner Danny Werfel promised tax pros this week that brick by brick the industry will start to see a steadier foundation of IRS improvements. Werfel, while speaking November 14 at the AICPA National Tax & Sophisticated Tax Conference in Washington, D.C., touted improvements toward building a new IRS – both those we’ve seen and those to come. These already accomplished and expected improvements are in large part because of the significant funding boost provided to the IRS under the Inflation Reduction Act. And though IRS funding continues to be a seemingly partisan issue on Capitol Hill, the logic behind …
Treasury Secretary Yellen Talks IRS Wins, 2024 Tax Filing Season
Treasury Secretary Janet Yellen spotlighted various IRS wins and goals for the 2024 tax filing season in prepared remarks delivered on Tuesday, November 7 at IRS headquarters in Washington, D.C. Most notably, taxpayers are now able to digitally submit to the IRS all correspondence and responses to notices, Yellen announced.This digital enhancement greatly moves the IRS’s modernization efforts forward and beyond a tax system that for too long has lagged far behind the digital age in which we live, according to Yellen. IRS Wins “Last August, I announced an ambitious goal: For the 2024 filing season, taxpayers would be able …
AICPA, Over 50 CPA Organizations Call on FinCEN to Delay BOI Reporting
The American Institute of CPAs (AICPA) and over 50 affiliated CPA organizations are calling on Treasury’s Financial Crimes Enforcement Network (FinCEN) to delay a beneficial ownership information (BOI) reporting rule starting in 2024. The AICPA-led coalition consisting of over 50 state CPA societies and associations, including Washington, D.C. and Guam, stated in an October 30 letter that most businesses are in the dark about the BOI reporting rule’s existence and that the rule as currently drafted would significantly punish even the slightest misunderstanding of the reporting requirements. Small Business Burdens The controversial final rule issued by FinCEN on September 30, 2022, implements …
IRS to Launch Free Direct File Pilot During 2024 Tax Filing Season
The IRS announced today that it will launch a test run of its free Direct File program during the 2024 tax filing season. The Direct File pilot will be limited in scope but will allow eligible taxpayers to file their 2023 federal tax return for free, directly with the IRS. Currently, the IRS expects eligible taxpayers in 13 states to be able to participate in the pilot.Under the Inflation Reduction Act (IRA) (P.L. 117-169), the IRS was directed to study the feasibility of an IRS-run free direct e-file tax return system (Direct File) and submit its findings to Congress. Last …
CALIFORNIA CORNER: IRS Extends California Disaster Relief Again!
By: On October 16, 2023, the IRS issued IR-2023-189, further postponing tax deadlines for most California taxpayers to Nov. 16, 2023. In the wake of last winter’s natural disasters, the normal spring due dates had previously been postponed to October 16.As a result, most individuals and businesses in California will now have until November 16 to file their 2022 returns and pay any tax due. Fifty-five of California’s 58 counties—all except Lassen, Modoc and Shasta counties—qualify. IRS relief is based on three different FEMA disaster declarations covering severe winter storms, flooding, landslides, and mudslides over a period of several months.Eligible returns …
To The Window; To The Wall – IRS Contractor Littlejohn Pleads Guilty for Leaking Data Crawl
Charles Littlejohn, a former IRS contractor, has pleaded guilty to leaking certain high-profile individuals’ tax returns to the media after conducting an illegal data crawl. Former President Trump’s tax return information was reportedly in the mix. The Department of Justice (DOJ) said in an October 12 press release that Littlejohn (not to be confused with the could-be-debated rapper Lil Jon) while working at the IRS as a government contractor stole the tax returns of “a high-ranking government official.” Littlejohn accessed the tax returns on an IRS database after using broad search parameters designed to conceal the true purpose of his …
IRS Releases Clean Vehicle Credits Guidance Package
The IRS has issued a significant package of guidance for the transfer of new and previously owned clean vehicle credits. Under the Inflation Reduction Act (P.L. 117-169), consumers can choose to transfer their new clean vehicle credit of up to $7,500 and their previously owned clean vehicle credit of up to $4,000 to a car dealer starting in 2024. IRS Guidance Drop The IRS guidance drop, which addresses the mechanics of transferring clean vehicle credits from a taxpayer to an eligible entity for vehicles placed in service after Dec. 31, 2023, includes the following: Proposed regulations (REG-113064-23);Revenue Procedure 2023-33; and Fact Sheet …
How Hard Is an Accounting Degree and Is It the Right Path for You?
If you’re considering a career in the realm of numbers, spreadsheets, and financial statements, accounting may be the perfect fit for you. Below, we delve into the complexities, tasks, and potential rewards of pursuing an accounting degree, providing aspiring accountants with the insights they need. If that’s you, stay tuned—we’ve got you covered. The Rigorous Journey: How Hard Is an Accounting Degree? Earning an accounting degree is not a straightforward task. If you find yourself asking, “How hard is an accounting degree?”, you’re asking a question many accounting students ponder. The rigorous accounting program demands a solid understanding of business …
Understanding the Paramount Importance of Professional Skepticism in Auditing
The importance of professional skepticism in ensuring the highest standard of audit quality can’t be overstated. Governed by professional standards and guidelines set by the Assurance Standards Board and other regulatory bodies, auditors are required to infuse a high degree of professional skepticism throughout the audit process. What Exactly is Professional Skepticism? If you’re asking “what is professional skepticism?”, it’s worth noting that it encompasses a questioning mind combined with a critical assessment of audit evidence. This mindset is crucial in obtaining reasonable assurance about whether financial statements are free of material misstatement. The exercise of professional skepticism enhances the …
A&A Alert: AICPA Releases Quality Management Resource
By: Jeff Sailor, CPA
The AICPA on September 26 finalized their long-anticipated resource to assist with implementation of the new System of Quality Management Standards. The practice aid materials were released on October 2. New Quality Management System Mandate SQMS No.1, issued in June 2022, requires all firms with an Audit & Accounting practice to implement a new system of quality management by December 15, 2025. This not only includes firms which perform audits, but firms which perform any A&A engagements including audit, review, compilation or preparation engagements. Thus, virtually ALL firms will have to update their systems and the changes are significant. This …
IRS Expands Tax Pro Account Features
Hey, tax pros — have you checked out the IRS’s upgrades to its online Tax Pro Account tool? The IRS announced last Friday its expansion of Tax Pro Account features, now providing you with access to new services to help clients. New additions to the digital self-service Tax Pro Account portal include:management of active client authorizations on file with the Centralized Authorization File (CAF) database (tax pros can now send Power of Attorney (POA) and Tax Information Authorization (TIA) requests directly to a taxpayer’s individual IRS Online Account);the ability to view client’s tax information, including balance due amounts; andeasier withdraw …
FinCEN Extends BOI Reporting Deadline for Certain Companies
The Financial Crimes Enforcement Network (FinCEN) today issued proposed regulations to extend the deadline for certain entities to file their initial beneficial ownership information (BOI) reports. Under the amendment to FinCEN’s BOI Reporting Rule, it is now providing 90 days for reporting companies created or registered in 2024 to file their initial reports, instead of 30 days.The proposed rule would not make any other changes to the final BOI Reporting Rule:reporting companies created or registered before January 1, 2024, would have until January 1, 2025, to file their initial BOI reports with FinCEN, andentities created or registered on or after January 1, 2025, …
Capitol Hill Connection: Federal Gov’t Shutdown Looms
A federal government shutdown looms as lawmakers on Capitol Hill struggle to reach consensus on fiscal year 2024 appropriations. In other words, Congress has just four days to get it together on the funding front before the lights go out on October 1. A senior congressional aide told Western CPE on September 25 that a “clean” continuing resolution (CR) is expected to pass just in the nick of time this week to keep the government’s doors open, which will likely run through mid-November or December. Typically, CRs are used as a stopgap measure to continue the level of government funding at …
FinCEN Issues BOI Reporting Guide for Small Businesses
On 9/18/23, Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a guide to help small businesses comply with a new beneficial ownership information (BOI) reporting rule set to begin in 2024. The controversial final rule issued by FinCEN on September 30, 2022, implements Section 6403 of the Corporate Transparency Act (CTA), an anti-money laundering law aimed at those seeking to conceal their ownership of corporations, LLCs, or other entities in the U.S. to facilitate money laundering, tax fraud, and other illegal acts.According to FinCEN, the new Small Entity Compliance Guide: Describes each of the BOI reporting rule’s provisions in simple, easy-to-read language; Answers …
CMA vs MBA: A Guide to Career Paths for Accountants
Deciding between a CMA (Certified Management Accountant) and an MBA (Master of Business Administration) is a common conundrum for accounting and finance professionals. Both the CMA credential and the MBA degree offer promising career prospects in the business administration and financial management sectors. This guide aims to decode these academic and professional paths, from the CMA exam to MBA programs, to help you align your education with your desired career path. What is CMA? The Certified Management Accountant (CMA) is a globally recognized certification that focuses on management accounting and financial management. To earn the CMA certification, candidates must pass …
CALIFORNIA CORNER: FTB Issues Guidance Regarding Payments Made Following Disaster Relief
In a Tax News Flash issued September 15, 2023, the California Franchise Tax Board (FTB) has warned taxpayers and tax professionals about combining payments due October 16, 2023. The disaster declarations from the winter storms that were applicable to most counties of California extended the due date for multiple personal and business entity tax payments covering two tax years. To ensure your clients’ payments are processed timely and accurately, please submit separate payments for each payment type and do not combine payments for different tax years. As an example, be sure that payments for 2022 tax year liabilities are made …
IRS Stops All New ERC Processing to Combat Fraud
The IRS has stopped processing all new employee retention credit (ERC) claims in an effort to combat rampant fraud associated with the program. The IRS announced the immediate moratorium on processing all new ERC claims on 9/14/23, which is expected to be in place through at least the end of the year.The move ordered by IRS Commissioner Danny Werfel comes after growing concerns from the IRS and tax pros alike that a substantial share of new claims from the aging program are ineligible and fraudulent, ultimately putting businesses at financial risk by being pressured and scammed by aggressive promoters and …
IRS Readies Boost in Partnership, High-Income Audits Using AI
The IRS has announced the rollout of a sweeping, historic effort to redirect its focus of taxpayer examinations on high-income earners, partnerships, and large corporations. The shift in the agency’s attention to more complex audits comes as a result of increased funding provided to the IRS under the Inflation Reduction Act (IRA) (P.L. 117-169).Key variables in the IRS’s new audit equation include:Prioritization of high-income cases.The IRS will intensify work on nearly 1,600 identified taxpayers with total positive income above $1 million that have more than $250,000 in recognized tax debt.Expansion of pilot focused on largest partnerships leveraging Artificial Intelligence.With the …