New IRS Memo Answers Questions Related to Form 8300 and Cannabis
Once a business receives cash exceeding $10,000 (in either a transaction or related transactions), a Form 8300 must be filed. Cannabis businesses are cash intensive businesses and therefore are subject to the reporting requirement.A March 1, 2024 Chief Council Memorandum 202409016 addresses a series of questions related to the filing of Form 8300 that have arisen in examinations of cannabis businesses. The memorandum provides guidance on many of these issues in a 16 question-and-answer format. Additional guidance on questions related to cash couriers/armored cars who transport cash between growers/manufacturers and dispensaries/sellers is in process.Example from Q and A #2. What …
President Biden Proposes 2025 Budget
President Biden has proposed a 2025 budget, and it’s a pie-in-the-sky plan that has no chance of getting through Congress. It is instead a political statement of what might be, not what will be. So, why read about the proposals? Because some well-read client will ask about a provision that particularly irritates them. (Think real estate investor and the Section 1031 proposed limit.)The proposed budget includes tax increases of $5.1 trillion over the next ten years, and it assumes that the Tax Cut and Jobs Act will not be extended past 2025.Here are a few items from President Biden’s proposed budget.The …
Student Loan Discharge for Small Loans Has Started
The Department of Education has announced that it will automatically discharge $1.2 billion in loans for nearly 153,000 borrowers who are eligible for the shortened time to forgiveness benefit under the Saving on a Valuable Education (SAVE) Plan. For a borrower to be eligible for this forgiveness, they must be enrolled in the SAVE Plan, have been making at least 10 years of payments, and have originally taken out $12,000 or less for college. For every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments. All borrowers on SAVE receive forgiveness after 20 years …
California Corner: Calling the Practitioner Hotline
By: The FTB continues to request (actually beg) practitioners to utilize the self-service options available on its website using “MyFTB Account.” Accessing information on the website frees up hotline agents to handle cases that cannot be resolved without live contact.Tax Practitioner Hotline(916) 845-7057Tax practitioner hotline implements virtual hold technology. As a result of practitioner feedback, the Tax Practitioner Hotline successfully implemented Virtual Hold technology. Virtual Hold allows callers to save their place in the phone queue and receive a call back instead of waiting on hold for a potentially extended period of time.In March 2023 alone, over 24,000 tax practitioners utilized …
Federal District Court Rules that the Corporate Transparency Act is Unconstitutional (National Small Business United et al v. Yellen et al)
An Alabama Federal District Court has found the Corporate Transparency Act and its Beneficial Ownership Interest (BOI) reporting to be unconstitutional. Judge Liles C. Burke concluded that “The Corporate Transparency Act is unconstitutional because it cannot be justified as an exercise of Congress’ enumerated powers.”What now? This will be a wait-and-see situation as the government appeals the decision and FinCEN decides how to address the decision. But what do we tell our clients?There will be no hurry in filing BOI reports for existing entities, as the reports are not due to FinCEN until Dec. 31, 2024. Wait for a FinCEN …
Capitol Hill Connection: House-Approved Tax Bill Stalls in Senate
While Tracy Chapman’s “Fast Car” may have found its way back to the top of the charts after 30 years, and rightfully so, there is zero related prophecy to the movement of that House-approved tax bill you love to hate or its need for a quickly moving legislative vehicle. “Maybe we can make a deal,” Chapman sings, “maybe together we can get somewhere.” Although it seems Congress is working to do just that with the largely bipartisan, bicameral tax deal that cleared the House on January 31, for now, the bill remains stalled in the Senate.Although I told you earlier …
California Corner: San Diego County Storm Relief Postpones Filing Deadlines to June 17, 2024
By: Federal Notice: IR-2024-51, February 27, 2024 IRS notice IR-2024-51 postpones tax year 2023 tax filing and tax payment obligations for residents and businesses of San Diego County as “federally declared disaster areas” due to severe storms and flooding that began on Jan. 21, 2024. California conforms to the June 17 filing and payment date.Other Counties Coming? The same relief will be available to any other California localities added later to the disaster area. The current list of eligible localities is always available on the disaster relief page on IRS.gov. Although not yet designated, watch for Southern California Counties to be …
Why Trusts Can Be Residents of More Than One State
By: California has 39 million people, according to the census. (I suspect at least 10 million of those folks are employed by the Franchise Tax Board.) The United States has 335 million people. Doing the math, there is a likelihood that if you have an irrevocable trust on the west coast, someone out there is going to ruin your tax professional’s day. so let me get this straight.you can have a trust established in hawaii, holding hawaii real estate and the sole beneficiary is a resident of hawaii, but because the sole fiduciary is a california resident, the whole trust is …
Capitol Hill Connection: Werfel Grilled in House Hot Seat
By: Happy Friday, tax pros. In case you thought you couldn’t possibly start your weekend without a Capitol Hill tax update from your friend in D.C. (you did not), I’ve got you covered.Indeed, things got a little heated yesterday in 1100 Longworth as IRS Commissioner Danny Werfel got a good grillin’ from lawmakers while in the proverbial hot seat during a House Ways and Means Committee hearing. But because I haven’t yet figured out how to communicate by way of smoke signals, despite my brief phase with pyromania, all you get is this eTax Alert. 2024 Tax Filing Season The …
IRS Revises Form 1099-K FAQs
The IRS has revised its frequently asked questions (FAQs) for Form 1099-K, Payment Card and Third Party Network Transactions. The FAQ Fact Sheet, FS-2024-03, released this month provides substantial updates to nearly 50 questions. The IRS announced last November in Notice 2023-74 that it would again delay the new $600 Form 1099-K reporting threshold for third party settlement organizations for calendar year 2023. Following tax community concerns and industry feedback, the IRS is treating 2023 as an additional transition year, which applies to taxes filed this year. Thus, reporting is not required unless the taxpayer receives over $20,000 and has more than …
CALIFORNIA CORNER: FTB Catching Up on Delayed 2022 Business Returns
The California Franchise Tax Board (FTB) has fallen significantly behind in processing business income tax returns for 2022. As of January 29, 2024, the FTB website was showing a processing time of 8 months for all business returns. FTB System Delays As a result of necessary system programming changes to accommodate the winter storm disaster extensions, FTB reports experiencing system delays outside its normal operational time frames. The reprogramming was needed to ensure that interest was correctly calculated on payments due and refunds because of the delayed due dates. As of February 1, 2024, FTB announced it expects to be …
Capitol Hill Connection: House-Approved Tax Bill Awaits Senate Action
I know what you’re thinking: if only the Senate would get moving on that House-approved tax bill, the tax world might not be such a bad place after all. Or maybe you’ve already lost all hope, which is probably best, because while the measure might have legs, they ain’t movin’. At least, not yet, anyway. March, Probably In case you missed it, last week the House cleared the bipartisan Tax Relief for American Families and Workers Act of 2024 (HR 7024) by an impressive 357-to-70 vote on January 31. The tax bill, spearheaded by Senate Finance Chair Ron Wyden, D-Ore., …
ERC Voluntary Disclosure Deadline Approaching
By: I hate to drop this on you just as tax season is starting, but…IRS squeezed in another deadline for tax pros – March 22, 2024. Applications to participate in the new Employee Retention Credit Voluntary Disclosure Program (ERC-VDP) must be filed by 11:59 pm on March 22, 2024. ERC-VDP The ERC-VDP will allow certain businesses to pay back ERC money that they were not entitled to claim. Tax pros will need to know whether their client is eligible to participate, wants to participate, and can meet the deadline to be considered. Then we tax pros will need to present advice …
Don’t Wait on Congress to File, Werfel Says
Happy opening day of the 2024 tax filing season, tax pros. While it may not be as exciting as Major League Baseball’s Opening Day (slated for March 28), today the IRS began accepting and processing federal individual tax returns. Tax Relief for American Families and Workers Act of 2024 In case you have been thinking about holding off on filing until you know more about that tax bill making its way through the House, don’t. At least that’s the advice from IRS Commissioner Danny Werfel.”We urge and encourage taxpayers to file when they are ready,” Werfel said. “Don’t wait on …
Capitol Hill Connection: Top Taxwriters Unveil Bipartisan Tax Framework
As Congress races the clock in negotiations to keep the government fully funded beyond January 19, top congressional taxwriters have unveiled a much-anticipated framework, which would retroactively enhance the Child Tax Credit and extend certain business tax breaks, among other things. The bipartisan, bicameral tax measure faces a tough road ahead, however, a senior congressional aide told Western CPE on January 16. Tax Relief for American Families and Workers Act of 2024 Although we don’t currently have legislative text to review, the proposal is expected to be introduced as the Tax Relief for American Families and Workers Act of 2024, …
2024 Tax Filing Season Kicks Off January 29, IRS Says
The IRS announced today that the 2024 tax filing season is set to begin on January 29. And what does begin really mean, you ask? (You didn’t.) That’s when the IRS will start accepting and processing 2023 individual tax returns. The IRS will begin accepting business tax returns on January 16, 2024. IRS Transformation Notably, the IRS is promising tax pros that they will continue to see significant improvement within the agency as it anticipates more than 128.7 million individual tax returns to be filed by the April 15, 2024, tax deadline. “As our transformation efforts take hold, taxpayers will …
BOI Reporting Begins
Happy New Year, tax pros. How many of you woke up yesterday with all the hopes and dreams a new year brings and spent some of your first moments in 2024 eagerly filing your first Beneficial Ownership Information (BOI) report? Perhaps you poured a spot of Baileys in your coffee to accompany the big moment. And maybe you were even a little surprised by how tickled you felt inside to see the filing process run so smoothly despite all the naysayers.I did none of those things, but you weren’t alone. And there’s no judgement here. Especially about the Baileys. BOI …
Drama in the ERC – IRS Sends Over 20,000 Disallowance Letters
With so much drama in the ERC, it’s kind of hard being denied eligibility. Of course, we’re talking about the Employee Retention Credit, but if “Gin and Juice” also came to mind, we might be friends.The IRS announced yesterday that it has sent more than 20,000 letters notifying taxpayers of their disallowed ERC claim. And that’s just round one. The IRS expects to send additional letters as it continues its increased scrutiny of ERC claims in response to numerous marketing campaigns that have targeted small businesses and other organizations.”With the aggressive marketing we saw with this credit, it’s not surprising …
The Global Tax Surprise
By: Alex M. Parker
With a project as broad and wide-ranging as the Organization for Economic Cooperation and Development’s planned overhaul of the global tax system, many taxpayers who don’t view themselves as involved in significant international tax planning are unexpectedly finding out that they’ll be affected.And they’re also finding out late in the process when their options for response are limited. 15% Global Minimum Tax The project culminated in a 140-country agreement announced in the summer of 2021, including plans for the minimum tax. But it began in 2017 in response to public outrage over alleged tax avoidance in the tech sphere, especially …
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 …