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Weekly Digests

Weekly Digest – May 19, 2023

I am thrilled that the nice weather is finally here and the sand is warm enough to walk on it barefoot.   I am glad I am following my April 21st Take Away with a twist, we now take “barefoot breaks”…

Beach Break
Beach Break

Get ready for the fig reports, I am not sure if we will have a “crazy” crop like last year but….

It’s Spring & it looks like we will have figs this summer!
It’s Spring & it looks like we will have figs this summer!

Jetty construction continues and it’s very cool to watch…

Jetty Construction Big Machinery at Work
Jetty Construction Big Machinery at Work
Rock Garden on the beach (the boulders that will become the Beach 125th Street Jetty)
Rock Garden on the beach (the boulders that will become the Beach 125th Street Jetty)

Even with all the construction, it’s great to get out early…

Just past sunrise; it's a beautiful morning
Just past sunrise; it’s a beautiful morning

The rain predicted for tomorrow will be good for our gardens and I am looking forward to another sunny Sunday and walk on the beach.  I am hoping you have some great plans.

WEEKLY TAKE AWAY

So much time and energy goes into preparing a webinar or seminar presentation, but I love participating on a panel and always have a great time.  In our office we love to say “any day I learn something new is a great day”.  I am not sure if I learned more preparing the bullet points and scenarios or participating in the actual discussion, but I do know that I got so much out of our presentation “OMG My Client Owes Taxes, What Can I do to help”.  In general I believe that we should be aware and open during interactions with others and you may find you “get more than you give”.  Our panel:  Karen Tenenbaum, esq and Moshe Zupnick of Tenenbaum Law   and Varun Kathait, CPA, esq of Dalal Associates

Panel presentation "OMG My Client Owes Taxes, How Can I Help"
Panel presentation “OMG My Client Owes Taxes, What Can I do to Help”

TAX ISSUES/TAX PLANNING

We have heard that the IRS has used it’s funding in part to hire new auditors and train them.  It has been reported that 2oo new auditors will be examining/auditing the amended payroll tax returns (941X) submitted by businesses for the 2020 and 2021 Employee Retention Tax Credits (ERC).  The IRS has already started sending out these examination/audit notices. Taxpayers may owe taxes due to audits, unexpected capital gains, large bonuses, etc.  It seems appropriate for me to share some of the bullet points from our seminar presentation and my recommendation that you check with your accounting professional or legal advisor before rushing to file a return where you believe penalties will be issued; you may save thousands of dollars:

  • The IRS allows for a first time abatement of penalties (could be late payment, late filing, underpayment of tax or estimates, etc).
  • The IRS allows for a six year “limited lookback” for tax filings.  If your situation meets the criteria you may not have to file and pay back due taxes.
  • The IRS has programs to assist in the collection/payment of various levels of tax debt, i.e., $25,000, $50,000, under $250,000
  • Those businesses who were ineligible for ERC funds but followed advice of the “ERC Mills” could face criminal charges in addition to penalties even after returning the funds.
  • The IRS examination notices for amended payroll tax returns (941X) include a request for very specific documentation as proof of eligibility
  • Those businesses who were ineligible for PPP 2 funds but applied for them and the forgiveness of the loan could face criminal charges in addition to penalties even after returning the funds.  They could also be liable for cancellation of debt income.
  • Those businesses who were ineligible for PPP funding forgiveness of the loan could face criminal charges in addition to penalties even after returning the funds.
  • New York State allows for a one time voluntary disclosure of taxes due the purpose of which is to abatement penalties associated with the late payment and/or late filing of the return. underpayment of tax or estimates).
  • New York State voluntary disclosure will “buy” you an additional 45 days to pay the taxes, however interest will still accrue.

It Bears Repeating: The IRS is Aware of ERC Abuse

I have written about the rules, cautioned about unscrupulous companies advertising huge refunds, and received emails from business owners showing what look like an actual IRS notice urging businesses to contact the company to “claim their estimated tax credit”.  As discussed above, the IRS has hired 200 new auditors and are going after “low hanging fruit”, these amended payroll tax returns with huge refund claims.  Many small businesses my be subject to criminal repercussions as well as penalties and interest on disallowed claims. IRS issues renewed warning on Employee Retention Credit claims; false claims generate compliance risk for people and businesses claiming credit improperly | Internal Revenue Service

The IRS Has Begun Sending Out Notices Again- Resolve Tax Debt With the Help of an Expert

The IRS has “stopped the pause” on generating and mailing notices; you may be receiving IRS correspondence in the near future.  IRS officials noted the following:

  • The IRS has caught up with its mail processing backlog, so there is no longer a concern that the agency is sending notices out to taxpayers who have responded or made payments that had not been opened.
  • Taxpayers who owed balances and were due for enforcement action before the pause will probably receive a refresh notice to remind them of the balance due in the hopes that they or their representative will contact the IRS to work out an arrangement before action is taken on a levy.
  • Enforcement notices will be sent out in waves to avoid overwhelming the IRS’s collection phone lines, Office of Appeals and Taxpayer Advocate when taxpayers receive their notices and try to contact the agency.

I posted this on my May 19, 2022 blog, and am sharing an edited version of that post here:

  • start with getting all delinquent returns ready to file; being in tax compliance is key to any negotiation
  • Offer in Compromise, voluntary disclosure or requests for limited lookback for tax liability reduction can be obtained under certain circumstances.
  • Sometimes just getting penalty reduction or elimination may be the path to bringing your tax bill under control
  • Short-term and long -term installment agreements: we see that the IRS is trying to work more with those who owe – extending existing installment agreements and offering new ones

ECONOMY/DEBT CEILING

Progress with the Debt Limit Ceiling is Being reported 

Talks continue and we wait for news on the outcome of negotiations.  Here are some links to reports:

Taiwan Semiconductor Ups its Arizona Investment to $40 Billion Ahead of Biden’s Visit

TSMC, the world’s largest semiconductor manufacturer, is investing $12 billion in a new factory in Arizona, creating over 1,600 jobs and boosting the local economy.

Read more

General Motors Moves Deeper into Mining with EnergyX Lithium Investment

General Motors has invested in EnergyX, a lithium mining company, in order to expand its presence in the mining industry and to secure a reliable source of lithium for its electric vehicles.

Read more

GENERAL RESOURCES

We sincerely hope that you and your family are well and remain well. If you have any questions or concerns, don’t hesitate to reach out to us. We are here for you.

If you need help with your accounting, want to create a tax minimization plan, want to discuss your business growth plan or your finances, are concerned about retirement goals or need to be held accountable for your 90 day action plan, contact us for a complimentary discovery session or an appointment to just get started.

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