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 TAX ISSUES/TAX PLANNING

IRS Halts New Employee Retention Tax Credit  Processing After the Flood of Bogus Claims

We and our clients have been receiving emails and letters from Employee Retention Tax Credit (ERC) mills for months. We reviewed the situation for each of our clients when the law was enacted and we received updates and clarification from the IRS. When applicable we were able to file amended tax returns to request the credits. It is certainly upsetting to see the extent of the fraud but I am glad the IRS is suspending the processing of new returns and scrutinizing those that have been filed but not funded.

From AccountingToday: The Internal Revenue Service said Thursday it’s putting an immediate stop to processing of new claims for the Employee Retention Credit after receiving a surge of questionable claims.

From CPA Practice Advisor:  IRS Commissioner Danny Werfel ordered the immediate moratorium today and said the agency “could no longer tolerate growing evidence of questionable claims pouring in.” …“The IRS is increasingly alarmed about honest small business owners being scammed by unscrupulous actors,” he said in a press release. “The further we get from the pandemic, the further we see the good intentions of this important program abused. The continued aggressive marketing of these schemes is harming well-meaning businesses and delaying the payment of legitimate claims, which makes it harder to run the rest of the tax system. This harms all taxpayers, not just ERC applicants.” …  On July 26, the agency announced it was increasingly shifting its focus to review these claims for compliance concerns, including intensifying audit work and criminal investigations on promoters and businesses filing dubious claims. The IRS said on Thursday that the agency is working on hundreds of criminal cases, and thousands of ERC claims have been referred for audit.

ECONOMY

The UAW’s Big Asks; Unusual Strike Strategy, and What this Means for Us

Auto workers at GM, Ford, and Stellantis walking off the job will have ramifications for workers, consumers, and the economy.  The auto workers are using a tactic of “stand up” strikes, where it will call on workers at certain specific plants to strike while others keep working under their expired contracts.  “All options remain on the table,” said UAW President Shawn Fine in a speech on Facebook Live on Thursday evening. “National leadership will determine the appropriate targets and timing for further stand-up strike action. This is our generation’s defining moment. The money is there, the cause is righteous, the world is watching, and the UAW is ready to stand up.”

The union hopes the strategy will give it leverage and keep the companies guessing as to what it’s going to do next. It will also help the UAW to stretch out its $825 million strike fund if the strike drags on — which it could, given the distance between the parties — and to escalate if need be.

The Fed Hits Pause on Interest Rate Hikes While it Reviews More Data

“The Federal Reserve said Wednesday it will pause its rate hikes, keeping its benchmark lending rate at a 22-year high, while signaling fewer rate cuts next year.  The move was widely expected, after the central bank signaled in recent weeks that it intended to wait for more data to understand how previous rate hikes are affecting the US economy.”

10 Signs the US Economy May Struggle in the Next Year

Over the past few months, economists have been noting how the economy’s progress has shattered expectations. The next year, though, may not be so smooth sailing. Torsten Sløk, chief economist at Apollo Global Management, highlighted at the Fall 2023 Stern Economic Outlook Forum on Tuesday, hosted by the NYU Stern School of Business, some risks to the quickly improving US economy. That included the resumption of student loan payments, rising delinquency rates, and slowing economies of US trade partners.

Inflation Ticks Up To 3.7%; Biggest Monthly Jump Since January

Consumer prices rose 3.7% in the 12-month period ending in August, registering their largest monthly increase since January thanks largely to surging prices at the pump

JPMorgan CEO Warns: ‘Huge mistake’ to Expect ‘Booming Environment for Years’

JPMorgan CEO Jamie Dimon warns that the extended period of good vibes for consumers may soon come to an end, an ominous warning about the relatively comfortable stretch for Americans’ financial health even amid a flurry of worrisome headlines.

GENERAL RESOURCES

• IRS resources for stimulus payments:
  • Use the Get My Payment tool to check on EIP payment status
  • Eligibility and general information about Economic Impact Payments
  • A list of frequently asked questions for stimulus payments
• IRS information about the Advance Child Tax Credit Payments
  • Portal to update information
  • A list of frequently asked questions on the advance Child Tax Credit Payments
• The best source for up-to-date and accurate health information is the Center for Disease Control (CDC)
• Our prior blog posts, videos and prior weekly newsletters
• Entrepreneur put together a listing of free tech resources for remote work
• The Consumer Financial Protection Bureau has warnings about COVID-related scams
• The New York Times has an online newsletter on K-12 and higher education
• The Wall Street Journal has a collection of articles on education
• The Louvre has digitized 482,000 artworks from its collection
• How to create a strong password

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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