tag:blogger.com,1999:blog-26413929734749462462024-03-21T03:28:09.006-07:00The Newport Beach Tax Attorney Blog The Newport Beach Tax Attorney blog is dedicated to tax issues serving Orange County and Southern California. Posts cover recent news and tax cases including audits, tax litigation, IRS, and cryptocurrency tax issues. For more on the Orange County Tax Attorney Joseph P. Wilson, visit https://www.wilsontaxlaw.com or 949.397.2292 Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.comBlogger235125truetag:blogger.com,1999:blog-2641392973474946246.post-52471289042200775692023-05-05T09:43:00.001-07:002023-05-05T09:43:43.803-07:00Tax Savings - Expanded Energy Tax Credits<p>Individuals who make energy improvements to their existing residence including solar, wind, geothermal, fuel cells or battery storage may be eligible for expanded home energy tax credits as stipulated by the Inflation Reduction Act of 2022. The Residential Clean Energy Credit equals 30-percent of the costs of new, qualified clean energy property for a home in the United States installed anytime from 2022 through 2033.  Individuals can claim their Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit for the year the qualifying expenditures are made by filing Form 5695.  In claiming these credits, its impotent to keep good records of purchases and expenses during the time the improvements are made.  It is also important that individuals understand the requirements for claiming these credits and that they discuss them with their own tax and/or legal advisors before claiming the credits on their tax returns.  If you require assistance with the requirements and claiming these credits, the tax attorneys at Wilson Tax Law Group are available to assist.<br/><br/>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.<br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)<br/><br/> </p>Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-86214204900109710242023-05-04T14:19:00.001-07:002023-05-04T14:19:37.646-07:002023 Tax Planning to Take Advantage of Tax Saving Opportunities<p>It’s never too early to start this year’s tax planning.  Entrepreneurs should begin planning to take advantage of tax-saving opportunities and get ready for reporting changes in 2023. With next year’s filing deadline nearly a year away, taxpayers still have time to identify possible tax benefits, take action to qualify for them and claim them when they file in 2024. They also have time to plan for reporting changes and even claim overlooked tax benefits from the recent past.<br/></p><h5>Tax Planning May Include Employee Retention Credits (ERC) and Energy Cost Savings</h5><br/>Taxpayers should review the provisions of the Inflation Reduction Act (IRA), which can save business owners money on energy costs. Additionally, eligible employers who overlooked the Employee Retention Credit (ERC) when they filed payroll tax returns for 2020 and 2021 can still claim it by filing the form 941-X.  Taxpayers should seek competent assistance from a reputable tax professional to determine eligibility requirements. Meanwhile, employers who provide educational assistance programs can use them to help pay student loan obligations for their employees. Employers should review the employment tax treatment of fringe benefits.<br/><br/>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.<br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-51071083291186645402023-05-02T09:48:00.001-07:002023-05-02T09:48:05.936-07:00California Disaster IRS Tax Relief Notice Updated<p>Tax Alert-<br/><br/>A January 10, 2023 notice granting relief to victims of severe winter storms, flooding and mudslides that began on January 8, 2023, in parts of California was updated by the IRS on February 23, 2023, to clarify language in the fourth paragraph of the notice. The IRS clarified that the October 16, 2023, deadline also applies to the quarterly estimated tax payments, normally due on January 17, April 18, June 15 and September 15, 2023.  The notice was updated on 1/11/23, 2/23,23 and recently on 4/26/23.   Affected taxpayers who are contacted by the IRS on a collection or examination matter should contact a tax professional who can explain how the disaster impacts the taxpayer so that the IRS can provide appropriate consideration to their case.<br/><br/>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.<br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)</p>Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-24251722738279950582023-05-01T07:52:00.001-07:002023-05-01T07:52:47.420-07:002018 Is Benchmark Year For Upcoming IRS Audit Rates<p>The Internal Revenue Service will use 2018 as the benchmark year for determining audit rates as it plans to increase enforcement for those individuals and businesses making more than $400,000 per year.<br/><br/>The agency is "going to be focused completely on … closing the gap," IRS Commissioner Daniel said April 27, 2023, during a hearing of the House Ways and Means Committee. "What that means is the audit rate, the most recent audit rate, we have that’s complete and final is 2018. That is the rate that I want to share with the American people. The audit rate will not go above that rate for years to come because for the next several years, at least, we’re going to be focused on work that we’re doing with the highest income filers."<br/><br/>Werfel added that even if the IRS were to expand its audit footprint a few years from now, "you’re still not going to get anywhere near that historical average for quite some time. So, I think there can be assurances to the American people that if you earn under $400,000, there’s no new wave of audits coming. The probability of you being audited before the Inflation Reduction Act and after the Inflation Reduction Act are not changed at all."<br/><br/>He also noted that many of the new hires that will be brought in to handle enforcement will focus on the wealthiest individuals and businesses. Werfel said that there currently are only 2,600 employees that cover filings of the wealthiest 390,000 filers and that is where many of the enforcement hires will be used.<br/><br/>"We have to up our game if we’re going to effectively assess whether these organizations are paying what they owe," he testified. "So, it’s about hiring. It’s about training. And it’s not just hiring auditors, it’s about hiring economists, scientists, engineers. And when I [say] scientists, I mean data scientists to truly help us strategically figure out where the gaps are so we can close those gaps."<br/><br/>Werfel did sidestep a question about the potential need for actually increasing the number of audits for those making under $400,000. When asked about a Joint Committee on Taxation report that found that more than 90 percent of unreported income actually came from taxpayers earning less than $400,000, he responded that "there is a lot of mounting evidence that there is significant underreporting or tax gap in the highest income filers. For example, there’s a study that was done by the U.S. Treasury Department that looked at the top one percent of Americans and found that as much as $163 billion of tax dodging, roughly."<br/><br/>And while answering the questions on the need for more personnel to handle the audits of the wealthy, he did acknowledge that "a big driver" of needing such a large workforce to handle the filings of wealthy taxpayers is due to the complexity of the tax code, in addition to a growing population, a growing economy, and an increasing number of wealthy taxpayers.<br/><br/>As we continue to see an uptick in audits for high income earners, having well-qualified tax professionals as representatives becomes even more essential.  Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.<br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)</p>Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-80797876902025988912023-03-23T15:02:00.001-07:002023-03-23T15:02:12.580-07:00FTB Extends filing deadline to 10/16/23 Due to Storms<strong>Sacramento</strong> – The IRS announced tax relief for Californians affected by the recent winter storms. Taxpayers affected by these storms qualify for an extension to October 16, 2023, to file individual and business tax returns and make certain tax payments. This includes:<br/><ul><br/> <li>Individuals whose tax returns and payments are due on April 18, 2023.</li><br/> <li>Quarterly estimated tax payments due January 17, 2023, April 18, 2023, June 15, 2023, and September 15, 2023.</li><br/> <li>Business entities whose tax returns are normally due on March 15 and April 18.</li><br/> <li>Pass-through Elective (PTE) Tax payments due on June 15, 2023.</li><br/></ul><br/>The following counties are eligible for this extended tax relief, per the IRS January 10 announcement and IRS January 24 announcement:<br/><br/>Residents and businesses in Alameda, Alpine, Amador, Butte, Calaveras, Colusa, Contra Costa, Del Norte, El Dorado, Fresno, Glenn, Humboldt, Inyo, Kings, Lake, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Nevada, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolumne, Ventura, Yolo, and Yuba counties who have been affected by severe winter storms, flooding, landslides, and mudslides are eligible for tax relief.<br/><br/>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.<br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-13371489725843825032023-03-17T02:51:00.001-07:002023-03-17T02:51:24.434-07:00FTB extends filing deadline for taxpayers impacted by 2022-23 winter storms to Oct. 16, 2023<p>Sacramento CA<br/>Repost<br/><br/>Tax Relief <br/><br/>The IRS announced tax relief for Californians affected by the recent winter storms. Taxpayers affected by these storms may qualify for an extension to October 16, 2023, to file an individual extension and business tax to claim <img src="https://wilsontaxlaw.com/wp-content/uploads/2021/08/Mansour-Tiffany-83-WEBSIZE-200x300.jpg" alt="" width="200" height="300" class="aligncenter size-medium wp-image-12701"/>tax payments. <br/><br/>This includes:<br/>• Individuals whose tax returns and payments are due on April 18, 2023.<br/>• Quarterly estimated tax payments due January 17, 2023, April 18, 2023, June 15, 2023, and September 15, 2023.<br/>• Business entities whose tax returns are normally due on March 15 and April 18.<br/>• Pass-through Elective (PTE) Tax payments due on June 15, 2023.<br/><br/>The following counties are eligible for this extended tax relief, per the IRS January 10 announcement and IRS January 24 announcement:<br/><br/>Residents and businesses in Alameda, Alpine, Amador, Butte, Calaveras, Colusa, Contra Costa, Del Norte, El Dorado, Fresno, Glenn, Humboldt, Inyo, Kings, Lake, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Nevada, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolumne, Ventura, Yolo, and Yuba counties who have been affected by severe winter storms, flooding, landslides, and mudslides are eligible for tax relief.<br/><br/> <br/><br/>For further information, or to arrange a consultation please contact Wilson Tax Law group, APLC. We will be more than happy to assist. As a former IRS trial lawyers a former Assistance US Attorneys in the Tax Division we are happy to share show up at the mall.<br/><br/>Please come contact as tax Attorney’s is you are considerate id if you plan to tal<br/>The quiz.<br/><br/>Newport Beach and Yorba Linda, California<br/>Tel: (949) 397-2292 (Newport Beach Office)<br/>Tel: (714) 463-4430 (Yorba Linda Office)</p>Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-55491640928822153332022-12-24T07:14:00.001-08:002022-12-24T07:14:17.005-08:00MERRY CHRISTMAS!<h3>From our home to yours, Merry Christmas and Happy New Year!  🎈 www.https://wilsontax.com</h3><br/> Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-78143736297787594632022-11-24T12:51:00.001-08:002022-11-24T12:51:20.297-08:00Happy ThanksgivingJoseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-2580348332969192802022-10-25T11:51:00.001-07:002022-10-25T11:51:36.447-07:00IRS Routinely Violates the Collection Statute of Limitations<p>Press Release<br/>FOR IMMEDIATE RELEASE<br/>TIGTA Report Number: 2022-10-043<br/>Newport Beach, California<br/><br/>A recent August 19, 2022 Treasury Inspector General For Tax Administration ("TIGTA") <a href="https://www.treasury.gov/tigta/auditreports/2022reports/202210043fr.pdf">report</a> held the inspector continued to identify errors related to the suspension of the collection Statute Expiration Date ("CSED")  on taxpayer accounts.  TIGTA found that 18 (20 percent) of the 91 cases reviewed had an incorrect CSED.  In TIGTA's prior year review, it identified 19 percent of cases had CSED errors (15 taxpayer accounts from a sample of 81). The CSED is the expiration of the time period established by law to collect taxes. The CSED is normally 10 years from the date of the tax assessment. Once a liability is assessed, the statute of limitations for collection begins to run. The expiration of the collection statute ends the Federal Government’s right to pursue collection of a liability. When a request for a CDP hearing is timely received, the IRS suspends the CSED from the receipt date of the CDP hearing request until the date the Appeals determination is made final or the date the IRS receives the taxpayer’s withdrawal request.  For this review, TIGTA identified:<br/><br/>• 10 CDP cases had the CSED incorrectly extended. As a result, the<span style="text-decoration: underline;"><strong> IRS has more time to collect delinquent taxes than it was authorized</strong></span>. Additional collection activity creates an unnecessary burden on the taxpayer.  Based on our sample results, TIGRA estimates that the IRS may have improperly extended the CSED for 3,233 of 28,667 CDP cases closed in FY 2021;<br/><br/>• 8 CDP cases had the CSED incorrectly shortened. As a result, the IRS has less time to collect any outstanding balance due from the taxpayer than it was authorized. Based on TIGTA's sample results, it estimates that the IRS may have inadvertently shortened the CSED for 2,586 of 28,667 CDP cases closed in FY 2021.<br/><br/>Calling this almost a wash would be inappropriate considering this means the IRS violated the collection the statute in an estimated 5,819 cases.   Appeals management agreed with all of the errors TIGTA identified and stated that the CSED errors were a result of human error.  Hopefully the IRS improves training on this to allow the statute to be correctly applied.  It also means anytime a taxpayer owes taxes it is extremely important that the collection statute expiration date be examined.   If the statute has expired it is legally impermissible for the IRS to collect the debt owed and it should release the tax liens.<br/><br/><a href="https://wilsontaxlaw.com/profile/">Wilson Tax Law Group, APLC</a> is an Orange County law firm specializing in Federal and State tax audits, internal compliance, FBAR, offshore bank account disclosures, and criminal tax, including appeals, trials, and collections. The Los Angeles and San Francisco Daily Journals have named Wilson Tax Law Group, APLC as one of the “<a href="https://wilsontaxlaw.com/wilson-tax-law-group-named-to-list-of-californias-top-20-boutique-law-firms/">Top 20 Boutique Firms in California</a>”.<br/><br/><a href="https://wilsontaxlaw.com/"><b>Newport Beach Main Office</b></a><b><br/></b>1401 Dove Street Suite 630<br/>Newport Beach, CA 92660<br/>949.397.2292<br/><br/><a href="https://wilsontaxlaw.com/"><b>Yorba Linda Branch Office</b></a><b><br/></b>18281 Lemon Drive<br/>Yorba Linda, CA 92886<br/>714.463.4430<br/><br/><img src="https://cts.businesswire.com/ct/CT?id=bwnews&sty=20191112005586r1&sid=web01&distro=nx&lang=en" alt=""/><a href="https://wilsontaxlaw.com/">https://wilsontaxlaw.com</a><br/><br/><a href="https://wilsontaxlaw.com/fareedeh-wilson/">Fareedeh Wilson</a><br/>Press Relations<br/>Wilson Tax Law Group, APLC<br/>Newport Beach, California<br/>949-397-2292</p>Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-22517889027605816992022-09-26T09:50:00.001-07:002022-09-26T09:50:29.555-07:00IRS Announces Late Filing Penalty Relief For 2019 and 2020 Tax Returns Filed Before September 30<p>Press Release - (IR-2022-163)<br/><br/>In recent news the IRS has announced that, individual taxpayers and businesses, impacted by the pandemic may qualify for a late filing penalty relief, provided their tax returns for the years 2019 and 2020 are filed on or before the filing deadline on September 30, 2022. This relief applies to Form 1040, US Individual Income Tax Return and Form 1120, US Corporation Income Tax Return series, as well as others listed in the Notice 2022-36, issued by the IRS. Further, taxpayers who file during the first few months after the filing deadline, would qualify for partial penalty relief, because the penalty for eligible returns would start accruing from October. 1, 2022, instead of the return’s original due date. However, the failure to pay penalty and interest stands applicable to unpaid taxes, based on the return’s original due date.<br/><br/>The IRS has also qualified that, the penalty relief is not available under the following circumstances:<br/></p><ul><li>for applicable international information returns when the penalty is part of an examination;</li><br/> <li>for filing of returns for the year 2021; and</li><br/></ul><br/>in situations where, a fraudulent return was filed, or where the penalties were part of an accepted offer in compromise or a closing agreement, or where the penalties were finally determined by a court.  This make sense given the nature of these specific situations.<br/><br/>However, for ineligible penalties, such as the failure-to-pay penalty, taxpayers could use existing penalty relief procedures, such as applying for relief under the reasonable cause criteria or the First-Time Abate program. The IRS has also announced that, eligible taxpayers who have already filed their return do not need to apply for it, and those filing presently, do not need to attach a statement or other documents to their return. Further, those who have already paid the penalty are eligible for refunds, which will be processed by end of September, 2022.<br/><br/><a href="https://wilsontaxlaw.com/profile/">Wilson Tax Law Group, APLC</a> is an Orange County law firm specializing in Federal and State tax audits, internal compliance, FBAR, offshore bank account disclosures, and criminal tax, including appeals, trials, and collections. The Los Angeles and San Francisco Daily Journals have named Wilson Tax Law Group, APLC as one of the “<a href="https://wilsontaxlaw.com/wilson-tax-law-group-named-to-list-of-californias-top-20-boutique-law-firms/">Top 20 Boutique Firms in California</a>”.<br/><br/><a href="https://wilsontaxlaw.com/"><b>Newport Beach Main Office</b></a><b><br/></b>1401 Dove Street Suite 630<br/>Newport Beach, CA 92660<br/>949.397.2292<br/><br/><a href="https://wilsontaxlaw.com/"><b>Yorba Linda Branch Office</b></a><b><br/></b>18281 Lemon Drive<br/>Yorba Linda, CA 92886<br/>714.463.4430<br/><br/><img src="https://cts.businesswire.com/ct/CT?id=bwnews&sty=20191112005586r1&sid=web01&distro=nx&lang=en" alt=""/><a href="https://wilsontaxlaw.com/">https://wilsontaxlaw.com</a><br/><br/><a href="https://wilsontaxlaw.com/fareedeh-wilson/">Fareedeh Wilson</a><br/>Press Relations<br/>Wilson Tax Law Group, APLC<br/>Newport Beach, California<br/>949-397-2292<br/><div class="et_social_inline et_social_mobile_on et_social_inline_bottom"><br/><div class="et_social_networks et_social_autowidth et_social_slide et_social_circle et_social_top et_social_no_animation et_social_outer_dark"><br/><ul class="et_social_icons_container"><li class="et_social_facebook"><br/></li></ul><br/></div></div>Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-79020046901906063512022-09-22T12:10:00.005-07:002022-09-22T12:10:34.928-07:00IRS Announces More Options to Amend Returns Electronically<p>The IRS has announced that more forms can now be amended electronically. These include people filing corrections to the Form 1040-NR, U.S. Nonresident Alien Income Tax Return, Forms 1040-SS, U.S. Self-Employment Tax Return and Forms 1040-PR, Self-Employment Tax Return – Puerto Rico. Additionally, an electronic checkbox has been added for Forms 1040, 1040-SR, 1040-NR, 1040-SS and 1040-PR to indicate that a superseding return is being filed electronically. Taxpayers can also amend their return…<br/><br/>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.<br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a>.<br/><br/>Newport Beach and Yorba Linda, California.<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)</p>Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-41833360814691697492022-09-22T12:10:00.003-07:002022-09-22T12:10:16.843-07:00California Ends Cannabis Cultivation Tax<p>Beginning July 1, 2022, the California cannabis cultivation tax no longer applies to cannabis or cannabis products entering the commercial market. Cannabis enters the commercial market when the cannabis or cannabis products pass the required testing and quality assurance review.<br/><br/><strong>Changes to Cultivation Tax Requirements</strong><br/><br/>The following cannabis cultivation tax changes apply beginning July 1, 2022:<br/></p><ul><li>distributors and manufacturers, including microbusinesses authorized to distribute or manufacture cannabis, are no longer required to collect the cultivation tax from cultivators;</li><br/> <li>cultivators, including microbusinesses authorized to cultivate, are no longer responsible for paying the cultivation tax to manufacturers or distributors when cultivators sell or transfer cannabis to another licensee;</li><br/> <li>the cultivation tax is not due on cannabis or cannabis products entering the commercial market on or after July 1, 2022, even if cannabis was received from a cultivator prior to July 1, 2022; and</li><br/> <li>any cultivation tax collected on cannabis that enters the commercial market on or after July 1, 2022, must be returned to the cultivator that originally paid the cultivation tax.</li><br/></ul><strong>Excess Cultivation Tax That Is Collected</strong><br/><br/>Cultivation tax that cannot be returned to the cultivator who paid it is considered excess cultivation tax collected. In such an instance, manufacturers or cultivators must:<br/><ul><li>a manufacturer that has collected the cultivation tax and is not able to return it to the cultivator who paid it, must transfer the excess cultivation tax collected to a distributor to remit to the California Department of Tax and Fee Administration (CDTFA);</li><br/> <li>a distributor that has collected the cultivation tax and is not able to return it to the cultivator who paid it, must remit the excess cultivation tax collected to the CDTFA; and</li><br/> <li>a distributor should report and pay any excess cultivation tax collected on their next cannabis tax return.</li><br/></ul><br/>Each licensee in a transaction should keep clear records to document when the cultivation tax was collected or not collected, returned to a cultivator, transferred to a distributor, or when excess cultivation tax was paid to the CDTFA.  Please be advised this should not be construed as legal advice.  You should consult a tax professional or the State of California if you have any questions or concerns regarding the end of the cannabis cultivation tax in the State of California.<br/><br/>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.<br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a>.<br/><br/>Newport Beach and Yorba Linda, California.<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-32893480132289358282022-09-22T12:10:00.001-07:002022-09-22T12:10:00.799-07:00IRS Audits on the Rise & Tax Credits<p>Press Release<br/>FOR IMMEDIATE RELEASE<br/><br/>President Biden Signs Inflation Reduction Act Into Law<br/><br/>WASHINGTON D.C.-  President Biden, on August 16, 2022, signed the Inflation Reduction Act into law following its passage along party lines in both chambers of Congress.<br/><br/>The law (H.R. 5376) is a slimmed down version of the Build Back Better Act that passed the House in 2021 but failed to even come up for a vote in the Senate due to opposition primarily from Sen. Joe Manchin (D-W.V.).  The Inflation Reduction Act did manage to keep some of the failed Build Back Better Act’s provisions in terms of generating revenues from corporations and wealthy taxpayers, as well as meeting some of the White House’s goals in the energy and health care sectors.<br/><br/>The law includes a one percent excise tax on stock repurchases, which goes into effect beginning in 2023, as well as a new corporate alternative minimum tax, although that does not apply to companies owned by private equity funds or certain manufacturing.<br/><br/>On the individual side, the IRS received a boost in funding of $80 billion across 10 years, part of which will be used to hire new agents who will help to the agency close the tax gap and get the wealthiest individuals to pay their fair share of taxes. Department of the Treasury Secretary Janet Yellen has directed the Internal Revenue Service to not use any of the new funding to increase the share of small businesses or households making $400,000 or less that are exposed to audit.<br/><br/>To help meet the Biden Administration’s environmental goals, the law includes tax credits for electric vehicle purchases, as well as new tax credits and extensions on expiring tax credits to produce electricity from renewable sources; making homes more energy efficient; and other activities aimed at reducing the carbon output of the nation.<br/><br/><a href="https://wilsontaxlaw.com/profile/">Wilson Tax Law Group, APLC</a> is an Orange County law firm specializing in Federal and State tax audits, internal compliance, FBAR, offshore bank account disclosures, and criminal tax, including appeals, trials, and collections. The Los Angeles and San Francisco Daily Journals have named Wilson Tax Law Group, APLC as one of the “<a href="https://wilsontaxlaw.com/wilson-tax-law-group-named-to-list-of-californias-top-20-boutique-law-firms/">Top 20 Boutique Firms in California</a>”.<br/><br/><a href="https://wilsontaxlaw.com/"><b>Newport Beach Main Office</b></a><b><br/></b>1401 Dove Street Suite 630<br/>Newport Beach, CA 92660<br/>949.397.2292<br/><br/><a href="https://wilsontaxlaw.com/"><b>Yorba Linda Branch Office</b></a><b><br/></b>18281 Lemon Drive<br/>Yorba Linda, CA 92886<br/>714.463.4430<br/><br/><img src="https://cts.businesswire.com/ct/CT?id=bwnews&sty=20191112005586r1&sid=web01&distro=nx&lang=en" alt=""/><a href="https://wilsontaxlaw.com/">https://wilsontaxlaw.com</a><br/><br/><a href="https://wilsontaxlaw.com/fareedeh-wilson/">Fareedeh Wilson</a><br/>Press Relations<br/>Wilson Tax Law Group, APLC<br/>Newport Beach, California<br/>949-397-2292</p>Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-2353112339249676952022-09-22T12:09:00.001-07:002022-09-22T12:09:25.936-07:00AICPA Requests More Penalty Relief<p>The American Institute of CPAs is seeking additional taxpayer relief following the announcement that the Internal Revenue Service would provide late filing penalty relief for certain taxpayers affected by the COVID-19 pandemic for tax years 2019 and 2020.<br/><br/>In a September 8, 2022, a letter to the agency and the Department of the Treasury, AIPCA asked the IRS for a number of additional relief measures, including expanding the scope of relief to include non-automatically assessed penalties, amended returns, and all international information returns; and include failure to pay penalties and have the relief cover additional forms; provide relief to more tax years.<br/><br/>The IRS, in August 2022, announced that it would be providing, announcing that certain taxpayers would be eligible for relief from failure to file penalties for tax years 2019 and 2020, assuming those tax forms are filed no later than September 30, 2022, with refunds automatically refunded or applied to outstanding debt. The relief has been offered as a result of the processing delays due to the ongoing pandemic.<br/><br/>"The AICPS appreciate the IRS providing relief from failure to file for years 2019 and 2020; however, as previously stated, the IRS is urged to expand the relief to also cover failure to pay penalty," AICPA states in the letter. "We think there are many taxpayers who sent payments to IRS but due to the IRS backlog or post office delays or other delays with banks, etc., IRS didn’t receive or record the payment timely (or the IRS said it was not received timely)."<br/><br/>The organization argues that there are "many checks that are still sitting in unopened envelopes, and there is concern that the IRS employees may make mistakes and process payments not with the dates the envelopes were mailed, but with the dates the envelopes were received or opened."<br/><br/>AICPA adds that relief should be provided to those suffering COVID hardship and paid late.<br/><br/>"We suggest that relief be provided for failure to pay if payment was received by IRS by a certain date after the due date," the letter states.<br/><br/>Given the ongoing nature of the pandemic and the new variants that are being discovered, AICPA also asked that the penalty relief be extended to cover tax year 2021. It noted that the federal government does acknowledge that the pandemic is ongoing and there were high incidents of outbreaks in the winter of 2021-2022.<br/><br/>AICPA also asked for further clarification that the relief does not affect applications for first-time abatement of penalties.<br/><br/>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.<br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)</p>Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-22624785284890528612021-11-09T09:12:00.001-08:002021-11-09T09:12:20.243-08:00Infrastructure Bill Impacts Cryptocurrency Reporting Laws<p>On Friday November 5, 2021, Congress passed the Infrastructure Investment and Jobs Act, which interestingly includes new reporting requirements on brokers of cryptocurrency, specifically persons responsible for regularly providing service effectuating transfers of any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology.<br/><br/>Currently, cryptocurrency reporting generally is only required in the context of reporting requirements applicable to capital property (which may not be required for transactions under $600), or where the currency is used as compensation to employees or independent contractors. The bill requires reporting of any other transactions where the current rules do not apply.<br/><br/>The provision is included due to the concern that large amounts of cryptocurrency transactions are not being reported as taxable income, and the taxation of that income helps to offset the total cost of the bill. Additionally, the penalties imposed on taxpayers for failure to file information returns are extended to apply to this new requirement, helping to raise more revenue.<br/><br/>Another provision expands a section of the U.S. tax code called 6050I to include digital assets.  Section 6050I requires that people who receive more than $10,000 in cash and equivalents file a report with the IRS. The report includes details about who paid them, including names and Social Security numbers. Any failure to report details about those sending payments is considered a felony offense.<br/><br/>The infrastructure bill provision would require similar from businesses and exchanges when they receive more than $10,000 in cryptocurrency.<br/><br/>Almost immediately upon the release of the legislative text, lawmakers and industry experts expressed concerns about the provision, claiming that the text of the bill is too broad, and could potentially extend the reporting requirements to cryptocurrency “miners” (people who generate new cryptocurrency by verifying complex chained transactions). Nevertheless, the amount of revenue generated by the provision made it essential to include in the bill, and amendments have been included to narrow the focus of the provision.<br/><br/>The reporting requirements do not take effect until a few years.<br/></p><div>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.</div><br/><div><br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)<br/><br/></div><br/> Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-65674225979677944692021-09-30T12:21:00.001-07:002021-09-30T12:21:01.643-07:00IRS Updates Countries which the U.S. Exchanges Tax Information<p>Rev. Proc. 2021-32, I.R.B. 2021-42, September 28, 2021<br/><br/>The IRS has supplemented the list of countries with which the U.S. has an agreement relating to the exchange of tax information. Chile has been added to the list. The Dominican Republic and Singapore have been added in Section 4 of this revenue procedure to the list of jurisdictions with which the Treasury and IRS have determined that it is appropriate to have an automatic exchange relationship. Under these agreements the U.S. consents to provide, as well as receive, information and appoints the Treasury Secretary or his delegate as the competent authority. The regulations under Code Sec. 6049 require the reporting of certain deposit interest paid to nonresident alien individuals on or after January 1, 2013.  With respect to Chile, this revenue procedure is effective for interest paid on or after January 1, 2022. Rev. Proc. 2020-15, I.R.B. 2020-23, 905, is superseded. For a complete list of countries click <a href="https://wilsontaxlaw.com/list-of-countries-with-u-s-exchange-of-information-agreements/">here</a>.<br/></p><div>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.</div><br/><div><br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)<br/><br/></div><br/> Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-58771010216577437512021-07-14T09:48:00.001-07:002021-07-14T09:48:56.772-07:00IRS Announces Issuing Refunds for Compensation Overpayments<p class="hP">On July 13, 2021, the IRS announced it would issue another round of refunds this week to nearly 4 million taxpayers who overpaid their taxes on unemployment compensation received last year. The refund average is $1,265, which means some will receive more and some will receive less. Refunds by direct deposit will begin July 14 and refunds by paper check will begin July 16. The Service previously issued refunds for unemployment compensation exclusion in May and June. It would continue to issue refunds throughout the summer.</p><br/><p class="hP">The American Rescue Plan Act of 2021 (ARP) excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations. The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000. Most taxpayers need not take any action and there is no need to call the IRS. However, if, as a result of the excluded unemployment compensation, taxpayers are now eligible for deductions or credits not claimed on the original return, they should file a Form 1040-X, Amended U.S. Individual Income Tax Return.</p><br/>Click <a href="https://wilsontaxlaw.com/newsresources/archive-irs-tax-news/ir-2021-151internal-revenue-service-jul-14-2021/">here</a> to read the full announcement.<br/><div>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.</div><br/><div><br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)<br/><br/></div>Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-56806152764495421472021-07-09T14:20:00.001-07:002021-07-09T14:20:36.370-07:00IRS Coronavirus Economic Relief for Transportation Services News<div class="documentContent"><br/><div><br/><br/>2021ARD 129-1<br/><br/><strong>Internal Revenue Service: Frequently asked questions: Coronavirus Economic Relief for Transportation Services (CERTS)</strong><br/><br/><strong>Coronavirus Economic Relief for Transportation Services (CERTS) Frequently Asked Questions</strong><br/><br/>The Coronavirus Economic Relief for Transportation Services (CERTS) Act, Division N, Title IV, Subtitle B of the Consolidated Appropriations Act of 2021, authorizes the Department of the Treasury to provide grants to eligible motorcoach companies, school bus companies, passenger vessel companies, and pilotage companies (Recipients) that have experienced annual revenue losses of 25% or more as a result of COVID-19. Recipients must generally prioritize the use the grants for payroll costs, though grants may be used for certain operating expenses (including the acquisition of services and equipment needed to protect workers and customers from COVID-19) and the repayment of debt accrued to maintain payroll. Funds not used for eligible activities within one year of receipt of the grant must be returned to the Treasury Department.<br/><br/>Additional non-Federal income tax information on the CERTS Act grant program can be found at the <em>Coronavirus Economic Relief for Transportation Services (CERTS) Program</em> webpage.<br/><br/><strong>Q1. Is the receipt of a CERTS Act grant taxable to the Recipient under the Internal Revenue Code (Code)? (added July 6, 2021)</strong><br/><ol><br/> <li>Yes. The receipt of a CERTS Act grant is not excluded from the Recipient's gross income under the Code and therefore is taxable.</li><br/></ol><br/><strong>Q2. When a Recipient uses the funds received from the CERTS Act grant program for eligible activities, such as for certain payroll costs and for the acquisition of services and equipment needed to protect workers and customers from COVID-19, are all of those expenses deductible under the Code? (added July 6, 2021)</strong><br/><ol><br/> <li>Yes, to the extent the costs are otherwise deductible under the Code. The Code generally permits the payment of wages, salaries, and benefits to employees and other amounts paid to carry on a trade or business to be deducted as ordinary and necessary business expenses.</li><br/></ol><br/></div><br/></div><br/><div>[ REPUBLISHED FROM IRS]</div><br/><div></div><br/><div>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.</div><br/><div><br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)<br/><br/> <br/><br/></div><br/><div></div>Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-14368400219671143322021-07-09T13:36:00.001-07:002021-07-09T13:36:19.333-07:00FTB Provides Additional Tax Guidance PPP Loan Forgiveness<p>On June 2, 2021, the California Franchise Tax Board (FTB) issued much anticipated guidance concerning loan forgiveness related to the Paycheck Protection Program (PPP).    Originally, California enacted legislation to tax the PPP loan forgiveness by not allowing businesses to deduct  necessary and ordinary operating expenses (including payroll) paid using emergency PPP funds.  California based its legislation on an IRS ruling that held the same. The federal government subsequently enacted legislation reversing the IRS from taking this position based on certain income requirements.  Uncertainty arose whether California would reverse course and conform with the federal government.  California delayed doing so right away due to concerns it had related to jeopardizing billions of dollars in federal stimulus aid it had received.   The federal stimulus funds California received had strings attached.  To receive the stimulus funds California had to agree not to lower any any taxes.   Allowing businesses to deduct legitimate business expenses lowers the taxes it owes.   Of course this is the right result.  Moreover, legislation to not allow the deduction of legitimate business expenses increases taxes.   After many months of uncertainty, public unrest and debate, California worked it out and enacted legislation to conform with the IRS.   On April 29, 2021, AB 80 was enacted which allowed more income exclusion (from second draw PPP loans and EIDL advance grants) and allowed the deduction of expenses, basis adjustments, and tax attribution adjustments for qualifying taxpayers, for tax years beginning on or after January 1, 2019.<br/><br/>The FTB guidance confirms:<br/></p><ul><br/> <li>The FTB will follow the SBA guidance regarding how to determine whether the 25% gross receipts threshold is met. This means taxpayers may compare any calendar quarter in 2020 to the comparable calendar quarter in 2019 (or total 2020 gross receipts to total 2019 gross receipts);</li><br/> <li>Taxpayers do not have to provide documentation or certification if they meet the 25% gross receipts threshold, they may simply deduct all expenses paid with PPP forgiven loan amounts;</li><br/> <li>Multistate taxpayers should use total gross receipts (not just California-source gross receipts) to determine whether the 25% gross receipts threshold is met; and</li><br/> <li>For taxpayers who do not meet the 25% gross receipts threshold, the disallowance of deductions must be reported on the tax return for the taxable year in which they reasonably expect the PPP loan will be forgiven. This would mean deductions must be reduced on the 2020 return if in 2020 the taxpayer reasonably expected that the PPP loan would be forgiven in 2021.</li><br/></ul><br/>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.<br/><br/>For further information, or to arrange a consultation, please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)<br/><br/>The FTB’s updated webpage regarding PPP loan forgiveness is at:<br/><br/><a href="https://www.ftb.ca.gov/about-ftb/newsroom/covid-19/paycheck-protection-program-loan-forgiveness.html" target="_blank" rel="noopener">www.ftb.ca.gov/about-ftb/newsroom/covid-19/paycheck-protection-program-loan-forgiveness.html</a><br/><br/>The FAQs for Paycheck Protection Program is available at:<br/><br/><a href="https://www.ftb.ca.gov/about-ftb/newsroom/covid-19/faqs-for-paycheck-protection-program.html" target="_blank" rel="noopener">www.ftb.ca.gov/about-ftb/newsroom/covid-19/faqs-for-paycheck-protection-program.html</a><br/><br/> Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-58986628506270050932021-06-07T13:29:00.001-07:002021-06-07T13:29:46.729-07:00OC Man Sentenced to 2 years in Prison for Laundering Bitcoin<h3><strong>Cryptocurrency News Alert:  6.7.2021</strong></h3><br/>An Orange County was sentenced today to 24 months in federal prison for operating an illegal virtual-currency money services business that exchanged up to $25 million – some of it on behalf of criminals – through in-person transactions and a network of Bitcoin ATM-type kiosks.<br/><br/>Kais Mohammad, a.k.a. "Superman29,"of Yorba Linda, was sentenced by United States District Judge Josephine L. Staton.<br/><br/>Mohammad pleaded guilty in September 2020 to a three-count criminal information charging him with operating an unlicensed money transmitting business, money laundering, and failing to maintain an effective anti-money laundering program. Mohammad has agreed to forfeit to the government 17 Bitcoin ATMs, $22,820 in cash, 18.4 Bitcoin and 222.5 Ethereum cryptocurrency.<br/><br/>From December 2014 to November 2019, Mohammad owned and operated Herocoin, an illegal virtual-currency money services business. As part of his business, Mohammad offered Bitcoin-cash exchange services, charging commissions of up to 25 percent – significantly above the prevailing market rate.<br/><br/>Using the moniker "Superman29," Mohammad advertised his business online to buy and sell Bitcoin in transactions up to $25,000. In a typical transaction, he met clients at a public location in Southern California and exchanged currency for them. Mohammad generally did not inquire as to the source of the clients' funds and, on certain occasions, he knew the funds were the proceeds of criminal activity. Mohammad knew at least one Herocoin client was engaged in illegal activity on the dark web.<br/><br/>Mohammad processed cryptocurrency deposited into the machines, supplied the machines with cash that customers would withdraw, and maintained the server software that operated the machines. Mohammad was able to monitor transactions on the machines and identify each transaction that occurred on them.<br/><br/>During the time of Herocoin's operation, Mohammad, a former bank employee who trained others on compliance matters, intentionally failed to register his company with the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN). Mohammad was aware that he was required to – but chose not to – develop and maintain an effective anti-money laundering program, file currency transaction reports for exchanges of currency in excess of $10,000, conduct due diligence on customers, and file suspicious activity reports for transactions over $2,000 involving customers he knew, or had reason to suspect, were involved in criminal activity.<br/><br/>With respect to his Bitcoin ATM network, Mohammad's machines allowed customers to conduct financial transactions without requiring any identification and permitted customers to conduct multiple, consecutive transactions of up to $3,000 each without ever reporting suspicious activity to regulators or law enforcement.<br/><br/>After FinCEN contacted Mohammad in July 2018 about his need to register his company, Mohammad did so, but he continued to fail to comply fully with federal law concerning money laundering, conducting due diligence and reporting suspicious customers.<br/><br/>"Rather than use his knowledge to create a robust compliance program, (Mohammad) avoided one altogether and profited by making his business an efficient, unchecked, and nearly anonymous conduit for money laundering and other crimes," prosecutors wrote in their sentencing memorandum.<br/><br/>From February 2019 to August 2019, Mohammad also conducted multiple in-person transactions with undercover agents who represented they worked at a "karaoke bar" that employed women from Korea who entertained men in various ways, including engaging in sexual activity. On August 28, 2019, Mohammad met with an undercover law enforcement agent and exchanged $16,000 in cash, which the agent represented were the proceeds from illegal activity, for 1.58592 Bitcoin. Mohammad never filed a currency transaction report or suspicious activity report for these transactions.<br/><br/>In total, Mohammad exchanged between $15 million and $25 million from in-person exchanges and transactions occurring at his Bitcoin kiosks.<br/><br/>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.<br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)<br/><br/> Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-82385470301483614122021-04-21T11:23:00.001-07:002021-04-21T11:23:48.910-07:00IRS Extends Employment Tax Deposit Penalty Relief for Employer Credits<p>The IRS has extended the penalty relief provided in Notice 2020-22, 2020-17 I.R.B. 664, for failure to deposit employment taxes to eligible employers that reduce their required deposits in anticipation of the following credits:<br/></p><ul><br/> <li>the paid sick and family leave credits under the Families First Coronavirus Response Act (Families First Act) (P.L. 116-127), as amended by the COVID-related Tax Relief Act of 2020 (Tax Relief Act) (Division N of P.L. 116-260), for qualified leave wages paid with respect to the period beginning January 1, 2021, and ending March 31, 2021;</li><br/> <li>the paid sick and family leave credits under Code Secs. 3131, 3132, and 3133, added by the American Rescue Plan Act of 2021 (ARP) (P.L. 117-2), for qualified leave wages paid with respect to the period beginning April 1, 2021, and ending September 30, 2021;</li><br/> <li>the employee retention credit under section 2301 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (P.L. 116-136), as amended by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act) (Division EE of P.L. 116-260), for qualified wages paid with respect to the period beginning January 1, 2021, and ending June 30, 2021;</li><br/> <li>the employee retention credit under Code Sec. 3134, added by the ARP, for qualified wages paid with respect to the period beginning July 1, 2021, and ending December 31, 2021; and</li><br/> <li>the COBRA Continuation Coverage Premium Assistance credit under Code Sec. 6432, added by the ARP, for continuation coverage premiums not paid by assistance eligible individuals under section 9501(a)(1) of the ARP, during the period beginning April 1, 2021, and ending September 30, 2021.</li><br/></ul><br/><h3>Background</h3><br/>Eligible employers claim the paid sick and family leave credits under the Families First Act, and the employee retention credit under the CARES Act, against the employer’s share of the Old Age, Survivors, and Disability Insurance (Social Security) portion of FICA tax under Code Sec. 3111(a). Employers that are eligible for the paid sick and family leave credits under Code Secs. 3131, 3132, and 3133, the employee retention credit under Code Sec. 3134, or the COBRA Continuation Coverage credit under Code Sec. 6432, can claim the credit(s) against the employer’s share of the Hospital Insurance (Medicare) portion of FICA tax under Code Sec. 3111(b). The credits are also available to eligible railroad employers for the attributable Railroad Retirement Tax Act (RRTA) taxes under Code Sec. 3221(a).<br/><br/>These refundable tax credits are reported on the employer’s employment tax return for reporting its liability for FICA tax, which for most employers is the quarterly Form 941. Certain employers may claim an advance payment of the refundable credits by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19.<br/><br/>Code Sec. 6656 imposes a penalty for failure to timely deposit required tax amounts, unless the failure is due to reasonable cause and not willful neglect. Failure to deposit employment taxes required under Code Sec. 6302 generally subjects an employer to the penalty. The various legislative acts and provisions implementing the refundable employment tax credits described above either instruct the IRS to waive the penalty or authorize guidance that provides penalty relief.<br/><h3>Paid Sick and Family Leave Credit Penalty Relief</h3><br/>An employer can reduce an employment tax deposit for a calendar quarter without a penalty, by the amount of the applicable paid sick or family leave credit anticipated for the calendar quarter prior to the required deposit, as long as:<br/><ul><br/> <li>the employer paid qualified leave wages, qualified health plan expenses, or qualified collectively bargained contributions, for the period beginning on April 1, 2021, and ending on September 30, 2021, to its employees in the calendar quarter prior to the time of the required deposit,</li><br/> <li>the amount of employment taxes that the employer does not timely deposit is less than or equal to its anticipated applicable paid leave credits claimed for the calendar quarter as of the time of the required deposit, and</li><br/> <li>the employer did not seek payment of an advance credit by filing Form 7200 for the anticipated credits it relied upon to reduce its deposits.</li><br/></ul><br/>The total amount of the deposit reduction cannot be more than the total amount of the employer’s anticipated paid leave credits as of the time of the required deposit, minus any amount of those anticipated credits that had previously been used (1) to reduce a prior required deposit in the calendar quarter and obtain this relief or (2) to seek payment of an advance credit.<br/><h3>Employee Retention Credit Penalty Relief</h3><br/>After a reduction, if any, of an employment tax deposit by the amount of the anticipated paid sick or family leave credits, an employer may further reduce an employment tax deposit for a calendar quarter without a penalty, by the amount of its applicable employee retention credit anticipated for the calendar quarter prior to the required deposit, as long as:<br/><ul><br/> <li>the employer paid qualified retention wages for the period beginning January 1, 2021 and ending December 31, 2021, to its employees in the calendar quarter prior to the time of the required deposit,</li><br/> <li>the amount of employment taxes that the employer does not timely deposit—reduced by the amount of employment taxes not deposited in anticipation of the paid leave credits claimed— is less than or equal to the amount of the employer’s anticipated applicable employee retention credits for the calendar quarter as of the time of the required deposit, and</li><br/> <li>the employer did not seek payment of an advance credit by filing Form 7200 for the anticipated credits it relied upon to reduce its deposits.</li><br/></ul><br/>The total amount of any deposit reduction cannot be more than the total amount of the employer’s anticipated employee retention credit as of the time of the required deposit, minus any amount of the anticipated credit that had previously been used (1) to reduce a prior required deposit in the calendar quarter and obtain this relief or (2) to seek payment of an advance credit.<br/><h3>COBRA Continuation Coverage Credit Penalty Relief</h3><br/>After a reduction, if any, of an employment tax deposit by the amount of the anticipated paid sick or family leave credits and the anticipated employee retention credit, an employer may further reduce an employment tax deposit for a calendar quarter without a penalty, by the amount of the employer’s COBRA continuation coverage credit anticipated for the calendar quarter prior to the required deposit, as long as:<br/><ul><br/> <li>the employer is a “person to whom premiums are payable,”</li><br/> <li>the amount of employment taxes that the employer does not timely deposit—reduced by the amount of employment taxes not deposited in anticipation of the paid leave credits and the employee retention credits claimed—is less than or equal to the amount of the employer’s anticipated credits under Code Sec. 6432 for the calendar quarter as of the time of the required deposit, and</li><br/> <li>the employer did not seek payment of an advance credit by filing Form 7200 for the anticipated credits it relied upon to reduce its deposits.</li><br/></ul><br/>The total amount of any deposit reduction cannot be more than the total amount of the employer’s anticipated COBRA continuation coverage credit as of the time of the required deposit, minus any amount of the anticipated credit that had previously been used (1) to reduce a prior required deposit in the calendar quarter and obtain this relief or (2) to seek payment of an advance credit.<br/><br/>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.<br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-54169100441283023812021-04-08T13:11:00.001-07:002021-04-08T13:11:06.807-07:009th Circuit Ruling Prohibits IRS from Charging Multiple Foreign Bank Account Report Non-Willful Penalties<p>In a case of first impression, the Court of Appeals for the Ninth Circuit ruled that the IRS can impose only one non-willful penalty under 31 USC 5321(a)(5)(A) when an untimely, but accurate, Report of Foreign Bank and Financial Accounts (FBAR) is filed, no matter the number of foreign financial accounts. The circuit court reversed and remanded a district court's judgment in an action for tax penalties and interest involving an individual’s failure to report foreign financial accounts.<br/><br/>The taxpayer had fourteen financial accounts in the United Kingdom from which she received interest and dividends. However, the taxpayer failed to report the interest and dividends from these accounts on her tax return for the tax year at issue or disclose the accounts to the IRS. Subsequently, the taxpayer participated in the IRS's Offshore Voluntary Disclosure Program and submitted an FBAR listing her multiple foreign accounts. The taxpayer also amended her tax return for the tax year at issue to include the interest and dividends from those accounts.<br/><br/>The IRS concluded that the taxpayer had committed thirteen non-willful violations of the reporting requirements—one for each account she failed to timely report for the tax year at issue—and sued the taxpayer for civil penalties. The district court agreed with the government that the relevant statutes and regulations authorized the IRS to assess one penalty for each non-reported account.<br/><br/>The Ninth Circuit examined the statutory and regulatory scheme for reporting a relationship with a foreign financial agency under 31 USC 5314, and found that it authorizes a single non-willful penalty for the failure to file a timely FBAR. The court held that under the statutory and regulatory scheme, the taxpayer’s conduct in failing to timely file the FBAR amounted to one non-willful violation.<br/><br/>The government argued that, based on the statutory scheme as a whole and legislative intent, the amount of the penalty can be assessed on a per-account basis. The court was not persuaded: it found nothing in the statute or regulations to suggest that the penalty can be calculated on a per-account basis for a single failure to file a timely FBAR that is otherwise accurate.<br/><br/>Reversing and remanding an unpublished DC Calif. decision.<br/><br/>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.<br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)</p>Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-35944019326185169812021-01-26T16:00:00.001-08:002021-01-26T16:00:18.843-08:00IRS Highlights Direct Deposit and Electronic Filing for Swift Tax Refunds<p>The IRS has reminded taxpayers that the fastest way to get their tax refund is by filing electronically and choosing <a href="https://www.irs.gov/refunds/get-your-refund-faster-tell-irs-to-direct-deposit-your-refund-to-one-two-or-three-accounts">direct deposit</a>. Further, eight out of ten taxpayers get their refunds by using direct deposit. The IRS uses the same electronic transfer system to deposit tax refunds that is used by other federal agencies to deposit nearly 98% of all Social Security and Veterans Affairs benefits into millions of accounts. Moreover, taxpayers can simply select direct deposit as the refund method when using tax software or working with a tax preparer, and either they or their tax preparer type in their account and routing number. The Service has reminded taxpayers they should only deposit refunds directly into U.S. affiliated accounts that are in their name, their spouse’s name or both if it’s a joint account.<br/><br/>In addition, by using direct deposit, taxpayers can split their refund into up to three financial accounts, including a bank or Individual Retirement Account. Taxpayers can split their refund by using tax software or by using <a href="https://www.irs.gov/pub/irs-prior/f8888--2015.pdf">Form 8888, Allocation of Refund</a> (including <a href="https://www.irs.gov/refunds/now-you-can-buy-us-series-i-savings-bonds-for-anyone-with-your-tax-refund">Savings Bond Purchases</a>), if they file a paper return. However, no more than three electronic tax refunds can be deposited into a single financial account or prepaid debit card. Taxpayers who exceed the limit will receive an IRS notice and a paper refund will be issued for the refunds exceeding that limit. The safest and most accurate way to file a tax return is to <a href="https://www.irs.gov/filing/e-file-options">file electronically</a>. Taxpayers can track their refund using "<a href="https://www.irs.gov/refunds">Where’s My Refund?</a>" or by downloading the IRS2Go mobile app.<br/><br/>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.<br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)<br/><br/> </p>Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-65889157298095310212021-01-26T14:13:00.001-08:002021-01-26T14:13:41.944-08:00Employers Can Claim the Employee Retention Credit for 2020 on the 4th Quarter Form 941<p>The IRS has clarified that, under section 206(c) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, an employer that is eligible for the employee retention credit (ERC) can claim the ERC even if the employer received a Small Business Interruption Loan under the Paycheck Protection Program (PPP). Accordingly, eligible employers can claim ERS on any qualified wages that are not counted as payroll costs in obtaining PPP loan forgiveness. However, any wages that could count toward eligibility for ERC or PPP loan forgiveness can be applied to wither of these programs, but not both.<br/><br/>Further, if an employer received a PPP loan and included wages paid in the 2nd and/or 3rd quarter of 2020 as payroll costs in support of an application to obtain forgiveness of the loan (rather than claiming ERC for those wages), and the employer's request for forgiveness was denied, the employer could claim the ERC related to those qualified wages on its 4th quarter 2020 Form 941, Employer's Quarterly Federal Tax Return. Additionally, the employer could report on its 4th quarter Form 941 any ERC attributable to health expenses that are qualified wages that it did not include in its 2nd and/or 3rd quarter Form 941. Moreover, employers who chose the 4th quarter procedure must add the ERC attributable to these 2nd and/or 3rd quarter qualified wages and health expenses on line 11c or line 13d (as relevant) of their original 4th quarter Form 941 (along with any other ERC for qualified wages paid in the 4th quarter). Further, employers should:<br/></p><ul><br/> <li>Include the amount of these qualified wages paid during the 2nd and/or 3rd quarter (excluding health plan expenses) on line 21 of your original 4th quarter Form 941 (along with any qualified wages paid in the 4th quarter).</li><br/> <li>Enter the same amount on Worksheet 1, Step 3, line 3a.</li><br/> <li>Include the amount of these health plan expenses from the 2nd and/or 3rd quarter on line 22 of the 4th quarter Form 941 (along with any health expenses for the 4th quarter)</li><br/> <li>Enter the same amount on Worksheet 1, Step 3, line 3b.</li><br/> <li><br/></li><br/>Finally, the IRS recognized the difficulty implementing these procedures so late in the timeframe to file 4th quarter returns. Therefore, employers do not have use this limited 4th quarter procedures.<br/><br/>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.<br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)</ul>Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0tag:blogger.com,1999:blog-2641392973474946246.post-77386539674427036412020-12-29T15:04:00.001-08:002020-12-29T15:04:34.761-08:00IRS Highlights Temporary Tax Changes Designed to Help Individuals and Businesses Who Give to Charity<p>The IRS has highlighted four temporary tax changes which are a part of the Coronavirus Aid, Relief and Economic Security Act (CARES Act). These tax changes have been designed to help individuals and businesses who give to charity before the end of this year.<br/></p><h3>Individuals who don’t itemize</h3><br/>Individuals who elect to take the standard deduction generally cannot claim a deduction for their charitable contributions. However, the CARES Act permits these individuals to claim a limited deduction on their 2020 federal income tax returns for cash contributions made to certain qualifying charitable organizations and still claim the standard deduction. Under this change, these individuals can claim an "above-the-line" deduction of up to $300 for cash contributions made to qualifying charities during 2020. The maximum above-the-line deduction is $150 for married individuals filing separate returns.<br/><h3>Individuals who itemize</h3><br/>Subject to certain limits, individuals who itemize may claim a deduction for charitable contributions they make to qualifying charitable organizations. These limits generally range from 20-percent to 60-percent of an individual’s adjusted gross income (AGI) and vary by the type of contribution and type of charitable organization. The CARES Act permits electing individuals to apply an increased limit, up to 100-percent of their AGI, for qualified contributions (Increased Individual Limit). The election is made on a contribution-by-contribution basis. Qualified contributions are limited to those made in cash during calendar year 2020 to qualifying charitable organizations. Individuals who would like to take advantage of the Increased Individual Limit must make their elections with their Form 1040, U.S. Individual Income Tax Return, or Form 1040-SR, U.S. Tax Return for Seniors.<br/><h3>Increased Corporate Limit for charitable contributions</h3><br/>The CARES Act has permitted C Corporations to apply an increased limit of 25-percent of taxable income (Increased Corporate Limit) for charitable contributions of cash they make to eligible charities during the 2020 calendar year. The maximum allowable deduction is usually limited to 10-percent of a corporation’s taxable income. C Corporations must elect application of the Increased Corporate Limit on a contribution-by-contribution basis.<br/><h3>Businesses donating food inventory</h3><br/>Businesses donating food inventory that is eligible for the enhanced deduction (for contributions for the care of the ill, needy, and infants) are eligible for increased deduction limits. For contributions made in 2020, the limit for these contribution deductions is increased from 15-percent to 25-percent. For C Corporations, the 25-percent limit is based on their taxable income. For other businesses, including sole proprietorships, partnerships, and S corporations, the limit is based on their aggregate net income for the year from all trades or businesses from which the contributions were made. A special method for computing the enhanced deduction continues to apply, as do food quality standards and other requirements.<br/><br/>In addition, the IRS has reminded both individuals and businesses that special recordkeeping rules apply to any taxpayer claiming a charitable contribution deduction. For donations of property, additional recordkeeping rules may apply, including filing a Form 8283, Noncash Charitable Contributions, and obtaining a qualified appraisal. The Service has requested taxpayers to see <a href="https://www.irs.gov/forms-pubs/about-publication-526">Publication 526</a>, Charitable Contributions, for additional details on how to apply the percentage limits described above and a description of the recordkeeping rules for substantiating gifts to charity.<br/><br/>Wilson Tax Law Group, APLC (<a href="http://www.wilsontaxlaw.com/">www.wilsontaxlaw.com</a>) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, <a href="https://wilsontaxlaw.com/attorneys/experience-education/">Joseph P. Wilson</a>, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  <a href="https://wilsontaxlaw.com/attorneys/">Wilson Tax Law Group</a> is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.<br/><br/>For further information, or to arrange a consultation please contact: <a href="https://wilsontaxlaw.com/">Wilson Tax Law Group, APLC</a><br/><br/>Newport Beach and Yorba Linda, California<br/><br/>Tel: <a href="http://http/tel:(949)%20397-2292">(949) 397-2292</a> (<a href="https://wilsontaxlaw.com/contact/">Newport Beach Office)</a><br/><br/>Tel: <a href="http://http/tel:(714)%20463-4430">(714) 463-4430</a> (<a href="https://wilsontaxlaw.com/contact/">Yorba Linda Office</a>)<br/><br/> Joseph Wilsonhttp://www.blogger.com/profile/00748961527457306867noreply@blogger.com0