The Newport Beach Tax Attorney Blog

Use of NOL Deductions for Corporate & Individual Taxpayers – Suspended

Recently passed legislation in California, under Senate Bill 175 - Taxation, might preclude some corporate and individual taxpayer claims for NOL deductions in 2024 beginning on January 1, 2024 and before January 1, 2027. This suspension may affect those California corporate and individual taxpayers who have a net or modified adjusted gross income greater than $1 million. This is not the first time that California has suspended or limited claims for NOL deductions. Additionally, this legislation places an annual $5 million cap on the utilization of income tax credits, including the California pass-through entity elective tax credit. For any income tax credit that is prohibited due to this annual limitation, there is an additional carryover period that is equivalent to the number of taxable years that the credit was denied.

It is unclear as to whether the Governor of California will end the NOL deduction suspension and annual tax limitation sooner than January 1, 2027 as it depends on the state revenue meets required minimums.

To find out more about how Wilson Tax Law Group, could help with your tax litigation and defense needs, we invite you to set up a consultation with our firm.

Wilson Tax Law Group, APLC 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, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board. Wilson Tax Law Group is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Tel: (949) 397-2292 (Newport Beach Office)

Tel: (714) 463-4430 (Yorba Linda Office)

Use of NOL Deductions for Corporate & Individual Taxpayers – Suspended

Wilson Tax Law Group, APLC, welcomes new Legal Administrator, Christine Wilbur

Please join us in welcoming Christine Wilbur to the Wilson Tax Law Group! We are very excited to have Christine on the team. She brings a wealth of experience from her notable career, with over fourteen years of experience providing legal management solutions, strategic creativity and human resources support to various law firms located throughout Orange County. Please connect with her today with any questions and she will be happy to assist you.

#Welcome #newemployee #WTLGrocks #strategicpartner

Business Tax Alert – Improper Employee Retention Credit Claims

While the IRS continues its expansive efforts to deny of improper Employee Retention Credit (ERC) claims, intensifying audits and pursuing civil and criminal investigations of potential fraud and abuse, there are several options that may still be available for those businesses who wish to resolve these matters to avoid these possible consequences. Recently, the IRS announced the details of a second employee retention credit Voluntary Disclosure program (ERC-VDP) for employers who claimed and received an ERC refund for a tax period in 2021 but were not eligible. Like the first ERC-VDP, the program will allow claimants to repay ERC at a reduced rate of 85% of the credit; this is slightly less favorable than the original ERC-VDP that allowed employers to repay 80% of their credits. Applications to participate in the second ERC-VDP will be accepted only until Nov. 22, 2024. The further benefits of the second program waive penalties and interest on the full amount, not just the 85% returned. The 15% reduction is not taxable as income and the IRS won’t examine (audit) ERC on your employment tax return for tax period(s) resolved within the terms of the second ERC-VDP. You also don’t need to repay any interest you received on your ERC refund. To qualify accepted applicants must execute a closing agreement confirming that they are not entitled to ERC and will be required to provide the name and contact information for any preparer or advisor who assisted in claiming the ERC. Additionally, the IRS released five more red flag issues they are regularly seeing in newly processed ERC claims; the agency recommends that businesses whose claims fall into any of these warning sign categories consider participating in the second ERC-VDP or the ERC Withdrawal Program.

To find out more about how Wilson Tax Law Group, could help with your tax litigation and defense needs, we invite you to set up a consultation with our firm.

Wilson Tax Law Group, APLC 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, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board. Wilson Tax Law Group is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Tel: (949) 397-2292 (Newport Beach Office)

Tel: (714) 463-4430 (Yorba Linda Office)

Business Tax Alert – Improper Employee Retention Credit Claims

Key Points for CA Employers After Southern California Wildfires

For employers directly affected by the Airport, Bridge or Land fires, you may be eligible for a two-month extension to complete state payroll reports and/or deposit payroll taxes without incurring penalties or interest, according to the Employment Development Department. Extensions are typically granted under section 1111.5 of the California Unemployment Insurance Code (CUIC) if the Governor declares a State of Emergency. As of September 7^th, and 11^th, 2024, Governor Newsom has proclaimed a state of emergency for Los Angeles, Orange, Riverside and San Bernardino counties. As wildfires persist throughout Southern California, we encourage you to stay alert to changes in tax deadlines and consult with your local tax attorney to learn more about how to be prepared should your business become affected.

To find out more about how Wilson Tax Law Group, could help with your tax litigation and defense needs, we invite you to set up a consultation with our firm.

Wilson Tax Law Group, APLC 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, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board. Wilson Tax Law Group is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Tel: (949) 397-2292 (Newport Beach Office)

Tel: (714) 463-4430 (Yorba Linda Office)