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In 2021, Congress passed the Corporate Transparency Act (CTA).  This act represents a significant change in the regulatory landscape for ALMOST ALL entities doing business in the United States.  The primary goal of the CTA is to enhance corporate transparency and combat financial crimes such as money laundering and the financing of terrorism.

The CTA introduced a new reporting requirement for Beneficial Ownership Information (BOI) to be filed with the Financial Crimes Enforcement Network (FinCEN).  Pursuant to this new requirement, reporting companies must disclose detailed information about their Beneficial Owners and Company Applicants.

• Reporting Companies that were created or registered to do business prior to January 1, 2024, must file their initial BOI report by December 31, 2024.
• Reporting Companies created or registered to do business in 2024, must file their initial BOI within 90 days of the effective date of their creation or registration.
• Reporting Companies created or registered to do business on or after January 1, 2025 must file their initial BOI within 30 days of the effective date of their creation or registration.

The CTA applies to a wide range of business entities, including corporations, limited liability companies (LLCs) including Single Member LLCs and other similar entities.  For more information on the new reporting requirements, FinCEN offers detailed and helpful guidance on BOI reporting.  You can visit https://www/fincen.gov/boi

NOTE:

We have been advised by the American Institute of Certified Public Accountants (AICPA), the New York State Society of CPAs (NYSSCPA) as well as our malpractice insurance carrier that compliance with CTA is not an accounting nor a tax function and is a legal task of your business.  Therefore, we have been informed that doing so could be construed as practicing law without a law license.

Your compliance with the Corporate Transparency Act (CTA) including beneficial ownership information (BOI) reporting is NOT within the scope of our engagement.  You have the sole responsibility for your compliance with the CTA, including its BOI reporting requirements and the collection of relevant owner information.  We shall have no liability resulting from your failure to comply with the CTA.  Consider consulting with legal counsel if you have questions regarding the applicability of the CTA’s reporting requirements and the issues surrounding the collection of relevant ownership information.

In a recent news release, the IRS issued a warning to taxpayers to be careful about donating to fake charities. While this has always been an issue to some extent, the problem has become more acute of late, as dishonest people look to take advantage of disasters and crises around the world. The IRS advises that you should always check to see if a charity is legitimate before donating money to them.

What Are Fake Charities?

In many ways, a fake charity is exactly what it sounds like: someone purports to represent a charitable organization that either does not exist, or pretends to represent a real charity they are not a part of. These fake charities work hard to convince people to donate to them, and tend to pop up more often in the wake of natural disasters, wars, and other crises. To accomplish this goal, they will use a variety of means to fake legitimacy, including using fake websites, falsified emails, or even “spoofed” phone numbers to make it look like they represent a legitimate organization.

What Are the Dangers of Donating to Fake Charities?

There are three primary dangers that can arise from donating to a fake charity. The first is, of course, that the fake charity takes your money and runs off with it, depriving you of your hard earned wealth for their personal enrichment. The second is that they steal your personal information, such as your credit card details, facilitating identity theft. Finally, you may potentially get into trouble if you try to claim a charitable donation on your taxes that was not made to a recognized tax-exempt charity.

What Are the Signs of a Fake Charity?

There are a few signs that you may be dealing with a fake charity:

• First, you should always be wary of someone seeking charitable donations who seeks more information than they actually need, such as someone who asks for both money and personal identifying information.
• Second, you should always be suspicious of someone who engages in high-pressure tactics to convince you to donate immediately, rather than coming back at another time, which may be indicative of an attempted “sale” rather than a legitimate solicitation.
• Finally, you should always be suspicious of a charity that seeks donations through non-traditional means, such as by wiring money or buying gift cards.

What Should You Do if You Encounter a Fake Charity?

If you encounter a charity and are not certain of its legitimacy, you should first check to see if it is actually registered as a tax-exempt organization through the IRS Tax Exempt Organization Search. If they do not come up, there is a good chance they are not a legitimate charity. If you discover such an organization, you can report them to the FBI’s Charity and Disaster Fraud unit.

The IRS announced on September 14 that it will be temporarily halting processing on claims for the employee retention tax credit, also known as the ERC. This is due to heightened concerns over abuse and what it refers to as “questionable claims” which may have resulted in many small businesses incorrectly claiming the tax credit. Companies that incorrectly claimed the ERC may be forced to pay back the money from the credit, so the IRS is warning businesses to make sure they actually qualify before trying to claim it.

What is the ERC?

The employee retention tax credit, or ERC, is a refundable tax credit that was passed during the height of the COVID-19 pandemic. It is a tax credit that allows certain businesses that were impacted by the pandemic to claim up to 50% of their employees’ wages against certain employment taxes. In order to qualify for the ERC, a business must meet certain specific criteria, which many who claimed the credit didi not.

Why Was the ERC Implemented?

The ERC was meant to encourage small businesses to keep their employees on staff through the pandemic by providing a tax credit to certain qualifying businesses, giving them potentially thousands of dollars in credits if they retained their employees through the pandemic. This would, in theory, soften the economic blow caused by extensive layoffs and furloughs that occurred as a result of COVID-19. It would also help to keep businesses from closing down when they otherwise were not able to operate normally.

Why Has Processing for the ERC Been Halted?

The IRS announced it would be halting ERC processing temporarily due to a shocking trend of ERC-related scams, which targeted small businesses and convinced them to apply for the credit when they were not otherwise eligible. As a result, many businesses improperly claimed the ERC, getting them in trouble with the IRS while saving them nothing in the end. For the time being, this means the IRS will not be processing ERC claims, and anyone who wants to benefit from the credit may not be able to do so.

How Could This Impact You?

If you are a small business who may qualify for the ERC, this is likely disheartening news, as it means you may not be able to benefit from it for the time being. However, it is likely that processing will resume soon, and business owners should not panic. Instead, it is important to remember why you should always get guidance from experienced tax professionals who will work to place your interests first, rather than doing what is best for their own bottom line.

1. Do Not Call Looking For Help With Your Return

• • This may sound obvious, but the IRS is not your tax preparer, or a tax attorney, or an accountant. They cannot directly assist you with your return, and if you call asking for help with your return, you will likely just wind up wasting their time and yours. That is why you should first speak to your accountant, lawyer, or tax preparer first, or check the IRS website to see if they have an answer to your questions already.

2. Have Your Identifying Information Ready

• • When you call the IRS, you will need to be able to identify yourself or the person you are calling on behalf of. This means you will need your name, date of birth, and a Social Security number, as well as a completed tax return, an EIN or Tax Payer Identification Number, and proof of past payments if you have a payment plan with the IRS. If you are calling on behalf of someone else, you should have their power of attorney available to prove you can speak on their behalf.

3. Know Why You Are Calling

• • In order to make your call with the IRS as efficient as possible, make sure you are clear about what matter you are calling about. This means you should have any relevant documentation on hand, and be clear about what kind of help you need. That way, your call will go as quickly as possible, and your chances of having your matter handled expeditiously will increase.

4. Expect Significant Wait Times

• • Although the IRS recently received additional funding for its help line, it is still very busy, especially as tax season approaches. Thus, if you need to call the IRS, expect to have significant wait times before your call goes through. This means you should set aside a decent amount of time for your call, and be ready to wait until you connect with someone on the line.

5. Beware Anyone Who Calls You Claiming to Be From the IRS

• • That being said, while it is perfectly normal for regular people to call the IRS, it is unheard of for the IRS to call people. The IRS may email you, but never unsolicited. If you receive an unsolicited call, text, or email from someone claiming to be an IRS agent, report it to the agency so they can investigate it.

It is estimated that as many as 19 million people filed extensions for their tax returns last year, according to the IRS, and it is expected that at least as many will file for their 2022 returns. However, not everyone understands what it means to file an extension for their tax returns, or how it could impact them. Here are five things you need to know about filing an extension for your taxes:

1. You can automatically file an extension for your returns for six months

• • Any individual taxpayer can file Form 4868 before the deadline to get an extension on their tax returns for up to six months. You do not need to have a specific reason for filing for an extension, and everyone can get one. You do, however, need to submit information for how much you will owe in taxes.

2. You can avoid penalties for failing to file on time

• • One of the biggest reasons that people seek an extension for submitting their tax returns is that they run out of time to do them. By filing an extension, you can avoid any penalties that might arise for being late, giving you more time to get everything done. This can be especially helpful if you have something else taking up your time and attention that you cannot focus on at the moment.

3. It gives you more time to collect necessary information, if you need it

• • Another important reason that people file for an extension is that it can give them time to compile necessary information or documentation. Submitting a return with missing or incomplete information can result in significant penalties, and may lead to legal issues. WIth an extension, you can give yourself time to make sure your return is complete and accurate, avoiding these potential problems.

4. It can help you if you are out of town during tax season

• • Sometimes, people will file for an extension because they are out of town during tax season. This can make it harder to fill out or file tax returns in a timely fashion, possibly causing them to miss important filing deadlines. With an extension, you have more time to get your tax return in order, which can be helpful for those who need to do something on paper or who struggle with electronic filing.

5. If you do not pay when you file your extension, you could owe interest

• • That being said, an extension on filing your tax return does not mean that you are exempt from paying your taxes. While it gives you time to get your return in order, it does not give you extra time to pay. If you do not pay your taxes on time, you could owe additional penalties, as well as interest on the amount owed. That is why it is essential to get proper tax advice from professionals with the knowledge and experience to guide you through the process.

Republicans in Congress are attempting to extend the tax cuts that were implemented by former President Donald J. Trump, but the sticking point seems to be the $10,000 cap on deducting state and local taxes (SALT).

Many homeowners who live in high-tax areas, especially Long Island, take advantage of the SALT deduction. That is because a majority of their tax bills are property taxes, which are higher than the state and national averages. According to the Tax Foundation, Long Island is one of the most expensive areas to live in, with Nassau County being the most expensive and Suffolk as the 12th most expensive county in the nation.

“While there are some tax cuts and other provisions of the law that we would like to see extended, the SALT cap is not one of them,” Long Island Congressman Andrew Garbarino, a Republican and co-chairman of the SALT Caucus, told The Washington Examiner. He is introducing the SALT Deductibility Act (H.R.613), which would eliminate the cap and reinstate the full SALT deduction.

In 2021, the Senate considered a repeal of the SALT cap on those making $500,000 annually or less. According to the Center for Responsible Budgeting (CFRB), the Senate proposal would result in a loss of $150-$200 billion in tax revenue over a five-year period.

U.S. Representative Mike Lawler (R-Pearl River) announced that he is introducing the SALT Marriage Penalty Elimination Act, which would double the deduction to $20,000 for married couples. He said it is unfair for married couples who file jointly to receive only a $10,000 deduction, while single homeowners are entitled to the same amount. The bill is being co-sponsored by Republican Anthony D’Esposito of Long Island and Democrat Mikie Sherrill of New Jersey.

“What I’m introducing here is a commonsense, bipartisan piece of legislation that begins to chip away at the cap on SALT in a way that I think we can get it passed,” Lawler told The Examiner-News.

The SALT deduction cap is set to expire in 2025, which is OK with Garbarino. “The clock is running out,” he told Roll Call. “To me, I’d like to see it go completely in three years. I think it would be better than doing any sort of extension with a lift or with an increase right now. So I think time is on our side.”

As a result of the American Rescue Plan Act being signed into law, millions of Americans will be receiving $1,400 checks from the IRS to help them deal with the economic burden caused by the coronavirus pandemic.
Officially, checks will start going out on March 17, although people with direct deposit accounts may already see the money in their bank accounts as pending or provisional deposits. People without direct deposit set up should begin to see their checks over the coming days and weeks. Here is what you need to know about your stimulus check:

How Will I Receive My Stimulus Check?

If you have direct deposit set up with the federal government, it should be deposited directly into your account. However, if you do not already have direct deposit set up, you will instead receive the stimulus check in the mail. Some people may also instead receive the money through an Economic Impact Payment (EIP) Card, which is a sort of prepaid debit card which must be activated online.

How Are These Payments Being Calculated?

While the stimulus payments are potentially up to $1,400 per person, the fact is that the exact amount of your payment will depend on a number of factors, including your income, the number of dependents you have, and whether you are filing as an individual or jointly. If you have not yet filed your tax returns for 2020, the IRS may instead base your payment on your tax return information from 2019. In addition, there may be other factors that limit or delay your payment.

What if I Have Direct Deposit and Have Not Seen The Money in My Account?

The stimulus checks are being processed in batches, and thus not everyone will be receiving their money right away. In addition, given the proximity to tax day on April 15, there will likely be delays at the IRS. You can track your stimulus payment with the IRS’ official tool here.

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