Connect with us

Accounting

IRS accelerates ERC claims processsing

Published

on

The Internal Revenue Service says it has processing underway on some 400,000 claims for the Employee Retention Credit, representing about $10 billion of eligible claims.

Work on the claims for small businesses and others is ongoing as the agency continues to wade through claims from the complex — and at times misused — pandemic-era credit. A significant number of the ERC claims came in during what the IRS calls “a period of aggressive marketing” by promoters, leading to a large percentage of improper, ineligible claims.    

“In recent weeks, the IRS has made substantial progress in separating eligible claims from the wave of ineligible claims that have come in,” said IRS Commissioner Danny Werfel in a statement, “and we continue working to refine our models to identify more eligible claims.”    

werfel-daniel-irs-testifying-senate.jpg

IRS Commissioner Daniel Werfel testifying at a Senate Finance Committee hearing

The claims being processed include eligible and ineligible claims, with most being processed for approval. Checks are being mailed for eligible claims with refunds.

The ERC program increasingly became the target of aggressive marketing well after the pandemic ended. Some promoter groups called the credit by another name, such as a grant, business stimulus payment, government relief or other names. The IRS is continuing to work denials of improper claims, intensifying audits and investigating potential fraud and abuse. 

Last month, the agency opened a supplemental claim process to help third-party payers and their clients resolve incorrect ERC claims, and warned that its second Employee Retention Credit Voluntary Disclosure Program ends Nov. 22.

Continue Reading

Accounting

In the blogs: Just in time

Published

on

BOI is back; phantom stocks; continuous compliance; and other highlights from our favorite tax bloggers.

Just in time

  • Tax Vox (https://www.taxpolicycenter.org/taxvox): Who benefits and who loses from extending major provisions of the Tax Cuts and Jobs Act?
  • Taxing Subjects (https://www.drakesoftware.com/blog): The Republican party can shape legislative priorities for the next two years, setting the stage for long-term policy changes. A downloadable resource offers a breakdown of key policy areas and action steps for tax pros and small businesses. 
  • AICPA & CIMA Insights (https://www.aicpa-cima.com/blog): How the IRS and tax pros can both start prepping for any government shutdown.
  • Eide Bailly (https://www.eidebailly.com/taxblog): “Just in time for the holidays,” a federal appeals court has restored the Corporate Transparency Act requirement for businesses to disclose their beneficial owners.
  • Taxable Talk (http://www.taxabletalk.com/): And just like that, yet again, with an injunction’s stay, course is reversed.
  • Current Federal Tax Developments (https://www.currentfederaltaxdevelopments.com/): At least they extended the deadlines a whisker.
  • The Tax Times (https://www.thetaxtimes.com): The IRS continues to claw back from non-filers, to the tune of 10 figures and counting.
  • The National Association of Tax Professionals (https://blog.natptax.com/): Favorite headline of the week: “The best gifts for the tax pro in your life this holiday season.”
  • National Taxpayer Advocate (https://www.taxpayeradvocate.irs.gov/taxnews-information/blogs-nta/): “‘Twas the night before tax season, and all through the land; Tax professionals were working, each with pen in hand; The forms were all sorted with numbers just right; who says tax accounting can’t thrill and excite?”

2025

Continuity

Size matters

Continue Reading

Accounting

H&R Block releases Santa Claus’s tax return

Published

on

p195u5dhs3pmh1ufo1oo27ml818.jpg

That doesn’t look like a 1040 … .

H&R Block has given the world just what it wants to see this holiday season: Santa Claus’s tax return.

Santa has a lot of itemizations to consider. Eight tiny reindeer depend on him for food and shelter, for instance, but are they dependents? How much can you give to one person before reporting it? Does Santa keep good mileage records for his 41.5 million miles? Santa isn’t an employee, so compensation (even in cookie form) over the threshold may create a 1099-NEC.

Old St. Nick, who files MFJ with Mrs. Claus, did all right on 1040 Line 34, but some of his numbers do bear examination: 6.3 million cookies and 2 million gallons of milk means a third of a gallon of milk per cookie. Will the deduction of coal, magic dust and sleighbells stand up to audit? At least Santa has plenty of time on his hands between January and April to find a good preparer.

Santa's tax return

“Even the jolly man in red takes time to report taxes,” reads the announcement from the tax prep giant. “He’s probably the world’s most famous small-business owner, running a gift-giving workshop and distribution network across the globe … Santa is giving us the first ever peek at his tax return and showing us how he used H&R Block Online and AI Tax Assist to get his maximum refund.”

Continue Reading

Accounting

5 changes coming to IRAs and 401(k)s in 2025

Published

on

The SECURE 2.0 Act contained several changes to traditional and Roth individual retirement accounts and 401(k) plans that are being phased in over the coming years, with several notable changes coming in 2025. The Illinois CPA Society highlighted five changes coming to IRAs and 401(k)s in 2025:

Continue Reading

Trending