Federal Reserve Vice Chairman Lael Brainard told a conference that there are still questions about the idea of creating a digital dollar. Brainard also pointed to risk if stablecoins are not properly regulated.
The Internal Revenue Service is making progress on its backlog of unprocessed tax returns, as it's asked by the American Institute of CPAs to extend its recently announced penalty relief through the end of the year.
The shifting interest rate environment means that retirees may want to reconsider whether they should pay off their mortgages or invest the additional funds in a low-risk financial vehicle. Tax considerations and liquidity issues should also be factored into the decision.
Some businesses face a challenge when trying to determine whether they have state sales tax exposure under an economic nexus standard. What steps should companies take to mitigate their exposure?
Although details on the application process have yet to be released, learn the basics and what to expect for your clients.
The Great Resignation, which saw droves of workers leave their jobs or switch careers, may still be going strong — but another new workplace phenomenon is emerging: “quiet quitting.”
The Inflation Reduction Act (H.R.5376) is a climate and tax bill that advances elements of the administration’s economic agenda. President Biden signed the Inflation Reduction Act into law in August 2022. The legislation includes provisions designed to prevent the largest corporations from exploiting tax loopholes that allow them to pay little or no federal income tax. It also includes new and extended tax credits designed to incentivize businesses and individuals to boost their use of renewable energy. While additional guidance and regulations are expected in the coming months and years, here is a look at the key corporate tax provisions of the Inflation Reduction Act. Unless otherwise noted, all changes are effective beginning after December 31, 2022.
Here's an item-by-item review of the many tax provisions in the recently enacted Inflation Reduction Act, which creates a new corporate alternative minimum tax and a host of energy tax credits.
The AICPA recently released proposed revisions to the Statements on Standards for Tax Services for public comment. The proposal includes new standards on data protection, reliance on tools, and representation of clients before taxing authorities.
Inflation is driving up the cost of tailgating parties, according to a report from Wells Fargo, although it also noted that many people are still expected to take part in these gatherings. Travel to the games is "the biggest pain point," according to the report, and the cost of beer and groceries are up from last year.
Federal Reserve officials discussed the need to keep interest rates at levels that will restrict the US economy “for some time” in a bid to contain the highest inflation in roughly 40 years, according to an account of their most recent meeting. The central bank has raised rates this year at its fastest pace since the 1980s.
Perhaps one of the most controversial pieces of the Inflation Reduction Act is the expansion of the IRS. The law will increase the IRS budget by roughly $80 billion over 10 years. The IRS funding increase should raise additional revenue and help shrink the tax gap, while imposing some additional compliance costs along the way. The biggest win-win for reducing both the tax gap and taxpayer compliance costs is still simplifying the tax code. However, this new law does not take significant steps towards simplification.
The new 15% corporate alternative minimum tax (AMT) contained in the Inflation Reduction Act set to be signed into law today by President Joe Biden will put pressure on regulators to quickly develop guidance and CFOs to prepare new systems for compliance, according to Edward Karl, AICPA's vice president of taxation. Congress did not heed a request made by AICPA for a delay in the implementation of the new minimum tax on big companies that earn more than $1bn annually; instead the AMT will be effective as of the 2023 tax year. While an estimated 150-200 large companies are expected to be subject to the new tax, its complex rules mean that financial executives at many more companies must prepare for the possibility of being subject to it, Mr. Karl said; he added that AICPA has already kicked off a project to look at the guidance issues stemming from the new tax and will then let the U.S. Treasury and the IRS know what it finds. He anticipates that it could take the regulators six to 12 months before they can issue guidance.
U.S. lawmakers are pressing the IRS to explain how it plans to relieve a backlog of tax returns that have delayed refunds and to detail what measures it’s taking to improve customer service. Dozens of congressional Republicans and Democrats made the demands in a letter to the agency. The IRS has said it plans to reduce by year-end the backlog of paper filings, which have been running at historically high levels since the pandemic hit. But the lawmakers, citing data from an IRS watchdog, said that the backlog has grown and that the agency has failed to meet targets to hire new employees. "The IRS must take additional steps to improve customer service issues, decrease processing delays, and work down the backlog of paper returns and correspondence by continuing the maximum use of overtime and surge teams," according to the letter, signed by 93 House and Senate lawmakers. The lawmakers asked IRS Commissioner Chuck Rettig to answer questions this week about how the agency plans to resolve the backlog and bring on additional workers.
The Federal Reserve can still achieve a soft economic landing as it looks to bring inflation under control, but doing so is difficult, according to Goldman Sachs. So far, the Fed's actions have helped to narrow the gap between supply and demand, but there are several economic factors outside of the central bank's control that could affect its progress.
Over the course of the next year, lawmakers on the U.S. House and Senate Agriculture committees will draft a new federal farm bill that will shape food, farm, conservation and nutrition programs across the country for the next five years. The omnibus law that began 90 years ago as crop supports now has an impact far beyond the farm, with programs to create wildlife habitat, address climate change and run the nation’s largest federal nutrition program.
A recent Tax Court case, Gonzalez, TC Summary Opinion 2022-13, 7/18/22, found that it is permissible to deduct vehicle expenses related to a side-gig, as long as the filer follows strict rules. Generally, expenses relating to use of a car, van, pickup, or panel truck used for business are deductible. For example, if they drive their own passenger car to visit clients or customers, they may write off the portion of their vehicle’s cost that is attributable to business use, subject to some special limits. If they use their car 80% for business, they can deduct 80% of the costs. The vehicle expenses are deductible under one of two methods: either the standard mileage rate, or by deducting actual expenses based on the percentage of business use. This includes gas, oil, insurance, repairs, licenses, tires, etc., plus a generous depreciation allowance.
The American Institute of CPAs has sent comments to lawmakers in the House and Senate about the tax proposals in the Biden administration's climate, tax, and spending bill.
Under final regulations recently issued by the IRS and Treasury (T.D. 9963), partnerships electing to adjust the basis of partnership property under Sec. 754 will not have to include a partner's signature on their election statement.
Democrats pushed their election-year economic package to Senate passage Sunday, a hard-fought compromise less ambitious than President Joe Biden’s original domestic vision but one that still meets deep-rooted party goals of slowing global warming, moderating pharmaceutical costs and taxing immense corporations.