Lee B

IRS management blamed for tax return backlog By Michael Cohn September 21, 2022, 4:22 p.m. Accounting Today "Management has not taken steps to either reallocate staff or realign work to address the backlog of tax transcript requests," said the report. "As a result, taxpayers who need these transcripts to validate information for mortgages or apply for student and small business loans will continue to be burdened. In addition, the IRS's mail-processing equipment is 20 years old. Although IRS management previously agreed to take the necessary actions to replace this outdated equipment, as of May 11, 2022, funding has yet to be allocated. Until the funding is allocated and equipment replaced, the federal government will continue to lose millions of dollars in interest revenue. Finally, a strategy is needed to address the delays in processing amended returns, which is not only causing significant burden on taxpayers but also results in the federal government continuing to pay substantial amounts of interest."

https://dwdcpa.com/resources/insights/tax-free-conversion-of-us-savings-bonds-to-529-plans

Unfortunately, the annual report only reflects what was filed by the person filing the report.

My state has a Business Registration Search Lookup function which I use for any new business entity clients. It shows all of the relevant information. However, just because someone's name shows up here doesn't mean that all of the legal requirements have been meet. Are there Board of Director's Minutes confirming who the Officer's are? I suspect most of us assume that our clients are telling us the truth, unless something obvious smacks us in the face!

Interesting, if I have new clients with copies of prior years tax returns with different last names, should I ask for proof of marriage?

The OSCPA has a 1 hour online webinar coming up titled, "The Imposter Syndrome". Who am I anyway

I have an older HP Laserjet 1320 that still works really well. However the last driver update removed my ability to duplex print. Fortunately, I also have a newer Canon BP253dw that prints in duplex really quickly.

I listened to a recent podcast where the host was discussing Quickbooks Desktop. He said that he had noticed that Intuit has included unannounced "kill features" in their updates this summer so that if you don't pay for the next year, your version of Quickbboks Desktop will stop working.

Bloomberg Tax projects that the upcoming inflation adjustments to tax brackets and exclusions will be about 7.1 %, more than double last years adjustments.

Tom, I encourage you to take a deeper look at whether your client is in an active trade of business?

I have taken an in depth look at Dennis's accounting software several times and It will do everything that you need at a very reasonable price. The only reason I don't use it is that I need more flexibility in COA and Financial Statement Design for my larger clients. I am very pleased with his payroll software and support, which I have used for over 3 years now.

"Paychex announced Paychex Voice Assist, a new voice feature for its Paychex Flex SaaS solution that allows for hands-free functionality for payroll processing. Working through any Google Assistant-compatible device — whether smart phone, smart watch, smart speaker or smart TV — Paychex Voice Assist uses the sound of a verified user's voice to do things like starting a pay period or acting on one already in progress, applying standard pay, making adjustments, reviewing totals, and submitting payroll for processing. Admins can also receive real-time notifications with payroll data insights, review and adjust hours and pay rates, and submit checks for payday." I can't stretch my braIn enough to imagine doing payroll "hands free" How have I survived 46 years of banging on a ten key, a typewriter, a calculator and a keyboard.

I believe startup expenses relate to being in or beginning an active trade or business. This taxpayer may or may not be in or starting an active trade or business. If not, I would either add it to the cost of the property or it would be not deductible.

According to the Tax Foundation there are 7 states who don't automatically reconnect where forgiven education loans may end up being taxed.

That's why I helped my second largest corporate client , because their bank a northwest regional bank was ignoring them, not returning their phone calls or emails requesting help with obtaining a PPP Loan.

If they filed a 1099 NEC, I assume this was for 2021? Yes, the payroll needs to be cleaned up and amended Quarterly Reports W-2s and etc need to filed.

If he was working in my state for 2 months, he would have to register with the Construction Contractors Board, providing proof of liability and worker's comp insurance and post a performance bond. He also might have to pay several different district and or local SE taxes.

"NEW YORK, NY (Sept. 22, 2020) – The American Institute of Certified Public Accountants (AICPA), its business and technology arm, CPA.com, and fintech leader Biz2Credit today announced they are teaming up on a new platform, CPALoanPortal.com, to streamline the process for CPA firms advising small businesses both on loan forgiveness under the Paycheck Protection Program (PPP) and additional small business financing options that clients may need to fund growth." I used Biz2Credit for 2 PPP Loans for my 2nd largest corporate client. I saw a number of different CPA Firms online promoting their PPP Loan related services with a base fee of $7,000.

Actually I understand how that could happen. When I became a Controller for a good sized beer distributor/food wholesaler after being a Staff Auditor for a Big 8 Firm and an Accounting Supervisor for a Forest Products company, I had never worked with or audited payroll. Fortunately I had a very experienced bookkeeper who took care of all of the payroll related tasks.

"The Comedy Store filed a lawsuit against its accounting firm, alleging that it missed out on receiving at least $8.5 million in COVID-19 relief funds due to “misrepresentations, gross negligence and misconduct.” According to the suit filed Tuesday in Los Angeles Superior Court, accountants Moss Adams, based in Seattle with offices in Los Angeles, misrepresented its “expertise and knowledge about” the federal COVID-related relief program and failed to inform the Comedy Store that the application to apply for the government grants was closing in August 2022." Moss Adams is a good sized West coast regional CPA Firm. I handled the PPP Loan applications and the forgiveness applications for 5 different small business clients. At our size we tend not to think about the risk of handling things like this

I agree, the speaker at your seminar doesn't have both oars in the water. If you don't mind sharing, who was sponsoring the seminar and who was the speaker, so that I can avoid them!

"The federal Military Spouses Residency Relief Act allows spouses of military servicemembers to travel with the servicemember to the state where the servicemember is stationed, keep their residence in their home state, and claim exemption from income tax in the state where they work, generally by filing a form, Medlock said. The law was amended at the end of 2018 by the Veterans Benefits and Transitions Act (Pub. L. 115-407), which allows the spouse to assume the servicemember’s state of residence for tax purposes upon marriage." This appears to be an exemption from the state income tax not from employment taxes. Also see this article: https://www.claconnect.com/en/resources/articles/2021/tax-surprises-with-work-from-home-policies

Fortunately, all of my payroll client's employees work and live in Oregon. Not planning on doing any payroll for other states.

"the IRS reported Monday it has reduced the number of unprocessed individual returns received this year to 8.7 million, as of Aug. 19, and it's now opening mail within normal time frames. In addition, it has caught up on the backlog of millions of unprocessed paper tax returns from last year and said all paper and electronic individual returns received prior to January 2022 have been processed if the return had no errors or did not require further review." "According to mid-August figures reported this week by the IRS, the 8.7 million unprocessed individual returns received in calendar year 2022 include both tax year 2021 returns and late-filed tax year 2020 and prior returns. "Of these, 1.7 million returns require error correction or other special handling, and 7 million are paper returns waiting to be reviewed and processed," said the agency. "This work does not typically require us to correspond with taxpayers but does require special handling by an IRS employee so, in these instances, it is taking the IRS more than 21 days to issue any related refund and in some cases this work could take more than 120 days." " As of Aug. 20, 2022, the IRS reported it had 1.9 million unprocessed Forms 1040-X with amended tax returns. "We are processing these returns in the order received and are working hard to get through the inventory," said the IRS. "The current timeframe can be more than 20 weeks instead of up to 16 weeks." I guess it's progress although its sloow. I still have a response to a CP2000 mailed in mid December that's still processing?

If their Earned Income and their AGI are both under $21,430, they could still potentially qualify for for the Single/No Children EIC.