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The Department of Treasury and the Internal Revenue Service have released Announcement 2024-19, which provides detailed guidance on the federal tax implications of rebates under the Department of Energy (DOE) home energy rebate programs. These programs are funded through the Inflation Reduction Act of 2022 and are designed to promote the adoption of energy-efficient technologies in residential settings. This announcement is crucial for homeowners and industry professionals, helping them understand how these rebates integrate into the broader federal tax system. To help clients, prospects, and others, Wilson Lewis has summarized the key details below. Background on DOE Home Energy Rebate Programs The DOE Home Energy Rebate Programs were launched to promote widespread energy-saving retrofits and high-efficiency home electrification projects, contributing to national energy efficiency and environmental sustainability goals.

On March 11, President Biden presented a budget proposal that seeks to enact nearly $5 trillion in tax adjustments over the next decade. Key facets of this proposal focus on modifying the tax obligations of corporations and individuals earning above $400,000 annually. Notably, the initiative revisits and expands upon elements from previous budgets, incorporating both established and new measures aimed at tax reform. While inclusion in the presidential budget does not guarantee that the provisions will be enacted, it does provide important insight into the administration’s priorities. To help clients, prospects, and others, Wilson Lewis has summarized the key details below.

The SECURE 2.0 Act, enacted in 2022, significantly enhances the original Setting Every Community Up for Retirement Enhancement Act. To improve retirement savings opportunities across the United States, it introduces over 90 provisions designed to expand access, improve flexibility, and encourage participation in employer-sponsored retirement plans. In light of this legislation, the IRS has released new guidance (Notice 2024-2) that targets critical facets of the legislation. This guidance is crucial for plan sponsors, ensuring they can both comply with the new regulations and optimize their retirement plan offerings. As the IRS is expected to issue more updates, plan sponsors must stay informed and prepared to adapt to these changes ahead.

Fraud prevention is an essential component of any corporate risk management program. Limiting the opportunities for bad actors to commit illegal activities is necessary. To achieve this goal, various protections can and should be implemented. These include formal fraud risk assessments, surprise audits, mandatory job rotation/vacations, internal audits, financial statement audits, and anti-fraud policies. When updating your program, it is essential not to forget about fraud awareness training. According to the ACFE Occupational Fraud 2024 – Report to the Nations, it was found that training on the risks and costs of fraud helped reduce related losses and ensured schemes were identified more rapidly.

Many businesses regularly conduct research and development projects to improve processes and efficiencies and to uncover ways to make new and more valuable products. Companies with dedicated research and development functions invest significant human and financial resources in the process. Others without a formal department often invest in such activities continuously with a limited scope. These activities are essential because they help to create new or improved products and uncover efficiencies and enhancements. While helpful, these activities can be pretty expensive, leaving management unable to continue efforts in the long term.

Earlier this month, the Association of Certified Fraud Examiners (ACFE) issued Occupational Fraud 2024: A Report to the Nations. This is the 13th installation of the largest global study on occupational fraud and includes information about the costs, schemes, victims, and perpetrators of fraud. To limit the potential for criminal activities and financial loss, management needs to regularly evaluate and update fraud prevention programs to ensure maximum effectiveness. The findings contained in the report, including changes to how tips are reported, should be carefully considered.

For most charities and organizations, fundraising is an essential function that ensures funding is available to continue existing programs, create new ones, and pay operating expenses. Without this money, it would be tough to maintain the ability to fulfill the core mission. This underscores the importance of a vibrant fundraising strategy that highlights successes, articulates how programs meet goals and provides a clear picture of how funds are used. Since donors want to feel they have contributed to a worthwhile cause, it’s vital to demonstrate the value provided. Attention will be focused on what an organization says about itself and what others are saying.

There has been significant concern amongst legislators about the retirement-saving opportunities available to American workers. A recent study by the Pew Charitable Trusts has found that 51% of workers are concerned about running out of money in retirement and 71% wished they had more saved. These findings, common among such studies, reflect the alarming situation many will face in the golden years. It also means taxpayers could be left paying the bill to help those without sufficient means. Over the past few years, Congress has passed several parcels of legislation to make it easier for employees to participate in and benefit from workplace retirement plans including the SECURE Act of 2019 and the SECURE Act 2.0.  

In late November, the IRS announced a delay in the $600 reporting threshold requirement for payment apps and online marketplaces. The decision was made due to feedback received from tax professionals and payment processors and general taxpayer confusion. The 2023 tax year will serve as another transition year leaving prior threshold reporting requirements in place. This means only payees who made gross payments of more than $20,000 or more than 200 transactions will remain. The delay is welcome news for businesses that would otherwise be required to prepare and submit Form 1099-K.

In late January, the House of Representatives passed important bi-partisan tax legislation that provides several saving opportunities for families and businesses. The Tax Relief for American Families and Workers Act of 2024 (Act) calls for the extension of several credits and incentives that expired at the end of last year. It includes an increase to the reporting threshold for Form 1099s, changes to federal Section 174 research and development (R&D) credit expense rules, an extension of bonus depreciation, and updates to the Child Care Credit. There is also a provision that calls for a ban on accepting new Employee Retention Tax Credit claims effective January 31, 2024