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Alexis Nash

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.

For those companies that had already received payment, the IRS indicated there would be a voluntary disclosure program to help. Earlier this month, the details of the program were announced in IRS Announcement 2024-3 outlining how the program will work. Not only does it provide a way to resolve civil tax liabilities, but includes information on eligibility, program terms, repayment options, and more.

For years construction companies and contractors have leveraged the Section 45L federal tax credit for the inclusion of energy-efficient systems in new residential construction. Originally passed in 2005, it permitted homebuilders to claim a federal tax credit for energy efficient home construction. Over the years the credit has been updated and modified to extend its value. Most recently, the Inflation Reduction Act (IRA) extended and enhanced the credit to allow homebuilders who construct, reconstruct, or rehabilitate energy efficient homes to receive a credit up to $5,000.  Unfortunately, many home builders have not claimed the credit because of a lack of detailed guidance from the IRS.  The good news is the agency recently released Notice 2023-65 which provides the long-awaited details.

The automotive industry is going through a period of significant change. The commitment by major U.S. automakers such as GM and Ford to electric vehicles (EVs) is drastically changing manufacturers business models. Despite the large-scale shift, it is the current economic conditions including issues with credit availability and inflation that are acting as roadblocks to profitability. The Cox Dealership Sentiment Index – 2nd Quarter 2023, found that many independent dealers are focused on maintaining profitability while addressing staffing issues.

In the past, the IRS has issued warnings about these schemes and the potential consequences to businesses if the claims are denied. Since these companies continue the aggressive marketing tactics, the IRS recently issued another warning which provides additional information. Included are details on signs of aggressive marketing, details on how promoters lure victims, and steps on how taxpayers can protect themselves.

On March 8, 2023, the Biden Administration released the proposed Budget of the U.S. Government – Fiscal Year 2024. The document outlines the President’s spending priorities for the coming year, details policy objectives, and detailed descriptions of how the changes will impact each Department, starting with Agriculture and concluding with the Social Security Administration. Buried deep in the long document are important updates and changes to the Internal Revenue Code (IRC) including tax incentives, tax rates, and the addition/extension of certain tax benefits.

The Research & Development (R&D) tax credit can provide significant savings to businesses conducting eligible activities. It has become an attractive tax incentive as over the last 15 years the number of companies claiming the credit has almost doubled. It may come as no surprise that the opportunity to deduct eligible expenses in the year incurred is one compelling reason. Unfortunately, changes made in the Tax Cuts and Jobs Act (TCJA) now require eligible research expenses claimed under Section 174 need to be capitalized and amortized. In other words, taxpayers can no longer capture immediate savings. Concurrently, businesses are also required to make a change of accounting method to comply with these new rules.

The 2023 filing season for Georgia state income taxes officially began on February 1. While returns are being accepted for last year, there are several new tax credit programs in effect for 2023 and beyond. In addition to updates for the standard deduction and online sellers, new tax credits are available for donations supporting various programs. This includes the Qualified Law Enforcement Donation Credit, Qualified Foster Child Donation Credit, and the Georgia Heart Hospital Program.

Extra fees that businesses pass on to consumers, like convenience, processing, and service fees, may now be subject to sales tax in certain states. These fees are a way to recoup the costs of doing business without increasing the prices of goods and services. If businesses fail to properly account for the sales tax implications of extra fees, it could unknowingly violate state sales tax rules. Affecting Atlanta area companies, Georgia and South Carolina recently issued guidance to help businesses better understand state and local sales tax compliance requirements.

The temporary 100 percent business meal deduction expires on December 31, 2022. The incentive allows business taxpayers to completely deduct the full cost of business-related meal and beverage purchases made in a restaurant. The deduction is especially beneficial to law firms that rely on these interactions for business development and networking activities. Starting on January 1, 2023, the eligible deduction amount will revert to 50%.