Author Archives:
Josh Crisp

There has long been concern that workers have been improperly classified as independent contractors to avoid required pay minimums, insurance benefits, overtime pay, and other employment-based protections. Earlier this month, the Department of Labor (DOL) issued Employee or Independent Contractor Classification Under the Fair Labor Standards Act (FSLA). This new guidance relies on the economic reality test supported by various reality factors. These include worker opportunity for profit or loss, nature, and degree of control over the work, permanency of the work relationship, and more. Other factors may be considered when determining economic dependence on the employer.

As the closing weeks of the year quickly approaches, there are many steps that individuals and families can take to reduce taxes. These steps can not only yield immediate savings but also set up additional opportunities in 2024 and beyond. While tax planning is most effective when conducted on an ongoing basis, there are steps to take now that can have an immediate impact. This includes optimizing gifting strategies, maximizing retirement plan contributions, prepaying university expenses, IRA conversions and tax loss harvesting. To reap the full benefit, it is essential to take action before December 31st.

As the end of the year approaches, many executives and high-net-worth individuals are focused on tax-saving strategies. While there are several options available, depending on specific circumstances, making qualified charitable distributions (QCDs) can easily reduce taxable income. Taxpayers who must take required minimum distributions (RMDs) have the option to give up to $100,000 in tax-free gifts to an eligible charity. Payment is facilitated through the transfer of funds from the plan administrator directly to the eligible charity.  

When the Inflation Reduction Act was passed last year, it called for significant investments in clean energy. It contained dozens of clean energy provisions which included 24 new tax incentives designed to accelerate clean energy investments. While many incentives were designed to benefit companies there were three new tax incentives introduced and updated that benefit individuals. Specifically, the Used Clean Vehicle and New Clean Vehicle tax deductions provide an incentive for purchasing qualified clean energy vehicles. Through the end of 2023, taxpayers interested in claiming the credit need to do so by filing Form 8936 along with the federal tax return. At the start of the new year these rules will change.

The high amount of fraud plaguing the Employee Retention Tax Credit (ERC) program reached a tipping point forcing the IRS to take action. Last month, the agency announced a moratorium on new claims processing through the end of the year. The time is needed to review existing claims more carefully and to implement programs to assist those who may have improperly filed claims. On October 19th, the IRS release Notice IR- 2023-193 which provides guidance for those who wish to withdraw a claim. Depending on the taxpayer’s situations there are different steps which must be followed. Only those that want to completely withdrawal a claim can participate.

The Inflation Reduction Act, which was signed into law on August 16, 2022, includes several provisions designed to help fight the high level of inflation. The purpose was to help meet national climate goals, strengthen energy security, invest in the creation of good paying jobs, and to reduce the costs of energy and healthcare for families. It is filled with dozens of provisions and includes 24 new tax incentives designed to accelerate the deployment of clean energy vehicles, buildings, and manufacturing. This includes both the Used Clean Vehicle and New Clean Vehicle Tax Credits.

Over the last year the IRS has issued several warnings about the number of ineligible Employee Retention Tax Credit (ERTC) claims being submitted. A central issue has been the large amount of misinformation about the program being spread by promoters and marketing companies. Business owners are led to believe that every business is entitled to receive the credit without any discussion about eligibility criteria or what happens if the credit is improperly awarded. What makes the situation worse are the aggressive radio, email and online marketing tactics used. Unfortunately, these bad actors pray on those who have little information about the credit resulting in ineligible claims.  

The IRS announced last week (in IR-2023-169) a moratorium on processing new ERTC claims through the end of 2023. The reason for the change is the increase in the number of ineligible claims that are being filed. It appears many of these are coming from businesses that have been pressured and scammed by aggressive promoters and marketing firms. The agency will continue processing claims received prior to September 14th but cautions it will now take longer due to increased fraud concerns.

In May, Tennessee unanimously passed the Tennessee Information Protection Act (TIPA), outlining new data privacy protections businesses operating in the state must follow. It is similar to regulations already in effect in Utah, Virginia, Iowa, and Colorado. The legislation requires certain protections of personal information including genetic or biometric, demographic, immigration status, sexual orientation, information about minors (under 13), and precise geolocation information. Due to the comprehensive nature of the changes impacted businesses will have two years to achieve compliance.

Fraud in any form is certainly unwelcome. Over the past few years there has been a significant increase in the amount of cyber attacks being perpetrated. In fact, there were over 232,972 individuals that fell victim to phishing attacks of various types in 2021. More specific to tax fraud, there has been a concurrent increase resulting in an average median loss was $278, 325. Given these numbers, the IRS has been working closely with state tax authorities, software companies, tax preparation firms, and payroll processors to defend against identity theft and fraud. A key purpose of the group, known as the Security Summit, is to reduce the amount of fraud through ongoing reporting and education.