Category: IRS

Estate planning can be a complex process that includes identifying the value of assets within an estate. Properly valuing those assets helps ensure an accurate distribution according to the wishes of the estate holder while minimizing the potential for disputes among heirs. It also allows for efficient tax planning and can help reduce estate taxes and liabilities. Finally, a precise and accurate asset valuation helps in complying with legal and regulatory requirements, avoiding potential penalties or complications. Below are details… Read more ›

Understanding Business Valuation Valuations are subjective in nature so the expert’s report must be persuasive. It is critical to provide supporting information and documentation for every assumption, methodology, or process and make sure that it can be replicated by the reader. The IRS is going to read any valuation report attached to an estate tax return or a gift Tax Return. Any errors, no matter how small, will destroy the appraiser’s credibility. Objectivity and independence are critical to the role of the appraiser. … Read more ›

The Inflation Reduction Act provided the IRS with billions of dollars of additional funding to reduce the so-called “tax gap” between what taxpayers owe and what they actually pay. The tax agency has already launched numerous initiatives aimed at this goal, including several business-related compliance campaigns. Let’s take a closer look at three of the most significant recent targets.  Abusive Pass-through Practices The IRS has accelerated its enforcement efforts against partnerships and other pass-through entities, which it claims have been… Read more ›

The Internal Revenue Service (IRS) announced significant relief measures for some taxpayers facing penalties on their 2020 and 2021 tax returns. The relief addresses a mishap caused by COVID measures. 4.7 million individuals, businesses and tax-exempt organizations incurred late fees without receiving collection reminders. The IRS will provide $1 billion to settle these penalties or reimburse filers who have already paid their account. Those who qualified will be sent a letter some time this month, no action is needed to… Read more ›

With the 2024 tax year right around the corner, there’s good news coming from the IRS. According to a recent announcement from the tax agency (Notice 2023-75), there will be increases to retirement plan contributions next year due to inflation adjustments. Here’s a rundown of some of the changes: Contributions to 401(k) and 403(b) Plans. Taxpayers will be able to contribute up to $23,000 in 2024, up from $22,500 in 2023. The catch-up contribution amount for those age 50 and… Read more ›

Does your business receive large amounts of cash or cash equivalents? If so, you’re generally required to report these transactions to the IRS — and not just on your tax return. Beginning January 1, 2024, this reporting will have to be done electronically. Here are some answers to questions about the requirements and what’s changing. What Is Required? Each person who, in the course of operating a trade or business, receives more than $10,000 in cash in one transaction (or… Read more ›

Recent IRS warnings and announcements regarding the Employee Retention Tax Credit (ERTC) have raised some businesses’ concerns about the validity of their claims for this valuable, but complex, pandemic-related credit — and the potential consequences of an invalid claim. CBM has helped many clients file claims when they met the approved criteria requirements. However, we also recognize that many businesses not working with a reputable tax professional may have been misled by fraudulent parties into believing they were eligible to… Read more ›

On Wednesday October 11th, Microsoft announced it had received a $28.9 billion dollar bill for unpaid taxes between 2004 and 2013. The case shed light on the complexities and challenges of international taxation, and it serves as a cautionary tale for businesses looking to avoid similar tax penalties. Understanding Microsoft’s Tax Bill The $29 billion in unpaid taxes stemmed from an IRS audit into Microsoft’s 2004 to 2013 finances. The IRS investigation began after an unusually structured manufacturing facility in… Read more ›

In a surprising move, the IRS announced that the SECURE 2.0 rule, which stated that catch-up contributions for high earners must go into Roth accounts, will be delayed until 2026. Originally scheduled to start in 2024, the delay provides a window for employers’ retirement plans to comply with the law and employees to reap the tax benefits of current catch-up contributions. The rule requires employees aged 50 or above, who earned $145,000 or more the previous year, to direct their… Read more ›

Summer isn’t just for barbeques and baseball. It’s also a good time to think about ways to cut your 2023 business tax bill. Here are four planning ideas for small business owners to consider, assuming there won’t be any changes to current federal tax laws at least through 2024. 1. Establish a Tax-Favored Retirement Plan If your business doesn’t already have a retirement plan, now might be the time to take the plunge. Current rules allow for significant annual deductible… Read more ›