I am going to nominate the Clark Raymond opinion as the best tax story of the year. At least, it is the best one for CPAs. You have to tease it out of the opinion, but there is a kind of rollicking story of troubled partner relationships. I did 40 years in large local and regional public accounting with a little bit of national icing on the cake and never encountered so much apparent dysfunction. Other commentary on the case has concluded that the lesson is about doing a good job maintaining your capital accounts, but I think the real lessons may be a little different. It is public record, but the guys in the conflict are still practicing so out of professional courtesy I will refer to them as Tom, Dick, and Harry. There is another partner who is part of the story that I will call Jane. Also, for simplicity, I will ignore the fact that they held their partnership interests through single member entities and in Tom’s case in an entity with his wife who did administrative work. And I will refer to the entity involved as “the firm.” The story is every accountant’s nightmare (and would make for a great tax-themed soap opera). Partners disagree. Partners walk out. Clients follow exiting partners to their new business leaving the old partner with debt. Here is the story.

Get $7,500 when you buy your Telsa with this new tax credit. President Biden signed the Inflation Reduction Act (IRA) on August 16th, 2022, and the misinformation started circulating almost immediately. I’ve seen it, you’ve seen it, and this means that our clients have seen it as well. It’s our job to help them navigate these new laws to help them maximize their tax savings. Taxpayers have been able to save on their taxes by buying an electronic vehicle (EV) since 2008 . So, the tax savings are nothing new. How the tax savings work has been completely revised under the IRA. That’s where you come in as an expert advisor. The maximum credit for all clean vehicles is now $7,500. A new credit was even added under the IRA to make used EVs eligible for a tax credit. But here is the thing, battery size no longer matters. The assembly, production, and taxpayer income does matter. Not understanding the changes made to Section 30D can cost you and your client. Your client can pay an unexpected additional $7,500 at tax time and you lose a client. Or you can stay the hero, saving them $7,500. I want you to stay the hero so let’s look at the qualifications for the $7,500 under the Inflation Reduction Act.

The IRS is deploying technology and big data to combat compensation under-reporting. What does this likely mean for you and your S Corps? That Reasonable Compensation challenges will likely occur outside the traditional exam process. A challenge may come from the ongoing Employment Tax Program or the recently launched CIP. From our polling, we find most tax advisors and their S Corp clients are dangerously unprepared for an IRS reasonable compensation challenge. If you are working with S corps, here’s the news you need to know...

The Internal Revenue Service (IRS) mission statement is to "provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all." The IRS provides forms and instructions, publications, robust web-based resources, and other tools to help taxpayers prepare and file their tax returns – an exercise relished by few. But what happens after you file your tax return? For many, the IRS accepts their tax returns as filed and processes them quickly, which is the end of the process. Others get "post-filing" correspondence from the IRS. The IRS may need additional information to process your tax return or, worse, may examine your tax return (asking you to document some or all parts of the return). There's a middle ground where the IRS adjusts your tax return without the "courtesy" of requesting documentation first. These are the math error notices. Read on to discover more (including that it's not always about math).

There was some rain on the parade of celebration of the student loan debt forgiveness. The Tax Foundation, perhaps with a touch of schadenfreude, announced that the forgiveness, not federally taxable due to recent legislation, might be taxable in as many as thirteen states. They have taken a closer look and backpedaled quite a bit. It is now down to four states Minnesota, Mississippi, North Carolina and Wisconsin and those are not for sure. But, there is likely another way out for many of the recipients of this boon. Keep reading to learn more!

It's 4th quarter, soon taxpayers will be reaching out to their trusted advisors. They will want to see what they can do last minute to save on taxes. There isn't much you can do at the end of the year. Still, these taxpayers will reach out expecting you to wave a magic wand and save them a few thousand dollars. Well, this year you may be able to do just that. Even if they have already maxed out their retirement accounts. Taxpayers are not restricted from using this strategy by income or self-employment. Are you ready to add this triple tax advantaged savings tool to your bag of resources?

A TOTTB Live Webinar Event sponsored by our friends at RCReports! For two decades the IRS has been preparing an assault on reasonable compensation for S Corps. Their arsenal is now fully locked and loaded. In it, there is everything from commonsense tools to obscure memos. We will explore key court cases, IRS guidelines, preparer penalties and some of the obscure weapons the IRS has put in place. We debunk common myths and fiction on how reasonable compensation should be calculated and replace it with facts and methodologies that the IRS relies on.

Evie and I withdrew from active tax practice in 2018, but she maintains a sort of family and friend's freebie practice using Drake. I help a little. We have been struggling with difficulty getting the information for one of our “clients” as we watch the ultimate October 15 deadline creeps up on us. She is in Florida in one of the counties covered by President Biden’s disaster declaration relative to Hurricane Ian. So it was sort of a relief to find out that we have another three months to get the return done. In this case it is not a huge benefit since interest will still clock if there turns out to be a balance due, since the payment was due on April 18. “Certain deadlines” falling on or after September 23, 2022 and before February 15, 2023 are postponed through February 15, 2023. Read on to learn more!