Client Alert
How to Advise on the EV Tax Credit
At one time, a federal tax credit toward the cost of an electric car seemed like a permanent idea to help fight pollution and climate change. Now, a political shift in the U.S. endangers the notion and, more to the point, makes advising clients tougher in a tighter timeframe. How and when can those clients interested in an electric car and the credit still secure a tax break?
Read MoreTrust Issues: Don’t Try to Save Your Way to the Trust Fund Recovery Penalty
When people reach out to me about reducing their tax bill, there are two things that they bring up. The first is starting an LLC, and the second is converting their business to an S-Corp. When I ask why they think an S-Corp will help, the common knee jerk reaction response is to eliminate self-employment tax. It is true that their net income will no longer be subject to self- employment tax and neither will their distributions. However, what they fail to learn in their S-Corp online class from YouTube university is that they need to be on payroll if they are working in the business. Not only that, but they also need to receive reasonable compensation while on payroll. So, what happens if they go a year or two without being on payroll before they find this out? The TFRP is the biggest ouch a business owner can face and threatens to close businesses each year. It's the penalty that business owners pay for stealing from their employees and the IRS. To better understand it, let's look at what the trust fund is, how the IRS calculates the penalty, and who is responsible.
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10 Ways Certified Tax Planners Can Prepare for Increased IRS Focus on Documentation During Audits
The IRS is ramping up scrutiny of high-net-worth individuals and businesses, increasing audit rates by over 50% for those earning above $10 million. Recent IRS initiatives backed by Inflation Reduction Act funding have intensified enforcement on wealthy taxpayers, large partnerships, real estate investors, and tech businesses. IRS agents are digging deeper during audits and expecting taxpayers to produce more documentation to support every position on their returns. To help clients navigate this environment, certified tax planners must take proactive steps to bolster documentation and audit readiness. Below are ten authoritative strategies, complete with industry examples, IRS policy references, and best practices, to prepare for the increased IRS focus on documentation.

Best Practices for Surviving (and Helping Your Client Survive) an IRS Audit
Few things strike fear in our clients’ hearts more than an IRS notice, especially one that says a client’s tax return is being examined or audited. While this must be dealt with on a timely basis, it is not a reason for you, the tax professional, or the client to panic. Here, I’ll discuss a range of best practices to ensure the success of your client’s case, plus what to do when things go awry.

If You Have an IRS Audit Coming Up, Make Sure You Have the Tax Law on Your Side
When you have to go toe-to-toe with the IRS, make sure you keep the fight clean. The only way to succeed when arguing your case with an auditor is to follow the IRS’s own procedures. And, the primary way to do that is—you guessed it—keeping proper documentation. With this article, you’ll better understand where tax authority is derived, what rules the IRS must stick to, and what rules the IRS accepts.