Client Alert
Remember, Influencers, the IRS Follows You Too!
The influencer marketing industry was able to grow during Covid as many advertisers had to adjust or cancel their marketing campaigns. This was because more people were sitting at home consuming content on social media. This new opportunity for smaller influencers has created a new group of taxpayers who need to know their new filing obligations. They’ll also be open to tax planning strategies that you have to help them reduce their tax liability.
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Help Clients Rebuild Tax Records After Disaster
Tax pros help clients with a lot of catastrophes: wrangles with tax authorities, paltry nest eggs, more wrangles with tax authorities. More frequently, your clients might face a more tangible and cinematic disaster. These days, there’s always a storm comin’. Swept away in that destruction, for many people, are physical tax and financial records. A few precautions could have prevented such loss and made life at least a bit easier for victims. Here’s how to help clients head off trouble – and recover after it hits.
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CURRENT EDITION
What Happens If You Can’t Use All Your Clean Energy Tax Credits This Year?
Clean energy tax credits have a lot going for them. Clients buy them at a discount, apply them dollar-for-dollar against federal tax liability, and walk away paying less to the IRS. That alone makes them worth a serious look. But here’s what often gets overlooked and what makes these investments genuinely remarkable compared to almost anything else in your tax planning toolkit: the flexibility built into how and when the credits can be used. Can’t absorb the full credit this year? Carry it back up to three years and trigger refunds on taxes your client already paid. Think about that for a second. There are very few places in the tax code where you can go back in time and rewrite last year’s tax bill. This is one of them. Still have excess after the carryback? Carry it forward for up to 22 years. That’s not a typo. Two decades of runway to put those credits to work as your client’s passive income grows. And if circumstances change and the credits simply aren’t needed? An emerging secondary market means there may even be an option to sell them. No other common tax planning strategy offers this combination a guaranteed discount on purchase, dollar-for-dollar offset of tax liability, the ability to look backward and forward, and a potential exit if plans change. Understanding how each of these features works is what separates a good credit investment from a great one.
Perspectives on IRS Scrutiny of Captive Insurance Elections
The Internal Revenue Service has made no secret of its increased scrutiny of captive insurance arrangements, particularly those involving the small insurance company election. For taxpayers and their advisors, this has created understandable concern and, in some cases, hesitation about whether captive insurance remains a viable risk management and tax planning tool. Yet heightened scrutiny does not mean prohibition. The Internal Revenue Code continues to recognize captive insurance, Congress has refined it, and courts evaluate it based on well-established insurance principles. The real issue is not whether captives are allowed, but whether a specific taxpayer has a legitimate business need for insurance, has structured the arrangement properly, and has implemented it in a manner consistent with both tax law and insurance fundamentals. Understanding where scrutiny arises, how elections function, and what separates compliant captives from problematic ones is critical for CPAs advising closely held businesses today.
Strict Substantiation: Why Being Right Without Proof Can Cost You Your Charitable Deduction
Reilly’s Sixteenth Law of Tax Planning – Being right without substantiation can be as bad as being wrong – is particularly apt when it comes to charitable contributions. The case law makes it clear that there is not much wiggle room in rules relating to substantiation and reporting of charitable contributions. We’ll dig into the rules here.
