When the 2023 CPATrendlines Busy Season Barometer asked practitioners what advice they’d give small businesses, most of the responses boiled down to two essential messages:
Let’s say the odds of prosecution are low … lower still for business entities.
By CPA Trendlines Research
Accountants are often the first to notice white-collar crime. They’re also the ones with access to the evidence. Contrary to the cliché, numbers can lie, though not forever. When there’s something fishy in the figures, it’s an accountant who first notices.
Lack of audits on President Trump triggers an investigation.
By CPA Trendlines Research
Should the president and vice president of the United States be a little above the law, a little privileged, a little exempt from audits of tax returns?
The answer would seem obvious. And while these top-level executives aren’t explicitly exempt, they do wield power over the Internal Revenue Service, and the president signs into law bills that could affect his or her personal financial situations. And in today’s almost even split of the Senate, the vice president often casts a deciding vote on such bills. READ MORE →
Audit Rates by Total Positive Income: Although audit rates are declining more rapidly for higher-income taxpayers, the audit rate for lower-income taxpayers claiming the Earned Income Tax Credit is running higher than average. The reason: IRS says it doesn’t have the highly-trained staff needed for high-income audits. EITC audits are easier. Shown: 2019 tax year.
For the wealthy, the IRS says it’s out-gunned.
By CPA Trendlines
The percentage of taxpayers audited by the IRS has been in precipitous decline since 2010, with the steepest decline in – surprise, surprise! – the highest income bracket, according to a new study.
HOISTED from COMMENTS: “It is not the auditors who are to blame. It is the IRS processes that the auditors are following.”
The odds of a taxpayer being audited are astonishingly low, an average of just 0.25% in 2019, way down from 0.9% in 2010.
They’ll take some time, but not much money or technowizardry.
By CPA Trendlines
When National Tax Advocate Erin M. Collins sat down before the House Subcommittee on Government Operations this April for hearings titled “IRS: Is It Ready?” she spoke Truth to Power.
She told Power that the IRS is truly in big trouble.
Its backlog of unprocessed returns and unanswered mail is unprecedented in the history of the United States.
Last year its agents answered only 11% of incoming phone calls.
Its “Where’s My Refund?” and “Where’s My Amended Return?” online tools often failed to answer either question.
Julio Gonzalez, founder and CEO of Engineered Tax Services, has been named among the Accounting Today Top 100 Most Influential People. Gonzalez has been a pioneer in bringing specialized engineering tax studies to local CPA firms and mainstream America, which historically had only been available to Fortune 500 through national accounting firms. Engineered Tax Services also owns The Growth Partnership, ABLE: CRM for Accountants, and INSIDE Public Accounting.
Alas, the 100 percent bonus depreciation rule—the federal tax law under the Tax Cuts and Jobs Act (TCJA) of 2017 that made it possible for taxpayers to write off a property’s reallocation in the year of acquisition—will begin to sunset at the end of this year.
In its place in 2023, an 80 percent bonus depreciation will be allowed for properties acquired in 2023, scaling down to 60 percent in 2024 (for properties acquired in 2024), 40 percent in 2025 (for properties acquired in 2025), 20 percent in 2026 (for properties acquired in 2026), and then zero percent in 2027 and later years for properties acquired in 2027 and afterward.
It’s important to note for your clients in real estate that bonus depreciation is applied to a property based on the year it was purchased (although there are some exceptions to this rule). And taxpayers can only claim bonus depreciation retroactively within two tax years of the original placed-in-service date. READ MORE →
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Three ways to fix the program.
By CPA Trendlines