Tax Section Odyssey

The employee retention credit (ERC) has been an important lifeline to many struggling businesses impacted by the economic uncertainty around the COVID-19 pandemic.

The ERC has helped support many businesses through the onset of the COVID-19 pandemic and taxpayers, many with the help of their CPA practitioners, have faithfully filed for refund claims.

However, some taxpayers have been approached by firms or consultants who may promote an overly aggressive narrative with the promise that any and every business can qualify for the ERC. Taxpayers should be wary of such aggressive claims and be conscientious of how to mitigate risks when applying for the ERC.

In this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, welcomes back Kristin Esposito, CPA, MST, Director — Tax Policy & Advocacy, Association of International Certified Professional Accountants, representing AICPA & CIMA, to discuss this top-of-mind topic.

What you'll learn in this episode

• The current environment (1.27)
• Concerns with overly aggressive firms or consultants (2.48)
• Steps for taxpayers who have fallen victim (3.51)
• IRS guidance available and on the horizon around this topic (7.35)
• Impact on those who have filed legitimate claims (9.02)
• The latest in processing times for filed Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund, and the coordination with examination activities (10.19)
• AICPA advocacy efforts around ERC (12.20)
• A page from Kristin's travel journal (15.29)

AICPA resources

• Employee retention credit guidance and resources — The rules to be eligible to take this refundable payroll tax credit are complex. This resource library will help you understand both the retroactive 2020 credit and the 2021 credit.
• Mythbust and maximize the employee retention credit | Tax Section Odyssey — Helping eligible clients successfully apply for and receive the ERC is a once-in-a-lifetime opportunity for CPAs according to Chris Wittich, MBT, CPA.
• ERC — What we know now | Tax Section Odyssey — Kristin Esposito, CPA, MST, addresses the much-anticipated employee retention credit (ERC) guidance released in August 2021 that answered many outstanding questions.

Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.

This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

The Inflation Reduction Act of 2022 increases the IRS budget by roughly $80 billion over 10 years. The funds are broken down into four main categories: taxpayer services, business system modernization, operations support and enforcement.

On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, talks with Gloria Sullivan, Managing Director, Tax Controversy & Regulatory Services — PwC, who spent 37 years with the IRS Large Business & International (LB&I) division. Gloria provides her insights on differentiating between the funding categories and understanding the ins and outs of the IRS from a personnel, budgetary and personal perspective.

What you'll learn in this episode

• Introspection at the IRS — How it's changed over the years and the current environment (1.20)
• IRS funding provisions set forth in the Inflation Reduction Act of 2022 (8.48)
• Deeper dive and insider look at the funding provisions (14.44)
• Insights regarding the IRS backlog (18.42)
• Can the IRS move funds from one category to another (22.21)
• Enforcement insights on a comparison of statutes and the U.S. Treasury Secretary Janet Yellen's letter to Commissioner Rettig (25.03)
• A page from Gloria's travel journal (32.49)

AICPA resources

• Inside look at the Inflation Reduction Act | Tax Section Odyssey — The Inflation Reduction Act, H.R. 5376, now law, includes a 15% corporate minimum tax, various energy credits and increased IRS funding.
• Breakdown of the Inflation Reduction Act of 2022 — The Inflation Reduction Act of 2022 contains several provisions that could affect your tax clients. Learn what's changed so you can adapt in this webcast.

Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.

This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

President Biden signed the Inflation Reduction Act, H.R. 5376, into law on Aug. 16, 2022. Tax professionals must now undertake the task of quickly understanding the tax provisions, including the new corporate minimum tax, based on financial statement, or "book," income and various energy credits, which include several new credits for clean energy and fuels and clean vehicles and other transportation. The bill also extends several temporary existing credits.

On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, and Kasey Pittman, CPA, Senior Manager, Washington National Tax — Baker Tilly US, dissect the tax stipulations in the new tax and climate legislation.

What you'll learn in this episode

• What's in the Inflation Reduction Act, H.R. 5376 (1.35)
• 15% minimum tax for large corporations (5.07)
• 1% excise tax on corporate stock buybacks (11.12)
• Extension of the Sec. 461(l) business loss limitation (13.24)
• Clean energy measures (17.22)
• IRS funding provisions (24.14)
• A page from Kasey's travel journal (28.33)

AICPA resources

• AICPA comments on tax provisions in Senate reconciliation legislation released on July 27, 2022 — On Aug. 4, 2022, the AICPA submitted comments regarding important profession and tax policy issues that are in the Senate reconciliation legislation released on July 27, 2022.
• AICPA comments on the corporate profits minimum tax in reconciliation legislation being considered — On June 21, 2022, the AICPA recommended that Congress reconsider and clarify the rules associated with the proposal regarding implementing a minimum tax on corporate adjusted financial statement income due to complexity and because it may have many significant and potentially negative implications. The AICPA previously submitted a letter on Oct. 28, 2021.
• AICPA request for additional guidance and relief regarding Sec. 461(l) – limitations on excess business losses of noncorporate taxpayers — On June 22, 2020, the AICPA submitted a comment letter requesting for additional guidance and relief regarding Sec. 461(l). The recommendations address treatment of previously reported excess business losses and relief for underpayment of estimated taxes.

Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.

This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

The tax ecosystem is in constant flux given the rotating release of legislation and regulations and reliance upon open communication with, and accessibility to, the IRS.

On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager – AICPA Tax Section, and Lauren Pfingstag, Director of AICPA Congressional & Political Affairs, review frequently asked questions (FAQs) that the AIPA Tax Section receives from members on topics such as the employee retention credit (ERC), tax-related legislation and IRS service levels.

What you'll learn in this episode

• ERC-related topics (1.11)
  • Potential credit reinstatement possibilities for Q4 2021 (1.22)
  • Aggressive ERC services by third parties (3.08)
  • Timing, salaries and the ERC (5.20)
  • Other potential legislative action possibilities (6.59)
  • Timing of ERC refunds (8.00)
• Tax-related legislation on the horizon (9.43)
  • Tax-related legislative packages most likely to pass (10.12)
  • LIFO relief for certain industries (14.15)
• IRS-related topics (15.53)
  • Erin Collins's 2023 Objectives Report to Congress (16.05)
  • Additional IRS funding (16.52)
  • Notices (18.56)
  • Proposed regulations related to RMDs (21.52)
• A page from Lauren's travel journal (26.43)

AICPA resources

• Mythbust and maximize the employee retention credit— Helping eligible clients successfully apply for and receive the ERC is a once-in-a-lifetime opportunity for CPAs according to Chris Wittich, MBT, CPA.
• 2023 Objectives Report to Congress — National Taxpayer Advocate Erin Collins's annual midyear report for fiscal 2023 was released in June. The report reviewed the IRS's performance in the 2022 tax filing season, outlined 14 "systemic advocacy objectives" going forwards and lists internal goals and objectives for the Taxpayer Advocate Service (TAS).
• Relief for Taxpayers for the 2022 Filing Season (Coalition letter) — The coronavirus pandemic has created enormous challenges for taxpayers, tax professionals and the IRS. Implementing reasonable penalty relief measures, that the IRS can offer immediately, are necessary to help not only taxpayers and tax professionals but also the IRS during these challenging times.
• Proposed regulations update RMDs for SECURE Act changes — The Tax Adviser, Feb. 23, 2022.

Other resources

• Where's My Refund? — IRS tool that provides refund information for the 2021, 2020 and 2019 tax years.

Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.

This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

The employee retention credit (ERC), the refundable tax credit designed to reward business owners for retaining employees throughout the COVID-19 pandemic was signed into law on March 27, 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and further significantly expanded in 2021.

Eligible business owners can claim up to $5,000 in refundable tax credits for each employee on their payroll in 2020 and up to a $7,000 credit per quarter (excluding Q4) for each employee in 2021. The calculation and procedures are complex, and taxpayers continue to seek help from trusted advisers to help them successfully claim their benefit.

On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, and Chris Wittich, MBT, CPA, Partner — Boyum Barenscheer, discuss eligibility requirements for the credit, how to help clients with their ERC needs and pitfalls when working with questionable third parties.

What you'll learn in this episode

• Overview of ERC qualifications (2.47)
• What is an acceptable government order (4.50)
• How to collect documentation regarding government orders (9.00)
• Supply chain disruptions effect on the ERC (11.46)
• How to handle clients that don't qualify (13.43)
• Marketing strategies for clients (17.09)
• Contingent fees (21.29)
• Experiences with refund statuses (24.50)
• Wrap-up (27.14)
• A page from Chris's travel journal (28.07)

AICPA resources

• Employee retention credit guidance and resources — The ERC is an important of the COVID-19 relief legislation for small businesses. This library provides the ins and outs of calculating this credit.
• Challenges with contingency fees and the ERC | Tax Section Odyssey — Explore the prospect of contingent fees for ERC work and how regulatory rules govern its usage with the AICPA's April Walker and Ed Karl.

Other resources

• FAQs: Employee Retention Credit under the CARES Act — IRS answers to frequently asked questions on the ERC.

Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.

This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

In this episode of the Tax Section Odyssey, April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, talks with brand, marketing and growth strategists, Manny Torres and Kenny Harper from Growth Amplifiers.

Growth Amplifiers works with business advisors to help them increase their profits and the success of their businesses. The organization provides tips, tools and strategies to help advisory businesses elevate the value and experience they provide to their customers and/or clients.

What you'll learn in this episode

• What Growth Amplifiers offers to business owners (1.52)
• Strategies to help tax professionals elevate the type of clients that they serve (3.17)
• Tips for attracting the right clients (8.58)
• How to decide what range of services to offer to attract ideal clients (13.11)
• The profit-growth formula (15.35)
• Communication strategies to overcome the overwhelming feeling during tax season (23.01)
• Final thoughts (29.16)
• A page from Kenny's travel journal (31.24)

AICPA resources

• CPA Marketing Toolkit — The resources in the CPA Marketing toolkit help you communicate with prospects and clients throughout your career. These tools help you demonstrate your strength as a trusted adviser, assisting with all aspects of your clients' financial situations.

Other resources

• Business Advisor Growth Guide — Growth Amplifiers offers a free downloadable resource to amplify your practice.

Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.

This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

Alternative work arrangements such as remote or hybrid options are becoming more prolific making it crucial for firms to fully leverage digital technologies. Mainstays like automation, e-marketing and employee engagement strengthen relevancy and future proof a business — especially with the "great resignation" looming and client interaction mechanisms evolving.

In this episode of the Tax Section Odyssey, April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, talks through these topics with Cari Weston, MST, CPA, CGMA, Executive Director — Center for Accounting Transformation. Cari will be joined by Donny Shimamoto, CPA,CITP, CGMA, Founder and Managing Director — IntrapriseTechKnowlogies LLC, for the webcast Tax Practice Quarterly: A Blueprint for Tax Technology and Digital Optimization on May 17, 2022, 1–3pm ET (rebroadcasted on May 25, 2022, 3–5pm ET) to continue the discussion with an in-depth presentation.

What you'll learn in this episode

• Important objectives for the Center for Accounting Transformation (2.45)
• Tips on how to narrow the search for technology stack improvements and ideal implementation timing (4.10)
• Primary hold ups that impede the progress of firms embracing technological changes (9.45)
• Potential processes often overlooked that are eligible for the biggest automation improvements (15.00)
• Alternate work arrangements and related technology improvement needs (16.26)
• Cari's final thoughts (20.50)
• A page from Cari's travel journal (22.08)

AICPA resources

• Tax Practice Quarterly: A Blueprint for Tax Technology and Digital Optimization — Digital transformation can take a "phoenix" or "evolutionary" approach — the path you take depends on your risk appetite, budget, and business strategy. Attend this non-technical session on May 17, 2022, 1 – 3pm ET (rebroadcast on May 25, 2022, 3 – 5pm ET) to figure out which digital technologies you should be looking at and which transformation strategy may be the right one for you.
• AICPA Town Hall Series— Bi-monthly, high-impact news broadcast series that delivers the latest news, analysis, insights and practical guidance to accounting and finance professionals and respond to pressing issues facing the profession

Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.

This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

The April 2022 tax deadline has passed and many tax practitioners are soaking in a well-deserved respite. Now may be the opportune time to think about starting up your own tax practice. While the thought of being a successful entrepreneur may seem daunting, there's some best practices to get you started.

On this episode of the Tax Section Odyssey April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, talks with Kelly Rohrs, CPA, P.C., Owner — Kelly A. Rohrs, CPA, about her transition over the past year to owning her own tax practice and lessons learned for success.

What you'll learn in this episode

• Motivating factors that influenced Kelly to open her own practice (1.57)
• Important lessons learned over the past year (4.09)
• Finding help for administrative tasks (5.38)
• Knowing your optimal technology stack needs (7.20)
• Tips for having a successful work-life balance (10.06)
• Evaluating social media platforms(15.22)
• Billing practice suggestions (17.53)
• Final thoughts from Kelly (22.10)
• A page from Kelly's travel journal (23.06)

AICPA resources

• Key considerations when buying a CPA practice | Tax Section Odyssey — Raleigh Cutrer, CPA/PFS/ABV, Shareholder at Matthews, Cutrer and Lindsay, P.A., talks about five key areas to consider when exploring whether to acquire another CPA practice.
• Key considerations when selling a CPA practice | Tax Section Odyssey — Raleigh Cutrer, CPA/PFS/ABV, Shareholder at Matthews, Cutrer and Lindsay, P.A., talks about five key areas to consider when in the process of selling your CPA practice.
• AICPA Town Hall Series– Bi-monthly, high-impact news broadcast series that delivers the latest news, analysis, insights and practical guidance to accounting and finance professionals and respond to pressing issues facing the profession

Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.

This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

The homestretch of the tax season is drawing near. On this episode of the Tax Section Odyssey April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, highlights three top-of-mind items lingering on as we near the end of busy season 2022.

What you'll learn in this episode

• Status of relief around Schedules K-2/K-3 (0.50)
• Updates to the Gramm-Leach-Bliley Act Safeguards Rule (3.45)
• Where to hear more about the "billionaire tax" and other proposed tax reforms related to the 2023 fiscal year budget (6.36)

AICPA resources

• Gramm-Leach-Bliley Information Security Plan Template — Tax preparers must implement security plans to protect client data. Failure to do so may result in a Federal Trade Commission (FTC) investigation. Download and customize this template to document your firm's policies.
• The 2023 tax revenue proposals released by the Biden Administration — In this March 29, 2022 episode of the PFP Section podcast, Bob Keebler, CPA/PFS, highlights the relevant proposals to CPA financial planners.

Other resources

• General Explanations of the Administration's Fiscal Year 2023 Revenue Proposals — Commonly referred to as the "Greenbook," the document summarizes the Administration's tax proposals contained in the fiscal year 2023 budget.
• FTC Strengthens Security Safeguards for Consumer Financial Information Following Widespread Data Breaches — The FTC announced on Oct. 27, 2021 updates to the Safeguards Rule to better protect the American public from breaches and cyberattacks that lead to identity theft and other financial losses.

Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.

This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

At the end of 2017, the Tax Cuts and Jobs Act (TCJA), P.L. 115-97 delivered the $10,000 state and local tax (SALT) deduction limitation. Before passage of TCJA, individuals who itemized deductions could deduct their state tax payments in full using Schedule A, Itemized Deductions, of their federal Form 1040, U.S. Individual Income Tax Return. Now that the amount of the deduction is limited, shifting the income taxes directly to the passthrough entity swings the deduction upstream.

In theory, a basic workaround seems simple. However, the varying mechanics of how each state's workaround actually works has created complexities for taxpayers and practitioners.

On this episode of the Tax Section Odyssey, Alexander Scott, JD, LLM Senior Manager — AICPA Tax Policy & Advocacy, and Annette Nellen, CPA, CGMA, Esq., Tax Professor — MST Program at San Jose State University, and a past Chair of the AICPA Tax Executive Committee, join April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, to examine the current state of various passthrough entity (PTE) tax workaround regimes.

What you'll learn in this episode

• Overview of the passthrough entity (PTE) tax (1.07)
• Items to keep in mind that vary among states (2.23)
• Highlights of the Notice 2020-75 published in 2020 (4.05)
• Considerations for tax practitioners when working with clients (7.42)
• Terminology considerations, including "specified income tax payments" and "nonseparately stated taxable income or loss" (8.55)
• Additional considerations to keep in mind for compliance purposes, including what personnel within a client's business you're interacting with (10.55)
• Similarity to second class of stock complications (12.26)
• Form presentation and partnership agreement modifications (15.35)
• Timing sensitivities and mechanic issues (17.15)
• Final thoughts (21.42)

AICPA resources

• SALT Roadmap — State and Local Tax Guide — Navigate the complex world of state and local taxes with an animated map compiling basic state information and quick links to state's forms and instructions, government websites and CPA society information.
• State and Local Tax Advocacy Resources — Information on state-level advocacy issues featuring the AICPA position paper on state PTE tax implementation issues.
• States with adopted or proposed PTE tax — This map demonstrates state activity regarding PTE tax.
• The Tax Adviser —a collated list of the latest articles on the SALT cap deduction.

Other resources

• Notice 2020-75 — The IRS clarified in 2020 that partnerships and S corporations may deduct their state and local tax (SALT) payments at the entity level in computing their nonseparately stated taxable income or loss. In addition, the notice announced that the Department of the Treasury and the IRS intend to issue proposed regulations of the same.

Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.

This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.