Tax Section Odyssey

On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Association of International Certified Professional Accountants, representing AICPA & CIMA, and Larry Pon, CPA/PFS, CFP, EA, USTCP, AEP — Pon & Associates, review the changes to the 2021 child tax credit (CTC) and discuss the latest news regarding the related advanced payments.

The American Rescue Plan Act enacted in March 2021 temporarily expands the CTC amount for certain taxpayers, made the credit fully refundable (meaning taxpayers can receive it even if they don't owe the IRS) and directs the IRS to make advance payments equal to 50% of IRS's estimate of the eligible taxpayer's 2021 CTCs during the period July 2021 through December 2021.

In a letter currently being sent to taxpayers, the IRS explains that taxpayers will automatically receive advance CTC payments —assuming they are otherwise eligible to receive the CTC — for 2021.

To date, the IRS has unveiled the following:

• Child Tax Credit Eligibility Assistant – allows families to answer a series of questions to determine whether they qualify for the advance payments
• Child Tax Credit Update Portal – allows families to verify their eligibility for the payments and gives them an option to unenroll from receiving the monthly payments
• Child Tax Credit Non-filer Sign-up Tool – allows families who are not required to file a tax return but who are otherwise eligible for the payments to report their qualifying children.

What you'll learn in this episode

• Changes to the CTC for 2021 (1.13)
• What we know about the advance payments (3.50)
• How qualifying children are defined for the advance CTC (5.29)
• What practitioners should be discussing with clients in the next few weeks and related financial planning tips (6.28)
• Scenarios in which practitioners should advise clients to opt out of receiving advance payments and what is involved in the opt-out process (9.33)
• Tips for billing clients for work in this area (14.41)
• The CTC in 2022 and beyond (16.50)

AICPA resources

• Child Tax Credit Client Letter – Client letter template for tax practitioners to use to notify their clients about the child tax credit changes and encourage clients to contact their CPA for additional tax and financial planning guidance.
• Child tax credit: New portal for opting out of advance payments – The Tax Adviser article published June 22, 2021 detailing the latest about the new portal.

Other resources

• Advance Child Tax Credit Payments in 2021 – The IRS dedicated site that houses information related to the advance CTC payments as well as the eligibility assistant, update portal and non-filer sign-up tool
• 2021 Child Tax Credit and Advance Child Tax Credit Payments Frequently Asked Questions – Consolidation of answers to frequently asked questions related to the CTC and the advanced payments, separated by topic
• Proc. 2021-24 – Procedures for individuals who are not otherwise required to file federal income tax returns for taxable year 2020 to receive advance child tax credit payments under Sec. 7527A.

Note, if your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.

This episode is brought to you by the AICPA's Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.

The employee retention credit (ERC) has been a significant lifeline to struggling businesses in the wake of the COVID-19 pandemic. The refundable credit was first established in March 2020 with the enactment of the Coronavirus Aid, Relief and Economic Security (CARES) Act. Since then, is has been expanded in various other relief legislation, most recently in the American Rescue Plan Act, H.R. 1319 enacted in the first quarter of 2021.

While at its core the mechanics may appear straightforward, its practical application has shown to be complex and tax preparers have been an integral part of making it a reality for clients. Meanwhile, some professionals debate whether contingent fees should be considered in this area.

On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager – AICPA Tax Section and Ed Karl, CPA, CGMA, Vice President – AICPA Tax Policy & Advocacy, delve into the intricacies of what is considered a contingent fee and how the AICPA Code of Professional Conduct and other regulatory rules address its usage.

What you'll learn in this episode

• What is a contingent fee (0.40)
• AICPA Code of Professional Conduct surrounding acceptability of contingent fees for original and amended returns (2.04)
• Alternative acceptable fee arrangements (5.39)
• History and evolution of contingent fee usage (6.51)
• Treasury Department Circular No. 230 considerations for contingent fees (9.48)

AICPA resources

• AICPA Code of Professional Conduct – Dedicated hub for the AICPA Code of Professional Conduct which provides guidance and rules to all members in the performance of their professional responsibilities
• COVID-19 tax resources – Resources and information to help CPA tax practitioners navigate the tax world in the COVID-19 pandemic
• Getting to the Bottom Line about Contingent Fees – Blog post by Edward Karl, CPA, CGMA on Oct. 16, 2014
• Tax advocacy – Consolidation of the AICPA Tax Policy & Advocacy team efforts as they advocate for legislative, regulatory and administrative tax matters on behalf of members. See also AICPA advocacy news and recent comment letters.
• Treasury Department Circular No. 230 – Consolidated information and a link to the rules governing the recognition of attorneys, certified public accountants, enrolled agents, enrolled retirement plan agents, registered tax return preparers and other persons representing taxpayers before the IRS.

Note, if your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.

This episode is brought to you by the AICPA's Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.

The past 15 months have been a whirlwind in the tax arena with several COVID-19 relief packages introducing new tax provisions and enhancements to older ones now passed and packed away. President Biden, his administration and Congress are turning their attention to more permanent legislative tax reform measures.

On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager – AICPA Tax Section, sits down with Lauren Pfingstag, Director of AICPA Congressional & Political Affairs, to discuss the possibilities of tax legislation in the near future.

What you'll learn in this episode

• Broad overview of what's included in the various proposals (0.49)
• Outlook regarding the regulation of tax return preparers and the AICPA's position on such regulation (3.00)
• Three potential tax proposal scenarios considering competing political forces and procedural limitations (6.11)
• Timing and likelihoods for tax legislation (13.30)

AICPA resources

• COVID-19 tax resources - Developed resources and information to help CPA tax practitioners navigate the tax world in the COVID-19 pandemic.
• Tax advocacy– Consolidation of the AICPA Tax Policy & Advocacy team efforts as they advocate for legislative, regulatory and administrative tax matters on behalf of members. See also AICPA advocacy news and recent comment letters.

Resources

• GovTrack – Tracks the United States Congress and publishes the status of federal legislation and information about members of Congress.

Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.

This episode is brought to you by the AICPA's Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.