A landmark court ruling, Kwong v. United States, found that the IRS improperly assessed certain penalties and interest during the COVID-19 pandemic.
Continue readingIRS Penalties During the Pandemic Could Be Refundable
Reducing IRS Audit Risk for Small Businesses
When business owners think about risk, they often focus on market pressures or operational challenges. An IRS audit usually isn’t top of mind — but it can be costly, disruptive and time-consuming.
Continue readingMore Entities Gain Access to IRS Business Tax Account
The IRS has announced an expansion of its Business Tax Account (BTA), making the self-service platform available to partnerships; tax-exempt organizations; federal, state and local governments; and Indian tribal governments.
Continue readingWhat to Know If You Receive an IRS Notice
Notices from the IRS are more common than you may realize. Each year, the IRS mails millions of letters to clarify information, confirm changes or request additional documentation.
Continue readingFacilitate IRS Transactions With a Business Tax Account
The IRS Business Tax Account provides information to sole proprietors, partners of partnerships, and shareholders of S corporations and C corporations.
Continue readingDon’t Believe the Myths
The IRS has posted a list of common refund myths on its website. For example, if the online Where’s My Refund tool or automated hotline doesn’t specify when a refund will be approved, there’s no point in calling the IRS. The tax agency won’t have additional details yet.
Also, don’t assume that Where’s My Refund is wrong if the refund amount is less than anticipated. The IRS may have adjusted your refund. If so, it will send you a letter explaining the adjustment.
While most refunds are issued within 21 days, some may take longer because the IRS requires additional information. If so, the agency will contact you.
Wheeler has a dedicated team assigned to IRS correspondence. If you are a client and have additional questions, don’t hesitate to contact us!
408-252-1800
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Does the Corporate Transparency Act Apply to Your Business?
On March 1, 2024, the U.S. District Court for the Northern District of Alabama ruled that the CTA is unconstitutional. Does that mean that businesses no longer need to comply? Not necessarily. The federal government filed an appeal on March 11, 2024, in the U.S. Court of Appeals for the 11th Circuit. That same day, FinCEN announced that the law’s requirements are still in effect for those not involved in the court case.
Continue readingErroneous Refund?
Mistakes happen. What if you receive a refund from the IRS that you’re not entitled to? Or what if you receive one that’s more than you’re entitled to? How you must handle it depends on the details. A paper check refund should be voided and returned within 21 days of receipt to the address in the link below. But suppose you cashed the check. In that case, submit a personal check within 21 days to that address.
If the refund was by direct deposit, contact your bank to have them return the deposit. Also contact the IRS at the phone number in the link. Be aware that if the IRS intentionally changed your refund amount from what was on the return you filed, it will mail you a notice of explanation.
You can find more information here: https://www.irs.gov/taxtopics/tc161
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ERC Voluntary Disclosure Program Available for a Limited Time
As part of an ongoing initiative to combat questionable Employee Retention Credit (ERC) claims, the IRS has launched a voluntary disclosure program. It allows eligible businesses to pay back money they received after filing ERC claims in error.
The disclosure program runs through March 22, 2024, and requires only 80% of the claim received to be repaid. It’s part of a larger IRS effort to stop aggressive marketing around the ERC that misled some employers into filing claims they were ineligible for.
The IRS has another program that allows employers to withdraw pending ERC claims with no interest or penalty. More than $100 million in withdrawals has already been received.
Withdrawing ERC Claims
Recently, the IRS halted processing of claims for the Employee Retention Credit (ERC), due to a high volume of fraudulent claims. The moratorium is through at least the end of 2023. ERC claims that were already filed are now subject to longer processing, including heightened scrutiny to weed out fraud.
Now the IRS is creating a path for businesses that are concerned they may be victims of aggressive ERC marketing schemes. Eligible businesses can opt to withdraw unprocessed claims that they now believe may be invalid. Among other things, to be eligible, the business must have made the claim on an adjusted employment return that included no other adjustments and must want to withdraw the entire amount of the ERC claim.
Withdrawing a claim can allow the business to avoid receiving a refund for which it’s ineligible (and that would have to be repaid) as well as interest and penalties. Businesses that aren’t eligible to use the withdrawal process may be able to reduce or eliminate their ERC claim by filing an amended return.