The tax consequences of fraud on the victims are complex and usually aren’t good news.
IRS relief for domestic passthrough entity reporting requirement
The IRS is waiving the requirement to include international tax information Schedules K-2 and K-3 for most domestic partnerships and S corporations for tax year 2021 (IR-2022-38, February 16, 2022.)
California expands the passthrough entity tax
The passthrough entity tax is a workaround for the $10,000 individual income tax limit on the deduction for state taxes adopted in the Tax Cuts and Jobs Act of 2017. On February 9, 2022, Governor Newsom signed SB 113, which fixes some of the issues with California's passthrough entity tax.
Domestic passthrough entities must include new international forms
According to the new instructions, domestic partnerships (including most LLCs) and S corporations must include new Schedules K-2 and K-3, reporting the owner's share of international transactions, even when the entity had no foreign activities.
Oopsie! California wages aren’t reduced for Employee Retention Credit
According to 2020 FTB Publication 1001 (Revised November, 2021), page 13, the federal reduction of wages doesn't apply on the California income tax return.
Employers claiming employee retention credit and digital currency owners hit by Infrastructure and Jobs Act
I'm going to focus on two tax provisions of the Infrastructure and Jobs Act that I expect will have the broadest impact.
California initiative classifying app-based drivers as independent contractors ruled unconstitutional
Based on the court's ruling, California app-based drivers would be classified as employees under the "ABC test" prescribed in AB 5.
IRS employee retention credit guidance confounds tax professionals
According to the Notice, whether wages of controlling owners of a business and their spouses qualify for the employee retention credit depends on whether they have certain relatives.
No federal tax increase, for now
Many high income and high net worth taxpayers will be relieved to learn that Biden's major revenue proposals are NOT included in the agreement.
Congress approves extending the PPP loan submission due date
The Senate approved legislation previously approved in the House of Representatives (H.R. 1799) that will extend the final submission date to May 31, 2021