Business Frame Weekly - 2022 State Payments are Non-Taxable / Document Mgmt Inefficient at Accounting Firms / IRS Asked to Revamp Examination Function
The IRS confirmed on Friday that taxpayers in certain states will not have to report state general welfare or disaster relief payments or refunds in 2022 on their federal tax returns.
According to Canopy’s survey, inefficient document management has presented its own difficulties for most accounting firms.
The Treasury Inspector General for Tax Administration reported yesterday that the IRS currently does not have a multiyear Examination Strategic Plan for allocating resources across its entire examination function.
In this newsletter:
- Some Corporate Taxpayers Eligible for IRS CAP Pilot on Prefiling Feedback
- Taxpayers Can Exclude Certain 2022 State Payments from Federal Returns
- IRS Urged to Overhaul Its Examination Function
- Thomson Reuters: Tax & Accounting Update
- U.S. Treasury to Open Advanced Energy Tax Credit Applications on May 31
- Document Management is a Big Problem for Accounting Firms
February 14, 2023
Some Corporate Taxpayers Eligible for IRS CAP Pilot on Prefiling Feedback
The IRS is piloting changes in the Bridge phase of its Compliance Assurance Process (CAP) program that provides prefiling return review for some large corporate taxpayers. In a news release published Monday, the IRS said the pilot phase, called Bridge Plus, was developed in response to taxpayer comments about the Bridge phase, which is part of the CAP program.
Taxpayers Can Exclude Certain 2022 State Payments from Federal Returns
Days after instructing taxpayers in certain states to delay filing their 2022 federal tax returns if they received state general welfare or disaster relief payments or refunds in 2022, the IRS late on Friday clarified that those taxpayers generally will not have to report those payments on their federal tax returns. The IRS acknowledges the challenge of determining which payments made by various states in 2022 may fall under one of those exceptions and, because the issue affects only 2022 returns, has decided that "in the best interest of sound tax administration," it will not challenge the treatment of any 2022 payment as excludable from income on an original or amended return.
IRS Urged to Overhaul Its Examination Function
A report released Monday by the Treasury Inspector General for Tax Administration found the IRS doesn't have a multiyear Examination Strategic Plan for allocating resources across its entire examination function. The report noted that the IRS's four business operating divisions — Wage and Investment, Small Business/ Self-Employed, Large Business and International, and Tax Exempt and Government Entities — each cover different segments of taxpayers and do different types of examinations, including full tax audits.
Thomson Reuters: Tax & Accounting Update
TIn FASB News: Advisors offer tepid approval on board developing rules for government grants. And investors await disclosure rules on income taxes paid. In IASB News: Keeping accounting rules converged is beneficial to global capital markets. And in Audit Practice News: Remote auditing continues to be a hot topic.
U.S. Treasury to Open Advanced Energy Tax Credit Applications on May 31
The U.S. Treasury said on Monday it will open applications on May 31 for $4 billion worth of new tax credits for advanced energy manufacturing and decarbonization projects, with $1.6 billion of those required to be in communities hit by closures of coal mines or coal-fired power plants. Treasury made the announcement as it issued initial guidance for the Inflation Reduction Act program aimed at expanding U.S. manufacturing capacity and jobs in clean energy technologies and separate tax incentives for small-scale solar and wind power projects in low-income and disadvantaged communities.
Document Management is a Big Problem for Accounting Firms
Canopy recently surveyed more than 150 accounting professionals about the ways they handled their document management. The results clearly showed inefficient document management is a big problem for most accounting firms. In the last several years, many accounting firms have gone from being entirely paper-based to moving to digital document management. But a paperless firm has its own difficulties, often with a different system for every function.
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