Tax Section Odyssey

The employee retention credit (ERC) is a new credit created in the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March 2020 and later modified with subsequent legislation. Tax preparers and their clients have been anticipating updated guidance on several remaining questions related to the ERC. On August 4, the IRS issued Notice 2021-49 and accompanying IR-2021-165. Further, on August 10, the IRS issued Rev. Proc. 2021-33, which provides a safe harbor permitting employers to exclude certain amounts from gross receipts solely for purpose of determining eligibility for the ERC. Notice 2021-49 provides guidance on the ERC provided under Sec. 3134 of the Internal Revenue Code, as added by Sec. 9651 of the American Rescue Plan Act of 2021, and applies to qualified wages paid after June 30, 2021, and before Jan. 1, 2022. The notice amplifies Notices 2021-20 and 2021-23 with additional guidance on claiming the ERC in the third and fourth calendar quarters of 2021 as well as guidance on several miscellaneous ERC concerns. In this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, and Kristin Esposito, CPA, MST, Director — Tax Policy & Advocacy, Association of International Certified Professional Accountants, representing AICPA & CIMA, dissect the latest guidance. What you’ll learn in this episode Are wages of >50% shareholders and their spouses are considered qualified wages? (2.25) The calculation of gross receipts and a discussion on how Paycheck Protection Program (PPP) loans and other COVID-19 relief programs are incorporated (3.56) Are cash tips considered qualified wages? (5.25) The use of full-time employees or full-time equivalents in the determination of whether a business is a small or a large-eligible employer and the period for this calculation (5.53) Timing of the wage deduction disallowance (7.11) Determination of eligible employer status clarification for the 2021 credit (9.06) Recovery startup business overview (9.58) What is a severely financially distressed employer? (11.55) Potential legislative impacts to the ERC (13.27) 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. 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 responds to pressing issues facing the profession Challenges with contingency fees and the ERC — 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 on this Tax Section Odyssey episode from June 2021. What to know about the 2021 ERC before April 30 — On this April 2021 Tax Section Odyssey episode, Jan Lewis, CPA, with Haddox Reid CPAs & Advisors, reviews the latest ERC guidance and important information to help your clients benefit from this credit. PPP and ERC in 2020 — This Tax Section Odyssey episode from March 2021 reviews the IRS Notice 2021-20 and highlights what you need to know about the interaction between the ERC and PPP. Breaking down the employee retention credit – This February 2021 Tax Section Odyssey episode contains a deep dive on the calculation of the ERC. Other resources FAQs: Employee Retention Credit under the CARES Act — IRS answers to frequently asked questions on the ERC Rev. Proc. 2021-33 provides a safe harbor that permits a taxpayer to exclude certain items from “gross receipts” under Sec. 448(c) and Sec. 6033, as applicable, solely for purposes of determining eligibility to claim the ERC Notices 2021-20 — Guidance for employers claiming the ERC for calendar quarters in 2020 IRS Notice 2021-23 — Guidance on the ERC under the CARES Act for the first and second calendar quarters of 2021 Notice 2021-49 — Guidance that amplifies Notices 2021-20 and 2021-23 by providing additional guidance on claiming the ERC in the third and fourth calendar quarters of 2021. 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 ongoing COVID-19 pandemic has impacted both the personal and professional lives of CPAs and their clients. The legislative changes alone provided an incredible amount of complexity to sift through, but the trailing guidance thereafter has compounded the intricacy. Two of the most talked about pieces of enacted legislation is the Paycheck Protection Program (PPP) and the employee retention credit (ERC). While we have guidance on how to treat most aspects of these provisions, key questions remain. On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, and Cari Weston, MST, CPA, CGMA, Director — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, discuss how to finalize client tax returns when we don’t yet have all the answers. What you’ll learn in this episode Initial thoughts on how to handle open, unclarified and unclear issues while trying to finalize extended tax returns (1.43) Professional responsibilities and the signing of tax returns (9.11) Example on how to handle the ambiguity of a shareholder and their spouse’s salaries as qualifying wages for the ERC. (19.43) What to do when the IRS releases guidance after a position is taken on a return (24.28) AICPA resources SBA PPP resources for CPAs – Tools and resources on the ever-evolving PPP 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 Treasury Department Circular No. 230 – Consolidated information on the rules governing the recognition of attorneys, CPAs, enrolled agents, enrolled retirement plan agents, registered tax return preparers and other persons representing taxpayers before the IRS Statement on Standards for Tax Services (SSTSs) – Toolkit for the enforceable tax practice standards for members of the AICPA Other resources Circular No. 230 Tax Professionals – IRS resource page with multiple links to information on Circular No. 230 and information from the Office of Professional Responsibility (OPR).   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.

Summer may be in full swing, but tax practitioners still need to be mindful of certain alerts and deadlines that might have gotten lost in the shuffle earlier this year. Annette Nellen, CPA, CGMA, Esq., Tax Professor – MST Program at San Jose State University, and a past Chair of the AICPA Tax Executive Committee, shares her summer hit list of items to be aware of including: Discussion on how to repay any deferred payroll taxes from 2020 Documentation needed for the employee retention credit (ERC) and other COVID-19 payroll tax credits Treatment of other COVID-19 relief including grants and debt cancellation programs What you’ll learn in this episode General overview of the deferred payroll taxes (1.20) How self-employed individual and household employers can repay deferred Social Security taxes (4.29) Accrual method employer treatment of the deferred payroll taxes (9.42) ERC and sick leave credit documentation requirements (11.22) Tax treatment of other COVID-19 relief (23.00) AICPA resources Employer retention credit guidance – Collection of resources and guidance on the latest with the ERC Other resources Use Tax Pro Account – Information on how to request Power of Attorney (POA) or Tax Information Authorization (TIA) online COVID Tax Tip 2021-96: How self-employed individuals and household employers repay deferred Social Security tax – Provides information on how these taxpayers can repay the deferred payroll taxes COVID Tax Tip 2021-99: Making payments for deferred tax reported by third party payers – Pointers on how to make payments for deferred payroll tax by third party payers   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 pressure to adapt business models to the present while simultaneously preparing for the future has always been a force acting upon professionals.    On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Association of International Certified Professional Accountants, representing AICPA & CIMA, and Donald A. Nelson, EA, Co-Founder — Pacesetter Tax, discuss current technology buzz words and what it takes to become modern firm in a sustainable model. What you’ll learn in this episode What the term “embrace the change” means (0.50) Evaluate your tech stack (3.08) The IRS tech stack (4.50) Key things to keep in mind when considering modifications to your tech stack (7.00) What a “modern firm” is (8.01) Ways to incorporate automation to facilitate efficiency (9.37) Steps firm leaders can take to help themselves and staff avoid burnout (14.58) Overview of Pacesetter Tax (17.39) AICPA resources Technology hub – Provides access to the latest technology information, tools and resources to best serve your clients or support the organization where you work. Tax Practice Quarterly: Managing a Tax Practice in the Modern World | Tax Section webcast archive – Webcast archive from May 19, 2021 that covers important issues such as how to expand your service offerings as a result of the pandemic, delve into the evolution of the virtual tax practice and explore best practices from a human resource and a client-service perspective Talking to clients about the advanced child tax credit before July | Tax Section Odyssey – This podcast, recorded in late June 2021, covers the latest news to date regarding the child tax credit advanced payments and the related online tools and portals. 2020 tax software survey – Journal of Accountancy article featuring the results of their annual tax software survey Other resources Pacesetter Tax – Integrated solution that allows tax preparation practices to work more efficiently and serve clients more effectively. Pacesetter Tax is designed to work seamlessly with whatever tax software your practice uses, from basic to top-of-the-line, and to replace the patchwork of other one-off tools that don’t play nicely together.   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.

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.