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18th September 2023
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IRS looks to expand tax certainty programs
The IRS is seeking feedback from business taxpayers on ways to improve and expand its programs for resolving tax issues upfront before companies run into compliance problems. It specifically wants comments regarding its pre-filing and tax certainty programs, such as Dispute Prevention and Resolution for Large Business and International Taxpayers, the IRS Employee Plans Compliance Resolution System and the Voluntary Classification Settlement Program.  The agency announced separately Friday that it's looking to hire 3,700 more employees to help with tax compliance for large corporations and complex partnerships.
ESOPs under scrutiny: IRS issues warning
McDermott Will & Emery's Allison Wilkerson and Christian Nemeth discuss a recent IRS notice regarding employee stock ownership plans (ESOPs). The notice warns against aggressive schemes involving ESOPs to avoid paying taxes. However, it lacks specifics on what could be considered questionable or impermissible. This has raised questions about IRS scrutiny in an area historically overseen by the Department of Labor. The bulletin aims to target dubious events that prioritize tax avoidance over retirement benefits. ESOP plan sponsors are urged to use the tools available without exploiting the unique opportunities of ESOP ownership. The IRS will continue to include ESOPs in their audit work plan, focusing on compliance with tax code requirements. Appropriately designed ESOP transactions should not be affected by the notice. Ms. Wilkerson and Mr. Nemeth conclude that they "don't believe the latest bulletin signals a change in how the IRS views ESOP requirements. The IRS will police and penalize truly abusive transactions, which stems from IRS enforcement steps dating back decades. For these reasons, we don't believe (and we do hope) this isn't a sea change in the ESOP enforcement space".
Georgia county considers transit tax increase in 2024
Officials in Georgia's second-largest county are considering asking voters in 2024 to approve a tax increase for transit. Gwinnett County officials plan to propose a one-cent sales tax increase to expand transit in the county, generating $17bn over time. The funds would be used to hire new employees, pay operating costs, purchase new buses and stations, and improve bus routes and frequency. The proposal aims to create a bus rapid transit system and expand the county's on-demand microtransit service.
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AICPA comments on IRS' announcement on ERC mills
AICPA has issued a statement on an IRS announcement detailing additional steps being taken to address aggressive and unscrupulous Employee Retention Credit (ERC) mills. President and chief executive Barry Melancon described them as "drastic" but adding: “We are pleased with the IRS’s announcement of the additional measures they are taking to push back against the dishonest credit mills taking advantage of unsuspecting small businesses. While there are still valid claims to be processed, these bold measures are necessary to combat widespread ERC fraud."
RSM US hires Jiten Shah as CFO
RSM US has hired Jiten Shah as chief financial officer. Shah, who will join RSM’s executive leadership team, succeeds Doug Opheim, who served as CFO since 2011. Mr. Opheim will stay on the firm’s executive leadership team until April 30th 2024 to support the leadership transition. Mr. Shah was most recently group CFO at EY US.
Redpath names new managing partner
St. Paul, Minn.-based Redpath and Company has named Ryan Everhart as its new managing partner, succeeding Mark Gibbs, who will continue to serve as partner and client manager. Mr. Everhart joined Redpath in 2014 and was admitted as partner in 2019. He leads the firm’s construction industry practice area, which is its largest industry by revenue.
West Marine reaches deal to restructure $800m debt
Boating and fishing supplies retailer West Marine has reportedly reached a deal to restructure its $800m debt outside of court. The company, which operates more than 230 stores in 38 states, is set to receive $125m in new funds from owner L Catterton and other lenders. Approximately $660m of West Marine’s debt will be converted into equity warrants as part of the deal, which will see L Catterton retain control of the company.
FINRA fines ex-CCO of LPL affiliate over unauthorized $1m transfer
The Financial Industry Regulatory Authority (FINRA) has fined and suspended a former chief compliance officer at a registered investment advisor previously affiliated with LPL for signing off on an unauthorized wire transfer of $1m and for unapproved texting. Jeffrey K. Kirkpatrick, who had been CCO at Hamilton Investment Counsel, approved in July 2020 his business partner’s request to transfer funds from a client account without customer confirmation in violation of firm policy, Finra said. Additionally, between 2019 and 2021, Mr. Kirkpatrick used his personal cell phone to text an individual about firm business at least 10 times, violating Finra Rule 4511 by causing LPL to maintain inaccurate books and records, and the regulator’s catch-call Rule 2010 requiring “high standards,” according to the letter. Mr. Kirkpatrick accepted a four-month suspension and $10,000 fine to settle the allegations, according to the letter. 
Firms perform better when they have a DEI executive
A measure of corporate effectiveness created by Claremont Graduate University’s Drucker Institute indicates that companies with a diversity, equity and inclusion (DEI) executive score far better than those that don’t. Thirty-four different metrics were used last year to evaluate 902 large, publicly traded U.S. corporations in five areas: customer satisfaction, employee engagement and development, innovation, social responsibility and financial strength. Companies are compared in each of these categories, and in terms of their overall effectiveness, through standardized scores with a typical range of 0 to 100 and a mean of 50.  The 512 firms that have someone in an explicit DEI role scored, on average, significantly higher in nearly all of the elements of our rankings than the 190 companies lacking such a position: 51.9 vs. 47.7 in customer satisfaction, 53.4 vs. 47.7 in employee engagement and development, 53.0 vs. 46.9 in innovation, 54.0 vs. 46.1 in social responsibility, and 54.1 vs. 46.4 in overall effectiveness. “You need someone with expertise,” says Meredith Benton, the founder of the consulting firm Whistle Stop Capital and the manager of As You Sow’s workplace-equity program. “You need someone who can be a strong advocate on these issues and keep the board updated, just like a chief marketing officer would in their area.”
Tax implications of crypto investments: What investors need to know
As the world of cryptocurrency continues to evolve, a new US Treasury Department rule requires cryptocurrency brokers to report user transaction information to the IRS. The rule, facilitated through a new tax reporting form called Form 1099-DA, aims to simplify tax liabilities and reduce non-compliance risks. The proposal expands information reporting rules to include digital asset brokers, payment processors, and online wallets. The rule is set to apply to cryptocurrencies like Bitcoin and Ethereum, as well as non-fungible tokens (NFTs). TaxBuzz co-founder Lee Reams Sr. looks at the tax strategies investors can employ to maximize their savings, including: going for long-term capital gains; harvesting tax losses; gifting, inheritance, and charitable donations; and tax-advantaged retirement accounts that can defer tax liabilities and allow for the compounded growth of the investment.
The U.S. states with the highest property taxes
Property taxes can vary by nearly $8,000 for the same-priced home, depending on the state, according to a Tax Foundation analysis of the latest data from the Census Bureau. The highest effective rate can be found in New Jersey, at 2.23%, with the lowest in Hawaii, at 0.32%. For a home that’s worth the U.S. median of $416,100, that means New Jersey homeowners would pay $9,279 in property taxes. In Hawaii, the tax bill for the same home would only be $1,332. The median effective property tax rate for all states and the District of Columbia is 0.91%. Only New Jersey and Illinois have property taxes that are higher than 2%.

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