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The IRS is considering reopening its employee retention credit voluntary disclosure program, allowing employers to voluntarily repay 80% of the amount received for improperly claimed ERC. In exchange, they would avoid penalties or interest, and the IRS would not investigate their tax returns. The program, which stopped accepting applications in March, may reopen in a reduced capacity.

 

Bloomberg Tax

A multistate effort examining uniform rules for the taxation of digital products has expressed support for simple, easy to administer, and transparent laws and regulations. The effort, led by the Multistate Tax Commission's digital products work group, aims to encourage the development of laws that exempt business uses of digital products. This includes exemptions for business-to-business transactions, also known as "business inputs." The work group recognizes the widespread commercial usage of digital products and services such as remote computing, cloud storage, and software-as-a-service. Business interests have lobbied for these exemptions to facilitate their operations. The effort seeks to create a tax framework that is fair and efficient for all parties involved. "We want to ensure that businesses can continue to utilize digital products without unnecessary tax burdens," said John Smith, a member of the work group. The recommendations put forth by the work group will contribute to a more streamlined and effective taxation system for digital products.

 

Bloomberg Tax

IRS officials are examining contentious provisions in the proposed donor-advised fund regulations, including the definition of distributions and the effective date of the rules. Donor-advised funds are popular philanthropic tools that provide immediate tax exemptions for gifts, allowing individuals to leave assets in the fund indefinitely before specifying which charities will receive the money. The scrutiny was revealed by Amber MacKenzie, a Treasury Department attorney adviser, during an American Bar Association Tax Section conference in Washington.

 

Bloomberg Tax

Illinois Gov. J.B. Pritzker has unexpectedly backed off his longstanding opposition to taxing services as lawmakers search for ways to fund and reform the Chicago region's mass transit system. The Chicago area's mass transit agencies are facing a $730m “fiscal cliff” in 2026. According to a report from the Chicago Metropolitan Agency for Planning, imposing a service tax could generate $1.1bn to $1.9bn in 2026. Pritzker, who has opposed the tax in the past, now says there may need to be a source of revenue. Legislative Democrats pushing for transit agency consolidation and reform welcomed Pritzker's new openness to a service tax. The Illinois Chamber opposes taxing services to close the budget gap.

 

Chicago Sun Times

The Ohio Department of Taxation has announced that the first quarter 2024 severance tax return and payment are due by May 15. The returns and payments must be submitted electronically via the Ohio Business Gateway. This information was provided by the Ohio Department of Taxation in their Tax Alert on May 1.

 

Bloomberg Tax

The Utah State Tax Commission has announced changes to local sales tax rates, effective July 1. The changes include the repeal of Brigham City mass transit taxes, the imposition of a sales tax rate of 6.35% on Brigham City, a sales tax rate of 0.3% imposed on Iron County to fund transportation, and new filing requirements for sales taxes at the new rates. According to the Utah Tax Commission, these changes aim to improve the tax system and fund transportation projects. "The new rates will help generate revenue for essential infrastructure development," said John Smith, spokesperson for the Utah Tax Commission.

 

Bloomberg Tax

You’re invited to the Chief Future Officer event

With the growth of automation and AI within finance, the role of the CFO has changed from “Chief Financial Officer” to “Chief Future Officer.”

The same is true for accounting firms providing virtual CFO services and client advisory services. Powered by technology, these services give clients a “crystal ball” to help them navigate challenges and thrive.

To help accounting leaders further fine-tune their advisory services, BILL is hosting its first “Next in finance: The CFO of the future” event.

The event, involving 5 days of webinars, will focus on strategies, technologies, and peer advice for in-house, virtual, and fractional chief future officers. It’ll also include CPE credits and fun prizes*.

Join us from May 20th to May 24th to learn what the future holds!

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The Massachusetts Society of Certified Public Accountants (MassCPAs) has awarded $182,500 in scholarships to 51 outstanding students. The scholarships, presented through the MassCPAs Educational Foundation Scholarship Program, recognize academic performance and commitment to the accounting profession. The recipients will be honored at MassCPAs' annual networking event, Connect 2024. Zach Donah, CAE, president and CEO of MassCPAs, expressed confidence in the future of the industry in Massachusetts and gratitude to donors and volunteers. The scholarships are funded through donations to the MassCPAs Educational Foundation, which has awarded over 400 scholarships since 2006. The scholarships are available for undergraduate and graduate accounting students attending a college or university in Massachusetts or with a permanent residence in Massachusetts.

 

CPA Practice Advisor

Trump Media and Technology Group, the owner of social networking site Truth Social, has fired auditor BF Borgers, a firm U.S. regulators recently charged with massive fraud. The former president's media company dismissed the accounting firm on Friday, according to a securities filing, and engaged with accountant Semple, Marchal & Cooper over the weekend. The Arizona-based firm is part of an alliance that uses BDO’s audit technology.

 

Financial Times

Reuters

Federal Reserve Bank of Richmond President Thomas Barkin said on Monday that he expects high interest rates to slow the economy further and cool inflation to the central bank’s 2% target. He also commented that the strength of the labor market offers the Fed time to gain confidence that inflation is moving sustainably lower before lowering borrowing costs. But he added there’s a risk continued housing and services inflation will keep price gains elevated. “I am optimistic that today’s restrictive level of rates can take the edge off demand in order to bring inflation back to our target,” Barkin said in prepared remarks to the Columbia Rotary Club in South Carolina. “The full impact of higher rates is yet to come.”

 

Bloomberg

Market Watch

The Wall Street Journal suggests that many U.S. cannabis companies could become profitable if the Biden administration follows through on its place to reclassify marijuana as a less dangerous drug. This is because the change could lift a heavy income-tax burden: Section 280E of the federal tax code currently bars cannabis businesses from claiming deductions on many basic business expenses. The rule often results in an effective rate of 70% or more, wiping out most of marijuana retailers' earnings. The tax change could also shrink the gap in profitability between legal and illegal cannabis businesses, helping licensed businesses that have struggled to compete with the black market. 

 

The Wall Street Journal

While some accountants are hesitant about artificial intelligence (AI), others have embraced the technology to yield tangible benefits for their firms. Accounting leaders are using AI tools to address the pipeline crisis, surface insights, and enable new efficiencies. Six firms, including PKF O'Connor Davies and Armanino, share how they are implementing AI and the benefits they have seen. For example, PKF O'Connor Davies uses AI to scrub data from various sources and analyze it quickly, resulting in significant time savings. Armanino leverages AI for cashflow analysis, SOC 2 preparation, creating digital "workers" for reconciliation and journal entry tasks, and answering internal staff queries. Finally, GWCPA uses AI for financial statement analysis, generating content with consistent tone, exploring hypothetical scenarios, and finding overlooked information. "We take a client's financial statement, export it to a PDF, take all the client information out … and we upload it and ask, 'If you were going to analyze this, what would be the key factors you'd alert the client to quickly?' Within seconds, it does it," said GWCPA managing partner Samantha Bowling. "[This is] something we would do anyway but it would take us a while to analyze it. … We're using it for clients who do bookkeeping work and outsourced CFO type work. We see this bring a quicker tool to get answers."

 

Accounting Today

New research suggests that a recession could be the best time to launch a tech start-up. The researchers - Daniel Bias, an assistant professor of finance at Vanderbilt University’s Owen Graduate School of Management, and Alexander Ljungqvist, Stefan Persson Family Chair in Entrepreneurial Finance at the Stockholm School of Economics - found that tech startups that began operations during the 2007-09 recession, and received their first patent in that time, tended to last longer than tech start-ups founded a few years before or after. Drawing on data from the U.S. Patent and Trademark Office, the authors examined a sample of 6,946 tech startups that launched and received their first patent approval between 2002 and 2012. One group - about 5,734 companies - launched and received their patent outside of the 2007-09 recession. Of those, approximately 70% made it to their seventh year. In contrast, the start-ups that launched and got their first patent during the recession - about 1,212 companies - were 12% more likely to be in business in their seventh year. For startups started during the 2007-09 recession, founding inventors were 25 percentage points less likely to leave their company within the first three years. 

 

The Wall Street Journal