On March 1, 2024, Judge Liles Burke of the U.S. District Court in Huntsville, Alabama, ruled that the Corporate Transparency Act and its beneficial ownership information reporting mandate are unconstitutional, as they exceed the regulatory powers granted to the federal government.

The article reflects on the significant tax-related events of 2023, noting that while the year was not as tumultuous as those with the Tax Cuts and Jobs Act or COVID-19 complications, it still brought about important changes. The piece highlights new legislation, regulations, court decisions, and IRS announcements that have influenced the tax field. David De Jong, a tax professional from the law firm Stein Sperling Bennett De Jong Driscoll PC, provides insights into the key developments of the year. The article emphasizes that the most crucial updates for tax practitioners are those that directly affect their current work.

The article discusses the shift in focus for tax professionals from tax compliance to tax planning and strategies. It highlights the trend where firms are moving towards providing proactive advice to their clients, rather than just looking at past tax compliance. The article suggests that there are specific areas where clients can greatly benefit from forward-looking tax advice, although it does not detail what these areas are. The piece seems to be an introduction to a feature story that may elaborate on the specific tax planning and strategies that clients need.

The article discusses the evolution of tax services from compliance-focused to a more advisory-centric approach. Tax professionals like Roger Harris of Padgett Business Services and James Guarino of Baker Newman Noyes explain the shift from historical reporting to forward-looking tax planning. Betsy Evans from Deloitte and Kevin Jackson from KPMG US highlight the role of technology and the increasing complexity of tax laws, such as the OECD's Pillar Two, in shaping the industry. The article also touches on the importance of client relationships and the need for CPA firms to adapt their services to meet client demands for comprehensive tax planning and advisory services. It emphasizes the growing importance of advisory services in the face of constant tax law changes and the need for firms to offer value-added services to enhance client wealth. The article also mentions the role of artificial intelligence in compensating for the declining number of people entering the accounting profession.

The article discusses the evolution of tax services from compliance-focused to a more advisory-centric approach. Tax professionals like Roger Harris of Padgett Business Services and James Guarino of Baker Newman Noyes highlight the shift from offering compliance services to providing advisory services to clients. Betsy Evans from Deloitte and Kevin Jackson from KPMG US discuss the balance between compliance and consulting, with the latter becoming increasingly important due to complex tax laws and technological advancements. The article also touches on the role of artificial intelligence in the industry and the challenges of finding the right client base for advisory services. Eva Simpson from the American Institute of CPAs and Beanna Whitlock of Whitlock Tax Service emphasize the importance of consultative services and the opportunities in personal financial planning and estate planning. The article suggests that tax planning and advisory services are crucial for CPA firms to meet client expectations and adapt to the changing landscape of tax law and technology.

The article discusses the Supreme Court case Moore v. U.S., which examines the constitutionality of the Mandatory Repatriation Tax from the Tax Cuts and Jobs Act. Observers predict that the Supreme Court may uphold the tax. Small business advocates, including Anne Zimmerman, co-chair of Small Business for America's Future, have submitted a brief urging the court to uphold the tax, emphasizing the need for tax predictability and equity for small businesses. They argue that a decision against the Mandatory Repatriation Tax could destabilize the tax environment, leading to a wave of litigation and uncertainty that would disproportionately affect small businesses and benefit wealthier entities. Zimmerman highlights the importance of a stable tax system for small business planning and growth, and warns of the potential negative impacts on small businesses if the court favors the plaintiff-petitioners.

The article discusses the Supreme Court case Moore v. U.S., which examines the constitutionality of the Mandatory Repatriation Tax from the Tax Cuts and Jobs Act. Observers predict that the Supreme Court may uphold the tax. Small business advocates, including Anne Zimmerman, co-chair of Small Business for America's Future, have submitted a brief urging the court to uphold the tax, emphasizing the need for tax predictability and the potential negative impact on small businesses if the tax is overturned. Zimmerman argues that a decision against the Mandatory Repatriation Tax could lead to a wave of litigation and legislative reforms, creating uncertainty and hardship for small businesses, which are crucial to the economy. The article highlights the importance of a stable tax system for small business planning and growth, and the concerns that a ruling favoring the petitioners could disproportionately benefit wealthier entities.

Roger L. Russell, a high school principal, reflects on a recent incident of academic dishonesty in his school. He describes a situation where several 12th-grade students were caught cheating on an important mid-term assessment. Russell discusses the school's academic integrity policy and the potential severe consequences of cheating, including expulsion. However, he emphasizes his desire to address the issue beyond the legalistic and pragmatic approach. He criticizes the students' rationalization of cheating as being wrong only because it is against the rules and could lead to severe penalties. Russell's goal is to encourage the students to re-evaluate their values and make a fundamental change in their decision-making process, rather than just avoiding getting caught in the future.

The author expresses a personal appreciation for people who speak English with an accent, particularly those for whom English is not their first language. The reflection is not based on a professional linguistic interest but rather a personal one, as the author is an American who has had limited success in learning foreign languages. Despite taking Spanish and German classes, the author admits to not being proficient in either. The article includes a self-deprecating joke about Americans only speaking one language and shares a humorous anecdote about the author's attempt to speak German. The author also mentions having lived in Romania for a decade, which may have influenced their appreciation for multilingual individuals.

The article discusses the Supreme Court case Moore v. U.S., which challenges the constitutionality of the deemed repatriation tax under Section 965 of the Tax Cuts and Jobs Act of 2017. The plaintiffs, who are shareholders with a controlling interest in a foreign company, argue that the tax on their unrealized income is unconstitutional. Academics are divided on the issue, with some supporting the government's power to tax unrealized income. The case has significant implications for the U.S. tax system, potentially affecting the Tax Cuts and Jobs Act reforms, S corporations, partnerships, and the concept of 'realization' in tax law. Amy Miller from Carta and Ryan Losi from Piascik provide insights into the potential consequences of the case's outcome.

Jessalyn Dean, the vice president of tax information reporting at Ledgible, has raised concerns about the proposed tax reporting requirements for digital assets. Speaking at an IRS hearing on the Notice of Proposed Rulemaking for digital asset transactions, Dean highlighted the short timeframe given to the digital assets industry to comply with these regulations compared to the traditional financial services industry. She pointed out the potential issues with the proposed Form 1099-DA, which could lead to double reporting and disincentivize the tokenization of mutual funds. Dean also addressed the complexities of tokenized real estate transactions and the inappropriateness of Form 1099-DA reporting for them, suggesting that tokenized real estate with Schedule K-1 reporting should be exempt from the DA reporting requirement. With 120,000 public comments on the proposed regulations, the finalization of these rules may take a significant amount of time.

The article discusses the scrutiny of transfer pricing by the IRS, highlighting the case where Microsoft was demanded to pay $28.9 billion in back taxes for a cost-sharing arrangement involving transfer pricing. Mimi Song, chief economist at Exactera, explains that tech companies often transfer intellectual property to low-tax countries to reduce tax bills in higher-tax countries. Microsoft's case involved licensing intangibles to entities in Puerto Rico, Ireland, and Singapore, which the IRS deemed as an arrangement serving no material economic purpose other than to shift income. Song provides lessons from the case, emphasizing that tax cannot be the sole reason for business decisions, the IRS is becoming a tougher adversary, and the importance of substance over form and documentation in transfer pricing arrangements.

The article discusses the upcoming 2024 tax filing season, highlighting the Internal Revenue Service's (IRS) improvements, such as the Paperless Processing Initiative and updates to the 'Where's My Refund?' tool. Tax practitioners are preparing for potential challenges, with Ryan Losi of Piascik discussing the impact of recent legal cases like Bittner and Moore on tax practices. Gian Pazzia of KBKG addresses issues related to the Employee Retention Credit and R&D tax credits. The article also covers Microsoft's dispute with the IRS over a transfer pricing arrangement, with insights from Mimi Song of Exactera on the implications for other businesses. The IRS's efforts to digitize and streamline processes aim to reduce taxpayer reliance on mail and improve customer service, while legal developments and IRS enforcement actions signal a changing landscape for tax professionals and businesses.

The article discusses the concerns of chief tax officers at large multinational organizations regarding the global minimum tax under Pillar Two of the OECD's Base Erosion and Profit Shifting Project. A survey by KPMG found that a majority of tax executives are preparing for the implementation of a 15% minimum tax in jurisdictions where they operate. The survey revealed that most organizations anticipate an increase in tax liability and are considering expanding resources, including hiring additional staff, to comply with the new requirements. The survey also highlighted the potential increase in external audit costs and the involvement of third parties in compliance processes. The article notes the complexity for U.S. multinationals due to the need to comply with both U.S. GILTI rules and foreign jurisdictions' Pillar Two rules.

The article discusses the challenges and considerations in taxing digital products in the United States. It highlights that most state tax legislation is outdated, with varying definitions of digital goods. The Multistate Tax Commission (MTC) and the Streamlined Sales Tax Governing Board are examining current laws to determine if they are adequate. Gil Brewer from the Washington Department of Revenue suggests a broad-based tax on digital products to allow exemptions for business purchases. Scott Peterson of Avalara notes the business lobby's resistance to taxing digital products and the issue of tax pyramiding. The MTC is working on a proposal that could influence states to adopt new tax measures for digital goods. Peterson points out that many states have not updated their definitions, leading to a reduced tax base, and uses the evolution of music delivery as an example of changing digital goods.

The article discusses the ongoing issues with the Employee Retention Credit (ERC) and the IRS's moratorium on processing new claims due to a backlog and concerns over improper filings. Devin Tenney from Baker Tilly explains that while many eligible businesses have claimed the credit, new claimants are likely ineligible. The IRS has introduced a withdrawal program to help businesses that filed inaccurately to retract their claims. Healy Jones from Kruze Consulting highlights the problem of venture capital-backed startups filing improper claims for the ERC, noting that many small businesses lack sophisticated tax advice and may struggle to repay the credit if required by the IRS. The article suggests that further steps will be taken to address the issue and advises CPAs to proactively check with their clients regarding ERC claims.

The Internal Revenue Service (IRS) is forming a new working group within its Large Business & International Division to target high-net-worth taxpayers who use pass-throughs and complex tax strategies to minimize their tax obligations. Rob Wall, a partner at Akerman LLP, explains that this initiative is a response to the Bipartisan Budget Act of 2015, which changed how the IRS examines partnerships, especially those with non-individual entities as owners. The new group aims to conduct more frequent and thorough audits of large partnerships, with a particular focus on private equity and hedge funds. The IRS plans to hire 3,700 professionals to address staffing challenges and compete with the private sector for skilled accountants. The agency has already started activities, including examining large partnerships and contacting taxpayers with significant tax debt.

The article discusses the Internal Revenue Service's (IRS) advice for tax practitioners on handling their potential incapacitation or death, particularly for small firms. Stephen Mankowski of the National Conference of CPA Practitioners (NCCPAP) highlights the importance of having a succession plan and the IRS's steps for practitioners to prepare for such events. The IRS recommends having an arrangement with another practitioner and keeping an updated inventory of client matters. Additionally, the IRS is actively hiring, with 4,000 mid-level positions open and plans to increase its workforce to 90,000 employees. The article also mentions IRS Commissioner Danny Werfel's long-term goals and the need for stakeholder engagement. Other updates include the expansion of Maha Williams' role in the Small Business/Self-Employed Division, notice redesigns for taxpayer convenience, and the formation of a Digital Assets Team to strategize on digital assets across the agency.

The article discusses the challenges faced by accountants, particularly in the context of professional liability insurance and risk management. Stephen Vono of McGowanPro notes that the market for professional liability insurance is cyclical and has been affected by COVID-19, with increased claims and underwriting guidelines tightening. Sarah Ference of CNA highlights the risks associated with the Employee Retention Credit (ERC) and the IRS's audit capabilities. Suzanne Holl of CAMICO advises CPA firms on risk management best practices, including managing client expectations and navigating new service opportunities cautiously. John Raspante of McGowanPro and Alvin Fennell and Rudy Rudolph of Aon discuss the increase in claims due to a sluggish economy, the complexity of new tax regulations, and the importance of having insurance coverage and taking proactive measures to mitigate risks.

The article provides an overview of the AICPA Professional Liability Insurance Program, underwritten by Continental Casualty Co. and administered by Aon Insurance Services. It details the types of coverage available, including professional liability, cyber, crime, and employment practices, with policy limits ranging from $100,000 to $10 million for eligible firms. The program offers various plans tailored to different sizes of CPA firms, from sole practitioners to large regional firms. The article also mentions the A.M. Best rating of 'A' and outlines the criteria for premium credits, such as membership in AICPA quality centers, peer review ratings, and risk control training participation. Supplementary benefits like pre-claim and subpoena assistance are highlighted, along with coverage specifics for assurance services and contact information for Alvin Fennell for further inquiries.

The article discusses the challenges faced by accountants in managing professional liability and risks associated with tax legislation, cybersecurity, and staffing. Stephen Vono of McGowanPro describes the professional liability insurance market as cyclical, with current trends showing a hard market in large metropolitan areas. Sarah Ference of CNA highlights the risks associated with the Employee Retention Credit (ERC) and the IRS's audit capabilities. Suzanne Holl of CAMICO advises on risk management best practices for CPA firms, including managing client expectations and navigating new service opportunities cautiously. John Raspante of McGowanPro notes an increase in claims against CPAs due to more tax audits and a litigious environment. Alvin Fennell and Rudy Rudolph of Aon emphasize the importance of proper documentation and awareness of engagement creep to mitigate risks. The article underscores the importance of accountants being prepared for various risks and having insurance coverage to protect their practice.

The article discusses the upcoming beneficial ownership reporting rules set to take effect on January 1, 2024, which will require most U.S. corporations, LLCs, and U.S. operations of foreign companies to report their beneficial owners to FinCEN. Despite calls for a delay, only a proposal to extend the initial reporting deadline for new entities from 30 to 90 days has been suggested. The rules, part of the Corporate Transparency Act of 2021, aim to prevent illicit activities through corporate structures. Tax attorney Barbara Weltman and tax partner Barry Bendes from Locke Lord provide insights into the requirements, exemptions, and the process of filing in the BOSS system. The article also highlights the severe penalties for non-compliance and the limited requirement for updates once a company is registered.

The Internal Revenue Service (IRS) is shifting its focus towards high-income individuals and corporations, utilizing Inflation Reduction Act funding to expand compliance work. A new IRS group within the Large Business and International Division will target tax avoidance through complex entities like S corporations and partnerships. Niles Elber of Caplin & Drysdale comments on the political challenges and the IRS's plans to hire 3,700 revenue agents. Colin Walsh from Baker Tilly highlights the IRS's use of artificial intelligence to improve audit efficiency and warns of legal gray areas in tax compliance. The IRS aims to streamline audits and reduce professional fees for taxpayers.