Cherry Bekaert: The Tax Beat: Recent Episodes
Cherry Bekaert
Cherry Bekaert’s podcast for tax services where we discuss developing trends and market dynamics as well as tax and accounting tips that could impact your business.
For fast-growing companies, becoming a C corporation for income tax purposes can offer significant tax savings for their shareholders. Section 1202 of the Internal Revenue Code (IRC) is a powerful tool for attracting investors with funds to fuel a company's growth.
To qualify for these tax benefits, both the company and shareholder must meet specific requirements, and non-compliance can result in missed opportunities for savings. It is crucial for businesses to have a comprehensive understanding of the qualifications and technical aspects of Section 1202 to make the most of this tax law.
In this episode, Brooks Nelson, Tax Partner and Sarah McGregor, Tax Director, are joined by Barry Weins, Tax Director and Molly Gill, Transaction Tax Senior Associate. Together they discuss how qualified business stock offers a valuable opportunity to exclude capital gains from taxation, making it a powerful tool for attracting investors and fueling the growth of small to mid-sized businesses.
Listen to learn more about:
- 02:11 – Section 1202 background
- 04:57 – Businesses that qualify for Section 1202
- 05:47 – Beneficial transaction examples
- 06:42 – Recurring questions regarding Section 1202
- 10:37 – Difficulties of collecting client information
- 13:31 – Factors investors should consider
- 18:02 – How to become eligible for Section 1202
- 20:03 – How state provisions vary
Related Guidance
- Article: LLC vs. S Corp: Which Offers Better Tax Savings?
- Webinar: Maximize Tax Savings Through Cost Segregation, Section 179D, and Section 45L Approach and Client Success Stories
Public Law 86-272 (PL 86-272) offers limited protection to out-of-state companies that solely solicit sales for tangible personal property within a state. Small and medium-sized businesses in the manufacturing, distribution and retail sectors have heavily relied upon this state protection since it was enacted in 1959 to decrease overall tax liability.
In 2021, the Multistate Tax Commission (MTC) released a controversial reinterpretation of what activities may be considered more than mere sales solicitation. The MTC guidance suggests that some internet-based activities such as post purchase chats, online tutorials and cookies used for data mining may cause a business to no longer qualify for the protection of PL 86-272.
In this episode, Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, are joined by Louis Cole, Partner and State & Local Tax Services Leader, and Cathie Shaw, National Tax Partner. Together they discuss the current challenges surrounding PL 86-272 and the increasing pressure stemming from the evolution of modern-day business practices.
Listen to learn more about:
- 04:07 – PL 86-272 background
- 05:25 – MTC authority
- 06:45 – Businesses that have adopted MTC interpretations
- 10:07 – MTC impact on small businesses
- 12:45 – Determining nexus without the sale of tangible goods
- 14:59 – Relevance of nexus studies
- 16:59 – Record keeping and internet activity analyses
- 19:43 – Mitigating compliance burden
Related Guidance
- The Income Tax Nexus Battle and Federal Public Law 86-272
Private aircraft ownership can be a great asset for companies, providing convenience, flexibility and efficiency for business travel. However, ownership also comes with significant costs, including purchase, maintenance, fuel and insurance. In addition to these expenses, companies that own private aircraft must also comply with various tax regulations, including properly reporting any personal use of the aircraft by company owners and executives, as the Internal Revenue Service (IRS) has recently been targeting this area for audits.
To further examine compliance with tax regulations, the IRS has initiated a pilot program to audit tax returns associated with up to 48 corporate-owned jets. The results of these initial examinations will help the IRS determine where to focus further attention. Despite the potential tax implications, owning and operating a private aircraft can still be a valuable business tool if managed properly.
Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, talk with Mike Grim, State & Local Tax Director, about how companies can navigate the intricate IRS tax regulations associated with owning a private aircraft to maintain compliance and maximize tax savings.
Listen to learn more about:
- 02:41 – Federal private aircraft regulation background
- 06:36 – Key IRS tax issues
- 09:24 – Tax reporting key areas
- 11:14 – Disallowance of expense deductions
- 14:22 – IRS pilot audits
- 17:37 – Questions to consider before purchasing a private aircraft
Recent Tax Beat Episodes
- Inbound U.S. Tax Services
- Accounting Standards Update 2023-09: New Income Tax Disclosure Rules
- IRS ERC Voluntary Disclosures Program
- New Markets Tax Credits and Innovate Fund Award
- TCJA: Estate & Trust Planning Update
When expanding operations into the U.S. market, business owners must learn about the federal, state and local tax systems they will encounter. Sales tax in the U.S. is quite different from a value-added tax (VAT) or a goods and services tax (GST) assessed by many other countries. Companies selling goods and some services must comply with a sales tax system that can vary across thousands of taxing jurisdictions. The U.S. federal tax system can also be challenging for companies new to this country. Companies and their tax advisors are currently busy working towards the March and April deadlines for filing tax returns, applications for additional extensions of time to file returns~~,~~ and reporting income tax withholding.
Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, talk with Lauren Stinson, Sales and Use Tax Leader, and Brian Dill, International Tax Leader, about the tax reporting complexities that international companies encounter when carrying on business in the U.S.
Listen to learn more about:
- 03:54 – GST tax vs. U.S. sales tax
- 05:24 – Compliance differences
- 06:43 – Nexus
- 12:02 – Preparing for March 15 deadline
- 14:54 – Important foreign subsidiary owner discussions
- 17:14 – Outsource solutions
Related Guidance
- Article: Tax Insights for Indian Companies in the U.S. Market
- Article: Beneficial Owner Information Reporting Final Rule for FinCEN Entity Identifiers
- Article: ASU 2023-09: FASB’s New Income Tax Disclosures for Private Entities
- Article: ASU 2023-09: New FASB Rule Enhances Income Tax Disclosures for Public Companies
- Podcast: Accounting Standards Update 2023-09: New Income Tax Disclosure Rules
On December 14, 2023, the Financial Accounting Standards Board (FASB) expanded income tax disclosure requirements for public and private companies. The expanded disclosure requirements are detailed in Accounting Standards Update No. 2023-09 (ASU 2023-09) and increase transparency of a filer’s global taxes. This will require filers to provide more details and be more descriptive in their financial statement income tax disclosures, which should enable business leaders and investors to make more informed investment decisions.
Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, talk with William Billips, Partner and Tax Provisions Leader, and Brian Dill, Partner and International Tax Leader, about ASU 2023-09 and how the new regulations will significantly impact multinational companies, particularly public and private entities.
Listen to learn more about:
- 03:49 – Background on ASU 2023-09
- 05:19 – Common requirements
- 07:47 – Rate reconciliation overview
- 09:48 – New challenges with tax disclosures in foreign jurisdictions
- 13:14 – Steps to prepare for tax reporting next year
- 16:38 – Affiliates in foreign jurisdictions
Related Guidance
- ASU 2023-09: New FASB Rule Enhances Income Tax Disclosures for Public Companies
- ASU 2023-09: FASB’s New Income Tax Disclosures for Private Entities
The Internal Revenue Service (IRS) has taken several steps to tackle the millions of invalid Employee Retention Credit (ERC) claims. First, they temporarily halted all ERC claims until the beginning of 2024. Two new programs were introduced by the IRS to aid employers who may have filed ERC claims they didn’t qualify for without realizing it.
The IRS announced the Voluntary Disclosure Program (VDP) on December 21, 2023, to aid employers who filed invalid ERC claims. The IRS created the VDP to allow taxpayers to report any potentially incorrect ERC claims by paying back 80% of the tax credit received by the company. Only available until March 22, 2024, employers should look into the VDP and determine if they should file for it.
Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, talk with Martin Karamon, Tax Credits and Incentives Advisory Practice Leader, about the recent guidance released by the IRS regarding the VDP and recommendations for employers as the deadline is quickly approaching to file ERC claims.
Listen to learn more about:
- 04:16 – Background on the ERC
- 06:42 – Overview of new IRS programs for invalid claims
- 11:57 – What to consider before participating in IRS programs
- 13:29 – Other options available for ERC concerns
- 18:19 – Recommendations for employers considering filing ERC claims before the deadline
Related Guidance
- Understanding IRS’ Voluntary Disclosures Program for Employee Retention Credit (ERC) Claims
- New IRS Employee Retention Credit (ERC) Claim Withdrawal Process
- December ERC Updates: Mastering Preparations for ERC 2024
- IRS Temporarily Suspends ERC Claims: What You Need to Know
- IRS Update on ERC Eligibility: 5 Scenarios That Do Not Qualify as Supply Chain Disruptions
The New Markets Tax Credit (NMTC) program has been issuing tax credits for more than two decades as a driving force for investors to aid low-income communities across the United States. In September 2023, Cherry Bekaert’s The Innovate Fund, a Community Development Entity (CDE), received a $50 million allocation in NMTC. With this money, The Innovate Fund will continue to support and enhance community development projects in North Carolina, South Carolina, Tennessee and Georgia low-income communities.
Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, talk with Laurel Tinsley, Managing Director of Cherry Bekaert’s Strategic Financing Services group, about the obstacles and opportunities for those applying to the NMTC program and how The Innovate Fund is a key source of financing for lenders when taking on a community development project.
Listen to learn more about:
- 02:54 – Background on NMTC, CDE and CDFIs
- 09:00 – What it means to be awarded NMTC allocations
- 15:02 – Recent learnings from NMTC awards
- 17:46 – Navigating NMTC allocation complexities
- 22:46 – Key focus that would help people win future NMTC allowances
Related Guidance
- New Markets Tax Credit Case Study for 4Roots Farm Campus
- New Markets Tax Credit Case Study for Welcome House
- New Markets Tax Credit Case Study for Williams Adult Day Center
The Tax Cuts and Jobs Act (TCJA) was enacted in 2017, and part of this bill amended the lifetime exclusion amount for estate and gift tax planning. Over the last 6 years, the lifetime exclusion has ballooned from $10 million to over $13 million in 2024. Together, a married couple could leave $26 million of asset value to their family or other beneficiaries, free of federal estate tax. However, at the end of 2025, this increased lifetime exclusion will sunset and revert to a lower amount. What can taxpayers do now to enhance their estate planning, and how do recent Tax Court cases impact estate planning?
Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, talk with Mike Kirkman, Partner and Estate, Trust, and Gift Tax Leader, and Katie Sims, Estate, Trust, and Gift Tax Manager, about the importance of taking time to engage in estate and trust tax planning for small and large estates.
Listen to learn more about:
- 04:04 – Annual gifts and estate exclusions from 2023 and 2024
- 04:52 – Importance of addressing estate planning
- 06:55 – Schlapfer case, Tax Court Memo 2023-65
- 09:14 – Cecil case, Tax Court Memo 2023-24
- 12:30 – Planning taxpayers should engage with trusts
- 15:33 – Spousal Lifetime Access Trust (SLAT) overview
- 18:33 – Estate of Hoensheid Tax Court Memo 2023
- 21:00 – Advice for smaller estates
Related Guidance
- Federal Estate and Gift Tax Exemption Will Sunset After 2025: How to Prepare Now
- 2023 Year-End Tax Planning Checklist for Individuals
The Inflation Reduction Act of 2022 (IRA) bolstered existing clean energy tax credits and incentives and added new ones. Looking forward to 2024, it is important to stay up to date with the qualifications for these various tax credits and incentives and the growing marketplace for transferring credits between buyers and sellers. The Internal Revenue Service (IRS) regularly releases notices and proposed regulations to provide guidance to help taxpayers benefit from these clean energy credits. Cherry Bekaert’s Energy Credits and Incentives team stays on top of these important alerts to ensure our clients are best positioned to take advantage of IRA provisions.
Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, talk with Tim Doran, Director, and David Mohimani, Manager, from our Energy Tax Credits and Incentives team, about how companies can take advantage of these tax credits and incentives. They also discuss recent IRS guidance on how taxpayers can monetize these credits by transferring them to potential buyers.
Listen to learn more about:
- 04:03 – IRA overview of investment and production credits
- 06:43 – Section 179D, Section 45L, improvements under IRA
- 09:03 – IRS notices and proposed regulations to maximize credits
- 16:02 – Examples of other credit boosters based on project materials or location
- 18:54 – IRA monetization provisions
Related Guidance
- Article: Take Advantage of New Section 45L Tax Credit Opportunities Under IRA
- Podcast: IRA Domestic Content Bonus Credit: How To Maximize Your Energy Tax Credits
- Webinar: Maximize Tax Savings Through Cost Segregation, Section 179D, and Section 45L Approach and Client Success Stories
- Podcast: Energy Savings Revolution – Section 179D for Commercial Buildings
- Article: Capitalizing on Elective Pay and Transferability of Tax Credits Under the Inflation Reduction Act
- Brochure: A Comprehensive Overview of Energy Tax Credits Under the Inflation Reduction Act of 2022
On September 8, the Internal Revenue Service (IRS) released Notice 2023-63, providing much anticipated guidance on the application of Section 174. The Notice addresses key issues for handling specified research or experimental (SRE) expenditures that are capitalized and amortized in accordance with the Tax Cuts and Jobs Act (TCJA) changes to Section 174. Taxpayers can apply the rules of Notice 2023-63 to tax years ending after September 8, 2023, or apply these rules to an earlier tax year beginning after December 31, 2021.
Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director are joined by Tax Credit and Incentive Advisory Partners, Martin Karamon and Ron Wainwright, to discuss Notice 2023-63 and how this interim guidance clarifies certain questions about the application of Section 174.
Listen to learn more about:
- 05:03 – Section 174 background
- 07:54 – Who should pay attention to Notice 2023-63
- 12:00 – Key terms in Notice 2023-63
- 15:40 – What Notice 2023-63 says about funded research
- 18:05 – Guidance on software development definition and activities
- 21:01 – Effective dates and open questions under Notice 2023-63
Related Guidance
- Recent Legislation and Section 174 Updates
- Section 174 New Requirements and Its Impact on Technology Companies
- Section 174 Research & Software Development Costs – A Guide to Compliance
- R&D Update: What’s Going On With Section 174?
When thinking about not-for-profit or tax-exempt organizations, abiding by strict tax rules is probably not top of mind. However, it is important for members of the board of directors and organization leaders to stay informed about tax laws, regulations~~,~~ and Internal Revenue Service (IRS) reporting guidelines for not-for-profit organizations. Form 990 is the annual information return for most tax-exempt entities. The IRS uses Form 990 to collect information about the annual financial activity and good governance practices of the organization.
Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, speak with Paula Wendling, Tax Director with the Firm’s Not-For-Profit services team, about important tax rules that board members and leaders of not-for-profit organizations should be aware of before reviewing a Form 990.
Listen to learn more about:
- 02:30 – What board members should think about when looking at Form 990
- 05:10 – Why the IRS asks for information and disclosures about compensation
- 07:21 – Differences between private benefit and private inurement
- 10:15 – Conflicts of interest and transactions with interested parties
- 12:10 – Differences between working with small and large organizations
Related Guidance
- 2023 Not-for-Profit Speaker Series: Tax Considerations for Alternative Investments
- Benefits of Cloud-Based Accounting Software for Nonprofit Organizations
- What Board Members of Not-for-Profits Should Know about Taxes
Often, after much negotiation, debt may be reduced on various projects to realign debtor and equity holders' interests in properties. Property owners restructuring debt should be wary of tax consequences that could occur. Debt cancellation, foreclosures and short sales can often increase tax liability for cancellation of debt income.
On this episode of the Tax Beat Podcast, Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, discuss the tax cost and potential opportunities of cancellation of debt, particularly in the context of real estate transactions, with Laura Turner, Tax Partner, and Mark Cooter, Real Estate, Construction & Hospitality Industry Practice Leader.
Listen to learn more about:
- 02:35 - Basics of cancellation of debt and common occurrences
- 04:00 - Section 108 exceptions to recognizing income
- 05:30 - Attribute reduction as it pertains to cancellation-of-debt (COD) income exclusion
- 08:35 - Differences between short sales and debt modifications
- 12:07 - Advice for facing challenges during foreclosure conversations with lenders
Related Guidance
- Making Informed Entity Selection for Real Estate Ownership
- Financing Capital Projects with the Use of New Markets Tax Credits
Wayfair v. South Dakota was a landmark case that clarified how sales tax is determined and collected. Brought about by a group of online retailers that challenged a South Dakota law, the case has had major impacts on how state and local jurisdictions throughout the U.S. establish physical presence or nexus. Since the initial ruling of the Supreme Court case, states have begun to set up their own sales tax laws.
On this episode of the Tax Beat Podcast, Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, discuss the Wayfair decision’s lasting impact with Cathie Shaw, State and Local Tax Practice Leader, and Lauren Stinson, Sales and Use Tax Team Leader.
This conversation includes:
- Impressions of Wayfair v. South Dakota oral arguments
- Changes over the last five years
- Industry impacts of Wayfair
- States that have adopted economic nexus
- Technology created to handle Wayfair
- Nexus enforcement
- Impact on income and franchise tax
Related Guidance
- What Tech Companies Overlook in Sales Tax Reporting
- Start the Year Reviewing Your Economic Nexus Thresholds
- The Wayfair Decision – Three Years Later
- eCommerce Sales Tax Collection
Section 179D Energy Efficient Commercial Buildings Deduction (Section 179D) was significantly enhanced through the Inflation Reduction Act (IRA), offering commercial building owners and designers, like architects and engineers, potential lucrative tax credits. The tax credit rewards qualifying energy-efficient commercial buildings to encourage clean energy and offset the costs of the improvements.
Energy Tax Credits & Incentives team members, Bill Harbeson, Manager, and Andre Kohn, Senior Associate, share their knowledge on Section 179D with Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director.
Listen to this podcast episode to learn more about:
- The history of Section 179D
- How Section 179D works
- IRA updates
- Which projects Section 179D can be used for
- Section 179D client case study
- Qualification Process
Related Guidance
- New IRS Form 7205 for Returns Requiring Section 179D Documentation
- 179D Energy Efficient Commercial Building Deduction Now in Effect
- Understanding the Expanded Benefits of Energy Tax Incentives Under 179D and 45L
- Inflation Reduction Act Nearly Triples Section 179D Tax Incentives
- Global A&E Firm Saves $2 Million with 179D Tax Deduction
- How to Claim Section 179D Energy-Efficiency Tax Deduction: A Guide for Architects and Engineers
U.S. taxpayers that own or control certain foreign corporations, foreign partnerships or foreign trusts are required to disclose the activities, usually with forms attached to a tax return. If not reported timely or properly on the designated forms, these U.S. taxpayers may be subject to significant penalties. A recent Tax Court Ruling for Farhy v. Commissioner brought to light how the Internal Revenue Service (IRS) applies these penalties. The main issue argued whether the law actually grants the IRS the authority to assess and collect these penalties.
Listen as Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, are joined by Brian Dill, International Tax Leader, as they discuss:
- 2:28 – Background Farhy v. Comm and Similar Taxpayer Challenges
- 6:30 – Tax Court Ruling in Farhy Case
- 8:55 – Penalties Impact from Ruling
- 10:24 – Government Penalty Collection
- 11:07 – Demand for Clear Statue of Limitations
- 18:01 – Other Important Tax Court Rulings
- 20:05 – Recommendations to Organizations with International Assets and Operations
Other Related Guidance
- Supreme Court Issues Opinion in Bittner v. United States (FBAR Case)
- Importance of R&D Tax Credit Documentation: Lessons from Recent Court Cases
The Internal Revenue Service (IRS) made headlines this past year with the news that they would be receiving an additional $80 billion towards their budget over 10 years through the Inflation Reduction Act of 2022. With the IRS facing many of the same issues they have been dealing with for more than six decades, the question remains: what will be different this time?
There has been much discussion as to how the IRS would utilize this budget increase to:
- Update technology infrastructure,
- Attract and retain talent,
- Strengthen enforcement and taxpayer services,
- And more.
Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, talk with Anne Oliver, Tax Controversy Director, about the current state of the IRS and their potential future plans.
Related Guidance
- Supreme Court Issues Opinion in Bittner v. United States (FBAR Case)
- ERC Update: Tax Professional Responsibilities and IRS Examinations
- Transfer Pricing and Foreign Legal Restrictions: 3M Co. v Commissioner Ruling
On March 9, 2023, the Biden Administration released The President’s Budget for Fiscal Year 2024. It is currently unlikely that this budget proposal will become legislation, but it is important to recognize the tax revenue raises in this latest budget proposal. Parts of the latest proposed budget come from the drafted Build Back Better Act and early versions of the Inflation Reduction Act.
In the latest episode of the Tax Beat Podcast, Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, are joined by Ron Wainwright, Tax Credits & Incentives Advisory Partner, and Brian Dill, International Tax Leader. They will dive into the proposed tax changes, the likelihood of it becoming law, and the potential implications for business taxpayers.
Related Guidance:
- R&D Update: What’s Going On With Section 174?
- 2022 Year-End Tax Planning Strategies for Businesses
In July 2021, the Internal Revenue Service (IRS) formally introduced Schedules K-2 and K-3. These forms bring uniformity and consistency to reporting items of international tax relevance to partners and S corporation shareholders on the foreign activity of a partnership or S corporation. Unfortunately, Schedule K-3 can add up to 20 additional pages to a partner’s or shareholder’s Schedule K-1.
Michael Elliot, Director with the Firm’s national tax team, joins this edition of the Tax Beat podcast with Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, to share his insights on filing Schedule K-2 and K-3 for 2022. More importantly, Mike discusses the exceptions to the required filing of these forms for partnerships and S corporations.
The podcast covers:
- 2021 Pushback on Relief
- Importance of Filing Correctly
- 2021 Relief Notice No Longer Effective for 2022
- Qualifying for the Domestic Filing Exception
- Tiered Partnerships and Limited Foreign Activity
- Opting in vs. Pursing an Exception to Filing
- K-3 Filing Difficulties
Additional Guidance:Domestic Filing Exception for 2022 Schedules K-2 and K-3
State Credits & Incentives programs are offered by state governments to encourage economic development and investments in their state. These credits allow businesses an opportunity to reduce their tax burden, increase cash flow and make investments for growth and long-term success. All these credit and incentives programs are designed to benefit the local areas and give businesses an advantage in a competitive market.
Melinda Young, State Credits & Incentives Director, and Nick Cousino, State Credits & Incentives Senior Manager, join Brooks Nelson, Partner and Strategic Leader, and Sarah McGregor, Tax Director, on this edition of the Tax Beat podcast to share insights on how your business can take advantage of these programs.
Listen to learn more about:
- Background on the State Credits & Incentives Practice
- Commonly Claimed State Credits
- State Credits From Previous Years
- State Credits Trends
- Investments and Job Creation With State Credits
- Impact of Layoffs During COVID-19
- Minimum Business Investments to Benefit From State Credits & Incentives
- Site Selection Services
- Location Retention Incentives
- Impact of the Tax Cuts & Jobs Act (TCJA) On State Incentive Packages
At the end of 2022, the Consolidated Appropriations Act of 2023 (the Act) was signed into law. The bill included the Securing a Strong Retirement Act, commonly known as SECURE 2.0, that gave new guidance and regulations to retirement plan provisions. The new law encourages employers to offer retirement savings plans, extend tax deferred earnings for plan participants and permit easier withdrawals for emergencies.
Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, welcome Deb Walker, Tax Director, on today’s tax beat podcast to learn more about the many new retirement plan provisions introduced in SECURE 2.0.
This Podcast Will Cover:
- 2:55 - Background on SECURE 2.0
- 4:08 - Provisions Impacting Employers
- 6:07 - Changes to Catch-Up Contributions
- 11:27 - Changes to Required Minimum Distributions
- 16:09 - Unused 529 Plans
- 18:33 - Benefits for Employees
Related Guidance:
- SECURE Act 2.0: Summary of Key Tax and Retirement Provisions
One of the provisions of the Tax Cuts and Jobs Act of 2017 (TCJA) that had a major impact on businesses was Section 174: Amortization of Research & Experimental Expenditures (IRC Section 174). The Internal Revenue Service (IRS) recently released Rev. Proc. 2023-11 in December 2022 to update the IRC Section 174 guidelines.
Martin Karamon, Tax Credits Incentives & Advisory Practice Leader, joins this edition of the Tax Beat podcast with Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, to share his insights on Section 174.
Listen in to this episode as the TCIA team discusses:
- 2:30 – Section 174 Costs
- 3:50 – History on Section 174
- 6:13 – Impact of Section 174
- 11:42 – New Revenue Procedure
Relevant Guidance:
- R&D Tax Credits: 2022 Year in Review
- Planning for Capitalization of Research and Experimentation (R&E) Costs
In 2022, the Internal Revenue Service (IRS) released Revenue Procedure 2022 – 19 (Rev. Proc. 2022-19) to offer relief for businesses operating as S Corporations (S Corp) that have issues with their organizational documents. IRS guidance addresses six specific items that could potentially disqualify the status of an S Corp, with the most important of these items focused on a non-identical governing provision where distributions and liquidations are not always equal.
Barry Weins, Tax Director, joins this episode of the Tax Beat podcast with Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, to share more about Rev. Proc. 2022-19 and the benefits it brings to S Corps.
Listen in as our team covers:
- 2:22 – Background on S Corps
- 4:43 – Maintenance of S Corp qualification
- 5:50 – Common issues for S Corps dealing with IRS Relief
- 9:53 – Background on Revenue Procedure
- 13:16 – Key Points of Revenue Procedure
- 14:33 – Compliance with Revenue Procedure
- 18:16 – Impacts on mergers and acquisitions involving S Corps
- 19:59 – Issues S Corps should be thinking about
Related Resources:
- R&D Tax Credits: 2022 Year in Review
- Tax Planning Opportunities For Executives with Incentive Stock Options Strategies
- IRS Crackdown on Incomplete Transfer Pricing Documentation
Our conversation covers new benefits for tax-exempt organizations from the Inflation Reduction Act of 2022 (IRA), big picture data from recent Internal Revenue Service (IRS) examinations, and hot topics of name, image and likeness(NIL) and alternative investments. Additionally, the team looks though a future-focused lens at proposed legislation.
Join Cherry Bekaert professionals Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, as they catch-up with Amanda Adams, our Not-for-Profit Tax Leader, to learn more about recent tax-related updates impacting the not-for-profit industry.
Related Content
- 2022 Cherry Bekaert Not-for-Profit Speaker Series
- 2022 Not-for-Profit Speaker Series: Nonprofit Tax Update
- Inflation Reduction Act of 2022: Key Income Tax Provisions
In January 2021, the Corporate Transparency Act (CTA) was passed into law as a part of the larger Defense Authorization Act for Fiscal Year 2021. The CTA requires certain domestic and foreign held business entities to report information to the Department of Treasury about the company and its individual owners and managers. The required reporting focuses on personal information about company owners and key management personnel. BOI is intended to assist the Financial Crimes Enforcement Network (FinCEN) division of Treasury to identify shell companies used for potentially criminal activities. On September 30, 2022, Treasury released its final regulation and guidance for BOI reporting. The Regulation is effective as of January 1, 2024.
Join Brooks Nelson and Sarah McGregor as they invite Michael Cornett to this episode of the Tax Beat podcast to answer the questions:
- What is new in the final regulation?
- What should companies do now?
Related Guidance:
- Final Regulations Issued for Beneficial Ownership Information Reporting
- New Beneficial Owner Reporting Requirements Aim to Limit Illicit Activities
Transfer pricing is the intercompany pricing of goods and services that one company charges another when both are under common ownership or control. Countries around the world pay attention to transfer pricing as these intercompany charges can shift income or deductions from one tax jurisdiction to another. When it comes to collaborating with transfer pricing within a company, front-end planning and back-end tax compliance often receive the most attention.
However, the latest Tax Beat Podcast walks through the importance of melding transfer pricing into company operations, which can bring value to current operations, meet the goals established in planning, and ease the documentation requirements of annual income tax filings.
Brooks Nelson and Sarah McGregor talk with Kirk Hesser, leader of Cherry Bekaert’s Transfer Pricing Analysis and Consulting group, about the shift in focus to operational transfer pricing. The conversation with Kirk also covers the impact of economic downturns and supply chain stress on transfer pricing, and the need for flexibility in company pricing documents.
Missed our other Tax Beat Podcasts? Check them out at cbh.com/podcasts
On August 16, 2022, President Biden signed the bipartisan Inflation Reduction Act (“IRA”) of 2022 into law. The bill includes sweeping legislation to create more incentives for green energy production, storage, and use through federal income tax credits and deductions. The IRA allows government and not for profit entities to cash in on certain credits, and it increases the payroll tax offset election for start-up companies.
Brooks Nelson and Sarah McGregor are joined by Ron Wainwright, Partner in our Tax Credits and Incentives practice, to dive deep into the tax implications that are included in the IRA.
This podcast covered the various tax credits, new and enhanced, for commercial vehicles, monetizing credits, research and development (“R&D”) for start-up companies, and much more.
- Extending existing credits
- Introducing a few new credits
- Commercial vehicle credits
- Enhancements and bonuses
- Tax Exempt Entities can monetize credits
- R&D tax credit for start-up companies
- Raising and collecting tax revenues
Related Guidance:
- Inflation Reduction Act Doubles R&D Tax Credit to Offset Payroll Taxes for Start-Up Businesses
- Inflation Reduction Act Nearly Triples Section 179D Tax Incentives
- How Can A&E Firms Take Advantage of New Tax Credits in the Inflation Reduction Act?
Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was passed on March 27, 2020. With that legislation came the Employee Retention Credit (“ERC”), which provided tax credits to employers that retained employees due to government mandates or supply chain issues during the COVID-19 pandemic.
Why are we still talking about ERC?
Many employers still have not taken advantage of ERC that they are eligible for not realizing how their businesses were impacted at the time. Join Brooks Nelson and Sarah McGregor as they discuss with Martin Karamon as they explore why you should take a second look at if you are an eligible employer for ERC.
This episode of our Podcast covers:
- What is ERC and how do Government COVID-19 orders qualify employers for this credit
- Government orders leading to supply chain disruptions
- Industries affected by Government orders beyond supply chain disruptions
- Status of ERC refund claims already filed, and IRS scrutiny of claims filed
Related Guidance
- 2022 Update on the Employee Retention Credit (ERC)
- 2022 Most Frequently Asked Questions about the Employee Retention Credit (ERC)
- Accounting for the Employee Retention Credit
Pass-through entity (“PTE”) guidance has rapidly been changing state-by-state since the IRS issued Notice 2020-75 on November 9, 2020. After that notice was released, almost 30 states have passed new PTE related legislation. With this developing landscape, we turn to Cathie Stanton, a Tax Partner and national leader of the firm’s State & Local Tax practice, and Tony Konkol, a Strategic Tax Manager, to share their latest PTE insights with Brooks Nelson and Sarah McGregor on this addition of the Tax Beat Podcast.
In this edition of our Podcast, our knowledgeable leaders discussed:
- 4:55 - Why Have There Been Fast Changes to PTE Taxation?
- 9:26 - Credit Method and Income Reduction Definitions
- 12:32 - Issues and Considerations When Implementing a PTE Election
- 22:02 - What Makes a Good Candidate for PTE Election?
- 23:23 - Key To-Do’s for PTE Election
If you have any questions specific to your business needs, Cherry Bekaert’s State & Local Tax advisors are available to discuss your situation with you.
Additional Resources
Article: The Growing Trend of Pass-Through Entity SALT Cap Workarounds
Brochure: Pass-Through Entity Tax Services
Article: Pass-Through Entity Considerations for the Real Estate Sector
Podcast: Avoiding the SALT Cap with Pass-Through Entity Taxation (October 2021)
Podcast: How Supply Chain Changes Impact Your State and Local Taxes
For more than 20 years, the New Markets Tax Credits (“NMTC”) program has issued federal tax credits to community development entities (“CDEs”) and community development financial institutions (“CDFIs”). These organizations are empowered to use NMTC to support business development and investment in economically challenged communities around the country.
In the last year, less than one half of all CDEs applying for grants of credits received an award. Laurel Tinsley, Managing Director for the Firm’s New Markets Tax Credit Services, shares with Brooks and Sarah how she, and her team, work with CDEs to improve their applications and their chances of receiving credits for their communities. This discussion pairs nicely with our early podcast covering how businesses and developers can take advantage of NMTC. Understanding the mission and plans of a CDE lender can help business leaders, investors, and developers match their projects with the CDEs goals to benefit a community.
Chapter Markers
- 2:10 – Overview New Market Tax Credit Program
- 5:47 – Key Elements of an NMTC application
- 8:57 – What is an NMTC award?
- 12:40 – Why have CDE’s?
- 16:47 – Aligning purpose, pipeline, and outcomes
- 21:43 – Action steps to take now
- 25:30 – Room for success and collaboration
The Corporate Transparency Act (“CTA”) was passed into law, effective January 1, 2021, as part of the larger Defense Authorization Act for Fiscal Year 2021. CTA requires most business entities registered to conduct business in the U.S. to report information about the entity’s beneficial owners to the Department of the Treasury. Specifically, Beneficial Owner Information (“BOI”) is reported to the Financial Crimes Enforcement Network (“FinCEN”) division of Treasury.
The goals of CTA are to limit the use of shell companies in the U.S. to hide the actual individuals owning or controlling activities that may evade tax or may be criminal. BOI information may be shared with government agencies, law enforcement, financial institutions, and regulators. The information is not intended to be shared with the general public.
For closely held businesses and foreign entities operating in the U.S., BOI reporting may generate a new compliance burden to collect, protect, and report personal information on individual owners and key management personnel.
Join Michael Cornett, a leader in the Firm’s International Tax group, with Sarah McGregor and Brooks Nelson to have your burning questions answered about the CTA.
Chapter Markers
- 2:20 – Overview of BOI reporting
- 7:04 – What is a Reporting Company
- 12:24 – Who is Beneficial Owner
- 16:37 – When is information reported
- 18:22 – What information must be reported
- 23:06 – Action Steps
Since 1996, when California became the first state to legalize the medical use of marijuana, 38 more states have followed. Additionally, approximately 18 states, as well as the District of Columbia, have passed legislation to allow for recreational or adult use of cannabis. With many listeners living in or vacationing in one of these states, this is a good time to review the difficult federal income tax rules applied to cannabis businesses. Barry Weins, Director in the Firm’s National Tax Group, joins Brooks and Sarah to discuss the tax laws that have an important impact on earnings of companies operating in state law allowed cannabis industry.
Chapter markers
2:35 – Overview
3:40 -- Definitions and background
7:30 – Internal Revenue Code Section 280E
9:50 – How Section 280E impacts different companies
15:54 – Section 263A and taxpayers seeking relief from Section 280E
21:14 – Trends in the industry
This Tax Beat podcast takes a closer look at Form 2848, Power of Attorney and Declaration of Representative (“POA”). A properly completed Form 2848 can open the flow of taxpayer information between the IRS and the tax professional representing the taxpayer. Anne Oliver, leader of the Firm’s Federal Tax Controversy Practice answers questions on how to effectively file, share, and use a POA.
Chapter markers
- 1:58 – Overview
- 7:35 – Methods for completing and filing Form 2848
- 10:58 – Who should sign the Form 2848?
- 13:32 – Advantages of using a POA when contacting the IRS
- 17:02 – Information learned from a taxpayer’s account transcript
- 20:08 – When can a tax professional contact the IRS without a POA?
- 22:42 – What happens to a POA after the notice is resolved?
In this episode of Cherry Bekaert’s Tax Beat, Brooks Nelson and Sarah McGregor welcome back Ron Wainwright, Partner with the Tax Credits & Incentives Advisory practice to talk about recent activity in Washington D.C. The conversation opens with a discussion of the President’s proposed budget for fiscal year 2023 and Treasury’s Greenbook.
Next, Ron covers tax provisions that may be attached to the “America COMPETES Act of 2022” passed by the House and the “United States innovation and Competition Act” passed by the Senate. We wrap up the conversation talking about provisions in the House passed “Securing a Strong Retirement Act of 2022” or SECURE 2.0.
Chapter markers
- 3:30 President’s proposed budget - Overview
- 10:42 President’s proposed budget – Individuals
- 16:29 America COMPETES and tax extenders
- 26:15 SECURE 2.0
Accomplished business leaders, professionals, and community leaders are often sought out to serve on the boards of not-for-profit organizations. These organizations generally operate under a tax-exempt designation from the IRS, but that does not mean they do not file tax returns. In fact, the Form 990 asks for more information about the operations, best practices, related party activities, investments, and results of mission-oriented programs than most for-profit business tax returns do.
Amanda Adams, Managing Director and Not-for-Profit Tax Leader at Cherry Bekaert, provides insight into the world of Form 990 reporting. Brooks and Sarah ask Amanda to walk through the various parts of the Form 990 and highlight sections that board members should review. Amanda also points out where to spot warning signs for potential risks. She explains a few of the key questions within the Form 990 that the IRS considers as evidence of best practices for good governance of organizations. The conversation wraps up with a discussion of unrelated business taxable income and key issues facing not-for-profit organizations in 2022.
The employee retention credit (“ERC”) is an incentive for employers who faced declining revenues or experienced disruptions to their businesses due to government-imposed restrictions during 2020 and 2021. Businesses and certain not-for-profit organizations that continued to pay employees during these challenges of the COVID-19 pandemic can still qualify for the ERC, and many recipients are receiving cash refunds.
Martin Karamon, the leader of the Firm’s ERC team, provides insights into selecting an ERC service provider and explains how these services may vary between CPA firms and boutique agencies. Brooks and Sarah follow up with questions about eligibility for ERC in various industries, what has changed from claiming credits in 2020 vs. 2021, and the future for the ERC in 2022 and beyond.
Today we are covering the latest news and guidance regarding R&D tax credits. Innovation is percolating through all areas of the economy, especially with companies pivoting during the pandemic and later as the economy has recovered. Since 1981, the federal income tax credit for increasing research activities (“R&D credit”) has been a vehicle for the federal government and many states to reward companies for investing time and money into innovation and experimentation. Addressing technical engineering, scientific or computer science uncertainties is the core activity that yields R&D tax credits. Tax Beat hosts Brooks and Sarah interview leaders from the Firm’s Tax Credits and Incentives Advisory practice for their insights into new IRS documentation provisions, required capitalization of expenditures starting this year, a legislative outlook, and the value of R&D credits for all size businesses.
Topics discussed include:
- 4:21 – The big picture for R&D credits
- 6:19 – Importance of R&D credits to industry
- 8:38 – Middle market companies taking advantage of R&D credits
- 9:55 – New IRS documentation requirements for tax credit refund claims
- 17:36 – Required capitalization of R&D expenditures
- 20:49 - Trends and opportunities
Tax Beat hosts Brooks and Sarah continue a focus on strategic planning issues for companies that are onshoring, expanding and relocating operations. In this episode, the issue faced by many companies is finding funding sources to support their growth plans. One solution is the New Markets Tax Credit (“NMTC”) which facilitates private investment into low-income and targeted communities. Peter Byford with TAG by Cherry Bekaert answers questions about how the New Markets Tax Credit program works and when companies may access NMTC backed financing.
Topics discussed include:
- 3:00 – Overview of the New Markets Tax Credit program
- 6:02 – Role of TAG by Cherry Bekaert
- 7:24 – How companies benefit from NMTC backed financing
- 8:36 – Examples of funding for facilities and equipment
- 17:53: -- How the NMTC Impacts Supply Chain Issues
Profits splits, tax incentives, income shifting, nexus, pass-through entity tax elections, and commercial domicile are just some of the state and local tax (SALT) issues that companies should incorporate in planning substantive changes to their supply chain. Tax Beat hosts, Brooks andSarah, talk with Cherry Bekaert’s State and Local Tax Practice Leader, Cathie Stanton about these issues and more covering income tax, franchise tax, and sales and use tax. As Cathie says, don’t leave SALT as a footnote to your company’s strategic plan.
Chapter Markers:
- 3:53 -- Legal Entity, Structuring, and Tax Incentives
- 9:00 -- Entering and Exiting Markets
- 10:50 -- Splitting Profits and Transfer Pricing
- 15:13 -- Nexus and New Guidance for Public Law 86-272
- 19:11 -- Sales and Use Tax Considerations
Tax Beat hosts Brooks and Sarah sit down with Christy Pierce, managing partner of Cherry Bekaert’s Tax Services, to discuss the big events in the tax world during 2021 that impacted our clients and our Firm, and the trends we expect to see continue in 2022.
Chapter Markers:
- 1:44 -- 2021 Tax Highlights and Legacies
- 8:42 -- Impact of Tax Law Uncertainty
- 17:38 – Complexity of Tax Reporting
- 21:02 -- Challenges working with the IRS
- 25:32 – Pandemic Funding from PPP Loans & Employee Retention Credits
- 28:12 -- The Great Labor Reset
- 32:39 -- 2022 Tax Trends and Expectations
Tax Beat hosts, Brooks and Sarah, are joined by their Cherry Bekaert colleagues, Mike Elliot and Barry Weins for a look back at 2021 to discuss a sampling of Federal guidance and court cases that have an impact on closely held businesses and their owners. They talk about final Regulations, Tax Court decisions, Revenue Procedures, IRS Notices, and even changes to 2021 federal tax forms and instructions. There is not enough time to cover all published guidance from the IRS and Treasury this year, but these are items of broad interest and common situations for partnerships, S corporations, and employers.
Chapter Marks:
- 3:56 - PPP loan forgiveness income and three recent Revenue Procedures
- 7:26 - Final Regulations for Carried Interests and new tax return reporting requirements
- 13:23 - Form 7203 and basis reporting for S corporation shareholders
- 19:44 - Final Regulations for the small business taxpayer exception
- 23:52 - C corporations and S corporations paying for shareholder services
- 32:49 - Two Tax Court rulings regarding loans and pass-through entities
- 39:04 - Relief to employers after Employee Retention Tax Credit was terminated early
The latest version of the Build Back Better bill was released by the U.S. House of Representatives on November 5, 2021. The bill includes significant spending initiatives which are paid for, in part, by proposed tax provisions that impact companies operating outside the United States. Tax Beat hosts, Brooks and Sarah, invite Cherry Bekaert’s International Tax specialists, Brian Dill and Michael Cornett, to highlight the proposed provisions impacting income subject to GILTI and FDII tax rates. They also address other proposed provisions including changes to foreign tax credits and BEAT. This is timely information as companies evaluate changes to their supply chains and watch the movement towards a global minimum tax.
A companion Tax Beat podcast highlights the proposed tax provisions that can impact businesses and individual taxpayers.
Chapter Marks:
- 7:14 -- Proposed provisions impacting GILTI and FDII
- 11:18 -- Changes to the foreign tax credit regime
- 13:34 -- Other provisions in and out of the bill
- 18:59 -- State of global minimum tax rate
- 26:42 -- Recommendations for planning
On November 5, 2021, the House of Representatives released the latest version of the Build Back Better bill. This bill presents significant spending initiatives of the Biden Administration. The spending in the bill is paid for by proposed tax provisions impacting businesses and individuals and with greater enforcement efforts by the IRS. Tax beat hosts, Brooks and Sarah, talk with three Cherry Bekaert Tax Services Directors, Anne Oliver, Deb Walker, and Mike Elliot, to highlight the revenue raising provisions in this bill. They speak to the potential impact of these provisions and some planning ideas for taxpayers to consider.
There is a companion podcast which highlights the proposed tax provisions that may impact companies operating outside of the U.S.
Chapter Marks:
- 3:19 -- Which tax provisions are in and out this version of the bill
- 10:25 -- Provisions for IRAs
- 15:00 -- IRS enforcement provisions
- 20:48 – What happens next?
- 23:15 -- Recommendations for year-end planning
The Internal Revenue Service (IRS) is the one government agency with which almost every individual, couple, business, trust, and not-for-profit organization interacts. And, just like all of us, the IRS and its thousands of employees have been profoundly impacted by the COVID-19 pandemic. In this Tax Beat episode, hosts Brooks and Sarah bring in Anne Oliver, Director and Leader of Cherry Bekaert’s Federal Tax Controversy practice. Anne shares insights on why the pandemic caused more problems for the IRS than the last government shutdown, what happens behind the scenes for tax returns, and technology changes the IRS has pushed forward in the last 20 months.
Chapter Markers
- 2:50 - Background on impact of the pandemic vs government shutdown on the IRS
- 6:09 - Different responses from divisions within the IRS
- 13:02 - Responding to IRS notices
- 21:58 - Congress offers proposals to close the tax gap
- 26:18 - Final advice to taxpayers
As soon as the Tax Cuts and Jobs Act was signed into law in 2017, state tax administrators, small business owners, and residents of states with high property tax and income tax rates began to look for ways to work around the Act’s $10,000 itemized deduction limit for state and local taxes (SALT). Typically, the owner of a partnership or S corporation pays income tax on the share of state income passed through to them from the business. However, over the last several months approximately 20 states have implemented new legislation to tax pass-through entities directly, rather than tax the individual owners. Tax Beat hosts, Brooks and Sarah, are joined by Cherry Bekaert’s Tax Partner and Leader of the State and Local Tax Practice, Cathie Stanton, and Tony Konkol, Manager with the Firm’s State and Local Tax Practice, to talk about these pass-through entity tax regimes. They cover the entities and owners who can take advantage of pass-through entity taxation and address issues to consider before electing in to this approach to state taxes.
Chapter Markers:
- 2:24: Overview
- 4:39: How states are responding to SALT Cap
- 8:52: IRS Notice 2020-75 paves the way for pass through entity taxation (“PTE”)
- 17:22: Issues to consider before making opting in to PTE
- 21:55: Methodologies and requirements for PTE
- 24:45: Limitations
- 28:45: Year-end tax planning and PTE
On September 13, the House Ways and Means Committee and the Joint Committee on Taxation released drafts of proposed tax legislation and estimated budget effects of taxes under the $3.5 trillion budget reconciliation bill. Many of the provisions in the draft legislation are familiar from President Biden’s American Families Plan and American Jobs Plan and Treasury’s Green Book released earlier this year.
In this session, Cherry Bekaert’s Tax Beat hosts, Brooks and Sarah, walk through highlights of the draft legislation including proposed tax rate changes and the taxpayers who may be impacted. They also discuss surprises in the draft bill that were not mentioned in the earlier proposals from President Biden, and the effective dates for various provisions. To close out the discussion, Brian Dill, partner and leader of the Firm’s International Tax Practice Team, joins in for a discussion of the proposed legislative changes to FDII, GILTI, foreign tax credits and other tax provisions impacting companies operating within and outside of the U.S.
Chapter Marks:
- 01:30 Background – legislative process - $1.2 T infrastructure
- 08:02 Tax rate changes (effective for tax years beginning after 12/31/2021)
- 11:13 Capital gains (generally effective for transactions on or after September 13, 2021)
- 14:42 Taxing income from a pass-through business (effective for tax years beginning after 12/31/2021)
- 20:01 Estates and trusts (generally effective for estates and gifts arising after 12/31/2021)
- 22:25 Mega-IRAs (generally effective for tax years beginning after 12/31/2021)
- 24:39 Other Selected Provisions
- 26:30 International Tax Provisions
Claim R&D Tax Credits to Help Fund Digital Transformation
What if companies could fund part of their digital transformation with federal and state tax credits for increasing Research and Development activities? In this session, Brooks and Sarah and their guests take a closer look at the intersection of digital transformation and R&D tax credits. Nita Sanger, Director with Cherry Bekaert’s Digital Advisory Services talks about her work helping companies changing their current business practices and tools to 21st century data and technology. Daniel Mennel, Tax Partner with the Firm’s Credits & Accounting Methods Services, discusses his work assisting companies to identify and maximize opportunities for R&D tax credits.
Chapter Markers:
3:45 Defining Digital Transformation
7:19 Principles of R&D tax credits
14:30 A typical project for CB Digital
18:06 Opportunities for R&D tax credits
25:21 Closing remarks
Many companies are having very successful years, and at the same time are struggling to find and retain key employees. Could a well-crafted retirement saving plan provide answers to both issues? Tax planning opportunities in the SECURE Act (Setting Every Community Up for Retirement Enhancement Act) may have been overlooked during the Coronavirus pandemic and the subsequent CARES Act. Tax Beat hosts Brooks and Sarah welcome their colleagues David Flinchum, Tax Partner and Leader of the Firm’s Qualified Plan Services, and Jeff Gump, Financial Advisor with Cherry Bekaert Wealth Management LLC, to talk about current trends in retirement savings plans. The discussion highlights hot topics, using multiple plans, and how business owners can still lower their 2020 tax bill.
Brooks and Sarah discuss the potential impact of proposed changes to U.S. based multinational companies with Cherry Bekaert’s Brian Dill, Principal and International Tax Leader, and Michael Cornett, Director for International Tax Services. These proposed changes were introduced in the American Jobs Plan and further explained in Treasury’s Green Book. The conversation covers proposed changes to FDII, GILTI, anti-inversion, and other tax rules intended to discourage moving business operations off shore. We also discuss the recent G7 and G20 agreements to pursue a 15% minimum global tax rate. Brian and Mike highlight common themes in tax policies across countries, and we wrap up with a few ideas and actions multinational companies should consider now.
The conversation includes:
- 2:45: Overview
- 7:50: American Jobs Plan proposals and Green Book explanations
- 19:55: A 15% global minimum tax rate
- 29:13: Potential Impact to a company’s global supply chain
- 35:56: Final comments
Related Guidance:
- Tax Beat: Treasury’s Green Book Part 1
- Tax Beat: Treasury’s Green Book Part 2
- Tax Beat: American Jobs Plan, 2021
- Tax Beat: American Families Plan
This episode of the Tax Beat focuses on SPACs - Special Purpose Acquisition Companies - that are taking the investment world by storm. SPACs are a new way to get private companies to the public equity market. Nearly half of all IPOs in 2020 were SPACs and the trend is accelerating in 2021. Management teams and sponsors start with a new, shell corporation listed on a public stock, raise funds by selling shares to the public, and then find and acquire an operating company. Sounds straight forward, but the transactions details and tax consequences can be far from simple. Tax Beat hosts, Brooks and Sarah, discuss the tax challenges for SPACs with Cherry Bekaert’s Chris Truitt, Partner and Leader of the Firm’s Tax Transaction Advisory Service team, and Barry Weins, Director, specializing in transaction tax services.
The conversation includes:
1:49: Overview of SPACs
6:48: Responsibilities of Founders and Sponsors
10:08: Tax Issues of De-SPACing
12:49: Tax Considerations for Target Companies
20:03: Impact of Location on Taxes
For more information about SPACs, read our three-part article series written by Chris and Barry.
This episode of the Tax Beat is part two of reviewing the U.S. Treasury’s “General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals” (the “Green Book”). The Treasury report was released on May 28, 2021, and provides details of the tax provisions introduced with the American Jobs Plan and the American Families Plan. Following up on our Green Book, Part One conversation, we discuss what happens next in Congress and what other competing needs must be addressed within a limited number of days that Congress is in session. We also touch on the G7 agreement regarding a minimum tax rate. Finally, we turn our conversation to some good news in the Green Book – new and enhanced tax incentives and credits. Ron Wainwright, Cherry Bekaert’s Credits and Accounting Methods Leader joins hosts Brooks and Sarah for this episode.
The conversation includes:
4:12: Legislative Update
13:30: G7 Agreement for Minimum Tax Rate
15:58: Business Incentives
20:18: Energy Incentives
31:21: R&D Tax Credit Proposed Legislative Changes
This episode of the Tax Beat is part one of two reviewing the U.S. Treasury’s “General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals” (aka, the “Green Book”). This report was released on May 28, 2021 and provides details of the tax provisions introduced with the American Jobs Plan and the American Families Plan. This episode focuses attention on proposed tax rate increases for corporations and individuals, and capital gains – both realized and unrealized. Tax Beat hosts Brooks and Sarah welcome back Cherry Bekaert tax professionals, Mike Kirkman, Leader of the Firm’s Estate Gift and Trust practice, and Barry Weins, Director, specializing in corporate tax and transactions tax services. Both Mike and Barry participated in the Tax Beat episode covering the American Families Plan.
Topics Discussed:
4:15 Proposed tax rate increases for corporations
11:37 Proposed tax rate increases for high earning individuals
18:05 Proposed tax on unrealized gains with gifts and estate transfers
29:30 Proposed tax on active income from pass-through entities
33:56 Proposed tax changes to close “loopholes”
What does the U.S. Supreme Court’s 2018 Wayfair ruling mean today? How are states enforcing new nexus laws? Can remote sellers ease the burden of their complicated tax obligations? Tax Beat hosts, Brooks andSarah, talk to Cherry Bekaert’s State and Local Tax Practice Leader, Cathie Stanton, and Sales and Use Tax Team Leader, Lauren Stinson, to examine the impact of this milestone ruling on businesses and states, now and in the future.
Chapter markers:
- 1:47 - Wayfair Ruling Overview
- 4:19 - Impressions of the Ruling
- 8:44 - Wayfair’s Impact on Different Industries
- 15:35 - The Keys to Compliance
- 21:28 - State Enforcement Techniques
- 27:12 - Impact on Income & Franchise Taxes
- 30:10 - Lessons Learned
The employee retention credit (“ERC”) can be a rewarding incentive for employers who continue paying employees while their businesses and not-for-profit organizations are disrupted by mandates or diminished by lost revenues. Martin Karamon, the leader of the Firm’s ERC team and Robby Burgen, a manager in the Firm’s Credits and Incentives practice answer practical questions about the ERC. Brooks and Sarah ask questions raised by attendees from a recent webinar as well as questions we hear most often from our clients. The team will highlight the best ways for employers to monetize the credit and share experiences working with companies, payroll providers, and the IRS.
The conversation includes:
1:38 Overview of the Employee Retention Credit
7:07 Monetizing the credit
12:29 Qualifying for ERC: gross receipts test
17:14 Qualifying for ERC: government mandates
21:49 Working with employers and payroll providers
28:52 Coordinating with PPP Loan forgiveness
This episode of the Tax Beat highlights the income tax provisions proposed in the American Families Plan. The White House staff released the Fact Sheet: The American Families Plan and President Biden introduced the Plan to Congress in a speech on April 28, 2021. Hosts Brooks Nelson and Sarah McGregor discuss the Plan with their fellow Cherry Bekaert tax professionals, Mike Kirkman, Leader of the Firm’s Estate Gift and Trust practice, and Barry Weins, Director specializing in corporate tax and transactions tax services. The team reviews the potential impact of proposed tax rate increases for higher-income taxpayers, and addresses several questions raised by the American Families Plan:
- Who will pay the higher tax rates?
- How will the rate changes impact the sale of a business?
- Should business owners reconsider the tax entity choice for their operations?
- What tax savings actions are taxpayers planning now?
Chapters:
- 2:05 Overview of The American Families Plan and tax provisions
- 5:20 Impact of proposed tax rate increases
- 9:18 Higher tax rates may impact sale of a business
- 12:56 Choice of business entity
- 21:08 Estate Gift and Trust provisions
- 27:24 Closing loopholes and increasing IRS enforcement
Listen in as Cherry Bekaert’s Brooks Nelson and Sarah McGregor review the proposed tax provisions outlined in the American Jobs Plan, 2021. They are joined by the firm’s partners Brian Dill, International Tax Practice leader, and Ron Wainwright, Federal Tax Credits and Accounting Methods team leader. The group addresses the legislative process for this proposed bill, the potential impact of tax rate increases, and a change in direction raising U.S. taxes on offshore income. Brooks and Sarah kick off this session with a brief conversation on IRS Notice 2021 – 21 postponing the tax due date for individual taxpayers.