We do not usually write articles about tax issues, but we recently found some noteworthy articles related to taxes, the pandemic, and COVID-19, for you to think about. These are all courtesy of the “Accounting Today” Daily Briefing, to which we subscribe.
Coronavirus delays IRS reorganization
The Taxpayer First Act that Congress passed last year, which mandates that the IRS reorganize itself to provide better taxpayer service, is being delayed. There is a senior-level team leading the reorganization, but COVID-19 is preventing the plan from going forward. As taxes have become more complex, better taxpayer services are sorely needed.
The craziest work from home expenses of 2020
There is very little humor about COVID-19 and working from home, but “Emburse”, an expense management software company, has released some outlandish and humorous expenses. We have chosen a half dozen for you to peruse and laugh about:
Facelift, $7,600: Facelift procedure to be expensed as repairs and maintenance, despite one’s need to look their best during Zoom meetings. – NOT APPROVED
Branded coffee mugs, $1,250: To boost team morale for weekly coffee chats. – APPROVED
Case of wine, $389: For online networking events. – NOT APPROVED
Private jet charter, $20,000+: Required to limit COVID-19 exposure when visiting international clients. – APPROVED
Tea service at home, $265: In-the-office tea was supplied for free as a company perk. – NOT APPROVED
Peloton Bike, $1,895: Deducted as health and wellness for an employee.
Will tax audits and enforcement increase to make up for pandemic shortfalls?
The pandemic and shutdowns, along with trillions of dollars in stimulus, have all affected the amount of money various governments have available to spend. These losses will need to be made up from taxes in various different ways.
Sales and use taxes
There already has been a concerted effort from states and municipalities to enforce sales and use taxes. This has helped sales and use tax software companies such as Avalara, Vertex and CCH become successful. Massachusetts has recently released a budget that will require sales taxes to be remitted faster.
Expect more audits and enforcement of current taxes. along with increased examinations of losses and deferrals. The IRS has already announced that it is planning to focus on high net worth taxpayers which could yield trillions of dollars in new revenue. And the IRS announced that they will resume tax visits to suspected high income tax avoiders.
All of these audit and enforcement efforts are contingent upon the various taxing authorities having the resources and personnel to accomplish these goals.
The most important things for businesses and taxpayers to have at their disposal is the proper software to comply with the new tax changes, and accounting and legal help to advise them on relevant tax matters.
Need help figuring out how best to set up your Sage 50 software to keep track of all of these tax reporting requirements? Give us a call to discuss. While we are not tax advisers, and do not pretend to be, we can help you use your software to make tax reporting a bit easier.
Alan Phillips is an experienced accountant, and has supported clients as a Sage Certified Consultant since 2002. Prior to that time he spent 13 years in public accounting and 14 years in the private sector, as a controller and financial vice-president. He brings to Crosspointe Consulting Group a deep understanding of the accounting needs of many business types, which complements his skills with software implementation, training and professional advice. Alan’s consulting skills help small businesses more efficiently use their accounting software, and thus enable them to make better and more timely business decisions.