Yang & Associates, CPAs, P.C.

01/06/2025

Beneficiary Ownership Information Report (BOI) Updates

Let’s start from the beginning and discuss where we are now on December 27th.

Injunction Issued

On December 3, 2024, the U.S. District Court for the Eastern District of Texas in Texas Top Cop Shop, Inc. vs. Garland issued a preliminary injunction that prohibited the enforcement of the CTA and its implementing regulations (including the BOI reporting rule), finding that the CTA and its implementing regulations are likely unconstitutional.

The injunction made BOI reporting discretionary, but a major concern was the rapidly approaching January 1, 2025 regulatory deadline for reporting companies formed before January 1, 2024 to file their initial BOI reports. If the injunction was stayed or overturned later in December, reporting companies would have little time to comply.

Congressional Confusion

Meanwhile, Congress had a December 20 deadline to pass a continuing resolution to fund the government. The initial compromise bill would have extended the January 1, 2025 deadline to January 1, 2026; however, due to massive opposition, the bill died, and Congress passed a much smaller bill with no BOI deadline relief.

Injunction Relief

The government had requested an emergency stay of the injunction in the Fifth Circuit Court of Appeals. On December 23, a three-judge panel issued a stay of the temporary injunction, bringing back mandatory BOI reporting.

Almost immediately after the stay, FinCEN announced that the January 1, 2025 deadline would be extended to January 13, 2025; other relief was granted to other companies with reporting deadlines impacted by the injunction.

Injunction Returns

Fast forward three days to the evening of December 26, and the Fifth Circuit reversed the stay, stating that the injunction should stay in place while a different three-judge panel considers the merits of the government’s appeal.

As of December 27, 2024, at 9:30 ET, here is where BOI reporting stands:
• There is a temporary injunction against the reporting rule, making BOI reporting discretionary nationwide.
• If the injunction is lifted, reporting companies formed before January 1, 2024 must file their initial report by January 13, 2025 (unless FinCEN grants another short extension).

It remains my position that clients should be given information about the injunction, and they can decide whether to voluntarily comply or wait until the courts resolve the legal challenges. Taxpayers should have agency in their key business and tax decisions.

02/27/2024

IRS: San Diego area taxpayers impacted by severe storms, flooding qualify for tax relief; various deadlines postponed to June 17

IR-2024-51, Feb. 27, 2024

WASHINGTON — The Internal Revenue Service announced today tax relief for individuals and businesses in parts of California affected by severe storms and flooding that began on Jan. 21.

These taxpayers now have until June 17, 2024, to file various federal individual and business tax returns and make tax payments.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). Currently, this includes San Diego County. Individuals and households that reside or have a business in this locality qualify for tax relief.

The same relief will be available to any other California localities added later to the disaster area. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

Filing and payment relief
The tax relief postpones various tax filing and payment deadlines that occurred from Jan. 21, 2024, through June 17, 2024 (postponement period). As a result, affected individuals and businesses will have until June 17, 2024, to file returns and pay any taxes that were originally due during this period.

This means, for example, that the June 17, 2024, deadline will now apply to:

Individual income tax returns and payments normally due on April 15, 2024.
2023 contributions to IRAs and health savings accounts for eligible taxpayers.
2024 estimated tax payments normally due on April 15, 2024.
Quarterly payroll and excise tax returns normally due on Jan. 31 and April 30, 2024.
Calendar-year partnership and S corporation returns normally due on March 15, 2024.
Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2024.
Calendar-year tax-exempt organization returns normally due on May 15, 2024.
Also, penalties for failing to make payroll and excise tax deposits due on or after Jan. 21, 2024, and before Feb. 5, 2024, will be abated as long as the deposits were made by Feb. 5, 2024.

Reminder about extensions
The IRS urges anyone who needs an additional tax-filing extension, beyond June 17, 2024, for their 2023 federal income tax return to request it electronically by April 15, 2024. Though a disaster-area taxpayer qualifies to request an extension between April 15, 2024, and June 17, 2024, a request filed during this period can only be submitted on paper. Whether requested electronically or on paper, the taxpayer will then have until Oct. 15, 2024, to file, though payments are still due on June 17, 2024.

Questions? Contact us.

01/03/2024

Effective 1/1/2024, the Corporate Transparency Act (CTA) will require most business entities to file an initial report with the Financial Crimes Enforcement Network (FinCEN) to disclose the entity's beneficial owners.
Now business owners can start to file their beneficial ownership information (BOI) with FinCEN now via FinCEN's website here:
https://www.fincen.gov/boi

Questions? Contact us.

Many companies are required to report information to FinCEN about the individuals who ultimately own or control them. FinCEN began accepting reports on January 1, 2024. Learn more about reporting deadlines.

12/14/2023

Enacted by Congress in 2021, the CTA requires many companies formed or operating in the United States to report information about their beneficial owners to Treasury’s Financial Crimes Enforcement Network (FinCEN), which will store this sensitive information in a secure, confidential database.

The CTA effective date is 1/1/2024 and most business need to file initial report on or before 1/1/2025.

You can find more information via FINCEN website here:

https://www.fincen.gov/boi

Questions? Contact us.

Starting January 1, 2024, many companies will be required to report information to the U.S. government about who ultimately owns and controls them.

10/16/2023

Most CA taxpayers now have one more month (till 11/16/2023) to file their 2022 tax.

IR-2023-189, Oct. 16, 2023 — The Internal Revenue Service today further postponed tax deadlines for most California taxpayers to Nov. 16, 2023. In the wake of last winter’s natural disasters, the normal spring due dates had previously been postponed to Oct. 16.

02/25/2023

ERC refunds are not taxable income for California

FTB stated:

“Recently, the Franchise Tax Board provided a response to a question regarding the taxability of the refundable portion of the federal Employee Retention Credit (ERC). The previous response indicated that the portion of the refundable ERC that is refunded to the taxpayer would be income for California income tax purposes. However, upon further review of the applicable federal rules and guidance related to the ERC, the Franchise Board has modified its previous response. An employer receiving the ERC is not required to include the portion of the credit that reduces the employer’s applicable employment taxes, nor the refundable portion of the credit, in its gross income for California income tax purposes.”

https://www.caltax.com/news/hot-news-and-notes/erc-refunds-are-not-taxable-income-for-california/

Questions? Contact us.

The FTB has reconsidered its position regarding California’s tax treatment of the Employee Retention Credit (ERC) and will not require taxpayers to include any portion of the ERC on their California tax return. Specifically, the FTB stated: “Recently, the Franchise Tax Board provided a response ...

02/24/2023

Disaster-area taxpayers in most of California and parts of Alabama and Georgia now have until Oct. 16, 2023, to file various federal individual and business tax returns and make tax payments, the Internal Revenue Service announced today. Previously, the deadline had been postponed to May 15 for these areas.
Among other things, this means that eligible taxpayers will also have until Oct. 16 to make 2022 contributions to their IRAs and health savings accounts.
The Oct. 16 deadline also applies to 2023 estimated tax payments, normally due on April 18, June 15 and Sept. 15. It also applies to the quarterly payroll and excise tax returns normally due on Jan. 31, April 30 and July 31.

IR-2023-33, Feb. 24, 2023 — Disaster-area taxpayers in most of California and parts of Alabama and Georgia now have until Oct. 16, 2023, to file various federal individual and business tax returns and make tax payments, the Internal Revenue Service announced today. Previously, the deadline had bee...

02/11/2023

IRS announced guidance for states—including California—that issued special payments in 2022 related to general welfare and disaster relief and has determined “in the interest of sound tax administration and other factors, taxpayers in many states will not need to report these payments on their 2022 tax returns.”

In California, this federal tax guidance relates to the Middle Class Tax Refund payments that were issued in 2022. California had already determined that these payments are not taxable to state tax purposes.

IRS guidance states that if a payment is made for the promotion of the general welfare or as a disaster relief payment, for example related to the outgoing pandemic, it may be excludable from income for federal tax purposes under the General Welfare Doctrine or as a Qualified Disaster Relief Payment.

IR-2023-23, Feb. 10, 2023 — The IRS provided details today clarifying the federal tax status involving special payments made by 21 states in 2022.

01/13/2023

Tax Relief for Californians Impacted by Storms
TAX EXTENSION

To help alleviate some of the stress many have endured during this trying period, the FTB has extended the filing and payment deadlines for individuals and businesses in California until May 15, 2023.
CLAIMING DISASTER LOSSES

Taxpayers affected by a presidentially declared disaster may claim a deduction for a disaster loss. Taxpayers may claim a disaster loss when filing either an original or amended tax year 2022 tax return.

SACRAMENTO – Californians impacted by winter storms are now eligible to claim a deduction for a disaster loss and will have more time to file their taxes. “Whether it’s more time to file your taxes or…

01/11/2023

IRS: California storm victims qualify for tax relief; April 18 deadline, other dates extended to May 15

IR-2023-03, January 10, 2023 — California storm victims now have until May 15, 2023, to file various federal individual and business tax returns and make tax payments, the Internal Revenue Service announced today.