Certain small business owners may qualify for tax breaks by making their premises accessible to people with disabilities. The CDC reports that 61 million people in the United States are affected by disabilities. The Disabled Access Credit is a nonrefundable credit for up to 50% of eligible access expenditures made by qualifying small businesses in each year the costs are incurred.
Also available is a barrier removal tax deduction when a business removes an architectural barrier that improves access for persons with disabilities and the elderly. Both tax benefits can be used in the same year if the requirements are met. Click here to learn more.
The cost of business fraud is ramping up, said the Assoc. of Certified Fraud Examiners (ACFE). In its biannual report, the ACFE said the median fraud loss per incident rose in the last two years from $117,000 to $145,000. The good news is, more businesses have adopted fraud detection and prevention measures.
The top methods of detection are tips, internal and external audits, and management reviews. The best defenses against fraud are robust internal controls, including surprise audits, management review and fraud training, the report found. Fraud training sends a powerful message to dishonest people of the intention to fight fraud where it occurs. Learn more here.
One of the lesser-known tax breaks available to qualified businesses and individuals is the rehabilitation credit. If you own (or in some cases, lease) a historically important building and renovate it, you may be able to claim a 20% credit of eligible rehabilitation costs. Covered expenses include those for renovation, restoration and rehabilitation, but not enlargement or new construction. In general, a qualified building must be listed on the National Register of Historic Places or belong to a "registered historic district." And the cost of the renovation must exceed the greater of $5,000 or the building's adjusted basis. For more details, click here or contact us.
The IRS is continuing its focus on compliance issues among some high-income earners, including partnerships. With funding from the Inflation Reduction Act (IRA), the agency is developing guidance designed to close loopholes used by some partnerships. Currently, the IRS is looking at tens of billions of dollars of deductions claimed by partnerships, with a focus on abusive transactions known as "basis shifting." IRS Commissioner Danny Werfel calls basis shifting a sophisticated "shell game" that allows "complex partnership arrangements to hide from a tax bill." These maneuvers have been difficult to uncover, he said, but with IRA funding, work in this noncompliance area is accelerating.
A recent announcement identified a scheme that could've cost taxpayers $3.5 billion in fraudulent payments. An investigation by the Treasury Inspector General for Tax Administration (TIGTA) found that individuals had obtained Employer ID Numbers (EINs) for businesses that may not be active. The EINs were used to file tax returns claiming Employee Retention Tax Credits and COVID-19-related credits for sick and family leave. TIGTA alerted the IRS, which implemented controls to thwart the scheme.
"This is a great example of how TIGTA can save the federal government and taxpayers billions of dollars," stated Acting Inspector General Heather Hill. For more information click here.
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