The following is select recent federal and Kentucky developments that you may find interesting.
When you think about technology, what’s hotter than AI? Can AI be used to help provide tax advice? Given the subject matter, why not ask Google’s Gemini, available at gemini.google.com, and OpenAI’s ChatGPT, available at ChatGPT.com? Let’s start with the basics.
Several changes to Kentucky’s tax code would enhance Kentucky taxpayers’ rights and increase fairness to Kentucky taxpayers. What is fairness anyway? Fairness is described as “lack of favoritism toward one side or another” by Merriam-Webster Dictionary, “evenhandedness” by Dictionary.com, and “the quality of being reasonable, right, and just” by Collins Dictionary. Following are some such enhancements, all of which are supported and suggested by the Kentucky Society of CPAs.
So, your company or client got audited by the Kentucky Department of Revenue (DOR), and it will not be a no-change audit. Instead, the DOR has informed the taxpayer that they will receive an assessment. What do you do?
The KyCPA publishes an annual outline of legislative priorities. For 2024, the issues are: Guiding principles of sound tax policy Accounting pipeline Tax simplification Some federal priorities, including: Fiscal state of the nation Federatl tax extension "safe harbor" Beneficial Ownership Information (BOI) reporting
The federal income tax has changed radically since its inception in 1861 during the Civil War. The tax rate was a flat 3 percent on income over $800, later repealed in 1872; then, the 16th Amendment took effect on February 25, 1913, which established Congress’ right to impose a federal income tax, which is still in effect today. Ironically, the Titanic sank not even a year prior, on April 15, 1912. Even though the first tax return under the 16th Amendment was due March 1, I have always believed that the Titanic sinking on the ultimate IRS deadline may have foreshadowed how many taxpayers feel about this recognizable date each year. Looking back over the last hundred years of the Accounting Profession in Kentucky, we want to highlight a few interesting facts in federal tax history, starting with the 1924–1949 era, compared to where we are now.
There were many big state tax issues for 2023. This article looks at the following: Alternative apportinment PTET entities Remote workers PL 86-272 Unequal and non-uniform property tax assessments
Tax simplification would make life easier for some, but history paints an unlikely outlook for this sentiment. Temporary tax law changes passed at the end of 2017 as part of the Tax Cuts and Jobs Act (TCJA) are no exception. Several temporary tax laws will expire on December 31, 2025, including all the individual changes and the estate tax exemption. But with an election year next year in 2024, their fate is anyone’s guess. We cannot predict what will happen with certainty, but a few bills out in the legislature that may provide hints about what Congress is focusing on in the near term.
In March 2023, the IRS added aggressive promoters making offers for ERC claims that are too good to be true to the IRS’s “Dirty Dozen” list. Then the IRS put a moratorium, effective September 14, 2023, on processing new claims for Employee Retention Credit through the end of 2023 to give it time to add more safeguards to prevent future abuse and to protect businesses from predatory tactics. The IRS also announced that it is working with the Justice Department to pursue fraud fueled by aggressive marketing. Does this mean that companies should not submit ERC claims? No, but the company making the claim must assume that the IRS will examine it and prepare to prove their claim.
Louisville, Kentucky, is known for many landmarks and distinctions, namely the Kentucky Derby. Natives of the area are proud of the notoriety and the international spotlight; for two minutes in early May, practically the entire world has their eyes on Churchill Downs to witness which horse wins the Run for the Roses. Seventy miles east of Louisville in Lexington, you will find yourself in “The Horse Capital of the World.” In Lexington, Keeneland attracts the masses for several weeks during the spring and fall meet. There is no denying that the state of Kentucky holds its own in the horse industry. Kentucky CPAs have little choice when it comes to understanding tax laws that affect many of their equine-owning clients. Fall is here, and horses are running again, let’s visit a few federal tax laws common to clients who dabble in or make their living racing horses.
