The U.S. Justice Department filed an appeal Monday challenging the district court’s decision that the law, which requires businesses to report beneficial ownership information, is unconstitutional.
The plaintiffs who won a summary judgment that bars enforcement of the Corporate Transparency Act against them said the Financial Crimes Enforcement Network should pause beneficial ownership information reporting requirements for all businesses.
While acknowledging that the law is well intentioned, the opinion from a U.S. district court in Alabama said Congress lacked authority to enact the business ownership information reporting requirement.
IRS Commissioner Danny Werfel said Thursday that the effort will begin with compliance letters going out to high-income taxpayers in 125,000 cases where third-party information indicated federal tax returns have not been filed since 2017.
The Service said that U.S. withholding agents are administratively exempt from the requirement to e-file Forms 1042 during calendar year 2024, while foreign agents are exempt in calendar years 2024 and 2025.
The rules in the Small Entity Compliance Guide apply to access for some financial institutions and cover security and confidentiality, authorized use, administration of requests, and violations.
Under the Sec. 6417 direct-pay election, tax-exempt organizations, including not-for-profits and governmental agencies, can claim certain energy credits on their federal income tax returns, but to claim them for 2023, the direct-pay election must be made on a timely filed 2023 federal income tax return.
IRS Commissioner Danny Werfel said Wednesday that the audits will focus on business vs. personal use of aircraft by large corporations, large partnerships, and high-income taxpayers.
Practitioners must weigh applicable professional standards and exercise due diligence in assessing whether a taxpayer claiming an employee retention credit must amend one or more income tax returns to reduce deductions of wages for which the credit was claimed.
Andrea Gacki, director of the Financial Crimes Enforcement Network, reassured a House committee that the agency can act only against willful violations of the new beneficial ownership information reporting rule.