That hurt my head. Am I reading this right, where previously we were all told do not add to income in year received, but amend the original. The IRS has flip flopped and is now saying we can include it as income in the year received?
Is this their way of saying that the 3 year SOL is not starting from the year filed, but now starts from when the ERC was actually received?
So glad it's Friday and drinktations can begin soon.
My Sch C client received his 2021 ERC in 2023. So we amended his 2021 tax return to decrease his wages deduction. He just received a notice indicating he owed $4,500 of interest expense that was computed beginning with 4/15/2022.
What do you think about amending his 2021 return by taking the full wages deduction and then amending 2023 by taking the reduced wages deduction. Now, interest expense would only be computed from 4/15/2024. He could save a few thousand dollars of interest. Would take us no time. Your thoughts.....I know we have SOL to worry about with respect to 2021 amended return.
I personally would not do this. The matter has been resolved via the amended return, and now you have to manage a refund claim and an additional assessment of tax.
This is not good news for several of my clients. I have a C-Corp that received the ERC Credits... all but 1... He sold the business and we were going to amend his 2020 return and he would owe nothing because he had a loss. 2021 would have been only a little. He sold the business so the loss couldn't be rolled to new owner and if the new owner has to include on her return she's going to have a fit. And there is no way the previous owner is going to be able to pay back all of that since we knew he wouldn't have to pay much because of the loss. THIS IS GOING TO BE A NIGHTMARE!!!!!
That hurt my head. Am I reading this right, where previously we were all told do not add to income in year received, but amend the original. The IRS has flip flopped and is now saying we can include it as income in the year received?
Is this their way of saying that the 3 year SOL is not starting from the year filed, but now starts from when the ERC was actually received?
So glad it's Friday and drinktations can begin soon.
This is the IRS attempting to recoup monies they lost the right to collect.
My Sch C client received his 2021 ERC in 2023. So we amended his 2021 tax return to decrease his wages deduction. He just received a notice indicating he owed $4,500 of interest expense that was computed beginning with 4/15/2022.
What do you think about amending his 2021 return by taking the full wages deduction and then amending 2023 by taking the reduced wages deduction. Now, interest expense would only be computed from 4/15/2024. He could save a few thousand dollars of interest. Would take us no time. Your thoughts.....I know we have SOL to worry about with respect to 2021 amended return.
I personally would not do this. The matter has been resolved via the amended return, and now you have to manage a refund claim and an additional assessment of tax.
This is not good news for several of my clients. I have a C-Corp that received the ERC Credits... all but 1... He sold the business and we were going to amend his 2020 return and he would owe nothing because he had a loss. 2021 would have been only a little. He sold the business so the loss couldn't be rolled to new owner and if the new owner has to include on her return she's going to have a fit. And there is no way the previous owner is going to be able to pay back all of that since we knew he wouldn't have to pay much because of the loss. THIS IS GOING TO BE A NIGHTMARE!!!!!