Top Federal Tax Issues for 2023 CPE Course: Module 1

Author: Jim Buttonow, Steven D. Mercatante, Allison McLeod, Greg White, James R. Hamill

Wolters Kluwer's Top Federal Tax Issues Course identifies those recent events that have developed into the current “hot” issues of the day. These tax issues have been selected as particularly relevant to tax practice in 2023. They have been selected not only because of their impact on return preparation during the 2023 tax season but also because of the important role they play in developing effective tax strategies for 2023 and beyond.

This module reviews 1099 essentials, understanding the new K-2 and K-3 filing requirements, how to handle the top 10 issues in an IRS small business audit, maximizing the employee retention credit, partnership and S corporation tax filing issues, and highlights for passthrough entities.

Publication Date: October 2022

Topics Covered

• Overview
• 1099 Essentials Start with the W-9
• Data Validation Basics
• Watch Out for the Middleman
• Corrections Tips
• B-Notice Response Best Practices
• Protect Yourself
• Overview of Schedules K-2 and K-3
• Transition Relief
• IRS Frequently Asked Questions
• Other Issues
• AICPA Requirements
• The Top 10 Audit Issues
• Honorable Mentions
• Final Tips
• Six Key Takeaways
• Paycheck Protection Program Loans: Interaction with ERC
• American Rescue Plan Act Changes to the ERC
• Wages Paid to Majority Shareholders and Relatives
• Partial Suspension
• PPP Loan Forgiveness and the ERC: No Double-Counting
• The ERC Reduces Deductions
• Paycheck Protection Program Loan Issues
• SALT Workaround Issues
• Qualified Business Income Deduction: Issues and Reporting
• Reporting Tax Basis Capital
• Centralized Partnership Audits
• Section 179 reporting
• Reporting Passive Activity Loss Activities
• Allocations of Profit and Loss: Partnership
• Determining Shares of Liabilities: Partnerships
• Qualified Opportunity Funds
• Qualified Business Income Deduction
• Entities Subject to Code Sec. 163(j)
• The QBID and Rental Real Estate
• Revenue Procedure 2019"38: Safe Harbor
• Carried Interest
• Employee Retention Credit

Learning Objectives

• Identify the key elements needed to comply with IRS requirements and discover how best to respond to the IRS
• Recognize what payments you are required to 1099 report and how to recognize when those payments are reportable
• Identify Form 1099-NEC/MISC boxes
• Describe what information you need from your payee to properly report a payment
• Recognize how to use the W-9 to collect the correct information and when you are required to obtain a signed W-9
• Identify how to use the IRS TIN Matching Program and how it can help ensure the information you have is correct
• Differentiate Code Sections that apply to 1099 reporting
• Identify best practices for B-Notices
• Understand the purpose of Schedules K-2 and K-3
• Identify the general requirements for Schedules K-2 and K-3
• Recognize each part of Schedules K-2 and K-3 and who is required to meet reporting standards
• Describe the relief options available for incomplete Schedule K-2 and K-3 filing
• Describe the reasons for compliance focus on small businesses
• Recognize the top 10 IRS audit focus areas for small businesses
• Describe how to evaluate a client's records and identify the critical records in an IRS small business audit
• Identify the steps to prepare for a small business audit
• Recognize how much annually the U.S. Treasury loses due to noncompliance
• Recognize approximately what percentage of the tax gap is accounted for by individuals
• Identify the factors the IRS uses to determine control with regard to worker status
• Identify clients who qualify for the employee retention credit (ERC)
• Explain how to compute the ERC
• Describe how to allocate wages between Paycheck Protection Program (PPP) loan forgiveness and the ERC
• Identify an advantage of using the prior quarter for the 80 percent test
• Identify in which types of situations a business would qualify for a partial suspension
• Recognize the establishments that would be subject to a partial suspension of the ERC caused by a government order
• Name the form that should be filed if a business missed claiming the ERC
• Identify key reporting issues in pass-through entities
• Recognize how to provide the most useful information to the owner
• Determine the amount in which phaseout of the qualified business income deduction (QBID) ends for single and married taxpayers
• Describe correct statements regarding capital account reporting
• Recognize the four situations that require reporting S corporation shareholder basis
• Identify issues in tax basis capital reporting
• Identify how to advise pass-through clients on the Tax Cuts and Jobs Act and CARES Act
• Recognize and apply the new effective tax rates and 20 percent deduction for K-1 income
• Describe tax incentives provided
• Summarize court cases that found the rental real estate in question was in fact a business
• Describe the different types of qualified opportunity funds
• Identify the 2022 threshold amount for the qualified business income deduction (QBID) for married filing jointly taxpayers
• Recognize aggregation factors with respect to QBID
• Identify the number of ways a rental can produce qualified business income
• Identify the 2021 maximum employee retention credit per employee per quarter
• Recognize which form is used to claim the employee retention credit

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (11 hours)

Program Prerequisites
None

Advance Preparation
None