Every year the IRS puts out their "Dirty Dozen" list of tax scams. This year they spotlighted fraud related to the Employee Retention Credit. Scammers have been trying to con businesses that are not eligible into claiming the credit. There have been numerous alerts from the IRS about such scams but they persist, which usually means the con artists are having some success. One thing the IRS has pointed out is that ads on the internet and radio have been part of this; just because something is in an advertisement doesn't mean it is legitimate. Do not fall for these ads full of inaccurate information that can cause you and your business a world of trouble. 

"Businesses need to think twice before filing a claim for these credits. While the credit has provided a financial lifeline to millions of businesses, there are promoters misleading people and businesses into thinking they can claim these credits." said IRS Commissioner Danny Werfel. "There are very specific guidelines around these pandemic-era credits; they are not available to just anyone. People should remember the IRS is actively auditing and conducting criminal investigations related to these false claims. "

Be careful and remember we stand behind our work and behind your business. Call us.

- Sec. 174 Research 1 Year Expense Bill Started in Congress

This bi-partisan bill from Sens Maggie Hassan (D-N.H.) and Todd Young (R-Ind.) would roll back the provision of the 2017 Tax Cuts and Jobs Act law that, as of last year, required companies to amortize R&D costs over five years rather than in the year they were incurred. Money now, deductions now, are better than "later." This bill would also expand eligibility for refundable research tax credit and would raise the cap for that credit for startups and small businesses.

The bill didn't find its way into the 2022 omnibus spending bill, but it may find new life as a stand-alone bill. We will be monitoring this closely, so you don't have to. 

-California Sales Tax Manufacturing or Research & Development 50% Exemption

California businesses are eligible for a 50 percent reduction of sales tax on purchases, leases or sales of equipment used in manufacturing. Generally speaking this refers to anything that is not consumed in the manufacturing process.

Also note that what you THINK is a "manufacturer" may be entirely different from what the great state of California legally considers to be a manufacturer. There are similar reductions in California for research and development. Obviously such reductions can increase a businesses' profit margin and revenue. We'd be thrilled to help you take advantage.