Want to Escape being Audited?

Tax Services Warminster

Have your business operate as an S-corporation or a partnership!

The IRS continues to struggle to audit S-corp and partnership returns. This situation is likely to get worse as the more experienced IRS business auditors continue to retire. Audit rates for S corps and partnerships are both 0.22 percent — or, put another way, one in every 455 passthrough entities were examined in 2018. It is no wonder that the number of S corporations have increased by 38 percent from 2005 to 2018 (3.5 million in 2005 versus 4.85 million in 2018).

IRS Confirms Tax break For Large Gifts

The Tax Cuts and Jobs Act temporarily increased the basic exclusion amount for gifts (BEA) from $5 million to $10 million for tax years 2018 through 2025, with both dollar amounts adjusted for inflation. For 2019, the inflation-adjusted BEA is $11.4 million. In 2026, the BEA will revert back to the 2017 level of $5 million, as adjusted for inflation.

On November 22, 2019 IRS issued Final Regulations that individuals who take advantage of the increased gift and estate tax exclusion amounts in effect from 2018 to 2025 won’t be penalized after year 2025. They will be allowed to use higher of BEA applicable to the period the gifts were made in.