Business Frame Weekly - 2023 Tax Filing to Start Jan 23 / Troubleshooting QuickBooks Opening Balances / Effective Big Corporation Tax Rate Fell to 9%

The average effective tax rate of profitable large corporations fell from 16% in 2014 to 9% in 2018 after passage of the Tax Cuts and Jobs Act of 2017, according to a report released last Friday by the Government Accountability Office.

One of the tools in QuickBooks Desktop called Troubleshoot Prior Account Balances is useful in helping you identify balances that are different in the client’s books from your own records for the client from your last review.

After the Tax Cuts and Jobs Act of 2017 passed, the Government Accountability Office reported that the average effective tax rate of big corporations fell from 16% in 2014 to 9% in 2018.

In this newsletter:

• IRS Says 2023 Filing Season to Start on Jan. 23
• Troubleshooting Opening Balances in QuickBooks Desktop
• Effective Tax Rate for Big Corporations Fell to 9% After TCJA
• PEEC Updates Code for Compliance Audits
• House Republicans Aim to Abolish IRS, Replace Income Tax
• Financial Accounting Foundation Seeks Nominations for Financial Accounting Standards Board Member

January 17, 2023

IRS Says 2023 Filing Season to Start on Jan. 23

The 2023 tax-filing season will open on Jan. 23—the day in which the IRS will begin accepting and processing 2022 tax year returns, the agency said on Thursday. The IRS said it is expecting more than 168 million individual tax returns to be filed this year, with the majority of those returns coming before the April 18 tax deadline. Taxpayers have three extra days to file in 2023 due to the calendar.

Troubleshooting Opening Balances in QuickBooks Desktop

The QuickBooks Desktop Client Data Review offers a variety of tools to assist you in your periodic review of a client's data. One of the tools, Troubleshoot Prior Account Balances is especially beneficial in helping you identify balances that are different in the client's books from your own records for the client from your last review. This feature, which displays the differences in the balances, also suggests adjusting entries to correct the opening balances. The feature is available for accountants and ProAdvisors in their QuickBooks Desktop Accountant and QuickBooks Enterprise Accountant versions.

Effective Tax Rate for Big Corporations Fell to 9% After TCJA

The average effective tax rate of profitable large corporations fell from 16% in 2014 to 9% in 2018 after passage of the Tax Cuts and Jobs Act of 2017, according to a new government report. The report, released last Friday by the Government Accountability Office, noted that each year from 2014-18, approximately half of large corporations and a quarter of profitable ones didn't owe federal taxes. In the first year after the law went into effect, the effective tax rate for profitable corporations was 8.9%, a 40% drop from the prior year, and 34% of profitable corporations paid zero in taxes, a 25% increase from the previous year.

PEEC Updates Code for Compliance Audits

The AICPA Professional Ethics Executive Committee (PEEC) has approved revisions to the AICPA Code of Professional Conduct related to compliance audits. PEEC took a closer look at how independence requirements are currently being applied in compliance audits and found that the requirements are overly cumbersome and are not being applied consistently. To provide clarity and align the requirements with applicable threats, PEEC has approved two new definitions and one revised definition related to independence in compliance audits. The changes apply to members in public practice. These revisions to the code will be effective for compliance audits beginning after June 15, 2023, with early implementation allowed.

House Republicans Aim to Abolish IRS, Replace Income Tax

The new speaker of the House, Kevin McCarthy, R-California, agreed as part of a deal with conservatives in the Freedom Caucus to win the speakership to allow a vote on a bill that would abolish the IRS of much of the extra $80 billion in funding and institute a "Fair Tax" that would replace federal income taxes and other taxes with a national consumption tax administered by the states. On Tuesday, Rep. Earl L. "Buddy" Carter, R-Georgia, introduced H.R. 25, The Fair Tax Act, to replace the current Tax Code with a national consumption tax known as the Fair Tax. The bill would impose a 23% sales tax according to the legislation, although ITEP federal policy director Steve Wamhoff believes the true costs could add up to 30% or higher.

Financial Accounting Foundation Seeks Nominations for Financial Accounting Standards Board Member

The Board of the Financial Accounting Foundation (FAF) today announced it is seeking nominations for a new member of the Financial Accounting Standards Board (FASB). Though the official start date for the new FASB position would be July 1, 2024, the newly appointed member would be expected to start some time earlier in that year to ensure a successful transition. The initial five-year term will extend through June 30, 2029, at which time the Board member would be eligible to be considered for reappointment. A full description of the FASB member opportunity can be found on the FAF website.

Random Ramblings

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• The hallmarks of a top-performing CAS practice.
• Why it's time for your business to accept crypto payments.
• Key tax and retirement provisions in the Secure 2.0 Act.