ERC Updates, Texas Geothermal Energy Project, and First 3D Printed Neighborhood
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SPECIAL REPORT: ERC UPDATES
Virginia Senators Mark Warner and Tim Kaine have urged the IRS to address significant delays in processing COVID-19 Employee Retention Tax Credit (ERTC) payments, which have left many businesses in financial limbo.
In a letter to IRS Commissioner Danny Werfel, the senators expressed concerns over the impact of these delays on small businesses that are relying on the ERTC to recover from the pandemic's economic challenges.
Warner and Kaine highlighted that the backlog is causing undue strain on businesses already struggling to stay afloat, emphasizing the need for swift action to expedite the processing of claims.
The senators have requested detailed information on the steps the IRS is taking to resolve the issue and to ensure timely payments moving forward. This appeal reflects growing frustration among lawmakers and businesses alike regarding the slow pace of ERTC disbursements.
August 15: IRS Reopens Voluntary Disclosure Program to Address Problematic Employee Retention Credit Claims
The IRS has reopened its Voluntary Disclosure Program (VDP) to assist businesses that have improperly claimed the Employee Retention Credit (ERC).
The program aims to help businesses rectify these errors and avoid harsher penalties, as the IRS estimates over $1 billion in questionable claims have been filed.
To address this issue, the IRS is sending up to 30,000 letters to businesses that may have claimed the credit erroneously, urging them to review their submissions and use the VDP if needed.
The move is part of a broader effort by the IRS to crack down on ERC fraud while providing a pathway for businesses to come forward voluntarily and correct mistakes.
The IRS has emphasized the importance of compliance and transparency, encouraging businesses to take advantage of the program to avoid more severe consequences.
August 15: IRS Provides Details of Second Employee Retention Credit Voluntary Disclosure Program
The IRS has launched a second Voluntary Disclosure Program (VDP) specifically targeting improper claims related to the Employee Retention Credit (ERC).
This program, open through November 22, 2024, allows businesses that may have incorrectly claimed the ERC to voluntarily correct their filings with reduced penalties.
The initiative is part of the IRS’s broader effort to address widespread fraud and errors within the ERC claims process, particularly following the large number of erroneous claims identified earlier. Businesses participating in the program must provide detailed documentation and explanations for their previous claims.
The IRS has emphasized the importance of transparency and has warned that harsher penalties will be imposed on those who do not come forward voluntarily. This second VDP offers a critical opportunity for businesses to rectify their claims while minimizing potential legal and financial repercussions.
IRS Provides Guidance on How to Withdraw an Employee Retention Credit (ERC) Claim
The IRS has issued new guidance for businesses seeking to withdraw an Employee Retention Credit (ERC) claim, particularly for those that may have claimed the credit in error or under questionable circumstances.
This guidance allows businesses to formally retract their ERC claims by submitting a signed statement to the IRS, which must include the details of the original claim and an explanation for the withdrawal.
The IRS is encouraging businesses to use this withdrawal process to correct any mistakes before the agency takes further action.
This move is part of the IRS’s broader efforts to address and reduce fraudulent or improper ERC claims, ensuring that businesses rectify their filings in a timely and compliant manner.
The agency also highlights that withdrawing an improper claim can help businesses avoid potential penalties and interest associated with erroneous filings.
Tax Policy/News:
August 20: IRS, Security Summit Highlight "Security Six" and Key Steps for Tax Pros to Protect Themselves
The IRS, in collaboration with the Security Summit, is emphasizing the importance of the "Security Six"—a set of essential security measures that tax professionals should implement to safeguard their data and systems.
These measures include using anti-virus software, setting up firewalls, employing two-factor authentication, encrypting sensitive data, creating backups, and ensuring a secure virtual private network (VPN) is in place.
The initiative is part of the broader effort to protect tax professionals and their clients from the growing threat of cyberattacks and data breaches. The IRS also urges tax professionals to stay informed about the latest security threats and to take proactive steps to secure their digital environments.
This campaign underlines the critical role that tax professionals play in protecting the integrity of the tax system and the sensitive information they handle.
August 19: Child and Dependent Care Tax Credit Can Help Offset Summer Day Camp Expenses
The IRS has highlighted that taxpayers with children may benefit from the Child and Dependent Care Credit, which can help offset costs associated with summer day camps.
This credit, which can cover up to 35% of qualifying expenses, is available to parents and guardians who pay for child care services to enable them to work or actively seek employment.
Eligible expenses include not only summer day camps but also before- and after-school care.
The maximum credit is $3,000 for one qualifying individual and $6,000 for two or more, with income levels influencing the exact percentage of expenses covered.
The IRS encourages eligible taxpayers to retain receipts and documentation to substantiate their claims. This credit offers significant financial relief, particularly for working families, by reducing the net cost of child care during the summer months.
Economic News/Policy:
August 20: Harris to Pursue 28 Percent Corporate Tax Rate
Vice President Kamala Harris has announced her intention to push for an increase in the corporate tax rate to 28 percent, marking a significant shift from the current 21 percent rate established by the 2017 Tax Cuts and Jobs Act.
Harris argues that the hike is necessary to ensure that corporations pay their fair share, especially as the government seeks to fund infrastructure and social programs.
The proposed rate aligns with the Biden administration’s broader fiscal policy goals but is likely to face resistance from Republicans and business groups who argue that it could hinder economic growth and competitiveness.
The proposal also underscores the ongoing debate about tax equity and the balance between stimulating the economy and generating government revenue.
As this issue progresses, it will likely be a key topic in the upcoming elections and broader policy discussions.
August 16: Kamala Harris Unveils Economic Plan Focused on Equity and Climate
Vice President Kamala Harris has introduced a comprehensive economic plan that emphasizes equity, job creation, and climate resilience.
The plan includes significant investments in green energy, infrastructure, and initiatives aimed at reducing economic disparities, particularly for marginalized communities.
Harris outlined her strategy to enhance workforce development through expanded access to education and training programs, while also addressing barriers to employment such as affordable childcare.
The proposal also includes measures to support small businesses and entrepreneurs, particularly those from underrepresented groups, by increasing access to capital and resources.
With an eye on the future, Harris’s plan aims to position the U.S. as a leader in the global green economy, aligning economic growth with environmental sustainability. However, the plan is expected to face opposition from Republican lawmakers concerned about the cost and potential regulatory impacts.
Technology:
August 13: Texas Grid Could Get Boost from New Geothermal Energy Project
A new geothermal energy project in Texas could enhance the reliability of the state's electric grid by tapping into the Earth’s natural heat.
The project, spearheaded by a collaboration between the University of Texas at Austin and various energy companies, aims to harness geothermal energy as a sustainable and consistent power source.
Unlike solar or wind energy, geothermal provides a stable output regardless of weather conditions, making it a potentially valuable addition to the Texas grid, which has faced challenges in recent years due to extreme weather events.
The initiative also seeks to repurpose existing oil and gas infrastructure, leveraging the state's expertise in drilling and subsurface technology.
If successful, this project could position geothermal energy as a key player in Texas's transition to a more resilient and sustainable energy system.
August 12: World's Largest 3D-Printed Neighborhood Takes Shape in Georgetown, Texas
Georgetown, Texas, is now home to the world’s largest 3D-printed neighborhood, a groundbreaking project spearheaded by construction technology company ICON.
The neighborhood features 100 single-family homes, all constructed using advanced 3D-printing technology, which significantly reduces construction time and costs while enhancing design flexibility and sustainability.
Each home is built with a concrete-based material, providing greater durability and energy efficiency compared to traditional construction methods.
This project marks a major milestone in the housing industry, showcasing the potential of 3D printing to address housing shortages and affordability challenges.
The homes are designed to blend modern aesthetics with environmental sustainability, aligning with the growing demand for eco-friendly housing solutions.
As the neighborhood takes shape, it represents a significant step forward in the adoption of innovative construction technologies on a large scale.
Energy and Environmental Policy/News:
August 16: EPA Defends Climate Change Funds Amid GOP Scrutiny
EPA Administrator Michael Regan defended the agency’s allocation of funds for climate change initiatives amid growing criticism from Republican lawmakers.
During a House hearing, GOP members raised concerns over the transparency and effectiveness of the EPA’s spending, particularly regarding the billions allocated for climate-related projects under the Inflation Reduction Act.
Regan emphasized the importance of these funds in addressing climate change and supporting environmental justice initiatives, arguing that the investments are crucial for public health and future economic stability.
Despite the criticism, Regan maintained that the EPA is committed to accountability and is taking steps to ensure that the funds are used effectively.
The debate highlights the ongoing tension between the Biden administration’s climate agenda and Republican concerns over government spending and regulatory overreach.
For Fun:
August 14: Probiotic-Powered Bandages Generate Electricity to Fight Infections
Researchers have developed innovative probiotic-powered bandages that generate electricity to help fight infections, particularly in chronic wounds.
These bandages harness the natural metabolic processes of probiotics, which produce electrical energy as they consume glucose.
The generated electricity not only powers the bandage but also stimulates tissue regeneration and enhances the antimicrobial properties of the bandage material.
This dual-action approach is particularly beneficial for patients with diabetes or other conditions that impede wound healing. Early studies have shown promising results, with the probiotic bandages effectively reducing bacterial growth and promoting faster recovery in animal models.
This breakthrough could revolutionize wound care by providing a more effective, sustainable, and potentially low-cost treatment option for managing chronic wounds.