Probity Tax Recovery is a tax consulting firm specializing in tax credits and incentives for small to mid-sized businesses. We work with business owners and their CPAs to identify tax credits and incentives while saving you time and money. Schedule a free consultation with a member of our team here.

FINCEN FILING: Beginning this year, most small companies have a NEW small business filing requirement with FinCEN call the Business Ownership Information Report, that can be time confusing. Failure to file or erroneous filings can result in jail time and up to $10,000 in fines. Our team can handle the filing for you with minimal effort on your end. To get started, schedule a time to speak with us here.

Tax Policy/News:

November 19: Musk’s Government Efficiency Role May Target IRS Employees with Tax Delinquencies  

Elon Musk, in his new role as co-head of the Department of Government Efficiency, has hinted at reviewing unpaid taxes by IRS employees, following a report that agency staff owe $50 million in taxes.  

The department, announced by President-elect Donald Trump, is an advisory body tasked with identifying and reducing government waste, aiming for structural reform and an entrepreneurial approach to governance by July 4, 2026.   

While symbolic, focusing on IRS employees aligns with Republican criticisms of the agency as mismanaged and overreaching. Critics argue targeting civil servants undermines morale and distracts from the IRS’s essential role as a revenue generator. Former IRS Commissioner Charles Rettig noted that over 99% of employees comply with filing requirements, and many delinquent accounts are under repayment agreements.   

Skepticism remains about the scope and impact of the commission’s work. While Musk claims up to $2 trillion in potential savings, analysts question whether reforms will address inefficiencies in tax administration or focus solely on spending cuts. The initiative underscores ongoing debates over the IRS's role, funding, and perceived accountability in federal governance. 

November 18: IRS Highlights Fraud Reporting and Taxpayer Protection During International Fraud Awareness Week 

During International Fraud Awareness Week, November 17-23, the IRS is urging taxpayers, businesses, and professionals to recognize and report tax-related fraud, scams, and schemes.  

The agency emphasizes using tools like Form 3949-A to report false exemptions, unreported income, multiple filings, and other tax law violations. Tax-exempt organizations suspected of noncompliance can be reported using Form 13909, while individuals providing credible fraud-related information may qualify for monetary awards through Form 211 submissions. 

The IRS also cautions against scams featured in its annual "Dirty Dozen" list, including phishing, fraudulent Employee Retention Credit claims, and fake charities. Reports of abusive tax preparers or promoters can be made using Form 14242, with referrals potentially leading to audits, penalties, or criminal action. 

The IRS Office of Fraud Enforcement and its Security Summit partners continue to enhance fraud detection and enforcement measures to protect taxpayers and ensure compliance with tax laws. Taxpayers are encouraged to remain vigilant and use available resources to guard against scams and fraud. 

November 15: Republican Election Wins Energize Trump’s Vision for Expansive Tax Reforms   

The Republican win of the presidency and Congress gives Donald Trump a clear path to expand his 2017 tax cuts, with proposals to further reduce corporate taxes, exempt tips from federal income tax, and extend expiring provisions benefiting businesses and wealthy families.  

These measures could add trillions to the federal deficit, sparking internal GOP debates over deficit financing and economic growth claims.  

Trump has suggested tariffs on imports, particularly Chinese goods, to offset costs, though experts question their viability. Restoring the full state and local tax (SALT) deduction is unlikely due to its high revenue loss.  

Republicans aim to pass a tax bill early in Trump’s term, but negotiations are expected to be complex, with business lobbying intensifying and Democrats targeting specific Republicans to influence provisions. Balancing ambitious tax cuts with fiscal responsibility will be a key challenge. 

Economic News/Policy:

November 19: Trump’s Proposed Tariffs Could Raise Consumer Costs and Spark Retaliation  

President-elect Donald Trump’s proposed tariffs—up to 60% on Chinese imports and 10-25% on imports from other countries—are expected to increase costs for American consumers and could trigger global retaliation.  

While Trump has framed tariffs as a way to fund extensions of the Tax Cuts and Jobs Act and replace some income taxes, analysts remain skeptical about their effectiveness. For instance, a 10% tariff on all imports could raise up to $2.7 trillion over 10 years, but dynamic market shifts would reduce that revenue significantly.   

The tariffs are projected to cost a typical American household $2,600 annually, disproportionately impacting lower-income groups, while the wealthiest Americans could see net gains due to concurrent tax cuts. Trade partners like the EU and China are preparing retaliation lists targeting politically sensitive U.S. sectors such as agriculture. For example, China’s retaliation could devastate U.S. soybean exports, a key sector worth $36.4 billion annually, shifting demand to competitors like Brazil and Argentina. 

Economists warn that a return to aggressive tariff policies could echo the economic damage caused by the 1930 Smoot-Hawley Tariff Act. Retaliatory measures and increased consumer costs risk exacerbating economic tensions globally, with potential trade wars looming as trading partners aim to protect their interests. 

November 17: Small Businesses Struggle with Inflation During Critical Holiday Season  

Small businesses across the U.S. are grappling with inflation as the holiday season—a vital period for many—approaches. Businesses like Enjou Chocolat in New Jersey are facing rising costs for materials and labor, forcing them to increase prices, which has alienated some customers.  

Inflation remains a top concern among small business owners, with a recent NFIB survey showing that 23% consider it their biggest challenge. Unlike large retailers like Walmart and Target, which can implement broad price cuts, small businesses have less flexibility and tighter profit margins, amplifying their financial strain.   

Despite these challenges, there are signs of hope. Consumer spending in October rose by 0.4%, indicating resilience in holiday shopping trends. Surveys also suggest a strong commitment among shoppers to support local businesses, with 78% of respondents planning to shop at a small business for the first time this season.  

As small business owners navigate inflation and customer pushback on price hikes, they remain cautiously optimistic that the holidays will help them meet their financial goals. 

November 14: Biden Hits Milestone of 20 Million Small Business Applications Before Leaving Office  

The Biden administration has reached a record-breaking 20 million new small business applications since President Joe Biden took office, a milestone confirmed by the Census Bureau and announced by the White House.  

This marks the strongest period of small business growth for any presidential term since record-keeping began in 2004. Biden attributed the surge to government investments that expanded lending opportunities and assistance, highlighting increased business ownership among Black, Hispanic, and women entrepreneurs.   

Despite this achievement, small business optimism remains tempered. While the NFIB Small Business Optimism Index hit a two-year high in October, it remained below its 50-year average for the 34th consecutive month, with ongoing concerns about inflation and economic challenges.  

Technology:

November 18: Federal Funding Available for Small Ed-Tech Entrepreneurs   

Small ed-tech entrepreneurs can now apply for up to $1.25 million in grants through the U.S. Department of Education’s Institute of Education Sciences Small Business Innovation Research (SBIR) program.  

Open to companies with fewer than 500 employees, the program supports the development of innovative educational tools, particularly those leveraging AI and interactive learning.  

Examples of 2024 projects include AI-powered tools like ChatGPT-based quizzing systems, mental health dashboards, and literacy-enhancing devices such as the Kibeam Wand Reading System, which assesses and supports children’s reading skills. Interactive learning tools, such as circuitry kits and educational games, were also prominent.  

The application deadline for 2025 funding is January 8, with $10 million available annually to foster advancements in ed-tech. 

November 15: OpenAI and Others Seek Smarter AI as Current Methods Face Limitations  

AI companies, including OpenAI, are reevaluating strategies for developing large language models amid challenges such as escalating costs, limited data, and hardware constraints.  

Traditional methods of scaling models with more data and computational power have shown diminishing returns, prompting researchers to explore alternatives like "test-time compute." This technique enables AI to simulate human-like reasoning by evaluating multiple solutions during the inference phase, enhancing problem-solving without massive pre-training.   

OpenAI’s latest model, o1, leverages this approach, combining multi-step reasoning with curated data and feedback from experts. Other labs, including Google DeepMind, xAI, and Anthropic, are pursuing similar advancements.  

These shifts could transform the AI landscape, reducing reliance on expensive pre-training clusters and reshaping demand for chips like Nvidia’s, which currently dominate AI hardware markets. Prominent investors are closely monitoring the implications as the AI industry adjusts its approach to innovation and scalability. 

Energy and Environmental Policy/News:

November 15: DOE Awards Over $17M for Local Decarbonization and Energy Efficiency Projects  

The Department of Energy has allocated more than $17.7 million to 61 local and territorial governments for decarbonization and energy efficiency initiatives under the Energy Efficiency and Conservation Block Grant (EECBG) program.  

Funded by the 2021 infrastructure law, the program supports a wide array of projects aimed at reducing energy use and pollution while promoting clean energy at the community level.  

Recent grants will fund diverse efforts, including net-zero building road maps, recycling initiatives, energy efficiency rebates for disadvantaged residents, and expansions of bike and pedestrian infrastructure.   

Atlanta plans to use its funds for energy retrofits and certifications in underperforming buildings, while Indianapolis will establish a workforce training program for energy audits. Largo, Florida, intends to host community classes on smart energy tools and weatherization.  

Though the program is no longer accepting applications from local governments, tribal governments have until May 2025 to apply. Energy Secretary Jennifer Granholm emphasized the importance of local action in achieving the nation’s clean energy goals. 

November 15: Trump Transition Team Plans to End EV Tax Credit, Sparking Concerns Over U.S. Competitiveness  

The Trump transition team is reportedly planning to eliminate the $7,500 federal tax credit for electric vehicle (EV) purchases, a key component of President Biden’s Inflation Reduction Act.  

The move could significantly impact the already slowing U.S. EV transition and intensify competition with global markets, particularly China. Despite potential repercussions, Tesla, the largest U.S. EV maker, has voiced support for ending the subsidy, with CEO Elon Musk noting it would hurt competitors more than Tesla.   

The proposal is being discussed by Trump’s energy-policy transition team, led by oil executive Harold Hamm and Republican North Dakota Governor Doug Burgum, who was recently nominated for interior secretary. Critics, including U.S. Energy Secretary Jennifer Granholm, warn that canceling the credit would undermine American competitiveness in EV manufacturing. Automakers and industry groups have urged Congress to retain the credit, emphasizing its importance for maintaining global leadership in auto innovation.   

While Trump campaigned on ending Biden’s “EV mandate,” specifics of the policy remain unclear, leaving the future of U.S. EV incentives uncertain as the administration prepares for its term. 

November 14: Musk’s Influence on Trump May Reshape the Electric Vehicle Landscape 

Elon Musk’s appointment as co-head of the Department of Government Efficiency under President-elect Donald Trump has sparked scrutiny over potential conflicts of interest, given Tesla’s position as the nation’s largest EV maker.  

Musk’s new role allows him significant sway over federal policies affecting electric vehicles and other industries tied to his businesses, raising concerns about how his influence might shape decisions to benefit Tesla while disadvantaging competitors.   

Trump’s administration has signaled plans to eliminate the $7,500 EV tax credit, a move Musk himself has acknowledged could harm competitors more than Tesla. Analysts agree that ending the credit could significantly reduce EV sales and derail traditional automakers’ electrification efforts, while Tesla, with its more advanced EV operations, would likely emerge stronger.   

Musk’s government role also intersects with federal subsidies that have benefited Tesla, such as grants for EV chargers and California’s emissions credit system, which earned Tesla $739 million last quarter. Policies targeting such programs, like revoking California’s EPA waiver for stricter emissions rules, could impact Tesla’s revenue.   

While Musk has positioned himself as a “long-term thinker” aiming to streamline government operations, critics argue that his involvement in shaping policies affecting Tesla and his other ventures, such as xAI, creates inevitable second-guessing. As the Trump administration considers scaling back EV incentives, the implications for the broader auto industry and U.S. competitiveness remain uncertain, with Tesla positioned to gain as competitors falter. 

November 13: Biden Administration Unveils Plan to Triple U.S. Nuclear Energy Capacity by 2050  

The Biden-Harris administration has released a detailed road map to triple U.S. nuclear power generation by 2050, targeting 200 GW of new capacity through newly built reactors, restarts of economically retired plants, and upgrades to existing facilities.  

 By 2035, the plan envisions 35 GW of new capacity operating or under construction, scaling up to 15 GW of annual deployment by 2040. The initiative aligns with a global goal to triple nuclear output for achieving net-zero emissions, building on ongoing efforts and existing authorities across multiple federal agencies.  

 It includes constructing large gigawatt-scale reactors, small modular reactors, and microreactors, while extending and expanding the lifespan of current reactors. Workforce development, supply chain enhancements, and streamlined licensing processes are key components.  

 While proponents praise the ambitious strategy, critics argue nuclear energy poses environmental risks and distracts from renewable alternatives. The plan also highlights the potential for deploying reactors at existing nuclear and retiring coal plant sites, with several U.S. reactors already set for restart. Challenges remain as the framework leaves gaps for the incoming administration to address. 

 For Fun:

November 15: How Human Brains Got So Big—And Learned to Handle the Stress  

Human brains evolved to be disproportionately large compared to those of other primates, creating significant cellular stress. A recent study, published on the bioRxiv preprint server, reveals how human dopamine neurons uniquely adapt to these demands, potentially offering insights into neurological disorders like Parkinson’s disease and schizophrenia.  

By comparing lab-grown dopamine neurons from humans and primates such as chimpanzees and macaques, researchers found that human neurons express higher levels of genes managing oxidative stress. These genes produce enzymes that neutralize harmful molecules generated by dopamine production, a process essential for movement, learning, and emotion.   

 The study also found that human dopamine neurons activate additional protective responses, such as increasing the molecule BDNF, which is reduced in neurodegenerative diseases. This resilience was not observed in chimpanzee neurons when exposed to oxidative stress. As dopamine neurons in the human brain are larger and form millions of synapses, they face greater energy demands, making these adaptations crucial.   

 The findings could guide new therapies that boost cellular defenses, especially for individuals with genetic vulnerabilities. However, researchers emphasize that more work is needed to understand how these protective mechanisms function in mature and aging neurons, where degenerative diseases typically manifest. 

Schedule a free consultation with a member of our team