Key Updates for CPAs anyone who owns at least 25 percent either directly or indirectly . It was pointed out that this new requirement falls under Title 31 of the United States Code , which is under FinCEN and not the IRS ’ s purview . It remains to be seen whether FinCEN will delegate authority to the IRS to administer , as they did with the FBAR requirement .

CPAs should be aware that there has been some ongoing debate about whether non-attorney practitioners advising clients on these new requirements and / or assisting clients with such filings may be considered an unauthorized practice of law . Practitioners are urged to reach out to their state regulators , insurance carriers or legal counsel to further discuss this issue and to decide whether this is a service they will offer to their clients .

Practitioners should also consider updating their engagement letters , organizers and checklists to clearly state whether services related to the CTA will be included .

More information about the requirements can be found in the FinCEN ’ s FAQs at fincen . gov / boi-faqs . FinCEN is

working on a small business compliance guide to inform businesses of their responsibilities , and practitioners are also encouraged to monitor the FAQ site for additional guidance as they come out .

Update on PFIC Mattson , who is also the chair of the AICPA ’ s PFIC task force , briefly updated attendees about the proposed PFIC regulations that were published on Jan . 25 , 2022 .

Under the current rules , U . S . partnerships and S corporations that either directly or indirectly own an interest in one or more PFICs are considered the first U . S . shareholder and are eligible to make a QEF election such that its partners or shareholders do not .

If finalized as proposed , U . S . partnerships and S corps would be treated as an aggregate of its partners / shareholders and be precluded from making the QEF election , leaving it to each partner or shareholder to make the election .

This would result in a compliance nightmare for many taxpayers who either

prepare their own tax returns or work with practitioners who may not be equipped to handle the issues this raises . Also , partners or shareholders who own less than a 10 percent interest would have difficulty accessing the information needed to make the QEF election .

On June 28 , 2022 , the AICPA submitted comments urging the IRS to reconsider . Mattson recommended that practitioners keep an eye out for developments on the proposed PFIC regulations between now and next filing season .

Hot Topics — Criminal Investigation Two agents with the IRS ’ s Criminal Division shared about trends they have been seeing . Among them :

· Information theft from CPA firms

· Identity theft

· COVID 19 fraud ( there is a huge issue with application and usage of PPP funds , and people creating false entities or filing false payroll tax returns for the ERC )

· Employment tax fraud ( people under or not reporting payroll taxes )

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