If your business has recently closed its doors for good, you are not alone. While the Paycheck Protection Program (PPP) and other pandemic relief programs offered short-term lifelines for many businesses, this often proved not to be enough. From soaring inflation to the unbalanced labor market, a variety of factors have come together to create an extremely challenging business environment in 2022.

The Internal Revenue Service (IRS) recently issued a Tax Tip reminding businesses of their obligations with regard to nonemployee compensation. As the IRS explains, while businesses generally are not responsible for withholding and remitting employment taxes when paying independent contractors, “business taxpayers who pay nonemployee compensation of $600 or more must report these payments to the IRS.”

While the employee retention credit established under the CARES Act (and extended under the Taxpayer Certainty and Disaster Tax Relief Act) provided much-needed financial relief for many businesses seeking to keep their employees on staff during the pandemic, businesses that claimed the credit are also at risk for facing IRS scrutiny. Combating COVID-19 relief fraud has become a top federal law enforcement priority, and this includes targeting businesses suspected of improperly claiming credits and other tax benefits.

Each year, the Internal Revenue Service (IRS) publishes a list of its “Dirty Dozen” tax scams. While the list primarily highlights scams that target taxpayers, it also includes tax scams that top the IRS’ list of enforcement priorities. In 2022, the IRS published its “Dirty Dozen” list in a series of articles, and the last article in the series makes clear that the IRS is prioritizing offshore account and digital asset reporting compliance in 2022. Learn more from New Jersey tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group:

Most New Jersey residents think about taxes once a year—usually a few weeks or months before April 15. But, many taxpayers have an obligation to make quarterly estimated tax payments throughout the year. Taxpayers who fail to make estimated payments as required can face steep penalties, and they can increase their risk of facing a tax audit or investigation. Learn more from New Jersey tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group.