2022 Year in Review: What Do New Jersey Taxpayers Need to Know in 2023?

As we head into 2023, taxpayers in New Jersey need to prioritize compliance. The IRS has made clear that it intends to ramp up its enforcement efforts in the years to come, and its Strategic Plan for Fiscal Years 2022-2026 highlights several enforcement priorities. With this in mind, here are some of our key insights from 2022 that taxpayers can (and should) carry into 2023:

Business Income and Employment Tax Compliance

Businesses in New Jersey have several federal income and employment tax obligations. Business owners also need to be very careful to avoid improperly claiming credits or taking advantage of benefits for which their companies are ineligible. In 2022, we published articles on business tax compliance including:

• What If I (or My Business) Received PPP Loan Forgiveness Improperly?
• Important Tax Considerations for New Jersey Businesses Closing Their Doors in 2022
• IRS Issues Tax Tip for Businesses on Nonemployee Compensation
• 5 Reasons for IRS Audits Related to the Employee Retention Credit
• Failure to Remit Employees’ Income and FICA Taxes Can Lead to Substantial Penalties

Individual Tax Filing and Payment Compliance

Individuals who reside in New Jersey can owe a variety of obligations to the IRS as well. For many taxpayers, filing an annual income tax return is just one of several steps they need to take in order to remain in compliance with the Internal Revenue Code. Some of the top subjects we covered for New Jersey residents in 2022 included:

• Filing a U.S. Tax Return for the First Time? Here are Some Important Considerations
• 5 Issues That Can Lead to IRS Scrutiny of “Abusive Trust Arrangements”
• What Do You Need to Know if You Didn’t File Your Taxes?
• Make Sure You Know Your Quarterly Estimated Tax Responsibilities to Avoid Underpayment Penalties
• IRS Increases Underpayment Interest Rates for 2023

Offshore Account Disclosure Compliance

Many of our clients have offshore accounts and other foreign assets. For these clients, maintaining compliance with the IRS’s (and FinCEN’s) annual reporting requirements is critical. Non-compliance can lead to steep penalties, though there are options for mitigating these penalties in some cases. In 2022, we covered topics related to offshore account disclosure compliance such as:

• 2021 Data Book Highlights the IRS’s Tax Enforcement Priorities
• Specified Foreign Financial Assets: When Do You Need to File IRS Form 8938?
• IRS FATCA FAQs: What Do U.S. Taxpayers with Offshore Accounts Need to Know?
• The IRS is Emphasizing Offshore Account and Digital Asset Reporting Compliance
• What To Know if You Missed the October 15 FBAR Deadline in 2022

Proactively Resolving Issues with the IRS

Many of our clients also have problems with the IRS. If you are dealing with the IRS (or if you are concerned about facing IRS scrutiny), a proactive approach is generally best. Here are some of the articles we published in 2022 with tips on resolving tax-related issues and tax controversies:

• Do You Qualify for Penalty Relief from the IRS?
• What You Need to Know if You are the Victim of a Tax Scam
• What To Do (and What Not To Do) When You Receive a Letter from the IRS
• I Received a Letter from the IRS. Is It Legit?
• Should You Submit an Offer in Compromise or File an Appeal?

Request an Appointment with Tax Attorney Kevin E. Thorn

If you have questions or concerns about tax compliance in 2023, we invite you to get in touch. To schedule a confidential consultation with tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, please call 201-842-7696, email ket@thornlawgroup.com or request an appointment online today.