Alert: State Revenue Departments Report A Surge In Tax Phishing Scams

Sep 22, 2025

Across the US, state revenue departments, including those in Ohio and Michigan, have begun reporting a surge in tax phishing scams targeting taxpayers via text messages. These fraudulent messages claim the recipient’s tax refund has been approved and instruct them to click on a link to “finalize processing.” The link directs users to a website impersonating the state’s official tax portal, often displaying authentic-looking logos and branding.

What is a phishing scam?
Phishing scams are a form of social engineering where attackers deceive people into revealing sensitive information or installing malware such as viruses, worms, adware, or ransomware on their devices.

Essential tips for personal protection:

  • Do not click links or respond to suspicious texts: Ignore and delete any unsolicited messages claiming to be from state revenue agencies or the IRS regarding tax refunds.
  • Do not share personal or financial information via text: State revenue departments and the IRS do not communicate tax matters or request sensitive information via text.
  • Verify website addresses: Always double-check URLs before entering any information to ensure you are using the official state revenue department or IRS website.

Next Steps:
If you believe you have been targeted by a tax phishing scam or have shared information with scammers, you should report the scam to the following authorities:

  • Local law enforcement
  • Relevant credit reporting agencies (let them know your information has been compromised).
  • Your Financial Institution
  • State Attorney General
  • State Revenue Department Fraud Prevention Unit

If you are unsure about an incoming message, contact your state revenue agency directly through their official channels. For your convenience, the Ohio Department of Taxation has developed an official video detailing how to recognize fraudulent communications: ODT Scam Awareness Video.

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Categories: IT & Risk Services, Tax Planning

IRS Releases New Employee Retention Tax Credit Guidance

Mar 28, 2025

Wait, we’re talking about the Employee Retention Tax Credit (ERC) yet again? Yes, you read it right, after hearing very little on the topic for the past 18 months, ERC is back in the news. On March 20, 2025, the IRS released new Employee Retention Tax Credit Guidance in an updated FAQ.

Specifically, the IRS introduced a new section entitled “Income Tax & ERC,” that addresses, one, situations where taxpayers didn’t reduce their claimed wage expense but received the ERC, and two, situations where taxpayers did reduce wage expenses but had a disallowed ERC claim. The tax authority also expanded guidance on reporting ERC fraud.

Here is what you need to know:

Income Tax & ERC

  • The IRS stands by its original position that taxpayers should have reduced their deductible wage expense by the amount of allowed ERC in the tax year the qualified wages were paid or incurred. However, the IRS is now providing alternative solutions for claiming unreduced wages. Under the revised guidelines, taxpayers now have the option to report the overstated wage expense as gross income in the tax year when the Employee Retention Credit was received, rather than amending their previous returns. This marks a shift from the earlier policy.
  • The updated FAQ also addresses scenarios where an ERC claim was denied after a taxpayer had already reduced their wage expenses for the year in which the qualified wages were paid. In these cases, taxpayers can now adjust their current return to reflect the increased wage expense corresponding to the disallowed ERC, instead of filing an amended tax return, an AAR, or a protective claim for refund for the earlier tax year. It’s important to note that taxpayers may still opt to amend previous returns to recapture the previously reduced wages.

ERC Scams

  • The IRS has issued further guidance on the procedures for reporting ERC-related fraud, strongly urging taxpayers to report any suspicious activities, including illegal, tax-related activities involving ERC claims, individuals who promote improper and abusive tax schemes, and tax return preparers who deliberately prepare improper returns. The step-by-step process for reporting ERC fraud can be found in the “ERC Scam” section of the FAQ.

To read the full FAQ along with the updated guidance, please refer to the IRS website here. To better understand how this new guidance may impact your business, we encourage you to connect with our Employee Retention Tax Credit (ERC) lead, Mike Hanf.

Mike Hanf, Tax Partner – mike.hanf@wvco.com

Categories: Tax Compliance

Social Security Retroactive Payments: What You Need To Know

Mar 07, 2025

In January, President Biden signed into law the Social Security Fairness Act, significantly increasing benefits for nearly 3 million former public employees in the United States through Social Security retroactive payments.

This week the Social Security Administration (SSA) announced that back payments have been sent to over 1.1 million beneficiaries. These payments reflect the retroactive benefits owed to retirees, spouses, and surviving spouses due to the elimination of the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP).

How This May Impact You:

  • Retroactive Payments: As of March 4, over $7.5 billion in retroactive payments have been distributed to 1,127,723 individuals.
  • Monthly Increases: Starting in April, beneficiaries will notice an increase in their monthly payments, corresponding to higher benefits for March.

Next Steps:

Beneficiaries can visit SSA’s dedicated website to learn more about the Fairness Act and see updates on the agency’s progress. The SSA is expected to release more details soon.

For any assistance or further inquiries regarding the Social Security retroactive payments, please do not hesitate to contact our team. We are here to help you navigate these changes and understand how they impact your benefits.

Categories: Other Resources

Congress Announces Bipartisan Tax Agreement In The Works

Jan 22, 2024

Last week, the chairs of the congressional tax committee unveiled a significant $78 billion bipartisan tax agreement poised to enhance the Child Tax Credit and offer substantial support to businesses. Named the “Tax Relief for American Families and Workers Act of 2024,” this pivotal legislation awaits the green light from both houses of Congress to be enacted into law. As the 2023 tax filing season commences on January 29, this introduces a narrow window for the bill’s approval and implementation.

Here are some of the key proposed provisions:

  • Expanded Child Tax Credit – The deal outlines enhancements to the child tax credit in an attempt to provide relief to families that are struggling financially and those with multiple children. It would also lift the tax credit’s $1,600 refundable cap and adjust it for inflation by $200 per child to $1,800 for 2023, $1,900 for 2024, and $2,000 for 2025.
  • Section 174 – The proposed law would postpone the requirement to capitalize and spread out the cost of domestic research and experimental expenses over multiple years. This change would apply to tax years starting from January 1, 2022, but the new rules wouldn’t take effect until tax years that begin after December 31, 2025. However, for research and experimental costs incurred outside of the U.S., these costs would still need to be spread out over a 15-year period.
  • Section 163(j) – Under this draft bill, business deductions would be restored a less restrictive limitation for net interest expense, returning to a 30 percent limit based on EBITDA (earnings before interest, taxes, depreciation, and amortization) rather than EBIT (earnings before interest and taxes).
  • Bonus Depreciation – The bill would temporarily restore 100 percent bonus depreciation for property placed in service between January 1, 2023, and December 31, 2025. It also would allow 20% bonus depreciation for property placed in service after December 31, 2025, and before January 1, 2027. For property placed in service after January 1, 2027, no bonus depreciation would be allowed.
  • Employee Retention Tax Credit (ERC) – Under this deal, businesses would no longer be able to claim the popular ERC credit as of January 31, 2024. In addition, it would also extend the statute of limitations for ERC claims to six years from the date the claim was filed. Finally, it includes more stringent penalties for ERC promoters.

Please keep in mind that this bipartisan tax agreement is still in the proposal stage and must pass through the legislative process to become a law. As always, we will continue to monitor the status of this proposed bipartisan agreement, and keep you apprised of any developments. Please reach out to your tax advisor to discuss how this may impact your tax situation.

Categories: Tax Planning

Beneficial Ownership Information (BOI) Reporting Requirements

Oct 23, 2023

What is BOI Reporting?
Beneficial Ownership Information (BOI) Reporting is a framework developed by the Financial Crimes Enforcement Network (FinCEN) that mandates certain businesses to disclose specific information about their “beneficial owners.” The new reporting guidelines were formed as an effort to enhance financial transparency and curtail illicit financial activities by illuminating the individuals who own or control certain foreign or domestic entities registered to do business within the U.S.

Who is Required to Report Beneficial Ownership Information?
Domestic companies required to report include corporations, LLCs, and other similar entities formed through the registration with a secretary of state or similar office. Certain entities, such as large companies with over 20 million dollars in revenue, those that employ more than 500 full-time employees, and entities that operate under extensive regulatory scrutiny, among others, may be exempt from BOI reporting. In total, there are 23 types of entities exempt from reporting requirements, making it extremely important to carefully review FinCEN’s qualifying criteria, (published in their Small Entity Compliance Guide,) before concluding that your company is exempt.

Key Reporting Elements Defined

  • Beneficial Owner(s): the FinCEN defines Beneficial Owners as individuals who own or control (either directly or indirectly,) at least 25% of the ownership interest in a reporting company, or hold “substantial control” over the company.
  • Substantial Control: according to the FinCEN, an individual holds substantial control over a reporting company if the individual meets any of four general criteria:
    • The individual is a senior officer;
    • The individual has authority to appoint or remove certain officers or a majority of directors of the reporting company;
    • The individual is an important decision-maker; or
    • The individual has any other form of substantial control over the reporting company.
  • Required Reporting Information: includes the name, date of birth, address, and an identifying number (e.g., a driver’s license or passport number) of each beneficial owner, as defined above.
    Reporting Timelines
  • Existing Entities: Business that were formed as of January 1, 2024, must submit an initial BOI report by January 1, 2025.
  • New Entities: Those businesses created or registered after January 1, 2024, must report within 30 days of creation/registration.
  • Updates: Any changes or updates to a business’s BOI structure must be reported within 30 days of occurrence.

How to Report Beneficial Ownership Information
BOI reports must be submitted electronically through FinCEN’s secure, online filing system, which will be accessible starting January 1, 2024. FinCEN is currently not accepting any beneficial ownership information reports.

Next Steps

  • Identify and verify Beneficial Owners: Ensure you have accurate, verifiable information for all individuals who hold a significant interest or control in your company.
  • Understand your reporting obligations: Dive into the specifics of what information needs to be reported and acquaint yourself with the reporting formats and guidelines included in the Small Entity Compliance Guide linked above.
  • Engage Professional Assistance: Consider connecting with WVC’s team of tax advisors who continue to remain on top of BOI reporting mandates to ensure accurate and timely filing.
  • Stay Informed: Sign up for WVC Insights to receive regular updates and additional guidance on BOI reporting guidelines to ensure your business maintains continuous compliance.

Concluding Thoughts
Complying with BOI reporting requires businesses to exercise diligence in maintaining accurate records, understand the mechanics of the reporting framework, and exhibit punctuality in submissions. Strategic partnerships with professional experts can help pave the way for seamless compliance and fortified financial transparency.

Ensuring that your business is well-prepared to successfully navigate both BOI reporting mandates and other critical tax updates is William Vaughan Company’s top priority. Connect with a trusted WVC tax advisor today to see if your business qualifies to report on Beneficial Ownership Information under the updated framework.


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Categories: Tax Compliance

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