Self-Employed Businesses:

Independent Contractor Registration - H.5710 SubA and S.427 SubB require independent contractors to file electronically with the Department of Labor and Training (DLT) on an annual basis. DLT will submit the list to the Division of Taxation each April 1st. The new law becomes effective January 1, 2024. Chapters 242 and 243 of the 2023 Public Laws were signed by the Governor.

This looks like there will be more audits for self-employed businesses.

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• FOXBusiness News - RI 'horror' bill a 'test run' for more Democrat-led states, experts warn and watch the video
• RI Independent Contractors Mandate to Pay Fee to Retain Status
• Reclassifying Rhode Island's Independent Workforce Could Cost the State Millions

Some LLC and LP members who don’t pay Self-Employed Contributions Act (SECA) taxes are on IRS’s radar. IRS has an active audit campaign on when limited partners and LLC members in professional service firms practicing law, medicine, consulting, accounting, etc., owe self-employment tax on their distributive share of the firm’s income. In 2017, the Tax Court ruled that law members who actively participated in an LLC’s operations and in management weren’t mere investors and were liable for self-employment taxes. A few hundred professional-service companies have been selected for SECA audits.

Retailers & Sellers of Gift Card

Gift Card Mandate for Retailers - H.5732SubA and S.759SubAaa were signed into law by Governor McKee.

The new law requires businesses that sell gift cards for their own store or affiliated businesses, to display a notice at the location where the cards are sold. The notice must caution the purchaser about prepaid card scams and instruct the purchaser on what to do if they suspect they might be a potential victim of such a scam. The Department of Business Regulation is charged with determining the content and form of the notice. The approved sign, in both English and Spanish, can be found at: https://dbr.ri.gov/gift-card-fraud-mandate  

Failure to display the notice can result in a penalty of up to $250 per violation. The law is in effect now. Chapter 167 and 168 of the 2023 Public Laws.

Litter Control Permit Elimination

Beginning August 1, RI statute requires litter control participation permits for certain businesses who provide meals and beverages. Each place of business in Rhode Island selling certain beverages is required to file an annual application for a litter control participation permit. Included in this are nonalcoholic beverages in a sealable bottle, can, jar, or carton excepting milk, but including beer and malt beverages.

Permit fees range from $25-$125 based on the gross receipts of the previous calendar year. 

With the passage of House Bill 5200, Substitute A, as amended, and effective January 1, 2024 the litter control participation permit and permit fee will no longer be a requirement in Rhode Island. For all applicable entities in 2023 conducting business that would require a permit under the current statute, a new permit is still required but will not need to be renewed. Any permit renewals for the period after January 1, 2024, do not need to be filed.  

The removal of the litter control participation permit and associated fee does not impact the existing litter tax. 

Effective: 1/1/2024

Citation: House Bill 5200, Substitute A, as amended, Article 4, Sections 5, 6, & 7

Affects: Rhode Island General Laws Section 44-44-3.1 

Online tax prep companies sold private & confidential taxpayer data with Google & Meta for years - now discovered!

Do you know why Wendy's burgers are square and not round? Because they don't cut corners.

And sometimes trying to save a few bucks by doing it yourself or having a friend do your return with one of these "free" services cost you thousands of dollars in the long run with identity theft and unwanted solicitation phone calls and emails.

Some of America’s largest tax-prep companies have spent years sharing Americans’ sensitive financial data with tech titans including Meta and Google in a potential violation of federal law — data that in some cases was misused for targeted advertising, according to a seven-month congressional investigation.

The report highlights what legal experts described to CNN as a “five-alarm fire” for taxpayer privacy that could lead to government and private lawsuits, criminal penalties or perhaps even a “mortal blow” for some industry giants involved in the probe including TaxSlayer, H&R Block and TaxAct.

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Federal Reserve announces that its new system for instant payments, the FedNow® Service, is now live

The Federal Reserve on Thursday, July 20, 2023, announced that its new system for instant payments, the FedNow® Service, is now live. Banks and credit unions of all sizes can sign up and use this tool to instantly transfer money for their customers, any time of the day, on any day of the year.

"The Federal Reserve built the FedNow Service to help make everyday payments over the coming years faster and more convenient," said Federal Reserve Chair Jerome H. Powell. "Over time, as more banks choose to use this new tool, the benefits to individuals and businesses will include enabling a person to immediately receive a paycheck, or a company to instantly access funds when an invoice is paid."



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Fed fines Deutsche Bank $186 million & threatens further action

LondonCNN — Deutsche Bank has been trying to leave its troubled past behind for years. But the fines keep coming.

The US Federal Reserve slapped the German lender with a $186 million penalty Wednesday for failing to fix “unsafe and unsound practices” that it pledged to address as long ago as 2015.



The Fed found that Deutsche Bank (DB) has made insufficient progress since 2018 to tighten its anti-money laundering controls, improve customer due diligence and ensure compliance with sanctions, among other failures. The Fed had already fined the bank a total of $99 million in 2015 and 2017 over the same issues.

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Medicare Part B premiums may increase in 2024, prompted by a new Alzheimer's treatment

One of the costs retirees pay — Medicare Part B premiums — may be increasing in 2024, driven by a new Alzheimer’s treatment on the market.



The Medicare trustees projected in March that the standard monthly Part B premium may increase to $174.80 in 2024, an almost $10 monthly increase from the $164.90 standard monthly premium beneficiaries are currently paying.

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Reduce tax liability by making quarterly, estimated tax payments

IRS has a tax withholding estimator on its website to help you figure out whether you are having the right amount of income tax withheld from wages, pensions, IRA distributions, etc. The tool asks about various sources of income, gives tips on credits and deductions, and estimates how much withholding to request.

Employees can give their employers a new W-4 form to have more tax withheld from wages. People receiving pension or annuity payments can submit Form W-4P.

IRA owners use Form W-4R. And Social Security recipients fill out Form W-4V. Estimated tax payments are for taxpayers who have taxable income that is not subject to withholding. They’re usually made in four equal installments.

The first remittance for 2023 was due April 18, 2023, except for victims of disasters, who have more time. The other dates generally are

• June 15
• Sept. 15
• Jan. 16, 2024

Pony up to pay your debts

Making an offer with IRS to settle your tax debt at less than what you owe? There are two payment options:

Lump-sum cash, which requires 20% of the total offer amount to be paid up-front, with the remaining balance to be paid in five or fewer installments within five months of the date your offer is accepted.

Periodic payment requires that your first payment be made with the offer, with the remainder remitted in monthly installments over a period of six to 24 months.

Be sure you’ve filed all required tax returns before submitting your offer. Otherwise, the Revenue Service will return your application and the filing fee and apply any initial payment included with your submission to your tax debt. Individuals or businesses in bankruptcy can’t apply for a compromise offer.

Also, IRS has an online tool for individuals to check preliminary eligibility for filing a compromise offer. Go to irs.treasury.gov/oic_pre_qualifier for details.

Beware of “offer in compromise mills,” IRS’s term for firms and promoters that hawk tax-debt-relief plans with promises to settle your debts at steep discounts, even pennies on the dollar. Many advertise on radio and TV, charge big upfront fees and churn out applications for relief that some of their clients can’t even qualify for.

IRS gets its wrist slapped for being too inflexible about collecting a tax bill. A couple who racked up $33,000 in back taxes offered to settle their debt for $1,629. They claimed they couldn’t pay more money because they were in their mid-sixties, the husband was retired, they had lots of debt, and their finances were impacted by the COVID pandemic. But the IRS settlement officer and appeals officer wouldn’t bite, finding that the couple had enough income and home equity to pay the bill in full. The Tax Court ruled that IRS abused its discretion in outright rejecting the offer and sent the case back to the agency’s appeals office (WHITTAKER v. COMMISSIONER OF INTERNAL REVENUE Docket No. 3147-21L).

Amending your Personal Tax Returns

You generally have three years from the date you filed your original 1040 to amend it and claim a refund. If you’re due a refund on your original 1040, wait to receive it before filing an amended return with form 1040-X.

You can e-file Form 1040-X to amend your return for 2020 through 2022. However, some states require the amended to be paper mailed. If you are amending for multiple years, use a separate 1040-X for each year.

You can now request direct deposit of your refund into your bank account. This is a new feature that applies to those who are amending a 2021 or 2022 return by e-filing the 1040-X. Direct deposit isn’t available on amended returns filed on paper.

It’s taking IRS more than 20 weeks to process an amended return.

Did you receive a cardboard envelope in the mail with an IRS letter enclosed?



It’s a scam, intended to mislead people into thinking they’re due a tax refund. The letter on IRS masthead includes the phrase “in relation to your unclaimed refund.”

The contact information and phone number on the letter are fake. And the notice asks the recipient to send pictures of a driver’s license and other personal information, such as cell phone number, bank routing information and Social Security number. The letter has lots of warning signs…bad grammar and punctuation, different fonts, etc.

Don’t respond, and don’t give the scammers any of your personal data.

Want to help a working child or grandchild save for the future?

Consider making a contribution to a Roth IRA owned by him or her.

For 2023, you have until April 15, 2024, to put in up to the lesser of $6,500 or what the child earns. The money grows tax-free inside the Roth account.

The payin counts toward your $17,000-per-donee annual gift tax exclusion. Note if you put in the maximum, the child won’t be able to put in additional funds.

Taxpayers who sell items or provide a service and get paid by payment card or through a payment app, may get a Form 1099-K reporting those transactions. Remind your clients to keep good records of these sales throughout the year. Learn more by watching a short IRS video.

The IRS redesigned the Understanding Your Form 1099-K webpage on IRS.gov to make it easier to understand and navigate.

It now separates information for personal items sold versus selling goods, renting property and providing services. It includes important information on Form 1099-K topics such as:

• What shouldn’t be reported on it
• What to do if it’s incorrect
• Who gets the form

The IRS outlined the expanded home energy tax credits in an easy-to-understand e-poster. Taxpayers can learn about the credit amounts and types of qualifying expenses. Small businesses, please print and post or share the link. 

RI ranks No. 45 on CNBC’s 2023 top states for business list

For the 2023 report, states were evaluated on 86 metrics in 10 categories: cost of doing business; infrastructure; life, health and inclusion; workforce; economy; business friendliness; access to capital; technology and innovation; education; and cost of living.

As you might have already seen, we've assigned you to your very own designated client portal. The client portal allows you to send files to our firm, securely, and also grants you access to your tax returns (starting with 2020) any time you want - 24/7/365 - from a desktop or smartphone.

When uploading to the portal, there is no need to password protect your files or create a zip file - it's already encrypted and each time you upload files to the firm, our admin team gets a notification that you've uploaded files. The same will happen when we upload files to your portal.

When we prepare your 2022 tax return, these will be made available in your portal, too! If you prefer to have a paper copy, please let us know when you supply your tax documents and completed tax organizer whether that be dropping off, mail or through the portal.

Rise of the Audits

We hear it all the time. "I don't want to get in trouble with the IRS".... "What can I do to mitigate my risk of getting audited?"

An audit does not necessarily mean that you did anything wrong. It could really mean a quality controls test and complete luck (or unlucky) of the draw.

An audit is a review/examination of an organization's or individual's accounts and financial information to ensure information is reported correctly according to the tax laws and to verify the reported amount of tax is correct.

Audit FAQs

If you're concerned with being audited, be sure to enroll in the Silver or Gold client care options each and every year when you drop off your tax documents so we can help you should you get audited.