Serving Our Clients In

To File or Not To File?

The last few weeks have been a busy time for our federal government, as we have been inundated with news of the Federal Government, including the Internal Revenue Service, job cuts. So far, over 6,000 IRS jobs have been eliminated, with growing fears of additional cuts looming. 

Some may be thinking - Do I really need to file my tax returns? With such a reduced workforce, is the IRS likely to notice that my return is missing? With the filing deadline just a week away, now is a great opportunity to remind everyone that yes, you should file your tax returns. To those joking, to file or not to file? Please remember that the penalties are no joking matter. 

For example: 

· The Failure to File Penalty is 5% per month, up to 25% of the balance due. 

· The Failure to Pay Penalty is 0.5% per month, up to 25% of the balance due. 

· The penalty for understating income is 20% of the portion of the underpayment of tax. 

If you are considering not filing due to an inability to pay the tax due, the IRS has alternative methods to assist taxpayers. There are options such as an installment plan agreement or requesting additional time to pay the balance due. If you have any questions about these options, please contact our office at (631) 683-8700. 

It may take the IRS longer to find you, but they will. And while we are happy to help our clients with tax concerns, it is our responsibility to try to help you avoid these issues before they arise.  

If you find yourself thinking over the next week... to file or not to file? Please remember that no matter how many IRS employees are cut, it is always advisable to timely file and pay your taxes. 

Corporate Transparency Act

On March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule removing the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act. In that interim final rule, FinCEN revised the definition of “reporting company” to only apply to foreign entities registered to do business in a U.S. State or Tribal jurisdiction (entities formerly known as “foreign reporting companies”) and excludes domestic entities. 

Thus, all entities created in the United States and their beneficial owners will be exempt from the requirement to report BOI to FinCEN. Foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the reporting requirements must report their BOI to FinCEN. Any foreign entity that became a reporting company before March 26, 2025, is required to file an initial report no later than April 25, 2025. Any foreign entity that becomes a reporting company on or after March 26, 2025, is required to file an initial report within 30 calendar days of the earlier of when it receives actual notice that it has been registered to do business or the date on which a secretary of state or similar office first provides public notice that it is registered.

Foreign entities will not be required to report any U.S. persons as beneficial owners, and U.S. persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner.

It appears this is the final chapter in the controversial Corporate Transparency Act…until it is not!!! 

Katz Chwat, P.C. | 175 Broadhollow Road, Suite 130, Melville, NY 11747 | Website | 631-683-8700