STATE ISSUES

Regulatory Bulletin Sales Tax Filings

August 29, 2022
Illinois Department of Revenue (IDOR) has informed the ICPAS Government Relations team of recent report filing errors related to the sales tax holiday on groceries and school supplies. In some instances, the nontaxable sales were excluded from the reports. This is problematic due to the hold harmless provisions for units of local government to enact legislation.

See posted IDOR sales tax regulatory bulletin. See ICPAS Regulatory Bulletin on State & Federal Regulatory Tax Updates.

ICPAS Sends Concern Letter to Attorney General re Charitable Filing Delays

July 25, 2022
In response to feedback from not-for-profit practitioners, ICPAS Government Relations sent a letter of concern to the Illinois Office of the Attorney General (OAG) outlining concerns with administrative processing gaps. This letter facilitated an expansive conversation wherein the OAG outlined corrective courses of action that have been or will be executed. OAG is also working on electronic filing of charitable reports.

Update--
The Attorney General's Office immediately responded to the ICPAS letter by explaining a number of corrective or remedial practices in place to mitigate issues raised in the letter of concern. Most notably is notice by the U.S. Post Office of expanded daily mail deliveries, increased staffing and procedural training.

Chicago's New Sexual Harassment Prevention Requirements Take Effect July 1

June 8, 2022
The Chicago City Council has passed an ordinance adding significant sexual harassment prevention requirements for employers, including new employee policy, notice, and training obligations; expanded recordkeeping requirements; and stricter penalties for violations. 

Sexual harassment prevention requirements are applicable to employers with one or more employees in the City of Chicago that are subject to Chicago licensing requirements or maintain a business facility within city limits. The ordinance is effective as of July 1, 2022. See Lawflash from Morgan Lewis.

IDFPR Proposes Guidelines for Professional Licensees' Complete Sexual Harassment Training 68 Ill. Adm. 1130.400

The Illinois Department of Financial and Professional Regulation has adopted administrative rules to implement Public Act 100-883 which requires licensees to complete one hour of sexual harassment training as a part of continuing education requirements. The training must be provided by a licensed CPE provider. The rules were officially adopted on May 10, 2019 and will be a part of Illinois renewal requirements for CPAs in 2021. See IDPFR Info Sheet.

FEDERAL ISSUES

Concerns with Form 1099-K Reporting Threshold

In response to the reduced de minimus threshold for information reporting on third-party network transactions ($20,000 to $600), taxpayers are now required to receive 1099-Ks for payment and third-party networks for transactions in the amount of $600. In a letter to Congress, the AICPA outlined concerns with the new reporting threshold. The AICPA Letter to leadership of the Senate Finance Committee and the House Ways and Means Committee opines that the $600 threshold is too low and significantly outdated. The $600 threshold amount was established by the Internal Revenue Code section 6041 which was established in 1954. The AICPA proposed remedy is to apply a cost-of-living adjustment using 1954 as a base and agreeing that $5000 would constitute significant progress. The IRS has provided an FAQ to assist practitioners with the reporting threshold requirements.

The Illinois CPA Society urged members of the Illinois Congressional Delegation to join a bipartisan House and Senate sign-on letter to the Secretary of the Treasury on addressing ways for taxpayers and tax preparers to bypass the backlog that is plaguing the IRS. The Illinois CPA Society appreciated the 10 members of the Illinois Congressional Delegation who joined hundreds of their colleagues in adding their name to the letter to  Secretary Yellen urging Treasury to improve this year’s tax filing season process.    

ICPAS--Federal Advocacy

The Illinois CPA Society and Illinois members of AICPA Council communicated with members of the Illinois Congressional Delegation on issues of importance:

H.R. 5155 -- COVID-19 Tax Penalty Relief
H.R. 3855 -- Recognizing Accounting as a STEM Profession
H.R. 3574/S. 2748 -- Timely Issuance of IRS Disaster Relief

IRS Recognizes Illinois Prepaid Property Tax

Updated April 12, 2018
Congressman Peter Roskam (R-6), Subcommittee Chair of the House Ways and Means Committee, requested an opinion from the IRS regarding the deductibility of Illinois prepaid property taxes.The IRS responded to the Congressman's request stating that IR-2017-210 applies to a different fact pattern than Illinois, and that the Tax Cuts and Jobs Act (TCJA) of 2017 remains the rule and prepayments are deductible.The IRS has not issued any formal pronouncements or guidance.

 

REGULATORY ISSUES

Illinois Public Accounting Act Sunset

June 8, 2022The Illinois Public Accounting Act "sunsets" on January 1, 2024 as a part of the regulatory sunset act. The purpose of sunsetting is to ensure statutes that regulate for the public's protection are thoroughly reviewed, and if necessary updated or allowed to expire. The last sunsetting of the Public Accounting Act was in 2013.The Chair of the Illinois CPA Society Board of Directors has appointed a working group to provide a high level review of the act in its current form and make recommendations to the ICPAS Board of Directors for updates and changes.

See briefing. Questions or comments may be submitted to:  [email protected]

Peer Review Requirement

Sole practitioners or firms who perform audits, reviews or examinations of prospective financial statements must complete a peer review as a requirement for licensure renewal. To learn more visit the ICPAS Peer Review page.