IRS Feed

As expected, states whose residents will take a major federal tax hit under the new $10,000 limit on deductions of state and local tax (SALT) payments have headed to court. Connecticut, Maryland, New York and New Jersey on Tuesday (July 17) afternoon filed a lawsuit in federal court in New York seeking to invalidate the Tax Cuts and Jobs Act's (TCJA) changes to a long-standing federal tax deduction. In this latest semi-reform of the tax code, Congress essentially gutted the value of this itemized tax deduction for, in most cases, the millions in state income and local real property payments... Read more →


If you're superstitious or suffer from paraskevidekatriaphobia, today is not a good day. In case you haven't checked your calendar, it's Friday the 13th. Even scarier is the reality that any day can be unlucky if you happen to fall for a tax scam. It's true that most tax crooks use scams to steal your identity and then file fake returns to get fraudulent refunds in your name. It's also true, though, that these scammers work year-round. That's why Friday the 13th is a good day to look at 13 scary tax scams that have appeared so far this year.... Read more →


The role of Supreme Court nominee Brett Kavanaugh in preventing the Internal Revenue Service from aggressively regulating tax preparers has prompted some questions about such oversight. Currently, the IRS uses a voluntary tax professional oversight system, but is expected to continue to push for Congressional authority to implement more stringent tax preparer regulations. Those who agree with the IRS (like the agency's National Taxpayer Advocate) argue that regulating tax pros is necessary in order to protect taxpaying clients. It also, they contend, would lead to more accurate tax returns and ensure a fairer and more efficient tax system Opponents of... Read more →


Judge Brett Kavanaugh spoke at the White House after being nominated to be the next Supreme Court justice. (Official White House photo by D. Myles Cullen via White House Instagram) Federal judge Brett Kavanaugh was tapped last night (July 9) by Donald J. Trump to replace retiring Justice Anthony Kennedy on the Supreme Court Supreme Court of the United States (SCOTUS) Kavanaugh, 53, has served on the D.C. Circuit Court of Appeals since 2006, a position for which he was nominated by the last Republican Oval Office occupant, President George W. Bush. Like Trump's prior Supreme Court justice nominee, Neil... Read more →


Has anyone really been as happy as this couple when filing their taxes? The IRS hopes the new, shorter Form 1040 will put smiles on more taxpayers' faces. Did you spend your weekend looking at the new Form 1040, which the Treasury Department and Internal Revenue Service officially unveiled on June 29? I didn't think so. That's OK. Most of us, either individual taxpayers or our tax pros helping us file, don't look at literal paper tax forms any more. We use computer software that walks us through the filing process. Still, it's worth reviewing the new form since it's... Read more →


Charles Rettig, Donald Trump's choice to head the IRS, is expected to be confirmed, despite not originally revealing that he has an ownership stake in properties in a Trump-branded Hawaiian hotel. (Photo of Trump International Hotel Waikiki via Hotels.com) The Internal Revenue Service may soon have a new commissioner, almost eight months after the last tax agency chief retired. But before Charles P. Rettig gets his new title, some lawmakers want more information from him about his ties to Donald J. Trump. Specifically, they want to know whether Rettig would maintain his independence from the man who nominated him. That... Read more →


U.S. Treasury Secretary Steven Mnuchin promised that this week we'd see the new, shorter and closer-to-a-postcard Form 1040. Well, the week's almost over and we're still waiting. However, I'm sure Mnuchin will keep his word and sometime today officially debut the new tax return. My faith is not so much in the Administration's top money man, as it is on the fact that I'll be out of my office and offline most of the day due to some personal business I can't reschedule. I'm good at tax timing like that. At least the proposed changes already have leaked. First came... Read more →


The new postcard-sized Form 1040 isn't nearly as pretty as the vintage Austin, Texas, postcard, reproduced as a mural in the Lone Star State's capital city. The tax postcard also isn't nearly as simple as its smaller size — or the Republicans who've long promised it — would have taxpayers believe. Image courtesy Roadhouse Relics Facebook/Instagram The good news about the new postcard-sized Form 1040 is that it is, as promised, smaller. The bad news is that in condensing the form, the Internal Revenue Service removed many popular above-the-line deductions that survived the actual new tax law itself. That's the... Read more →


The world — OK, U.S. tax world — is anxiously anticipating the shrinkage (yeah, I'm now replaying that Seinfeld episode in my head, too; sorry) of Form 1040. The Treasury Secretary last week promised that by the time the 2019 tax filing season rolls around, the longest tax return, which is filed by 68 percent of taxpayers, will be substantially smaller. The goal is the long-promised size of a postcard. But another Internal Revenue Service form that affects even more folks already has been revised. The IRS earlier this month released a draft version of Form W-4 for the 2019... Read more →


Since its appearance in 2003, around 50 million taxpayers have used Free File. As the name indicates, this partnership of the Internal Revenue Service and tax software manufacturers known as the Free File Alliance gives most taxpayers the opportunity to do their taxes on their computers and then e-file them at no cost. But, notes Pro Publica in an article co-published with Quartz, the number of Free Filing taxpayers comes to just around 3 percent of eligible households. That, according to the article by Tik Root, means that folks have spent around $1 billion on tax prep and filing fees... Read more →


Speaker Paul Ryan touts postcard tax return possibilities after House passage of tax reform legislation last November. (Screen shot from Speaker.gov YouTube video) Every year the Internal Revenue Service makes tweaks to tax returns. Often it's simply updating annual inflation adjusted amounts. Other times it's adding or subtracting a line due to law changes. But for 2018's filing material, there will be large-scale form alterations thanks to the major changes made by the Tax Cuts and Jobs Act (TCJA). Among the new law's modifications for the 2018 tax year will be the actual size of the oldest of the tax... Read more →


Kilauea lava flow from U.S. Geological Survey via Giphy.com Hawaiians got some relatively good news this week in connection with the continuing lava flow from Mount Kilauea. The volcano is continuing to spew potentially deadly gases and pour flaming lava across a growing southeastern section of the 50th state's Big Island. The eruption, which started May 3, also is still producing explosions and earthquakes. Now, however, the catastrophe has been declared a major disaster by the White House. That is good tax news for affected residents, which is everyone on the state's largest island, also named Hawaii, as is the... Read more →


June generally is a good time to review your tax situation and make moves while there are months for them to make a difference to your upcoming tax bill. That's particularly true this year, what with the Tax Cuts and Jobs Act (TCJA) changes in full force. Unfortunately, questions remain as to just how the new tax law changes will affect some folks. Business change uncertainty: Businesses in particular are among the taxpayers still unsure about TCJA provisions. Many are waiting for clarification of the new law's elimination of business entertainment expenses. The tax community is divided as to whether... Read more →


Yes, as soon as I heard about the New York Attorney General filing a lawsuit against Donald J. Trump's charitable foundation, I checked the Internal Revenue Service exempt organization online search tool. There it, or they, were. When I entered Trump Foundation into the Tax Exempt Organization Search, or TEOS because everything in Washington, D.C. has an acronym, it turned up six results. The top two were what I was looking for: Trump Foundation EIN: 13-3054537 | New York, NY, United States Donald J Trump Foundation Inc. EIN: 13-3404773 | Woodbury, NY, United States Both organizations are listed in IRS... Read more →


The only folks cheering the Federal Reserve's expected decision to hike its benchmark federal funds rate by a quarter-percentage point — to a range between 1.75 percent and 2 percent — are those with savings that earn interest. But relatively speaking, there aren't that many of us. Plus, we all know that banks and other financial institutions are going to be slow to increase the interest they pay us for holding our money and when they do, the hikes will be small. Meanwhile, if you are trying to get a mortgage, don't panic but move that process along as quickly... Read more →


Millions of folks filed for an extension last April, getting six more months to finish their 2017 Form 1040. They also paid their expected tax bill, or as much as they could, then so as to avoid late- or nonpayment penalties. Some taxpayers, however, always blow off this annual tax duty entirely. They don't finish he Internal Revenue Service forms. They don't send them and the money to Uncle Sam at all. They might have good reasons for the tax oversight. Or they might just be ignoring their civic tax duties. Regardless, the oversight is gonna hurt. But it doesn't... Read more →


If you filed a return on April 17 (or the 18th thanks to the Internal Revenue Service's Tax Day systems glitch), but didn't pay your full tax bill, Uncle Sam is coming for you. OK, not in person (yet). So you can still answer when someone rings your doorbell. But the IRS says in the coming weeks it will be sending out billing notices to 2017 tax return filers who still owe money. These tax bills actually will be in the form of IRS notices, specially notices CP14 and CP501, which are frequently mailed in the months of June and... Read more →


Expensive real estate no longer provides owners unlimited federal property tax deductions. The Internal Revenue Service announced today that it will make an announcement about states efforts to provide taxpayers workarounds to the Tax Cuts and Jobs Act's $10,000 limit on state and local tax (SALT) federal deductions. The issue has arisen as a handful of states have enacted or are considering law changes to allow their residents to make contributions to state accounts, from which their state taxes then are paid. State "charity" workarounds: Essentially, the states' general approaches have been to effectively turn the tax payments into charitable... Read more →


Taxes are complicated. Most filers, however, escape some of the hassle by claiming the standard deduction instead of itemizing expenses. Over the years, around 70 percent of taxpayers annually have taken the standard deduction route. That number is likely to increase next year, when even more folks filing 2018 returns will claim the standard deduction amounts because, under the Tax Cuts and Jobs Act (TCJA), they have almost doubled. A few of us, though, will stick with Schedule A and our itemized expenses. And we, says the Internal Revenue Service, need to look at our payroll withholding now because of... Read more →


They're baaaack! Actually, they never left. They, of course, are tax scammers, who the Internal Revenue Service says have tweaked an old scheme using a form used by international taxpayers and non-resident aliens in their latest effort to steal taxpayer identities and cash. As is the case in many tax scams, the form used in this latest identity theft iteration, the W-8BEN, is real. That's an excerpt of the real IRS document, which is titled Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, below. You can click on it to see the full form at IRS.gov.... Read more →