One of the pressing issues of President-elect Donald Trump’s campaign was his proposed tax reform. It is clear that not everything will be passed into law, and in fact changes were made over the course of the presidential race before arriving at the current proposal. Of course, it is too early to know exactly what will change and by how much, but it is clear that some major changes will be made. With the backing of a Republican majority in both the House and Senate, it should not take long for these changes to happen. Furthermore, many of the changes are not significantly different than previously proposed tax reforms by some Congressmen, which should help ease their passage into law. Read more
Tag Archive for taxpayers
With its extensive changes and immediate effects, the December 2017 enactment of the Tax Cuts and Jobs Act (the “Act”) has taxpayers seeking guidance on the Act’s potential impact to their businesses. Uncertainty results from the interaction of certain new provisions of the tax law with unchanged provisions. One example of this uncertainty is the question of whether alternative minimum tax (AMT) credits remain subject to potential limitation under section 383 of the Tax Code now that the AMT credits have been made “refundable” – i.e., capable of generating refunds for taxpayers without overall taxable income for the year. Read more
Even though some IRS audits are chosen at random, there are a few factors that could put Texas taxpayers at an increased risk.
Taxpayers in Texas may understandably have a fear of being audited. After all, an Internal Revenue Service audit may be incredibly time-consuming and end in the consumer having to pay money to the government. However, that is not always the case. Read more
The new tax bill became law on December 22nd. Like many laws, some people will be affected more than others. The consequences of the new law will be felt as early as 2017, with some provisions set to start in 2018 and others in 2019. Below are a few of the items that may affect you.
Tax brackets have changed. There are still seven tax brackets, but income is now taxed at a different rate. Read more
Very often there may be a Ponzi Scheme financial theft, in which certain taxpayers have profited since they made early investments and were paid unusual profits that did not exist. Often taxpayers in Ponzi Schemes that have benefited from the financial loss of others are called upon by a trustee to forfeit the profits made in the Ponzi Scheme. Read more
With the new Tax Cut & Jobs Act Congress is enacting the biggest tax reform law in thirty years, one that will make fundamental changes in the way you, your family and your business calculate your federal income tax bill, and the amount of federal tax you will pay. Since most of the changes will go into effect next year, there’s still a narrow window of time before year-end to soften or avoid the impact of crackdowns and to best position yourself for the tax breaks that may be heading your way. Read more
Every year, millions of taxpayers ask for an extra six months to file their taxes. These taxpayers should have paid the tax they owed by the April deadline, but those who requested an extension should mark Monday, Oct. 16 as the extension deadline for 2017.
While the deadline normally falls on Oct. 15, that date falls on a Sunday this year so the due date is moved to the next business day. Every year, millions of taxpayers ask for an extra six months to file their taxes. These taxpayers should have paid the tax they owed by the April deadline, but those who requested an extension should mark Monday, Oct. 16 as the extension deadline for 2017. While the deadline normally falls on Oct. 15, that date falls on a Sunday this year so the due date is moved to the next business day. Read more
Excel has been described as the most important business software application in use today. It is convenient, inexpensive, easy to use, versatile and for all intents and purposes universally available on each office worker’s laptop. However, this does not mean that every data manipulation task requires an Excel-shaped solution. So, for Tax reporting and finance activities where does the suitability of Excel begin and where does it end?
Tax Reporting Solutions are Dead!
A few years ago, while speaking to a respected colleague, he declared that “Tax Reporting solutions are dead!”. When asked to explain he replied, “Excel can now handle a million rows!” Of course, he’s wrong about Tax Reporting, but after first wondering what version of Excel he’s been using it then became a case of wondering why he’s wrong. Read more
Unlike private creditors, the IRS has wide discretion to exercise its administrative levy powers. Internal Revenue Code (IRC) § 6331(a) says the IRS can generally “levy upon all property and rights to property.” The IRS must make notice and demand for payment and in most instances provide collection due process (CDP) rights prior to levy. And under IRC § 6334, the IRS is prohibited from levying on certain sources of payments, such as unemployment benefits and child support. But overall, the IRS can cast a large net when it chooses to levy a taxpayer’s property, including funds in retirement accounts.
It seems that a whole lot of taxpayers are anxious to get their taxes in to the IRS!
I’ve never seen the IRS issue a statement that they have yet to determine the date when they will be accepting tax returns; however, they’ve done just that this year.
Below, I outline various reasons that could be responsible for this sudden frantic rush:
Taxpayers can claim the Earned Income Tax Credit (EITC) in more than one tax year, so using the audit as an opportunity to educate them about the requirements for claiming EITC is of particular benefit to them and to the IRS. If a taxpayer claims the credit in error but understands why there was an error, he or she can not only become compliant for the year of any audit, but remain compliant going forward. However, audits are expensive for both the IRS and taxpayers, and are intrusive and intimidating for the taxpayer. There are many EITC returns the IRS does not audit but identifies as containing an error. Thus, while the IRS may not have the resources to audit these taxpayers, through other cost-effective approaches, it can educate them about why they appear to have erroneously claimed EITC, and avert future noncompliance.
The Internal Revenue Service (IRS) has issued an urgent warning about a new scheme targeting taxpayers. The scheme, which IRS Commissioner John Koskinen called “a new twist on an old scheme” involves a bogus email which impersonates the IRS and the Federal Bureau of Investigation (FBI) as part of a ransomware scam to take computer data hostage.
The scam email uses the emblems of both the IRS and the FBI. The email urges recipients to click on a link to download a questionnaire allegedly from the FBI. The email implies that the questionnaire is required as part of changes in the law focused on tax compliance. The regs referenced in the email are bogus, and the link doesn’t click through to a questionnaire. Instead, the link downloads ransomware. Read more