National Taxpayer Advocate responds to criticisms

The National Taxpayer Advocate Erin Collins is responding to phone service criticisms made by the Treasury Inspector General for Tax Administration. In a blog post (https://bit.ly/47F2X0d), Collins acknowledged that the Tax Advocate Service (TAS) isn’t resolving cases, providing updates or returning phone calls as quickly as she’d like. She noted an 18% increase in TAS […]

Per diem rates for 2024-2025 released by the IRS

The IRS has released new 2024–2025 special per diem rates for expenses incurred when traveling away from home. They include the 1) transportation industry meals and incidental expenses (M&IE) rates, 2) incidental expenses only deduction and 3) list of high-cost localities used in the high-low substantiation method. Although employers can pay workers more than the […]

The Alternative Fuel Vehicle Refueling Property Credit

The IRS has issued proposed regulations regarding the Alternative Fuel Vehicle Refueling Property Credit. The Inflation Reduction Act amended the credit for qualified alternative fuel vehicle refueling property. (These properties generally consist of battery-powered electric vehicle recharging stations.) The changes apply to qualified alternative fuel vehicle refueling property placed in service after Dec. 31, 2022, […]

Here we go again…another budget impass

Federal government funding is set to run out on Oct. 1. If Congress doesn’t reach an agreement, a partial federal government shutdown will occur. Eager to avoid this outcome during the run-up to the Nov. election, lawmakers have been crafting a continuing resolution to temporarily fund government agencies. Speaker of the House Mike Johnson (R-LA) […]

Are you liable for two additional taxes on your income?

Having a high income may mean you owe two extra taxes: the 3.8% net investment income tax (NIIT) and a 0.9% additional Medicare tax on wage and self-employment income. Let’s take a look at these taxes and what they could mean for you. 1. The NIIT In addition to income tax, this tax applies on […]

What to do if you receive another taxpayers information from the IRS

Mistakes happen, even at the IRS. For example, you may receive an IRS document that isn’t meant for you. The National Taxpayer Advocate (NTA) calls that an inadvertent unauthorized disclosure. It may arrive by postal mail, email, fax or electronic transmission. What should you do? The NTA says to notify the IRS using the phone […]

Is an Offer In Compromise right for you?

Individuals with federal tax debts may seek an offer in compromise (OIC). This IRS program allows qualifying taxpayers to settle a debt for less than is owed, or pay over a longer period, if the IRS agrees. However, most OICs are rejected. In addition, the IRS wants the public to beware of OIC “mills” that […]

Navigating tax complexities: Craft partnership agreements and LLC operating agreements with precision

Partnerships are often used for business and investment activities. So are multi-member LLCs that are treated as partnerships for tax purposes. A major reason is that these entities offer federal income tax advantages, the most important of which is pass-through taxation. They also must follow some special and sometimes complicated federal income tax rules. Governing […]

US Senate Finance Committee holds hearings on tax system

The U.S. Senate Finance Committee recently held a hearing to consider how to make the U.S. tax system more fair. The hearing included research released by the Joint Committee on Taxation (https://bit.ly/47tVUrn). The lawmakers discussed taxing the ultra-wealthy, how to simplify reporting and the degree to which taxes should be “progressive.” Chair Ron Wyden (D-OR) […]

Fed reduces Benchmark borrowing rate

On Sept. 18, 2024, the U.S. Federal Reserve (Fed) reduced its benchmark federal funds rate by 0.50 percentage points, with more cuts expected in coming months. This is good news for consumers with adjustable-rate debt (for example, credit card interest) and those hoping to finance a car or home purchase. State and local governments will […]