Alternative dispute resolution

Taxpayers involved in a tax dispute with the IRS may want to consider mediation. Also known as “alternative dispute resolution,” mediation can help taxpayers resolve issues quickly and with less hassle. The process is voluntary and nonbinding on both parties, not requiring either party to relinquish control. It offers a chance to avoid lengthy appeals […]

IRS error causes improper balance due notices

The IRS is acknowledging that some taxpayers have erroneously received CP14 (Balance Due, No Math Error) notices. Affected taxpayers include those who made electronic or check payments with their 2023 tax returns. CP14 notices may indicate that a taxpayer’s account is “pending,” even if a payment has been received and processed. The IRS has explained […]

House rich but cash poor? Consider a reverse mortgage strategy

Are you an older taxpayer who owns a house that has appreciated greatly? At the same time, you may need income. Thankfully, there could be a solution with a tax-saving bonus. It involves taking out a reverse mortgage. Reverse mortgage basics With a reverse mortgage, the borrower doesn’t make payments to the lender to pay […]

Green Energy tax credits

Employers that want to claim “green energy” tax credits made available by the Inflation Reduction Act, take note: The IRS is releasing final regulations and guidance about prevailing wage and apprenticeship (PWA) requirements. In general, businesses must comply with the PWA tests if a worker performs construction, alteration or repair of a qualified facility. However, […]

Educational assistance benefits

Did you know that you can exclude certain educational assistance benefits from your gross income if they’re provided under Section 127 educational assistance programs? Educational assistance benefits include payments for tuition, fees, books, supplies and equipment. They also include certain principal or interest payments on qualified education loans made by employers. Generally, taxpayers don’t have […]

Inflation enhances the 2025 amounts for Health Savings Accounts

The IRS recently released guidance providing the 2025 inflation-adjusted amounts for Health Savings Accounts (HSAs). These amounts are adjusted each year, based on inflation, and the adjustments are announced earlier in the year than other inflation-adjusted amounts, which allows employers to get ready for the next year. Fundamentals of HSAs An HSA is a trust […]

Basis Shifting

The IRS has issued guidance addressing the increasing instances of abusive basis shifting by related-party partnerships. Taxpayers are inappropriately using partnership rules to inflate the basis of underlying assets without affecting the economics of their businesses. The basis-shifting transactions targeted in Notice 2024-54 fall into three groups: 1) transfer of partnership interests to a related […]

Is it a hobby or a business?

Do you or someone you know have a side hustle? As a rising number of Americans earn side income, the IRS is reminding taxpayers that money earned this way is taxable. Depending on whether the IRS considers the activity to be a hobby or a business, the tax treatment is very different. Businesses can generally […]

IRS focus on high income compliance continues

The IRS is continuing its focus on compliance issues among some high-income earners, including partnerships. With funding from the Inflation Reduction Act (IRA), the agency is developing guidance designed to close loopholes used by some partnerships. Currently, the IRS is looking at tens of billions of dollars of deductions claimed by partnerships, with a focus […]

Historic Preservation Tax Incentives

One of the lesser-known tax breaks available to qualified businesses and individuals is the rehabilitation credit. If you own (or in some cases, lease) a historically important building and renovate it, you may be able to claim a 20% credit of eligible rehabilitation costs. Covered expenses include those for renovation, restoration and rehabilitation, but not […]