2019 Tax year closing soon

The IRS is issuing a last call to nearly 1.5 million taxpayers to claim their refunds for tax year 2019 by filing a tax return before the July 17, 2023, deadline. For these unclaimed refunds, the IRS estimates that the average median refund amounts to $893. Indeed, many low- and moderate-income workers may be eligible […]

The Trust Fund Recovery Penalty: Who can it be personally assessed against?

If you own or manage a business with employees, there’s a harsh tax penalty that you could be at risk for paying personally. The Trust Fund Recovery Penalty (TFRP) applies to Social Security and income taxes that are withheld by a business from its employees’ wages. Sweeping penalty The TFRP is dangerous because it applies […]

IRS issues final regs on replacement of offer rates

The transition from the use of interbank offer rates (IBORs) to other reference rates has been years in the making. Recently, the IRS issued final regs that provide the replacement rate for the IBOR. The replacement rate may be used by taxpayers to determine the amount of interest expense attributable to their excess U.S.-connected liabilities […]

Are you a gig worker?

Are you part of the “gig economy?” Many people earn money as independent contractors by providing on-demand work, goods or services. If so, the IRS wants to remind you that money earned in the gig economy is taxable. It’s common for gig work (including driving a car for booked rides, renting out property and selling […]

The best way to survive an IRS audit is to prepare

The IRS recently released its audit statistics for the 2022 fiscal year and fewer taxpayers had their returns examined as compared with prior years. But even though a small percentage of returns are being chosen for audits these days, that will be little consolation if yours is one of them. Recent statistics Overall, just 0.49% […]

Is Cancellation of debt taxable?

Generally, when individuals borrow money, they’re obligated to repay the debts. If the lender subsequently does a cancellation of debt (COD), the borrower may have to include all or part of the COD amount in gross income. Exclusions exist, such as when the debtor is insolvent (defined as when liabilities exceed assets) at the time […]

Disaster declarations give more time to pay

The IRS is sending follow-up mailings to taxpayers in several states affected by natural disasters to let them know that they have additional time to pay their taxes. Specifically, the new notices will be sent to residents in designated disaster areas in AL, AR, CA, FL, GA, IN, MS and TN who received CP14 notices […]

Why some small businesses are switching to tax-basis reporting

Accrual-basis financial statements are considered by many to be the gold standard in financial reporting. But with the increasing cost and complexity of today’s accounting rules — in particular, the updated lease guidance that went into effect last year — some private companies are seeking a simpler alternative to U.S. Generally Accepted Accounting Principles (GAAP). […]

File and Forget?

Do you file and forget? In other words, do you put taxes out of your mind as soon as you file your tax return? You shouldn’t. The IRS has published some action steps to take throughout the year that may affect the tax you owe or the refund you may receive next year. Begin by […]

Virtual currency lands in the IRS’s crosshairs

While the value of virtual currency continues to fluctuate, the IRS’s interest in it has only increased. In 2021, for example, the agency launched Operation Hidden Treasure to root out taxpayers who don’t report income from cryptocurrency transactions on their federal income tax returns. Moreover, the Inflation Reduction Act, enacted in 2022, allocated $80 billion to the […]