The EV clean vehicle tax credit

Not all electric vehicles (EVs) will qualify for the clean vehicle tax credit. Specifically, EVs placed in service in 2024 won’t be eligible if their battery components are manufactured by a foreign entity of concern (FEOC). EVs placed in service beginning in 2025 mustn’t have batteries containing applicable critical minerals extracted, processed or recycled by […]

Cigarette Taxes and Cigarette Smuggling by State

Cigarette Taxes and Cigarette Smuggling by State, 2021 https://bit.ly/486bw3f

The IRS Whistleblower Office

The IRS Whistleblower Office (WBO) plays a key role in tax collection. The federal tax system relies on voluntary compliance, investigations, data analytics and information from people with knowledge of noncompliance. A tip that leads to collection of proceeds based on matters within the IRS’s jurisdiction may result in a valid claim for a cash […]

Do I need to report funds received?

Federal tax law defines gross income as income from all sources, unless excluded by law. Amounts received for personal injuries or personal sickness are excluded from taxation. In one case, a formerly married couple received a settlement in exchange for vacating their apartment. Neither reported the amounts on their separate tax returns. In U.S. Tax […]

IRS issues guidance on donor-advised funds

Earlier this month, the IRS issued long-awaited guidance on donor-advised funds (DAFs). As proposed regulations define them, DAFs are accounts maintained by “sponsoring organizations” and funded by charitable donors who retain advisory privileges regarding distribution of their accounts’ holdings. Distributions made to individuals or for non-charitable purposes are taxable, but non-taxable distributions can be made […]

New regulations clarify when part time employees must be allowed in employer 401k plans

New IRS proposed reliance regulations clarify when employers must allow long-term, part-time (LTPT) employees to participate in their 401(k) plans. The SECURE and SECURE 2.0 Acts changed the length of service needed before LTPT workers can participate. Starting in 2025, they’re eligible to contribute to their employer’s retirement plans after working 500 hours during two […]

IRS clamps down on using OSHA guidance to claim ERTC

The problem of fraudulent Employee Retention Tax Credit (ERTC) claims has been well documented. Indeed, the IRS issued a moratorium (currently through year end) on the processing of ERTC claims, due to a high volume of fraud. In a recent memo (AM 2023-007), the IRS is tamping down on a tactic used by claimants to […]

House Democrat urge release of information on IRS investigation of Puerto Rico tax abuse

A group of U.S. House Democrats is urging the IRS to provide an update on the agency’s investigation of tax incentive abuses designed to lure investors to Puerto Rico and spark economic growth. The schemes involve high-net-worth individuals reaping the benefits of Puerto Rico’s Act 22. This law exempts new Puerto Rican residents from federal […]

The Saver’s Credit

Are you familiar with the Saver’s Credit? It’s a special credit that helps offset part of the first $2,000 that low- and moderate-income workers contribute to IRAs, 401(k)s or similar workplace retirement plans. The maximum credit is $1,000 ($2,000 for married couples). It can increase a taxpayer’s refund or reduce the tax owed. Eligible taxpayers […]

Collection Due Process

Taxpayers who owe more taxes than they can currently pay can request a Collection Due Process (CDP) hearing, but they must follow the rules. One taxpayer received a deficiency notice for failing to report $387,000 of income, some of which represented premature retirement plan distributions before she was 59½. After ignoring the deficiency notices, she […]