What is ordinary and necessary, when it comes to deductions?

Tax law generally allows deductions for ordinary and necessary business expenses incurred in carrying on a trade or business. However, an activity must be conducted with continuity and regularity and with the primary purpose of realizing income or profit. In one new case, the U.S. Tax Court found an individual didn’t conduct an activity in […]

HSA contribution limits

In addition to participants and their family members, employers can contribute to employee health savings accounts (HSAs) on a tax-advantaged basis. Such contributions are considered employer-provided coverage of medical costs and are, therefore, excludable from the employer’s income. The 2023 limit for employee and employer contributions combined is $3,850 for individual accounts and $7,750 for […]

IRS Commissioner testifies before House Oversight Committee

Recently, IRS Commissioner Daniel Werfel testified before a U.S. House Oversight Committee about achievements attributable to the Inflation Reduction Act’s supplemental funding for the agency. In particular, Werfel named three successes: 1) improved access to the IRS for taxpayers via customer service, 2) upgraded IT infrastructure that will help the agency identify and audit wealthy, […]

GAO reports on IRS opportunities to address challenges

In recent testimony to Congress, the Government Accountability Office (GAO) said the IRS has areas in which to improve its operations that align with the agency’s strategic operating plan. GAO’s Director of Strategic Issues, Jessica Lucas-Judy, focused her testimony on two specific areas that warrant attention: “service and processing” and “data safeguards and information technology.” […]

New Speaker agrees to SALT relief

Rep. Mike Johnson (R-LA) has been sworn in as the 56th speaker of the U.S. House of Representatives. Notably, Johnson has agreed to address state and local tax (SALT) relief in a potential year-end tax package. A group of House Republicans, along with their House Democratic counterparts, have been working to undo a Tax Cuts […]

The IRS is changing communication methods available to taxpayers

Two-way communication with the IRS is getting easier as the agency seeks to improve customer service. For example, taxpayers that receive notices from the IRS generally have been required to respond by mail. However, beginning with the 2023 tax filing season, notice recipients have been able to respond online to 10 of the most common […]

Withdraw funds from inherited accounts now to avoid getting ‘buried in taxes’ later

Withdraw funds from inherited accounts now to avoid getting ‘buried in taxes’ later, IRA expert says – CNBC https://bit.ly/3QymBUW

Beware of Charity Scams

Around the world, natural disasters and violent conflicts with civilian victims continue to happen, and generous donors are eager to help. But before you donate to a disaster-related charity, check it out, the IRS warns. Unfortunately, criminals respond to our desire to help by posing as legitimate charities to solicit donations. When that happens, the […]

Foreign companies with US subsidiaries receive IRS scrutiny

Large foreign companies with U.S. subsidiaries, take note: The IRS is looking your way. On Oct. 19, IRS Commissioner Daniel Werfel announced that the tax agency would be sending compliance alerts to about 150 U.S. subsidiaries of foreign corporations the IRS believes don’t pay “their fair share of tax on the profit they earn on […]

IRS collection activity in the news

One outcome of the Inflation Reduction Act is the collection of unpaid taxes owed by certain high-income individuals. In Sept. 2023, the IRS announced that it had begun contacting 1,600 taxpayers that collectively owe hundreds of millions of dollars in recognized taxes. Already, $122 million have been collected. Among the individuals, one was ordered to […]