Common Sense Recommendations for the Application of Tax Law to Digital Assets

Developing guidance regarding the taxation of digital assets hasn’t been easy for the U.S. Senate Finance Committee. The committee sought comment from the public and a group of 30 tax law academics responded by compiling “common sense” answers in a recent report. The report makes two general points that are deemed “central to any coherent […]

IRS extends acceptance of digital signatures

The IRS announced it has extended the acceptance of digital signatures indefinitely “until more robust technical solutions are deployed.” In addition, the use of encrypted email when working directly with IRS personnel has been extended until Oct. 31, 2025. The IRS originally allowed taxpayers and CPAs to use digital signatures and encrypted email during the […]

Does the IRS evaluate employees by how much they collect?

The IRS isn’t allowed to evaluate its enforcement employees by using any record of tax enforcement results (ROTERs) and certain other factors. In a recent audit, the Treasury Inspector General for Tax Administration (TIGTA) examined whether the IRS complied with the requirements. The IRS defines ROTERs as data, statistics, compilations of information, or other numerical […]

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