Senators request rules to close loopholes around cryptocurrency

In a letter to the U.S. Dept. of Treasury and the IRS, a group of U.S. senators (three Democrats and one Independent) is requesting rules to close tax loopholes currently being exploited by cryptocurrency tax evaders. Indeed, the Infrastructure Investment and Jobs Act, enacted in late 2021, directed the Treasury and the IRS to implement […]

IRS prevails in Tax Court on Child Tax Credit and Earned Income Credit Claims

In a recent U.S. Tax Court decision, the IRS prevailed over a taxpayer who argued that the IRS erroneously disallowed claims of certain tax credits on his original and amended tax returns. The credits included the Child Tax Credit (CTC), Additional Child Tax Credit (ACTC) and Earned Income Tax Credit (EITC). Regarding the CTC and […]

New Technical Guides are a resource for tax exempt and government boards

Four new Technical Guides (TGs) about tax-exempt organizations and government entities are now available from the IRS. The guides are designed to help IRS employees. However, governing boards, tax-exempt group employees and others may also find them useful in understanding the tax regulations they must adhere to. Here are the latest TGs by topic: TG […]

Treasury Secretary Yellen meets with IRS Commissioner Werfel to discuss Strategic Operating Plan

U.S. Treasury Secretary Janet Yellen and IRS Commissioner Daniel Werfel met recently to discuss the tax agency’s Strategic Operating Plan (SOP). With nearly $60 billion of new funding over 10 years, Yellen said modernization is a priority. That includes retiring outdated computer systems, such as those used to process returns. Other improvements will include the […]

Legal Fees in the Courts

Is a pharmaceutical company entitled to deduct legal fees incurred while defending itself against patent infringement lawsuits as ordinary and necessary business expenses? In a recent case, the U.S. Tax Court said “yes,” but the IRS appealed. The IRS contended that the company should have treated the legal expenses as capital expenses because they were […]

The IRS’s Customer Callback system

The IRS’s Customer Callback (CCB) system is intended to help taxpayers avoid waiting on hold when they call the tax agency. If callers provide their numbers, IRS employees will call them back. First introduced in 2019, CCB functionality was expanded in early 2023. Recently, the Treasury Inspector General for Tax Administration (TIGTA) audited the system […]

The Tax Treatments of cryptocurrency are complex

Questions surrounding the tax treatment of cryptocurrency are complex. According to new IRS Revenue Ruling 2023-14, the process of verifying ownership of cryptocurrency is called “staking.” And when a taxpayer has successfully staked his or her units of cryptocurrency, he or she may also receive “staking rewards” consisting of additional units. When does the taxpayer […]

Educational tax credits

Before long, students will be heading off to college or trade school. Higher education is expensive, but taxpayers who take post-high school coursework in 2023 (or who have dependents taking such courses) may qualify for one of two tax credits that can reduce their tax bills. The American Opportunity Tax Credit is worth up to […]

GAO questions IRS efficiency

A Government Accountability Office (GAO) report is questioning whether the IRS can be more efficient when auditing large partnerships, especially those with complicated structures. The GAO defines a large partnership as one with more than $100 million in assets and 100 or more partners. It reports that the number of large partnerships has risen almost […]

IRS updates FAQ’s for ERTC

In response to widespread fraud involving the Employee Retention Tax Credit (ERTC), the IRS has added new frequently asked questions (FAQs) about the credit to its website. The IRS stresses that while some promoters are claiming that all employers qualify for the ERTC, this isn’t true. Eligibility depends on the facts and your specific circumstances. […]