IRS uses bank deposits analysis for underreporting of income

If the IRS suspects a taxpayer isn’t reporting all income, it may conduct a “bank deposits analysis” to compare deposits with what the taxpayer reported. In one case, the IRS analyzed the bank deposits of a man who held multiple accounts in his name and in the names of his businesses. The IRS argued he […]

Will the New Markets Tax Credit be permanent?

Bipartisan legislation introduced in Congress would make the New Markets Tax Credit (NMTC) permanent. Currently, it’s set to expire on Dec. 31, 2025. The NMTC program helps economically distressed communities attract private capital by providing investors with a 39% nonrefundable federal tax credit. Since 2000, the U.S. Treasury Department has used the NMTC to make […]

Missouri Tax Package Would Set State Up for Success

Missouri Tax Package Would Set State Up for Success https://bit.ly/3mBTFiv

Reactions to IRS strategic plan

Reactions following the April 6 release of the IRS’s $80 billion spending plan were swift, not to mention, mixed. U.S. House Ways and Means Chair Jason Smith (R-MO) complained that the plan lacks specifics on items such as hiring and audits. And many Republicans are speculating that the IRS intends to boost audits of middle-class […]

TIGTA releases audit of IRS systems

The IRS made positive strides during the 2022 tax filing season, but work remains to shore up lingering areas of concern, according to a Treasury Inspector General for Tax Administration (TIGTA) audit. TIGTA found that by July 1, 2022, all 2020 paper tax returns were processed, but 9.5 million 2021 paper tax returns remained unprocessed. […]

IRS strategic plan outlines initiatives

New IRS Commissioner Danny Werfel has released his strategic operating plan for the nearly $80 billion allocated to the IRS by the Inflation Reduction Act. Werfel said the plan outlines “42 specific initiatives designed to achieve IRS goals.” The 150-page plan focuses on three main components: customer service, compliance efforts and technology updates. Regarding customer […]

When can I deduct a casualty loss?

You can generally deduct casualty losses related to your home, household items and vehicles if the loss is caused by a federally declared disaster. Deductions are subject to limits and must be unreimbursed. Taxpayers must show the change in the property’s value before and after the damage. One married couple claimed a nearly $740,000 casualty […]

IRS warns on abusive tax arrangements

Continuing its annual “Dirty Dozen” campaign, the IRS warns taxpayers of “potentially abusive” tax arrangements. In these scams, legitimate tax planning tools such as Charitable Remainder Annuity Trusts (CRATs) and monetized installment sales are misused by shady promoters who misapply the rules and leave taxpayers vulnerable. CRATs must correctly report all transactions and file all […]

Arkansas Storm tax relief

Tax relief has been granted to victims of recent severe storms and tornadoes in Arkansas. Following a disaster declaration by the Federal Emergency Management Agency, the IRS announced that residents and businesses in Cross, Lonoke and Pulaski counties are eligible for extensions. They have until July 31, 2023, to file tax returns and make tax […]

IRS guidance issued to address energy tax credits

What’s an “energy community”? Recent IRS guidance addresses the topic as it relates to certain tax credits made possible by the Inflation Reduction Act (IRA). The IRA specifies three categories of energy communities: brownfield sites, coal communities and certain statistical areas identified based on tax revenues and unemployment rates. Those sites that meet the requirements […]