Improper use of taxpayer data

The IRS closed nearly 1,700 cases in which agency employees may have improperly accessed taxpayer data between 2012 and 2021, according to a recent report. The Government Accountability Office (GAO) found 27.3% of the incidents were substantiated as misconduct. The IRS established that misconduct occurred in 462 cases involving unauthorized information access, from among 1,694 […]

IRS audits

U.S. House Democrats held a hearing questioning the fairness of IRS audit rates. A recent GAO report found IRS audits of high-income Americans have dropped while audits of those claiming the Earned Income Tax Credit (EITC) remain high. The audit rate for EITC taxpayers is 0.77%, compared with 0.25% for all taxpayers. A taxpayer with […]

Getting Married? Don’t forget to check your tax withholding.

It’s wedding season — a happy time that includes gifts, cake and endless details. Chances are, taxes are the last thing on your mind. But the IRS wants to remind you of a few important steps. Soon, you’ll be filing your first tax return as a married person and that could affect how much taxes […]

Marijuana businesses face compliance woes

Marijuana businesses still face federal income tax compliance woes. Though 18 states allow cannabis for recreational use and 37 states allow it for medical use, the National Taxpayer Advocate Erin Collins recently issued a warning for those in the cannabis industry. Businesses that produce, distribute or sell cannabis “should be aware that there are significant […]

e-file your payroll tax returns

The IRS is urging employers to e-file payroll tax returns. Common payroll tax forms, including Forms 940, 941, 943 and 944, all can be submitted electronically using third-party software approved by the IRS or through a tax professional. Filers can sign e-filed returns with a signature PIN assigned by the IRS or by printing, signing, […]

IRS audits

If you’re worried about an IRS audit, there’s good news! According to a recent Government Accountability Office report, audits of individuals between 2010 and 2019 decreased for all income brackets, from 0.9% to 0.25%. Higher-income taxpayers experienced the biggest decline in audits, probably because they require more IRS staff review and resources. Lower-income audits, on […]

New Mexico wildfires

The IRS is providing disaster tax relief to victims of the New Mexico wildfires and straight-line winds that began April 5. The tax agency announced that the relief applies to taxpayers who live or have a business in Colfax, Lincoln, Mora, San Miguel and Valencia counties. Affected taxpayers will now have until August 31, 2022, […]

Will there be an increase in standard mileage rates?

Democrats in the U.S. House of Representatives have asked IRS Commissioner Charles Rettig to increase the 2022 standard mileage rate used to deduct the cost of operating a vehicle for business purposes. The legislators cited the rise in gasoline prices in the months since the IRS issued the latest rates as a reason to increase […]

The Trust Fund Recovery Penalty

Businesses that withhold taxes from employees and others but don’t pay them over to the IRS may face a penalty equal to 100% of the unpaid tax. The Trust Fund Recovery Penalty (TFRP) can be assessed personally against “responsible” parties, even non-owners. When the treasurer of an airline-related business was hit with the TFRP on […]

IRS document destruction update

In a recent audit, the Treasury Inspector General for Tax Administration announced the destruction of 30 million information returns filed with the IRS. The IRS now admits destroying the returns due to system constraints. The agency was required to process the backlog of documents by the end of the calendar year in which they were […]