Taxpayer Advocate releases annual report

The National Taxpayer Advocate (NTA) released her latest annual report to Congress, which identifies problems that taxpayers face in dealing with the IRS. While the NTA reported there has been “overall improvement in IRS taxpayer service,” there are still “persistent challenges.” One of the most serious problems involves IRS delays in processing the Employee Retention […]

What is a CP24 notice?

What does it mean if you receive a CP24 notice from the IRS? Don’t panic. It’s probably not bad news. The IRS sends this notice when the amount of tax paid on a taxpayer’s return doesn’t match its records of estimated tax payments posted. A CP24 generally will inform you that the IRS has corrected […]

Hydrogen Production Tax Credit regulations issued

The IRS has issued final regulations that broaden the Inflation Reduction Act’s Clean Hydrogen Production Tax Credit (Section 45V). In a nutshell, the final regs expand the number of hydrogen production sources that qualify for the credit. Among other matters, the final regs clarify how hydrogen producers can determine credit eligibility. Producers include those using […]

What will happen with expiring tax provisions?

How will Republican lawmakers address expiring provisions in the Tax Cuts and Jobs Act and tax-related campaign promises? There are various opinions on how to proceed. President-Elect Donald Trump is calling for “one powerful bill” to address tax, border and energy issues. House Ways and Means Committee Chair Jason Smith (R-MO) also recommends one reconciliation […]

Deductions versus credits

One of the most common misconceptions about filing an income tax return is the distinction between deductions and credits. Deductions lower a taxpayer’s taxable income before the tax is calculated. For instance, on an individual return, you can either claim the standard deduction or itemize deductions, depending on which option reduces your taxable income more. […]

IRS tax offset program

Taxpayers with outstanding federal tax debt may be subject to the IRS tax offset program. It allows the IRS to use federal refunds to cover unpaid taxes and other debt, such as child support. The Treasury Inspector General for Tax Administration (TIGTA) recently reported on the program. From tax years 2020–2022, nearly $40.1 billion was […]

Proposals on private placement life insurance uncertain

Private placement life insurance arrangements may enable wealthy taxpayers to borrow against policies at favorable rates and pass on wealth to their heirs tax-free. In late Dec. 2024, outgoing Senate Finance Committee Chair Ron Wyden (D-OR) proposed legislation that would end such preferential tax treatment. According to Wyden, private placement policies are nothing more than […]

What is the Social Security Fairness Act?

On Jan. 5, President Biden signed the Social Security Fairness Act into law. It repeals two long-standing provisions that reduce or eliminate Social Security benefits for certain retirees who receive public pensions but also worked in private sector jobs during their careers. Affected individuals include some former firefighters, police officers, teachers, postal workers and government […]

Do you own digital assets?

Do you possess digital assets, such as convertible virtual currencies and cryptocurrencies, stablecoins or non-fungible tokens (NFTs)? If so, you must report any digital asset-related income on your 2024 federal income tax return. According to the IRS, a digital asset is one that can be stored electronically and can be bought, sold, owned, transferred or […]

CBO reports budget deficit

The Congressional Budget Office (CBO) reported an estimated federal budget deficit of $622 billion in the first two months of fiscal year 2025. That amount is $242 billion more than the deficit recorded during the same period last fiscal year. Revenue receipts were $50 billion, down 7% compared to last fiscal year, and outlays were […]