IRS

ERC application stamped with On Hold

Up to 90% of ERC Claims Are Potentially Fraudulent Forcing IRS to Extend Freeze

Originally part of the 2020 pandemic relief efforts, the ERC was meant to alleviate financial pressures for businesses by subsidizing wages up to $26,000 per employee for retained workers during COVID-19 related downturns. Despite the program’s intent to distribute $55 billion over 10 years, the IRS discovered widespread abuse, leading to an unplanned payout of […]

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An lawyer working with clients through an ADR

IRS Opens New Office to Encourage Alternative Dispute Resolution

In a significant move to revitalize and enhance the efficiency of tax dispute resolutions, the IRS has recently established a new Alternative Dispute Resolution (ADR) Program Management Office. This strategic initiative follows a substantial decline in ADR engagement, as detailed in a 2023 Government Accountability Office report. ADR utilization has decreased by 65%  from 429

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IRS Increases HSA Limits for 2025

The IRS recently announced the 2025 inflation adjustments for health savings accounts (HSAs) and health reimbursement arrangements (HRAs), reflecting the ongoing economic conditions. The adjustments show an increase in allowable contributions and cost thresholds for high-deductible health plans (HDHPs), which could impact financial planning for those utilizing these accounts. For individuals with self-only HDHP coverage,

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1040 Individual Income Tax Return blank with dollar bills, calculator and pen on calendar page with marked 15th April. Tax period concept. IRS Internal Revenue Service

How Did the 2023 Tax Season Go for the IRS?

The IRS reported a significant return to taxpayers, disbursing around $659 million in refunds, marking a 2.7 percent increase in 2023 over 2022. This uptick in refunds comes against a backdrop of approximately $4.7 trillion in gross revenues collected by the agency, which underpins nearly 96% of federal government operations. Despite the increase in refunds,

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Paper with Required Minimum Distributions RMD on a table. Business concept

RMD Relief Extended for 2024

The IRS has recently extended the tax relief on required minimum distributions (RMDs) for inherited individual retirement accounts (IRAs) and annuities through 2024. This extension is part of a series of reliefs that began in 2021, aiming to alleviate financial stress for beneficiaries during the regulatory transition period. Under Notice 2024-35, the IRS specifies that

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IRS audit letter and pile of cash

IRS Targeting High-Income Taxpayers with Unfiled Returns

After its success targeting millionaires with unpaid taxes, the IRS has launched a new initiative to improve tax compliance among high-income taxpayers who have not filed federal income tax returns since 2017. This effort, funded by the Inflation Reduction Act, involves sending out IRS compliance letters to more than 125,000 cases where tax returns have not been filed since 2017. These mailings began in

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1042-s forms close up at horizontal composition

Exemption Granted from Electronic Filing for Form 1042

The IRS granted a temporary electronic filing exemption for Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons. The exemption is automatic, so withholding agents do not need to file an electronic filing waiver request to use the exemption. Under the exemption: Withholding agents (both U.S. and foreign persons) are not required to file Forms 1042 electronically during calendar

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Hand writing sign Employee Retention, Internet Concept internal recruitment method employed by organizations

Warning Signs of Questionable Employee Retention Credit Claims

The IRS has issued a warning to small businesses regarding potential issues with Employee Retention Credit (ERC) claims as the March 22, 2024 deadline for the ERC Voluntary Disclosure Program approaches. Seven suspicious warning signs have been identified based on feedback from tax professionals and compliance personnel. These signs may indicate erroneous claims and could lead to IRS scrutiny. The ERC Voluntary Disclosure Program allows businesses to rectify incorrect claims by repaying just 80% of the amount claimed. Taxpayers who

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business people on private airplane

IRS Increases Audits on Personal Use of Business Aircraft

The IRS is expanding its ongoing efforts to improve tax compliance in high income categories with dozens of audits on personal use of business aircraft. Focused primarily on large corporations, large partnerships and other high income taxpayers, they will scrutinize the allocation between business and personal use to ensure accuracy. “During tax season, millions of

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Cropped image of businessman passing money to colleague at table

IRS Announces Penalty Relief for 2020 and 2021 Tax Returns and Plans to Resume Collection Notices

The Internal Revenue Service (IRS) has recently announced a significant update for taxpayers, providing much-needed relief for those affected by the COVID-19 pandemic. Specifically, the IRS is offering automatic penalty relief for taxpayers who failed to pay their income taxes for the tax years 2020 and 2021. This relief is part of the IRS’s efforts

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