Federal Tax Posts

The IRS has announced that recipients of Veterans Affairs (VA) benefits will automatically receive Economic Impact Payments (EIPs). It noted that the timing of the payments is still being determined. If individuals who receive VA benefits have dependent children and haven’t filed federal taxes in 2018 or 2019, they must register with the IRS “Non-filers” website. Enter payment information, such as a bank account, to [...]

The Social Security Administration has provided guidance for Social Security recipients using the IRS “Non-filers” website to report information needed to receive Economic Impact Payments (EIPs). Specifically, those with Direct Express debit cards who enter information at the IRS’s website must complete all of the mandatory questions, but they may leave the bank account information blank as the U.S. Treasury already has their Direct Express [...]

What might the price tag for the Coronavirus Aid, Relief and Economic Security (CARES) Act be? In a letter to the U.S. Senate Budget Committee, the Congressional Budget Office and the Joint Committee on Taxation estimated that the CARES Act will add more than $1.8 trillion to the federal deficit in the period of 2020-2030. The estimate included: a $988 billion rise in mandatory outlays; [...]

The IRS workload continues, in spite of added challenges. A Treasury Inspector General for Tax Administration (TIGTA) audit estimated that for 2020, the IRS will receive and process roughly 155.1 million individual income tax returns. But, TIGTA said, “unlike any other filing season, the IRS is having to take unprecedented and drastic actions to address Coronavirus Disease 2019 (COVID-19) to protect the health and safety [...]

Do you know someone who receives Supplemental Security Income (SSI)? If so, that person should automatically receive a $1,200 Economic Impact Payment (EIP) “no later than early May,” according to the IRS. No further action is required on his or her part, even though SSI recipients typically aren’t required to file tax returns. The SSI program provides monthly payments to people with limited income. Moving [...]

Not everyone is successful using the IRS’s new Get My Payment tool. The tool is meant to help taxpayers check on the status of their Economic Impact Payments, which were sent to help ease the coronavirus (COVID-19) crisis. But a lot of people report they are getting a “Status Not Available” message when they try to use it. The IRS says the message could be [...]

The IRS says its new Get My Payment tool is now up and running. It allows taxpayers to check on the status of their Economic Impact Payments (EIPs), which are being sent to help ease the coronavirus (COVID-19) crisis. If you filed a 2018 or 2019 tax return, you can use the application to find out the projected date for when your payment will be [...]

The 5th U.S. Circuit Court of Appeals has held that an individual who successfully challenged in bankruptcy court a $40 million penalty assessed against him by the IRS wasn’t entitled to recover attorneys’ fees and costs. The individual failed to file his fee petition within 30 days of the final judgment in his favor, and the filing period wasn’t suspended. According to the court, viewing [...]

Under the tax code, “eligible individuals” can claim a refundable Health Coverage Tax Credit (HCTC). The credit is for a part of the premiums they paid for qualified health insurance coverage for themselves and qualifying family members. The IRS has provided election information about filing the HCTC form. The tax agency emphasizes that a taxpayer participating in the HCTC Advance Monthly Program must still file [...]

Good recordkeeping can be a lifeline for taxpayers facing an IRS audit. Otherwise, the IRS can reconstruct income using a “bank deposit analysis,” which assumes that all deposits to accounts in a given period are taxable income. In one case, a married nail salon owner was audited using this type of analysis. The couple admitted making unreported deposits into their business account and depositing business [...]

Many erroneous tax credit claims are still paid each year, according to a recent audit by the Treasury Inspector General for Tax Administration (TIGTA). To combat errors, Congress provided the IRS with tools including penalties, bans on eligibility and recertification of eligibility. Yet, TIGTA found the following paid claims were “likely improper:” 25% of earned income credits (2018); some 33% of additional child tax credits [...]

Members of the military and veterans often have unique federal tax situations. The IRS has several resources designed to provide information to current and former military personnel and their families. For example, the IRS has an “Information for Veterans” page (https://bit.ly/39ovBUK), which includes information on tax and non-tax resources available to veterans. And “Tax Information for Members of the Military” (https://bit.ly/38hjUhf) includes resources geared to [...]

Are you a U.S. citizen (or resident alien) living abroad? If so, you may be able to elect to exclude your foreign earned income and housing costs from your gross income, subject to certain limitations. The housing cost exclusion is based in part on the number of days a person is physically present in the foreign location. For 2020 under the general limitations, the maximum [...]

Certain applicable tax-favored foreign trusts are now exempt from information reporting. With IRS Revenue Procedure 2020-7, the IRS now exempts from information reporting requirements certain tax-favored foreign trusts that are established exclusively to provide retirement benefits or to provide medical, disability or educational benefits. The IRS also provides guidance on how to request abatement, or a refund, of penalties for failure to comply with these [...]