Federal Tax Posts

Hurricane Ian is likely to rank as one of the most destructive storms in U.S. history. The federal government has announced tax relief for all of Florida’s residents and businesses. If you’ve been affected by Hurricane Ian, visit the IRS’s dedicated webpage for details, updates and resources: https://bit.ly/3rqYnyI 

Taxpayer identity theft is alive and well. However, progress has been made in combating this crime. The IRS, state agencies and tax professionals urge taxpayers to protect themselves with an Identity Protection PIN (IP PIN). This 6-digit number must be requested from the IRS and is renewed each year. The number must be entered on your tax return upon filing. The IRS explained that “the [...]

If the proposed Inflation Reduction Act is passed, domestic manufacturers could bear the brunt, warns one lawmaker. U.S. Senator Mike Crapo (R-ID), a member of the Senate Finance Committee, cited analysis by the Joint Committee on Taxation (JCT). While the JCT projects that only about 150 taxpayers annually will be subject to the 15% book minimum tax in the bill, it also estimated that 49.7% [...]

The Affordable Care Act’s (ACA’s) affordability percentage for employers to avoid a shared responsibility payment (penalty) is decreasing in 2023. The ACA’s employer-shared responsibility provision requires applicable large employers to offer minimum essential coverage that’s “affordable” and that provides “minimum value” to full-time employees or potentially make an employer-shared responsibility payment to the IRS. Health insurance coverage is considered “affordable” to an employee if the [...]

A proposal to appropriate $80 billion over 10 years to the IRS is back on the table as part of the Inflation Reduction Act. (It was originally included in the Build Back Better bill.) The funds would be available to the IRS through Sept. 30, 2031, across four areas of the agency. First, nearly $3.2 billion would help improve taxpayer services. Second, $45.6 billion would [...]

Can you spot a fake IRS employee? Many people tremble at the thought of hearing from the IRS. That fear can make them vulnerable to scams that seek to steal their assets or identities. To combat IRS impersonator scams, the IRS has created a fact sheet explaining how it contacts taxpayers. The first contact is not by text or email. Usually, the first contact is [...]

The American Rescue Plan Act of 2021 expanded tax benefits to reduce the cost of health insurance premiums. But these benefits are scheduled to expire at the end of 2022. Colorado Democratic Senators Bennet and Hickenlooper have proposed that the advanced premium tax credit (APTC) be made permanent. According to the senators, the APTC helped 14.5 million Americans enroll in affordable marketplace insurance during the [...]

The electric vehicle (EV) tax credit begins to phase out when 200,000 of a manufacturer’s qualifying vehicles have been sold. But automakers are telling Congress, not so fast! In a letter, GM, Ford, Chrysler and Toyota asked Congressional leaders to give all electric car and light truck buyers a tax credit of up to $7,500. The group says that lifting the limit would give buyers [...]

Congress is getting serious about addressing the confusion surrounding the tax treatment of digital assets such as cryptocurrencies. A bipartisan bill dubbed the Responsible Financial Innovation Act was recently introduced in the U.S. Senate. The bill would establish a regulatory framework for digital assets. The first-of-its-kind proposed legislation would attempt to validate the mainstream use of digital assets, particularly so-called stablecoin cryptocurrencies that function as [...]

“It is time to scrap the cap, expand benefits, and fully fund Social Security,” Independent Senator Bernie Sanders stated in a Senate Budget Committee hearing on June 9. With the support of seven Democratic co-sponsors, Sanders introduced the Social Security Expansion Act, which would increase Social Security benefits by $2,400 annually. This increase would be funded by lifting the current $147,000 cap on the maximum [...]

Seriously delinquent tax debt (SDTD) is no minor issue and could result in revocation of a passport. An SDTD is a federal tax liability that has been assessed, exceeds $55,000 in 2022 (inflation adjusted), is unpaid, legally enforceable and is subject to a filed lien notice or levy. One taxpayer had SDTD totaling $90,201, incurred over several years ($28,912 was interest). She satisfied $17,346 of [...]

Good news for those who use a vehicle for business purposes and are frustrated by the sky-high cost of gas! Starting July 1, 2022, the IRS is increasing the standard mileage rate for business use to 62.5 cents (from 58.5 cents for Jan. 1 – June 30, 2022) per mile. The rate for medical use and moving will rise to 22 cents (from 18 cents), [...]

Employers that withhold taxes from employees but don’t pay them over to the IRS may face harsh penalties. The Trust Fund Recovery Penalty (TFRP) equals 100% of the unpaid tax. The TFRP can be assessed personally against responsible parties and may include prison time. One taxpayer who operated an ammunition manufacturing and sales business withheld federal taxes from his employees’ paychecks. A U.S. Dept. of [...]

Chief financial officers (CFOs) of some major U.S. companies are seeking help from U.S. Treasury Secretary Janet Yellen. In a letter, they said the final foreign tax credit (FTC) regs issued on Dec. 28, 2021, are a “radical departure from well-established law.” The final regs, they added, put U.S companies at a “competitive disadvantage” with foreign companies. For over a century, foreign income tax paid [...]