Posts tagged "federal tax law"

IRS Issues Final Regulations Capping SALT Deductions

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) recently finalized the federal government's answer on the charitable contribution work-around certain states have attempted to implement to reduce the effect of the cap on state and local tax deductions for federal filing purposes. Citing Internal Revenue Code section 170, the IRS determined that contributions made by taxpayers to a fund or entity designed as an alternative to paying property taxes, for example, is not a charitable contribution, because the donation is not made with a charitable intent, and the taxpayer receives a privilege or benefit in exchange for the donation.

IRS Narrows Definition of "Responsible Party" for EIN Applications

The Internal Revenue Service (IRS) recently announced that, starting May 13, 2019, only natural persons with a Social Security number or an individual taxpayer identification number may request an EIN as the "responsible party" on the application. Entities will no longer be able to use their own EINs to obtain additional EINs.

Taxpayer First Act Seeks Structural Reform for IRS

The House Way and Mean Committee is working on a bill that would overhaul Internal Revenue Service (IRS) operations, appeals, and taxpayer services. The Taxpayer First Act faltered in the Senate Finance Committee last April, but a bipartisan group of lawmakers reintroduced the bill for consideration last month. A major focus is improving customer service, from codifying the IRS Free File program and expanding and improving services for low-income taxpayers to strengthening cybersecurity and identity protection. The bill also seeks to create an independent appeals process for IRS matters.

Deadline Approaches for 2015 Non-Filers to Claim $1.4 Billion in Federal Refunds

The Internal Revenue Service (IRS) estimates that it has nearly $1.4 billion in unclaimed income tax refunds due to about 1.2 million taxpayers who failed to file a 2015 Form 1040. The deadline to claim these funds is this year's return filing deadline, April 15, 2019.

WSJ Publishes Clarification Regarding Results of Federal Tax Reform

Recent news accounts have claimed that federal taxpayers are receiving smaller tax refunds for the 2018 filing season, implying that their taxes are higher as a result of the 2017 Tax Cuts and Jobs Act. According to research by the Wall Street Journal, however, although refund amounts are indeed lower this year for many individuals, it is not necessarily a result of higher taxes.

IRS Issues Guidance on New Qualified Business Income Deduction

The Internal Revenue Service (IRS) recently issued final regulations and related guidance on the new qualified business income (QBI) deduction created by the 2017 Tax Cuts and Jobs Act. Eligible business owners and taxpayers can now deduct up to 20 percent of their qualified business income or real estate investment trust dividends on their federal tax return beginning after December 31, 2017.

TIGTA Report Finds IRS Private Debt Collection Policies May Be Harmful to Taxpayers

The Treasury Inspector General of Tax Administration (TIGTA) recently conducted an audit of the Internal Revenue Service (IRS)'s latest private debt collection program and found much room for improvement. As of May 31, 2018, the private debt collection program had netted $1.3 million, but the private agencies have collected only 1 percent of the $4.1 billion assigned to the program. For reference, the industry average for 2016 was 9.9 percent.

Plans Underway for New Federal Form 1040

The Internal Revenue Service (IRS) announced plans to consolidate the federal Forms 1040, 1040A and 1040EZ into a single Form 1040 for the 2019 filing season. The shorter form would be supplemented with schedules for more complex tax filing situations. Tax professionals can view the proposed new Form 1040 in draft form here and submit any comments to [email protected].

Taxpayers Now Have More Time to Challenge IRS Levies

Through the Tax Cuts and Jobs Act of 2017, taxpayers now have up to two years to file an administrative claim and bring suit for a wrongful levy by the Internal Revenue Service (IRS) where the IRS has already sold the property it levied. This time limit is a significant extension on the previous nine-month time limit and applies to levies made after December 22, 2017, and on or before that date if the shorter time limit hadn't yet expired.

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