November 16, 2020
Your Tax Transcript May Look Different As IRS Moves To Protect Privacy – Kelly Erb Forbes, Forbes. “The Internal Revenue Service (IRS) continues to take steps forward in efforts to protect taxpayer data. Two years ago, the IRS moved to provide more privacy for individual taxpayers; now, beginning on December 13, 2020, the IRS will start masking sensitive data on business tax transcripts.”
Here is what is visible on the new tax transcript:
IRS will mask business tax transcript identifying information – Sally P. Schreiber, J.D., Journal of Accountancy. “The IRS announced on Friday that it is taking a step to fight identity theft for business taxpayers by masking sensitive identifying data on business tax transcripts (IR-2020-254). The rules will apply beginning Dec. 13, and the IRS is asking for suggestions on changes to the rules before that date.”
Looking for Cooperative Tax Policy in a Biden Administration – Mindy Herzfeld, Tax Notes($). “Any possible space between Democratic tax policy objectives and Republican adherence to Tax Cuts and Jobs Act accomplishments is very narrow, so there are many reasons to be skeptical about successful tax legislation in a divided administration.”
One of the best opportunities for cooperation will be to overturn a provision of the Tax Cuts and Jobs Act to allow for research expenditures to be deducted in full rather than amortized over five years.
“The limitation on full R&E expensing represents a material adverse change (a potentially significant broadening of the tax base) for many companies and, again, is especially problematic during a severe recession when governments generally want businesses to invest in research and job-creating activities. Congressional failure to address the upcoming law change could result in economic harm, so there might be room for bipartisan support for amending the law. Even so, it’s not a change that would appeal to the Democratic base, and Democrats have generally been disinclined to help Republicans fix glitches left by the TCJA.”
IRS Threatens 75% Fraud Penalty For Investors In Syndicated Conservation Easements – Peter J. Reilly, Forbes. “There is a sign that the IRS is raising the stakes in its attack on syndicated conservation easements (SCE). Jennifer Black, (Senior Counsel Procedure and Administration) authored two chief counsel advices CCA 202044009 and CCA 202044010 in response to National Fraud Counsel Carolyn A. Schenck.”
Guidance Denying Deduction for PPP Forgivable Expenses Even if Forgiveness Not Granted by Year End Reported to Be on the Way from Treasury – Ed Zollars, Current Federal Tax Developments. “An issue that has not yet been addressed directly by the IRS is the treatment of certain expenses paid after a taxpayer received a Paycheck Protection Program (PPP) loan when the taxpayer’s tax year end concludes prior to either the filing of an application for or a grant of forgiveness.”
In California, fate of tax hikes depends on who is asking – Adam Beam, AP News.
“This 2020 election, California voters narrowly defeated a $12.5 billion statewide business property tax increase that would have benefited schools and local governments, offering a rebuttal to the state’s reputation as a liberal paradise dominated by tax-and-spend Democrats.
But in that same election, voters approved at least 173 local measures that authorized more than $12.8 billion in new spending and borrowing that mostly benefits schools and local governments, according to an analysis by the California Taxpayers Association. That number could grow in the coming weeks, with another $2.9 billion in spending and borrowing proposals still pending as county election officials continue to count votes.”
Intuit Settlement Modifies Its Free File Marketing, Disclosures – William Hoffman, Tax Notes ($). “A proposed $40 million settlement of a lawsuit charging that Intuit Inc. misdirected Free File taxpayers to its paid products seems to address litigants’ concerns while leaving the free-filing status quo intact, a former national taxpayer advocate said.”
Watch out for continuing COVID-19 tax (and more) scams – Kay Bell, Don’t Mess with Taxes. “It's no surprise that bad people take advantage of bad situations. That's why as we continue to cope with COVID-19, pandemic-related scams — tax and otherwise — proliferate.”
“if you get this COVID-19 tax stimulus scam text, alert the IRS.
Take a screen shot of the text message and then send it in an email to firstname.lastname@example.org with the following information:
The date, time and time zone that you received the text message,
The number that appeared on your Caller ID, and
The number (your number) to which the text message was sent.”
Germany hails couch potatoes as heroes of coronavirus pandemic – DW.com. “Germany has applauded the country's "heroes" who stay at home, "lazy as raccoons." In the ad, the government encourages citizens to do what is expected: "Absolutely nothing."
This is a roundup of tax news and opinion. Any opinions expressed or implied are those of the author and not necessarily those of Eide Bailly. Opinions found in linked items are those of the authors of the linked item, not of your bloggers or of Eide Bailly. “$” means link may be behind a paywall. Items here do not constitute tax advice.