Energy Tax Incentives Top of Mind but Some May Have to Wait
The American Energy Innovation Act is in on the table in D.C. with bipartisan support but recent amendments, like 179D permanency, may not make the cut this round.
Joe Sawatske, Director of Energy Incentives at Eide Bailly, leads the company in maximizing clients’ 179D energy efficient commercial building deduction and notes making the deduction permanent, “would be a good thing for America.” With the goal of promoting environmental responsibility through energy efficiency, the deduction helps offset up-front costs via an accelerated tax deduction.
But with its continual short-term nature, Sawatske says, “no one is sure if the incentive will be available for their project.” And while the deduction is repeatedly retroactively extended, taxpayers may not be aware of the ability to reach back into those years.
Lawmakers have said they will continue to push for expansion and extension of energy incentives throughout the year even if it doesn't happen with this bill.
Have an energy efficient project in the past or future? Contact our Fixed Assets Specialists to learn more!
Colorado bill allowing college athletes to be paid passes both houses of Legislature – Kelly Lyell and Steve Berkowitz, Fort Collins Coloradoan. “It is a profession that many people are profiting from, except the people who are doing the work.”
Reminder: Passthrough Schedule K-1s Received and Your Return Should Match
A taxpayer had a rude awakening when the IRS realized more than $400,000 of passthrough income had been incorrectly reported as qualified dividends rather than ordinary income on Form 1040. This significantly changes the tax liability given that qualified dividends are taxed at preferential capital gains rates.
While the taxpayer paid the roughly $56,000 difference in tax due, they argued no interest of nearly $37,000 should be imposed because the IRS erroneously filed notices for tax liens. The Tax Court held the taxpayers were liable for tax deficiencies from misreporting income but did not have jurisdiction related to the lien or underpayment of interest.
It’s a good reminder that income reported on Schedule K-1 should be reflected in the same nature on Form 1040, unless there’s good reason and a Notice for Inconsistent Treatment is filed.
Cite: T.C. Memo. 2020-31
What Would Income Equality Really Look Like? – Scott A. Hodge, Tax Foundation. “A more realistic and sustainable way to improve the lives of low- and middle-income Americans through the tax code would be to focus on policies that promote economic growth, create jobs, and boost real wages.”
Arizona Nears Formally Asking Congress for Federal Sales Tax Rules - Paul Jones, TaxNotes ($). "It argues that the 'decentralized nature of the internet and destination-based sourcing requirements make remote sellers uniquely susceptible to numerous conflicting and complex tax requirements across a patchwork of thousands of state and local taxing jurisdictions,' necessitating action by Congress."
TIGTA Reminds Taxpayers About Impersonation Scams
The Treasury Inspector General for Tax Administration (TIGTA) urges taxpayers to be aware of fraudulent calls they may receive impersonating IRS employees. Calls generally are trying to con taxpayers into paying false tax liabilities and despite concerted efforts to stop the scams, it remains an issue. TIGTA reports:
“To date, more than 2.5 million people have reported to TIGTA that they have received an impersonation call. More than 15,800 victims have reported that they paid the criminal impersonators a total amount of more than $80 million.”
Scammers aren’t getting off easy, though. Out of 170 people charged in Federal court for such scams so far, 93 have been sentenced to a collective 393 years’ jail time. That’s an average of 4 years in jail per person, if you’re doing the math along with me!
Remember the following:
- The IRS generally makes first contact via mail about unpaid taxes
- If the IRS does call, they will not threaten you or insist on unusual payment methods
- The IRS will not request personal or financial information via email, text, or social media
If you’re the recipient of a suspicious call from someone claiming to be the IRS, call TIGTA at 1-800-366-4484, or visit www.tigta.gov to complete an “IRS Impersonation Scam” form. Suspicious emails can be forwarded to phising@irs.gov – don’t click on attachments or links!
Related: Six Simple Ways to Stay Safe Online
Social Security Issues Warning On New Texting Scam – Kelly Phillips Erb, Forbes. “When in doubt, assume it's a scam.”
Trust your instincts, they are usually right!
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