Tax News & Views Know Your Worth Roundup

March 24, 2023

Important details to understand when the IRS might contact a taxpayer - IRS:

For people who owe taxes, the IRS provides many different payment options to help taxpayers meet their obligations. Taxpayers can avoid late filing and interest penalties by submitting their tax return and using one of these options to pay what they owe by April 18.

For those struggling to pay in full by the deadline, the IRS offers several different options. For example, most individual taxpayers qualify for a payment plan and can use the IRS' Online Payment Agreement to set up a payment plan (including an installment agreement) to pay off an outstanding balance over time.

People encountering a tax issue, such as an unpaid bill or a question about their taxes, will typically receive multiple letters in the mail from the IRS. People are encouraged to respond to these letters quickly, since interest and penalties can compound quickly.

Most IRS contacts with taxpayers are through regular mail delivered by the United States Postal Service. However, there are limited circumstances when the IRS will come to a home or business as part of a collection investigation, an audit or an ongoing criminal investigation.

Dirty Dozen: Watch out for third-party promoters of false fuel tax credit claims - IRS:

People should watch out for erroneous fuel tax credit claims and the scammers that promote them," said IRS Commissioner Danny Werfel. "These scammers will often charge a hefty fee for these bogus claims, and participants also face the possibility of identity theft. This is another example that people should always remember: Be wary if a tax deal sounds too good to be true.

Be wary of ALL tax deals that sound too good to be true or you may get a letter from the IRS delivered to your address of record!

IRS revises frequently asked questions about Form 1099-K - IRS:

On Dec. 23, 2022, the IRS announced that calendar year 2022 will be treated as a transition year for the reduced reporting threshold of more than $600. For calendar year 2022, third-party settlement organizations who issue Forms 1099-K are only required to report transactions where gross payments exceed $20,000 and there are more than 200 transactions.

Remember the IRS made a last minute decision to delay new 1099-K reporting requirements?

Appropriators Diverge Over IRS Funds; Treasury Reveals Early Plan - Cady Stanton and Doug Sword, Tax Notes ($):

It took just a few minutes for appropriators to make clear at a March 23 Financial Services and General Government Subcommittee hearing that the Treasury and IRS fiscal 2024 budgets will be a battleground in spending talks.

IRS Needs to Rethink Its Compliance Strategy, Ex-Commissioner Says - Lauren Loricchio, Tax Notes ($):

The IRS won’t be able to reduce the tax gap simply by hiring lots of revenue agents and increasing audits, but instead needs to devise an entirely new compliance strategy, according to a former head of the agency.

To shrink the tax gap — the difference between the taxes owed and the taxes that are collected — the IRS will first need to pinpoint in a strategic way where most of the underreporting and lack of payment is occurring, Charles Rossotti said March 23 during a virtual event hosted by the Center for Taxpayer Rights.

Rossotti, commissioner of the IRS from 1997 to 2002, oversaw implementation of the Internal Revenue Service Restructuring and Reform Act of 1998, the last major overhaul of the agency.

Whether more than $400,000 in annual income should be the threshold for more audits is arguable, but it is clear that most of the underreporting is at least in the top 10 percent of taxpayers, Rossotti said.

HILL TAX BRIEFING: $80 Billion Infusion Helps IRS Address Paper Addiction - Kim Dixon, Bloomberg News: "Treasury Secretary Janet Yellen this week promised lawmakers that the IRS strategic plan for spending the $80 billion it got from the Inflation Reduction Act will be coming in short order."


Tax Pros May Need Lots of Coffee to Analyze Starbucks NFTs - Nathan J. Richman, Tax Notes ($):

Starbucks’ Odyssey program mixes a traditional rewards program with an emergent technology, non-fungible tokens (NFTs), and by doing so raises a host of tax questions, many of which don’t have clear answers without more IRS guidance.

FASB releases exposure draft for cryptocurrency standards - Chris Gaetano, Accounting Today ($): "The Financial Accounting Standards Board released an exposure draft that proposed rules on accounting for, and disclosing information on "crypto assets." It's the first time the standards body has produced a formal proposal governing such assets."

Accountants encouraged by proposed NFT rules - Chris Gaetano, Accounting Today ($): "Proposed IRS rules for non-fungible tokens are seen as a good first step by some accounting professionals in this space, indicating the agency is finally taking these assets seriously."


Biden Reaches Moment of Truth for Electric Vehicle Tax Credits - Gabrielle Coppola, Bloomberg News: "One week from today, the auto world will know where the Biden administration stands on some of the toughest policy questions surrounding the US transition to electric vehicles."

Tax Court: No Home Office or Car Deductions for Confidential Work - Mary Katherine Browne, Tax Notes ($): "A taxpayer was ineligible to deduct home office and vehicle expenses for work that was classified and couldn’t be performed at home, according to the Tax Court."

Review Eide Bailly's Tax Planning Guide for a better understanding of allowable home office and vehicle expense deductions. 

Today is National Each Person is A Person of Worth Day. What does this mean for folks named Stephanie (it is also National Stephanie Day)?

Expand Full Article

We're Here to Help

We are here to help
From business growth to compliance and digital optimization, Eide Bailly is here to help you thrive and embrace opportunity.
Speak to our specialists