Blog

Tax News & Views Deadline Extensions and Pumpkin Seeds Roundup

By Joe Kristan
October 2, 2024
Pumpkin seeds going into oven

Key Takeaways

  • Helene disaster declaration moves affected taxpayer deadlines to May 1, 2025.
  • Returns affected include extended 12/31/23 1040s and 1120s.
  • Disaster relief also provides two extra weeks for 2024 1040s due next year.
  • Covered area includes Alabama, Georgia, North Carolina and South Carolina and parts of Florida, Tennessee and Virginia.
  • Tariffs, Child credit show up in Veep debate.
  • ERC termination picks up support, per report.
  • Being imprisoned in Siberia is a poor excuse for not filing taxes, it seems.
  • Big-firm tax accountant accused of non-filing, mortgage fraud.
  • National Pumpkin Seed Day.

IRS provides relief for Helene; various deadlines postponed to May 1, 2025; part or all of 7 states qualify - IRS:

The Internal Revenue Service today announced disaster tax relief for all individuals and businesses affected by Hurricane Helene, including the entire states of Alabama, Georgia, North Carolina and South Carolina and parts of Florida, Tennessee and Virginia.

Taxpayers in these areas now have until May 1, 2025, to file various federal individual and business tax returns and make tax payments. Among other things, this includes 2024 individual and business returns normally due during March and April 2025, 2023 individual and corporate returns with valid extensions and quarterly estimated tax payments

...

The tax relief postpones various tax filing and payment deadlines that occurred beginning on Sept. 22, 2024, in Alabama; Sept. 23 in Florida; Sept. 24 in Georgia; Sept. 25 in North Carolina, South Carolina and Virginia; and Sept. 26 in Tennessee. In all of these states, the relief period ends on May 1, 2025 (postponement period). As a result, affected individuals and businesses will have until May 1, 2025, to file returns and pay any taxes that were originally due during this period.

This means, for example, that the May 1, 2025, deadline will now apply to:

-
Any individual or business that has a 2024 return normally due during March or April 2025.

-Any individual, business or tax-exempt organization that has a valid extension to file their 2023 federal return. The IRS noted, however, that payments on these returns are not eligible for the extra time because they were due last spring before the hurricane occurred.

-2024 quarterly estimated income tax payments normally due on Jan. 15, 2025, and 2025 estimated tax payments normally due on April 15, 2025.

-Quarterly payroll and excise tax returns normally due on Oct. 31, 2024, and Jan. 31 and April 30, 2025.

The large size of the disaster area provides important deadline relief to millions of taxpayers.

 

Taxes: The Vice Debate

Walz Criticizes Tariffs Without Saying Tariffs - Richard Rubin, Wall Street Journal:

Like Kamala Harris often does, Tim Walz criticized Trump’s plans for across-the-board tariffs without actually using the word tariffs.

He described them as a consumption tax or national sales tax that would raise prices. The tariffs would likely raise prices, but tariffs aren’t exactly like a sales tax. They would apply to imports only, raising prices on things Americans buy from overseas—and on any exports that face foreign tariffs when other countries retaliate. Vance later pointed out that the Biden administration kept many of Trump's tariffs and said that was one of the few Biden-Harris economic policies he agreed with.

 

Vance, Walz Clash on Use of Tariffs to Pay for Child Tax Credit - Alexander Rifaat, Tax Notes ($):

Democratic vice-presidential nominee Tim Walz sought to dismiss Republican vice-presidential nominee JD Vance’s contention that a blanket tariff on imports would be an effective way of paying for an expanded child tax credit.

...

“We’re going to be taking in a lot of money from penalizing companies for shipping jobs overseas and penalizing countries that employ slave laborers that then ship their products back to our country and undercut the wages of American workers,” Vance said. “What President Trump is saying is that when we bring in this additional revenue with higher economic growth, we’re going to be able to provide paid family leave [and] child care options that are viable and workable for a lot of American families.”

 

VP Nominees Vance, Walz Spar Over Tax Cuts - Stephen Cooper, Law360 Tax Authority ($):

The debate between Walz, the running mate of Democratic presidential candidate and current Vice President Kamala Harris, and Vance, the running mate of former President Donald Trump, took place roughly five weeks ahead of the upcoming November elections. Neither candidate gave detailed answers when asked by the moderators how they planned to pay for their tax cut proposals without increasing the federal government's red ink.

Walz said he and Harris would provide a $50,000 tax credit for new small businesses and a child tax credit of $6,000. He criticized Trump and Vance's plans to renew the GOP's 2017 Tax Cuts and Jobs Act, which he estimated would cost taxpayers billions of dollars.

 

Trump’s Tariff Proposals Would Raise Tariff Rates to Great Depression-Era Levels - Erica York, Tax Policy Blog:

As a review, tariffs are a type of excise tax (a narrowly targeted consumption tax) applied to domestic consumption of foreign-produced goods. Since the depths of the Great Depression and the collapse in global trade after the 1930 Hawley-Smoot tariffs, US policy shifted away from restrictive tariffs in favor of multilateral cooperation to reduce tariffs (as economist Douglas Irwin explains in his book Clashing Over Commerce).

That shift in policy sent the average tariff rate on a downward path, from highs of 59.1 percent on tariffed goods and 19.8 percent on all imported goods during the Great Depression to an average of 4.7 percent on tariffed goods and 1.4 percent on all imported goods in 2017.

 

Tax Policy in the News

Calls to End the Employee Retention Credit Gain Support - Caitlin Mullaney, Tax Notes ($):

A legislative proposal to put an end to the processing of employee retention credit claims has been met with strong support from policy groups.

...

The ERTC Repeal Act of 2024 (S. 5079), introduced September 18 by Sen. Mitt Romney, R-Utah, would apply a retroactive filing deadline of January 31 for ERC claims and increase penalties for fraud related to claims.

...

The Joint Committee on Taxation originally estimated the cost of the ERC at $55 billion, but increased its estimate to $78 billion with extensions of the credit. In January the Committee for a Responsible Federal Budget projected that the ERC may end up costing over $550 billion.

 

Management’s Decisions Led to Billions of Dollars in Claims Not Being Considered for Prerefund Examination - Treasury Inspector General for Tax Administration. The IRS watchdog reports (my emphasis):

From November 7, 2022, through June 29, 2023, the IRS further limited referrals of ERC claims for possible prerefund examination by only requiring review of two of the 11 test scenarios developed to identify potentially erroneous ERC claims. According to the IRS, the shift to these two tests served to strengthen the referral criteria and limit referrals to potentially questionable returns. Thus, the only ERC claims referred were cases that failed one of the two specified tests.

Our review of more than 1.9 million ERC claims processed by the IRS during the same time frame identified 44,930 Tax Years 2020 and 2021 ERC claims totaling $22.3 billion that exceeded the IRS’s updated threshold for referral and passed the two specified test scenarios. These ERC claims were neither referred for possible prerefund examination nor tested on the remaining nine scenarios developed to identify potentially erroneous ERC claims. We estimate that $948.3 million in refundable ERC and $149 million in nonrefundable ERC may have been allowed because of the IRS’s limited referral criteria.
Maybe, just maybe, the IRS isn't the best tool for every public policy need. IRS and Treasury

 

IRS announces new relief for taxpayers affected by terrorist attacks in Israel: 2023 and 2024 returns and payments are now due Sept. 30, 2025; other relief available - IRS:

The Internal Revenue Service announced today that due to recent terrorist attacks in Israel, the agency is providing additional tax relief to affected individuals and businesses, postponing until Sept. 30, 2025, a wide range of deadlines for filing federal returns, making tax payments and performing other time-sensitive tax-related actions.

Notice 2024-72, posted today on IRS.gov, covers similar groups but is separate from Notice 2023-71, which originally provided relief to taxpayers affected by the Oct. 7, 2023, attacks in Israel.

 

It's hard to e-file from Siberia

Held Hostage Overseas? The IRS Wants Your Back Taxes. - Emma Camp, Reason:

That's the bizarre situation in which hostages Evan Gerskovich, Paul Whelan, and Vladimir Kara-Murza found themselves after they were released from detention in Russia last month. All three men say they faced a battery of surprise financial issues after returning home, including tax charges and hits to the credit stemming from bills they were unable to pay while behind bars.

"I got one of those bills from the IRS saying, you owe this much on this year, you owe this much on this year because of failure to pay on time—here's the interest that's accrued," Washington Post reporter and former hostage Jason Rezaian told NPR. He faced more than $6,000 in fees for unpaid taxes after his release, following 544 days of detention in Iran. "This is an oversight that nobody really thought about."

Apparently few hostage takers or gulag administrators provide tax filing resources.

 

Blogs and Bits

3 tax moves to make October less scary - Kay Bell, Don't Mess With Taxes. "1. File your 2023 tax return. You were smart to get more time earlier this year to finish your tax return. It’s much better to file later and correctly, than rush through the process in April and make costly mistakes."

With Tax Changes Likely, Should You Collect Payments In 2024 Or 2025? - Robert Wood, Forbes. "A classic tenet of tax planning says that you should generally try to accelerate tax deductions and defer income where you can. Timing invoicing, and even 'pay me next year' requests are common with employers, suppliers, vendors, customers and more. On a cash basis, you probably assume that you can't be taxed until you receive money. But technically, if you have a legal right to payment but decide not to receive it, the IRS can tax you nonetheless."

IRS Issues Proposed Regs on Alternative Fuel Vehicle Refueling Property Credit - Parker Tax Pro Library. "The IRS issued proposed regulations regarding the federal income tax credit under Code Sec. 30C, as amended by the Inflation Reduction Act of 2022 (Pub. L. ), for certain costs relating to qualified alternative fuel vehicle refueling property that is placed in service within a low-income community or within a non-urban census tract."

 

Farming and taxes: what you need to know in 2024 - National Association of Tax Professionals. "Yes, crop insurance proceeds received by a farmer due to physical crop damage or reduction of crop revenue are considered taxable income."

Planes, Trains, & Automobiles: A Guide To The Section 645 Election - Ashley Case, Forbes. "The Section 645 election allows a qualified revocable trust (QRT) to be treated as part of a decedent’s estate for federal income tax purposes. By making this election, the tax reporting process can be streamlined significantly, similar to the convenience of taking a direct flight to your destination instead of dealing with multiple connecting flights. Just as a direct flight saves you time and reduces stress, the Section 645 election simplifies tax filings, combining them into one coherent return."

Related: Eide Bally Wealth Transition Services.

 

Cobblers and Barefoot Children Department

DC Accountant Charged with Mortgage Fraud and Tax Crimes - US Department of Justice (Defendant name omitted, emphasis added):

A federal grand jury in Washington, D.C., returned an indictment yesterday, which was unsealed today, charging a CPA with not filing income tax returns, bank fraud and aggravated identity theft.

According to the indictment, Defendant, of Washington, D.C., was a partner or managing director at several large accounting and finance firms and worked in tax compliance. Nevertheless, Defendant allegedly did not file federal income tax returns for himself for nearly a decade despite earning more than $7.7 million during that time.

Anybody can be busy. Yet a guy like that knows his deadlines.

In February 2023, Defendant allegedly sought to obtain a $1.36 million bank-financed loan to purchase a home in D.C. and was working with a mortgage company to do so. After the mortgage company allegedly told Defendant that the bank would not approve the loan without copies of Defendant’s filed tax returns, Defendant allegedly provided the mortgage company with fabricated documents to make it appear as if he had filed tax returns and provided copies of tax returns for 2020 and 2021 that Defendant never filed with the IRS. On these returns and other documents that he submitted to the mortgage company, Defendant allegedly listed a former colleague as the individual who prepared the returns and uploaded them for filing with the IRS. This individual allegedly did not prepare the returns, has never prepared tax returns for Defendant and did not authorize Defendant to use his name on the returns and other documents that Defendant submitted to the mortgage company. Based on Defendant’s false representation, the bank allegedly approved the loan and Defendant purchased the home.

This unfortunate taxpayer has worked in tax for two Big 4 firms and three big next-tier accounting and advisory firms, according to his LinkedIn profile. If he doesn't have the tools to skip out on paying taxes, lesser non-filers don't have much hope. 

 

What day is it?

It's National Pumpkin Seed Day! In our house, we observe this holiday the day after we carve the Jack-o'-lanterns.

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

About the Author(s)

Joe Kristan

Joe B. Kristan, CPA

Partner
After 38 years centered on tax consulting for closely held businesses and their owners, Joe is joining Eide Bailly's National Tax Office. Joe's responsibilities include communication, process improvement and training. He is a principal contributor to the Eide Bailly Tax News and Views blog, providing daily updates on tax reform and other tax news. Joe is a Certified Public Accountant and a member of the AICPA Tax Section and Iowa Society of Public Accountants.

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.