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.
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:
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 ($):
...
“We’re going to be taking in a lot of money from penalizing companies for shipping jobs overseas and penalizing countries that employ slave laborers that then ship their products back to our country and undercut the wages of American workers,” Vance said. “What President Trump is saying is that when we bring in this additional revenue with higher economic growth, we’re going to be able to provide paid family leave [and] child care options that are viable and workable for a lot of American families.”
VP Nominees Vance, Walz Spar Over Tax Cuts - Stephen Cooper, Law360 Tax Authority ($):
Walz said he and Harris would provide a $50,000 tax credit for new small businesses and a child tax credit of $6,000. He criticized Trump and Vance's plans to renew the GOP's 2017 Tax Cuts and Jobs Act, which he estimated would cost taxpayers billions of dollars.
Trump’s Tariff Proposals Would Raise Tariff Rates to Great Depression-Era Levels - Erica York, Tax Policy Blog:
That shift in policy sent the average tariff rate on a downward path, from highs of 59.1 percent on tariffed goods and 19.8 percent on all imported goods during the Great Depression to an average of 4.7 percent on tariffed goods and 1.4 percent on all imported goods in 2017.
Tax Policy in the News
Calls to End the Employee Retention Credit Gain Support - Caitlin Mullaney, Tax Notes ($):
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):
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.
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:
"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):
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.
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.
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