Tax News & Views ID Theft Protection is Not Tripe Roundup

IRS encourages all taxpayers to sign up for an IP PIN for the 2025 tax season - IRS:

As the 2025 tax season approaches, the IRS encourages all taxpayers to take an important step to safeguard their identity by signing up for an identity protection personal identification number (IP PIN).

This simple yet crucial step can provide an added layer of security, helping protect against tax-related identity theft.

ID theft remains a big problem. It can delay refunds, trigger a nightmare of tax notices, and screw up your financial life in general.

The IRS encourages taxpayers to sign up for IRS Online Account, which provides a quick and easy way to obtain an IP PIN. Signing up early will ensure taxpayers have extra safety by having an IP PIN to electronically file their returns when the filing season begins in 2025.

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The best way to sign up for an IP PIN is through IRS Online Account. The process requires identity verification, and spouses and dependents can also obtain an IP PIN if they complete the required verification steps. Once an IPPIN is issued, it must be on both electronic and paper returns.

To get an IP PIN, taxpayers should create or log into their online account at IRS.gov and follow the steps for identity verification. Once verified, taxpayers need to click on the profile tab to request their IP PIN. IP PIN users must use this number when filing their federal tax returns for the current calendar year and any previous years filed during that same period.

In addition to getting an IP PIN, you can practice good tax data hygiene to protect yourself from ID theft. Some key steps:

- Never transmit your social security number via e-mail or text.

- Don't send copies of tax documents as email attachments or via text message. Use your preparer's secure portal to transmit documents.

- Beware public wi-fi. If you need to use it a lot for travel, get secure VPN software.

- Use strong passwords.

- Watch out for imposters "phishing" for your tax information.

CPAs, Lobbyists gear up for 2026 Tax Train Wreck

CPAs Prepare For Uncertainty As TCJA Expiration Looms - Stephen Cooper, Law360 Tax Authority ($):

With billions of dollars in federal tax revenue at stake for the next decade, tax professionals are closely monitoring the November elections for insights into how congressional lawmakers' priorities will shape future tax policy. Different outcomes for control of the House, Senate and White House will require separate planning to inoculate taxpayers from potentially unwelcome changes.

Key among the expiring provisions of the 2017 tax law are those that cover estate and gift taxes, capital gains rates, opportunity zones and income tax brackets, several CPAs told Law360. Lawmakers' opinions on those provisions are critical to watch, the CPAs said, since the next Congress will decide how the mix of tax incentives and tax hikes are distributed among different groups of taxpayers.

Tax lobbying ramps up in third quarter ahead of elections - Caitlin Reilly, Roll Call:

Lobbyists this year have stressed the need for companies to engage early on next year’s expiring tax provisions, warning of the compressed timeline and the possibility that any issue could land on the chopping block amid long wish lists and pressure to curtail deficits.

It seems the private sector got the message, if quarterly lobbying disclosures filed Monday are anything to go by. Mentions of the expiring 2017 tax cuts in lobbying filings increased sharply last quarter, up 33 percent from the second quarter and 67 percent from the first three months of the year. Interest in the expiring provisions is likely higher than is captured in reports citing the law, as many filings cite specific policies, rather than the law by name.

They were lobbying on legislation before his committee. They were also employing his son. - Benjamin Guggenheim, Politico.

After three decades representing his home of Springfield, Massachusetts, in the U.S. House, Democratic Rep. Richard Neal reached the goal of his lifetime in January 2019: He took the gavel of the House Ways and Means Committee, with far-reaching powers to shape the nation’s tax code.

A year later, his 45-year-old son Brendan Neal launched a one-person public affairs firm dedicated to “political advice, lobbying, and strategic communications.”

Taxes and the Election

Future for IRA Credits Is Uncertain in Most Election Scenarios - Cady Stanton, Tax Notes ($):

Three-branch Democratic control in Washington would likely leave the tax credits ironclad or even open to further expansion. Vice President and Democratic presidential candidate Kamala Harris cited climate change initiatives and the IRA’s impact on the clean energy economy as priorities in her economic plan released September 25, and the IRA received broad Democratic support in Congress when it passed.

Divided government or Republican sweep scenarios leave room for attempts at a partial repeal or an attack on the regulations and rules dictating the provisions, especially given former President Trump’s criticism of both the credits and Harris’s tiebreaking vote for the IRA, as well as Republican taxwriters' animus toward the law's higher-than-anticipated cost.

But should Trump retake the executive branch, a full or piecemeal rollback of the credits is not guaranteed, according to David Burton, a tax partner at Norton Rose Fulbright.

Trump Keeps Promising New Tax Cuts. Other Republicans Are Wary. - Andrew Duehren, New York Times:

Some of his recent ideas would undermine a central reform in the 2017 tax law he signed: limiting the number of deductions people claim.

The goal, shared by many liberals, was to simplify the system and tax Americans with the same income at roughly the same rate. That was accomplished by increasing the standard deduction, and then limiting deductions for state and local taxes and mortgage interest. The share of Americans who itemize their deductions, rather than take the standard deduction, plunged to 9 percent from 31 percent after the Tax Cuts and Jobs Act became law, according to the Tax Policy Center, a think tank.

Harris Goes Quiet on Biden’s Push to Tax Unrealized Gains - Josh Wingrove, Bloomberg via MSN:

The move to tax unrealized gains was one of the more polarizing features of Biden’s budget proposal — critics saw it as murky to enforce and a disincentive for growth, while advocates cheered it as an innovative way to tax the rich more.

Harris’ silence comes as she’s bolstered her pro-business rhetoric and tacked her policy agenda to the middle to woo Republican and independent voters with polls showing her deadlocked against Republican rival Donald Trump. She described herself as a “pragmatic capitalist” in an interview with Telemundo Tuesday, saying she is part of a new generation of leadership that “actively works with the private sector to build up the new industries of America.”

Tax History: Not Everyone Likes Trump’s Tariff Plans — But Who Will Stop Him? - Joseph Thorndike, Tax Notes:

After all, Trump probably doesn’t need any help in making it happen. “I don’t need Congress, but they’ll approve it,” he said. “I’ll have the right to impose them myself if they don’t.”

Such a grandiose assessment of presidential power seems like it would be incorrect (if in character for Trump). But in fact, it’s quite possibly accurate. Congress long ago delegated many of its constitutional tariff powers to the executive branch, and lawmakers have shown little interest in reclaiming that authority anytime soon.

International Terminal

Eide Bailly's International Tax Team and our affiliates at HLB, the Global Advisory and Accounting Network stand ready to help with your worldwide tax planning and compliance needs.

Kamala and the Global Minimum Tax - Alex Parker, Things of Caesar:

In that environment, it’s worth asking—how committed to Pillar Two would a President Harris be?

The answer’s not quite as obvious as you might think. As she’s made pains to emphasize on the campaign trail, Harris isn’t Joe Biden, and she won’t have the same feeling of ownership over the agreement as her current boss.

Also, virtually everyone at the U.S. Treasury Department involved in negotiating and finalizing the agreement has left—aside from current Treasury Secretary Janet Yellen, who may well decide to stay on. But she was only involved at a high level, and isn’t necessarily as invested in it as her staff.

IRS Consolidated Loss Rules Seen Raising Corporate Tax Bills - Lauren Vella, Bloomberg ($). "The government has proposed dual consolidated loss regulations that, if finalized, will require corporations to change the way they include certain forms of foreign income, like stock, in their tax calculations. The changes would create more losses abroad that companies wouldn’t be able to deduct from their US income."

Americans Living Abroad: Foreign Housing Tax Break, Explained - Virginia La Torre Jeker, Forbes:

The foreign housing exclusion allows U.S. expats to exclude from income certain reasonable overseas housing expenses if they (i) are eligible (ii) exceed a base housing amount and (iii) do not exceed a specified ceiling amount.

While the FHE is not available for self-employed individuals (since an employer is not paying housing costs for them), they can deduct the eligible foreign housing amounts from taxable income.

Canada drops in global ranking after hike to capital gains tax - Pamela Heaven, Financial Post. "The country dropped from 15th to 17th out of 38 countries in the Organisation for Economic Co-operation and Development on the International Tax Competitiveness Index."

From the Tax Foundation discussion of Canada in the Index:

In 2024, Canada started to phase out full expensing for machinery and the accelerated investment incentive for buildings and adopted a digital services tax. By increasing its capital gains inclusion rate from half to two-thirds, Canada also hiked its top capital gains rate from 26.7 to 35.8 percent. Canada’s rank fell from 15^th to 17^th.

Ranking table here.

Blogs and Bits

Standard deduction amounts increase for 2025 tax year - Kay Bell, Don't Mess With Taxes. " For filers who claim the standard deduction in tax year 2025, single taxpayers and married individuals who file separate returns will get to claim $15,000 to get to their taxable income amount. That’s an increase of $400 from 2024's standard deduction for these filers."

1040 vs 1040NR: Selecting the Right Tax Form - Kasia Strzelczyk, 1040 Abroad. "Form 1040NR, often referred to as the nonresident alien income tax return, is the IRS form used by nonresident aliens to report their U.S.-sourced income. Nonresident aliens, who do not meet the substantial presence test or possess a green card, are generally required to file Form 1040NR if they have income generated from U.S. sources."

Various IRS Disaster Area Tax Filings Are Due Nov. 1, Feb. 3 & May 1 - Robert Wood, Forbes. "Here is how it shakes out. Taxpayers in parts of Arkansas, Iowa, Kentucky, Mississippi, New Mexico, Oklahoma, Texas and West Virginia have until Nov. 1, 2024, to file their 2023 returns."

Tax Crime Watch: Florida

Owner of Majestic Seals & Stripes, Inc. sentenced to federal prison for payroll tax fraud - IRS (Defendant name omitted, emphasis added)

U.S. District Judge Thomas P. Barber has sentenced Defendant to four years in federal prison for willfully failing to pay to the Internal Revenue Service (IRS) employment taxes that were withheld from employees’ paychecks. Defendant was also ordered to pay $719,049.62 in restitution. Defendant entered a guilty plea on November 9, 2023.

According to court documents, Defendant owned and operated a pavement maintenance company, known as Majestic Seals & Stripes, Inc. (Majestic), in Clearwater. As the owner of Majestic, Defendant was responsible for withholding employment taxes from the Majestic employees’ paychecks and paying the taxes owed. Instead of paying these amounts to the IRS, Defendant diverted the funds for her own personal use. Defendant also failed to pay to the IRS the employer’s portion of the payroll taxes. Specifically, between June 2016 and December 2021, Defendant failed to pay $557,249.62 in payroll taxes.

Further, in February 2021, Defendant applied for a Paycheck Protection Program (PPP) loan on behalf of Majestic. In support of the loan application, Defendant submitted a false IRS Form. As a result of the application package, the PPP loan was approved and funded in the amount of $161,800.

Florida man pleads guilty to tax evasion - IRS (Defendant name omitted, emphasis added)

According to court documents and statements made in court, Defendant, of Deltona, owned and operated several furniture liquidations businesses in Florida, including Century Liquidators. For tax years 2004 through 2013, Defendant did not timely file his federal income tax returns or pay taxes. After an audit, the IRS assessed a total of $1.7 million in taxes, interest and penalties against him.

To evade collection of these taxes, Defendant concealed his income and assets from the IRS. For example, Defendant used nominees to hide his purchases of luxury vehicles, including Rolls Royces. Defendant also filed false income tax returns that understated his income and when interviewed by an IRS special agent, falsely represented the amount of income he earned.

Lessons:

1. When you withhold taxes from your employees, it's not your money. Send it in.

2. File your tax returns. Filed returns are less likely to draw IRS attention than not filing.

3. Don't show up for your IRS exam in one of your Rolls Royces.

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Tax News & Views ID Theft Protection is Not Tripe Roundup

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Joe B. Kristan, CPA