Tax News & Views Frosted Lemonade Roundup

IRS & Policy Updates

Werfel Urges Patience on IRS Modernization Agenda - Benjamin Valdez, Tax Notes($): 

Although the large bucket of funding the IRS received from the Inflation Reduction Act may not always yield instant results, it’s allowing the agency to start initiatives that previously wouldn’t have left the drawing board, Werfel said July 22 during a conference hosted by the National Association of Tax Professionals.

“People on the outside will say, ‘They got all this money. Where’s the high-functioning app platform that works as well as my banks?’” Werfel said. “It’s coming, but there’s work being done behind the scenes.”

Uncertainty Growing at IRS Over Project 2025 - Benjamin Valdez, Tax Notes($). "A Washington think tank’s plan to change the IRS and the federal workforce has made some IRS employees anxious."

IRS Funding Bill: Now You See It, Now You Don’t - Doug Sword, Tax Notes($). "House leadership announced an aggressive push to pass four appropriations bills when the chamber returned from a break, but three days later scrapped plans for two of them, including the one that funds the IRS."

3 Policies Tax Pros Want Congress To Pass This Year - Asha Glover, Law360($). "As momentum around the House-passed tax break bill has fizzled and election season ramps up, tax experts hope lawmakers use what little time they have left to extend expired research tax breaks, approve the Taiwanese tax agreement and pass disaster relief before the end of the year."

Werfel Wants IRS to Help Eligible EITC Nonclaimaints - David van den Berg, Law360($):

Every year about 6 million people who are eligible for the credit don't claim it, Werfel said during a National Association of Tax Professionals conference at a Walt Disney World resort in Lake Buena Vista, Florida. Werfel said addressing that gap is an example of what he wants to do with the increased funding the agency received from the Inflation Reduction Act .

"There's a failure, a disconnect," he said. "And with our new capacity, I want to do something to help solve that disconnect."

Kamala Harris And Her Tax Proposals: A Primer - Nikhita Airi and Margot Crandall-Hollick, Tax Policy Center. "Vice President Kamala Harris may be the 2024 Democratic Party nominee following President Joe Biden’s decision not to seek a second term and earning his endorsement. Should Harris ascend to the top of the ticket, her legislative record as a senator may shed light on her future approach to tax policy."

Tax Relief for Texans

IRS announces tax relief for victims of Hurricane Beryl in Texas; various deadlines postponed to Feb. 3, 2025 - irs.gov. "The Internal Revenue Service announced today tax relief for individuals and businesses in 67 Texas counties, affected by Hurricane Beryl that began on July 5, 2024. These taxpayers now have until Feb. 3, 2025, to file various federal individual and business tax returns and make tax payments."

IRS Delays Tax Deadlines For Texans Affected By Hurricane - Jack McLoone, Law360($):

Certain Texas taxpayers affected by Hurricane Beryl, which hit the state this month, will have until a delayed deadline of Feb. 3 to file individual and business tax returns and make payments, the Internal Revenue Service said Monday.

The relief will be automatically granted to any individual or business within the disaster area designated by the Federal Emergency Management Agency, which covers 67 counties, including the state's most populous, Harris County, the IRS said in a news release. Any areas added later would also be eligible for the relief.

Scam Alert 

Tax Breaks: Planning Can Help You Deal With The Unexpected - Kelly Phillips Erb, Forbes:

While this situation [canceled flights] is out of our control, sometimes, travelers can be grounded for reasons they can control—like delinquent taxes. Yes, that’s a real thing. Under IRC Section 7345, which targets taxpayers with "seriously delinquent tax debt,” a U.S. passport can be denied or revoked for “seriously delinquent” tax debt. Currently, the threshold for what qualifies as “seriously delinquent” is $62,000 (including interest and penalties). A taxpayer’s challenge to the rule as being unconstitutional has already failed.

One way to escape a bad result? Rely on a trusted tax pro—and not social media—for your tax advice. You’ve seen these warnings before, but the IRS has again issued a consumer alert after seeing bad advice circulating on social media about several credits.

BOI

FinCEN estimates millions of hours will be spent seeking BOI access -Martha Waggoner, Tax Adviser:

Entities seeking access to beneficial ownership information (BOI) will spend over 8.7 million hours filling out paperwork in the first year and over 3.6 million in the second year, the Financial Crimes Enforcement Network (FinCEN) said in an estimate Monday.

FinCEN posted the estimate in the Federal Register as part of a 30-day notice seeking comment on the information to be collected from certain authorized recipients requesting access to BOI. Comments are due by Aug. 22. 

R&D Credit

Kyocera Failed To Back R&D Credits With Records, US Says - Anna Scott Farrell, Law360($):

In a motion for partial summary judgment Friday, the government asked the court to reject Kyocera's claim for $1.7 million in research credits under Internal Revenue Code Section 41 , saying the company didn't create or keep the documents required to substantiate the credit.
...
"Moreover, because Kyocera did not retain any supporting documents and the study is based on mere guesstimates from interviews, the court should decline any invitation to estimate the amount of the credit," the government said in the filing.

What Day is it?

More summer fun and a great combination! Today is National Lemon Day and National Vanilla Ice Cream Day. Frosted Lemonade anyone?