Key Takeaways
- IRS workers reinstated with backpay, put on administrative leave.
- Appeals court upholds back-to-work orders.
- DOGE targets 25% of Taxpayer Advocate staffing.
- Technology vs. Staffing.
- Tariffs and the $50,000 flat tire.
- Congress targets university endowments.
- A Great Falls fall.
- Sloppy Joes.
IRS Reinstating Fired Employees After Court Decision - Kristen Parillo and Mary Katherine Browne, Tax Notes ($):
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It appears that the IRS has taken steps to comply with the temporary restraining order. A March 17 email from the IRS to a fired agency probationary employee states that the employee is being reinstated to their position immediately in response to a March 13 order from the U.S. District Court for the District of Maryland.
The email, viewed by Tax Notes, states that “while you are being reinstated to federal service, you are also being placed on Administrative Leave. You should not report to duty or perform any work until receiving further guidance.”
Split 9th Circ. Won't Halt Federal Workers Reinstatement Order - Beverly Banks, Law360 Tax Authority ($). "The Office of Personnel Management can't have an immediate administrative pause on U.S. District Judge William Alsup's grant of a preliminary injunction last week, the majority of a three-judge Ninth Circuit panel said in an order."
Taxpayer Advocate faces DOGE Meataxe
Trump administration plans a 25 percent staff cut at IRS taxpayer help office - Shannon Najmabadi and Jacob Bogage, Washington Post:
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The Taxpayer Advocate Service is part of the IRS but operates independently as its internal watchdog. It identifies major problems facing taxpayers, recommends fixes and assists people with individual problems. For instance, the service might help a person who has tried to resolve an identity theft case for a year or someone struggling to pay rent while the IRS has a levy on their bank account.
“I think [the cuts] will have devastating consequences to the taxpayers that are in need of help,” said Nina Olson, who was the national taxpayer advocate from 2001 to 2019.
Elyse Katz, a partner in the Eide Bailly Tax Controversy practice, says such cuts would be "Devastating. We rely heavily on TAS to help our clients get the IRS to correctly do their job. Including processing refunds and returns. They are already stretched. Taxpayers are going to be left with no options or resources to get their problems solved and will be at the mercy of the IRS to eventually get things accomplished. With both the IRS and TAS being slashed, problems will go up and resolutions will go down."
IRS Planned Worker Cuts Would Hit Advocate, Filing Tool Staff - Erin Slowey and Naomi Jagoda, Bloomberg ($):
Prospective cuts to the IRS workforce are drawing warnings from many tax attorneys and policy advocates who say it will lead to delayed refunds, longer wait times, and to taxpayers not paying what they owe.
What can technology replace? - Bernie Becker, Politico:
On top of that, the IRS has plugged certain technological advancements made in recent years that were spurred by the tens of billions of dollars in new funding it received during the Biden administration, like relying on artificial intelligence to pick large partnerships for audits. Efforts like that, the senior IRS official said, were “just starting to scratch the surface.”
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“Yes, 90 percent of taxpayers file electronically, but that still leaves millions of complex cases — like small businesses, high-income individuals, and fraud and criminal investigations — that require human expertise and judgment,” said Kelly Reyes, the head of the Professional Managers Association, which represents IRS managers.
The Day in Tariffs
Trump Team Explored Simplified Plan for Reciprocal Tariffs - Gavin Bade, Josh Dawsey, and Vipal Monga, Wall Street Journal:
Officials have recently weighed whether to simplify the complex task of devising new tariff rates for hundreds of U.S. trading partners by instead sorting nations into one of three tariff tiers, according to people close to the policy discussions, who emphasized that the situation remains fluid and could evolve in the coming weeks. The proposal was later ruled out, said an administration official close to the talks, adding that Trump’s team is still trying to sort how to implement an individualized rate for each nation.
Kentucky in Trump’s tariff crosshairs - Ari Hawkins, Politico:
The global spirits industry is bracing for pain: The EU is enacting 50 percent tariffs on U.S. whiskey starting April 1, in retaliation to Trump’s latest round of duties on steel and aluminum.
In response, the president upped the ante further, threatening a whopping 200 percent tariff on alcohol from France and other EU countries. The announcement came weeks before Trump’s reciprocal tariffs planned for April 2, which could mark another blow to industry.
For Importers Rushing to Beat Tariffs, It’s Life on the Edge - Liz Young and Paul Berger, Wall Street Journal. "Jordan Dewart, president of Mexico operations for logistics provider Redwood Logistics, said one auto-parts shipment was hit with a bill for about $50,000 during the brief period the 25% tariff on goods from Mexico was in effect after the trucker carrying the load was delayed by a flat tire."
Tariff Turmoil Revives Interest in Neglected Components of Transfer Pricing Documentation - Chad Martin, Eide Bailly. "For example, a US distributor purchasing steel products from a related party Canadian manufacturer must consider the proper intercompany allocation of the 25% tariff it now bears as the importer of record."
Deep Thoughts in Congress
Senate Budget Republicans to huddle with parliamentarian - Samantha Handler, Laura Weiss, and Andrew Desiderio, Punchbowl News:
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The baseline would essentially say it costs nothing to extend the 2017 tax cuts that expire this year, rather than the more than $4.5 trillion price tag under Congress’ typical tax scoring methods.
That would help get around Senate reconciliation rules that require everything to be paid for after the first 10 years in reconciliation. Republicans don’t view the amount of budgetary offsets they’d need to cover the tax cuts after 10 years as politically viable.
The Republicans Pushing Trump to Save Biden’s Clean Energy Tax Credits - David Gelles, New York Times:
About 80 percent of the investments tied to the bill have gone to Republican congressional districts, according to an analysis by Atlas Public Policy, a research firm. They include battery plants across the Southeast, a lithium mine in Nevada and wind farms in Texas.
Nevertheless, Mr. Trump has said he wants to dismantle the Inflation Reduction Act, and many Republicans in Congress support eliminating all incentives for clean energy.
Related: IRA Credits Remain in Place Despite Mixed Signals.
Republicans in Congress weigh tax increase for top university endowments - Amelia Pollard, Sun Yu, and Andrew Jack, Financial Times:
Dozens of the country’s richest schools would be subject to the levies if approved, including Harvard, Stanford and Princeton. Universities invest endowment assets and use the gains to fund all manner of operations, including professor salaries, financial aid, student fellowships and campus activities. For some, such as Harvard’s $50bn fund, investment returns are the single-largest source of funding for the school, representing more than a third of revenue.
Related: Eide Bailly Exempt Organization Tax Services.
Blogs and Bits
Tax scammers use AI to up their criminal schemes - Kay Bell, Don't Mess With Taxes. "So, if a message, regardless of how delivered, demands you take quick action, take a breath. Don’t give the caller what is asked. Don’t click on the electronic link. Instead, call the IRS or go to IRS.gov to find out if you really do have a tax problem. And if you use a tax preparer or tax software, personally contact them, too, for clarification before taking any action."
Not Ready To File Your Tax Return? File For An Extension - Kelly Phillips Erb, Forbes. "Still, some taxpayers resist, insisting that filing for an extension will cause a return to be flagged for audit. Not only do the statistics not bear this out, but it doesn’t make good sense: I maintain that it’s always better to file a complete, correct return on extension than a rushed, flawed return by Tax Day."
Chief Counsel's Office Advises on Deductibility of Losses from Scams - Parker Tax Pro Library. "To claim a theft loss, a taxpayer must establish that the loss resulted from an illegal taking of property done with criminal intent that is considered theft under applicable state law."
IRS Releases—And Debunks—Five Tax Myths About Getting Your Tax Refund - Robert Wood, Forbes. "Myth #1: Calling IRS, a tax software provider or a tax professional will provide a more accurate refund date"
IRS Issues Applicable Federal Rates (AFR) for April 2025 - Bailey Finney, Eide Bailly.
A Great Fall
Great Falls businessman sentenced for tax and investment fraud - IRS (Defendant name omitted, emphasis added):
According to court documents and statements made in court, Defendant owned and operated several businesses, including laser tag facilities and an Amazon reseller. From 2015 to 2021, Defendant did not pay the IRS the taxes withheld from his employees’ paychecks or file the required quarterly employment tax returns reporting those withholdings.
Between October 2010 and October 2012, Defendant filed two personal income tax returns on which he reported owing substantial taxes, but did not pay all the taxes due. When the IRS attempted to collect the unpaid taxes, Defendant submitted a false statement that omitted valuable assets he owned, including a helicopter, a Bentley, a Lamborghini, and real estate in Great Falls. Approximately two weeks later, Defendant transferred ownership of the Great Falls property to his wife. He also paid personal expenses from his business bank accounts, including more than $889,000 toward his mortgages and more than $669,000 to purchase or lease cars, including three different Lamborghinis. Defendant withdrew more than $1.1 million in cash in amounts less than $10,000 to avoid triggering currency transaction reports from the bank. Defendant has not filed a personal income tax return since 2012 despite earning more than $34 million in gross income.
In total, Defendant caused a loss to the IRS of at least $4.4 million.
When you make that much money and don't file, even IRS computers eventually notice. That's especially true when you don't remit withheld employment taxes. It can, however, help you buy things like fancy cars and helicopters.
How did he make his money?
Anybody can have a bad eight months, right?
What day is it?
It's National Sloppy Joe Day. Not necessarily in honor of my workspace.
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