Key Takeaways
- Executive order tells Treasury to phase out paper checks.
- Stolen refunds: what to do.
- Dangers of IRS sharing tax information with other agencies.
- The continuing crisis at IRS.
- Congress tax talks continue; Corporations are worried.
- Tariff Two-Step.
- A farmer, you say?
- Spinach Day, Manatee Day.
Trump Signs EO Aimed at Fully Digitizing Tax Refunds, Payments - Alexander Rifaat, Tax Notes ($):
The order provides exemptions for individuals who don′t have access to banking services, emergency situations in which electronic disbursement would cause “undue hardship,” and certain national security and law enforcement activities.
Executive Order Will Generally Bar the Use of Paper Checks to Make Payments to or Receive Refunds from Treasury, Including Tax Related Ones - Ed Zollars, Current Federal Tax Developments. "This transition aims to reduce costs, delays, and the risks of fraud associated with paper checks. The reliance on paper checks has historically led to a higher incidence of loss, theft, undeliverability, or alteration compared to electronic funds transfers (EFTs)."
Your Paper Refund Check Never Showed Up?
What Taxpayers Should Do When Their Refund Is Stolen - Erin Collins, NTA Blog:
Those who elected to receive the refund by direct deposit but their funds were improperly diverted will need to wait 26 days from the date the IRS received the taxpayer’s return.
Those expecting a paper refund check will need to wait six weeks from the date the IRS issued the refund.
Once the appropriate time has passed, taxpayers can request a refund trace by submitting IRS Form 3911, Taxpayer Statement Regarding Refund. The process for submitting this Form varies depending on the taxpayer’s filing status.
Why Other Agencies Don't Get Tax Returns
Trump Border Czar Says He’s Hopeful IRS Agrees to Share Data - Alexander Rifaat, Tax Notes ($)
“If immigrants fear that filing taxes could expose them to deportation, many will choose not to file, reducing Federal revenues that contribute to funding public schools, health care, and disaster relief for Americans while shifting resources to the informal economy,” reads the letter, which was spearheaded by Rep. Debbie Wasserman Schultz, D-Fla.
Frank Agostino of Agostino & Associates PC made a similar argument in comments to Tax Notes earlier this month, noting that undocumented immigrants are often persuaded to file tax returns after being told of the protections of tax confidentiality.
IRS Turmoil
IRS Cuts May Delay Taxpayer Help Beyond 2025 Filing Season - Stephen Cooper, Law360 Tax Authority ($):
Taxpayers who filed their taxes electronically with the Internal Revenue Service early in the current filing season likely won't have difficulty getting timely refunds this year, congressional lawmakers and tax experts said. But that likely won't be the case for those who file paper returns with math errors and other problems that need assistance.
More Fallout From IRS Cuts: Audit Delays, Do-Over Risks, Stress - Erin Schilling and Rebecca Chen, Bloomberg ($). "Departures of IRS enforcement employees since February are leading to headaches and higher taxpayer costs while at the same time reducing the government’s ability to collect the money it’s owed. The cuts also might undermine recent campaigns to go after wealthy taxpayers started under the Biden administration."
Reinstated Probationary Employees Likely to Be Cut, Treasury Says - Kristen Parillo, Tax Notes ($):
The government discussed the employees’ job prospects in a March 25 status report in Maryland v. Department of Agriculture, No. 1:25-cv-00748 (D. Md.), a suit brought by 19 states and the District of Columbia alleging that the Trump administration violated reduction-in-force protocols in its mass firings of tens of thousands of probationary employees.
Tax Day Is Almost Here. Millions of Americans Haven’t Filed Yet. - Ashlea Ebeling, Wall Street Journal:
Some tax professionals had worried that layoffs at the agency could gum up tax season, even though the cuts were primarily in the compliance division. But the processed returns figures show that isn’t the case, so far, and taxpayers with filing-season questions are getting answers.
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Meanwhile, some tax professionals said their clients are asking about taking more aggressive positions on their returns, in light of the IRS compliance layoffs. The agency is retreating from some audits, but reassigning auditors on others, and automated collection notices continue to go out.
Tax Talks Continue in Congress
Trump tells Senate GOP he wants a debt limit increase in his tax bill - Jordain Carney, Politico:
The issue, according to Barrasso, came up during a meeting earlier this month when Senate Finance Committee Republicans visited the White House to discuss the path forward for the “one big, beautiful bill” that Trump is envisioning to link an overhaul of the tax code to border, energy and defense policies.
Senate deficit hawks balk at debt limit amid reconciliation push - Punchbowl News.
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There’s also Sen. Rand Paul (R-Ky.), who has long opposed using reconciliation to raise the debt limit. Paul told us Tuesday night: “They’ve lost me.”
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That being said, it’s difficult to see any of the aforementioned conservatives wanting to get blamed for tanking Trump’s agenda and allowing a massive tax increase.
Businesses Sound Alarm Over GOP’s Corporate-Tax Idea - Richard Rubin, Wall Street Journal:
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Ending deductions for state corporate income taxes would yield $223 billion over a decade and ending property-tax deductions would nearly double that, according to the Tax Foundation, which favors a system with lower rates and fewer breaks. That is easily enough to cover, for example, President Trump’s no-tax-on-tips pledge or help offset changes to the individual SALT cap.
Tariff Two-Step
Donald Trump considers two-step tariff regime on April 2 - Aime Williams, Financial Times:
The tools used to hit partners immediately could include the use of the International Emergency Economic Powers Act, or a little-known US trade law, Section 338 of the Tariff Act of 1930, to potentially apply tariffs of up to 50 per cent on the country’s trading partners.
Trump barrels forward with tariffs for ‘Dirty 15’ trading partners - David Lynch and Jeff Stein, Washington Post:
But the similarities stop there. The nations that the president could hit with new “reciprocal” tariffs on April 2— which account for nearly 90 percent of the $3.3 trillion in merchandise that the United States imported last year — range from tiny Switzerland to China, the world’s second-largest economy...The goal, as set out in a presidential memorandum Trump signed on Inauguration Day, is to eliminate “destructive trade deficits.”
Ignore the Politicians: Trade Deficits Don’t Really Matter - Michael Chapman, Cato At Liberty. "Trade deficits or surpluses will always occur and will vary by product and from country to country. Keep in mind, you may buy lots of things from Amazon or Whole Foods yet they never buy anything from you. That’s a huge trade deficit on your end. But it does not matter because both parties benefited. The same economic relationship exists on the international level."
Getting Filed
Free File provides quick and easy way to file taxes - IRS. "IRS Free File is available to taxpayers and families whose 2024 total adjusted gross income (AGI) was $84,000 or less. A taxpayer’s AGI includes wages, tips, business income, retirement income and other forms of taxable income. Through a public-private partnership between the IRS and the Free File Alliance, tax preparation and filing software providers make their online products available to eligible taxpayers. Each provider sets its own eligibility rules based on age, state residency and income. IRS Free File will guide taxpayers through choosing the provider that’s right for their needs."
Got your first job? Here are some tax tips for first-time filers - Adriana Morga, Associated Press. "If you freelance, work in rideshare or sell your clothes online in addition to your part- or full-time job, you must add this income to your tax returns, said Tim McGrath, a certified financial planner based in Chicago."
Dividend Tax Rates in Europe, 2025 - Cristina Enache, Tax Foundation. "Estonia, Latvia, and Malta are the only European countries covered that do not levy a tax on dividend income. For Estonia and Latvia, this is due to their cash-flow-based corporate tax system: instead of levying a dividend tax, they levy a corporate income tax of 20 percent when a business distributes its profits to shareholders. Malta, in contrast, allows shareholders to offset personal income tax on their dividend income against its 35 percent corporate tax rate, resulting in a zero percent top rate."
Blogs and Bits
The IRS isn’t fooling around. April 1 is RMD deadline for some. - Kay Bell, Don't Mess With Taxes. "The RMD amount must be taken by Dec. 31 of each year. However, tax law provides a few month's leeway for the first required withdrawal. In that initial RMD birthday year, septuagenarians can delay their first retirement account distribution until April 1 of the following year."
IRS provides new flexibility in reporting ERC income adjustments - Tonya Rule and Gil Mitchell, Eide Bailly. "Taxpayers will no longer be required to amend a prior year income tax return or file an administrative adjustment request (AAR) to adjust the wage expense as a result of an Employee Retention Credit claim, under changes included in an updated FAQ last week."
Most Lawsuit Settlements Are Taxed By IRS, But Some Are Capital Gain - Robert Wood, Forbes. "In any but the most pedestrian and tiny of legal disputes, it seems foolish to sign a settlement agreement without considering taxes, and asking for the wording you want."
Unfiled Tax Returns Can Lead To An IRS Action That Costs You Money - Virginia La Torre Jeker, US Tax Talk. "With tax filing season in full swing, it’s important to understand what might happen if you do not file a U.S. income tax return. The IRS can, and often will, file a “substitute” return for you and generally, it won’t be favorable. Taxpayers living and working abroad face greater risks with a SFR."
Fraud Farming
Local tax preparer sentenced to federal prison for filing false tax returns - IRS (Defendant name omitted, emphasis added):
Defendant was a federal income tax return preparer... in Shreveport and was the sole tax return preparer for the company. According to information presented in court, Defendant prepared and filed a client’s 2019 tax return with the IRS. The return she prepared included a false and fraudulent Schedule F, “Profit or Loss from Farming,” which falsely claimed that the client had farming income and incurred farming expenses, resulting in a net farming loss. As a result of Defendant’s actions, the tax refund falsely showed the client was due a refund when, in fact, the client actually owed taxes for that tax year.
An investigation into the falsely filed tax return showed that Defendant’s client did not have a farm, nor did they tell Defendant they owned or operated a farm. In fact, the client never provided Defendant with any of the farming-related income or expenses that she input on the Schedule F. Defendant pleaded guilty on November 20, 2024, to one count of aiding and assisting in making and subscribing a false return.
Defendant made similar misrepresentations on six other tax returns prepared for clients. In addition, she falsified her own income on two of her personal tax returns, and she failed to file tax returns for other years. The total criminal tax loss in this case was determined to be $123,455.
If you are city folk and a farm suddenly shows up on your tax return, additional questions are called for.
What day is it?
Tough choice: "National Spinach Day" and "Manatee Appreciation Day." But who doesn't appreciate a good manatee?
