Tax News & Views Deadlines and Pecans Roundup

Tips and resources to help last minute tax filers - IRS:

The IRS reminds last-minute tax filers that the April 15 tax deadline is a day away, and there are a variety of free tools to help them, including the Let us help you page, on IRS.gov.

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IRS.gov is an important resource that can help in several areas:

- For answers to tax law questions, taxpayers can use the Interactive Tax Assistant. Choose a topic, then enter basic information to find an answer.
- Special information is available about tax credits and deductions. Available to individuals and businesses, credits can reduce the amount of tax due while deductions can reduce the amount of taxable income.
- Get the most up-to-date information about tax refunds using the Where's My Refund? tool.
- For payment options, visit Payments on IRS.gov.
- Taxpayers who need more time can get an extension of time to file. Remember that a filing extension does not extend the April 15 payment deadline.

All of Tennessee qualifies for disaster tax relief; various deadlines postponed to Nov. 3 - IRS.

The Internal Revenue Service announced today tax relief for individuals and businesses in the entire state of Tennessee affected by severe storms, straight-line winds, tornadoes and flooding that began on April 2, 2025.

These taxpayers now have until Nov. 3, 2025, to file various federal individual and business tax returns and make tax payments.

Tax and Financial Illiteracy Are Costing Americans - Daniel Bunn, Tax Policy Blog:

Last year, TaxEDU and the Tax Foundation’s Center for Federal Tax Policy conducted the National Tax Literacy Poll examining American taxpayers’ basic knowledge and opinions on income tax filing. Among the poll’s noteworthy findings was that over 61 percent of US taxpayers did not know, or were not sure of, basic tax concepts related to filing income taxes. In addition, more than half were reportedly unfamiliar with how tax brackets work.

These findings are alarming. If someone is not familiar with a basic concept like tax brackets and marginal tax rates, they may make serious financial missteps like forgoing a promotion or overtime for fear of losing money from a higher tax rate. But that’s not how it works!

Not all of your income is subject to your highest marginal tax rate. If your income places you in, say, the 22 percent bracket, then just the amount that falls within that bracket is taxed at 22 percent. The income within the first bracket is taxed at that rate, the amount within the next bracket at the next rate, and so on until you reach your top marginal rate.

Whenever someone says "I don't want that income, it would put me in a higher bracket," it is an example of tax and financial illiteracy.

Behind Smooth Tax Season Lurk Delays From IRS Workforce Cuts - Erin Schilling, Bloomberg ($):

For example, a short-staffed chief counsel office could be less inclined to compromise with taxpayers during disputes, he said. And if the taxpayer advocate service is overwhelmed, that will trickle down to more work for the volunteer income tax assistance programs and low-income tax clinics.

The administration had initiated termination of 128 IRS offices that host taxpayer assistance centers and five that include call sites earlier this year but decided to keep them open through this filing season. It’s unclear how many might close in the coming months.

More than $1 billion in 2021 tax refunds still unclaimed – Taxpayers should act now to see if they are eligible - IRS. "There is no penalty for failure to file if a refund is due. However, a return claiming a refund must be filed within three years of its due date for a refund to be allowed. After the expiration of the three-year period, the refund statute generally prevents the issuance of a refund check and the application of any credits, including overpayments of estimated taxes or withholding amounts, to other tax years that are underpaid. If a taxpayer does not file within the three-year window, the money goes to the U.S. Treasury."

The Weekend in Tariffs

Trump exempts phones, computers from his ‘reciprocal tariffs’ - Ali Bianco, Politico:

A guidance published by the U.S. Customs and Border Protection late Friday exempted these consumer electronics — many are manufactured in China — from Trump’s back-and-forth tariff escalation with China and the 10 percent global tariff. Machines used to make semiconductors will also be exempt.

While these electronics won’t be subject to the escalating tariff rate Trump levied this week in a back-and-forth with China, these goods still could be hit with a significant duty if made there.

Lutnick: Smartphone tariff exemptions are temporary - Brett Samuels, The Hill:

“This is not like a permanent sort of exemption. [Trump’s] just clarifying that these are not available to be negotiated away by countries. These are things that are national security, that we need to be made in America,” Lutnick told ABC’s “This Week.”

Shifting Signals on Tech Tariffs Fuel Fresh Trade Uncertainty - Amrith Ramkumar and John McCormick, Wall Street Journal. "The exemptions, which weren’t announced but rather included in guidance with Customs and Border Protection, initially fueled hope that the tech industry could avoid an immediate surge in costs for imported products, particularly from China, which Trump has slapped with 125% in so-called reciprocal tariffs. The prospect of new tariffs coming soon could now cause more turbulence. Shares of tech companies have swung wildly in recent trading sessions, gyrating the entire market because of their size and central role in the economy."

Tariffs Are Costly, And So Is Tariff Uncertainty - Lillian Hunter and Robert McClelland, TaxVox. "Businesses cannot make informed decisions with tariff uncertainty, and neither can consumers (for example, those trying to choose whether to buy now or later). Each layer of markets, suppliers, and workers inherits and magnifies that uncertainty—particularly for workers in especially affected sectors."

Meanwhile at IRS

IRS Halts Probationary Workers’ Return as States Dispute Firings: Kristen Parillo and Benjamin Valdez, Tax Notes ($):

The IRS told probationary employees not to return to work after a recent court ruling allowed the Trump administration’s planned terminations to go through.

The roughly 7,000 employees, who were told they could return to work beginning April 14, will now remain on administrative leave, the IRS said in an April 11 email viewed by Tax Notes.

IRS Braces For More Workforce Cuts Once Tax Season Ends - Kelly Phillips Erb, Forbes:

Including those probationary employees, the IRS has cut about 11,000 to 12,000 employees. Some offices were hit more acutely than others. Approximately 3,500 IRS employees in the Small Business/Self-Employed (SB/SE) division of the IRS were impacted. The SB/SE division, currently headed up by Lia Colbert, serves more than 57 million small business owners and self-employed taxpayers—those with less than $10 million of assets. SB/SE employees may include those in the exam (audit) and collections departments and workers in operations support and fraud enforcement.

Congress Getting Down to Tax Details

Capitol Hill Recap: Forward Progress on Tax Bill - Alex Parker, Eide Bailly:

Congressional Republicans, however, finally broke through their freeze on Thursday, and moved forward in the process to pass a major tax bill sometime this year. The House of Representatives approved a budget resolution previously passed by the Senate, in a 216-214 vote. (See more coverage in our daily roundup.)

The resolution is the first step in the reconciliation process, which will eventually allow Congressional leaders to bypass a Senate filibuster and put a major tax and spending bill up for a simple majority vote in both chambers. Republicans are expected to use this procedure to try to extend provisions in the 2017 Tax Cuts and Jobs Act set to expire at the end of the year, and to consider additional tax measures like full expensing for research and development expenditures and President Trump’s proposal to exempt tips from taxation. Now that Congress has passed a budget resolution, the Congressional committees—especially the tax-writing committees—can get to work drawing up legislative language.

Republican SALT Caucus in House Mulls Specifics on Raising Cap - Cady Stanton, Tax Notes ($):

But reports of an early proposal to raise the cap to $25,000 received a chilly reception from the high-tax state SALT proponents.

Rep. Michael Lawler, R-N.Y., called the idea “woefully insufficient,” and Republican SALT caucus co-chairs Andrew R. Garbarino of New York and Young Kim of California said in a statement that the proposal “does not get close to bringing relief to families unfairly burdened by the current cap.”

But Republicans railing against the proposed new cap as being too low declined to specify what number they would accept in a tax package, and the higher the cap, the more expensive the proposal becomes, furthering the cost headache for GOP leadership trying to fit a plethora of tax ideas into the package with limited options for offsets.

Reconciliation markup schedule takes shape – Jake Sherman, Laura Weiss and Samantha Handler, Punchbowl News:

Speaker Mike Johnson’s leadership team is committed to marking up its reconciliation package first, before the Senate gets started. Remember: tax bills have to start in the House.

Johnson and Senate Majority Leader John Thune are intent on finishing the package before Memorial Day. That’s just 42 days from now. This is a very ambitious timeline, as we’ve repeatedly noted.

Also, paging the White House. Johnson again expressed his dismay with raising the top tax rate for wealthy Americans, something that the Trump administration keeps privately pushing.

Blogs and Bits

April 15 is the deadline for more than just filing Form 1040 - Kay Bell, Don't Mess With Taxes. "Contribute to your IRA for the 2024 tax year. Tax Day is the last day to maximize prior year IRA contributions, whether you’re putting money in a traditional IRA or a Roth version. For the 2024 tax year, you can add up to $7,000 to your traditional or Roth IRA. Taxpayers age 50 and older can contribute up to $8,000."

Revised SIFL Rates for Valuation of Noncommercial Flights: Revenue Ruling 2025-9 - Ed Zollars, Current Federal Tax Developments. "This guidance is crucial for tax practitioners advising clients on the taxation of fringe benefits."

Federal Circuit: Drug Manufacturer Can Deduct Patent Litigation Expenses - Parker Tax Pro Library. "The court rejected the IRS's argument that the expenses were incurred in pursuit of an intangible capital asset: namely, regulatory approval to lawfully market a generic drug product in the United States."

Recurring Tax and Legal Issues for Farmers and Ranchers - Roger McEowen, Agricultural Law and Taxation Blog. "To be a farmer for estimated tax purposes, a taxpayer must have at least two-thirds of gross income from farming. Some items of income don’t qualify as farm income such as gains from selling or trading farm equipment. Also, cash rent income does not qualify as farm income, but income from selling livestock does."

Bozo Tax Tip #1: Not Remitting Payroll Taxes - Russ Fox, Taxable Talk. "If your business is having tough times, not remitting payroll taxes is absolutely, positively one of the worst possible choices (if not the worst) you can make. Don’t do it! But if you did, don’t say I didn’t warn you when two nice looking individuals in suits knock on your door and tell you that you have the right to remain silent."

Go Big or Go Home

Kansas Realtor Indicted for Tax Evasion and COVID-19 Loan Program Fraud - US Department of Justice (Defendant name omitted, emphasis added):

The indictment alleges that Defendant, of Louisburg, owned and operated a realty company based in the Kansas City metro area. For tax years 2008 through 2015, Defendant filed federal income tax returns, self-reporting that she owed approximately $300,000 in taxes. Despite acknowledging she owed the taxes, Defendant did not pay them. In 2011, the IRS audited her 2008 and 2009 tax returns and concluded that Defendant had improperly claimed tens of thousands of dollars in personal expenses as charitable deductions to the “Church of Revelation and Love,” a purported church she and her husband created and were, along with her family, its primary members. Based on that audit, the IRS assessed over $40,000 in additional taxes against Defendant.

Starting in 2011, the IRS began trying to collect the outstanding taxes from Defendant, sending her over 50 notices regarding them. From 2011 through 2023, however, Defendant tried to stymy (sic) the IRS’s collections efforts by, among other things, filing three separate false and frivolous bankruptcy petitions, purchasing approximately $250,000 of cashier’s checks to reduce her bank account balances, and closing her personal bank accounts and using her business’ bank accounts to pay personal expenses.

By 2020, Defendant owed the IRS nearly $500,000 in taxes, penalties, and interest.

In 2020, Defendant submitted 34 fraudulent COVID-19 Economic Injury Disaster Loan (EIDL) applications on behalf of her real estate business and seven other corporate entities she created for the purpose of maximizing potential EIDL credits.

It's striking that the taxpayer allegedly attempted the COVID fraud knowing that the IRS was already after her for other reasons. "Go big or go home" may not be the best strategy when you are already in tax trouble.

What day is it?

It's National Pecan Day! However you pronounce it.

Tax News & Views Deadlines and Pecans Roundup

Joe B. Kristan, CPA