Key Takeaways
- Did the pandemic emergency extend refund claim deadlines?
- Don't deduct the Lamborghini.
- Influencers and deductions.
- City, Congress Standoff snarls filing of D.C. returns.
- Tariffs, Threats, and the Supreme Court.
- Presidents Day, Do a Grouch a Favor Day.
Tax Deadlines Accidentally Got Turned Off for Three Years. Now What? - Richard Rubin, Wall Street Journal:
A federal court ruled late last year that the tax code’s relaxed rules for disaster victims—combined with presidential disaster declarations during the Covid-19 pandemic—paused required deadlines between Jan. 20, 2020 and July 10, 2023. The ruling means that the traditional April 15 payment date and other required deadlines didn’t actually matter during that period—if the ruling stands after possible appeals.
The fallout is just starting. Some taxpayers argue that the Internal Revenue Service charged them interest or penalties they weren’t required to pay during the pandemic, and they now are seeking refunds and amending tax returns to get money back. Attorneys are racing to file claims before new deadlines expire.
Ben Peeler, leader of the Eide Bailly tax controversy team, says taxpayers may have opportunities as a result of the case:
Related: Eide Bailly IRS Dispute Resolution and Collections Services.
Influencers and their Deductions
Top Mistakes Tax Advisers Keep Their Wealthy Clients From Making - Charlie Wells, Bloomberg ($):
It’s a common complaint across the tax industry, one that has grown more brazen in today’s digital economy. Clients have long tried to write off “business” expenses — dinners, trips, even properties — that might veer into the personal category more than the Internal Revenue Service would like. The issue has collided with the rise of the creator economy, at a time when some 27 million Americans say they are paid content creators. Influencers can earn six-figure salaries posting images of themselves with expensive items online. That does not make them deductible.
“For the past few years we’ve been getting more and more young clients, like influencers,” says Um in Beverly Hills. “Some of them really make a lot of money and want to write off a lot of luxury items. Their argument is that they’re related to their business.”
The tax code, however, is strict about what can and can’t be deducted. As a general rule, goods written off for business purposes must be used exclusively for work.
Influencers Make Money Posting About Their Lives. The Taxes Can Get Messy. - Oyin Adedoyin, Wall Street Journal:
...
A quarter of influencers say taxes are their top source of business stress, and nearly 25% say they’ve made tax mistakes that cost them money, according to a recent H&R Block survey.
Clothes are a common area of confusion. Influencers might want to deduct clothing purchases if they feel their appearance is a part of their online persona, but accountants say they’d have to be able to show the outfit would only be worn in a specific work-related context.
Spoiler: no wedding photographer deduction.
The Secret Addresses for Offshore Online Account Reporting
Online Gambling and Cryptocurrency Mailing Addresses for 2026 - Russ Fox, Taxable Talk:
There’s a problem, though. Most of these entities don’t broadcast their addresses. Some individuals sent email inquiries to one of these gambling sites and received politely worded responses (or not so politely worded) that said that it’s none of your business.
Well, not fully completing the Form 114 can subject you to a substantial penalty. I’ve been compiling a list of the addresses of the online gambling sites.
Russ does tax preparers and their clients an inestimable service by rounding up this information, doubtless saving many taxpayers time, fees, and penalty money.
Filing Season Tools and D.C. Discontents
Avoid waiting on hold; use IRS online tools for faster help - IRS:
Presidents Day week is historically one of the busiest periods of the filing season, when calls to IRS phone lines often spike. Many common tax questions and tasks can be handled online before, during, and after filing through IRS self-service tools available 24/7.
Given that the IRS is sending the HR department to man the phones, the online resources might well be a better bet.
Congress and DC Tax Standoff Leaves Local Filing Season in Limbo - Daniel Moore, Bloomberg ($):
But the US Senate’s action Feb. 12 to thwart a Washington, DC, measure that decoupled the city from portions of President Donald Trump’s signature 2025 tax law has thrown a wrench into the filing season that opened Jan. 26. Republican lawmakers voted to essentially require the district to change more than a dozen provisions in its tax code to align with the federal law enacted last July.
The resolution (H.J. Res 142), which Trump is expected to sign, is made possible by the 1973 District of Columbia Home Rule Act, which allows Congress to disapprove of the city’s laws. DC officials contend the Senate’s vote occurred beyond the act’s 30-day review period, raising the possibility of a legal battle, all while taxpayers—who normally expect certainty—face a confusing filing season.
Tariffs: Supreme Court Slowness Explained. Who Pays. Metal Rollbacks. Threats.
'It Takes Time To Write': Jackson On High Court's Tariff Ruling - Kate Buehler, Law360 Tax Authority ($):
Justice Jackson told CBS Mornings in an interview aired Tuesday that the high court is still in the process of deliberating and writing its opinion in a pair of cases that ask whether the International Emergency Economic Powers Act empowers the president to levy tariffs. Trump has invoked the law to impose a smorgasbord of tariffs, including reciprocal ones aimed at addressing trade deficits with other countries and tariffs targeting Canada, China and Mexico in an effort to staunch the flow of fentanyl into the U.S.
...
During November's oral argument session, the Supreme Court seemed skeptical of the president's authority to impose tariffs, which experts said might mean the court's eventual ruling could spur a complex refund process or lead to an effort to reimpose the duties under different authorities. With each day that passes without a Supreme Court opinion, the amount of tax dollars at stake and legal battles continue to balloon.
US business, consumers bore 90 percent of Trump tariff costs: NY Fed - Fiona Bork, The Hill:
The study, published Thursday, found that the majority of costs that came from tariffs were passed onto the American public in the first 11 months of 2025, contradicting Trump’s promises that foreign companies would pay the import taxes.
...
In the first eight months of the year, consumers and businesses were shouldering 94 percent of the economic burden associated with tariffs.
Trump threatens primaries over tariff vote - Sylvan Lane, The Hill:
Don't miss the timely HLB Group Webinar "Tariffs Update: Current State, Outlook, Success Stories and Mitigation Strategies" taking place Wednesday, February 18. Register here.
The Week in D.C.
Capitol Hill Recap: Budgets, Trade Votes on the Agenda - Alex Parker, Eide Bailly:
Republican leaders had successfully kept those bottled up until now. But following a change in rules for the House of Representatives this week, votes to approve or disapprove of some of Trump’s most far-reaching tariffs are unavoidable, and could put many Republican lawmakers on the spot.
Trump has used the International Emergency Economic Powers Act—which has traditionally been used in a much more limited way—to enact the “reciprocal tariffs” announced on “Liberation Day” last year. Through those measures, most imports to the United States face at least a 15% toll, while those from some countries such as China could be charged much more.
Blogs and Bits
6 reasons married couples should file joint tax returns - Kay Bell, Don't Mess With Taxes. "When you and your spouse own a home together, you can exclude up to $500,000 of the taxable profit on the sale of your house. The exclusion amount is just half that for single taxpayers who sells a primary residence."
Marijuana Business Is Prohibited from Claiming Employee Retention Credit - Parker Tax Pro Library. "The court concluded that Code Sec. 280E's bar to taking tax deductions and credits squarely applied to the ERC, including the refundable portion of the credit, and thus, as a trafficker of a federally controlled substance, the taxpayer was ineligible for the credit."
To Save Social Security, Stop Subsidizing Wealthy Retirees - Romina Boccia, The Debt Dispatch. "Absent reform, benefits will be cut across the board by roughly 23 percent within six years. That outcome would harm retirees who depend on Social Security the most — while barely affecting the living standards of those who do not need financial support in old age."
The Things People Do To Avoid Paying Taxes - James Maule, Mauled Again. "It's one thing to lie about something that is private and difficult, if not impossible, for others to ascertain. It's another thing to lie about the number of employees at a pizza shop when it isn't that difficult for anyone to notice or figure out that there are more than the owner and three employees working there."
Teachers Union Gets Hard Lesson on Financial Controls
Former president and vice president of Jacksonville Teachers Union sentenced to federal prison for embezzling millions in union funds - IRS (Defendant names omitted, emphasis added):
From 2013 to 2022, Defendants engaged in a conspiracy to steal more than $1.2 million apiece from DTU by selling back to DTU leave time that they had not accrued or earned, and by paying themselves unauthorized bonuses and fake reimbursements. They concealed their scheme by providing false information to DTU’s auditor, and by signing each other’s checks when distributing the unaccrued and unearned payments, hiding those distributions from the DTU Secretary/Treasurer and its board of directors. Defendants also hid their embezzlement from the State of Florida’s Public Employee Relations Commission (PERC), in legally required annual financial statement filings, some of which were mailed to PERC.
A couple of lessons here.
The first is the need for sound financial controls to prevent and deter fraud.
The second is that IRS enforcement goes beyond strictly tax crime, and cutting the IRS enforcement budget empowers fraudsters.
Related: Eide Bailly Fraud Prevention and Detection Services.
What day is it?
It's Presidents' Day, of course. If you get today off from work, think of me while observing Do a Grouch a Favor Day.
Make a habit of sustained success.
