Key Takeaways
- AI-enabled "deepfake" tax scam calls.
- How to protect yourself.
- Trump floats retirement match based on Biden SECURE 2.0 tax credit.
- Details to come.
- Tariffs, refunds, foot-dragging.
- The tax nerd who bet against DOGE.
- National Chocolate Covered Nut Day meets Let's All Eat Right Day.
How scammers are using AI deepfakes to steal money from taxpayers - Michelle Singletary, Washington Post:
You may be told that you haven’t paid your taxes or be offered an opportunity to connect with a “tax resolution officer,” who can help you apply for an “IRS liability reduction program.”
“Those aren’t real programs,” the FTC said.
It’s a scam intended to steal either your identity or your money.
I get these. My wife got one last week and asked me about it. They are everywhere. Ignore them. Don't pick up. Don't call back. If you aren't sure, call an actual tax pro.
Also: get an IRS Individual Online Account, which will let you check your federal tax accounts. It will include copies of notices the IRS might have sent.
Trump Touts Retirement Match in State of the Union Address
Trump Pitches Retirement Savings Match Change - Cady Stanton, Tax Notes ($):
In his nearly two-hour State of the Union address February 24, Trump announced that his administration would expand the availability of tax-advantaged retirement accounts similar to those provided to federal employees and provide a path for an annual retirement savings plan match of up to $1,000 from the federal government.
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The plan would provide an account vehicle for low-income private workers to receive the “saver’s match” from the SECURE 2.0 retirement legislation from 2022, according to a White House official. The saver’s match is set to replace the saver’s credit, a nonrefundable tax credit that benefited only taxpayers with a tax liability, in 2027.
The proposal will largely be implemented through administrative authority, but could be bolstered by future legislation from Congress, according to the official.
Trump Pledges New Retirement Savings Plan for Workers Without 401(k)s - Suzanne Woolley and Josh Wingrove, Bloomberg News:
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The official acknowledged that Trump’s plan was based on the Savers Match program from the 2022 “Secure 2.0” legislation passed during the Biden administration.
Trump will seek to modify the structure to ensure portability and allow for philanthropic contributions as well, the official added. The administration will have more announcements on the details, the official said.
SECURE 2.0’s Saver’s Match is set to take effect in 2027. It allows a match to taxpayers who are at least 18 years old and not a dependent or full-time student. It provides a 50% match of specified individual non-Roth retirement savings, with match contributions up to $1,000 annually. It requires taxpayers to file returns claiming the match as a tax credit, which will then be deposited into the retirement account. It begins to phase out once modified AGI exceeds $41,000 for joint filers ($20,500 for single filers).”
By contrast, the SOTU proposal hints at expanding access and creating a “vehicle”—a federal-worker-style, tax-advantaged account option for people who don’t have employer coverage. Details of the plan remain unspecified.
State of the Tariffs
Trump Spurns Calls to Codify Tariffs in 2026 State of the Union - Zach Cohen, Bloomberg ($):
They’re instead relying on a patchwork of narrower authorities, including a temporary 10% global levy, which will increase to 15%, and investigations that could result in tariffs on industrial goods.
Trump’s 10% Levy Takes Effect as US Rebuilds Tariff Wall - Catherine Lucey and Josh Wingrove, Bloomberg News:
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The White House is working on a formal order that will increase the global tariff rate to 15%, according to an administration official. The timeline for implementing that higher levy has not been finalized, said the official, who spoke on the condition of anonymity to discuss private matters.
The lack of clarity from Washington has spawned confusion around the globe about Trump’s tariff agenda. Countries and corporations are poring over existing trade agreements to determine how they’d fare under Trump’s latest threats. Major trading partners, including the European Union and India, have abruptly halted ongoing trade negotiations amid the uncertainty.
Section 122 Can’t Carry Trump’s Tariffs - Phillip Magness, Wall Street Journal:
The same may happen to Mr. Trump. His plan relies on a seldom-invoked clause of the Trade Act of 1974, Section 122. It allows the president to impose a general tariff of up to 15% for 150 days to address “fundamental international payments problems” that “require special import measures to restrict imports.”
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As Milton Friedman explained in 1967, “a system of floating exchange rates completely eliminates the balance-of-payments problem.” It allows the relative values of currencies to adjust against each other automatically on the open market. Coordinated buying, selling and lending of currency reserves between central banks became an obsolete tool, and with it the risk of a balance-of-payments deficit disappeared.
State of the Refunds of Illegal Tariffs
Bessent dodges questions about tariff refunds - Tara Suter, The Hill:
“I do want to start with the big question, will you refund the roughly $134 billion in revenue taken by these emergency tariffs?” CNN’s Dana Bash asked Bessent on “State of the Union.”
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“Sure, they didn’t address refunds. That is clearly going to be up to you, which is —” Bash said.
“No, no, no, no, Dana,” Bessent responded, adding later that refunds are “not up to the administration, it is up to the lower court, let’s just be clear on that.”
Tariffs were illegal. Now Trump wants to delay refunds. - Neal Katyal, Washington Post:
Those assurances carried weight. They were likely central to the appeals courts’ willingness to allow tariff collection to continue while the litigation advanced. Judges relied on the government’s representation that the injury was temporary and repairable. And our small businesses relied on it.
Now the Supreme Court has ruled, and the tariffs have been invalidated. Yet Trump and Treasury Secretary Scott Bessent are suggesting that refunds could take years, entangled in further litigation and administrative delay.
State of the Tax Season
D.C. attorney general says Congress missed deadline, failed to block tax policy - Meagan Flynn, Washington Post:
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Congress voted earlier this month to swat down D.C. legislation that divorced the city’s local tax code from Trump’s One Big Beautiful Bill. Republicans celebrated the move as a way to put more money back in Washingtonians’ pockets through various tax deductions — but D.C. officials warned it could cost the city millions and upend tax season while it is already well underway, raising concerns from the city’s chief financial officer.
When Congress objects to a D.C. law, disapproval resolutions have the effect of rendering it null and void. But Schwalb (D) argues in his opinion that Congress missed a critical 30-day deadline and also failed to make the resolution apply retroactively, given the 2025 tax season already began.
The State of Tax Enforcement
Feds' White Collar Crime Enforcement 'Retreat' Raises Alarms - Phillip Bantz, Law360 Tax Authority ($):
Last year, fines collected from anti-money laundering-related violations dropped by 54%, probes into tax schemes slipped 63% and about 25,000 federal agents, including career prosecutors and FBI and IRS agents who investigated white collar crimes, were diverted to immigration enforcement.
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In the separate letter... seven U.S. senators have sought details about why IRS probes into abusive tax schemes fell from 92 cases in 2024 to 34 last year, a 63% drop and "roughly 40% below every other year in the past decade," according to the IRS criminal investigation annual report released in December.
Court says the IRS can continue to share immigrants’ taxpayer data with ICE - Fatima Hussein, Associated Press:
The agreement allows U.S. Immigration and Customs Enforcement to submit names and addresses of immigrants inside the U.S. illegally to the IRS for cross-verification against tax records.
In declining the preliminary injunction request, Judge Harry T. Edwards wrote that the nonprofit groups “are unlikely to succeed on the merits of their claim,” since the information the agencies are sharing isn’t covered by the IRS privacy statute.
Better Preparer Oversight Needed to Prevent Return Errors, GAO Says - Tyrah Burris, Tax Notes ($):
Those errors arise because most paid tax preparers have different levels of education and aren’t subject to testing and educational requirements, according to the GAO’s report released February 24.
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The GAO recommended that Congress grant the IRS authority to establish professional requirements and establish security requirements for the information systems for paid preparers and authorized e-file providers.
The report doesn't appear to mention unintended consequences that would come from such regulation. Compliance costs would rise, resulting in more taxpayers resorting to self-filing or not filing at all.
Blogs and Bits
4 new tax breaks join long list of deductions that don’t require itemizing - Kay Bell, Don't Mess With Taxes. "Health savings account deduction (line 13): Here you can write off your contributions to one of these medical coverage plans, commonly referred to as HSAs. You can check out the amount limits for 2025 filing and 2026 planning purposes. However, you’ll need more paperwork here, too. You must also file Form 8889."
Legal Representative Is Personally Liable for $1.9 Million of Insolvent Corp's Tax Debt - Parker Tax Pro Library. "The court determined that the lawyer, as the corporation's legal representative, had knowledge of the government's claim for tax liabilities and the amount of those liabilities and played an integral role in the development, oversight, and execution of a plan to pay entities other than the government when the corporation was insolvent."
The Real Social Security Debate: Who Should Bear the Adjustment? - Jack Salmon, The Unseen and the Unsaid. "The viable path combines structural reforms with progressive benefit adjustments that protect low-income seniors while requiring more from those with greater resources."
Never Bet Against A Bigger Government
The Tax Nerd Who Bet His Life Savings Against DOGE - Richard Rubin, Wall Street Journal:
Cole is a 37-year-old tax economist with Ivy League degrees, a mortgage and a young child. Until Elon Musk’s Department of Government Efficiency came roaring into the nation’s capital last year, he was largely a plain-vanilla investor or, as he puts it, a “normal, conventional Wall Street Journal-reading adult.”
But Musk’s boasts and his eager fans brought an unusual opportunity into the burgeoning U.S. prediction markets: People willing to bet that the world’s richest man would transform and shrink the federal government.
Cole took the opposite position, one he didn’t see as a gamble at all. If federal spending in each quarter of 2025 exceeded federal spending in the fourth quarter of 2024, he would win big.
How did the bet come out? Let's just say that Mr. Cole might be able to deduct a fair amount of gambling losses, should he have any.
What day is it?
Today is National Chocolate Covered Nut Day and Let's All Eat Right Day. Surely not a coincidence.
Make a habit of sustained success.
