Key Takeaways
- Today is the "farmer deadline."
- It isn't as important as some farmers think.
- January estimated payment vs. March 1 frenzy.
- Tax season progress report.
- Bipartisan tax fix bill floated.
- Poker-playing star Supreme Court litigator convicted of tax charges.
- International Rescue Cat Day.
Welcome to the deadline that isn't really a deadline.
Today is the so-called Farmer deadline for filing tax returns.
Farmers who receive at least two-thirds of their gross income from farming may be eligible for a special IRS filing rule. Instead of making quarterly estimated tax payments throughout the year, they can choose to file and pay their entire tax due by March 1 (March 2 this year, because March 1 fell on a Sunday). By meeting this deadline, farmers avoid underpayment penalties that would ordinarily apply if estimated taxes were not paid in quarterly installments.
This is an archaic rule dating back to at least 1954. It was enacted when most farms were small operations and there were a lot more of them. Income was lumpy and uncertain. Taxpayers were unsophisticated.
Modern farming operations use precision GPS to control planting and nutrient application. They get the latest futures prices on smartphones. They are capital-intensive production businesses, many with values in eight figures. The tax law gives them control of income and deduction timing that non-farm businesses can only dream of. Yet the tax law assumes that they can't handle the seasonal income estimated tax rules that apply to everyone else.
As a result, there is a misguided frenzy for March 1 filing every year across farm country.
It's less important than many filers think. Many farmers carefully minimize their income each year using prepayments for inputs like feed, seed, and fertilizer. Such farmers often have nominal liability and only minor estimated tax payments due. Even so, I have seen farmers with tax liabilities of under $2,000, or even with losses, panicked over the "farmer deadline."
It's not really a return deadline. If a farmer files after today, the return is not considered a "late filing" for purposes of late filing and late payment penalties. Those only apply if a return isn't filed or extended by April 15.
It gets less practical every year. They may employ sophisticated hedging strategies to limit price risk. Farmers often have outside investments that generate K-1s. These items require time for information gathering and computation, making it difficult or impossible to complete a return by March 1.
There is a better way. Instead of aiming for the March 1 deadline, farmers are allowed to make only one estimated tax payment by January 15 and then file their return by the regular April deadline - or to extend if they are still waiting on other tax information. This approach still allows farmers to avoid quarterly payments without a rushed March 1 filing.
If you file today, do it right. Be sure your preparer has your signed Form 8879 e-file authorization in-hand today. They are not allowed to file based on a phone call assurance that it's on its way. If you insist on paper filing, make the trip to the post office to send the return certified mail, and save the postmark.
How Tax Season is Going
Refunds, IRS Site Visits Continue to Climb - Benjamin Valdez, Tax Notes ($):
The spike — up from an average of $2,476 last week — is owed in part to the issuance of earned income tax credits and additional child tax credits, which are held by the IRS until February 15 under the Protecting Americans From Tax Hikes Act of 2015.
Still, the uptick is slightly higher than last year, holding with predictions that refunds this year will be larger thanks to the myriad new tax provisions enacted by the One Big Beautiful Bill Act (P.L. 119-21). The IRS has cautioned that larger percentage differences will even out as the filing season progresses.
The I.R.S. Shut Its Direct File, but Here Are Other Free Filing Options - Ann Carrns, New York Times:
This year, eight firms, including TaxAct and TaxSlayer, are participating, and they can set their own criteria. Two of the most well-known tax software providers, TurboTax and H&R Block, no longer take part in the program. (They each offer their own free products separately; more on that later.)
...
TurboTax Free Edition, for instance, sets no income limit for users, said a spokeswoman, Lisa Greene-Lewis. The free tool is available to filers with “simple” Form 1040 returns with no schedules, except for those used to claim the earned-income tax credit; the child tax credit; and Schedule 1-A, the new form for claiming certain deductions related to overtime pay and tips.
IRS launches new web page to streamline tax fraud and scam reporting - IRS:
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The new web page consolidates multiple IRS fraud-reporting options into a single, centralized location, making it easier for taxpayers to report suspicious activity. The web page can be found by selecting the new ‘Report Fraud’ button on the IRS.gov homepage or at IRS.gov/SubmitATip. Taxpayers are encouraged to report suspected tax-related wrongdoing as soon as possible to help the IRS address fraud and noncompliance.
Morale-Building Efforts at IRS Continue
Union President Blasts IRS For Terminating Workers' Contract - Anna Scott Farrell, Law360 Tax Authority ($):
In a letter sent Friday, National Treasury Employees Union President Doreen Greenwald told the agency's chief human capital officer that it can't end its collective bargaining agreement as it has claimed to do "because NTEU remains the exclusive representative of its bargaining unit employees."
The officer, Alexander Kweskin, had sent a memo to the union Friday terminating the agreement, according to the letter. The IRS told Law360 it canceled the contract to comply with the executive order, issued in March 2025, and with guidance from the Office of Personnel Management, the federal government's top human resources office.
Figuring out This Year's Tax Law
New Changes to Deduction Limitations Need Clarity, AICPA Says - Mary Katherine Browne, Tax Notes ($):
The AICPA noted that the outcome is straightforward for taxpayers with ordinary income, but the statute doesn’t address how the new limitation applies when a taxpayer’s taxable income consists largely of preferentially taxed amounts, such as long-term capital gains and qualified dividends.
“For individuals, estates, and trusts in the 37 percent tax bracket, such income is taxed at the maximum long-term capital gains rate of 20 percent,” the AICPA wrote. “In this case, taxpayers only receive a benefit of 20 percent for any itemized deductions (rather than 37 percent), even though their taxable income exceeds the threshold at which the 37 percent tax rate bracket begin.”
Further reading: AICPA Letter Requests Guidance for Itemized Deductions and Trump Accounts.
Taxes on Capitol Hill
Capitol Hill Recap: Congressional Action on Tariffs? Don't Count on It. - Alex Parker, Eide Bailly:
Meanwhile, Democrats are pushing for legislation to ensure tariff refunds are issued to consumers or small businesses. While the Supreme Court ruled that Trump’s tariffs issued under the International Emergency Economic Powers Act were invalid, it left open the issue of refunds or reimbursement for past tariffs paid.
With the parties strongly divided on trade issues, finding a bipartisan agreement which could pass the Senate seems out of the question. That would leave reconciliation, the process that allows the majority party to pass legislation through both chambers of Congress with a bare majority.
Bipartisan Senate bill promises ‘commonsense fixes’ to IRS - Jacob Fulton, Roll Call:
The legislation, introduced by Finance Chairman Michael D. Crapo, R-Idaho, and ranking Democrat Ron Wyden of Oregon, also includes a provision increasing the penalties for improper behavior from tax preparers, as well as another provision imposing more regulations for obtaining a preparer tax identification number.
National Taxpayer Advocate Erin Collins said the bill “would strengthen taxpayer rights, reduce taxpayer burden and improve tax administration.” Collins, who leads the independent office within the IRS designed to represent taxpayers, also said the measure “incorporates dozens of commonsense proposals to make tax administration fairer, more transparent and more responsive to taxpayers.”
Tariff Update
How U.S. Businesses Are Shaving Billions Off Their Tariff Bills - Jon Emont, Wall Street Journal:
But under a legal precedent established in the 1980s, companies that dig deeper into their supply chains can report what was paid in the “first sale.” Suppose the original manufacturer of the sofa sold it for $200 to the trading company, which then marked it up to $300. The American retailer can declare the value of the sofa as $200—the first sale—and pay customs only $100 in duties.
Blogs and Bits
Treasury targeted alleged El Mencho cartel timeshare fraud just days before drug kingpin’s death - Kay Bell, Don't Mess With Taxes:
After getting this info, cartels, through their call centers, contact victims by phone or email and claim to be U.S.-based third-party timeshare brokers, attorneys, or sales representatives in the timeshare, travel, real estate, or financial services industries.
The fraud may include timeshare exit scams (also known as timeshare resale scams), timeshare re-rent scams, and timeshare investment scams. However they are characterized, they all share a common theme.
IRS Employment Tax Violations Can Be Criminal And Draw Prison Time - Robert Wood, Forbes. "You never want to become delinquent in paying taxes, especially employment taxes."
Are Your Social Security Benefits Taxable This Year? - Kelly Phillips Erb, Forbes. "But this year, as recipients prepare their 2025 tax returns, there’s another wrinkle, namely President Donald Trump’s “no tax on Social Security” promise."
A Losing Hand
Former Star Supreme Court Lawyer Convicted of Tax Violations - C. Ryan Barber, Wall Street Journal:
Goldstein argued more than 40 cases at the high court and was co-founder of SCOTUSblog, a digital publication devoted to the high court that is widely read by legal practitioners and enthusiasts. He broke into the club of top appellate lawyers with an entrepreneurial approach that set him apart from attorneys who leveraged Ivy League degrees, clerkships and prestigious Justice Department posts into star roles at elite firms. He aggressively screened for cases that carried promise for Supreme Court review, then courted the litigants involved, sometimes offering to take their cases for free.
But as Goldstein’s star rose in the legal world, so did his interest in poker, eventually leading him to games where the stakes at times reached millions of dollars. It also led to scrutiny from federal prosecutors, who brought charges in early 2025, alleging he engaged in a yearslong tax evasion scheme.
Mr. Goldstein took the stand in his own defense. It may have backfired:
Goldstein Testimony 'Solidified' Case, Juror Says - Jared Foretek, Law360 Tax Authority ($):
But the juror said that if Goldstein's testimony "solidified" much of the case, it was the amount of data the government had amassed and presented across the weeks of trial that really clinched things.
The juror didn't buy the blame-the-accountants defense:
Act accordingly.
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