Key Takeaways
- New procedure to fix depreciation election for interest deduction limits.
- Deadline to use fix is April 15 for some taxpayers.
- ERC promoters lose appeal of mass claim denial.
- Can only wealthy tax deadbeats come in from the cold?
- Digital tax issues heat up internationally.
- Survivor winner still fighting 2000 tax bill.
- National Poultry Day.
Webinar CPE Alert! Mark your calendars for our Quarterly Legislative Update Next Tuesday, March 24, Noon Central. Our own Alex Parker, along with Energy Credits & Incentives guru Colette Gagnet and Accounting Methods maven Andrea Mouw, will cover the latest from Congress and Treasury. One hour CPE available, no charge.
Mulligan for Depreciation Elections to Avoid Interest Limits Comes With Tight Deadlines
New IRS Guidance Lets Real Estate Firms in on Bonus Depreciation - Caleb Harshberger, Bloomberg ($):
The government issued Revenue Procedure 2026-17 Wednesday providing guidance under code Section 163(j) on how to withdraw from the elections, freeing businesses to fully deduct certain costs all at once.
The guidance also impacts electing farming businesses and excepted regulated utilities, according to the document.
IRS Clarifies Transition to Permanent Interest Deduction Limit - Nathan Richman, Tax Notes ($):
The OBBBA reversed that change, along with two other delayed TCJA business tax provisions, and allowed taxpayers to calculate the section 163(j) interest deduction limit based on the higher EBITDA permanently.
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The TCJA’s changes to section 163(j) created exceptions to the interest deduction cap for electing real property trades or businesses, electing farm businesses, and regulated utility trades or businesses. The excepted businesses swapped their ability to take section 168(k) bonus depreciation for uncapped interest expense deductions.
The deduction for business interest expense was limited for 2022-2024 by Sec. 163(j) to 30% of taxable income, after deductions for depreciation and amortization (EBIT) but not interest expense. The OBBBA tax bill signed last year increased the deduction limit to 30% of taxable income before depreciation and amortization (EBITDA) for tax years beginning after December 31, 2024. Many taxpayers who had lost interest deductions prior to the change in the limitation now are able to fully deduct their interest.
Sec. 163(j) allowed real estate businesses, farmers, and certain utility businesses to opt out of the interest deduction limits in exchange for reduced depreciation. Many taxpayers made this election between 2022 and 2024 in order to avoid limiting their interest expense deduction. However, the change in the calculation of the interest deduction limit to EBITDA may make this election a bad choice for some taxpayers. New Rev. Proc. 2026-17 allows taxpayers to revoke the prior opt-out elections made in 2022-2024 tax years.
Unfortunately, the deadline - the earlier of three years after the filing deadline or October 2026 - poses problems. Partnerships and S corporations who didn't extend calendar-year 2022 returns and who filed by the March 15, 2023 deadline may be out of luck. Individuals and calendar-year C corporations who didn't extend have an April 15, 2026 deadline to revoke their elections for 2022. Even extended 2022 taxpayers have only three years after the actual filing of their 2022 returns - not the extended due date of September 15 or October 15 - to revoke the elections.
Contact your tax pro now if you need to deal with this issue for 2022-2024.
Related: Eide Bailly Accounting Methods and Periods Services.
Appeals Court Denies Injunction Against Mass ERC Claim Denial
ERC Claim Processors’ Injunction Denial Upheld - Trevor Sikes, Tax Notes ($):
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Tax return preparation firms ERC Today LLC and Stenson Tamaddon LLC filed a motion in December 2024 requesting a preliminary injunction against John McInelly, executive director of the IRS’s ERC program.
The firms sought to halt the use of a new process known as the “Disallowance During Processing” (DDP) program that screened and disallowed thousands of ERC claims, alleging that it resulted in more disallowances to eligible claims.
Related: Eide Bailly Employee Retention Credit Services.
Voluntary Disclosure: Only the Wealthy Need Apply?
IRS Voluntary Disclosure Policy Double Down Worries Tax Lawyers - Nathan Richman, Tax Notes ($):
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As part of the announced proposed changes, the IRS said taxpayers looking to voluntarily disclose their past noncompliance would still have to file six years’ worth of delinquent tax returns. However, unlike the current program, taxpayers would face a 20 percent accuracy penalty for each year rather than a 75 percent civil fraud penalty for the year with the highest understatement.
The announced changes would also tighten up the time frame by giving taxpayers just three months following preclearance to file the required returns and make all payments. The IRS stuck to its guns on a requirement that has drawn some criticism, demanding taxpayers fully pay their tax debts immediately without the possibility of a delayed or lowered obligation through an installment agreement or offer in compromise.
Related: Eide Bailly IRS Dispute Resolution and Collections Services.
Internationally Speaking
Tax News & Views International Weekly: Digital Taxes and Trade - Alex Parker, Eide Bailly:
Rep. Ron Estes, R-Kan., a member of the House Ways and Means Committee, said he would soon introduce a resolution opposing such taxes. That would be the first step towards more aggressive action, Estes said, noting that opposition to DSTs is one of the few remaining areas of bipartisan agreement in Congress.
“What we plan to do with that resolution is intentionally remind governments that we have every tool available,” Estes said. Those options could include tariffs or something similar to Sec. 899, a proposed law which would have enacted new taxes on companies doing business in the U.S., which are based in countries using so-called discriminatory taxes. The provision was removed from the One Big Beautiful Bill Act when the U.S. reached an agreement with other countries about the 15% global minimum tax, the primary policy that the Trump administration was trying to alter.
American Retirees Are Moving to France, Italy and Costa Rica - Sara Clemence, Bloomberg ($):
“There’s this huge movement of Americans wanting to retire abroad,” says David Kuenzi, director of international wealth management at Geneva-based Creative Planning. The percentage of people older than 55 who want to leave the country has more than quadrupled since 1974, to 17%, according to polling from Monmouth University and Gallup. Experts on international living say much of that shift has taken place in recent years. Things started changing around 2017, Kuenzi estimates, and have accelerated during President Donald Trump ’s second term.
Related: Eide Bailly Global Mobility Services.
"Survivor" Tax Collection Efforts Continue into 25th Season
Judge Finalizes $3.3M Tax Bill Order For 'Survivor' Winner - Kat Lucero, Law360 Tax Authority ($):
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In 2000, Hatch won the inaugural season of "Survivor," winning $1 million and accumulating more wealth over the next few years with his newfound fame. In 2002, he jointly acquired real estate in Rhode Island with his sister, adding to a robust real estate portfolio, but he had transferred that property and another to his sister by April 2005, according to filings.
In 2006, Hatch was convicted of criminal tax evasion for 2000 and 2001 after failing to pay the full income taxes due on his "Survivor" and "Survivor"-related earnings for several years, according to filings.
The man won $1 million on national television - and that was a much bigger thing in 2000 than it would be in today's world of countless video options. He didn't include it in income on the 1040 due in 2001. He was convicted of tax evasion in 2006. The IRS is still trying to collect in 2026, but the amount owed now well exceeds the amount he earned in the first place.
As a wise man has said, sometimes it's easier to just pay the taxes.
Blogs and Bits
11 common tax-filing mistakes to avoid - Kay Bell, Don't Mess With Taxes. "9. Entering incorrect bank account numbers: The IRS has for years encouraged us to file electronically and have our refunds directly deposited into a financial account. That process is easy for taxpayers and the IRS, unless you enter the wrong account number and accompanying routing number."
Lawsuit Settlements Involve Tax Forms, Here’s What To Expect - Robert Wood, Forbes. "Disputes about Forms 1099 are common. The Form 1099 regulations are complex, which causes many businesses "to err on the side of issuing the forms.
The Rise of Portable Benefits - Liya Palagashvili, Labor Market Matters:
The independent workforce has grown by 97 percent since the late 1990s.
And yet, many of these workers lack access to benefits—not because companies are unwilling to offer them, but because the law makes it risky to do so.
Portable benefits directly address this problem. They are worker-owned accounts that follow individuals across jobs and allow multiple companies or clients to contribute. The key policy change is simple: remove the legal risk that offering benefits will trigger worker reclassification.
Related: Eide Bailly Compensation and Benefits Services.
Beyond Redemption
Former Sacramento man sentenced to over 4 years in prison for filing false tax returns - IRS (Defendant name omitted, emphasis added):
“Filing false tax returns is not a shortcut to easy money; it’s a federal crime,” U.S. Attorney Grant said. “By submitting nine fraudulent returns and stealing more than $1.17 million in refunds, the defendant tried to cheat the American taxpayer. Today’s sentence shows that those who abuse our tax system for personal gain will be held accountable.”
On Oct. 30, 2025, a jury found Defendant guilty of one count of making a false claim against the United States and eight counts of filing a false tax return. Defendant had filed nine false tax returns with the IRS in which he reported false income and false tax withholdings. For one of the tax return filings, Defendant received a refund of $1,172,446. The charges against Defendant stem from his use of a convoluted “redemption” scheme, used by tax protestors and sovereign citizens that has been repeatedly rejected by the courts.
"Redemption" schemes rely on weird theories that the government has secret accounts full of money for everyone, and you can tap into them by filing the right forms - typically fraudulent 1099s showing withholding. It should be punished, but it's disheartening to see that the IRS paid out over $1 million to this guy in the first place.
What day is it?
It's National Poultry Day! Don't chicken out.
Make a habit of sustained success.
