Key Takeaways
- How annual Trump 530A account contributions can build to a nice nest egg.
- Where guidance is still needed.
- Watchdog reports that IRS still struggles to examine large partnerships.
- A winding road to tariff refunds.
- Epstein's exempt organization under Senate scrutiny.
- National Ag Day.
Today! Tune in for Eide Bailly's Quarterly Legislative Update at noon March 24, Central Daylight Time. Alex Parker, Colette Gagnet, and Andrea Mouw will cover the waterfront from pending tax legislation to IRS guidance, highlighting planning opportunities. Register here.
The Trump Account Roth IRA Play
The Hack That Turns Trump Accounts Into Multimillion-Dollar Tax-Free Nest Eggs - Ashlea Ebeling, Wall Street Journal:
By the time the kids retire, they could end up with giant retirement accounts. The real power play is for parents to contribute $5,000 a year for 18 years, then help them convert the account to a Roth IRA so that it can ultimately be accessed tax- and penalty-free.
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The strategy likely only makes sense after setting aside funds in other accounts for nearer-term expenses, such as college, and funding the parents’ retirement. Add it all up and a married couple with two kids might commit upward of $100,000 annually into other tax-advantaged accounts, such as 401(k)s and 529s, before even thinking about adding to Trump accounts for their kids’ retirement.
The Real Guidance That’s Needed for Trump Accounts to Work - Marie Sapirie, Tax Notes ($):
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Section 530A establishes the framework for Trump accounts. In general, they are treated in the same manner as an IRA under section 408(a), although there are statutory rules unique to Trump accounts, and Treasury and the IRS are authorized to write guidance that differentiates their treatment from regular IRAs.
Section 6434 is where taxpayers fund accounts for newborns who are U.S. citizens. The provision permits a one-time $1,000 contribution from Treasury to the Trump account of an eligible child for whom an election under section 6434 is made.
Related: Eide Bailly Wealth Transition Services.
Inspector General: IRS Struggles with Large Partnerships
IRS Lacks Solid Plan To Audit Large Partnerships, TIGTA Says - Kevin Pinner, Law360 Tax Authority ($):
The Internal Revenue Service decided to audit none of about 500 partnerships with balance sheet discrepancies despite a third of them not responding to inquiries sent in 2023 and despite the agency rejecting most responses it received for lack of evidence or documentation, TIGTA said Wednesday in the report. Sending inquiries while the statute of limitations ticked away "allowed valuable time for examining the returns to lapse," while "the decision not to conduct examinations on partnerships that did not respond or whose responses were rejected presents a fairness issue," said TIGTA, the IRS' federal watchdog.
IRS Struggles to Police Large Partnerships, Watchdog Says - Kristen Parillo, Tax Notes ($):
The IRS launched a passthrough exam unit in 2024, believing it could reverse its history of low audit rates and high “no change” audit results in the partnership area with the $79.4 billion in supplemental funding it received from the Inflation Reduction Act in 2022. But the effort quickly faced headwinds, as business and industry groups criticized the unit’s focus on partnership basis shifting and conservative lobbyists sought to dismantle it.
Given Congress’s clawback of the IRA funding and IRS staff reductions stemming from the Trump administration’s efforts to cut the federal workforce, the IRS will need to revisit its partnership audit goals, TIGTA said, adding that the agency hasn’t yet estimated the impacts of the funding rescissions and staff cuts on its ability to conduct partnership audits.
The consequences of making large partnerships functionally enforcement-free may not be ideal.
Related: Eide Bailly Passthrough Entity Consulting Services.
Filing Season Update
Not so fast, my friend? - Bernie Becker, Politico:
If history is any guide, that means the tax collector still has tens of millions of refunds left to disburse. The IRS ended up paying out around 86 million refunds by Tax Day in both 2024 and 2025 and more than 100 million by the end of December in both years.
The case for average refunds shooting up even higher between now and the end of the year is that lots of better-off taxpayers will be claiming the new deductions for seniors, tipped income, overtime pay and interest on new U.S.-made car loans.
The IRS Is Sitting On $1.2 Billion In Unclaimed Tax Refunds - Kelly Phillips Erb, Forbes. "The IRS says that refunds for 2022 may be held if you haven’t filed returns for 2023 and 2024, meaning that your compliance with those more recent filing obligations matters."
Watchdog: Many Users of Now-defunct Direct File Ended Up Not Using It
Most Direct File Users Didn’t Submit Returns in 2025, TIGTA Says - Benjamin Valdez, Tax Notes ($):
The 2025 filing season marks the second year in a row in which less than half of the taxpayers who signed up for Direct File didn’t file their returns through the system, the Treasury Inspector General for Tax Administration said in a report released March 23.
Direct File, first launched as a pilot in 2024, allowed taxpayers with simple returns to file for free through the IRS. Treasury announced in November 2025 that it would shut down the tool and focus on improving Free File, attributing the decision to low usage and “high costs and burdens on the federal government.”
IRS Direct File Had Low Participation, TIGTA Says - Asha Glover, Law360 Tax Authority ($):
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The program also reportedly cost much less than the agency's $61.2 million estimated cost, TIGTA said. At $16.2 million, the reported cost for fiscal year 2025 excluded the costs for employees detailed to the IRS to help develop and launch Direct File, costs of the IRS functions' employees who supported the program's development and pilot and authentication costs, according to the report.
The Road to Tariff Refunds
The Long, Winding Road for Trump’s Tariff Refunds - Michael Smith, Tax Notes ($):
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Justin Angotti of Reed Smith LLP told Tax Notes that “we're farther along in understanding how a refund process may work than many people thought we would be at this point.” However, there is still no indication of what data importers will be required to submit with their refund declarations, which entries will be eligible for refunds, or a timeline for when CBP will process the refunds, he added.
Hundreds of companies, including Costco and FedEx Corp., have initiated federal lawsuits to obtain refunds of IEEPA tariffs. They claim that their accounts would be liquidated, causing them to be potentially unable to receive a refund for overpaid tariffs if the CIT does not provide the ability to challenge or extend the liquidation period of their tariff duties.
Funny, they didn't have any problem collecting the tariffs.
Exempt Organizations: Epstein Fallout
Wyden Questions Epstein Associate Over EO Tax Scheme - Kelsey Brooks, Tax Notes ($):
In a March 20 letter, Wyden said recently released Justice Department documents suggest that Leon Black and his associates may have funneled millions of dollars to Epstein through J Epstein Virgin Islands Foundation Inc., a section 501(c)(3) organization, to maximize deductions on Black’s federal tax filings.
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According to Wyden, government records viewed by his investigators show that Black made large payments to EOs “controlled by Epstein” but that it’s unclear if Black claimed charitable deductions under section 170 for those payments.
Senator Wyden asks a more interesting question:
“This calls into question whether claims you’ve made that Epstein’s exorbitant compensation was for legitimate tax planning results were merely a pretext for other more nefarious tasks Epstein performed on your behalf,” Wyden wrote.
Making a very generous assumption that Epstein worked 1000 hours each year for six years for Black, that comes out to a $28,333 hourly rate. I think he could have hired an actual CPA and attorney for less.
Related - Eide Bailly Exempt Organization Tax Services.
Somewhat Related: How I made the Epstein Files.
Backdating By IRS Leads to Easement Victory for Partnership
IRS Concedes To Partnership's $48M Easement Deduction - Kat Lucero, Law360 Tax Authority ($):
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The IRS' concessions related to 2018 claim to the deduction are "solely based on the fact that the Nov. 3, 2023 notice" — on which this case is based — "was not timely issued" under IRC Section 6235, the Tax Court said.
This is a rare victory for syndicated conservation easements. These were sold to investors on the grounds that recently-purchased land was really worth many times the amount paid for it because of hypothetical mining or development opportunities.
Blogs and Bits
Ways to work around a missing tax document and file your 1040 - Kay Bell, Don't Mess With Taxes. "Most of these documents — notably Form W-2 and myriad other third-party tax statements — were required to be issued by Jan. 31."
Remember, K-1 issuers - partnerships and S corporations - have until September 15.
IRS allows withdrawal of §163(j) real estate and farming elections - Adam Parr, Tax Coda. "Taxpayers may reverse prior §163(j) elections and adjust depreciation and interest positions for 2022 through 2024. Amended returns must be filed by October 15, 2026, or earlier if required."
IRS Issues Annual Vehicle Depreciation and Lease Inclusion Amounts for 2026 - Parker Tax Pro Library. "The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by Code Sec. 280F(d)(7) and include a $100 increase in the first tax year depreciation limitation deduction for passenger automobiles, to $20,300 from $20,200 in 2025."
Roland The Heedless Tax Preparer
Waterloo Man Sentenced to Three Years in Federal Prison for Preparing and Filing False Tax Returns - United States Attorney, Northern District of Iowa (Defendant name omitted, emphasis added):
Defendant, age 41, from Waterloo, Iowa, received the prison term after an August 25, 2025, guilty plea to one count of making and subscribing a false tax return.
Defendant admitted that he signed and filed a false tax return in his own name for the 2020 tax year. Evidence at sentencing showed that he also filed false tax returns in his own name for every tax year between 2017 and 2022. Evidence also showed that Defendant, who is originally from the Democratic Republic of the Congo, was being paid by other people in the Congolese community in Waterloo to prepare tax returns. Defendant falsified tax returns by claiming deductions and credits to which the taxpayers were not entitled. Defendant prepared more than 50 false returns that claimed more than $250,000 in fraudulent refunds. He was generally paid between $100 and $300 in cash to prepare a tax return.
Defendant has been in the United States since 2012. His lengthy criminal record includes five convictions for operating while intoxicated and convictions for other driving-related offenses. Defendant is currently serving a five-year prison term in the State of Iowa after an April 2025 conviction for operating while intoxicated in Black Hawk County.
This isn't the first case of a bad tax preparer taking advantage of members of his immigrant community through bogus tax returns, even in Iowa. U.S. taxes are hard enough when you are a native English speaker. Unfortunately, his clients are likely getting more than $100-$300 worth of trouble as the IRS follows up on the Defendant's client list.
Don't drink and drive. Don't drink and prepare tax returns.
What day is it?
It's National Ag Day! After due observance of the contributions of Agriculture, you might note that it is also National Cocktail Day.
Make a habit of sustained success.
