Key Takeaways
- Thoughts on making the next tax day easier.
- IRS "CEO" touts tax season performance, promises to pursue "bad actors."
- Tax cuts, whether or not you realize it.
- Refunds rise.
- Top 1% earns 20.6% of income, pay 38.4% of federal taxes.
- The tax nightmares of major leaguers.
- National Librarian Day.
It's April 16. You have filed your taxes, or extended them. Maybe you found yourself owing unexpected taxes. Maybe you got a refund that you could have used last year.
Today is a new day. Here are some thoughts for making next April 15 go more smoothly.
- Pay estimated taxes as directed. If you use a tax preparer, you may have received instructions for estimated tax payments due in April, June, September, and next January. Pay them. A surprising number of taxpayers get caught short on April 15 because they ignored their payment instructions.
- Check your withholding. A surprising number of married couples are chronically under-withheld. Causes vary, but often two-earner couples don't take spousal income into consideration, resulting in underwithholding. Others routinely have unwithheld investment income that they don't take into account. They should boost withholding or pay some quarterly estimates.
- Get on IRS personal online account. The IRS online accounts help you manage your taxes during the year. You can pay quarterly tax payments that way, see whether your e-filing went through correctly, and check on the status of your tax payments and refunds. And if you get a real-sounding scam phone call telling you that you are in tax trouble, you can verify that no, you are indeed in good standing with the IRS.
Many states have similar online accounts.
- Simplify. If you have sticker shock when you pay to have your taxes prepared, it may be because you have made your tax life unnecessarily complicated. Heavy trading in stocks or commodities makes your return prep more expensive. Cryptocurrency transactions and sports gambling can multiply compliance complexity.
Think several times before buying partnership investments that have K-1s. Not only can these add federal complexity, they can also make you taxable in extra states, increasing your tax prep costs.
- Plan. Sometime before year end take stock of your tax situation. Were there unusual income items? A change in life, like a marriage or divorce? New kids, or older kids moving out? The best way to avoid a tax surprise is to do your tax planning before year-end.
Tax Day on The Hill with Bisignano
IRS Chief Says Slimmer Tax Agency Is Pursuing Bad Actors - Richard Rubin, Wall Street Journal:
Bisignano told the Senate Finance Committee that the agency is improving its ability to detect potential noncompliance by the nation’s taxpayers, after repeated questions from lawmakers over whether the agency was pulling back on enforcement.
“Some people think, more agents, more agents,” he said during a hearing held on the annual tax-deadline day. “I think, more technology, more technology.” He also said the agency wasn’t shying away from enforcement of tax laws against high-income people.
IRS Isn’t Going Soft on Wealthy Taxpayers, Bisignano Says - Ben Valdez, Tax Notes ($):
Bisignano said the IRS sent out 500,000 letters over the last two months to taxpayers who were underreporting income, resulting in $250 million in additional revenue.”
...
The IRS has lowered its exam targets for fiscal 2026, according to its budget justification. The agency aims to start 2,264 exams on high-income individuals in fiscal 2026, down from 6,789 the prior year, and is aiming to start 2,932 exams on partnerships — down from 3,174, according to the document.
Under the White House’s proposed budget, the IRS’s annual enforcement funds would be slashed by 18 percent, along with thousands of additional exam and collections staff members.
IRS CEO Touts GOP Law, Proclaims Success Of Tax Season - Stephen Cooper and Asha Glover, Law360 Tax Authority ($):
"Thanks to the new landmark policies, more than 53 million Americans have already experienced new financial benefits," he told lawmakers after outlining a broad set of changes in the legislation that he said would benefit working Americans.
The budget reconciliation law, which was called the One Big Beautiful Bill Act until shortly before it was enacted, is now rebranded by Republicans as the "Working Families Tax Cut Act." The GOP tax law boosted the state and local tax deduction cap from $10,000 to $40,000, restored immediate expensing of research and development costs for businesses, increased the tax break for pass-through companies and allowed for the designation of additional qualified opportunity zones.
The New Tax Breaks and the Filing Season
Americans Are Getting Big Tax Cuts, Whether They Know It or Not - Ashlea Ebeling, Wall Street Journal:
That is in addition to the less buzzy provisions like the increased standard deduction and the enhanced child tax credit that are helping behind the scenes.
But it doesn’t necessarily show up as an obvious windfall during tax season. Someone who went from owing $6,000 to owing $5,000 gets the same tax cut as someone whose $1,000 refund turned into $2,000. Both are getting a $1,000 tax cut, but only the second person got a refund. Another taxpayer who got the same cut might go from owing $800 to getting $200 back.
It’s Tax Day. Treasury says 53 million filers used new Trump tax breaks before the deadline - Fatima Hussein, Associated Press:
Tax refunds shoot up as Americans take advantage of new deductions - Julie Weil, Washington Post:
The bigger refund checks reflect the major tax cut passed by Congress in July, which reduced many households’ tax bills. Because the law went into effect midyear, it also meant that many companies ended up withholding too much from workers’ paychecks, based on previous formulations.
Post-Filing Politics
Trump to promote tax breaks in Las Vegas, where residents feel the pinch of high gas prices - Michelle Price and Jessica Hill, Associated Press:
Workers who earn tips and overtime are seeing bigger returns this tax season, but those savings and others resulting from the “One Big Beautiful Bill Act” that Trump signed last year have been eaten away by higher gas prices driven by the Iran war.
...
Trump has said he first conceived of his “no tax on tips” in Las Vegas, a city where entertainment is the financial lifeblood and many workers depend on gratuities from visitors.
Trump Increased Tax Refunds, but a Political Challenge Still Looms - Andrew Duehren, New York Times:
But that’s well below what Mr. Trump initially promised. The White House had projected that the average refund would grow by $1,000 or more, echoing some Wall Street analysts.
...
The reason for the shortcoming is most likely that more of the tax relief from the law has gone toward reducing what people owe the I.R.S. when they file, rather than increasing refunds. And lowering people’s tax bills may be a less politically persuasive form of relief than a big refund, highlighting the challenge that Republicans now face in trying to sell the American public on the law.
Democratic Caucus Members Pitch Bill to Restore IRS Funding - Cady Stanton, Tax Notes ($):
The proposed legislation would provide the IRS with $45.6 billion for enforcement, with a ramp-up in funding each year to help the agency “gradually rebuild enforcement operations”; $25.4 billion for technology and operations support; $3.1 billion for business systems modernization; and $9.6 billion for taxpayer services.
The bill has 26 Democratic and Independent co-sponsors, and the Yale Budget Lab scored the bill as raising $998 billion over 10 years.
Dealing With a Diminished IRS
Attorneys Fret Over Troubling Shift in IRS Appeals Practices - Lauren Loricchio, Tax Notes ($):
National Taxpayer Advocate Erin Collins’s 2025 annual report to Congress reported that the average inventory per appeals employee for CDP increased by 155 percent from fiscal 2024 to fiscal 2025.
“Appeals cannot decline a case simply because it has an insufficient number of personnel. Until the IRS restores staffing to sustainable levels, taxpayers will continue to face prolonged waits and uneven case handling even after meeting every procedural requirement to obtain Appeals review,” the report said.
The story tells of a tax attorney who had not heard from appeals for months in a collections due process case suddenly receiving a call from appeals: “This is your CDP hearing. Are you ready to go?”
The problem with IRS personnel cuts isn't necessarily what happens with return processing, which is largely automated nowadays. It's what comes after the filing season.
Related: Eide Bailly IRS Dispute Resolution and Collections Services.
Internationally Speaking
Tax News & Views International Weekly: Transfer Tax Troubles - Alex Parker, Eide Bailly:
In an early draft of the OBBBA, the remittance tax looked quite different. Appearing in the “Removing Taxpayer Benefits for Illegal Immigrants” section of the bill, the 5% levy applied to most transfers, but exempted U.S. citizens. The enacted provision, however, applies to all taxpayers—but only covers transfers made by “cash, a money order, a cashier's check, or any other similar physical instrument.” It exempts payments made through withdrawals from a bank or financial institution covered by the Bank Secrecy Act, or by a debit or credit card issued in the U.S.
Treasury’s new release highlights how such a category-based approach can be less straightforward than it might seem.
Related: Eide Bailly International Tax Services.
2023 Tax Stats are Out. Who Paid How Much?
Summary of the Latest Federal Income Tax Data, Tax Year 2023 - Erica York and Emily Kraschel, Tax Foundation:
...
In 2023, the bottom half of taxpayers earned 12.3 percent of total AGI [Adjusted Gross Income] and paid 3.3 percent of all federal individual income taxes. The top 1 percent earned 20.6 percent of total AGI and paid 38.4 percent of all federal income taxes.
Blogs and Bits
Tax Day’s costs, in time to file your return and complete other April 15 tax tasks - Kay Bell, Don't Mess With Taxes. "Some of the ostensibly taxpayer-friendly changes in the One Big Beautiful Bill Act (OBBBA) law meant you’ve spent more time than ever working on your taxes."
Tax Day 2026: Meep Files Her 2025 Taxes - Mary Pat Campbell, Stump-Meep on public finance, pensions, mortality and more:
Every single reduction you add, every exception, adds complexity
Professional Employer Organization Isn't Eligible for Employment-Related Credits - Parker Tax Pro Library. "The Tax Court held that because a professional employer organization was a statutory employer and not a common law employer, it was ineligible to claim the Work Opportunity Tax Credit (WOTC) and the Empowerment Zone Employment Credit (EZEC) for its clients' employees."
Major Leaguers and their Major League Tax Problems
Hate doing your taxes? Be thankful you don’t have to do an MLB player’s books - Stephen Nesbitt, The Athletic:
“I think you’d be insane,” Cleveland Guardians outfielder Steven Kwan said.
It’s not that he’s above it. It’s that he knows it’s incredibly complex. Like other pro athletes and entertainers, MLB players are taxed per day in most cities, states and countries where they perform. Each paycheck can spiral into a multi-state accounting nightmare.
“Taxes are an athlete’s biggest lifetime expense,” said Jacob Turner, a former MLB first-round pick and co-founder of Moment Private Wealth in St. Louis, “and one they often don’t think about.”
Professional athletes can be in denial about how complicated their taxes can be. Many states consider one working day enough to subject you to tax in the state. Even ballplayers living in no-income-tax states like Florida and Texas still have to file in New York, California, Illinois, Massachusetts - you name it.
Related: Eide Bailly State and Local Tax Services.
What Day is It?
In addition to being accountants' day off, it's National Librarian Day. Celebrate quietly.
Make a habit of sustained success.
