Paul L. Caron
Dean




Thursday, September 30, 2021

Schedule VR: The IRS Can Register Voters Just As Well As The DMV

New York Times op-ed:  The I.R.S. Can Register Voters Just as Well as the D.M.V. Maybe Better., Jeremy Bearer-Friend (George Washington) &

Income tax forms are notoriously complicated, but there is one simple question that is missing: “Would you like to register to vote in your home state?” With over 150 million American households filing federal income tax returns each year, our annual ritual of tax filing is a missed opportunity for voter registration.

While Americans are filling out their 1040s and Schedule Cs, they should also be asked if they would like to complete a voter registration form. The form, let’s call it a Schedule VR, would be separate from tax information, and would be available to all citizens, regardless of the amount of taxes paid or refunded. A Schedule VR would be the simplest way to create a national and nearly universal registration system.

There is good evidence that tax-time voter registration would work.

Continue reading

September 30, 2021 in IRS News, Tax, Tax News | Permalink

Thursday, September 23, 2021

Treasury To Eye ‘Clawback’ Of Estate And Gift Taxes From Trusts Used By The Wealthy

Lynnley Browning (Financial Planning), Treasury to Eye ‘Clawback’ of Estate and Gift Taxes From Trusts Used by the Wealthy:

Financial advisors know by now that Democrats’ proposed tax increases would prevent affluent investors from using trusts to pass on major wealth to their heirs.

What most advisors and even estate planners don’t know: There’s a separate existential threat to investors who use trusts to move assets out of their estate free of estate and gift taxes.

The threat doesn’t come from Congressional tax writers, who are fighting over how to raise taxes to pay for the Biden administration’s $3.5 trillion spending plan. Instead, it comes via a nearly unnoticed sentence in an obscure Treasury Department document released by the agency earlier this month.

Treasury is looking at whether the IRS could “claw back” taxes on gifts that investors have made under the higher estate and gift tax exemption levels in place since 2018, according to a little-noticed remark in the agency's priority guidance plan released on Sept. 9. The recapture would come once those higher thresholds expire come 2026.

The agency’s flagging of the issue “has the potential to claw back into a taxable estate transfers into trusts that were made when exemptions were higher,” said Michael Repak, a vice president and senior estate planner at wealth management firm Janney Montgomery Scott in Philadelphia.

Continue reading

September 23, 2021 in IRS News, Tax, Tax News | Permalink

Thursday, September 9, 2021

Sarin: The Top 1% Are Responsible For 28% ($163 Billion) Of All Unpaid Taxes Each Year

Natasha Sarin (Deputy Assistant Secretary for Economic Policy, U.S. Treasury Department), The Case for a Robust Attack on the Tax Gap:

A well-functioning tax system requires that everyone pays the taxes they owe. Today, the “tax gap”—the difference between taxes that are owed and collected—totals around $600 billion annually and will mean approximately $7 trillion of lost tax revenue over the next decade. The sheer magnitude of lost revenue is striking: it is equal to 3 percent of GDP, or all the income taxes paid by the lowest earning 90 percent of taxpayers.

The tax gap can be a major source of inequity. Today’s tax code contains two sets of rules: one for regular wage and salary workers who report virtually all the income they earn; and another for wealthy taxpayers, who are often able to avoid a large share of the taxes they owe. As Table 1 demonstrates, estimates from academic researchers suggest that more than $160 billion lost annually is from taxes that top 1 percent choose not to pay.

Table 2

Continue reading

September 9, 2021 in IRS News, Tax | Permalink

Tuesday, September 7, 2021

Two-Thirds Of Americans Support Biden's Plan To Beef Up IRS Enforcement

University of Maryland Program for Public Consultation, Two-Thirds Favor Bolstering IRS Tax Enforcement as Proposed for Reconciliation Budget Plan:

MarylandMore than two-thirds of American voters favor increasing the IRS Budget by $8 billion a year to fund increased tax enforcement, a proposal being considered to help fund the reconciliation budget plan.

In the innovative survey of 2,613 registered voters by the Program for Public Consultation (PPC) at the School of Public Policy at the University of Maryland, respondents were given briefings on the proposal, and evaluated arguments for and against. The content was reviewed in advance by experts for accuracy and balance and to ensure the best arguments were being presented on both sides.

The proposal presented, based on one in the American Families Plan, calls for an increase in the IRS budget by $8 billion a year to:

  • ​​increase tax enforcement on very high-income individuals (income over $400,000);
  • update the technology used to detect tax evasion; and
  • require banks and other financial companies to provide information to the IRS.

In conclusion, a majority of 68% favor the plan including 88% of Democrats, 65% of independents, and 46% of Republicans.

Continue reading

September 7, 2021 in IRS News, Tax, Tax News | Permalink

Saturday, September 4, 2021

RenTec Hedge Fund Executives Agree To Pay $7 Billion To Settle IRS Tax Dispute Over Characterization Of Basket Option Income

Following up on my previous posts (links below):  New York Times, Hedge Fund’s Insiders Agree to Pay as Much as $7 Billion to I.R.S.:

RenaissanceA yearslong dispute between a pioneering hedge fund and the Internal Revenue Service ended Thursday with an enormous bill for taxes and penalties: as much as $7 billion.

James Simons, a mathematician whose algorithmic approach has been adopted by many other investment funds, and some of his former colleagues at Renaissance Technologies have settled a decade-long dispute with the government over the tax treatment of some of their investments, the firm said in a letter to investors.

The settlement, which involves 10 years’ worth of trades made by the hedge fund, could be worth as much as $7 billion, according to a person with knowledge of the agreement. It is one of the largest federal tax disputes in history.

The deal ends a standoff that led to a congressional investigation and involved two politically connected financiers: Mr. Simons, a longtime patron of Democratic candidates with an estimated net worth of $25 billion, and Robert Mercer, a former Renaissance executive whose advocacy for conservative causes included helping to found Cambridge Analytica. After Donald J. Trump won the 2016 presidential election, the now-defunct political consulting firm became embroiled in a scandal for harvesting Facebook data without users’ consent to assist his campaign.

Continue reading

September 4, 2021 in IRS News, Tax, Tax News | Permalink

Sunday, July 18, 2021

The IRS Reads The Bible And Reveals Its Bias: A Bureaucrat Examined Our Religion And Declared It Republican

Following up on my previous posts (links below):  Wall Street Journal Letter to the Editor:  Bunni Pounds (President, Christians Engaged), The IRS Reads the Bible and Reveals Its Bias: A Bureaucrat Examined Our Religion and Declared it Republican:

Christians EngagedWilliam McGurn (“Defund Joe Biden’s IRS,” Main Street, July 6) and Holman W. Jenkins, Jr. (“The IRS is ProPublica’s Accessory,” Business World, July 7) articulate theoretical dangers from the IRS that my organization experienced in reality.

Christians Engaged was founded to help civically minded Christians think through their responsibility in voting. All the pieces were in place—staff, a board, resources—but we had to apply for recognition by the IRS as a 501(c)(3). It took more than 18 months to get a response. When the IRS’s response letter came in May, it seemed to examine in great detail the faith that informs the organization. It felt strange to have a bureaucrat examine our religion, belief in the Bible and how we believe our faith impacts the world.

Then came this sentence: “The bible teachings are typically affiliated with the [Republican] party and candidates. This disqualifies you from exemption under the IRC Section 501(c)(3).”

Because we believed in and taught the Bible, the IRS disqualified us from charitable recognition. The IRS determined that biblical values and Republican politics were so intertwined as to make us partisan.

Thankfully, we appealed and this month secured a quick reversal of the IRS decision. Still, the danger remains as long as the IRS views religious institutions with such political cynicism.

Continue reading

July 18, 2021 in IRS News, Tax, Tax News | Permalink

Monday, July 5, 2021

'The IRS Is A Hot Mess': It Only Answers 3% Of Phone Calls, 35 Million Tax Returns Remain Unprocessed

Washington Post, The IRS Is a Hot Mess: Millions of Tax Returns Haven’t Been Processed, and Calls Are Going Unanswered, Including Mine:

IRS Logo 2I want to apologize to every person I’ve encouraged to be patient with the Internal Revenue Service as it stumbles through the aftereffects of the pandemic. Your righteous indignation is warranted.

The IRS is critically malfunctioning.

I didn’t fully grasp, until a recent report from the national taxpayer advocate, that the IRS has officially given up on answering every taxpayer telephone call for assistance — and that has to be fixed.

The agency is a hot mess. You are right to be mad as hell when you can’t reach somebody to help explain why your filing or refund hasn’t been processed. And, yes, I cussed, because the time to be polite and forgiving for the failures at the IRS is so over.

Right now, millions of taxpayers are waiting for their much-needed refunds and stimulus payments. Millions more are trying to settle issues with past tax returns and unable get a human being on the telephone, while interest costs potentially tick up each day things go unresolved.

Continue reading

July 5, 2021 in IRS News, Tax | Permalink

Thursday, July 1, 2021

National Taxpayer Advocate Releases Mid-Year Report To Congress

NTA

IR-2021-139 (June 30, 2021), National Taxpayer Advocate Assesses Tax Filing Season and Identifies Areas For IRS Improvement in Midyear Report to Congress:

National Taxpayer Advocate Erin M. Collins today released her statutorily mandated midyear report to Congress. The report presents an assessment of the 2021 filing season, identifies key objectives the Taxpayer Advocate Service (TAS) will pursue during the upcoming fiscal year, and contains the IRS's responses to each of the 73 administrative recommendations the Advocate made in her 2020 Annual Report to Congress.

The Advocate's report emphasizes that the difficulties the IRS faced in performing its traditional work due to the COVID-19 pandemic and the added responsibilities it was assigned to make three rounds of stimulus payments combined to create significant challenges for taxpayers.

Continue reading

July 1, 2021 in IRS News, Tax, Tax News | Permalink

Tuesday, June 29, 2021

Johnston: 'Diabolical' Trump Scheme To Undermine Estate & Gift Tax Enforcement

David Cay Johnston, Raw Story Uncovers a Huge Secret Tax Favor For the Super Wealthy:

IRS Logo 2Raw Story has uncovered a secret IRS tax favor for the super-rich—authorized when Donald Trump was president—that will take effect on Thursday, July 1. President Biden can stop it with one phone call. Will he?

The Biden White House was unaware of this Trump tax favor—disguised as a crackdown on wealthy tax cheaters—when Raw Story asked about it on Friday.

That's not surprising because the IRS remains under the control of Charles Rettig, a holdover from the Trump era. Before Trump named him IRS commissioner, Rettig was a Beverly Hills tax lawyer who helped the super-wealthy escape taxes and—if they got caught cheating—negotiated secret settlements that avoided public humiliation while minimizing taxes and penalties.

If Biden lets this Trump policy take effect it would be a huge benefit to clients of Rettig's old law firm and others like it. And it would make an already unfair tax system even more heavily tilted in favor of billionaires.

Internally the IRS characterized the new favor for the rich as nothing more than a subtle change to comply with arcane civil service policy. But at least one high-level IRS manager saw through this façade and fought the plan, an email obtained by Raw Story shows.

What makes this Trumpian scheme diabolical is that on the surface, it appears to be a 50% increase in enforcement of gift and estate tax law, areas where cheating is rampant. Actually, it's the opposite.

Starting Thursday, July 1, the IRS will hire 71 new people to examine estate and gift tax returns.

The 137 IRS tax lawyers who do this work now are, in effect, highly trained colonels on the tax police force. They need sophisticated detective skills to understand the mind-numbingly complex trusts and other devices that lawyers like Rettig designed to hide money from the IRS.

The new hires, however, won't be lawyers, only lightly trained "tax specialists." They will be equivalent of mere corporals on the tax police force, lacking the legal education required to see through the fog of confusion that tax lawyers get paid fat fees create so their clients can pay little to nothing in taxes. ...

The question is whether Biden will do what he promised or reveal himself to just be another politician who tells voters what he thinks they want to hear and then doesn't act.

David Cay Johnston, How Trump’s Toothless IRS Let the Rich Off Easy:

The amount of additional taxes that the richest Americans owed after the IRS audited their tax returns fell more than 99% in Donald Trump’s first full year in office, data tables released this week show.

Continue reading

June 29, 2021 in IRS News, Tax, Tax News | Permalink

Friday, June 25, 2021

IRS Releases 2020 Data Book

IR-2021-134, IRS Releases Data Book For Fiscal 2020 Describing Agency’s Activities During Pandemic (June 24, 2021):

IRS Data BookThe Internal Revenue Service today issued the Data Book detailing the agency's activities during fiscal year 2020 (Oct. 1, 2019 – Sept. 30, 2020).

"This year's Data Book describes the important work that IRS employees accomplish on behalf of the public," said IRS Commissioner Chuck Rettig. "The IRS accounts for approximately 96% of the funding that supports the federal government's operations, while proudly serving and interacting with more Americans than any other public or private organization."

"The 2020 Data Book also details the extraordinary measures the IRS took to protect the health and safety of taxpayers and IRS employees during the COVID-19 pandemic while implementing critical economic relief legislation – the largest economic rescue packages in US history," Rettig added.

Continue reading

June 25, 2021 in IRS News, Tax | Permalink

Sunday, June 20, 2021

IRS Denies Tax-Exempt Status To Organization That Encourages Christians To 'Pray, Vote, Engage' Because '[B]ible Teachings Are Typically Affiliated With The [Republican] Party'

Christians EngagedNewsweek, First Liberty Appeals Denial of Tax Exemption for Group Alleged to Have Republican Ties:

Christian legal organization First Liberty Institute is appealing the recent denial by the IRS to grant tax exemption status to a Texas Christian group that the federal agency alleges supports the Republican Party.

In May the IRS denied 501(c)(3) status to the Texas-based prayer group Christians Engaged because it encourages its members to vote for state and national leaders. The federal agency specifically noted in its rejection that the group supports Republican candidates.

In its letter, IRS Director of Exempt Organizations Stephen A. Martin concluded the group does not qualify as an organization described in IRS Section 501(c)(3) because it is not operated exclusively for religious and educational purposes. Specifically Martin noted, "You are engaged in prohibited political campaign invention" and "You are also not operated exclusively for one or more exempt purposes...because you operate for a substantial non-exempt private purpose and for the private interest of the 'D party.'" The "D party" is a reference to the Republican Party, according to a "legend" provided at the top of Martin's letter to the religious group.

Press Release, IRS Denies Religious Group Tax Exempt Status; States “Bible Teachings” Are “Affiliated With the Republican Party”:

Today, First Liberty Institute appealed an IRS determination denying tax exempt status to Christians Engaged, a nonprofit organization that exists to educate and empower Christians to pray for our nation and elected officials, vote, and be civically engaged. In a letter issued in May, the IRS argued that Christians Engaged was not eligible for 501(c)(3) status in part because “[B]ible teachings are typically affiliated with the [Republican] party and candidates.” ...

“The IRS states in an official letter that Biblical values are exclusively Republican.  That might be news to President Biden, who is often described as basing his political ideology on his religious beliefs,” said Lea Patterson, Counsel for First Liberty Institute. “Only a politicized IRS could see Americans who pray for their nation, vote in every election, and work to engage others in the political process as a threat. The IRS violated its own regulations in denying tax exempt status because Christians Engaged teaches biblical values.”

Continue reading

June 20, 2021 in IRS News, IRS Scandal, Legal Education, Tax | Permalink

Thursday, June 10, 2021

House Holds Hearing Today On Minding The Tax Gap: Improving Tax Administration For The 21st Century

The House Ways and Means Committee is holding a hearing today at 12:00 ET on Minding The Tax Gap: Improving Tax Administration For The 21st Century (livestream):

  • House LogoSteven Dean (Brooklyn) (testimony:  "In my testimony today, I will explain why a race-blind approach to tax enforcement produces bad tax policy. I will use three very different examples to show why leaving race out of the equation fails to prevent bias and how destructive that bias can be for everyone. Ignoring race doesn’t solve problems, it creates them. You have already heard from ProPublica that the ten most heavily audited counties in the United States are Black and poor. I will tell you how we can do better.")
  • Janet Holtzblatt (Tax Policy Center) (testimony)
  • Mark Mazur (Deputy Assistant Secretary for Tax Policy, U.S. Treasury Department) (testimony)

Continue reading

June 10, 2021 in Congressional News, IRS News, Tax, Tax News | Permalink

Monday, May 31, 2021

Treasury Releases Explanation Of Tax Proposals In President Biden's FY22 Budget

Green Book FY22

Presidents from George H.W. Bush through Barack Obama released General Explanations of the Administration’s Revenue Proposals — commonly known as the "Green Book" — an explanation of the Administration's revenue proposals for that fiscal year. President Trump did not follow this tradition in FY18 - FY21. President Biden has returned to that tradition and released General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals:

In the Fiscal Year 2022 Budget, the President proposes a number of reforms to the Internal Revenue Code (Code) that would modernize our tax system to respond to today’s challenges. These changes would raise revenue, improve tax administration, and make the tax system more equitable and efficient.

The American Jobs Plan includes revenue proposals that reform corporate taxation, support housing and infrastructure, and prioritize clean energy. Reforms to the corporate income tax aim to collect sufficient revenue, build a fairer tax system, and reduce tax incentives that encourage profit shifting and offshoring. Housing and infrastructure tax credits would support low-income housing, economic development, and public school and transportation infrastructure. The American Jobs Plan would eliminate all fossil fuel subsidies that linger in the Code, while substantially expanding tax incentives that encourage clean energy sources, energy efficiency, carbon sequestration, and electric vehicle adoption.

Continue reading

May 31, 2021 in IRS News, Tax, Tax News | Permalink

Monday, May 24, 2021

U.S. Proposes 15% Global Minimum Corporate Tax To Curb Profit Shifting Overseas

U.S. Treasury Department, Office of Tax Policy Meetings:

Treasury Department (2019)Over the last two days, leaders from the Office of Tax Policy at the U.S Department of the Treasury participated in meetings with the Steering Group of the Inclusive Framework on base erosion and profit shifting (BEPS) as part of the Organization for Economic Cooperation and Development (OECD) / G20 international tax negotiations. As part of those meetings, discussions on the global corporate minimum tax rate began in earnest.

Treasury expressed its belief that the international tax architecture must be stabilized, that the global playing field must be fair, and that we must create an environment in which countries work together to maintain our tax bases and ensure the global tax system is equitable and equipped to meet the needs of  for the 21st century global economy.  It is imperative to work multilaterally to end the pressures of corporate tax competition and corporate tax base erosion. Treasury reiterated that with the global corporate minimum tax functionally set at zero today, there has been a race to the bottom on corporate taxes, undermining the United States’ and other countries’ ability to raise the revenue needed to make critical investments. Treasury made clear that a global corporate minimum tax rate would ensure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and would spur innovation, growth, and prosperity while improving fairness for middle class and working people.

Treasury proposed to the Steering Group that that the global minimum tax rate should be at least 15%. Treasury underscored that 15% is a floor and that discussions should continue to be ambitious and push that rate higher. 

Continue reading

May 24, 2021 in IRS News, Tax | Permalink

Tuesday, May 18, 2021

IRS Seeks To Hire Five Transfer Pricing Attorneys

The IRS Large Business & International Division (LB&I) seeks to hire five transfer pricing attorneys (salary: $108,885 to $162,753) among these twelve locations:

  • IRS Logo 2Denver, CO
  • Chicago, IL
  • Downers Grove, IL
  • Schiller Park, IL
  • Indianapolis, IN
  • Farmington Hills, MI
  • Grand Rapids, MI
  • Bloomington, MN
  • Cincinnati, OH
  • Columbus, OH
  • Tulsa, OK
  • Houston, TX

The Transfer Pricing Practice (TPP) is part of Treaty and Transfer Pricing Operations (TTPO) in the Large Business & International (LB&I) division of the IRS. Transfer pricing essentially involves the pricing of goods, services, and intellectual property transferred between related entities of multinational enterprises (typically corporations with a common parent company). When these transactions involve related entities located in foreign countries, tax issues arise over how much income should be reported in each country. The United States and foreign tax administrations have complex tax rules about how intercompany pricing is to be determined and income reported. It is an area of significant tax controversy, not only in the United States, but also in numerous countries around the world.

Continue reading

May 18, 2021 in IRS News, Tax | Permalink

Tuesday, May 11, 2021

Tax Practitioners Scoff At Janet Yellen's Comment That 'The IRS Has Put On A Masterclass In How The Machinery Of Government Should Work'

Forbes, Treasury Secretary’s IRS Praise Sparks Backlash From Those Who Must Deal With The Tax Agency:

IRS Logo 2Is the IRS broken? It depends on whom you ask. Yesterday Treasury Secretary Janet Yellen tweeted “It’s a stunning achievement. In the midst of a crisis, the IRS has put on a masterclass in implementation and how the machinery of government should work.” The pushback from tax industry professionals was immediate and vehement.

Brian Streig, CPA and Tax Director at Calhoun, Thomson & Matza, LLP in Austin, Texas, responded “Yes, the IRS did a great job at implementing CARES Act and other Covid tax law changes. But, the IRS has completely failed American taxpayers in their primary function of processing tax returns, issuing refunds, and handling notices.” ...

Continue reading

May 11, 2021 in IRS News, Tax, Tax News | Permalink

Tuesday, May 4, 2021

IRS Seeks Grant Applications For Funding Low Income Taxpayer Clinics

LITC

The IRS has announced (IR-2021-100) that it is accepting grant applications through June 18 for Low Income Taxpayer Clinics for the 2022 grant cycle (Jan. 1 - Dec. 31, 2022):

The LITC Program is a federal grant program administered by the Office of the Taxpayer Advocate at the IRS, which is led by National Taxpayer Advocate (NTA) Erin M. Collins. LITCs can make a tremendous impact on the lives of taxpayers, as detailed in this recent blog from the NTA:  Not all Superheroes Wear Capes: Join the Low Income Taxpayer Clinic Community and Be a Hero to Taxpayers Most in Need.

Continue reading

May 4, 2021 in IRS News, Tax | Permalink

Tuesday, March 16, 2021

D.C. Circuit: Law Prof May Be Entitled To Attorney's Fees Due To Her 'Serious Scholarly Interest' After Beating IRS In FOIA Litigation

Kwoka v. IRS, No. 19-5310 (D.C. Cir. Mar. 9, 2021):

Denver Logo (2015)This case presents a recurring question in our court: under what circumstances is a prevailing plaintiff in a Freedom of Information Act (FOIA) case—here a law professor [Margaret Kwoka (Denver)] seeking information from the Internal Revenue Service—entitled to an award of attorney’s fees? The district court denied the professor’s request for fees. For the reasons set forth below, we vacate and remand for further proceedings consistent with this opinion. ...

Continue reading

March 16, 2021 in IRS News, Legal Education, New Cases, Tax, Tax News | Permalink

Tuesday, February 23, 2021

IRS Low Income Taxpayer Clinic Program Annual Report

IR-2021-41 (Feb. 19, 2021), Low Income Taxpayer Clinics Represented Over 20,000 Taxpayers Dealing With an IRS Tax Controversy; See the Latest Program Report and the 2021 LITC Grant Recipient List:

LITCThe Internal Revenue Service's Low Income Taxpayer Clinic (LITC) Program office today announced highlights from its 2020 annual report, featuring successful taxpayer outreach to thousands of taxpayers. The report describes how LITCs provide representation, education and advocacy for taxpayers who are low income or speak English as a second language (ESL). The program also announced its 2021 LITC grant recipient list. ...

During 2019, LITCs represented 20,259 taxpayers dealing with an IRS tax controversy. They helped taxpayers secure more than $6.8 million in tax refunds and reduced taxpayers' liabilities by more than $50 million. They also brought more than 4,100 taxpayers back into payment compliance.

Continue reading

February 23, 2021 in IRS News, Tax, Tax News | Permalink

Tuesday, January 19, 2021

National Taxpayer Advocate Delivers 2020 Annual Report To Congress

NTA

IR-2021-11 (Jan. 13, 2021), National Taxpayer Advocate Delivers Annual Report to Congress; Focuses on Taxpayer Impact of COVID-19 and IRS Funding Needs:

National Taxpayer Advocate Erin M. Collins today released her 2020 Annual Report to Congress, focusing on the unprecedented challenges taxpayers faced in filing their tax returns and receiving refunds and stimulus payments during a year consumed by the COVID-19 pandemic. The report also finds that a roughly 20% inflation-adjusted reduction in the IRS's budget since fiscal year (FY) 2010 has left the agency with antiquated technology and inadequate staffing levels to meet taxpayers' needs.

As part of the report, Collins released the fourth edition of the National Taxpayer Advocate's "Purple Book," a compilation of 66 legislative recommendations designed to strengthen taxpayer rights and improve tax administration.

Continue reading

January 19, 2021 in IRS News, Tax, Tax News | Permalink

Tuesday, January 5, 2021

IRS Whistleblower Awards Fall 28% (On Top Of 61% Decline Last Year)

Friday, December 18, 2020

Lipman: What National Taxpayer Advocate Nina Olson Did For America's Kids And Their Families

Francine J. Lipman (UNLV), Humanizing the Tax System: What National Taxpayer Advocate Nina E. Olson Did For America's Kids and their Families, 18 Pitt. Tax Rev. ___ (2020):

Pitt Tax Review (2020)At their core, taxpayer rights are human rights. They are about our inherent humanity. — Nina E. Olson

The federal income tax system does not exist for statutes, regulations, codes, enforcement, assessments, collection, redistribution, procedures, publications, liens, levies, refunds, liabilities, litigation, compliance, or even revenue. At its core, the federal income tax system exists for people. People like you, me, and all our loved ones including spouses, partners, parents, kids, brothers, sisters, nieces, nephews, grandparents, grandkids, friends, and neighbors. The people who eat at our tables and sleep under our roofs. The tax system is about current and future generations who live and work in America, and even those who don’t but have the coveted prize of U.S. citizenship. It is about our shared vision of ensuring the well-being of all people, young, old, Black, Brown, White, Asian, Native, multiracial, religious, atheist, agnostic, male, female, transgender, straight, queer, or nonconforming. It is about ensuring that the people of and in America have what they need to survive and thrive, especially those who are vulnerable for any reason or no reason at all. Tax systems, like other government institutions, should be designed and administered to make life better for everyone. Because “we the people” are America, the beautiful, the federal tax system serves us. This is the truth that Nina E. Olson laid bare during her eighteen years of service as the longest-serving National Taxpayer Advocate (NTA).

Continue reading

December 18, 2020 in IRS News, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Thursday, September 17, 2020

Questions Raised About Purdue Global University's Tax-Exempt Status

Purdue IRS

Inside Higher Ed, Questions Raised About Purdue Global's Tax-Exempt Status:

review conducted by the Century Foundation raised questions about the documents Purdue University Global presented to the Internal Revenue Service when it applied for tax-exempt status in August 2019.

Purdue University acquired for-profit Kaplan University from Graham Holdings in 2017, then used the acquisition to create a new online institution called Purdue University Global. Purdue Global relies on a Graham subsidiary, the educational services company Kaplan, to provide numerous support activities like financial aid administration, marketing, international student recruiting, business office functions and first-year student advising. Purdue Global acquired tax-exempt status from the IRS in December 2019.

Bob Shireman, director of higher education excellence and senior fellow at the Century Foundation, believes that the IRS was provided with misleading information about the nature of the deal between Purdue Kaplan. After reviewing documents provided by Purdue, Shireman said that Purdue Global excluded Kaplan from its list of contractors and failed to disclose Kaplan as an organization with which the university has a "close connection." ...

Continue reading

September 17, 2020 in IRS News, Tax, Tax News | Permalink | Comments (0)

Tuesday, September 1, 2020

Free Zoom Today On Federal Career Opportunities In Tax Law

Federal Career Opportunities in Tax Law

DOJCCWhy a federal career in tax law?  Contrary to popular belief, accounting expertise is not required to excel in this rewarding field.  In fact, you don’t even have to be a math whiz!  You are invited to hear a panel of federal tax (and non-tax) attorneys discuss the variety of federal career opportunities in the IRS Office of Chief Counsel and the Department of Justice, Tax Division.  We will also discuss opportunities for attorneys who want to focus on federal labor and employment practices.  Our panel will describe a typical day for experienced and new attorneys working for the Department of Justice, Tax Division, or the IRS Office of Chief Counsel.  Following the discussion, the panel will answer your questions.  So, by now you may be wondering: are we hiring?  YES, and we hope to meet you soon!

When and Where
Tuesday, September 1, 2020, at 12:00 p.m. – 1:00 p.m. EDT (live) and 3:00 p.m. – 4:00 p.m. EDT (video rebroadcast with live Q&A) via Zoom:
Meeting ID: 161 406 7274; Passcode: 9i?LhBYb

Continue reading

September 1, 2020 in IRS News, Tax | Permalink | Comments (0)

Thursday, August 13, 2020

Number Of Americans Renouncing Their U.S. Citizenship In 2020 Continues To Soar

International Tax Blog, 2020 Second Quarter Published Expatriates – Second Highest Quarterly Number Ever:

Last week the Treasury Department published the names of individuals who renounced their U.S. citizenship or terminated their long-term U.S. residency (“expatriated”) during the second quarter of 2020.

The number of published expatriates for the quarter was 2,406, which is the second highest quarterly number ever, with the first quarter of this year being the highest quarter ever. Therefore, 2020 is currently on track to have the highest number of published expatriates ever.

Expats

Continue reading

August 13, 2020 in IRS News, Tax, Tax News | Permalink | Comments (3)

Monday, July 13, 2020

IRS Releases 2019 Data Book

IR-2020-133, IRS Releases New Data Book:

IRS Data BookThe Internal Revenue Service today unveiled the 2019 IRS Data Book, featuring a redesigned format that provides a different and expanded look at IRS accomplishments during the past year.

Available now on IRS.gov, the redesigned Fiscal Year 2019 edition of the IRS Data Book provides the annual set of statistical tables summarizing tax filings, revenue collections, taxpayer services, enforcement activities and agency operations. The new Data Book features an updated format with additional tables designed to more accurately reflect the way the IRS does business today.

"The IRS is changing from many perspectives, and the Data Book reflects that change as well," IRS Commissioner Chuck Rettig wrote in the Data Book's introduction.

Continue reading

July 13, 2020 in IRS News, Tax | Permalink | Comments (1)

Saturday, June 27, 2020

GAO: IRS Sent $1.4 Billion In Stimulus Funds To Dead People

Wall Street Journal, IRS Paid $1.4 Billion in Stimulus Payments to Dead People, GAO Report Says:

GAO (2016)The Internal Revenue Service paid nearly $1.4 billion in stimulus checks to dead people, according to a Government Accountability Office report that provides the first tally of such payments.

Citing data from the tax agency’s inspector general through April 30, GAO said Thursday that the IRS made almost 1.1 million such payments before Treasury Department officials determined that deceased people were ineligible and began asking recipients to return the money.

New York Times, $1.4 Billion in Stimulus Funds Sent to Dead People, Watchdog Finds

Michael J. Graetz, a Columbia University law professor and former deputy assistant secretary for tax policy at the Treasury Department, said government money improperly going to the dead is a continuing problem when it comes to tax refunds and Social Security payments. In fact, improper payments for a broad range of expenses have been a long-term problem for the federal government. The G.A.O. reported that from 2003 to 2017, estimates of improper payment totaled about $1.4 trillion cumulatively.

Continue reading

June 27, 2020 in IRS News, Tax, Tax News | Permalink | Comments (2)

Thursday, April 23, 2020

ProPublica: Millions of Americans Might Not Get Stimulus Checks. Some Might Be Tricked Into Paying TurboTax To Get Theirs.

ProPublica, Millions of Americans Might Not Get Stimulus Checks. Some Might Be Tricked Into Paying TurboTax to Get Theirs.:

Coronavirus TurboTaxCongress has approved billions of dollars of checks for Americans hard hit by the biggest round of layoffs in U.S. history. But millions of Americans will have to wait months for that money — and millions more may never get the money at all.

That’s because the rescue legislation left it to the IRS, an agency gutted by Congress, to organize the complex logistics of delivering the money to those entitled to it. As the IRS has struggled, for-profit tax preparation companies, notably Intuit, the maker of TurboTax, have stepped in with websites to help people get their checks.

Continue reading

April 23, 2020 in Coronavirus, IRS News, Tax | Permalink | Comments (0)

Tuesday, April 7, 2020

WSJ: The Tax Consequences Of Working From Home During COVID-19

Wall Street Journal Tax Report, Millions Are Suddenly Working From Home. Can They Claim a Tax Break?:

IRS CovidIf you’re one of millions of Americans who are now working from home instead of the office because of the coronavirus pandemic, count yourself lucky: you aren’t sick and you have a job.

Still, both you and your employer may be wondering whether your remote work qualifies for any tax breaks. Have you bought a desk, a better chair or new computer equipment? Can you take a tax deduction on those improvements, as well as the increased utility costs needed to power a new home-office set up?

The short answer is no, the employee can’t take these deductions—but the employer often can. As part of the 2017 tax overhaul, Congress nearly doubled the standard deduction and repealed some specific write-offs on Schedule A. One was a partial deduction for unreimbursed employee expenses such as a home office or union dues.

But employers can claim these deductions, based on reimbursements to the worker. The good news for workers is that the breaks can help employees with a range of pandemic expenses and the payments don’t count as compensation, either for income or FICA taxes. ...

Continue reading

April 7, 2020 in IRS News, Tax, Tax News | Permalink | Comments (1)

Saturday, March 7, 2020

Analysis Of The Final Opportunity Zone Regulations

Jean Bertrand, David S. Miller, Sejin Park & Sean Webb (Proskauer), The Final Regulations on Opportunity Zones:

This paper discusses the final regulations on the opportunity zone program.

Continue reading

March 7, 2020 in IRS News, Tax, Tax News | Permalink | Comments (0)

Saturday, February 29, 2020

IRS Quietly Deletes Guideline That Fortnite Virtual Currency Must Be Reported on Tax Returns

CNN Business, IRS Quietly Deletes Guideline That Fortnite Virtual Currency Must Be Reported on Tax Returns:

Fortnite 2For months leading up to this tax season, a section of the IRS's website advised players of Fortnite, the popular online video game, that their use of in-game virtual currency could be subject to federal taxes.

The little-noticed provision, which dated back at least to October according to the cached version of an IRS webpage on Archive.org, appeared to mark the first time the agency has ruled on video game currencies, including Fortnite's V-bucks, purchased with real dollars. By applying the same policy to in-game money that it enforces on bitcoin, ether and other cryptocurrencies, the IRS guide seemed poised to affect millions of gamers — or their parents.

But on Wednesday, the IRS scrubbed all mentions of the in-game currency from the webpage after questions from CNN and other outlets about the policy.

Despite the sudden deletion, experts believe that transactions involving video game currencies will still need to be reported under a new question the IRS is including this year on tax forms.

Schedule 1

Just because the IRS deleted the language, they said, does not resolve questions about how the IRS plans to treat video game currencies.

Continue reading

February 29, 2020 in IRS News, Tax | Permalink | Comments (0)

Thursday, February 27, 2020

IRS Names New National Taxpayer Advocate

Treasury and IRS Announce National Taxpayer Advocate Appointment:

Erin CollinsToday, the U.S. Treasury Department and Internal Revenue Service (IRS) announced the appointment of Erin M. Collins to serve as the National Taxpayer Advocate (NTA).

“Erin Collins will be an outstanding voice for American taxpayers,” said Secretary Steven T. Mnuchin.  “She has a wealth of experience representing a broad range of taxpayers before the IRS.  She also developed valuable expertise during her years with the Office of Chief Counsel. Erin is the ideal candidate to help the IRS modernize and improve service for American families and businesses.”

“I am deeply honored to join the talented team at the IRS as the National Taxpayer Advocate and thank Secretary Mnuchin and Commissioner Rettig for the trust they have placed in me,” said Ms. Collins.  “I will work every day to be a strong and effective representative of American taxpayers.”

Continue reading

February 27, 2020 in IRS News, Tax, Tax News | Permalink | Comments (0)

Thursday, February 13, 2020

IRS Whistleblower Awards Fall 61%

Budget Blues For Tax Administration

Robert A. Weinberger (TaxVox), Budget Blues For Tax Administration:

The fiscal 2020 budget signed into law December 20, 2019 is a big disappointment for tax administration, continuing the over 20-percent inflation-adjusted decline in IRS funding since 2010 that has eroded enforcement, reduced audits, and handicapped performance.

TPC

Continue reading

February 13, 2020 in IRS News, Tax, Tax News | Permalink | Comments (1)

Wednesday, February 12, 2020

Inspector General: TurboTax, Other Companies Tricked 14 Million Taxpayers Eligible For Free-File Program Into Paying To E-File Their Returns

Following up on my previous posts (links below):  Treasury Inspector General for Tax Administration, Complexity and Insufficient Oversight of the Free File Program Result in Low Taxpayer Participation (2020-40-009) (Feb. 3, 2020): 

WHY TIGTA DID THE AUDIT
This audit was initiated in response to concerns raised by Congress and other stakeholders.  Their concerns relate to whether the Free File Program is operating as intended, and eligible taxpayers attempting to prepare and e-file their returns at no cost are diverted to tax return preparation services that are not free.  TIGTA’s objective was to assess the IRS’s oversight of the Free File Program.

WHAT TIGTA FOUND
The complexity, confusion, and lack of taxpayer awareness about the operation and requirements of the Free File Program are contributing reasons why many eligible taxpayers do not participate in the Program.  During Processing Year 2019, only 2.5 million (2.4 percent) of the 104 million eligible taxpayers obtained a free return filing through the Program.  In contrast, more than 34.5 million taxpayers, who met Free File Inc. members’ Free File Program criteria, used the members’ commercial software to file their tax return.

TIGTA called a statistically valid sample of 200 taxpayers who met the Free File Program criteria but used a Free File Inc. members’ commercial software and was informed by 87 (43 percent) taxpayers that they were charged a fee to prepare and e-file their Federal tax return.  Based on these results, TIGTA estimates that more than 14 million taxpayers met the Free File Program criteria and may have paid a fee to e-file their Federal tax return in the 2019 Filing Season.

TIGTA

Continue reading

February 12, 2020 in IRS News, Tax, Tax News | Permalink | Comments (2)

Tuesday, February 4, 2020

President Trump Nominates Richard Zuckerman To Be Assistant Attorney General (Tax Division)

President Donald J. Trump Announces Intent to Nominate and Appoint Individuals to Key Administration Posts:

ZuckermanRichard E. Zuckerman of Michigan, to be an Assistant Attorney General (Tax Division).

Mr. Zuckerman currently serves as the Principal Deputy Assistant Attorney General for the Tax Division at the Department of Justice, where he also serves as the Division’s Deputy Assistant Attorney General for Criminal Matters. Mr. Zuckerman began his legal career as a trial lawyer with the Organized Crime and Racketeering Section assigned to the Detroit Strike Force at the Department of Justice, prosecuting complex organized crime cases as well as criminal tax cases relating to organized crime figures. Mr. Zuckerman was previously a partner at Honigman LLP in Detroit. Prior to his legal career, Mr. Zuckerman served 4 years as an officer in the United States Navy. Mr. Zuckerman received a B.A. in Political Science from the University of Michigan, a J.D. from Southwestern University, and has advanced education in taxation from Wayne State University School of Law.

Continue reading

February 4, 2020 in IRS News, Tax, Tax News | Permalink | Comments (0)

Tuesday, January 28, 2020

Who’s Afraid Of The IRS? Not Facebook.

ProPublica, Who’s Afraid of the IRS? Not Facebook.:

Facebook IRSThe social media behemoth is about to face off with the tax agency in a rare trial to capture billions that the IRS thinks Facebook owes. But onerous budget cuts have hamstrung the agency’s ability to bring the case.

In March 2008, as Facebook was speeding toward 100 million users and emerging as the next big tech company, it announced an important hire. Sheryl Sandberg was leaving Google to become Facebook’s chief operating officer. CEO Mark Zuckerberg, then 23 years old, told The New York Times that Sandberg would take the young company “to the next level.”

Based on her time at Google, Sandberg soon decided that one area where Facebook was behind its peers was in its tax dodging. “My experience is that by not having a European center and running everything through the US, it is very costly in terms of taxes,” she wrote other executives in an April 2008 email, which hasn’t been previously reported. Facebook’s head of tax agreed, replying that the company needed to find “a low taxed jurisdiction to park profits.”

Later that year, Facebook named Dublin as its international headquarters, just as Google had done when Sandberg was there. And just like Google, Facebook concocted an intra-company deal to “park profits” in Ireland, where it would pay a tax rate near zero.

Like its Big Tech peers, Facebook wasn’t much afraid of the IRS. But, as it happened, the same year that Facebook started moving profits to Ireland, the IRS launched a team to crack down on deals like that. The effort started aggressively. As we recently reported, the IRS threw everything it had at Microsoft in the largest audit in the agency’s history.

Continue reading

January 28, 2020 in IRS News, Tax, Tax News | Permalink | Comments (0)

Saturday, January 18, 2020

The IRS Tried To Crack Down On Rich People Using An 'Abusive' Tax Deduction. It Hasn’t Gone So Well.

ProPublica, The IRS Tried to Crack Down on Rich People Using an “Abusive” Tax Deduction. It Hasn’t Gone So Well.:

Pro PublicaIn March 2019, the IRS added a scheme to its annual “Dirty Dozen” list of “the worst of the worst tax scams.” That same scheme was targeted, just weeks earlier, when the U.S. Department of Justice filed a fraud lawsuit against a handful of promoters allegedly responsible for generating more than $2 billion in improper tax write-offs. And the Senate Finance Committee has been investigating that very same racket, recently demanding thousands of pages of documents from six promoters. Lawmakers from both parties have introduced legislation to halt the same practice.

The scheme they’re all trying to kill is what’s called a “syndicated conservation easement,” which the IRS calls “abusive” and says has resulted in bogus deductions for the rich that have cost the U.S. Treasury billions in revenues.

Continue reading

January 18, 2020 in IRS News, Tax, Tax News | Permalink | Comments (2)

Sunday, January 12, 2020

Nina Olson: We Need A Permanent National Taxpayer Advocate, Now.

Nina Olson (Former National Taxpayer Advocate), We need a permanent National Taxpayer Advocate, now.:

Taxpayer AdvocateThis week, the acting National Taxpayer Advocate released the 2019 Annual Report to Congress, on the heels of the IRS’s release of its own “annual report” about its performance. Reading the two documents together, one wonders whether they are reporting on the same agency. The NTA’s report focuses on the challenges the agency faces and makes concrete recommendations about how to address them; the IRS’s report celebrates the agency’s performance over the last year and how it is on track to fulfill the goals of its 2018 to 2022 strategic plan. One report is forward looking; the other is a status update.

I’ll be scouring the contents of both reports over the next month or so, but their arrival reminds me of the important and unique role the National Taxpayer Advocate (NTA) plays in U.S. tax administration today. The NTA is the protector of taxpayer rights and, according to the National Commission on Restructuring the IRS, serves as the “voice of the taxpayer” inside the agency. Each of the Most Serious Problems, Most Litigated Issues, and Legislative Recommendations in the NTA’s 2019 Annual Report to Congress is prefaced with the relevant rights enunciated in the Taxpayer Bill of Rights; they form the framework for analysis. On the other hand, the IRS annual report doesn’t get around to mentioning “taxpayer rights” until page 12. Tellingly, the words “taxpayer rights” do not appear in any of the strategic goals listed in the annual report, nor are they listed among the “core values” of the agency.

This contrast highlights why it is so important to have a permanent National Taxpayer Advocate in place, to hold the IRS’s feet to the fire about promotion and protection of taxpayer rights, especially as it hires more audit and collection employees and launches new compliance and enforcement initiatives.

Continue reading

January 12, 2020 in IRS News, Tax, Tax News | Permalink | Comments (3)

Saturday, January 4, 2020

IRS Reforms Free File Program, Drops Agreement Not To Compete With TurboTax

Following up on my previous posts (links below):  ProPublica, IRS Reforms Free File Program, Drops Agreement Not to Compete With TurboTax:

Free FileFinding free online tax filing should be easier this year for millions of Americans.

The IRS announced significant changes Monday to its deal with the tax prep software industry. Now companies are barred from hiding their free products from search engines such as Google, and a years-old prohibition on the IRS creating its own online filing system has been scrapped.

The addendum to the deal, known as Free File, comes after ProPublica’s reporting this year on how the industry, led by TurboTax maker Intuit, has long misled taxpayers who are eligible to file for free into paying.

Under the nearly two-decade-old Free File deal, the industry agreed to make free versions of tax filing software available to lower- and middle-income Americans. In exchange, the IRS promised not to compete with the industry by creating its own online filing system. Many developed countries have such systems, allowing most citizens to file their taxes for free. The prohibition on the IRS creating its own system was the focus of years of lobbying by Intuit. The industry has seen such a system as an existential threat. Now, with the changes to the deal, the prohibition has been dropped.

Continue reading

January 4, 2020 in IRS News, Tax, Tax News | Permalink | Comments (2)

Sunday, December 29, 2019

Tax Profs Say IRS Is Unlikely To Pursue Whistleblower's Claim That Mormon Church Stockpiled $100 Billion In Charitable Donations And Dodged Taxes

Washington Post, Mormon Church Has Misled Members on $100 Billion Tax-Exempt Investment Fund, Whistleblower Alleges:

A former investment manager alleges in a whistleblower complaint to the Internal Revenue Service that the Church of Jesus Christ of Latter-day Saints has amassed about $100 billion in accounts intended for charitable purposes, according to a copy of the complaint obtained by The Washington Post.

The confidential document, received by the IRS on Nov. 21, accuses church leaders of misleading members — and possibly breaching federal tax rules — by stockpiling their surplus donations instead of using them for charitable works. It also accuses church leaders of using the tax-exempt donations to prop up a pair of businesses. ...

Continue reading

December 29, 2019 in IRS News, Tax | Permalink | Comments (0)

Saturday, December 21, 2019

IRS Releases 2019 Criminal Investigation Annual Report

IR-2019-199, IRS Criminal Investigation Releases Fiscal Year 2019 Annual Report; Celebrates 100 Years:

IRS Criminal Cover PageThe Internal Revenue Service today released the Criminal Investigation Division's (CI) annual report, highlighting significant successes and criminal enforcement actions taken in fiscal year 2019. The report also commemorates CI's 100th year anniversary as a law enforcement agency.

"CI is critical to the overall enforcement efforts of the IRS in pursuing its Mission in a fair, impartial, diligent and, where appropriate, tenacious manner." said IRS Commissioner Chuck Rettig. "The Fiscal Year 2019 Annual Report summarizes various CI activities throughout the year but vastly understates the importance of CI to the overall IRS mission. CI supports the efforts of compliant taxpayers by visibly demonstrating the risks of noncompliance thereby helping otherwise honest taxpayers stay honest and compliant."

Key focuses of CI in fiscal year 2019 included cybercrimes, with an emphasis on virtual and crypto currencies, traditional tax investigations, international tax enforcement, employment tax, refund fraud and tax-related identity theft. Other areas of emphasis included public corruption, corporate fraud and money laundering.

"We are working smarter using data analytics to augment good old-fashioned police work and find those cases that have the biggest impact on tax administration," said Don Fort, Chief of CI. "We are leading the world in our ability to trace virtual currency in financial investigations while still working our bread and butter tax enforcement mission areas."

IRS Criminal Chart 1CI initiated 2,485 cases in fiscal year 2019, applying approximately 75 percent of its time to tax related investigations. The number of CI special agents dropped to 2,009 by the end of fiscal year 2019, which is the lowest level since the early 1970's. Consequently, CI has increased its usage of data analytics and strengthened its international partnerships to assist in finding the most-impactful cases.

CI is the only federal law enforcement agency with jurisdiction over federal tax crimes. CI achieved a conviction rate of 91.2 percent in fiscal year 2019, which is among the highest of all federal law enforcement agencies. The high conviction rate reflects the thoroughness of CI investigations and the high caliber of CI agents. CI is routinely called upon by prosecutors across the country to lead financial investigations on a wide variety of financial crimes.

Continue reading

December 21, 2019 in IRS News, Tax, Tax News | Permalink | Comments (0)

Tuesday, December 17, 2019

Trial Begins For IRS Agent Accused Of Raping College Intern

Boston Globe, Trial Begins For IRS Agent Accused of Raping College Intern:

IRS Logo 2Weeks after a college intern in the Internal Revenue Service’s Boston office turned 21, an agent twice her age invited her for drinks at a nearby pub, where she got drunk and he showed off his gun to a woman hosting trivia night, a prosecutor told a Suffolk County jury Thursday.

The agent, James Clarke, offered the woman a ride to South Station after several hours of drinking at the Kinsale on July 26, 2017, then handcuffed her once they were inside his government-issued car with tinted windows, Suffolk Assistant District Attorney Ian Polumbaum said in his opening statement at Clarke’s trial. Clarke then shoved his gun in her mouth and raped her, he said. ...

Clarke, 45, is charged with aggravated rape, assault and battery with a dangerous weapon, and indecent assault and battery. ...

Clarke’s lawyer, Robert Sheketoff, dismissed Polumbaum’s opening statement as “a very interesting speech from someone who wasn’t there” and told jurors that the encounter between Clarke and the woman was consensual. ... “The defense is not that they didn’t have sexual relations of some sort in that car,” Sheketoff told jurors. “The defense is that it was consensual.”

Boston Globe, Woman Who Was Raped, Allegedly By IRS Agent, Gives Dramatic, Tearful Testimony:

Continue reading

December 17, 2019 in IRS News, Tax, Tax News | Permalink | Comments (0)

Monday, December 16, 2019

NY Times: The IRS Sent A Letter To 3.9 Million People. It Saved 700 Lives.

New York Times, The I.R.S. Sent a Letter to 3.9 Million People. It Saved Some of Their Lives.:

Three years ago, 3.9 million Americans received a plain-looking envelope from the Internal Revenue Service. Inside was a letter stating that they had recently paid a fine for not carrying health insurance and suggesting possible ways to enroll in coverage.

New research concludes that the bureaucratic mailing saved lives.

Three Treasury Department economists have published a working paper finding that these notices increased health insurance sign-ups [Jacob Goldin (Stanford), Ithai Z. Lurie (U.S. Treasury Department,  Office of Tax Analysis) & Janet McCubbin (U.S. Treasury Department,  Office of Tax Analysis), Health Insurance and Mortality: Experimental Evidence From Taxpayer Outreach]. Obtaining insurance, they say, reduced premature deaths by an amount that exceeded any of their expectations. Americans between 45 and 64 benefited the most: For every 1,648 who received a letter, one fewer death occurred than among those who hadn’t received a letter.

In all, the researchers estimated that the letters may have wound up saving 700 lives.

Continue reading

December 16, 2019 in IRS News, Tax, Tax News | Permalink | Comments (2)

Tuesday, December 10, 2019

Tax Prof Sharyn Fisk Named Director Of IRS Office Of Professional Responsibility

IR-2019-202, IRS Selects Longtime Tax Professional, Sharyn Fisk, to Lead the Office of Professional Responsibility (Dec. 9, 2019):

FiskThe Internal Revenue Service today announced the selection of Sharyn M. Fisk to lead the agency’s Office of Professional Responsibility (OPR).

Fisk has most recently been a professor of tax at the College of Business Administration at Cal Poly Pomona and active in the nation’s tax community in a variety of roles. She will assume leadership of OPR in early 2020.

“This is a critical position for the nation’s tax community. Sharyn Fisk is extremely well respected both internally at the IRS and throughout the tax professional communities. She has a strong set of skills and experience in many different settings that will serve the IRS well in this role,” said IRS Commissioner Chuck Rettig. “Taxpayers, the IRS and the tax community rely on this office to help uphold strong professional standards among tax professionals. We look forward to Ms. Fisk providing meaningful, fair and equitable guidance while also strengthening the oversight of tax professionals.”

Continue reading

December 10, 2019 in IRS News, Tax, Tax News | Permalink | Comments (0)

Tuesday, December 3, 2019

Treasury Eases Minimum-Tax Burdens On U.S. Multinationals

IR-2019-194, Treasury, IRS Issue Final Regulations on New International Provision, the Base Erosion and Anti-Abuse Tax (Dec. 2, 2019)

IR-2019-193, Treasury, IRS Issue Final Regulations on the Foreign Tax Credit (Dec. 2, 2019)

Wall Street Journal, Treasury Eases Minimum-Tax Burdens on U.S. Multinationals:

U.S.-based multinationals will be less exposed to certain U.S. taxes after the Treasury Department issued new rules implementing two major pieces of the 2017 tax law.

The regulations, unveiled on Monday, will help ease the burden of two separate minimum taxes that were designed to put a floor under corporate tax collections. ...

Continue reading

December 3, 2019 in IRS News, Tax, Tax News | Permalink | Comments (0)

Sunday, December 1, 2019

How IRS Investigators Busted A Huge Online Child-Porn Site — And Why The IRS?

Wall Street Journal, How Investigators Busted a Huge Online Child-Porn Site:

Welcome to VideoThe call came in while two criminal investigators for the Internal Revenue Service sat at a Bangkok airport gate in July 2017, waiting for a flight.

A confidential source they knew from past investigations was offering a tip that a new website was selling child pornography in exchange for bitcoin. The website, the source said, appeared to have popped up in the wake of shutdowns of other dark-web marketplaces for illicit goods.

Investigator Chris Janczewski and his colleague, Tigran Gambaryan, who had been involved in previous probes involving bitcoin transactions, decided to dig in to the possible financial ramifications of the matter despite the fact that child pornography was outside the IRS’s usual bailiwick. But they quickly hit a logistical roadblock: Their office, like many others, blocked access to pornographic websites.

“This is uncharted territory for the IRS,” Mr. Janczewski said in an interview. “What do I do? Is there a special room that I am supposed to go into if I want to look at the website?” They turned for help to Department of Homeland Security investigators, since the agency had a history of dealing with child exploitation.

Within eight months the duo, along with the DHS agents and counterparts in the U.K. and South Korea, had traced the financial trail of the largest online marketplace for child pornography they had ever encountered, comprising some 250,000 different videos.

Continue reading

December 1, 2019 in IRS News, Tax, Tax News | Permalink | Comments (2)

Wednesday, October 16, 2019

IRS-Commissioned Study Defends Benefits Of Free-File Program In Face Of Criticism

Wall Street Journal, IRS Tax-Prep Alliance With Private Firms Gets Fresh Scrutiny: Study Defends Free File’s Benefits as Substantial:

Free FileThe Internal Revenue Service’s partnership with private firms to provide free tax preparation to millions of filers has serious flaws but also appears to provide substantial benefits, according to an outside review commissioned by the IRS [Independent Assessment of the Free File Program (Oct. 3, 2019)]

The study, reviewed by The Wall Street Journal, responded to intense criticism of the public-private partnership, called the Free File Alliance. In theory the alliance is designed to provide free online tax-prep by a dozen companies to about 100 million filers who currently earn about $66,000 or less. Members include industry leaders such as H&R Block and Intuit, the maker of TurboTax.

But in recent years, Free File has been used by fewer than 3 million filers annually. Both the National Taxpayer Advocate and members of Congress have charged that the low usage rates signal that the program isn’t working well. Stories last spring by the nonprofit news site ProPublica drew more attention to the program’s workings. ...

Others say that commercial tax-prep companies in the alliance steer taxpayers away from Free File and into their paid commercial services. The study, conducted by the Mitre Corporation, a consulting firm that operates as an IRS research center, found that five of the 12 Free File members used coding that in effect hid their Free File landing pages from many online searches. ...

Continue reading

October 16, 2019 in IRS News, Tax, Tax News | Permalink | Comments (0)

Tuesday, October 15, 2019

IRS Software Developer Stole Identities Of Three Taxpayers To Open Credit Cards In Their Names And Spend $70,000 Was Apprehended After Using IRS Email And Home Addresses

Quartz, An IRS Employee Stole Identities and Went on a 2-Year Spending Spree:

IRS Logo 2An IRS employee stole multiple people’s identities, and used them to open illicit credit cards to fund vacations and shop for shoes and other goods, according to a complaint unsealed last week in federal court.

The complaint accuses the 35-year-old federal worker of racking up almost $70,000 in charges over the course of two years, illegally using “the true names, addresses, dates of birth, and Social Security numbers” of at least three people. ...

The IRS employee’s alleged scheme took place between January 2016 and February 2018, according to court filings. Investigators say he used a fraudulently obtained American Express card to fly to Sacramento and Miami Beach. He also used the card for some 37 Uber rides, nine payments on his father’s Amazon account totaling $1,200, various purchases at Lowe’s, the Designer Shoe Warehouse, BJ’s Wholesale Club, and a flooring outlet, as well as a $7,400 payment to a business he owned.

Continue reading

October 15, 2019 in IRS News, Tax, Tax News | Permalink | Comments (1)

Saturday, October 12, 2019

IRS Issues Cryptocurrency Tax And Reporting Guidance

Bloomberg Tax, IRS Adds Virtual Currency Question to Draft Income-Reporting Form:

Schedule 1

Rev. Rul. 2019-24:

  1. A taxpayer does not have gross income under § 61 as a result of a hard fork of a cryptocurrency the taxpayer owns if the taxpayer does not receive units of a new cryptocurrency.
  2. A taxpayer has gross income, ordinary in character, under § 61 as a result of an airdrop of a new cryptocurrency following a hard fork if the taxpayer receives units of new cryptocurrency.

[43] Frequently Asked Questions on Virtual Currency Transactions:

In 2014, the IRS issued Notice 2014-21, 2014-16 I.R.B. 938 (PDF), explaining that virtual currency is treated as property for Federal income tax purposes and providing examples of how longstanding tax principles applicable to transactions involving property apply to virtual currency.  The frequently asked questions (“FAQs”) below expand upon the examples provided in Notice 2014-21 and apply those same longstanding tax principles to additional situations.

Continue reading

October 12, 2019 in IRS News, Tax, Tax News | Permalink | Comments (0)