A new report from the Treasury Inspector General for Tax Administration (TIGTA) makes several recommendations to the IRS on how it could reduce improper retirement deductions by self-employed individuals. The report suggests that some self-employed people may claim...
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Year: 2020
Lawmakers revive tax on wealthier New Yorkers with second homes
Wealthier state residents who own additional homes in New York City may experience a bigger tax pinch if state lawmakers have their way. Members of the New York State Assembly recently revived plans on an annual tax of 10% to 13.5% on co-ops and condos used as second...
IRS planning to perform 50% more small business audits in 2021
The IRS recently announced that it is hiring 50 more specialized auditors who will be ready to begin in February. The agency is planning to ramp up small business audits by 50% over its historically low rates for these taxpayers. This could mean increased audit...
IRS is simplifying the process of getting a repayment agreement
Especially this year, many taxpayers are facing challenges paying their tax bills. If the pandemic has affected your ability to pay, the IRS has your back, according to a recent announcement. At least, the agency is making it easier to settle up. Taxpayers have always...
Bankruptcy or debt cancellation? There are tax consequences
This year, a lot of people are facing financial troubles. The good news is some lenders have been willing to work with debtors to relieve some of their debts. Unfortunately, that could result in a taxable event. Generally, debt that is freely forgiven, such as through...
What are the odds of being audited by the IRS?
The odds of getting a notification from the Internal Revenue Service (IRS) of a federal tax audit are fairly low. Recent projections estimate most individual tax filers are at about a 0.4% risk. However, certain things can increase this risk. In some cases, the...
IRS: Daily fantasy sports is gambling, not a game of skill
In a recent ruling, the IRS has determined that daily fantasy sports, which allows you to renew your roster every week, is not a game of skill. Instead, the agency found that it is gambling. The good news is that, according to PLR 202042015, daily fantasy sports (DFS)...
What can trigger an audit for your home-based business?
When you run your own business from home, you face handling a multitude of responsibilities to make your business successful. One of those is reporting your yearly business expenses and income and ensuring you shield yourself from a potential audit. However, if you...
Prosecutors file ‘largest-ever tax charge’ against software tycoon
The U.S. Attorney’s Office in San Francisco has filed a $2-billion criminal tax fraud case against Houston tech tycoon Robert T. Brockman. The 39-count indictment accuses the man of using a family charitable trust based in Bermuda and other offshore accounts to...
TIGTA urges IRS to target large business loss reports for audit
Every year, American taxpayers underpay by approximately $440 billion or more. This is called the “tax gap.” How should the IRS address the tax gap? Although the IRS’s audit priorities remain secret, there are indications that the agency focuses on certain types of...