Every year, the IRS expects around 155 million income tax returns. With that many returns to review, it's inevitable that the federal tax agency will make mistakes once in a while. If the IRS makes an error on your taxes, it is up to you (and, potentially, a tax...
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Year: 2021
What are the odds of being audited by the IRS?
The IRS chooses a small number of tax returns each year to audit. Receiving an audit doesn’t necessarily mean that you did something wrong – they can audit you for no reason at all. Even so, it can be very nerve-wracking to receive an audit notice. How does the IRS...
The IRS accepts different payment options
The Internal Revenue Service (IRS) is an important agency. But, before the IRS Restructuring and Reform Act of 1998, the agency seemed to operate as if it was also a judge and jury. If the agency believed that a citizen owed money, that was it – they owed the money....
The IRS found a deficiency in my tax returns: what can I do?
A letter from the Internal Revenue Service (IRS) can be alarming, especially if it’s a Statutory Notice of Deficiency. The IRS sends this when they find a difference between the amount you reported on your tax return and the amount they think you owe. Failure to pay...
New tax rates proposed by Biden
President Joe Biden recently proposed a new top tax rate on long-term capital gains and qualified dividends. The federal rate would be 39.6%, with another 3.8% federal surtax as well state taxes. This adds up to a total rate of nearly 49%, a jump from 29.2% for people...
IRS has a shortlist of common tax deduction scams
The Internal Revenue Service does a lot more than collect taxes and issues returns. One of its more helpful services is the annual “Dirty Dozen” list of tax scams. Amidst the twelve common scams is a shorter list of schemes that persuade taxpayers to engage in...
IRS to target wealthy taxpayers in Panama tax fraud probe
The IRS is working to identify wealthy Americans who used a law firm called Panama Offshore Legal Services to “create or control foreign assets and entities” in an effort to evade taxation. The Justice Department issued a statement last week saying that it had...
TIGTA: Government entities improperly claimed pandemic tax credits
According to the Treasury Inspector General for Tax Administration (TIGTA), over 500 governmental entities wrongly applied for the advance payment of employer tax credits that was made available during the COVID-19 pandemic. These entities claimed employer tax credits...
How are cryptocurrencies taxed?
You probably know someone who owns cryptocurrency, a decentralized digital coin that most people use as an investment tool. It is completely legal to own cryptocurrencies in the United States. However, you need to pay taxes every time you sell, exchange or mine a...
The IRS is ramping up staff to begin expanded business auditing
If Congress passes its proposed infrastructure plan as it stands now, the new law would include $40 billion to expand IRS audits on the wealthy and small businesses. The IRS isn’t waiting to start hiring. It’s hoping to bring in replacements for the nearly 17,000...