TaxCure Blog

Recently, the Treasury Inspector General for Tax Administration (TIGTA) advised the Internal Revenue Service (IRS) that it was losing billions of dollars in tax revenue due to unreported and underreported 1099-K income. A report released on December 30, 2020, explained the methods TIGTA used to find unreported 1099-K income, TIGTA’s recommendations, and the IRS’s plans to address this part of the tax gap. If you have 1099-K income, you need to understand what is happening. Here is a breakdown of the essentials.

Due to the devastating nature of the wildfires currently raging in California, the Internal Revenue Service (IRS) has extended most tax deadlines for people and businesses in affected areas to January 15, 2021. 

The IRS released data recently on the Offer in Compromise (OIC) acceptance rate for 2019. The OIC acceptance rate decreased by 7.4% when compared to 2018. The dollar amount for all accepted OICs increased by 10.76% or about $28.1 million. That represents an average of $16, 177.86 per offer accepted.  The number of offers submitted decreased by 4,902 or 8.3% when compared to 2018. This could be due to a strong economy in 2019.

According to the IRS, taxpayers across the country forget to claim nearly $1 billion in tax refunds every year. 

Established in 1998 to provide independent oversight to the Internal Revenue Service (IRS), the Treasury Inspector General for Tax Administration (TIGTA) regularly audits IRS processes. In September 2019, the group completed an audit of various aspects of the IRS appeals hearing process. The TIGTA found several mistakes that are worrisome for taxpayers.

When you filed your income tax returns for the past tax year, your tax preparer or the software program you were using probably gave an estimate of how much money you would receive back from the government.  You were likely very excited to receive your tax refund. You may have planned precisely how you were going to spend it.

Private collection agencies are now being assigned to collect selected delinquent accounts for the IRS. These agencies have placed some taxpayers in such stressful positions that it is hard for them to meet their living expenses. If the IRS assigns your account to a collection agency, you should receive notice CP40 or CP140. Do not speak to anyone from the collection agency until you have verified their information using the details on these letters, and also make sure that you verify that these notices are really from the IRS. 

Losing your partner can be emotionally debilitating, and on top of dealing with that aspect of the loss, you also have to handle numerous financial issues. Wondering how becoming a widow affects your income tax situation? Here’s a look at some of the essentials.

The sweeping changes of the Tax Cuts and Jobs Act (TCJA) that went into effect at the beginning of January 2018 included a 20% pass-through deduction to non-corporate taxpayers with “qualified business income.” What is known as the “pass-through rules,” taxpayers can find them in 26 U.S. Code § 199A – Qualified Business Income (QBI). The purpose of § 199A was to give individuals with qualified business interests a break similar to the 21% income tax bracket enjoyed by C corporations, which are taxed as separate entities.  26 U.S. Code § 199A will expire in 2026 unless extended.

The Bank Secrecy Act (31 USC 5324) was passed in the 1970s to address the problem of money laundering and other crimes that require large transfers of money. Under the auspices of this act, financial institutions must report financial transactions over $10,000.  Criminals found ways to sidestep this monitoring, such as by making several deposits under the $10,000 limit, otherwise known as structuring transactions. According to the IRS, “A structured transaction is a series of related transactions that could have been conducted as one transaction, but the financial institution and/or the transactor intentionally broke it into several transactions for the purpose of circumventing the reporting requirements of the Bank Secrecy Act (BSA).”