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September 26, 2025
News
If you're making a charitable contribution of property (other than publicly traded securities) valued at over $5,000 you'll need a qualified appraisal. In WT Art Partnership LP, Lonicera LLC, Tax Matters Partner (T.C. Memo. 2025-30) the taxpayer got an appraisal but, unfortunately, the appraiser was not qualified because his education and experience could not be verified and he did not prepare appraisals of this kind of property on a regular basis. The IRS disallowed the deduction in its entirety. The Court found that the appraisals were not "qualified appraisals" because none of the individuals involved in preparing those documents was a "qualified appraiser." However, it held that deductions are nevertheless allowable because the failure to secure qualified appraisals was due to reasonable cause and not to willful neglect. There were a number of reasons for the Tax Court's conclusion including the acceptance by the IRS of a prior appraisal by one of the appraisers.
Tip of the Day
Get detailed bills . . . If you're hiring a professional to do work for your business but the same professional provides services to individuals, get a detailed breakdown of the work performed. You don't want the IRS claiming that some or all of the work performed was personal in nature if it really was business related. That may be even more true now that most miscellaneous itemized deductions are no longer allowed.
September 25, 2025
News
The IRS has announced (IR-2025-94) that paper tax refund checks for individual taxpayers will be phased out beginning on Sept. 30, 2025, as required by Executive Order 14247, to the extent permitted by law. This marks the first step of the broader transition to electronic payments. The IRS will publish detailed guidance for 2025 tax returns before the 2026 filing season begins. Until further notice, taxpayers should continue using existing forms and procedures, including those filing their 2024 returns on extension of a due date prior to Dec. 31, 2025. Most refunds will be delivered by direct deposit or other secure electronic methods. Options such as prepaid debit cards, digital wallets or limited exceptions will be available. Taxpayers should be careful to check the account number.Tip of the Day
Gimmicks not the solution . . . Gimmicks such as a loyalty program or special deals will increase sales but they won't make up for a poorly run business. The first step is to have a competitive product or service. The second is to service the customer--on time delivery, refund or replacement of damaged product, etc. Whatever is appropriate for your business. The third is customer assistance. Respond to complaints and questions, make it easy to order, etc. If you've got that under control, you can work on the loyalty program, special sales, etc.
September 24, 2025
News
Notice 2025-54 announces the special per diem rates effective October 1, 2025, which taxpayers may use to substantiate the amount of expenses for lodging, meals, and incidental expenses when traveling away from home. This notice provides the special transportation industry rate, the rate for the incidental expenses only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method. For purposes of the high-low substantiation method, the per diem rates are $319 for travel to any high-cost locality and $225 for travel to any other locality within CONUS. The amount of the $319 high rate and $225 low rate that is treated as paid for meals for purposes of Sec. 274(n) is $86 for travel to any high cost locality and $74 for travel to any other locality within CONUS (continential U.S,). These rates are effective for for amounts paid to employees after October 1, 2025. Rev. Proc. 2019-48 provides the rules for using per diem rates, rather than actual expenses, to substantiate the amount of expenses for lodging, meals, and incidental expenses for travel away from home.
Tip of the Day
Property transfers subject to sales tax . . . Most states that impose a sales tax have rules regarding the transfer of property outside of a purchase from a retailer. For example, you give your used truck to an old friend. The truck is valued at $4,000. In most states the transfer is subject to sales tax. On the other hand, many states have a exemption for the transfer to a relative. Had you given the truck to your daughter, tax may not have been due. Most states have an exemption for assets transferred to a corporation or partnership in exchange for an interest in the entity. You contribute a truck you own personally along with tools in exchange for all the stock of Madison Inc. Generally, that transaction is exempt from sales tax. Not infrequently, the exception is narrowly worded, so you've got to check the rules carefully. On the other hand, fewer states exempt a transaction going the other way, when the business transfers assets to the shareholders or partners. Again, check the rules. A mistake here could be costly.
September 23, 2025
News
The IRS has announced (IR-2025-03) guidance Notice 2025-52 that provides tax relief for farmers and ranchers in applicable states and regions who sold or exchanged livestock because of drought conditions. Under the guidance, farmers and ranchers may take more time to replace their livestock and defer tax on any gains from the forced sales or exchanges. Notice 2025-52 lists the applicable areas, by county or other jurisdiction, that qualify for federal assistance. The list includes 49 states, the District of Columbia and other regions that reported exceptional, extreme or severe drought during the 12-month period ending on Aug. 31, 2025. The tax relief generally applies to capital gains realized by eligible farmers and ranchers from sales or exchanges of livestock held for draft, dairy or breeding purposes. Sales of other livestock--such as those raised for slaughter or held for sporting purposes--and sales of poultry do not qualify. Eligible farmers and ranchers must show that drought prompted the sales or exchanges, and that the area received a federal drought designation. Generally, livestock must be replaced within a four-year period, instead of the usual two-year period. The IRS is authorized to further extend this replacement period if the drought persists. The replacement period extension announced in the notice gives eligible farmers and ranchers until the end of their first tax year after the first drought-free year after the four-year replacement period to replace the sold or exchanged livestock. As a result, eligible farmers and ranchers whose drought-sale replacement period was scheduled to expire at the end of 2025 will have until the end of their next tax year to replace the sold or exchanged livestock. The IRS provides this extension to eligible farmers and ranchers if the applicable region is listed as suffering exceptional, extreme or severe drought conditions during any week between Sept. 1, 2024, and Aug. 31, 2025. This determination is made by the National Drought Mitigation Center.
Tip of the Day
Negotiating . . . . Don't underestimate your adversary. If you're buying, used equipment, real estate or a business keep in mind that the seller will almost assuredly have better information than you. One Fortune 100 company was buying a smaller business in a different industry in the rural south. The buyer came with top lawyers and business analysts and thought they were going to make a killing. The seller came with fewer resources, but knew his business. The seller got top dollar. Not two years later the market for the product soured and stayed that way for three years. The seller agreed to buy the business back for far less than the original selling price. Within two years the market recovered sharply.
September 22, 2025
News
The Department of the Treasury and the IRS is providing guidance on "no tax on tips" provision. The One, Big, Beautiful Bill proposed regulations identify occupations customarily and regularly receive tips and define "qualified tips" eligible taxpayers may claim as a deduction. The proposed regulations list nearly 70 separate occupations of tipped workers, from bartenders to water taxi operators. Treasury and IRS request comments from the public within 30 days to be made through Regulations.gov. Complete instructions on submitting comments can be found in the proposed regulations. Comments on the proposed regulations are due by Oct. 23, 2025. For a summary of the provision, go to IR-2025-92.
Tip of the Day
State employment tax credits . . . Employment tax credits for hiring individuals from targeted groups such as Supplemental Security Income recipients, veterans, etc. have been available on the federal level for a number of years. But many states provide credits for hiring based on similar criteria. While the rules are often similar to the federal ones, some individuals may be qualified for state but not federal purposes. There may be employment related credits in your state. And a credit is worth more than a deduction. It's a dollar-for-dollar reduction in taxes.
September 19, 2025
News
A partnership Blomquist Holdings, LLC, Crestlawn Investors, LLC, Tax Matters Partner (165 T.C. No. 6) subject to the audit and litigation procedures of the TEFRA, donated a conservation easement and claimed a charitable contribution deduction. P, the tax matters partner, timely petitioned this Court challenging the IRS's Notice of Final Partnership Administrative Adjustment. The partnership and the IRS subsequently entered into a settlement agreement under Tax Ct. R. Prac. & P. 248(b). The IRS, consistent with Tax Ct. R. Prac. & P. 248(b), filed a Motion for Entry of Decision along with a Proposed Decision. Thirty-nine Nonparticipating Partners (NPs) each filed and subsequently amended a Motion for Leave to File Notice of Election to Participate pursuant to Tax Ct. R. Prac. & P. 248(b)(4), seeking to avoid the settlement and proceed with the Tax Court case. NPs contend that they have an absolute right to participate in this case pursuant to Sec. 6226(c)(2) and, even if not, they have made the requisite substantial showing as to why the Court should permit their participation at this late stage of the litigation. The Tax Court held that the nonparticipating partners' rights to participate in a TEFRA proceeding under Sec. 6226(c)(2) are not absolute but are subject to the requirements of the Tax Court Rules of Practice and Procedure and that nonparticipating partners that request leave to file an election to participate pursuant to Tax Ct. R. Prac. & P. 248(b)(4) must make a substantial showing as to why they should be permitted to participate. The Court ruled that the NPs have not made a substantial showing as to why they should be permitted to participate in this case pursuant to Tax Ct. R. Prac. & P. 248(b)(4).
Tip of the Day
State scams . . . We've discussed internet scams frequently because one mistake can be so costly. The IRS has seen a number of scams attacking tax professionals as well as individuals and businesses. Apparently the states are not immune. Massachusetts is warning taxpayers of a scam were taxplayers receive a purported text from the Massachusetts Department of Revenue indicating they are due a refund and asking them to click on a link to provide bank information. We know of at least one other state that has issued warnings.
September 18, 2025
News
The IRS has released a draft of a new form Schedule 1-A-- Additional Deductions for the new deductions--No Tax on Tips, No Tax on Overtime, No Tax on Car Loan Interest, and Enhanced Deduction for Seniors. There a five compuational parts to the form and a summary part.The IRS announced (WV-2025-04) tax relief for individuals and businesses in parts of Wisconsin affected by severe storms, straight-line winds, flooding, and mudslides that began on August 9, 2025. These taxpayers now have until Feb. 2, 2026, to file various federal individual and business tax returns and make tax payments. Following the disaster declaration issued by FEMA, individuals and households residing or having a business in Milwaukee, Washington, and Waukesha counties qualify for tax relief. As a result, affected individuals and businesses will have until Feb. 2, 2026, to file returns and pay any taxes that were originally due during this period. he IRS will waive the usual fees for requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned FEMA declaration number (4892-DR), in bold letters at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS. For more information, click on the link above.
Tip of the Day
Interest rates . . . The Fed just reduced it's interest rate by 1/4 point and is expected to make two more, probably equally small, cuts through the end of the year. But that doesn't mean interest rates on car loans, mortgages, or credit cards will drop by the same amount. There are a number of other factors including credit risk that determine the actual interest rate of a loan or other debt. And, the longer the length of the loan, the less the interest rate is tied to the Fed rate which is inherently a short-term rate. To be sure, drops in the Fed rate decrease pressure on most interest rates. The downside is that the reason the Fed lowered the rate is that the economy is weaker than expected.
September 17, 2025
News
Section 280E denies business deductions for amounts paid in carrying on a trade or business that is in the business of trafficking controlled substances prohibited by Federal or state law. Basically if you're in the business of cnnabis sales, no deduction is allowed for costs, including wages. In Ayla A. Savage; Patricia A. Torres (165 T.C. No. 5) the taxpayers sought to claim the Sec. 199A deduction (the 20% of qualified business income deduction for unicorporated businesses) based on the wages paid in their cannabis business. The IRS determined that, under Sec. 199A(b)(4)(B) and (c), the computation of the taxpayer's Sec. 199A deductions should take into account only wages that were deductible after the application of Sec. 280E, and reduced Ps' section 199A deductions accordingly. The Tax Court sustained the IRS's with respect to the wages at issue.
Tip of the Day
Check credit reports regularly . . . Even if you're not looking for a new credit card, car loan, etc., you should check your credit report at least once a year. That means review the report, not just your credit score. A lot more gets reported than you might think. Besides your payment history on a mortgage, credit card, or car loan. It could show up and reduce your credit score. Late payments on utility bills, or any open account could affect your score. Those negative marks could affect your score for some time--and they may be in error. You did pay that $500 doctor bill, the receptionist didn't record the receipt. Issues like that are much easier to correct when they're young.
September 16, 2025
News
The DIRS has issued final regulations (T.D. 10033)_ addressing several SECURE 2.0 Act provisions relating to catch-up contributions. The final regulations include final rules related to a SECURE 2.0 Act provision requiring that catch-up contributions made by certain higher-income participants be designated as after-tax Roth contributions. The final regulations provide guidance for plan administrators to implement and comply with the new Roth catch-up rule and reflect comments received in response to the proposed regulations issued in January. The final regulations also provide guidance relating to increased catch-up contribution limits under the SECURE 2.0 Act for certain retirement plan participants, in particular employees between the ages of 60-63 and employees in newly established SIMPLE plans. While the final regulations generally follow the proposed regulations, changes were made in response to comments received on the proposed regulations. For example, the final regulations permit a plan administrator to aggregate wages received by a participant in the prior year from certain separate common law employers in determining whether the participant is subject to the Roth catch-up requirement.
September 15, 2025
News
With assets it's their "placed in service date" that determines when depreciation starts, credits can be taken, etc. In Artena Moon and Kenneth Moon (165 T.C. No. 4) the taxplayers purchased and began driving a new plug-in electric drive motor vehicle. Sec. 30D provides a onetime credit of up to $7,500 for new qualified plug-in electric drive motor vehicles placed in service by the taxpayer during the taxable year. On returns relating to 2013 through 2019, the taxpayers claimed the maximum $7,500 one-time Sec. 30D credit. The IRS disallowed the credit relating to 2019 and sent the taxpayers a Notice of Deficiency. They filed a Petition contending that they were entitled to the credit relating to 2019. The Court held they were not entitled to the Sec. 30D credit relating to 2019 because the vehicle was placed in service in 2013.
Tip of the Day
Returns and estimates due . . . If you've got a business tax return on extension--S corporation, or partnership, they're due today. Many states have the same deadline. Estimated taxes are due for individuals and trustsand estimated taxes for corporations. Again, many state estimates are also due today.
September 12, 2025
News
The IRS has released a preliminary list of occupations that qualify for the "no tax on tips" provisions of the One Big Beautiful Bill Act. The offical proposed list will be published in the Federal Reister, but the IRS anticipates the final list will be substantially the same as the proposed one. The list is fairly broad and doesn't contain much in the way of surprises. For example, the list includes food service workers and gambling dealers and certain other employees at gaming establishments, but also included are event planners and photographers, recreational and tour pilots, tour guides and sports instructors, and home electricians, plumbers, air conditioning and heating mechanics and installer. Click on the link above for the list of occupations and examples.
Tip of the Day
Bank mergers . . . Deposits in banks are insured up to $250,000 for each account with a single owner or $250,000 per co-owner. IRA accounts are insured for $250,000, regardless of the number of beneficiaries. Corporate or partnership accounts are also insured for $250,000. Things can get trickier if your bank merges with another where two banks merge and you have substantial deposits in each bank You may have options, talk to the bank. The FDIC puts out a pamphlet. Go to www.fdic.gov/resources/deposit-insurance/brochures/deposits-at-a-glance for general information and other sources.
September 11, 2025
News
Gifting or leaving a business in your will requires valuing it and that will require an appraisal and, most likely, scrutiny from the IRS if the dollar amount is significant. The IRS will frequently challenge a valuation and both the appraisal and defending it can be costly. In Kaleb J. Pierce (T.C. Memo. 2025-29) the owner of S corporation shares transferred some of his interests to trusts for his children. Fortunately, both the IRS and the taxpayer agreed the cash flow method to be the best method. Both parties agreed on a discount rate of 18% based on the weighted cost of capital. Both agreed that a discount factor should be applied for both control and marketability. The Tax Court sided with the taxpayer settling on a lack of control discount of 5% and a lack of marketability discount of 25%.
Tip of the Day
Note as wages . . . If you're working for a startup you may receive a note instead of a check for part of your services. If the note is secured you've got to include the fair market value of the note (discounted by an amount that depends on the payment terms) in income. Later payments on the note will be partly nontaxable and partly taxable. On the other hand, if the note is unsecured and nonnegotiable, only when you receive payments on the note are they includible in income as compensation.
September 10, 2025
News
The passive activity rules deny a deduction for net losses from passive activities. There's an exception for rental real estate rentals if you actively participate. Here you can deduct up to $25,000 if your modified adjusted gross income is less than $100,000. The $25,000 allowance is phased out if your AGI exceeds $100,000. The same rules apply to tax credits. In Kelly M. Strieby and Jan E. Sharon-Strieby (T.C. Memo. 2025-28) the taxpayers invested in a solar farm in Arizona and claimed energy tax credits related to their share of the cost of the energy property. The IRS found the taxpayers did not materially participate in the activity as their involvement was very limited. The taxpayers argued that the material participation rules did not apply to credits under Sec. 48. The Court reasoned otherwise, holding that the in order to secure the credits material participation was required.
Tip of the Day
Year-end thoughts . . . It's not too early to start thinking about year-end planning, particularly if you have a business. There's still time to make sure you have enough hours in a business to claim material participation, to make any large equipment purchases for a write-off and to sell off that old inventory to write it off. You may also want to make any special charitable contributions such as a qualified charitable distribution from an IRA, to get into a donor advised fund, and do a like-kind exchange of real estate.
September 9, 2025
News
The IRS is alerting (IR-2025-90) taxpayers about a growing number of fraudulent tax schemes circulating on social media that promote the misuse of credits such as the Fuel Tax Credit and the Sick and Family Leave Credit. These scams have led thousands of taxpayers to file inaccurate or frivolous returns, often resulting in the denial of refunds and steep penalties. Since 2022, the IRS has seen a surge in questionable refund claims fueled by misleading social media posts and bad actors posing as tax experts. Many of the posts falsely claim that all taxpayers are eligible for credits they do not actually qualify for, such as those meant for self-employed individuals or businesses. The IRS routinely publishes and updates a list of frivolous positions on IRS.gov that could lead to the imposition of penalties. So far, the IRS has imposed over 32,000 penalties costing taxpayers more than $162 million. Click on the link above for more information.Proposed REG-129260-16 withdraws a notice of proposed rulemaking that has been determined to be unnecessary. The notice of proposed rulemaking proposed to authorize the Department of State (State Department) to disclose returns and return information to its contractors who assist the State Department in carrying out certain responsibilities related to revoking or denying a passport of any individual certified to have a seriously delinquent tax debt.
Tip of the Day
Accounting for business assets . . . Whether you expense business assets under Sec. 179 or depreciate them over a number of years, if you're audited by the IRS there's a good chance you'll have to show the details surrounding the acquisition such as an invoice, costs to install (if appropriate), etc. You may also have to show details of any disposition or be able to show you still own the asset. The higher the asset's value, the greater the chance documentation may be requested. Ideally each asset of significance should be tracked and a file kept. That may also be required for accounting purposes. It's also a good way to check on assets from time to time to make sure they don't grow "legs".
September 8, 2025
News
REG-108822-25 contains proposed regulations modifying information reporting obligations with regard to sale or exchanges of certain interests in partnerships owing inventory or unrealized receivables. Under Sec. 6050Ka partnership is required to filea return if ather is an exchange described in Sec. 751(a) of any interest in the partnership during the year. Sec. 741 provides tht gain or loss recognized by a transferor partner upoin sale or exchange of a partnership interest is considered as gain or loss from the sale or exchange of a capital asset, except as provided in Sec. 751. In the case of the transfer of a partner's interest in partnership assets attributable to unrealized receivables or inventory items those items will be considered as an amount realized from the sale or exchange of property other than a capital asset. The proposed regulations would eliminate Part IV of Form 8308 by the January 31 filing deadline and require the completed 8308 including Part IV as an attachment to the Form 1065.
Tip of the Day
Second nondisclosure agreement? . . . You should have new employees sign nondisclosure and, if appropriate, noncompete agreements when starting employment. But you should also consider signing a second nondisclosure agreement when leaving the firm. The second agreement may just reiterate the provisions in the original, but it could have been some time since the original was signed and the second one will reinforce the first. It will be hard for the employee to argue that he didn't remember the first one or come up with some other excuse for not complying. Another reason is to make sure the agreement covers the current bases. This is especially true for anyone who has accesse to client, customer or patient information, or to any electronic records. Talk to your attorney.
September 5, 2025
News
IRS Tax Tip 2025-60 is reminding business taxpayers about the Work Opportunity Tax Credit. The credit can provide significant benefits if you hire an individual from one of the qualifying groups such as one on long-term unemployment, qualified unemployed veteran, formerly incarcerated individuals, etc. But the individual must be certified as a member of a qualifying group before hiring. The credit, unfortunately, expires at the end of the 2025 so if you were planning on qualifying for the credit, you should do so as soon as possible.The statute of limitations is normally limited to three years. But that limitation doesn't apply if fraud can be shown. In Stephanie Murrin, Appellant (U.S. Court of Appeals, Third Circuit) fraud was involved, but it wasn't the taxpayer who was accused but the return preparer. The Court held that it didn't make any difference who committed he fraud, the taxpayer, the preparer or some other party involved with the return, the tax may be assessed or a proceeding in court for the collection of the tax may be begun without assessment at any time.
Tip of the Day
Charitable contributions . . . It sounds like a good idea. You rent your vacation home during the season, but just after peak you've got a week vacancy. So you donate a week's use to your church for use in a raffle. Bad move--for two reasons. First, the use of the home is deemed personal, not business. That means you won't be able to deduct the expenses during that time. Second, you'll get no charitable contribution deduction. That's because the gift of the right to use property doesn't qualify as a deductible contribution.
September 4, 2025
News
The IRS announced (TX-2025-04) that it has added the Uvalde County to those that qualify for tax relief for individuals and businesses in parts of Texas affected by severe storms, straight-line winds. and flooding that began on July 2, 2025. These taxpayers now have until Feb. 2, 2026, to file various federal individual and business tax returns and make tax payments. The complete list of counties that qualify for relief now includes Burnet, Coke, Concho, Edwards, Hamilton, Kendall, Kerr, Kimble, Lampasas, Llano, Mason, McCulloch, Menard, Real, Reeves, San Saba, Schleicher, Sutton, Tom Green, Travis, Uvalde and Williamson. For more information, click on the link above.In a report issued by Treasury Inspector General for Tax Administration (TIGTA) found that nearly 1.1 million employers deferred approximately $133 billion in Social Security taxes for Tax Year 2020. An estimated $131 billion (98 percent) was paid. However, 167,373 employers had approximately $2 billion (2 percent) in unpaid deferrals. According to the IRS, as of May 2025, there were approximately 10,000 employers remaining who had not paid their deferral, and the IRS had yet to manually adjust their account which would subject the unpaid amounts to standard collection processes. Employers that did not timely pay their deferred Social Security taxes by the December 2021 and December 2022 due dates, or by the time the IRS manually adjusts their account, are subject to the IRS’s standard collection processes. Accounts with unpaid deferrals are also subject to the assessment of penalties such as failure to pay tax and failure to make deposit of taxes penalties. TIGTA found that the IRS incorrectly assessed manual Failure to Deposit penalties totaling $73.7 million on 9,548 business tax accounts. These employers had credits, such as payments or refund offsets available, but these transactions did not post timely to their tax accounts. The delay in posting these transactions caused the employer to have a delinquent deferral and resulted in the penalty being overstated. For the full report, go to www.tigta.gov/sites/default/files/reports/2025-09/2025406049fr.pdf.
Tip of the Day
Back property taxes may not be deductible . . . You buy a home, commercial property, etc. with delinquent back taxes (and other charges such as interest, etc.) at a foreclosure sale. Can you deduct all the taxes? No. Your deduction is limited to the portion of the taxes attributable to the time since you owned the property. Those prior accumulated taxes are part of the purchase price. If the property includes a building, a portion of the taxes, interest, etc. should be allocated to the building for which you can claim depreciation.
September 3, 2025
News
In order to claim a businesa deduction there must either be an out-of-pocket expenditure or one financed by debt for which the business is liable. In David Nwafor (T.C. Memo. 2025-27) the taxpayer was the sole proprietor of an bengineering firm operated as a single-member LLC. In calculating the firm's net profits on his tax returns, the taxpayer took into account (1) the value of the time he spent in developing a mathematical modeling program to be used in his engineering work, (2) payments to contract labor, (3) expenditures to buy office equipment and a car, and (4) adjustments and discounts given to customers. The IRS disallowed these expenses and the Tax Court sustained the disallowance. The taxpayer lacked documentation for some expenses which can sometimes be overcome with the Cohan which allows the Court to allow a deduction despite a lack of documentation if it's clear that expenditures where made but there is no record. Here the Court noted that it would not estimate a deductible expense unless the taxpayer presents a sufficient evidentiary basis on which an estimate can be made. Finally, the Court a denied amounts for the time the taxpayer spent in developing a software model because there was no amounts paid or incurred by the taxpayer and he could not deduct the value of his labor.Tip of the Day
Where'd the money go? . . . Fred was a major league athlete made $8 million a year for his 10 best years. He had other jobs after his professional career, but none paid as well. At 65 he was living in a two-bedroom, one bath home in a suburb that cost $300,000 and having trouble making ends meet. What happended? The Ferrari and the Lambroghini new every couple of years, the parties, charter aircraft, the three homes each costing over $3 million, and a couple of servants add up quickly. Add in custom suits and a wardrobe for his wife along with jewelry. Drilling down to less expensive items reveals $1500 meals for four at exclusive restaurants, expensive furniture and dishes for all the homes, and thousands a year just for pool maintenance. Unlimited cable for all three homes is close to $30,000 a year. The first step is to realize the money is not unlimited and some items should be relinquished. Expensive toys cost a lot to purchase and a lot to maintain. And insurance is not cheap. More high earners have ended up broke because of overspending than for lack of income.
September 2, 2025
News
Married taxpayers generally may elect to file a joint return for a taxable year although their right to do so may be limited after either spouse has filed a separate return. After the filing of a separate return, a joint filing status election is generally prohibited if either spouse has timely filed a petition for redetermination of a deficiency. In the case of Gina Jaha; Bob Anderson (T.C. Memo. 2025-26) the taxpayers hadn't filed and the IRS prepared substitutes for returns (SFR) in this case the return electing separate filing status is an SFR filed by the IRS, the taxpayer may still elect joint filing status by filing a joint return with his or her spouse before the case is submitted for decision. The record fails to establish that petitioners properly elected joint filing status. No party contends that petitioners filed their returns for the years at issue in the manner specified by regulation. The Court could not conclude that the taxpayers properly elected to change their filing status for the years at issue. The taxpayers lived in a community property state and married taxpayers who do not file joint returns are generally each liable for federal income tax on half of their community property income for a taxable year. The Court also found the taxpayers had income from a multi-level marketing program and denied the taxpayers deduction in excess of that allowed by the IRS because the taxpayers lacked documentation. The Court rejected the taxpayers' estimates of expenses for the years at issue and found the taxpayers' testimony lacking in specificity..
Tip of the Day
Critical checklist . . . In any substantial, unusual transaction there are usually many issues you don't normally deal with. You can't make a checklist to cover all of them, but you should make a checklist of the items that are most important. That goes for both business and personal transactions. Some items you probably don't even have to list--you'll definitely remember them. For example, you're buying a new home--four bedrooms and two baths are absolutely essential. That you won't forget. But will you remember to check for 500 gallons of oil storage, underground sprinklers, age of the roof, etc. Not enough outlets in the garage? That's not a big deal, you can put them in yourself. That's not something you need on the checklist. In business situations, the checklist can be much more important because you may be signing up for things that can't be easily changed. One business owner thought his attorney would check a purchase and sale agreement for a business being acquired. As a result the allocation of the purchase price was wrong and the purchase price wasn't contingent on certain employees remaining. The buyer considered both important.
August 28, 2025
News
The IRS is advising tax professionals should always remain alert to any scams and protect their client data. A common scam geared towards tax pros aims to collect their Electronic Filing Identification Numbers. Review this Tax Tip 2025-57 for details about how this scam works and how to protect your clients and your business. In an EFIN scam the scammer poses as a tax software provider and emails the tax pro with a request to provide their EFIN information by fax. When the tax pro faxes back their EFIN information, the scammer uses the information to steal client data and file fraudulent tax returns for refunds. Click on the link for more information.The IRS is inviting the public to provide anonymous feedback on tax preparation and filing options, which will run through Sept. 5, 2025. This survey is being conducted as part of the Department of Treasury and IRS efforts to fulfill a reporting requirement to Congress under the OBBB. Treasury will deliver a report to Congress by Oct. 2, 2025, on several key issues related to free tax filing options for the public.
Tip of the Day
Investment tax credit . . . There's no longer a federal investment tax credit. While it was big in the first half of 1980's it was repealed and replaced by faster depreciation. But some states have an investment tax credit, often aimed at specific segments of the economy such as farming or manufacturing. Check the rules in your state.
August 27, 2025
News
https://assets.msn.com/staticsb/statics/latest/slideshow-wc/icons/flipper-next.svg The IRS has relaeased (Rev. Rul. 2025-16) the interest rates under the Farm Credit System to be used to compute the special use value of real property used as a farm for which an election is made under Sec. 2032A for estate that value farmland under Sec. 2032A in 2025.The IRS has lost about a quarter of its employees since the beginning of the year and now finds itself deficient in some mission critical positions and is now looking to fill some slots. Some employees who signed up for deferred resignations are being offered to rescind the decision and remain with the Service.
Tip of the Day
Thermal paper . . . Heat sensitive paper was a staple in the early days of the fax machine. While even fax machines seem to be long gone, thermal paper is still in frequent use in store cash registers. There are several reasons for the use, but permanency isn't one of them. The info on the paper will fade in time--faster the higher the temperature. That may not mean much on your grocery store tape, but not so much if you need a record for tax purposes. If you can get an email receipt, request it. If thermal is your only option, consider scanning or copying the receipt before it fades.
August 26, 2025
News
The IRS announced (IR-2025-87) that interest rates will remain the same for the calendar quarter beginning Oct. 1, 2025. For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily. Here is a complete list of the rates:
The IRS has updated (NM-2025-03) the locales where individuals and businesses in parts of New Mexico affected by severe storms, flooding, and landslides that began on June 23, 2025 are eligible for relief. The areas now include Dona Ana County. As a result the complete list of counties that qualify for relief now includes Chaves, Doña Ana, Lincoln, Otero, and Valencia. Click on the link above for more information.
Tip of the Day
Scams and more scams . . . The internet has brought us untold conveniences, savings, speed, etc. It has also brought us untold scams. And, unfortunately, they're getting more convincing. There are some tricks that can help you avoid getting scammed. First, look carefully before you click on any emails or text messages. Do you know the person they're coming from? If it's a business, do you deal with them? Same is true of government agencies. Keep in mind that scammers will use the name of a business or organization that is common to many people. If it's a bank, it'll be a big one with many customers, not your local credit union. Second, check the email address. Most businesses use their web address as part of their email address. For example Fred Flood at Madison Paper will have an email address like FFlood@madisonpaper.com. This isn't a foolproof test, but if it's FFlood@gmail.com it's probably a scam. Third, only scammers want to deal in gift cards or crypto or similar "currencies". The reason? They're harder or impossible to trace. Fourth, forget caller ID. Scammers can easily spoof a phone number to come up as something else. Fifth, a scammer may not be after money, but your information. Credit card info, medicare and social security numbers, personal info such as age, etc. can be readily sold, often frequently on the web. Finally, if there is urgency involved you should be suspicious. That goes for legitimate deals as well as scams. Act today for your 20% discount. Chances are it's an overpriced offer. They want you to sign immediately so you don't have time to compare prices.
August 25, 2025
News
In Silver Moss Properties, LLC, Silas Mine Investments, LLC, Tax Matters Partner (165 T.C. No. 4) the partnership claimed a charitable contributions for a donated a conservation easement. The IRS denied the deduction and the taxpayer sought relief in the Tax Court. The IRS amended its answer to include the civil fraud penalty. The taxpayer contended that the Tax Court is barred from adjudicating the civil fraud penalty because U.S. Const. amend. VII guarantees a right to trial by jury in such actions, which is not an option in this Court. The Court held U.S. Const. amend. VII does not apply to suits against the sovereign, and Congress has not otherwise consented to trial by jury in TEFRA partnership-level actions and that the "public rights" exception to U.S. Const. amend. VII applies to a civil fraud penalty under Sec. 6663(a). Finally, the Court held it could adjudicate a Sec. 6663 civil fraud penalty.
Tip of the Day
Late filing penalties for business returns . . . For individual returns filed late the most costly penalties are based on the amount of tax owed. But for S corporations and partnerships, there's usually no tax due. Here the penalty for late filing is $245 per month, per shareholder or partner. For example, during 2024 Fred owned 50 percent of Madison for the full year; Sue owned 50 percent for the first six months of the year but sold her shares to Sharon in early July. The penalty for filing one month late would be $735; three months late would be $2,205. There's also a good chance your state (or states if you do business in more than one state) will also impose a penalty.
August 22, 2025
News
The IRS has issued frequently asked questions (FAQs) in Fact Sheet 2025-05 relating to the modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under the One, Big, Beautiful Bill Act (OBBBA). These FAQs provide guidance on several energy credits and deductions that are expiring under OBBBA and their termination dates. The FAQs also provide clarification on the availability of the new clean vehicle credit, the energy efficient home improvement credit and the residential clean energy credit, among others. Click on the link above for more information.
Tip of the Day
Making decisions under stress . . . Making important decisions under many stressful conditions can lead to poor judgment. For example, bidding on a job after losing an important bid or job can make you want to low ball the next bid. You can still make a bid, jusr make sure you're doing so with a clear head.
August 21, 2025
News
Notice 2025-44 announces that Treasury and the IRS intend to issue proposed regulations withdrawing the disregarded payment loss ("DPL") rules under Sec. 1.1503(d)-1(d)(consolidate return regulations). The DPL rules were finalized on January 14, 2025 and are applicable with respect to losses incurred in taxable years beginning on or after January 1, 2026. In addition, this notice announces an extension of the transition relief initially announced in Notice 2023-80 with respect to the interaction of the dual consolidated loss ("DCL") rules and the model rules published by the OECD/G20 Inclusive Framework on BEPS (the "GloBE Model Rules"). The notice extends the transition relief such that the DCL rules would generally be applied without respect to the GloBE Model Rules for losses incurred in taxable years beginning before January 1, 2028.The Treasury Inspector General for Tax Administration (TIGTA) has issued a report concerning the termination of IRS probationary employees earlier this year. TIGTA noted that the termination letters notified employees that they were terminated for performance reasons and current mission needs. TIGTA was advised that probationary employees did not have documented performance issues. TIGTA's evaluation focused on the actions and processes that the IRS followed when it sent termination notices in February and March 2025 to probationary employees. For the full report, go to www.tigta.gov/sites/default/files/reports/2025-08/2025ier028fr.pdf.
Tip of the Day
Pick a partner carefully . . . Picking a business partner, or even a rental property partner, depends on a number of factors such as their business skills, their attitudes, etc. But one factor that's often overlooked is their financial stability. Say Sue and Fred go 50-50 on a service business. The business is doing well, but Fred's a gambler and not only exhausted all his funds but got debt in debt. On declaring bankruptcy Fred has to give up his interest in your combined business. This isn't a problem if the partner has only a 5 or 10% interest. Talk to your attorney. There can be ways to protect yourself if you're concerned.
August 20, 2025
News
Notice 2025-45 announces that the Internal Revenue Service intend to issue proposed regulations under Sections 897(d) and (e) that modify the application of the rules described in Reg. Secs. 1.897-5T and 1.897-6T, Notice 89-85, and Notice 2006-46, to certain transactions involving the transfer of United States real property interests ("USRPIs"). The regulations will propose to revise the rules that apply to inbound asset reorganizations under section 368(a)(1)(F) that constitute a "covered inbound F reorganization" as defined in section 3.02 of the notice.
Tip of the Day
Check credit reports regularly . . . Even if you're not looking for a new credit card, car loan, etc., you should check your credit report at least once a year. That means review the report, not just your credit score. A lot more gets reported than you might think. Besides your payment history on a mortgage, credit card, or car loan, many businesses report late or failures to pay. Didn't pay that bill for $500? It could show up and reduce your credit score. Late payments on utility bills, or any open account could affect your score. Those negative marks could affect your score for some time--and they may be incorrect. You did pay that $500 bill, the vendor didn't properly record the receipt. Issues like that are much easier to correct when they're young.
August 19, 2025
News
If you're converting personal property to a rental property you need to start taking depreciation. Normally depreciation is equal to your cost (or with reference to your basis in an exchanged property). But it's more complicated if you owned the property for a time and then converted it to a rental or business property. In that case your basis for depreciation is the lesser of your cost or the fair market value at the time of conversion to rental or business. In Sherman Derell Smith (T.C. Memo. 2025-24) the propeety was first held for rent in 2017 but the taxpayer did not file his return for 2018 until 2024. The taxpayer took depreciation but could not show the fair market value of the property at the time of conversion. The Tax Court found the sources the taxpayer used were far too inaccurate the meet the standards required by the law. In addition, because the property was acquired as a result of a loan to a relative that transformed into a tenant-in-common situation and finally ownership, the taxpayer did not prove his cost basis to the satisfaction of the Court. The Court disallowed any deductions for depreciation.
Tip of the Day
Jurisdiction . . . From time-to-time when discussing Tax Court the Court has declined to rule on an issue because of jurisdiction. Jurisdiction is a general term regarding the power of a court. In the case of the Tax Court it can refer to an issue that was not properly brought up originally but it's more likely that subject matter jurisdiction is a result of the Tax Court's authority is limited to tax cases and then not all tax issues..
August 18, 2025
News
If you get a Form 1099 for income, you've got to report it unless you can dispute the amount. In Charlie Campana (T.C. Memo. 2025-23) the taxpayer failed to report a Form 1099 reporting a distribution from a qualified plan. Moreover, the taxpayer was not yet 59-1/2 and did not qualify for any of the exceptions to a penalty. The taxpayer argued that he was owed a refund from a prior year that would offset the liability. However, the Tax Court held it could not rule on the issue because it lacked jurisdiction.
Tip of the Day
Rental property lease . . . It's imperative you have a lease on any rental property--even if you're renting to your best friend. The law with respect to real property can be different so you would do well to consult an attorney for your first lease and any future ones with changes. Make sure you have a prohibition against subleasing without your express written permission. You should also prohibit a home office or business out of the home without permission. Why? Sue may use the home office for her consulting work, but Fred may by using it as for chemistry experiments. Finally, the lease should include a clause where the tenant will advise you of any planned absences of 30 days or more. A house that appears empty for too long invites squatters or other issues.
August 15, 2025
News
The IRS is warning tax professionals to remain alert to any scams and protect their client data. A common scam geared towards tax pros aims to collect their Electronic Filing Identification Numbers (EFIN). The scammer poses as a tax software provider and emails the tax pro with a request to provide their EFIN information by fax. When the tax pro faxes back their EFIN information, the scammer uses the information to steal client data and file fraudulent tax returns for refunds. Preparers who receive these emails should not respond to the email or follow the directions in the email. They should report it immediately. For more information, go to Tax Tiop 2025-57 at IRS.gov.
Tip of the Day
Home equity loans . . . Use home equity loans cautiously. Interest isn't deductible unless the proceeds are used to improve your principal residence (or the funds taken down are used in certain other ways). And the interest on only the first $750,000 of your principal amounts on your total home debt is deductible. Using home equity to pay off bills can lead to more spending. Make sure your reasons for getting the home equity loan are sound.S
August 14, 2025
News
Secretary of State can deny you a passport or revoke your current passport if you have a seriously delinquent tax debt. Generally a seriously delinquent tax debt is a federal tax liability that has been assessed, that exceeds $50,000 (adjusted for inflation), and that is unpaid and legally enforceable. In addition, the tapayer must have received certain notification and exhausted his or her rights under Sec. 6320 and the IRS certifies the debt. Drew J. Pfirrman (T.C. Memo. 2025-22) the taxpayer's debt was in excess of $59,000 at the time it was certified. The Court noted "It is uncontested that the IRS served [Mr. Pfirrman] with notice of its collection actions and his administrative rights over multiple years. [Mr. Pfirrman] took no action to timely contest the tax liens or underlying deficiency determinations. Only much later, after his passport was in jeopardy, did he attempt to dispute the IRS collection and enforcement actions. Section 7345 plainly forecloses such an eleventh-hour collateral attack on a person's underlying tax liabilities." The taxpayer also argued that he paid down the debt below the threshold. The Court noted the law requires that certification my be reversed only if the debt is fully satisfied or being paid through an installment agreement. The Court held certification of the debt was not erroneous.
Tip of the Day
Trusts . . . There are basically two types--grantor and irrevocable. A grantor trust isn't much of a trust. While title to property is transferred to the trust, you can get the property back at any time. An irrevocable trust is just that. Once the property is transferred you generally can't get it back. The same with designating beneficiaries and terms of the trust. But you can draft language that can give you some flexibility in doing these things and others. But you can't do it with a stock form. Carefully draw a list of what you want to do before visiting your attorney. And make sure you deal with an attorney who specializes in this field. Finally, before executing the trust, run it by another specialist, usually another attorney, but some CPAs specialize in trusts' tax consequences.
August 13, 2025
News
Basically all income is taxable unless there's an exclusion in the law. Arguments to the contrary have been shot down by the courts. In Paul H Christiansen and Terre Lynn Christiansen (T.C. Memo. 2025-21) the couple argued that wages and unemployment insurance were not taxable gross income because the sections of the regulations ere not approved by the Office of Management and Budget. The Court deemed the arguments frivolous and held the amounts in question were, indeed, includable in income.
Tip of the Day
Critical checklist . . . In any substantial, unusual transaction there are usually many issues you don't normally deal with. You can't make a checklist to cover all of them, but you should make a checklist of the items that are most important. That goes for both business and personal transactions. Some items you probably don't even have to list--you'll definitely remember them. For example, you're buying a new home--four bedrooms and two baths are absolutely essential. That you won't forget. But will you remember to check for 500 gallons of oil storage, underground sprinklers, age of the roof, etc. Not enough outlets in the garage? That's not a big deal, you can put them in yourself. That's not something you need on the checklist. In business situations, the checklist can be much more important because you may be signing up for things that can't be easily changed. One business owner thought his attorney would check a purchase and sale agreement for a business being acquired. As a result the allocation of the purchase price was wrong and the purchase price wasn't contingent on certain employees remaining. The buyer considered both important.
August 12, 2025
News
Even relatively small charitable contributions of property require additional information with your tax return. But donations in excess of $5,000 require a qualified appraisal. In William J. Cade and Mary E. Cade (T.C. Memo. 2025-20) the taxpayer claimed charitable contributions of some $284,000, consisting of $146,000 of personal clothing items, $89,000 for 16,300 granite cobblestones of various sizes, and $49,000 close to 10,000 pieces of commercial vinyl tile and adhesive. The attached Forms 8283 Section B Part III captioned Declaration of Appraiser was signed by various individuals apparently none of whom claimed to be qualified appraisers. The Forms 8283 were signed by the donee church pastor, but there was no printed name and the signature was illegible. Among other issues the taxpayers could not show that they attached a qualified appraisal to the return.
Tip of the Day
Report all income . . . Taxpayers sometimes ask how much do I have to make before I have to report the income. The answer is there is no threshold. Every dollar has to be reported. Some money you receive may be nontaxable--a gift from a friend (but if it's from your employer, it's probably not a gift), a rebate on a purchase (you're just getting your own money back), gas money when you're sharing expenses on a trip. But these and some others are exceptions. Another point. Don't net out an income with an expense, no matter how obvious. Report the full amount of the income received and deduct the associated expenses. There are several reasons for doing so and netting items could cause real problems if you're audited. Finally, bartering isn't like a nontaxable exchange. The item you receive is income and the value has to be reported.
August 11, 2025
News
The IRS announced (WV-2005-04) tax relief for individuals and businesses in parts of West Virginia affected by severe storms, straight-line winds, flooding, landslides, and mudslides that began on June 14, 2025. These taxpayers now have until Feb. 2, 2026, to file various federal individual and business tax returns and make tax payments. Following the disaster declaration issued by FEMA, individuals and households residing or having a business in Marion and Ohio counties qualify for tax relief. As a result, affected individuals and businesses will have until Feb. 2, 2026, to file returns and pay any taxes that were originally due during this period.
Tip of the Day
Nothing's forever . . . Or, everything changes. We were thinking about stocks and similar investments. Unless you follow the market closely, the best way to invest is research companies, buy into a good ones, and hold them. The same is true for mutual funds. But don't lock them away. Company managers change, markets change, technology changes, etc. That's particularly true today. With mutual funds it's often the managers. Twenty-five years ago one fund was had an unbeatable track record. Some time later the manager retired and with in, years the fund was underperforming the market.
August 8, 2025
News
The IRS announced (TX-2025-04) that it has added the counties of Edwards, Lampasas, Real, Reeves, Schleicher, and Sutton to those that qualify for tax relief for individuals and businesses in parts of Texas affected by severe storms, straight-line winds. and flooding that began on July 2, 2025. These taxpayers now have until Feb. 2, 2026, to file various federal individual and business tax returns and make tax payments. The complete list of counties that qualify for relief now includes Burnet, Coke, Concho, Edwards, Hamilton, Kendall, Kerr, Kimble, Lampasas, Llano, Mason, McCulloch, Menard, Real, Reeves, San Saba, Schleicher, Sutton, Tom Green, Travis, and Williamson. For more information, click on the link above.The IRS announced (IR-2025-52) that, as part of its phased implementation of the One Big Beautiful Bill Act, there will be no changes to certain information returns or withholding tables for Tax Year 2025 related to the new law. Key points for TY 2025 relating to OBBBA provisions:
These decisions are intended to avoid disruptions during the tax filing season and to give the IRS, business and tax professionals enough time to implement the changes effectively. For more information visit, One Big Beautiful Bill Act of 2025 Provisions.
Tip of the Day
End of meeting summary . . . Meetings can be extremely productive or a total waste of time. The outcome depends heavily on planning and control of the session. One thing you shouldn't forget is a quick summary of the most important points of agreement and a recitation of what each participant is supposed to follow up on. For short meetings that can be done verbally just before the group breaks up. For long meetings consider a written "to do" list for each participant.
August 7, 2025
News
REG-132805-17 contains proposed regulations that would provide guidance regarding an employer's line or lines of business for purposes of determining the exclusion from gross income for no-additional-cost services or qualified employee discounts provided to employees. These proposed regulations would replace a business classification system that has not been updated since 1974 with a much more current classification system that is updated every five years. Under these proposed regulations, the application of the no-additional-cost benefit and employee discount exclusions from employee income under Section 132(a)(1) and (2) would be determined under a classification system that more accurately reflects current economic activity than the system used under the existing regulations, thereby reducing burden in applying the exclusions from income under Section 132(a)(1) and (2).https://assets.msn.com/staticsb/statics/latest/fluent-icons/caret_left_24_filled.svgTip of the Day
Guaranteeing a loan? . . . Unless it's required for a business in which you're the sole or principal owner, it's almost always a no win situation. First, why obligate yourself to pay off a debt where you will get no benefit? Even if there is a benefit, in most cases it's small compared to the risk. And it is a big risk. If the lender asks for a guarantee, in most cases he doesn't think much of the primary obligor. And, if the primary obligor doesn't pay, the lender will quickly come after you. Second, you'll get no tax deduction for the interest on any payments unless the primary obligor actually defaults. He could be in a terrible financial situation, but if you make the payments with the purpose of keeping him afloat, you'll still get no deduction. And that assumes that the tax law would allow a deduction for the interest if you otherwise qualify. For example, you guarantee your brother-in-law's car loan. He defaults and you pay the interest. That's personal interest and would not be deductible. Third, in some situations you may leave yourself open to more than the original obligation when the loan is open-ended. Finally, if you look for credit a lender who's looking at your credt score will add the amount guaranteed to your debt load.
August 6, 2025
News
Many tax shelters rely on complying with the letter of the law but lack economic substance. That is, they create losses where the participant doesn't suffer any economic hardship. The IRS can disallow the losses based on the lack of economic substance. That was the case in Scott A. Blum and Audreyh R. Blum (T.C. Memo. 2025-18) but here the taxpayers argued that they had not received proper notice. The Court noted that The Treasury regulations 1 explicitly and clearly state the requirements for partnerships and their partners to update names and addresses of the partners as well as the IRS's obligations when mailing a notice of Final Partnership Administrative Adjustment (FPAA). The taxpayers did not adhere to the regulations; the IRS did. The taxpayers did not properly identify Scott Blum as an indirect partner in the TEFRA partnership or update the address for sending the FPAA with respect to his partnership interest. The Court rejected the taxpayers' arguments.
Tip of the Day
Deposits to wrong account . . . One business owner delegated check deposits to an employee of 10 years. The employee deposited almost an entire months' checks into someone else's account. We're not sure how this was accomplished, but there's an easy way to prevent it--check your account regularly. If you only make deposits once a week, you should check after each deposit. In the old days you had to wait a month for your statement. Now there's no excuse, it only takes a minute or two. In most cases deposits show up in less than an hour after a deposit. In most cases you can also get an email or text notice of the deposit. The person checking should not be the person making the deposit. Reconciling the bank account at the end of a month will often catch most errors.
August 5, 2025
News
The Federal Trade Commission is warning that scammers are still pretending to be the police, calling to say you've missed jury duty and need to pay. But in a new twist, some scammers are now telling you to visit a website to enter your personal information--all so they can steal it and your money. It starts with a call that sounds like it's from an officer in your local police department. (It's not.) They claim you missed jury duty (you probably didn't) and will be arrested unless you visit a website to pay a fine (still no). They send you to a site that looks legitimate, with an official-sounding URL and government-looking seals (all fake). It'll ask you to enter your birthdate and Social Security number to "look up how much you owe." It might ask you to pay up to $10,000 in fines on the site, or send you to a "government kiosk" (no such thing) to pay by cryptocurrency. But every bit of this is a scam. For more information, click on the link above.The Financial Crimes Enforcement Network (FinCEN) issued a Notice urging financial institutions to be vigilant in identifying and reporting suspicious activity involving convertible virtual currency (CVC) kiosks. While CVC kiosks can be a simple and convenient way for consumers to access CVC, they are also exploited by illicit actors, including scammers. The risk of illicit activity is exacerbated if CVC kiosk operators fail to meet their obligations under the Bank Secrecy Act (BSA). Click on the link for more information.
Tip of the Day
Not every solution need be high tech . . . There's no question that computers have made most work easier. But there are times when a low tech solution is easier and faster. If you're doing some computations only once and they're not that complicated, grab the calculator and a pencil rather than opening a spreadsheet. You can use a computer to schedule multiple processes in a small job, but you can almost assuredly do it quicker with paper and pencil or a whiteboard. There are other examples. Got a dozen nails to drive? You could use a nail gun, but by the time you move the compressor and drag the hose the job would be long done if you used a hammer.
August 4, 2025
News
You may be able to avoid paying the full amount of a tax liability with an offer-in-compromise or other collection alternative. In Richard L. Brown and Camille C. Brown (T.C. Memo. 2025-17) the taxpayers sold real property used as an early childhood education facility that resulted in a substantial tax liability. They bought replacement property but failed to qualify for a like-kind exchange. In a collection due process hearing the denied an offer-in-compromise. THe taxpayers claimed a lien would cause the them significant financial hardship. On Form 656 they checked the box for Effective Tax Administration and for "The amount offered is based on my exceptional circumstances other than economic hardship." They did not check the box for "Paying more than the amount offered would create a financial hardship." The offered $75,000 to settle their some $600,000 liability. The IRS rejected the offer. The two-page memo explaining the rejection indicated that the case did not meet criteria for effective tax administration on grounds other than economic hardship. The Tax Court found for the IRS.Tip of the Day
Buying property from estate . . . If you inherit property from an estate your basis is equal to the fair market value at the date of the decedent's death. But what if you purchase property from the estate at a bargain price? Your basis would be what you pay for the property. In one case a nephew who took care of the decedent for a number of years was allowed, by the terms of the will, to purchase a parcel of real estate for $200,000 regardless of the the market value. Other heirs received property and/or cash. As it turned out, the fair market value at the date of death was $950,000. The court held the taxpayer's basis was his purchase price.
August 1, 2025
News
The IRS is reminding taxpayers that social media can be a resource for up-to-date tax information, especially with the many changes to the federal taxes in 2025. However, taxpayers should be mindful of what accounts they're following for tax advice. Unfortunately, there's a lot of inaccurate or scam advice being shared. Which is why it's important that taxpayer get tax-related information from IRS verified social media account or e-news services. Visit IRS.gov to get direct links to IRS verified social media accounts. IRS has accounts on:
The IRS never contacts taxpayers on social media to ask for their personal or financial information. Taxpayers should be aware scammers may pose as the IRS to steal a taxpayer's identity or defraud them. To stay informed, be sure to follow, like and subscribe.
Tip of the Day
Business mwals . . . Business meals are only 50% deductible. But that's not the only limitation. The law contains a prohibition lavish meals--but doesn't define lavish. We've never seen a court case on the issue, but you don't want to be the one to test it. You should be able to defend the bill based on the circumstances. One issue that has been tested in court is "reciprocal" meals. In a case a group of businessmen from the same firm took turns taking the others out to lunch. Fred would take four of his colleagues on Monday, John's turn to take the group out would be Tuesday, etc. They got caught in part because the pattern was so blatant.
Copyright 2025 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The information is not necessarily a complete summary of all materials on the subject. Copyright is not claimed on material from U.S. Government sources.--ISSN 1089-1536