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June 1, 2026
News
The IRS has announced (IR-2026-70) the release of a new calculator to help businesses working on large, multi-year construction or manufacturing projects more easily figure interest related to those contracts. The Excel-based Percentage-of-Completion Method (PCM) Look-Back Interest Calculator supports calculations required for Form 8697, Interest Computation Under the Look-Back Method for Completed Long-Term Contracts. Tax professionals including certified public accountants, enrolled agents, and other tax preparers working with long-term construction and manufacturing contracts may find the calculator useful when computing look-back interest. Practitioners should review the calculator output carefully, consider each taxpayer's specific circumstances, and ensure compliance. The look-back interest is determined using a three-step process:
The calculator is designed to assist with the interest computation step by providing a structured framework to perform the computations. However, the IRS emphasizes that using the calculator does not guarantee compliance with the law and does not replace authoritative guidance, as the tool does not address all fact patterns or complexities associated with look-back interest calculations.
Tip of the Day
Borrowing from your parents? . . . Or another relative or friend? If one or both of you have businesses and this is a personal loan--for a car, boat, etc.--document the loan by writing up an agreement and transferring the money by a check or a transfer between bank accounts so you have a bank record of the withdrawal and deposit. That could be important if you're audited or one of you dies. You may need to charge interest because the lack of interest or too low a rate can be considered a gift. Talk to your tax adviser. If you're loaning money to a relative's business documentation will be even more important.
May 29, 2026
News
The IRS announced (IR-2026-68) new features in IRS Individual Accounts that allow taxpayers to view and submit Trump Account elections, making it easier to invest in these tax-advantaged accounts. Through IRS Individual Account, taxpayers can securely access their tax information and complete common tasks online, including:
These new features reflect the IRS's continued focus on transforming the Service into a digital-first agency that delivers a faster, more seamless experience for taxpayers and provides a new tax-advantaged investment account for children to save for college, retirement, and building generational wealth. Taxpayers benefit from greater transparency through real-time visibility into the Trump Account election process. Electronic submissions also improve accuracy, speed up processing times, and reduce delays associated with paper forms.
Tip of the Day
Contemporaneous records . . . The IRS and the courts give more value to diary entries, etc. made near the time of the action. For example, a car log entry regular made at the time of the trip has more value than one made at the end of the week and much more value than one made at the end of the month. The IRS and the courts can usually spot a log you made the night before you saw the IRS agent. But the IRS and courts also look at other aspects such as do you regularly keep such records. A single entry in your diary for a six-month period showing the detail of a certain transaction carries less weight than if you made regular entries. Finally, sometimes a well-kept diary or log can substitute for missing receipts. But there are some areas of tax law where strict recordkeeping rules won't allow that, e.g., in the case of travel and entertainment receipts, charitable contributions, etc. The law requires a receipt and neither the IRS nor the courts can waive that rule.
May 28, 2026
News
The IRS announced the interest rates for over- and underpayments for the third quarter beginning July 1, 2026. All the rates have increased by 1%. Interest rates on noncorporate over- and underpayments will be 7% (up from 6%), on corporate overpayments the rate is 6%, on underpayments 7% and on large overpayments it's 4.5% and large underpayments 9%.The IRS reported (IR-2026-67) it will offer Saturday hours at select Taxpayer Assistance Centers on May 30. TACs will be open from 9 a.m. to 4 p.m. to provide in-person assistance on a range of tax issues. During this one-day event, TACs in multiple states, the District of Columbia, and Puerto Rico will offer many of their regular services. The IRS encourages taxpayers to visit IRS.gov/SaturdayHours ahead of time to confirm participating locations and available services before heading to an office. TACs will offer most of their typical services during these hours. However, they will not accept cash payments. The IRS plans to continue offering these Saturday service opportunities through June.
Tip of the Day
Look behind the numbers . . . Often the numbers speak the truth. Your sales are up 20% year over year as a result of a new product that's cheaper and better. Or you've introduced a new service boosting revenue and traffic. But before taking the numbers at face value, ask yourself if they make sense. Is it the new product that generated the sales or the fact that your competitor was shut down for three months because of storm damage. If it's the former, you should take steps to take advantage of the new product. If it's the latter, you may still be able to take advantage of the situation, but in a much different way.
May 27, 2026
News
The Treasury Inspector General for Tax Administration (TIGTA) did an audit for Calendar Years 2024 and 2025, and found the IRS selected approximately 7.5 million tax returns through its identity theft filters. The IRS adjusted its identity theft filters to address emerging fraud schemes and risks. The IRS also reviewed tax return selections and revises filters to minimize selections of legitimate tax returns and reduce burden on these taxpayers. For example, the IRS reduced selections of legitimate tax returns from 55 percent in Processing Year (PY) 2023 to 52 percent in PY 2024. The IRS must balance its fraud detection efforts against the burden they may cause taxpayers. To lessen the burden on taxpayers, the IRS resolves and releases selected tax returns without contacting the taxpayer. For example, the IRS resolved 955,000 selections from the identity theft filters in Calendar Years 2024 and 2025 (as of November 2025) without issuing a notice to the impacted taxpayer. For PYs 2023 and 2024 tax returns that required taxpayer authentication, the IRS posted the tax returns within 13 days on average once the taxpayer authenticated. To see the complete report go to www.tigta.gov/sites/default/files/reports/2026-05/2026400019fr.pdf?.
Tip of the Day
Business Tax Accounts . . . The IRS has announced that any tax professional or client who registered as a Business Tax Account user in 2025 as a Designated Official for an S or C corporation must revalidate their status between June 15 and July 29 to renew their role. They must renew annually to maintain access to Business Tax Account. To renew, sign in.
May 26, 2026
News
Section 6050K(b) requires a partnership to provide certain information to transferors and transferees that are parties to a Section 751(a) exchange on or before January 31 of the year following the calendar year of the Section 751(a) exchange. Among other things, the information provided to each transferor and transferee must include the information required to be shown on the partnership's return under section 6050K(a) with respect to such person. T.D. 10048 makes permanent a safe harbor for reporting sales or exchanges of interests in partnerships that contain Sec. 751(a) property. Under the new rules a partnership would be required to furnish the information reported on only Parts I, II, and III of Form 8308, or a statement that includes the same information, to the transferor and transferee in a section 751(a) exchange by the later of (1) January 31 of the year following the calendar year in which the section 751(a) exchange occurred, or (2) 30 days after the partnership has received notice of the exchange as specified under Sections 6050K and 1.6050K-1. The proposed regulations explained that the IRS would update the Instructions for Form 8308 to make clear that a partnership must file a completed Form 8308, including Part IV, as an attachment to its Form 1065. The update to the Form 8308 instructions reflects this. Accordingly, and pursuant to Reg. Sec. 1.6031(a)-1(a)(2), which provides that a partnership return must contain the information required by the prescribed form and the accompanying instructions, a partnership would be required to file the completed Form 8308, including Part IV, as an attachment to its Form 1065, for the taxable year of the partnership that includes the last day of the calendar year in which the Section 751(a) exchange took place.
Tip of the Day
Taking losses . . . Picking winners in the stock market may not be as hard as knowing when to sell. Even the best stocks don't go up forever. They may have a pullback, often after a sharp run up. The pullback can be only a couple of percent or 25 percent or more. Sometimes a stock that's been in favor just loses its momentum and languishes for anywhere from a couple of months to a number of years. Often the reasons are fundamental, that is related to the business, but just as often an industry goes out of favor. Therre's rarely a hard and fast rule. You need to evaluate each stock. Holding a stock that's has no future means that you may be missing out on an opportunity. Holding a stock that's falling will mean losing accumulated gains or, if their are no gains, losing your original investment. Investors who consistently make money usually have a target price and a stop-loss price. They evaluate their position carefully when the stock hits the target and they have price where they're going to sell if the stock drops.
May 21, 2026
News
Notice 2026-33 provides guidance on qualified long-term care distributions, as permitted under Section 401(a)(39) of the Code. In particular, the notice provides guidance to providers of certified long-term care insurance (issuers) relating to the disclosure and reporting requirements under Sections 401(a)(39) and 6050Z. In addition, the notice provides guidance under Sections 72(t)(2)(N) and 401(a)(39) to plan administrators making and individuals receiving qualified long-term care distributions, including setting forth safe harbors for plan administrators in making qualified long-term care distributions. This notice also extends the deadline for a plan sponsor of a defined contribution plan that is not a governmental plan (within the meaning of Section 414(d)), a Section 403(b) plan maintained by a public school, or an applicable collectively bargained plan, to amend its eligible retirement plan to permit qualified long-term care distributions.Tip of the Day
Tax consequences of sale . . . We often say consider economic effects before tax effects. Too many people think a tax benefit will make a poor business decisions profitable. But the tax consequences can be more important on the flip side. You want to generate $20,000 in cash so you sell that much of Madison Inc. stock you bought 5 years ago at $5,000. You won't have that $20,000 for long because you could owe some $4,000 depending on your tax bracket. In the case of real estate or another asset with a mortgage you could generate far less cash than you anticipated. If you've refinanced the property and taken cash out you could end up with very little after taxes. Work through the numbers before or check with your tax adviser before signing.
May 20, 2026
News
You may be able to get relief from paying a liability by showing hardship or inability to pay. In Alphonsus E. Okoli and Margaret E. Okoli (T.C. Memo. 2025-119) the taxpayers owed amounts for taxes and penalties and requested a CDP hearing. During the CDP hearing, the settlement officer (S0) and the taxpayers discussed several issues and explored them in subsequent correspondence. First, the taxpayers desired to have their account placed in currently not collectible (CNC) status. To be entitled to such relief, taxpayers must demonstrate, on the basis of their assets, equity, income, and expenses, that they have no apparent ability to make payments on their outstanding tax liabilities. The SO informed the taxpayers they did not meet the criteria for penalty abatement. A Revenue Officer (RO) reviewed the taxpayers' information and determined that they could pay the liability in full from available assets, including sale of their real estate. As an alternative, the RO found that they could pay a portion of their liability to qualify for a Streamlined IA (installment agreement) with a minimum monthly payment of $2,262. The SO obtained additional information on the taxpayers' exp-expenses but disallowed some of them for lack of substantiation. The payments could be reduced to $1,892 based on the new information but still above the taxpayers' proposed $250. The Tax Court noted that its review is for an abuse of discretion by the SO and the taxpayers presented no evidence that the SO failed to act on information that was in fact submitted to her. In addition, the Tax Court has routinely held that an Appeals officer does not abuse her discretion when she rejects an IA because a taxpayer refuses to liquidate assets to satisfy his tax liabilities.Tip of the Day
Caution on contracts . . . Contractors have learned that anything more than a immediate one-week job can be subject to cost increases that can devastate a profit margin. Estimates have to have a short time limit or provision for price increases. That's particularly true right now. The cost of many materials have increased, some sharply. And there are many other examples of outsized price increases in other industries. The reasons for the increases vary, and many may be short-lived, but they can still impact even relatively short-range contacts and estimates.
May 19, 2026
News
Normally you're jointly responsible for your and your spouse's share of the taxes on a joint return. And if one spouse can't pay the responsibility can fall on the other spouse, in part or in full. But there is limited relief. In Jodell Sample (T.C. Memo. 2025-118) the husband had a professional practice and the wife worked for him as an office manager and receptionist. The taxpayer-wife had a high school education and relied on her husband to take care of the finances. The couple legally separated after a number of years of not paying their full tax liability. The terms of the separation were unusually favorable to the taxpayer. The husband agreed to be solely responsible for their federal and state tax debts. The wife received one of their shared cars, their main residence in Minnesota, a second home in Montana, and the husband's entire 401(k) account. The legal separation did not result in a physical separation. While the wife filed numerous innocent-spouse requests, she has continued to live with her ex-husband in their marital home, at least into 2021 and with nothing in the record to suggest that this arrangement has not continued. The Tax Court looked at the sections of the innocent spouse relief provision and examined various factors and granted relief during the early years at issue but denying relief once she learned of the IRS's visit to her husband's office. Before then, she was reasonably ignorant of her husband's underpayments for 2011 through 2013. But the Court also found she knew of the understatements-very substantial understatements-starting with the 2014 return. The Court granted her equitable relief for tax years 2011 through 2013 and denied her relief for tax years 2014, 2017, and 2018.Tip of the Day
Municipal bonds for income? . . . The theory is if you're in the top tax bracket and tax rates increase, the tax-exempt feature of munis will be more attractive. That does make sense. But buying individual municipal bonds can be expensive. Look for a fund with low expenses and a good portfolio. If you're in the lower brackets the tax-exempt feature may not be worth it. Talk to your investment adviser before making a move.
May 18, 2026
News
The IRS has updated (HI-2026-01) the disaster relief notice for tax relief for individuals and businesses in the State of Hawaii affected by flooding and mudslides due to severe storms that began on March 10, 2026 to change the July 8, 2026 filing of various federal individual and business tax returns and make tax payments to August 20, 2026. The notice continues to apply to individuals and households that reside or have business in Hawaii, Honolulu, Kauai and Maui counties. The extended deadline applies to individual income tax returns and payments normally due on or after March 10, 2026. Penalties on payroll and excise tax deposits due on or after March 10, 2026, and before March 25, 2026, will be abated as long as the tax deposits are made by March 25, 2026.Tip of the Day
Noncompete agreements . . . There are some documents you can download off the web and they'll work just fine. But that's certainly not universally true. For one thing, laws vary among states. And noncompete agreements are one of those documents that shouldn't be used lightly. Many states have laws preventing an employer from overly restrictive noncompete agreements. And in some cases a noncompete agreement doesn't even make sense. A noncompete is designed to prevent an employee from going to another employer and taking customers, trade secrets, or special knowledge with him and adversely affecting your business. But a former employee has a right to earn a living in his field of expertise. Get good advice from your attorney.
May 15, 2026
News
Exempt organizations with a calendar year should remember that May 15th is the Federal filing deadline and late filing can be costly. You can request a six-month extension using Form 8868.Individuals may be able to get an installment agreement from the IRS online if the amount requested is less than $50,000 and they have filed all required tax returns. (The threshold amount is $100,000 for a short-term installment agreement if the term is no more than 120 days.) In Gary B. Nelson (T.C. Memo. 21025-117) the taxpayer sought an installment agreement and a CDP hearing was scheduled. The scheduling letter further requested certain information from the taxpayer including a completed Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, as well as signed tax returns for 2020, 2021, and 2022. The taxpayer failed to respond to the request nor did he call into the CDP hearing. The Appeals officer gave him an additional 14 days to provide and information he wanted considered. Again no response. Nearly six months passed before the Office of Appeals issued a notice of determination upholding the proposed levy. The notice observed that the taxpayer "had not challenged the existence or the amount of the liability for the tax period[s] at issue" and that the "balances are the result of . . . self-filed tax returns with insufficient tax withholdings." The notice further explained that the installment agreement in which Mr. Nelson expressed an interest could not be considered because he was "not available for the hearing and . . . did not submit a completed Form 433-A . . . with supporting financial documentation." The taxpayer did not challenge the issues at trial but the Court added that even if the installment agreement issue were properly raised the taxpayer would have fared no better because of the failure to submit the request information. The Court granted summary judgment to the IRS.
Tip of the Day
Disputing a charge? . . . We're not talking about your credit card but a transaction such as business purchases, rent, etc. While the issue is in dispute you should probably put the amount of the dispute in an escrow account so that the money is available should you lose the issue. Unless you can clearly show you're in the right (e.g., you've been denied use of the rent space, etc.) the first step should be to consult an attorney.
May 14, 2026
News
The IRS announced (IR-2026-65) the terms of a time-limited settlement opportunity for eligible taxpayers involved in conservation easement or historic preservation easement disputes with the IRS. Since 2020, the IRS has offered settlement initiatives in these cases that were significantly more favorable than the outcomes taxpayers have generally achieved in the Tax Court. Under each of those prior initiatives, taxpayers were required to pay penalties on their underpayments and were not permitted to claim a charitable contribution deduction for the claimed donation, being limited solely to a deduction for estimated out-of-pocket costs. Nonetheless, the prior settlement initiatives resolved 405 cases, with 32% of all offers accepted. This new time-limited settlement opportunity is intended to advance the goals of the prior initiatives while addressing barriers that may have discouraged acceptance. Today, there are over 1,100 conservation easement cases (around 740 docketed cases in Tax Court and 400 cases in Exam). Under this new offer initiative, nearly 450 cases will no longer be required to make an upfront payment of the settlement amount, and instead the liability will be subject to post-settlement collection as described below. Separately, as many as 500 cases where prior settlement offers expired or were rejected by the taxpayer will have the renewed ability to settle their cases. The offer will also be extended to as many as 175 cases that did not previously have the opportunity to participate in an IRS settlement initiative. For a period of 90 days following the issuance of a settlement letter, the following terms will be available to an eligible partnership:
This settlement opportunity is not available in every conservation easement or historic preservation easement case. Specifically, this settlement is not available in cases. Click on the link above for more information.
Tip of the Day
Specific bequests in a will . . . Estates have a nasty way of creating rifts among the closest relatives. And often it's not the size of the bequest, but one or more items. Fred may not care that he got the larger share of the inheritance, he's upset he didn't get the lake property where he spent summers and proposed to his wife. Because of the way the will was written the property had to be sold and the proceeds divided. Often the best approach is to talk to the heirs and find out what they want and either put that as a specific bequest in the will.
May 13, 2026
News
Some areas of a tax return get more scrutiny than others. One of those is the earned income tax credit (EITC). That's partly because the dollar amounts can be relatively significant and partly because it's a complex issue. The amount of the credit depends on whether you're single or married, your income, and the number of qualifying children (or individuals), if any. To be considered a qualifying child an individual must (1) bear a relationship to the taxpayer as described in section 152(c)(2); (2) have the same principal place of abode as the taxpayer for more than one-half of the taxable year; (3) meet the age requirements described in section 152(c)(3); and (4) not have filed a joint return with the individual's spouse for the taxable year. The parties agree that the "qualifying individual" (here a disabled person) met the first and fourth requirements. The IRS contends that the she did not meet the second and third requirements. In John R. Graham and Nicole Graham (T.C. Memo. 2025-116) the taxpayer testified that the individual lived with the taxpayers for more than six months in the year at issue and that she suffered a stroke, was not able to care for herself and was confined to a wheelchair. However, the taxpayers provided no documentation to support the claim the individual lived with them or was permanently and totally disabled. The Court sustained the IRS's denial of the claim.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 often do it quicker with paper and pencil or a whiteboard. Whiteboards can be particularly useful. 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.
May 12, 2026
News
In the past you could deduct a number of miscellaneous itemized including legal fees directly related to the production of income. That's no longer true. But the case of Joanne G. Rosso (T.C. Memo. 2025-115) brings out several important points about legal fees. Here the taxpayer did not show that the fees were directly related to the production of income. The relationship between the expenses and what generated them is still important. For example, you might incur legal fees related to a rental property. Expenses incurred related to the purchase of the property are not deductible but must be capitalized as part of the purchase price. On the other hand, expenses related to a defending a suit from a tenant who slipped on an icy walk are deductible. While decided under prior law, the Court held that the legal fees were not related to income production purposes but were personal in nature.Tip of the Day
Homeowner's associations . . . You may have heard some horror stories. Some are true. Homeowner's associations can be responsible for many aspects of a development from just the winter snowplowing of the roads to the structural integrity and the mechanicals of an high-rise condo. A properly run association will budget for capital expenditures such as refurbishing the swimming pool and roads and assess an amount for a reserve. If you're buying a property that has an HOA you should know what the annual cost is and how the HOA has performed over the years. Be aware that in most cases failure to make payments will result in a lien on your property and, depending on state law and the HOA rules, they can foreclose on you for nonpayment.
May 11, 2026
News
The IRS has announced that due to the planned retirement of the Filing Information Returns Electronically (FIRE) System, the IRS will no longer accept new Information Returns (IR) Applications for Transmitter Control Codes (TCCs) beginning July 21, 2026. Existing applicants can continue to update their applications through December 2026, after which they will become read-only and retained for historical reference. Current FIRE users must complete an Information Returns Intake System (IRIS) Application for TCC and transition to IRIS for electronic filing beginning with the 2027 filing season. IRIS will be the only information returns electronic filing system, including current year, prior year, or corrections, after January 1, 2027. For additional information, visit IRS.gov/iris.In Jeffrey L. Daines, et al. (U.S. District Court, E.D. Wisconsin) the taxpayers sought to establish an employee stock ownership plan (ESOP). To do so, they enlisted a company called Byers that touted a proprietary system that would afford certain tax benefits. They set up the ESOP, thus creating an Employee Stock Ownership Plan, and for years things went as all had expected. The IRS then began to look closer at the methods that the consulting company employed for the taxpayers and other clients. The IRS eventually disqualified the ESOP at issue. The taxpayers are challenging that in Tax Court. In this action they argue that the IRS's actions constituted legislative rulemaking. The taxpayers argue that the IRS's actions violated the Administrative Procedure Act (APA) because the IRS did not follow the APA's notice and comment procedure. The IRS has now moved to dismiss the taxplayers' amended complaint, again arguing that there is no such thing as the Byers Rule and the agency actions the plaintiffs are complaining about are not subject to the APA. The Court held that insofar as the taxpayers are arguing that the IRS enforcement action constituted or was premised on a new rule because it reflected a change in the IRS's years-long practice of implicitly accepting the Byers ESOP system, the argument is without merit. The IRS does not and cannot police every transaction. As a result, it commonly may take action only after years of apparent acquiescence. Such inaction does not estop later enforcement.
Tip of the Day
State disaster relief . . . When the disaster is significant enough the president will designate a FEMA disaster area eligible for tax relief. Your state may have it's own relief program unrelated to the federal one or for smaller disasters that don't qualify for federal relief. It can take any number of forms from postponed filings to tax credits, incentive payments, real estate tax relief, loans, grants, etc. These may not be as well publicized. You may be able to contact a local official or the state for information. The state house or senate representative for your district may have or be able to get information.
May 8, 2026
News
The IRS announced (GA-2026-03) tax relief for individuals and businesses in parts of Southeast Georgia that were affected by wildfires and straight-line winds that began on April 18, 2026. These taxpayers now have until Aug. 20, 2026, to file various federal individual and business tax returns and make tax payments. Following the disaster declaration issued by the State of Georgia, individuals and households that reside or have a business in Clinch, Echols, and Brantley counties qualify for tax relief. The same relief will be available to any other counties added later to the disaster area. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after April 18, 2026, and before Aug. 20, 2026, are granted additional time to file. As a result, affected individuals and businesses will have until Aug. 20, 2026, to file returns and pay any taxes that were originally due during this period. Click on the link above for more information.The IRS released its annual update to Form 656-B, Offer in Compromise Booklet. An Offer in Compromise is an agreement between a taxpayer and the IRS that settles a tax debt for less than the full amount owed. The booklet includes all the forms small businesses need to file an offer in compromise and includes new information on how to file an offer electronically through an IRS Individual Account. It also leads small businesses and tax professionals through a series of steps to help calculate an appropriate OIC based on assets, income, expenses and future earning potential. For more information, see the offer in compromise page on IRS.gov.
Tip of the Day
Hiring? Make sure there's a culture match . . . There's always been cultural differences between industries and companies. In some industries and companies working 20 hours of overtime a week is expected; in others overtime is frowned on. Some companies foster competition among employees, in others it's discouraged. In some cases moving from one industry to another can be cultural shock. That's more often the case when an employee from a laid-back firm moves to a high-pressure, short-staffed one. But the reverse can also be true. There are often big culture differences between small companies and large firms. Family owned companies can have cultural issues. If you're hiring you should be aware of the differences and that should be an important point discussed with the prospective employee. Some people can adjust, but a high percentage will find it difficult, and that difficulty increases with the time spent in the culture. You're doing both the employee and your firm a disservice if there's a poor fit.
May 7, 2026
News
The IRS announced updates to its Conservation Easement site, expanding information on abusive conservation easement transactions, recent court decisions, and warning signs for investors. "Congress created the conservation easement deduction to encourage genuine preservation, not to subsidize abusive tax shelters," said IRS Chief Executive Officer Frank J. Bisignano. "The updated information on IRS.gov explains why the IRS continues to challenge these transactions and highlights the serious risks taxpayers face when they are sold inflated tax benefits disguised as conservation." The IRS reminds taxpayers that, while properly structured conservation easements can provide important public benefits, promoter-driven transactions are often built on inflated valuations that can lead to disallowed deductions, substantial penalties and other consequences. The updated Conservation Easement site addresses these issues in detail. The IRS also announces that it will soon release the terms of a time-limited settlement opportunity for eligible taxpayers involved in these transactions. Following that announcement, the IRS will extend settlement offers to eligible partnerships to provide an opportunity to resolve the federal tax consequences of these transactions with certainty.Tip of the Day
Temp or permanent hire? . . . If you're uncertain about the future of your business but you're understaffed, consider hiring a temp or an independent contractor rather than a full-time employee. A side benefit could be checking out the worker before taking him or her on full time. It may be a bit more expensive, but better than going through the expense of hiring and then later laying them off.
May 6, 2026
News
Even if you've complied with all the procedural requirements you could still lose out on a charitable contribution deduction if the property valuation is considered speculative. Generally property is valued at the highest and best use. Land that is not productive may be valued at what it would be if productive, less the cost to make it productive. But that approach can contain many assumptionsIn Paul-Adams Quarry Trust, LLC, Francis L. Adams, Tax Matters Partner (T.C. Memo. 2025-112) the partners bought property for some $430,000 ($2,073 per acre) in 2007. Starting in late 2010, the partners quarried granite on the property. They experienced significant losses and abandoned the effort in 2012, contributing the property to the LLC. In December 2017, LLC granted a conservation easement to a qualified organization. The LLC claimed on its tax return a charitable contribution deduction of $10,234,108 (about $49,364 per acre) for a "qualified conservation contribution". It attached to the return an appraisal supporting the deduction and taking the view that the highest and best use of the property was granite mining. When the IRS examined the partnership return it performed it's own appraisal of the property and arrived at a value of $612,000 for the easement. The Court challenged a number of the assumptions in the LLC's valuation of the property, including the fact the property was not a working quarry at the time of the contribution. The Tax Court accepted the IRS's valueand sustained a gross valuation misstatement penalty.Tip of the Day
Emergency funds first . . . Unless you're planning on inheriting a lot of money you should be saving for your retirement on a regular basis. Using your tax refund to invest is a good idea, but weekly or monthly investments are vital. Not only will funds accumulate faster, you'll be dollar averaging meaning you won't overpay at the top of the market. The disadvantage of putting funds into your 401(k), IRA, etc. is that if you need them in an emergency not only will you pay tax on the funds (possibly at the wrong time) you'll also owe a 10% penalty unless you meet an exception or are 59-1/2. But before putting money in a retirement fund you should have a decent emergency fund. How much? That depends on your specific situation. Own a home? A new septic system could run you $15-20,000. Same for a new roof. The roof you can plan for. The septic probably not. Live in a state with natural disasters like wildfires, hurricanes, etc.? You'll need extra funds. Got a job that's less than rock solid? On the other hand are your parents looking to replace their 5-year old, 60-foot yacht? You may be able to get help with a bank loan. You can't cover all the possibilities, but you should take some time to consider them and your options.
May 5, 2026
News
If you want to challenge a a determination by the IRS Independent Office of Appeals (Office of Appeals) upholding a notice of intent to levy with respect to unpaid federal income tax liability you've got to show a mistake on the part of the Service. In Carol Rae Foulds (T.C. Memo. 2025-111) the taxpayer argued the notices of deficiency were not properly mailed. The Court noted discrepancies in the IRS proof of mailing (USPS Form 3877), but that nonetheless the notices were properly mailed. The Court also noted the Office of Appeals (1) properly verified that the requirements of applicable law or administrative procedure were met, (2) considered any relevant issues the taxpayer raised, and (3) weighed "whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the taxpayer that any collection action be no more intrusive than necessary." The Court found no abuse of discretion by the IRS.The IRS announced (NMI-2026-01) tax relief for individuals and businesses affected by Super Typhoon Sinlaku in the Commonwealth of the Northern Mariana Islands that began on April 11, 2026. These taxpayers now have until Nov. 2, 2026, to file various federal individual and business tax returns and make tax payments. Following the disaster declaration issued by the Federal Emergency Management Agency (FEMA), individuals and households affected by Super Typhoon Sinlaku that reside or have a business in the Northern Islands, Rota, Saipan and Tinian qualify for tax relief. Click on the link above for more information.
Tip of the Day
Collectibles . . . That baseball card collection from the 80's may not be worth much, but many people have other items they've collected over the years. And they may be very valuable. That ugly lamp from your grandmother, the crock your mother picked up 40 years ago, etc. You may not have collected paintings but just inherited one from relatives. Even mundane items such as vacuum tubes from the 50's and 60's which went for $1.50 then could be worth $40 today. Not a windfall, but your father saved them and has over 80. Check the internet to see what the items could be worth and make sure your heirs know there may be value there. Your son or daughter might throw out $4,000 worth of tubes because they were taking up space. Another point. Homeowner's insurance may not cover that painting, stamp collection, etc. Check to see if the items are covered and, if not, discuss your options with your agent.
May 4, 2026
News
The IRS has issued temporary regulations and the accompanying notice of proposed rulemaking on a new method for recovering federal excise tax paid on dyed fuel established under the One, Big, Beautiful Bill. These temporary regulations provide the procedures by which a taxpayer may recover federal excise taxes paid on clear diesel fuel or kerosene if that taxpayer later removed the fuel from a terminal as dyed fuel for nontaxable use. They also limit the claimants to taxpayers that paid to the IRS the original tax on the dyed fuel to which the claim relates. The temporary regulations provide guidance to determine eligibility and rules for filing a claim for a dyed fuel refund. Taxpayers who paid tax on diesel fuel or kerosene and later removed the fuel from a terminal as eligible dyed fuel on or after Dec. 31, 2025, can submit a claim for refund, provided the requirements are met. For more information go to IR-2026-59 for a synopsis of the rules or click on the link above for the temporary regulations.Tip of the Day
Money laudering rules . . . The government has found that some banks, credit unions, etc. have been lax in their requirement to tighten up anti-money laundering activities. And, when your bank gets pressured expect to be pressured if you deal in cash or other activities that suggest laundering. The IRS is also advising taxpayers of the requirement to report cash received from customers in amounts of more than $10,000. You can get more information in IRS Publication 1544, Reporting Cash Payments of Over $10,000. Keep in mind there are stiff penalties for failing to report receipts of cash.
May 1, 2026
News
In Crystal R. Vettel (T.C. Memo. 2025-110) the taxpayer and her spouse failed to report both the foreign bank accounts and the income from them. They entered into and then withdrew from the Offshore Voluntary Disclosure Program (OVDP). The IRS audited their returns and assessed additional taxes as well as fraud and accuracy-related penalties. The taxpayers filed a petition with the Tax Court and a stipulated decisions was reached. Subsequently, the taxpayer-wife sought innocent spouse relief, the current case. The Court noted that when a court of competent jurisdiction enters a final judgment on the merits of a cause of action, the doctrine of res judicata, if properly and timely invoked, binds the parties to the judgment as to all matters that were or could have been litigated and decided in the proceedings. Common law principles of res judicata generally bar a party to a prior proceeding for the same tax year from seeking innocent spouse relief regardless of whether the party raised the claim in the prior proceeding. However, because res judicata is an affirmative defense that must be pleaded in the answer, the IRS bears the burden of proving that petitioners' claim is precluded under the doctrine of res judicata. Under Section 6015(g)(2), to escape the effect of res judicata from prior litigation, the requesting spouse must show (1) that her innocent spouse claim "was not an issue" in the prior proceeding, and (2) that she did not "participate meaningfully" in the prior proceeding. The Court, after reviewing the taxpayer's participation in arriving at the settlement in the prior case, did participate meaningfully in the settlement, noting the Court has previously held that Section 6015(g)(2) "contemplates that participation through counsel in a prior proceeding can constitute meaningful participation that triggers res judicata and bars a subsequent innocent spouse case."Tip of the Day
Found a mistake on your return? . . . If you discover an error after filing a federal tax return may need to file an amended return. There are some instances where an amended return isn’t required such as when the IRS corrects errors during processing or requests missing forms or schedules separately. To claim a refund, an amended return must generally be filed within:
If the original return was filed early, the three-year period begins from the April tax deadline. Special rules apply when there are net operating losses, foreign tax credits, bad debts or other issues. Additionally, taxpayers in disaster relief situations, combat zone service, have bad debts, foreign tax credits, or loss or credit carrybacks, may have more time to file an amended return. For more information and links to other resources, go to When and How to Amend a Tax Return.
April 30, 2026
News
Unreported income is almost sure to trigger the accuracy-related penalty and, if egregious enough could subject the taxpayer to a civil fraud penalty. In Andrew Mitchell Berry and Sara Berry (T.C. Memo. 2025-109) the IRS claimed the husband was a 50% shareholder in an S corporation that had unreported income including unreported receipts and diverted receipts that were paid to a third party. Claimed loan repayments were not substantiated. The Court sustained the accuracy-related penalty. The Court also noted that the Standing Pretrial Order issued to the parties five months before trial set forth an important requirement relevant to the evidentiary ruling the Court must make: that all documents expected to be used at trial, other than those included in a stipulation of facts agreed to by the parties, be exchanged with the opposing party at least 14 days before the date set for trial. The taxpayers failed to comply. One possible sanction for violating the 14-day rule is the exclusion of late produced documents, particularly if it prejudices the other party. Here the documents were produced the night before and the morning of the trial. For this, and other reasons, the Court decided to exclude the evidence.Tip of the Day
How deep will the IRS go? . . . You never know. But if you're willing to go to Court, you better make sure you've got all your bases covered. In most cases the IRS will examine books and records and the underlying documentation such as receipts, diaries, log books, bank statements, and employment records. But they certainly can go further including text messages, emails, leases, contracts, etc., including draft versions. Be ready to dig up minutes of company meetings, stock records or other ownership documents, etc. Got a pension plan (including SIMPLE or SEP) make sure those docs are up-to-date as well as any support for health plans, education assistance, dependent care, etc.
April 29, 2026
News
Personal theft losses are no longer deductible but may be used to offset theft gains. That's a result of the 2017 tax law change. Business theft losses are deductible. In Craig K. Potts and Kristen H. Potts (T.C. Memo. 2025-108) in 2008 the taxpayers entered into an agreement to purchase shares in a slot machine venture in the Caribbean. The memorandum of understanding (MOU) required a down payment toward the purchase price of the shares but did not otherwise specify how the purchase price would be used by the sellers. Subsequently the taxpayers purchased shares in an existing enterprise and the funds were supposed to be contributed to another entity. To determine if a theft existed the Court looked to the definition of theft in the place where it would have occurred, the Turks and Caicos islands. The Court found that the taxpayers failed to prove theft under those laws. Second, the Court noted that "A theft loss deduction may be claimed only by the taxpayer who was the owner of the stolen property when it was criminally appropriated." The theft, if any, was incurred by the enterprise, not by the taxpayers. The taxpayers got what they paid, the shares. If a theft occurred, the enterprise was the injured party.Tip of the Day
Contemporaneous records . . . The IRS and the courts give more value to diary entries, etc. made near the time of the action. For example, a car log entry regular made at the time of the trip has more value than one made at the end of the week and much more value than one made at the end of the month. The IRS and the courts can usually spot a log you made the night before you saw the IRS agent. But the IRS and courts also look at other aspects such as do you regularly keep such records. A single entry in your diary for a six-month period showing the detail of a certain transaction carries less weight than if you made regular entries. Finally, sometimes a well-kept diary or log can substitute for missing receipts. But there are some areas of tax law where strict recordkeeping rules won't allow that, e.g., in the case of travel and entertainment receipts, charitable contributions, etc. The law requires a receipt and the neither the IRS nor the courts can waive that rule.
April 28, 2026
News
The IRS has announced (IR-2026-58) a new, streamlined way for taxpayers to extend the period of time for the IRS and the IRS Independent Office of Appeals to review a taxpayer's response to a disallowance of an Employee Retention Credit (ERC) claim to avoid refund litigation. When an ERC claim is disallowed by the IRS, taxpayers receive a Letter 105-C or 106-C. These affected taxpayers generally have two years from the date of that letter to resolve their claim administratively or to file a refund suit in Federal court if they disagree with the IRS's decision. Taxpayers may protest the IRS's disallowance with the IRS Independent Office of Appeals, but that does not extend this statutory two-year deadline. After the two-year period ends, the IRS cannot issue a refund, even if it later decides in the taxpayer's favor after reviewing the disallowance. The deadline varies depending on the date of the original 105-C or 106-C letter. The IRS is aware that some taxpayers are approaching the end of this two-year period and is providing a new way for taxpayers to request more time to resolve their claims administratively or to file suit through the filing of Form 907, Agreement to Extend the Time to Bring Suit PDF, if they meet both of the following conditions:
Click on the link above for more details and links to other resources.
Tip of the Day
Nontaxable receipts . . . If you have a business and/or rental properties and you're audited by the IRS you may have to show that nontaxable income was truly nontaxable. For example, gifts from relatives, inheritances, transfers from other bank accounts, capitable contributions in the case of corporations and loan proceeds. Loan proceeds can be particularly tricky. In the case of private loans (i.e., not from a bank) you may have to show a true loan existed.
April 27, 2026
News
The IRS issued a Whistleblower Alert highlighting an area of concern about misuse, diversion or fraudulent use of federal funds by tax-exempt organizations, individuals and businesses. The IRS urges the public to provide information. The IRS Whistleblower Program offers monetary awards of up to 30% of proceeds collected based on whistleblower-provided information. The IRS encourages whistleblowers to report specific, timely and credible information about noncompliance with tax laws or other laws the IRS is authorized to administer. Whistleblowers should report what they know via Form 211, Application for Award for Original Information, at IRS.gov/SubmitATip. (Be advised that awards are far from automatic. Besides getting proceeds from the whistleblower's information, there are other requirements.)The Taxpayer Advocacy Panel released its 2025 Annual Report highlighting accomplishments and ongoing efforts to strengthen IRS delivery, improve communications with taxpayers, reduce taxpayer burden, and support continued modernization of tax administration. Among the recommendations were enhancing online tools and digital services, streamline IRS correspondence to reduce processing delays and minimize call volume, improve the clarity of tax forms and publications, and reduce wait times on toll-free telephgone lines by expanding secure chatbot and live chat capabilities.
Tip of the Day
Don't bankrupt your vendors . . . Cash flow manangement suggests delaying payment to suppliers as long as possible (and collecting from your customers as quickly as possible) but that can backfire on small suppliers if you're a substantial part of their business. They could end up going under leaving you with more limited options. And even if the supplier isn't strapped, they could decide your business isn't worth it and decide not to deal with you. Worse, you could get a reputation in the industry.
April 24, 2026
News
Just like individuals, corporations can get some relief with collection alternatives. In Avalon Home Health, Inc. (T.C. Memo. 2025-107) the taxpayer request and collection due process (CDP) hearing and sought an installment agreement related to an unpaid income tax liabillity. The case went through four settlement officers (SO) over a period of three years resulting in the denial of the taxpayer's request for an installment agreement. The Court noted errors and recordkeeping issues on the part of the IRS saying "The IRS's actions with respect to petitioner's CDP request were far from a model of good government, and the IRS's Motion's attempts to gloss over them were unavailing." The Court remanded the case to Appeals for consideration of petitioner's request for an installment agreement.Tip of the Day
Get a windfall? . . . Whether it's a tax refund or an inheritance from uncle Fred, don't run down to the local car dealer unless you've got your financial house in order. Many people are behind on credit cards, have a big mortgage, little saved for retirement, etc. If that's your situation, consider carefully before allocating the funds. Paying off credit cards should be your first move. After that consider your options. If you're having trouble making your monthly mortgage, you might try refinancing and putting more money down resulting in a lower momthly payment. If you're younger you might think putting money toward retirement isn't important, but it should have the same ranking as other demands for the funds.
April 23, 2026
News
In order to qualify as an organization from federal income tax in Sec. 501(c)(3) the corporation must be organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), . . . no part of the net earnings of which inures to the benefit of any private shareholder or individual. In Coaches 101 A NJ Nonprofit (T.C. Memo. 2025-106) the IRS found that the organizatiop's activities involve a substantial amount of commercial activities including the sale of merchandise (sneakers, books, etc [sic]), marketing services (including advertising services) with media production, stock investing, and insurance services. In addition the organization appears to be engaged in inurement and/or private benefit with its founder in that it reported student loan cancellation income on its return, it claims to hold a license, service mark and perhaps other intellectual property rights of the founder in relation to the founder's Mad Comedian and Fan endeavors among others, and its founder intends to report any royalty income on its return. The Court noted that in order to be operated exclusively for one or more exempt purposes only if it engages primarily in activities that accomplish the exempt purpose. An organization will not be so regarded if more than an insubstantial part of its activities is not in furtherance of an exempt purpose. The Court found the petitioner failed to refute the IRS claim that the organization had substantial commercial activities and the shareholder received a direct personal benefit.Tip of the Day
Checklists . . . They can be lifesavers, or just handy. Activities you do infrequently--a semiannual report--definitely require one. Unless you're prompted for the answers it's too easy to miss a step, forget a procedure, etc. But even activities you do every day in your business can benefit. The checklist makes it easy to train another employee to do the job, on a temporary or permanent basis. The checklist doesn't have to be detailed; it's intended as a reminder of the steps and critical information such as the name of a file, tool size, etc. Don't think a checklist is important? Every pilot uses one for startup, takeoff, landing, and emergency, even if he flies that same plane five days a week for years.
April 22, 2026
News
The IRS updated frequently asked questions in Fact Sheet 2026-10 related to educational assistance programs. An employee's gross income does not include educational assistance benefits if the benefits are provided under a section 127 educational assistance program and the amounts do not exceed $5,250. Under the One, Big, Beautiful Bill, the amount that may be excluded from gross income is adjusted for increases in the cost of living for taxable years after 2026. For calendar year 2025 and 2026, taxpayers receiving the benefits won't have to pay any tax on the first $5,250 of those benefits and the employer should not include those benefits in employee wages, tips, and other compensation shown in box 1 of Form W-2. These frequently asked questions contain revised information about educational assistance programs generally, including how the rules apply to certain qualified education loans. They also provide updates related to the One, Big, Beautiful Bill amendments and provide a modified sample plan. These questions supersede those in FS-2024-22.The IRS has updated(TN-2026-01) tax relief for individuals and businesses in Tennessee affected by Winter Storm Fern that began on Jan. 22, 2026. The relief now includes individuals and businesses in all 95 counties in the state. Clisk on the link above for more information.
Tip of the Day
Timeshare properties . . . They sound like a good deal until you're in them. Costs rise, additional expenses pop up unexpectedly and, the worst part--you can't get out. One firm advertised that it could get buyers out of timeshares and falsely claimed to be associated with timeshare companies; falsely telling consumers that they couldn’t exit a timeshare without paying their exorbitant fees; failing to provide promised refunds; and forcing consumers to sign contracts that they were told they couldn’t cancel. The FTC investigated and won a judgment against the company of $95 million in restitution and $45 million in civil penalty. Go to Court Orders Operator of Timeshare Exit Scheme. . . for more information.
April 21, 2026
News
The IRS has issued final regulations (T.D. 10044) effective June 12, 2026 identifying occupations that customarily and regularly received tips on or before December 31, 2024, and provide a definition of qualified tips for purposes of the income tax deduction for qualified tips. These regulations affect individuals who receive tips as part of their occupation. Section 224(d)(1) defines “qualified tips” as cash tips received by an individual in an occupation that customarily and regularly received tips on or before December 31, 2024, as provided by the Secretary. Section 224(d)(2) further requires that qualified tips not include any amount received by an individual unless the amount:Click on the link above for the full text of the regulations and the list of qualifying tipped occupations.
Tip of the Day
Remove old assets from books . . . It's not unusual for businesses to keep assets that have been abandoned, lost, or scrapped on the books. If they were fully depreciated there's no financial or tax impact, but you've got an asset that's offset by accumulated depreciation, inflating both sides of the bookkeeping equation. If the asset wasn't fully depreciated you may be able to tax a deduction for the remaining value. This is also a good time to take an inventory of your assets. Are they still there or have they "walked" off?
April 20, 2026
News
In Continental Grand Limited Partnership, Centurysubsidiary Corporation, Tax Matters Partner (166 T.C. No. 3) FC was a German holding company that wholly owned FS, also a German entity. In March 2001, FC issued to FS a promissory note with a face value of $610 million. USC, a U.S. company and FC's ultimate parent, guaranteed the note. FS contributed the note to PS, a partnership subject to the audit and litigation procedures of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA). In April 2002, FS elected to be disregarded as an entity separate from FC, effective March 2001, a few days before the date FC issued its note to FS. In March 2009, FC paid more than $1 billion to PS in satisfaction of its note and deferred interest. FS subsequently withdrew from PS and received a distribution of more than $1 billion. The IRS examined PS's 2009 return and issued a Notice of Final Partnership Administrative Adjustment, determining (among other things) that FC's basis in its interest in PS was initially zero and that PS's basis in the contributed promissory note was initially zero. P, the tax matters partner of PS, challenged the IRS's determinations. The IRS filed a Motion for Partial Summary Judgment, asking the Court to find that (1) FC's adjusted basis in the note at the time of the contribution was zero, (2) FC's basis in its interest in PS following the contribution was zero, and (3) PS's basis in the note following the contribution was zero. The Tax Court held that FS's election to be disregarded as an entity separate from FC caused FC's issuance of the note to FS to be disregarded and FS's contribution of the note to PS to be treated as FC's contribution of its own note to PS. In addition, the Court held that FC's adjusted basis in its own note when it contributed the note to PS was zero, FC's basis in its interest in PS immediately following the contribution was zero and PS's basis in the note immediately following the contribution was zero.Tip of the Day
2026 tax season statistics . . . Refunds were up, but not by as much as predicted or some have reported. The IRS claims an 11% increase to $3,460. Some 6 million returns claimed the deduction for tips, with an average deduction of over $7,100; 25 million claimed the deduction for overtime, with an average deduction of over $3,100; 30 million claimed the senior deduction with an average deduction of over $7,500; and over 1 million claimed the deduction for car loan interest, with an average deduction of over $1,800.
April 17, 2026
News
The IRS announced (IR-2026-53) a new online tool to help taxpayers understand and resolve tax debt. The Tax Debt Help tool provides individuals and businesses with a simple, accessible way to explore payment options and identify next steps based on their situation. The tool is part of the IRS's broader effort to expand digital services and make it easier for taxpayers to meet their obligations. The Tax Debt Help tool walks users through a series of straightforward questions about their financial situation and tax debt. Based on taxpayer responses, the tool will guide them to potential payment and resolution options available through the IRS. These options may include payment plans, temporary delay of collections, or an offer in compromise for those who qualify. By presenting options in a clear, structured format, the tool helps taxpayers make informed decisions about how to resolve their tax debt. To protect taxpayer privacy, the tool does not require taxpayers to enter personally identifiable information. Taxpayers can explore available options without providing details such as Social Security numbers, names, or addresses.Tip of the Day
Politics and business . . . They frequently don't mix well. You've done well in business and you've got a great reputation in town so you're thinking of running for mayor, or councilman, or . . . Years ago that may have been a good move, but in today's politics you could damage your business and be attacked for your politics. It's likely to be a no-win situation.
April 16, 2026
News
The IRS announced (MS-2026-01) tax relief for individuals and businesses in Mississippi affected by the severe winter storm that began on Jan. 23, 2026. These taxpayers now have until June 8, 2026, to file various federal individual and business tax returns and make tax payments. Following the disaster declaration issued by FEMA, individuals and households that reside or have a business in Mississippi (all 82 counties) qualify for tax relief. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, for certain deadlines falling on or after Jan. 23, 2026, and on or before June 8, 2026, taxpayers are granted additional time to file. As a result, affected individuals and businesses will have until June 8, 2026, to file returns and pay any taxes that were originally due during this period. The June 8, 2026, deadline applies to individual income tax returns and payments normally due on or after Jan. 23, 2026. Penalties on payroll and excise tax deposits due on or after Jan. 23, 2026, and before Feb. 9, 2026, will be abated as long as the tax deposits are made by Feb. 9, 2026. The June 8, 2026, deadline also applies to affected quarterly payroll and certain excise tax returns normally due on Feb. 2, 2026, and April 30, 2026.
April 15, 2026
News
The IRS announced (IR-2026-50) special Saturday hours at select Taxpayer Assistance Centers across the country to provide in-person help for taxpayers. The upcoming Saturday hours will be April 11 and April 25 from 9 a.m. to 4 p.m. During these special Saturday hours, TACs in dozens of states, the District of Columbia, and Puerto Rico will be open to assist taxpayers with a wide range of services. The IRS encourages taxpayers to visit IRS.gov/SaturdayHours to review participating locations and available services before traveling to an office. The IRS will continue to offer these special events through June. Taxpayers can receive help with most services routinely offered at a TAC. Cash payments, however, are not accepted. Click on the link above for more information and a link to contact your local office.Tip of the Day
Estimates due . . . Don't forget that first quarter estimated taxes are due today (April 15) for individuals on the Federal level and for most states.
April 14, 2026
News
The IRS announced (HI-2026-01) tax relief for individuals and businesses in the State of Hawaii affected by flooding and mudslides due to severe storms that began on March 10, 2026. These taxpayers now have until July 8, 2026, to file various federal individual and business tax returns and make tax payments. Following the disaster declaration issued by the State of Hawaii, individuals and households that reside or have business in Hawaii, Honolulu, Kauai and Maui counties qualify for tax relief. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, for certain deadlines falling on or after March 10, 2026, and on or before July 8, 2026, taxpayers are granted additional time to file. As a result, affected individuals and businesses will have until July 8, 2026, to file returns and pay any taxes that were originally due during this period. The July 8, 2026, deadline applies to individual income tax returns and payments normally due on or after March 10, 2026. Penalties on payroll and excise tax deposits due on or after March 10, 2026, and before March 25, 2026, will be abated as long as the tax deposits are made by March 25, 2026. The July 8, 2026, deadline also applies to affected quarterly payroll and certain excise tax returns normally due on April 30, 2026.Tip of the Day
Cheating on your taxes? . . . For many people it's probably come to mind in the light of the IRS staffing cuts. And there's no question there are less agents to audit returns--and the number could decline further. But the IRS has vast quantities of data and has ways to minimze manual labor on audits. And that's without AI which could eventually significantly reduce manual labor. You should also keep in mind that most audits aren't initiated until more a year after filing. If you're thinking of getting into a "tax deal" get advice from trusted a CPA, attorney, or enrolled agent. Do not rely on what a promoter is pitching.
April 13, 2026
News
The IRS has issued proposed regulations (REG-114499-25) that would provide rules and definitions related to the new excise tax imposed on certain remittance transfers, also referred to as the remittance transfer tax, under the One, Big, Beautiful Bill. Beginning Jan. 1, 2026, a 1% remittance transfer tax applies to remittances sent from the United States to recipients in foreign countries when the sender provides cash, a money order, a cashier's check, or other similar physical instrument to the remittance transfer provider. The sender is liable for the tax, and remittance transfer providers are required to collect the remittance transfer tax from certain senders, make semimonthly deposits, and file quarterly returns with the IRS. If the remittance transfer provider does not collect the tax from the sender, the tax becomes a liability of the remittance transfer provider. The proposed regulations clarify the application of the remittance transfer tax, including:
IR-2026-48 provides additional information and links to other resources.
Tip of the Day
Postmark date . . . The rule still stands. A federal tax return or payment is considered filed based on the postmark date. Most states and local governments follow the same rule. But the post office is no longer postmarking material as it comes into the facility. If you're mailing your return and/or payment to be sure it's postmarked by the due date you should go to the desk and have the clerk hand cancel the envelope or send it certified for proof of mailing. Be prepared. It could be a busy day.
April 10, 2026
News
Taxpayers generally have a choice of accounting method, but the method must clearly reflect income. In Armond Garibyan, et al. (T.C. Memo. 2025-105) the taxpayers adopted the accrual method of accounting for the company's books. Their problem was that the corporate ledger rarely showed income and expenses as they accrued during the year. The IRS audited the company's and then the taxpayers' individual returns. They examined the taxpayers' bank records for the 2015 and 2016 tax years and concluded that Lakeview had underreported its gross income by more than $200,000; and that the taxpayer underreported his income for both years too. The IRS found questionable journal entries, uncategorized deductions, irregularieties in how entries were booked to the accounts receivable and accounts payable among other issues. As a result the IRS used the bank deposits method to compute income. The Court however found that some deposits were nontaxable but sustained the IRS's disallowance of some expenses for failure to substantiate them.Tip of the Day
Mistake on bank account in return? . . . If you made a mistake on the bank account indicated on your return for a refund, There are options. Tax professionals and their clients do not have to wait to receive a CP53E notice to act. They can check the Where’s My Refund? tool for next steps. If this situation applies to them, they can use IRS Individual Online Account to resolve the issue quickly by providing accurate banking information or the reason they cannot. Once updated, the IRS will issue the refund, usually within seven days. For security purposes, IRS employees cannot update bank account information over the phone or in person.
April 9, 2026
News
Notice 2026-25 provides adjustments to the limitation on housing expenses for purposes of Section 911 for specific locations for 2026. These adjustments are based on geographic differences in housing costs relative to housing costs in the United States. The term "housing cost amount" is generally the total of the housing expenses for the taxable year minus a base housing amount. For this purpose, the base housing amount for the taxable year is limited to an amount that is tied to the maximum foreign earned income exclusion amount of the qualified individual, which is $132,900 for 2026. Specifically, the base housing amount is 16 percent of the maximum foreign earned income exclusion amount (computed on a daily basis), multiplied by the number of days in the applicable period that fall within the taxable year. Assuming that the entire taxable year of a qualified individual is within the applicable period, the base housing amount for 2026 is $21,264 ($132,900 x .16).Tip of the Day
Missing tax documents? . . . If you are it's now easier than ever to get a statement from a bank or broker online. If you're missing a W-2 you can ask for a replacement from your employer or may be able to access it on line from the payroll service. If you're missing a Form 1099-MISC or 1099-NEC contact the payer. If the W2 or 1099 is incorrect, contact the payer. While not having the W-2 or 1099 isn't an excuse for not filing on time, if you're up against the wire the first step is to request an extension.
April 8, 2026
News
The IRS announced (IR-2026-46) a major expansion of its Business Tax Account, making the online self-service platform available to partnerships, federal, state, and local governments, Indian tribal governments, and tax-exempt organizations. The newly eligible entities join sole proprietors, S corporations, and C corporations that are already able to access the platform. The expansion supports the agency’s ongoing service improvement effort by broadening digital access to more segments of the business community. The Business Tax Account is a secure, centralized platform that allows eligible users to manage their federal tax responsibilities online. Through BTA, users and designated officials can:
April 7, 2026
News
The IRS announced (TN-2026-01) tax relief for individuals and businesses in Tennessee affected by Winter Storm Fern that began on Jan. 22, 2026. These taxpayers now have until May 22, 2026, to file various federal individual and business tax returns and make tax payments. Following the disaster declaration issued by the State of Tennessee, individuals and households that reside or have a business in Cheatham, Chester, Clay, Davidson, Decatur, Dickson, Hardeman, Hardin, Henderson, Hickman, Lawrence, Lewis, Macon, Maury, McNairy, Perry, Robertson, Rutherford, Summer, Trousdale, Wayne, Williamson and Wilson counties qualify for tax relief. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, for certain deadlines falling on or after Jan. 22, 2026, and on or before May 22, 2026, taxpayers are granted additional time to file. As a result, affected individuals and businesses will have until May 22, 2026, to file returns and pay any taxes that were originally due during this period. The May 22, 2026, deadline applies to individual income tax returns and payments normally due on or after Jan. 22, 2026. Penalties on payroll and excise tax deposits due on or after Jan. 22, 2026, and before Feb. 6, 2026, will be abated as long as the tax deposits are made by Feb. 6, 2026.Tip of the Day
LProperty contributions . . . Don't forget the rules on property contributions. Contributions of more than $500 require Form 8283 and information about the property and the charity. Special rules apply to contributions of autos. Contributions of similar property (e.g. all types of clothing) of more than $5,000 require an appraisal and additional documentation.
April 6, 2026
News
The IRS warns taxpayers annually about new and evolving scams, fraud, and misleading schemes designed to steal taxpayers' money and personal information. With recent provisions under the One, Big, Beautiful Bill changing credits, deductions, and eligibility rules, some scammers may try to trick taxpayers by making false promises about eligibility for new or expanded tax credits and deductions. It's always best to be cautious with your financial data, especially when using tax deduction calculators and software online. Use only official, trusted sources for tax calculations and information. Don't reply, click on links, or open suspicious messages. For more information go to Fact Sheet FS-2026-09.
April 3, 2026
News
The IRS can reject a collection alternative for an unpaid liability if you don't provide the requested information. In Horizon Health Services, Inc. (T.C. Memo. 2025-104) the IRs sent a notice of filing of the NFTL advising the taxpayer of its rights to a CDP hearing. The company requested a CDP hearing seeking a collection alternative, such as an installment agreement or offer-in-compromise (OIC), because of financial hardship and inability to pay. The Appeals Officer (AO) sent a letter scheduling the hearing and requested certain financial information to aid in considering a collection alternative. The letter also asked the taxpayer for a signed income tax return for 2021 and a signed unemployment tax return for 2022, which were delinquent. The taxpayer did not produce the requested information or returns nor did it do so by an extended due date. The IRS rejected the taxpayer's offer-in-compromise because its returns remained unfiled. The Court held there was no abuse of discretion by the IRS in sustaining the NFTL filing and rejecting the taxpayer's offer in compromise.
Tip of the Day
2026 tax estimate . . . Now is a good time to take a look where you stand on your 2026 taxes. Most tax programs have a 2026 projection feature. If you've got a business you'll probably have to sit down with your tax advisor. But if you don't, he or she should be able to give you a rough idea fairly quickly. If you're doing your own return you can create estimated tax payments based on your liability for 2025. The software will also allow you to set up automatic withdrawals.
April 2, 2026
News
Notice 2026-24 provides a waiver of the addition to tax under Section 6654 for underpayment of estimated income tax by qualifying farmers and fishermen described in the notice. Under the notice, the addition to tax is waived for such farmers and fishermen who, by April 15, 2026, file a calendar-year 2025 federal income tax return and pay in full any tax reported as due on the return. The IRS understands that, for the calendar-year 2025 taxable year, some qualifying farmers and fishermen may have had difficulty preparing and electronically filing complete federal income tax returns that include Form 8995, Qualified Business Income Deduction Simplified Computation. The IRS corrected the 2025 Instructions for Form 8995 on January 27, 2026, including the line 11 computation of taxable income before the qualified business income deduction, and some taxpayers and preparers reported that they could not complete returns until February 23, 2026, when updated software became available.
Tip of the Day
Check gross proceeds reported . . . The IRS is getting far more information from 1099s than in even the recent past, but not all reports they receive can be matched to a taxpayer's return. However, make a mistake entering a W-2 or 1099-R or miss a 1099-INT or DIV and you're almost sure to get a letter. In many cases the IRS will make the correction and bill you in the same notice. Another area where matches are made is on 1099-B, Proceeds from Brokerage and Barter Exchange Transactions. You should make sure the gross proceeds shown on the statement match what you're reporting on your Schedule D. More than one statement? Make sure they all add up to what you're reporting. You should also double check the basis reported by the brokerage firm in the "covered" category (where basis is reported to the IRS) also matches.
April 1, 2026
News
In Barrett Business Services, Inc. (166 T.C. No. 7) the petitioner was a professional employer organization (PEO). Its clients (worksite employers) hire workers (worksite employees) who provide services for and at the direction of the worksite employer. The petitioner handles payroll and employment tax reporting on behalf of its clients. The petitioner claimed the Work Opportunity Tax Credit (WOTC) and the Empowerment Zone Employment Credit (EZEC) for qualifying worksite employees. The IRS disallowed the credits, determining that only a common law employer is eligible for those credits. The petitioner claimed it is eligible for those credits as either a statutory employer or as an agent of the common law employer. The Tax Court held that ommon law employers are eligible for WOTC; statutory employers and agents of common-law employers are not and that common law employers are eligible for the EZEC; statutory employers and agents of common law employers are not.
Tip of the Day
Potential tax legislation . . . There are several tax bills with three provisions which could benefit individuals. The first would exclude damage awards (but not including punitive damages) received on account of sexual acts or contacts. The second would allow a deduction for qualified disaster losses in excess of $500 instead of the current 10% floor. Finally, a provision would extend the definition of a educator eligible to deduct educator expenses to include early childhood educators.
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