Helping injured vets; donation changes; states conforming to the TCJA; and other highlights from our favorite tax bloggers.
Blood from stones
- National Taxpayer Advocate (https://taxpayeradvocate.irs.gov/about/nta-blog): A look back on the 20th anniversary of the Low Income Taxpayer Clinics.
- TaxMama (http://taxmama.com): We all know that you cannot get IRS refunds if you file for them more than three years after the tax return was filed or was originally due. Who can, however, go back more than 25 years to get refunds approved? A look at the Combat-Injured Veterans Tax Fairness Act to help vets who received a lump sum disability check when they separated from service. “IRS withholding was taken from those checks — but the benefits should not have been taxable.”
- Rubin on Tax (http://rubinontax.floridatax.com): A look at some key modifications to the Tax Code regarding reporting and substantiation requirements for a donor to claim a charitable contribution. Note from the blogger: “More than once I have seen the IRS adopt a strict approach with taxpayers and have sought to disallow deductions for substantial contributions due to technical failures to comply with the rules.”
- Tax Vox (http://www.taxpolicycenter.org/taxvox): Congressional bigwigs are exploring some ideas for a proposed Reform 2.0; their framework as yet does not include an expansion of the Earned Income Tax Credit for workers without children at home. That’s a missed opportunity, as a recent analysis by the blogger shows that even a modest increase in the credit for these workers could substantially help reduce poverty.
- Tax Foundation (https://taxfoundation.org/blog): Stock buybacks are making headlines again, with a new report claiming the practice is “plundering a company’s resources at the cost of a company’s long-term wellbeing.” Yet the perception that the choice is between stock buybacks or investment is false and fails to see how companies have cash to engage in stock buybacks in the first place.
The penalty box
- Federal Tax Crimes (http://federaltaxcrimes.blogspot.com/): In Norman v. United States the court held Norman liable for the FBAR willful penalty. Perhaps more importantly, the court rejected the holding that the FBAR willful penalty is limited to $100,000, because the regulations had not been changed to reflect the statutory amendment increasing the maximum FBAR willful penalty. Translation: The statute trumps the regulation.
- Taxbuzz (https://www.taxbuzz.com/blog): National Taxpayer Advocate Nina Olson has reported that the IRS use of private debt collectors is not paying off. The real issue: How are you going to get repayment from taxpayers that truly have nothing to give? The NTA reviewed the returns of 4,100 taxpayers who made payments to the IRS after being contacted by a private contractor. Of those who made a payment, more than a quarter had incomes below $20,000.
- Don’t Mess With Taxes (http://dontmesswithtaxes.typepad.com/): Paul Manafort’s trial spotlights the IRS Criminal Investigation division as a law-enforcement agency. As such, its agents carry firearms. A problem, according to a recent TIGTA report, is CI’s documentation of its officer training.
- Mauled Again (http://mauledagain.blogspot.com/): A look at the recent changes in withholding and the GAO’s report that many Americans (and likely a few of your clients) are falling short as we near fall of this year.
- The Wandering Tax Pro (http://wanderingtaxpro.blogspot.com/): What to remind them about deducting expenses for a kid’s summer day camp.
- H&R Block (https://www.hrblock.com/tax-center/): What to tell them about S corp and partnership late-filing penalties.
- SageNext (https://www.thesagenext.com/blog): The Internet has allowed people to connect (sort of) as never before. What happens when our devices themselves start to connect?
- Avalara (https://www.avalara.com/us/en/blog.html): Beyond Wayfair, several significant state sales tax changes took effect on July 1. Note: “Several states had economic nexus laws in the wings, waiting for the green light before enforcing them.”
- Bloomberg BNA (https://www.bna.com/news/#!topic=tax&type=blogpost&page=1): Legislative sessions for most states have ended — and many capitals used their sessions to address this year’s biggest question of whether to conform to the 2017 federal tax act. A review of who did, is doing and plans to do what.
- Dinesen Tax Times (http://dinesentax.com/blog): In a potential lesson for residents/clients in other states, “Can an Iowan Claim a 529 Deduction for Contributions Into Another State’s 529 Plan?”