During and after the COVID pandemic, the employee retention credit (ERC) became a massive source of new business for many accountants and other tax professionals. But as has been widely reported for years, the IRS often pushed back on aggressive and downright bogus claims. There were also plenty of good faith interpretive questions, where taxpayers and their advisers believed they qualified for the credit but where the IRS said otherwise. Some claims, though, were beyond the pale, and even have become criminal tax cases. Can a tax audit lead to serious criminal charges? In some cases yes. A case is…

The capital gains tax is destructive. By lowering the rewards of successful risk-taking—essential to innovation and a higher standard of living—the cap gains tax needlessly hobbles progress. It also hurts people’s retirement incomes. Equity prices would be higher with a lower rate or, even better, without it altogether. This is why President Trump and his tax-writing team should include a sizable reduction in the capital gains levy in the bill they’re cobbling together with various members of Congress. Such a cut would not only help the economy but also instantly raise more revenue for Uncle Sam. This should appeal to…

On his first day in office, President Donald Trump tackled several action items, including some that could have tax implications. While those focused on federal employees (including a hiring freeze and a return-to-office requirement) attracted the most attention because of their potential impact on the IRS workforce and the upcoming tax season, directives focused on global tax and trade policy are just as significant. The U.S. Will Back Out Of Global Tax Deal A presidential memorandum directed the Secretary of the Treasury, the U.S. Trade Representative, and the Permanent Representative of the U.S. to the Organisation for Economic Co-operation and…

Tax returns are annual, and getting them filed also means starting the clock ticking for how long the IRS has to audit you. But when might you be in the clear? Your audit exposure is at least three years from when you file your return, but you might be a risk for years more. In fact, the time periods can be downright frightening in some cases. Tax lawyers and accountants are used to monitoring the duration of their clients’ audit exposure, and so should you. In most cases, that will be either three years or six years. But in some…

On January 20, 2025, Donald Trump was inaugurated as the 47th President of the United States, marking the beginning of his second term in office. As with most all incoming presidents, the first day included a flurry of executive orders and announcements. The author of this article selfishly was hoping for some sort of guidance or commentary on the forthcoming sunset of the Tax Cuts & Jobs Act (TCJA) on January 1, 2026, knowing darn well that addressing such issue will need the assistance of Congress, but unfortunately there was no such luck. However, President Trump’s first day in office…

New Jersey’s proposed elimination of the 200-transaction threshold for economic nexus highlights a growing positive trend among states to simplify sales and use tax compliance and close revenue loopholes. Introduced in December of last year, the bill raises an important question: why haven’t more states abandoned transaction thresholds—and should 2025 be the year we see the end of this outdated mechanism, nationwide? Why Transaction Thresholds Should Go The 200-transaction threshold, gleaned from the Supreme Court’s decision in South Dakota v. Wayfair, was a well-intentioned attempt to ensure out-of-state sellers contributed their fair share to the states from which they enjoy…

The victims of the wildfires in the Los Angeles have many issues to address, and taxes may be far down the list. Fortunately, both the IRS and the California FTB granted extensions of time to fire victims, and other relief. But could fire victims still have to pay any taxes on money they collect, even possibly on payments from their insurance companies? Yes, it is possible. Amounts received following a wildfire are not automatically tax-free, although there are mechanisms that can make them effectively tax-free in many cases. Insurance Proceeds Some types of insurance payments are treated as tax-free by…

President Donald Trump signed dozens of executive actions on his first day in office, including some that could impact your taxes. Two executive orders focused on federal employees, including the imposition of a hiring freeze and a requirement that federal government employees return to the office. Both could have immediate and significant consequences on the IRS workforce. Return To In-Person Work Trump signed an executive order requiring federal employees to return to work “as soon as practicable” on a full-time basis. The federal government is the nation’s largest employer, with over two million civilian employees. According to a 2024 report…

In this episode of Tax Notes Talk, Lili Martin-Mashburn of Morris, Manning & Martin provides an update on where the Corporate Transparency Act stands in light of the recent litigation regarding its constitutionality. Tax Notes Talk is a podcast produced by Tax Notes. This transcript has been edited for clarity. David D. Stewart: Welcome to the podcast. I’m David Stewart, editor in chief of Tax Notes Today International. This week: on again, off again. While many of us in the tax world took some time off over the holidays, including myself, the courts handling the Corporate Transparency Act challenges were…

IRS Forms 1099 are critical to the agency’s information return matching program, that makes tax reporting—and sending out tax notices to collect additional taxes—ever more automated. The IRS relies on Forms 1099s because they easily allow the matching of data against tax returns. Generally, businesses must issue the forms to any payee (other than a corporation) who receives $600 or more during the year. And that’s just the basic threshold rule; there are many, many exceptions. That’s why you probably get a Form 1099 for every bank account you have, even if you earned only $10 of interest income. There…