Seventeen years after Congress enacted IRC Section 2801, the IRS (finally) released final regulations implementing the law on January 10, 2025. It’s been a long wait. The regulations clarify (to a certain extent) the tax implications for U.S. persons receiving certain gifts and bequests from former U.S. citizens and long-term resident green card holders. At its core, IRC Section 2801 imposes a transfer tax (currently at the rate of 40%) on the value of “covered gifts” and “covered bequests” received by U.S. persons (citizens or residents) from “covered expatriates.” Covered expatriates are individuals who meet certain criteria and who renounce…

The time of waiting and hoping is over for taxpayers looking to finance and develop hydrogen projects. Treasury and the IRS issued enough guidance on Inflation Reduction Act tax credits this month to rival the length of The Count of Monte Cristo. Readers who had to parse 379 pages of hydrogen rules — 306 of which are in the preamble — may be forgiven if they feel as badly done by as poor Edmond Dantès. But at least the government politely waited until January instead of ruining everyone’s holiday plans. The final regulations under section 45V are an improvement over…

In recent years, the IRS has taken a more defensive posture as it seeks to have federal courts validate its guidance. Indeed, many federal courts have overruled such guidance on procedural grounds, such as the agency’s failure to comply with the Administrative Procedure Act (APA). After the Supreme Court’s 2024 decision in Loper Bright, we can expect these types of challenges to continue on both substantive and procedural grounds. Unfortunately, Treasury and the IRS recently foreclosed these types of challenges before the IRS Independent Office of Appeals (IRS Appeals). Specifically, on January 15, 2025, they issued final regulations that would…

“I will commit that for this tax season … Direct File will be operative.” That was the word from Scott Bessent, President-elect Donald Trump’s nominee for Treasury Secretary, when asked about the program during his confirmation hearing. The controversial Direct File program allows eligible taxpayers to file taxes directly with the IRS online for free. The word “controversial” is a nod to the fact that while the IRS touts the program as beneficial to taxpayers and says the initial feedback was overwhelmingly positive, some Republicans in Congress aren’t happy with the program. (You can read what some taxpayers had to…

Should you rollover a spousal inherited IRA or just leave it? This is likely just one of the many decisions that has been dropped in your lap. You may also receive much well-meaning advice from friends and family that is not right for you. When a spouse passes away, navigating the complexities of your partner’s financial legacy can be challenging. For spouses who inherit an IRA, understanding the options available is essential to make the most of this inheritance and avoid costly mistakes. This guide breaks down spousal inherited IRAs, focusing on strategies to optimize these accounts. If you also…

IRS Commissioner Danny Werfel has announced that he is leaving the agency on January 20, 2025. The timing is something of a surprise, since it was expected that Werfel might remain through tax season. Late last year, President-elect Donald Trump announced he has tapped former Congressman Billy Long as IRS Commissioner, even though Werfel is serving a term that would normally run until late in 2027. Werfel said last week, when asked about his departure, that he was laser focused “on one thing and one thing only and that is getting ready for this filing season. That is my sole…

Overview Of The IRS Voluntary Disclosure Program The IRS Voluntary Disclosure Program serves as a means for taxpayers to correct previous errors or omissions related to their income reporting and tax filings. By participating in this program, individuals and businesses have the opportunity to come forward voluntarily to disclose unreported income, thereby addressing any non-compliance issues. The program is structured to encourage transparency and cooperation with the IRS, offering a way to mitigate potential penalties and legal actions that could arise from continued non-disclosure. Participants are required to provide comprehensive and accurate financial information for the period in question, ensuring…

The Biden administration’s decision to expand subsidies for hydrogen produced using fossil fuels with carbon capture alongside hydrogen from renewable sources undermines the intent of clean energy policies, risking environmental credibility and advancing greenwashing practices at a critical moment in the fight against climate change. Carbon capture is, at best, ineffective and, at worst, contributes to pollution. The revised rules, unveiled earlier this month, allow fossil fuel-derived hydrogen produced with offsetting carbon capture to qualify for the same tax incentives as hydrogen made from renewable energy sources like wind and solar. The intent is to accelerate the adoption of hydrogen…

The thousands of Californians who have lost their homes or businesses and the tens of thousands more who have been evacuated during the Los Angeles fires may be able to get some relief from the tax code and its guardian, the Internal Revenue Service. That help comes in the form of casualty loss deductions, more generous rules on tapping into retirement accounts and delayed deadlines for tax filings and payments. Of course, like just about everything related to taxes, it can get complicated. And the loss of personal records—or the fact that your tax pro, if you have one, may…

Wildfires in southern California have burned at least 47,000 acres in the Los Angeles area—the largest blaze, the Palisades Fire, has burned more than 23,000 acres. Thanks to dry and windy conditions, the fires are continuing to spread. At least 25 people are believed to have died in the fire as of Wednesday morning, and evacuation orders are in effect for 88,000 residents of Los Angeles (with about as many in evacuation warning zones, which means they may have to leave their homes at a moment’s notice). With so many people displaced—and first responders still battling blazes—many are asking what…