In the IRS IR-2024-262, the IRS estimated that there is a tax gap of around $696 billion for 2022. Even if the IRS mentioned in their communication that 85% of taxpayers are compliant, the 15% remaining is broken down in the following three areas (extracted directly from IRS communications): "... Non-filing, which means tax not
In the recent IR-2024-299 released at the end of November, the IRS indicated that the 1099-K threshold is delayed again. The 1099-K form is used by Third Party Settlement Organizations (TPSOs) like Venmo and similar cash apps and credit card processing vendors. The thresholds will be: 2024 - $5,000 2025 - $2,500 2026 - $600
Even the IRS is reminding us of the requirement to file the BOI (Beneficial Ownership Information), in their IR-2024-288 released around mid November 2024, the IRS shared information on this requirement and a free one hour seminar held by FinCen (Financial Crimes Enforcement Network) representatives. Why do we consider that even the IRS is urging
If you are a reader of our posts, you are aware that the IRS has increased significantly its funding (billions of dollars). As part of this inflow of money, the IRS has focused on two fundamental areas: 1) Customer services and 2) Enforcement. The IRS keeps publishing the data in an example of transparency and
Over the past twelve months, we’ve noticed a concerning rise in IRS deficiency notices (CP3219N) sent to taxpayers. In most cases, these letters result from discrepancies between filed tax returns and the IRS's records from third-party sources. When the IRS identifies a difference, they send a notice with the following options: File a Tax Return
You might have hear derogatory terms to refer to the IRS agents or to the entity in general, like "in my audit, I just threw them a bone to leave me away". However, this is nothing farther from the truth as in the recent years, the funding has been increased and the IRS employees has
Similar to the IRS focus on partnership that we shared in our last week post, the S Corporation is another higher scrutiny entity type for the IRS. Back in June 2024, the IRS Chief Counsel Margie Rollinson announced the creation of new Associate Office that would focus on partnerships, S Corporations, trusts and estates. She
In the 2023 National Taxpayer Advocate report to Congress, this organization lists a number of issues that the IRS should address as priorities for "serious" problems. The report is public and published each year. Additionally, the report provides details in plain language of why each problem has a significant impact on the taxpayers and how
The IRS has been putting more focus on partnerships in recent times. Back in June 2024, the IRS released a statement were the Agency would put more focus on "high-income compliance issues" and "... to combat abusive partnership transactions" which mainly related to basis shifting transactions. Then, the IRS targeted specifically three groups: " Transfer
From the IRS release in June 2024, there will be more reporting requirements to digital and crypto brokers (the ones taking possession or custody of those assets, similar to financial institutions that take custody of securities (stock, bonds, etc.) and release a 1099 Brokerage at year end). As included in the guidance, there is no
