Tax News

A state correctional officer won a $500,000 award for back pay from a discrimination lawsuit.  This consisted of $144,304 for compensatory damages, $355,696 for back pay, and $31,864 for interest; he...

The mid-year report from National Taxpayer Advocate Erin M. Collins contains an assessment of the 2021 filing season. It assesses the IRS response to 73 administrative recommendations that the Advoca...

If an employer has a leave-based donation program, employees may contribute their unused leave time (e.g., vacation, sick, and personal days) for the benefit of employees who need the time. Usually, e...

Gain on the sale of a principal residence is tax free up to $250,000 ($500,000 on a joint return) if certain conditions are met. The question put to a district court was whether the basis in the home ...

When an IRA owner died, the account passed to a Trust. Some months after the death, the trustee transferred the funds into a regular brokerage account to be able to trade stocks. But he soon learned t...

Each year the IRS releases a book providing insight into IRS activities for the government’s fiscal year ending September 30. The 2020 Data Book covers October 1, 2019, through September 30, 2020 (I...

Each year the IRS compiles a list of the “worst of the worst tax scams.” This year, the scams are grouped into categories: Pandemic-related scams, such as Economic Impact Payment theft and une...

The Affordable Care Act has come before the U.S. Supreme Court three times. In the latest challenge, the Court declined to rule on a constitutional challenge to the so-called individual mandate in the...

The American Rescue Plan Act of 2021, which was enacted on March 13, 2021, greatly expanded the dependent care credit for 2021. It raised the cap on expenses taken into account in figuring the credit ...

The IRS has the discretion to grant extensions of up to one year for certain tax actions for those impacted by federal disasters. The Further Consolidated Appropriations Act, 2020, created a mandatory...

Despite concerns about inflation, the interest rates on overpayments and underpayments are unchanged from the second quarter of 2021 (Rev Rul. 2021-10). The rates for the third quarter of 2021 beginni...

According to a Treasury report (https://home.treasury.gov/system/files/136/The-American-Families-Plan-Tax-Compliance-Agenda.pdf), the tax gap, which is the spread between what the federal government c...

The IRS is sending money to taxpayers for various reasons: Unemployment benefits erroneously reported as income. Some taxpayers may have filed their 2020 income tax returns before Congress enacted ...

In response to the COVID-19 pandemic, the Consolidated Appropriations Act, 2021 (CAA) and the American Rescue Plan Act (ARPA) made two important changes in dependent care assistance plans (DCAPs) offe...

The IRS announced next year’s contribution limits for health savings accounts (HSAs), as well as requirements for high-deductible health plans (HDHPs) to which HSAs must be linked (Rev. Proc. 2021-2...

That was the issue before the Tax Court. The estate initially reported the value of his image and likeness at $2,105 on the estate tax return. At trial, the estate’s expert said it was $3.1 million....

The answer to this question determines whether cancelation of debt is or is not taxable. The issue of whether an interest in a defined benefit (pension) plan should be treated as an asset arose in a T...

The American Rescue Plan Act of 2021 suspended for 2020 any required repayment of an excess advance premium tax credit. The IRS has now clarified what individuals should do with respect to this law ch...

Usually, the cost of a business meal is 50% deductible. However, for 2021 and 2022, the cost is 100% deductible for meals furnished by restaurants. The IRS has now defined the term “restaurant” (N...

If you received unemployment benefits in 2020, you may be eligible for an earned income tax credit (EITC) if you didn’t claim one, or a larger one if you did. Why? The American Rescue Plan Act provi...