Thursday June 30, 2022 – Taxpayers can subscribe to IRS “Tax Tips to get easy-to-read tips about taxes via e-mail from the IRS throughout the year.” Tax Tips are brief, to the point and cover a wide-range of topics.

A recent tax tip email titled “Here are some things gig economy workers should know about their tax responsibilities.” altering gig workers to their tax obligations.

Remember, the gig economy is a key sector the IRS is targeting as “cheaters.” So, the IRS reminds them – “Gig work is taxable” Suggests that gig workers should make sure they are properly classified as independent contractors, rather than employees. And, directs them to make estimated payments throughout the year to avoid penalties.

Attorney Leahy reviews the IRS Tax tips, so you don’t have to on Today’s Tax Talk.

https://www.irs.gov/newsroom/here-are-some-things-gig-economy-workers-should-know-about-their-tax-responsibilities

https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes

https://www.irs.gov/businesses/gig-economy-tax-center

Wednesday June 29, 2022 – One of the most common IRS questions I receive is from Parents who are divorced, separated, never married or live apart and who share custody of a child with an ex-spouse or ex-partner who ask “Who can claim our child as a dependent?”

Only one person may be eligible to claim the qualifying child as a dependent.- and receive the tax benefit – Parents can’t share or split up the tax benefits for their child on their tax returns.

Recently, the IRS issued a press release on this subject. Attorney Steven A. Leahy reviews this press release and clarifies the IRS rules on Today’s Tax Talk.

https://www.irs.gov/newsroom/claiming-a-child-as-a-dependent-when-parents-are-divorced-separated-or-live-apart

Monday June 27, 2022 – Get ready Taxpayers! The IRS Notice season will soon be upon us. That means you can expect the IRS to start sending notices about taxes you owe, but also notices about taxes the IRS determines you may owe.

IRS Form CP2000 is just such a form. A CP2000 is generated by the IRS automatically when the records the IRS has received from a third party do not match the tax return of the taxpayer.

For example, a taxpayer may have negotiated a settlement with their credit card company where the credit card company has agreed to accept less than the full amount owed and forgives the balance. When this happens, the credit card company is required to file a 1099-C with the IRS and send a copy to the taxpayer.

The taxpayer is to report that forgiven debt as income on their tax return. Man taxpayers do not know the forgiven debt is taxable as income, and do not include the 1099-C when they file. Or, the taxpayer may not have received the 1099-C. In either case, the IRS will detect a mismatch.

IRS Form CP2000 documents the mismatch and asks the taxpayer to verify the IRS calculations, or object. Often, this is the first the taxpayer becomes familiar with the alleged discrepancy and the taxpayer doesn’t understand the form. So, the taxpayer does not respond.

If the taxpayer does not respond, the IRS will send IRS Form CP3219A – Notice of Deficiency – A 90 day letter. This letter explains how the amount was calculated, what to do if you agree or disagree, and how you can challenge it in U.S. Tax Court.

Attorney Steven A. Leahy helps taxpayers who owe the IRS. So, he has seen IRS Notice CP2000 before.

https://www.irs.gov/individuals/understanding-your-cp2000-notice

https://www.irs.gov/individuals/understanding-your-cp3219a-notice

Wednesday June 22, 2022 – Everyone knows – The IRS is behind on processing tax returns. They are still processing 2020 tax returns – but predict the backlog will be cleared this week.

The IRS Commissioner Charles P. Rettig has promised the backlog “should ‘absolutely’ resolve before December” 2022 However, the backlog is still more than 11 million individual returns.

Attorney Steven A. Leahy looks at the progress the IRS has made on clearing up the backlog on Today’s Tax Talk.

https://www.myjournalcourier.com/news/article/IRS-erases-last-season-s-backlog-but-still-faces-17256437.php

https://www.msn.com/en-us/money/taxes/irs-is-making-progress-on-tax-return-backlog-but-millions-still-remain-unprocessed/ar-AAYJT07