IRS Causes Confusion – Then Clarifies

February 14, 2023 by admin

Monday February 13, 2023 – Last week The Internal Revenue Service (IRS) recommended taxpayers of 22 states that issued some form of state tax rebate should delay filing tax returns so the IRS could decide if those rebates were taxable.

After causing confusion, just 2 days later, the IRS clarified the federal tax implications of state-issued inflation or tax surplus rebates. The IRS decided, in most cases, recipients do not have to pay federal taxes on such payments. Although there are some exceptions depending on a given filer’s circumstances.

Taxpayers in California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island “do not need to report these state payments on their 2022 tax return,” the IRS said.

But, like most things’ taxes, there are exceptions, exclusions and complexities.

Attorney Steven A. Leahy clarifies the IRS clarifications on Today’s Tax Talk.

https://www.cnbc.com/2023/02/13/irs-clarifies-tax-issues-for-state-issued-relief-payments.html

https://www.irs.gov/newsroom/state-payments

https://www.cnn.com/2023/02/13/success/taxes-special-state-payments-federal-return-irs/index.html

Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649

IRS “Hurry up & Wait”

February 10, 2023 by admin

Thursday February 9, 2023 – As tax season begins, the IRS has yet to decide an important question: are state payments or refunds received in 2022 taxable? So, The IRS is asking people to hold off filing their Tax Returns.

The Internal Revenue Service (IRS) tells us they have been working for months with state tax officials about these special payments and refunds that were made available by some states in 2022.

“The IRS is aware of the complexity surrounding these payments and is doing its best to provide additional information that will help taxpayers make an informed decision.” In the meantime – Hurry up and Wait.

The Sixteenth Amendment to the Constitution proclaims, “Congress shall have power to lay and collect taxes on incomes, from whatever source derived.” There are, however, some statutory exceptions. Do these state rebate checks fit into the exceptions? The IRS doesn’t know yet.

The IRS tells taxpayers “the rules surrounding them are complex.” In the meantime “the IRS recommends [taxpayers] wait until additional guidance is available.” “[T}he best course of action is to wait for additional clarification on state payments rather than calling the IRS.”

Attorney Steven A. Leahy looks at the IRS February 3, 2023 Statement on Today’s Tax Talk.

https://www.irs.gov/newsroom/irs-statement-taxability-of-state-payments

https://www.nationalreview.com/corner/the-irs-fails-at-the-basics/

https://www.marketplace.org/2023/02/09/were-last-years-state-payments-taxable-taxpayers-in-24-states-wait-while-the-irs-decides/

https://www.fatherly.com/news/wait-to-file-your-tax-return-irs-warns

IRS Withholding

February 7, 2023 by admin

Monday February 6, 2023 – The IRS collects taxes from every paycheck issued. This is called withholding and it’s how most Americans pay their taxes. America is a “Pay as you go” system.

The idea is for employers to withhold an estimated amount of money from each paycheck that reflects what you owe in taxes; when you file your return, the difference between what was withheld and what you actually owe is either refunded to you or requested from you.

The problem is that the amount withheld is based on your income estimates for the year, and with wages increasing, many people are facing a surprise—instead of getting a refund, they owe money come April 18.

The good news is that you can adjust your withholding so it more closely matches what you owe when tax time rolls around. Talk to your payroll department or consult with a tax professional to figure out how to make sure you’re not giving away money in the form of a refund that you would have been better off using in your regular budget. That way, when Tax Day comes around, you’ll be prepared.

Pay attention to the amount withheld from each paycheck and make the necessary adjustments throughout the year to ensure that come tax time, you won’t be in for a shock. When it comes to taxes, knowledge is power. Take the time to understand your individual tax situation and make sure you’re withholding the right amount from each paycheck—so you can keep more of what’s rightfully yours.

After all, there’s no better way to celebrate Tax Day than with a little extra money in your pocket. Happy filing

https://www.thestreet.com/dictionary/w/withholding

https://www.mississippivalleypublishing.com/the_hawk_eye/the-irs-tightens-the-screws-on-the-gig-econimy/article_8d822b3a-a3d9-11ed-836a-9368abad0b67.html

https://www.fightbacknow.com

Digital Privacy & The IRS

February 3, 2023 by admin

Thursday February 2, 2023 – As Ronald Reagan once said: “Freedom is never more than one generation away from extinction.” Americans, rely on the government to keep us safe and secure, but we also expect our Constitutional rights to remain intact. The Internal Revenue Service’s (IRS) ability to gather taxpayer financial records without a warrant is unconstitutional and a blatant violation of our Fourth Amendment rights and an affront to the freedoms we hold dear.

Our Constitution recognizes our privacy for good reason—to protect us from government interference in our personal lives. Yet, when it comes to tax investigations, courts essentially give carte blanche authority to the IRS allowing them to seize and search through private financial information without regard for constitutional limits.

Digitization has only made this problem worse; with the IRS able to access digital records with relative ease, it has become increasingly difficult for taxpayers to protect their own financial information from unwarranted invasion. Yet Congress continues to pass legislation that grants the IRS even greater powers when it comes to collecting taxes, including bills requiring reporting on payments as low as $600 and providing chauffeurs for the IRS commissioner.

To deny Americans their right to privacy undermines centuries-long victories safeguarding liberty and diminishes our national character altogether; something every American should be fighting against before it’s too late!

Attorney Steven A. Leahy examines the IRS invasion of taxpayer privacy on Today’s Talk Talk.

https://www.nationalreview.com/2023/01/an-irs-that-is-above-the-law-threatens-taxpayers-security/

https://www.nationalreview.com/2023/01/will-the-irs-lose-its-80-billion-appropriation/?utm_source=recirc-desktop&utm_medium=article&utm_campaign=river&utm_content=next-article&utm_term=first

https://www.jpost.com/business-and-innovation/banking-and-finance/article-730308

https://www.fightbacknow.com/

AI & IRS – Beware!

February 2, 2023 by admin

Wednesday February 1, 2023 – As artificial intelligence (AI) continues to improve, the federal government is making great strides towards keeping up with the ever-increasing speed of change. This includes the Internal Revenue Service (IRS). The IRS is undergoing a computing revolution in which artificial intelligence and other software advancements will be implemented. These advances will drastically change how the IRS operates, allowing them to monitor income transactions more closely than ever before, bringing with it an increased chance of audits or penalties if you fail to follow their regulations.

Business owners need to stay ahead of these changes, familiarizing themselves with current regulations and preparing for any future updates that may come their way. Even if you follow all the rules now, it’s possible that you could get caught off guard by new technology-driven policies that you were unaware of before. It pays to be prepared!

How to Protect Yourself

The best way to protect yourself from being audited or penalized by the IRS is education and due diligence. Familiarize yourself with all aspects of tax law so that when changes occur (and they will!) you know exactly what’s expected of you as a business owner. Make sure that your records are accurate and up-to-date; double check your math and keep records organized so they can easily be accessed if needed. Additionally, consider investing in an audit protection plan or consulting with Opem Tax Advocates, Inc.—this could save time, money, and headaches down the line!

It’s no surprise that technology has drastically changed our lives over the past decade; everything from communication to travel has been transformed by advances in computing power and artificial intelligence capabilities. Now, these same technologies are also transforming how governments operate—including how we manage taxes here in America. As a business owner, understanding how this revolution affects your bottom line is essential for staying on top of your taxes—and avoiding any unpleasant run-ins with Uncle Sam! With knowledge comes power; educate yourself on current tax laws so that when changes come around (and they will!) you’re ready for whatever new regulations may exist. With preparation comes peace of mind!

If you are already fighting a tax problem, consider attending a FREE Tax Workshop hosted by Attorney Steven A. Leahy of Opem Tax Advocates, Inc. Go right now to FightBackNow.com to secure your seat at the FREE Tax Workshop. Seats are limited and fill up fast. There’s no time to waste FightBackNow.com

https://thehill.com/opinion/finance/3832574-coming-soon-irs-on-big-tech-steroids/

https://www.fightbacknow.com/