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https://player.captivate.fm/episode/18524b1a-01dd-4345-a003-7dba63751e23/ In September, there were still about 17.6 million tax returns awaiting processing, and the IRS anticipates receiving over 4 million more returns in October. The delay has resulted in a lot of frustrated taxpayers, especially those grappling with error notices and being charged penalties and interest for alleged mistakes. Those penalties add up. For the fiscal year 2020, the IRS assessed nearly $31.4 billion in civil penalties. But are those penalties fair? Are there claims or defenses that can get taxpayers out of those penalties? There’s a lot that can go wrong while filing a tax return because the tax code is so huge and increasingly complicated. How can taxpayers seek accessible tax advice, and even defend tax penalty notices if necessary? On today’s episode of the Taxgirl podcast, Kelly is joined by Andrew Gradman to chat about the general scope of tax penalties and what taxpayers can do…

Over the past year, the IRS has been slow to process tax returns but has appeared to continue to issue notices – especially math error notices. While the IRS made 628,997 math error corrections last year through July 15, 2020, the IRS made about 9 million math error corrections on returns filed by taxpayers in the same period in 2021—a more than 1400% increase. Most of those notices—about 7.4 million—were related to the refund recovery credit, or RRC. The RRC is claimed on Form 1040 to reconcile stimulus payments received in 2020. Most likely, taxpayers made errors when calculating the amounts of the checks due or actually received. But the remaining notices—still at a pace of two-and-a-half times more than in the prior year—were issued by the IRS for other reasons. To find out more, including how math errors work, check out IRS to Taxpayers Receiving Notices: What, Like Math…

The IRS estimates that around 85% of taxes are paid voluntarily and on time. But the tax gap, the difference between the taxes paid on time and those still owed, means hundreds of billions of dollars are missing every year. While politicians often look to increase or decrease taxes as a part of their platform, simply shrinking this gap by collecting the taxes due could solve problems and is fair to everyone. There’s an estimated $574 billion tax gap per year Charles Rossotti, the former IRS Commissioner, joins Kelly on this episode of the Taxgirl podcast to discuss how to shrink the tax gap. Charles goes over some of the ways the IRS can be modernized to not only collect all the taxes due but ensure a smoother process for preparers and filers. Listen to Kelly and Charles talk about the tax gap: Charles’ article on how the government should…

The coronavirus pandemic has impacted everyone in different ways. While it has been difficult over the last year, filing your taxes could prove to be yet another hurdle in this pandemic. For those that have been telecommuting, there are likely going to be working from home tax complications. Potential working from home tax problems On this episode of the Taxgirl podcast, Kelly is joined by Timothy Speiss, the co-leader of EisnerAmper’s personal wealth advisors group. Kelly and Timothy break down some of the biggest potential problems people will face when filing their taxes this year. Whether you hunkered down out of state or simply live in a different state than where you work, working from home could further complicate things like your tax withholding amounts and which state you file with. Listen to Kelly and Timothy talk about working from home taxes: What tax concerns should employees and employers think…

Tax fraud is serious business and the IRS is looking for help to crack down on it. Paying IRS whistleblowers a reward is one of the tools the government uses to find and prosecute those cheating on their taxes. And it can be a lucrative business for both the IRS and the whistleblowers as they helped the government recover more than $6 billion in 2020. Becoming a Tax Whistleblower On this episode of the Taxgirl podcast, Kelly is joined by Gregory Krakower. Gregory is a former senior advisor and counselor for the New York State Attorney General’s office, as well as an adjunct professor at Cardozo Law School where he teaches whistleblower statutes and corporate fraud. Listen to Kelly and Gregory talk about IRS whistleblowers: What is a whistleblower?Are whistleblowers protected and rewarded?The reward for IRS whistleblowersWhistleblowers don’t have to prove fraud but do need informationWhat type of information do…

Estimated reading time: 2 minutes Traditionally, taxpayers who need assistance during the tax season can find programs that fit their needs. Unfortunately, due to COVID, 2021 already looks challenging. But don’t lose hope: help is still available. VITA and TCE The IRS isn’t ruling out opening Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites but they are not all open now. The IRS says that, “Due to COVID-19, a number of VITA sites and all TCE sites are closed for an undetermined period of time.” VITA offers free tax help to taxpayers who generally make $57,000 or less, persons with disabilities, and limited English-speaking taxpayers who need assistance in preparing their own tax returns. In addition to VITA, the TCE program offers free tax help for those who are 60 years of age and older, specializing in questions about pensions and retirement-related issues unique to…

Chances are that you’ve already received notification about your second round of stimulus checks: this batch of checks is being issued much more quickly than the first round from 2020. The second round of checks is part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, signed into law by President Trump at 2020 year-end. Since the new law took effect, I’ve been fielding emails, tweets, and messages from folks with questions about the second round of stimulus checks. As with anything tax-related, there’s a little bit of confusion. To help you sort it out, here are a few questions and answers: General Questions What do I need to do to get my check? You don’t have to take any action to receive your checks: this second round of payments will be distributed automatically. How big will my check be? Eligible individuals will receive checks of up to $600…

Estimated reading time: 6 minutes I’ve been asked a lot recently about section 230 – a phrase that’s been tossed around a lot with respect to stimulus checks. Section 230 isn’t a tax provision (in fact, there isn’t even a section 230 in the Tax Code): it’s actually a telecommunications law. And I’m not a tech or intellectual property lawyer: my focus is tax. But in the spirit of trying to explain what section 230 has to do with stimulus checks – which are tax-related – I’m going to give you a quick summary. If you need a deeper dive, there’s some good stuff out there from tech lawyers. What is Section 230? Section 230 is part of a law – the Communications Decency Act (CDA of 1996) – which was passed in 1996. It provides liability protection for social media companies like Twitter and Facebook with respect to content…

The Internal Revenue Service (IRS) is emphasizing that no action is required by eligible taxpayers for the second round of Economic Impact Payments (EIPs, or stimulus checks). As noted earlier, initial direct deposit payments began arriving as early as last night for some and will continue into next week. Paper checks will begin to be mailed on Wednesday, December 30. This second round of checks is part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, passed by Congress last week and signed into law by President Trump on Sunday night. Some Americans may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of January 4, 2021. At least one bank has suggested that paper checks may be postdated. No matter whether payments are direct deposit or paper checks, they are automatic. There is no magic formula for determining the date that…

Congress may still be debating the size of additional checks, but Treasury is already taking action to deliver a second round of Economic Impact Payments (EIPs, or stimulus checks). This second round of checks is part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, passed by Congress last week and signed into law by President Trump on Sunday night. According to the Treasury Department, checks will begin to be direct deposited into accounts, arriving as early as tonight (Tuesday, December 29) for some. Direct deposit payments will continue into next week. Taxpayers expecting paper checks won’t have to wait as long as last time: paper checks will begin to be mailed tomorrow, Wednesday, December 30. “Treasury and the IRS are working with unprecedented speed to issue a second round of Economic Impact Payments to eligible Americans and their families,” said Secretary Steven T. Mnuchin. “These payments…

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