Explore

IRS Finalizes Regulations for Auto Loan Interest Deduction, Impacting Lenders and Consumers

IRS Finalizes Regulations for Auto Loan Interest Deduction, Impacting Lenders and Consumers

IRS Finalizes Regulations for Auto Loan Interest Deduction, Impacting Lenders and Consumers

IRS Announces Permanent Charitable Contribution Deduction for Non-Itemizers Starting 2026

IRS Announces Permanent Charitable Contribution Deduction for Non-Itemizers Starting 2026

The Internal Revenue Service (IRS) has reminded individual taxpayers that a permanent deduction for charitable contributions will begin for returns filed next year, specifically for the 2026 tax year. This provision, part of the Working Families Tax Cuts Act, allows taxpayers who do not itemize deductions to claim a deduction for qualifying cash contributions. According to IRS Chief Executive Officer Frank J. Bisignano, this permanent deduction aims to encourage giving by extending a tax benefit to those who typically claim the standard deduction. Starting with tax year 2026, individuals can deduct up to $1,000, and married taxpayers filing jointly can deduct up to $2,000, for qualifying cash contributions made to certain charitable organizations.

U.S. Department of the Treasury and IRS Designate Over 6,500 New Opportunity Zones

U.S. Department of the Treasury and IRS Designate Over 6,500 New Opportunity Zones

U.S. Department of the Treasury and IRS Designate Over 6,500 New Opportunity Zones

IRS Details Penalties for Erroneous Claims for Refund or Credit

IRS Details Penalties for Erroneous Claims for Refund or Credit

The Internal Revenue Service (IRS) imposes a penalty for erroneous claims for refund or credit, as outlined in IRC 6676. This penalty applies when a taxpayer submits a claim for an excessive amount without reasonable cause. The penalty is calculated as 20% of the excessive amount, which is the difference between the amount claimed and the allowable amount for the applicable tax period. Initially, this provision applied to income tax, but it was amended by the One, Big, Beautiful Bill Act to also cover erroneous claims for refund or credit related to employment taxes after July 4, 2025. The penalty may be assessed if there is no reasonable cause for the excessive claim and if the refund is not paid. However, this penalty will not apply to any disallowed portion of a claim that is already subject to an Accuracy-related penalty or a Fraud penalty.

IRS Releases 2027 Inflation Adjustments for Standard Deduction and Child Tax Credit

IRS Releases 2027 Inflation Adjustments for Standard Deduction and Child Tax Credit

The Internal Revenue Service (IRS) has announced its annual inflation adjustments for the 2027 tax year, which will impact tax returns filed in 2028. These adjustments include increases to the standard deduction and the child tax credit, reflecting a 3.2% rise in prices. For single filers, the standard deduction will increase from $16,100 to $16,600. Married couples filing jointly will see their standard deduction rise from $32,200 to $33,200, while heads of household will have a standard deduction of $24,925, up from $24,150. The maximum earned income tax credit for a worker with no children will increase to $685 from $664, and for a family with two children, it will rise to $7,552 from $7,316. The child tax credit will also increase by $100 to a maximum of $2,300 per child, with the refundable portion rising to $1,800. However, several tax breaks from the 2025 tax law, such as deductions for tip income and overtime pay, remain fixed and are not adjusted for inflation, meaning their real value will slight...

Toyota to bring 'really cute' tiny trucks favored by Trump to the US

Toyota to bring 'really cute' tiny trucks favored by Trump to the US

Tiny Kei trucks are popular in Japan. Now Toyota plans to build one for American buyers as interest in smaller, practical pickups grows.

U.S. Treasury Pays 5% on New 10-Year Notes as Foreign Demand Cools Post-Inflation Shock

U.S. Treasury Pays 5% on New 10-Year Notes as Foreign Demand Cools Post-Inflation Shock

U.S. Treasury Pays 5% on New 10-Year Notes as Foreign Demand Cools Post-Inflation Shock

IRS Provides Multiple Warnings Before Bank Levy, Taxpayers Have Options to Respond

IRS Provides Multiple Warnings Before Bank Levy, Taxpayers Have Options to Respond

Before the IRS can levy a taxpayer's bank account to collect unpaid tax debt, it must follow a defined sequence of notices, typically sending four or five communications over several months. The process begins with Notice CP14, an initial tax bill, followed by reminder notices CP501 and CP503. If the debt remains unpaid, Notice CP504 warns of an intent to levy property. The final warning is either Letter 1058 or Letter LT11, a Final Notice of Intent to Levy, which must be mailed at least 30 days before any levy action. This final notice also grants taxpayers Collection Due Process (CDP) rights, allowing them to request a hearing within 30 days to challenge the levy or propose collection alternatives. If a levy is issued, banks are required to hold the funds for 21 days before transferring them to the U.S. Treasury, providing a window for taxpayers to resolve discrepancies or request a release.

IRS Audits Remain Low, but Millions Receive Notices Annually

IRS Audits Remain Low, but Millions Receive Notices Annually

While only a small fraction of individual tax returns, approximately two to three out of every 1,000, are audited by the IRS annually, millions of taxpayers receive notices from the agency each year. These communications primarily result from routine verification processes where the IRS compares information reported on tax returns with data received from employers, financial institutions, and other third parties, such as W-2s, 1099s, and K-1s. Discrepancies, like unreported interest income or mismatched estimated tax payments, are automatically flagged and typically lead to a letter. Most of these issues can be resolved by agreeing to the income adjustment and paying the corrected tax. However, certain anomalies or unresolved issues identified through the Discriminant Information Function (DIF) system, which compares returns to data from similar taxpayers, can trigger a more detailed examination or audit. For instance, unusually large deductions for a given income level might prompt further scrutiny.

Tax Identity Theft Cases Take Months to Resolve, IRS Warns of Scams

Tax Identity Theft Cases Take Months to Resolve, IRS Warns of Scams

Tax identity theft occurs when someone uses a taxpayer's Social Security number (SSN) and personal information to file a fraudulent tax return, claim a refund, obtain employment, or claim dependents. The IRS processes the first return filed under an SSN, rejecting subsequent legitimate filings as duplicates. If a fraudulent return is caught by IRS filters, the agency holds it and requests identity verification from the taxpayer. However, if a thief's return is processed, the case is transferred to the IRS Identity Theft Victim Assistance Unit, where resolutions can take approximately 20 months, with refunds on hold until the case is closed. The IRS actively combats this fraud, stopping billions in fraudulent refunds annually, but individual cases still impact taxpayers. Victims often discover the theft through rejected e-files, IRS letters requesting identity verification, or notices about suspicious returns they did not file. The IRS emphasizes that it primarily contacts taxpayers by mail and does not ini...

IRS Can Sue Taxpayers for Unpaid Debts After Failed Collection Efforts

IRS Can Sue Taxpayers for Unpaid Debts After Failed Collection Efforts

The Internal Revenue Service (IRS) possesses the authority to sue taxpayers, typically as a last resort when administrative collection efforts, such as liens and levies, have proven unsuccessful. These lawsuits are relatively rare and are usually initiated when the unpaid tax bill is substantial, potentially exceeding $100,000. The IRS may also pursue litigation if it believes the case's publicity could enhance tax compliance or if it needs to reduce the tax assessment to judgment to extend the time available for debt collection. When the IRS decides to sue, the case is referred to the U.S. Department of Justice (DOJ) for litigation, which then files the lawsuit, most often in U.S. District Court rather than Tax Court. The process involves a series of steps, including referral to the DOJ, filing and serving a complaint, the taxpayer's response, discovery, and potentially a trial, culminating in a judgment if the DOJ prevails. Most of these civil tax suits are resolved through settlement before reaching tri...

Representative Aaron Bean Introduces Bill for Digital Asset Voluntary Disclosure Program

Representative Aaron Bean Introduces Bill for Digital Asset Voluntary Disclosure Program

Representative Aaron Bean introduced H.R. 9174, the Digital Assets Voluntary Disclosure Program Act, on June 8, 2026. This standalone bill aimed to establish a specific voluntary disclosure program for digital assets. The core concept of H.R. 9174 was later incorporated into a broader digital-asset tax package as Section 502 of H.R. 10357. On September 16, 2026, the House Ways and Means Committee adopted a Chairman’s Amendment in the Nature of a Substitute and favorably reported H.R. 10357 to the House by a vote of 38-5. This proposed legislation seeks to provide a structured pathway for U.S. cryptocurrency investors to resolve past federal tax issues related to unreported digital-asset transactions. The bill, however, has not yet become law, and the proposed Digital Asset Voluntary Disclosure Program is not currently available. It addresses various aspects of digital assets, including cryptocurrency, stablecoins, NFTs, mining, staking, lending, trading, and broker reporting, and outlines different penalty...