January 2020 Archives

Governor Announces More Than $1 Billion Tax Relief Aimed to Keep Retirees in Maryland

On January 16, 2020, the Maryland Governor's Office issued a news release reporting that Maryland Governor Larry Hogan announced the proposed Retirement Tax Reduction Act of 2020 (Act).[1]The Act would provide significant tax relief for Maryland retirees in order to make it more affordable for them to remain in Maryland. The news release quotes Governor Hogan as saying:

Non-Filers: IRS Will Not Prepare Your Return with QBI Deduction

When a taxpayer fails to file a tax return, the Internal Revenue Service (IRS) has the authority under Internal Revenue Code (IRC) §6020 to prepare a "substitute for return" (SFR) on the taxpayer's behalf. Generally, SFRs are detrimental to the taxpayer's overall tax situation. SFRs do not start the clock running for the three-year period for assessment, and the IRS is still permitted to proceed with collection activity. Moreover, the IRS is not going to assume that a taxpayer is entitled to a deduction for which it lacks evidence.

Tax Court Preserves Levy Protection Because IRS Fails to Show Good Cause

On January 3, 2020, the Tax Court issued an order refusing to remove an Internal Revenue Code (IRC) §6330(e)(1) suspension of levy, finding that the Internal Revenue Service (IRS) failed to establish good cause for such removal.[1] In this case, the taxpayer, as an attorney admitted to practice in Tax Court, was able to competently deflect what was essentially an IRS argument that his efforts to enforce his rights were frivolous. Other taxpayers should carefully consider this case as a particularly compelling example of why one is well-advised to hire competent counsel in IRS tax controversies.

Maryland Governor Proposes Tax Relief for Police, Firefighters and First Responders

On January 9, 2020, honoring National Law Enforcement Appreciation Day, Maryland Governor Hogan announced that he is introducing legislation to provide tax relief for police, firefighters, and first responders. He also urged lawmakers to pass his crime plan consisting of a series of initiatives and expanded legislation to address violent crime.[1]

Annual Report Indicates Overall Aggressive IRS Trend in Whistleblower Program

On January 6, 2020, the Internal Revenue Service (IRS) released its Fiscal Year 2019 Whistleblower Report.[1] Although the report shows a decline in awards made as compared to last year, potential whistleblowers should note that the report clearly portrays an overall trend that the IRS is increasingly motivated in today's mandatory tax whistleblower program. An important takeaway for potential whistleblowers is the report's emphasis that the number one reason for IRS rejection of whistleblower submissions was due to submissions lacking in specificity-51% of total closures were due to allegations that were not specific, not credible, or speculative. In other words, whistleblowers should understand that their best chance of success is a skillfully drafted submission with specifics which are presented in the clearest way possible.

Retirement & taxes in 2020: Are you prepared for the changes?

Recent legislation significantly impacts retirement savings. One notable change involves required minimum distributions (RMDs). This post discusses the change, how it impacts retirement savings, and how taxpayers can minimize potential penalties.

New Gig Economy Tax Center on IRS Website

The "Gig Economy"-independent workers paid for a task or project (i.e., a "gig")- isn't new, but it has grown exponentially over the last decade, especially with the help of smartphone-based technology. Companies like Uber, Airbnb or TaskRabbit have made it very attractive and easy for independent workers to receive payment for performing a specific gig. However, many of the companies providing the services and the individuals performing them don't fully understand their tax obligations in the gig economy.

New Year, new tax dates? Important dates for 2020.

Celebrations have finished. The new year is here. Now it is time to get back to business. One important consideration when transitioning back to work after the holiday season: tax dates. Due dates will vary depending on the tax form in question. This piece will focus on two of the more common forms, the individual tax return and estimated tax payments for small businesses.

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