IRS Updates
If you are an American taxpayer who earns income from abroad, you may already be familiar with the foreign tax credit (FTC). In short, taxpayers who pay taxes to foreign countries for income earned abroad may be able to offset a portion of their tax liability in the US using the FTC. For companies and…
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Late last October, we wrote about a new revenue procedure by the IRS that allows S corporations and their shareholders to resolve certain issues without having to resort to a private letter ruling (PLR). Prior to this revenue procedure, S corporations and their shareholders were often forced to turn to PLRs to resolve even simple mistakes. Since the…
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California has been in for nasty weather this year, having been hit since January with an onslaught of storms that have resulted in floods, mudslides, and evacuations. As Californians struggle to recover, there is a silver lining: the IRS has announced that affected taxpayers will have until October 16, 2023, to file various individual and business tax…
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Among the provisions of the Inflation Reduction Act of 2022 was an appropriation of $80 billion for the Internal Revenue Service. To date, the IRS has not provided a specific operational plan despite instruction from Secretary of the Treasury Janet Yellen last August to do so. However, based on the appropriations budget, we have a…
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Recently, we wrote about new draft guidance from the IRS that makes it easier for partnerships and S corporations to qualify for an exception to filing Schedules K-2 and K-3. Since then, the IRS released its final instructions, confirming those guidelines. Background To summarize, pass-through entities, such as partnerships and S corporations, are required to…
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If you own a car—or a fleet of cars—that you use for business, you should be aware that the IRS released new depreciation limitations for passenger automobiles. Automobile depreciation is the decrease in value of a vehicle over time. Under certain circumstances, businesses and self-employed individuals may be able to deduct a portion of this…
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On December 29, 2022, the IRS increased the standard mileage deduction rate for vehicles used for business in 2023 to 65.5 cents. This is a 4.5% increase over the rate it announced in June, which was itself a 6.4% increase over the previous rate. While it’s typical for the IRS to announce an annual rate…
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On December 30, 2022, the Treasury Department issued Notice 2023-11, guidance aimed at helping foreign banks and US citizens living abroad who have experienced problems staying in compliance with the US Foreign Account Tax Compliance Act (FATCA). Who is Affected by FATCA? FATCA primarily affects US citizens who have $10,000 or more in foreign financial…
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In November, we wrote about the IRS’s new $600 reporting threshold for third-party settlement organizations (TPSOs) and why it meant that more people would be getting 1099-K forms this January. TSPOs include payment platforms such as PayPal and Venmo, online marketplaces such as eBay and Etsy, and gig-worker platforms such as Uber and TaskRabbit. Since…
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The Treasury Inspector General for Tax Administration (TIGTA), released a report on December 20, 2022, assessing the IRS’s plan to return to pre-pandemic inventory levels by the end of calendar year 2022. The report found that while the IRS has made progress in reducing its backlog, the backlog will continue into 2023. TIGTA is a watchdog…
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