Federal Tax Updates IRS Upheaval: Staff Cuts, BOI Updates, and Filing Season Insights
Feb 24, 2025
The hosts dive into the upheaval at the IRS with staffing changes and the impact of upcoming Beneficial Ownership Information reporting requirements. They break down new 1099-K reporting thresholds, clarifying how to navigate various transactions. Current legislative proposals are analyzed, alongside insights into common misconceptions taxpayers have about income and deductions. They also tackle practical challenges faced during tax season and share tips for addressing client inquiries effectively.
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BOI Reporting: Hurry Up and Wait
- Despite ongoing uncertainty around beneficial ownership information (BOI) reporting, continue gathering necessary information.
- Be prepared to act quickly if the situation changes, but expect potential delays and further modifications.
ERC Updates and Proposed Legislation
- While disallowance letters for the Employee Retention Credit (ERC) are still being sent, some checks are being reissued.
- Proposed legislation aims to extend the statute of limitations for pandemic-related credits to address fraud.
1099-K Reporting: Client Communication is Key
- Be prepared for increased 1099-K reporting this tax season, including for personal item sales.
- Discuss with clients the tax implications of these forms, especially regarding gains and non-deductible losses.