Today's Tax Talk with Attorney Steven Leahy

Monday May 23, 2022 - Foreclosures have not been an issue since the pandemic.  One of the first things Government did was to issue a Foreclosure Moratorium. 

Last August the CDC moratoriums came to and end based on a United States Supreme Court ruling on the issue..  Some States (like Illinois) maintained a foreclosure moratorium thereafter - but no more!

“A total of 50,759 U.S. properties started the foreclosure process in the first quarter of 2022, up 67% from the previous quarter and up 188% from a year ago,”   Chicago saw over 3,000 foreclosures in the first three months of the year.

Attorney Steven A. Leahy reviews the numbers and also talks about the tax implications of losing a home to foreclosure.  Did you think the IRS wouldn't be involved?

https://www.courthousenews.com/foreclosure-wave-sweeping-us-crests-in-chicago/

https://recentlyheard.com/2022/05/22/foreclosures-and-your-income-tax/

https://propertyonion.com/education/supreme-court-throws-out-the-foreclosure-moratorium/

Wednesday May 18, 2022 - The United States Government Accountability Office recently released Report to the Chairman, Subcommittee on Oversight, Committee on Ways and Means, House of Representatives titled "TAX COMPLIANCE Trends of IRS Audit Rates and Results for Individual Taxpayers by Income."

The Report found that In recent years, IRS has examined, or audited, a decreasing proportion of individual tax returns. This trend has raised concerns about the potential for

declining taxpayer compliance, as well as whether IRS is equitably selecting taxpayers for audit, as audit rates for

higher-income taxpayers have decreased more than audit rates for lower-income taxpayers.

Attorney Steven A. Leahy reviews this recent report and details how these changes may effect taxpayers on Today's Tax Talk.

https://www.forbes.com/sites/ashleaebeling/2022/05/18/irs-tax-return-audit-rates-plummet/?sh=2a46301d1cca

https://www.accountingtoday.com/news/irs-audit-rates-plummet-especially-for-wealthy

https://www.gao.gov/assets/gao-22-104960.pdf

Tuesday May 17, 2022 - Cryptocurrency has grown up - and legislators and regulators have noticed.  We have covered many new regulations and proposed regulations over the last many months.  

In response, Crypto is sending in the lobbyists and pouring millions of dollars into primary elections to gain influence over members of Congress and other government officials who are crafting regulations.

Attorney Steven A. Leahy looks over the recent Cryptocurrency lobbying efforts on Today's Tax Talk.

https://tulsaworld.com/lifestyles/technology/crypto-comes-to-washington-will-the-millions-buy-influence/article_b5dac209-1c4e-542f-845c-370e8775df54.html

https://www.msn.com/en-us/money/markets/crypto-industry-wields-its-influence-in-washington-after-pouring-over-2430-million-into-campaigns/ar-AAXmLu2

Monday May 16, 2022 - The TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION recently conducted an audit and issued a report on May 4, 2022 - A Service-Wide Strategy Is Needed to Address Challenges Limiting Growth in Business Tax Return Electronic Filing.

"This audit was initiated because the IRS’s continued inability to process backlogs of paper-filed tax returns contributed to management’s decision to destroy an estimated 30 million paper-filed information return documents in March 2021. The IRS uses these documents to conduct post-processing compliance matches to identify taxpayers who do not accurately report their income."

The IRS destroyed 30 Million information return documents!  These information returns are required documents - taxpayers shoulder the cost and burden of producing these documents in a timely fashion.  And the IRS destroyed 30 million.  

Don't worry - says the IRS - “There were no negative taxpayer consequences as a result of this action,” “Taxpayers or payers have not been and will not be subject to penalties resulting from this action.”

So, it is important that information returns are filed - and information returns should be expanded - but, if they are destroyed, there are no consequences.  

Attorney Steven A. Leahy reviews this latest TIGFTA report today on Today's Tax Talk.

https://www.fool.com/the-ascent/taxes/articles/irs-destroyed-30-million-paper-tax-documents-due-to-backlog/

https://www.cnbc.com/2022/05/13/joe-biden-asked-to-replace-irs-chief-charles-rettig-over-tax-document-destruction.html

https://www.accountingtoday.com/news/irs-blasted-for-destroying-millions-of-information-returns-due-to-backlog

Thursday May 5, 2022 - Paper is the IRS's Kryptonite. So says Erin Collins the IRS National Taxpayer Advocate.  IRS Commissioner Chuck Rettig told the Senate Appropriation Committee’s subcommittee on financial services and general government that the agency is “going into the direction of being able to automate paper returns.”

The IRS Requested funding in 2013 to convert to a digital scanning system - as many states did some years ago. But the Commissioner said  “If we were asking for it in 2013, we are 10 years essentially, technology-wise, beyond that,”  

Rettig said scanning and digitization technology would help the agency reduce its backlog and improve efficiency, but probably wouldn’t result in workforce cost savings.

According to Subcommittee Ranking Member Sen. Cindy Hyde-Smith (R-Miss.) the IRS received more than $3 billion in supplemental COVID-19 funding since 2020, and more than $1 billion remains available.

Attorney Steven A. Leahy goes over the IRS digitalization plan on Today's Tax Talk.

https://federalnewsnetwork.com/it-modernization/2022/05/irs-looks-to-vendors-for-scanning-technology-to-tackle-its-paper-backlog/

Wednesday May 4, 2022 - Last year the IRS signed an $86 million contract with identity verification provider ID.me to provide biometric identity verification services.  As soon as the deal was announced, there was an outcry - and the IRS seemed to backtrack.  

Yesterday  IRS Commissioner Charles Rettig told a subcommittee of the Senate Appropriations Committee that the taxpayer access to the online IRS depends on ."identity proofing."  Something the current system just isn't good at.  

It appears from all the news, the IRS is backtracking again - going back to ID.me and biometric data of taxpayers.  

The public - along with many members of Congress - loudly objected to the invasion of privacy necessary to access their own records.  Now, that the roar has quieted, the IRS is back at it, pushing ID.me on the unwary public.

Attorney Steven A. Leahy revisits the IRS ID.me controversy on this episode of Today's Tax Talk

https://fcw.com/digital-government/2022/05/irs-leader-explains-why-irs-went-idme/366516/

https://venturebeat.com/2022/04/15/the-irs-id-me-debacle-a-teaching-moment-for-tech/

https://www.reuters.com/technology/identity-check-contractor-idme-fires-dozens-fraud-team-congress-probes-2022-04-26/

Tuesday May 3, 2022 - Non-Fungible Tokens (NFT) are the talk of the town. But, what is an NFT exactly.  An NFT is a digital asset that represents real-world objects.  The NFT may be art, music, in-game items or videos.

The value of NFTs come from their exclusivity, or "digital scarcity."  Digital copies may be infinite.  But, there is only one "original."  The NFT contains built-in authentication, which serves as proof of ownership.

Attorney Steven A. Leahy covers the NFT story so you can understand what hype is all about.  .

https://www.forbes.com/advisor/investing/cryptocurrency/nft-non-fungible-token/

Thursday April 28, 2022 - Last March, right around the time Congress enacted the American Rescue Plan Act with its hidden Cash App provisions, the United States House of Representatives passed the Protect the Right To Organize Act (PRO Act) on a 225 -206 vote.  

The Pro Act purportedly "strengthen workers' rights to strike for better wages and working conditions, strengthen safeguards to ensure that workers can hold fair union elections and allow the National Labor Relations Board to fine bosses who violate workers' rights."

What was not advertised is the PRO Act's impact on the tax obligations 1099 "Gig" workers.  A recent study by Americans for Tax Reform, the Tholos Foundation and Beacon Hill Institute, they report that the PRO Act is a massive tax hike on millions of Americans.

Attorney Steven A. Leahy examines this study and the PRO Act.

https://thehill.com/opinion/finance/3467470-bidens-pro-act-is-a-covert-tax-hike-on-7-7-million-americans/?rl=1

https://www.nbcnews.com/politics/congress/house-passes-protect-right-organize-act-225-206-sends-bill-n1260312

Wednesday April 27, 2022 - We have been warning our viewers that news stores calling for more funding for the IRS was right around the corner.   So it begins.

Did you know the government cannot function without funding?  America could not be America without the IRS.  Therefore, the logic goes, we need to double the size of the IRS - now.

Never mind the IRS abuses.  Never mind our government spends money it does not have. Never mind the average taxpayer is already paying out the nose.  No.  we should ignore all of that and give the IRS all the money it asks for.

I often wonder, "What free people would create an organization like the IRS?"  Yes, government needs money to function.  But funding an organization granted immense powers over the citizenry is bad enough.  But, DOUBLING ITS SIZE!  would be insanity.

Attorney Steven A. Leahy offers his opinion of the news dominating the media - Should we double the size of the IRS?

https://www.deseret.com/2022/4/26/23042916/irs-internal-revenue-service-funding-could-be-family-friendly-policy-build-back-better-plan-biden

https://brooklyneagle.com/articles/2022/04/26/the-irs-is-in-desperate-need-of-money-and-staff/

Tuesday April 26, 2022 - The future is near. Nearer than we think.  Advances in Blockchain technology - and its integration in the Internet are about to change the way we live and work, and how we interact with others.

The emergence of Web 3.0 - using Blockchain technology - promises to take control of private data away from the Big Tech companies and place it in the hands of End users, who directly manage and control their own data and information.

To get to Web 3.0 the Blockchain has some growing to do.  Remember, the Blockchain is more than Bitcoin, Ethereum or any single cryptocurrency - layer 1.  layer 2 is a collective term used to describe blockchain scaling solutions. These solutions are built on top of the layer 1 blockchain and help improve the network's scalability and transaction processing speed.

Attorney Steven A. Leahy reports on the exciting world of Blockchain, Internet and the Future.

https://www.infoworld.com/article/3657635/why-blockchain-is-the-future-of-the-internet.html

https://www.cnbctv18.com/cryptocurrency/what-is-a-layer-2-blockchain-13267932.htm

https://www.inc.com/howard-tullman/how-blockchain-thretens-uber.html