Today's Tax Talk with Attorney Steven Leahy

Thursday February 17, 2022 - The Internal Revenue Service's (IRS) Taxpayer Advocate Erin Collins appeared at the Senate Finance Committee hearing today.  It was the Taxpayer Advocate's report, issued in January 2022, that characterized the IRS operations as "In Crisis."

In her testimony today, Ms. Collins made several recommendations to help clear the IRS backlog. Remember, it was only 2 weeks ago that the IRS reassigned 1200 employees to create a "Surge Team":  A team tasked with cutting into a backlog that included millions of unprocessed returns from last year.

Today, Ms. Collins and the IRS called for a Second "Surge Team."  The first wave of reassignments was “an important first step,” Collins said at a Senate hearing.  The second wave provides “additional resources on the processing challenges,” 

Attorney Steven A. Leahy sheds light on the IRS plans and explains how this move may help taxpayers.

Wednesday February 16, 2022 - Foreclosure numbers have been at record lows across the country since March 2020.  Foreclosure moratoriums have a lot to do with those numbers.  Now that the moratoriums have ended, should we start to see a rise in foreclosures?

Well, January 2022 saw a sharp increase - Foreclosure filings such as default notices, scheduled auctions or bank repossessions more than doubled compared with January 2021.- still at lower levels than before the pandemic.  

But, we can expect those numbers to continue to rise. An estimated 7.1 million borrowers -- 14% of all mortgage holders -- entered into forbearance during the pandemic. The Federal American Rescue Plan Act, passed in March 2021, provided additional funding for distressed homeowners.  Eventually, those funds will dry up.

Attorney Steven A. Leahy takes a look at the Foreclosure numbers across the county.

Tuesday February 15, 2022 - Her Majesty’s Revenue and Customs office (HMRC) became the first law enforcement body in the United Kingdom (The world??) to seize Non Fungible Tokens during an investigation into a suspected value-added tax (VAT) fraud case.

Three NFTs, representing digital art, were seized, with an estimated value of $1.9 million (USD). “Our first seizure of a Non-Fungible Token serves as a warning to anyone who thinks they can use cryptoassets to hide money from HMRC,” Nick Sharp, HMRC’s deputy director of economic crime, said in a statement Monday. 

“We constantly adapt to new technology to ensure we keep pace with how criminals and evaders look to conceal their assets.”

Attorney Steven A. Leahy keeps you up to date on Crypto-assets and the IRS - and other Taxmen.

Monday February 14, 2022 - The IRS is behind - WAY BEHIND.  There are still millions of 2020 returns that are still not processed.  So, where are they with my 2022 refund?  Here is a schedule provided by the IRS:  The list shows the filed-by date on the left, and the tax refund payment date on the right.

February 7 - February 18

February 14 - February 25

February 21 - March 4

February 28 - March 11

March 7 - March 18

March 14 - March 25

March 21 - April 1

March 28 - April 8

April 4 - April 15

April 11 - April 22

April 18 - April 29

April 25 - May 6

May 2 - May 13

May 9 - May 20

May 16 - May 27

May 23 - June 4

The IRS has promised a 21 day turn around time - but only for electronically filed returns.  Paper returns will still have delays in processing.  How long?  No one knows.  

Attorney Steven A. Leahy lays out the IRS plans for getting refunds in taxpayers' hands.

Thursday February 10, 2022 - The Sixteenth Amendment to the United States Constitution states:

"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration."

This year the IRS is driving that point home.  Today, IRS Tax Tim 2022-23 warns "Taxpayers must report tip money as income on their tax return."  Most of those accepting tips as part of their income already know that tips are taxable - although some don't report all of their tips.

Remember, in IRS Publication 17 (2021) issued December 16, 2021, the IRS reminded us "If you steal property, you must report its fair market value in your income in the year you steal it unless you return it to its rightful owner in the same year."

Or the sports fan who receives gifts in return for giving back a record ball - The value of the gifts are taxable.

Attorney Steven A. Leahy reminds taxpayers EVERYTHING is taxable in today's episode.

Wednesday February 9, 2022 - "The IRS announced today the suspension of more than a dozen additional letters, including the mailing of automated collection notices normally issued when a taxpayer owes additional tax, and the IRS has no record of a taxpayer filing a tax return."

Some taxpayers, who have filed their tax returns that remain unprocessed, started receiving collection notices in error.  Those notices are sent out automatically.  So, when the return is not put into the system, the system assumes the return is unfiled.    The unprecedented delays the IRS is experiencing continues to create unforeseen problems.

Which notices are covered?  Attorney Steven A. Leahy will examine the effected notices and what you can expect next.

Tuesday February 8, 2022 - To understand Cryptocurrency, you have to understand blockchain technology.  Once you understand blockchain technology, you wil+l also understand Non Fungible Tokens (NFTs), & Decentralized Autonomous Organizations (DAOs).

Today we have two stories - one looks at blockchain and NFT.  The second is a story of DAOs and investing.  Each story has lessons to understand how blockchain technology is changing the way the world works.

Attorney Steven A. Leahy uses these stories as a learning tool  We all should understand these new mechanisms.

Monday February 7, 2022 - Last week we reported on the IRS plan to use facial recognition software from ID.ne to verify taxpayers identities before they could gain access to their own tax information.  We pointed out the potential and real problems with such a plan.

Late last week a bipartisan group of  Senators, including Democratic Senator Jeff Merkley of Oregon and Republican Senator Roy Blunt of Missouri wrote in a letter to Commissioner Charles P. Rettig that the IRS has a “poor track record of protecting taxpayer data” and that facial recognition technology, in particular, poses deep concerns around privacy and security—"

The IRS announced the plan 19 days ago saying "by the summer of 2022, the only way to log in to irs.gov will be through ID.me, an online identity verification service that requires applicants to submit copies of bills and identity documents, as well as a live video feed of their faces via a mobile device."

The IRS often comes up with ideas they public thinks is outlandish - go figure.

Attorney Steven A. Leahy will review that latest news about this IRS effort.

Thursday February 3, 2022 -  Beginning this summer, the IRS may require taxpayers to use the ID.me facial recognition software to access sensitive taxpayer information.  

The effort to secure all our private data is admirable.  However, the intrusiveness of that effort has been overlooked.  ID.me is a private company, that will potentially hold millions of the most sensitive data taxpayer's have - their biometric information.

Illinois has the most restrictive laws in America designed to ensure individuals are in control of their own biometric data. The Illinois law prohibits private companies from collecting the data unless they follow strict protocols.

Wednesday February 2, 2022 - The IRS calls an audit an “Examination of Returns.” The IRS accepts most federal tax returns just as they are filed. Some returns, however, are selected for review. The IRS selects returns for audit by computerized screening, random sample, or by an income document matching program.

Attorney Steven A. Leahy reviews the top reasons taxpayers get audited.