American Rescue Plan Creates New Tax Reporting Requirements for Payment App Users

Apps like PayPal, Venmo, or CashApp have made it much easier for small businesses to take payments for their services, but as far as the IRS is concerned, they have also made it easier for small businesses to commit fraud. Included in the American Rescue Plan, passed in 2021 and put into effect at the start of 2022, is a new law changing tax reporting requirements for third-party payment apps. Previously, if you or Read More

IRS Stuck in 2021’s Tax Returns and 1997’s Technology

2021 was a difficult year for many of us, the IRS included. For an organization that was already facing budget cuts, more incoming work, and outdated technology, the events of last year may have proven to be too much. Many Americans still have not received their refunds from 2021, and are concerned they may not see their 2022 refunds for a long time. The issue stems from funding, computer systems, and old habits of Read More

The Time that Miniature Donkeys Made Their Impact on The Tax Code

It’s not every day that we see cases like these. William Huff, a hedge fund manager, had a miniature donkey-breeding venture that he started to create income for his adult daughter. In 2013 and 2014, the farm generated losses totaling about $134,000. This alerted the IRS, who believed that the intent of the business was not to generate profit, but as a hobby of Mr. Huff’s. This led Mr. Huff down a rabbit hole of Read More

Marijuana Dispensaries’ Conflict With the IRS

Marijuana dispensaries are very much in a grey area of legality. A marijuana dispensary in Colorado is subject to employment and income taxes, does daily business, and abides by local and state laws just like every other business. On the federal level, however, they are still considered illegal due to drug trafficking laws. Because of this, dispensaries are subject to interference from federal organizations like the Read More

Can the IRS Stop You From Getting a Passport?

If you’ve got plans to travel abroad this year and haven’t applied for or renewed your passport, the Internal Revenue Service can throw a wrench in the works if you owe a significant amount of back taxes. Three years ago, the IRS implemented harsher collection measures for people with "seriously delinquent" federal tax debt. This change, which applies to those who owe $54,000 or more, appeared as part of the Read More

An Introduction to Mail and Wire Fraud

If you have a PayPal account, you’ve probably gotten emails with warning headers like ‘Security Breach on Your Account or ‘Act Now or Your Account Will Be Deactivated’. These communications are probably not from PayPal: they are intended to make you panic, log into your ‘account’ via a false website, and unwittingly give your login credentials to a cyber-thief who will lock you out of your own account and empty any Read More

An Overview of Federal Probation Violation

The biggest fear for anyone charged with a crime is having to serve time in prison. Besides having your charges dropped or getting acquitted in court, receiving probation could be the best outcome. Federal judges consider numerous factors and are influenced by countless factors when sentencing a defendant to probation.  In other words, it is not just luck but often a compelling life story well -presented by your Read More

Does the IRS Really Use Private Collection Agencies?

To answer the question, yes. The Internal Revenue Service began using the services of private collection agencies (PCAs) several years ago. The IRS tasks the contracting PCAs to collect (or attempt to collect) inactive tax receivables from taxpayers. Inactive tax receivables do not cover all, or even most, tax debts. These receivables are tax debts that cannot be collected due to the IRS’s inability to find the Read More

When Can Taxpayers Rely on Professional Advice for IRS Penalty Abatement?

To begin to answer the question posed above, we must first clarify that taxpayers are typically presumed to own their own mistakes. That is especially true when taxpayers prepare their own tax returns, without the help of a CPA or other tax professional.  Let’s say you did hire an accountant to prepare your federal tax return. You’re under the impression that you provided truthful and comprehensive information. Read More

Important IRS Statutes of Limitations

For many people accused of wrongdoing, statutes of limitations are their saving grace. The highest stakes with respect to statutes of limitations involve criminal charges, but most civil actions also have limiting statutes.  A statute of limitations is the maximum amount of time allowed to start legal proceedings against a party accused of wrongdoing. The clock begins ticking on the statute of limitations Read More