The Internal Revenue Service/Federal Taxes,Tax Evasion, State Income Tax, etc

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IRS opening free online tax filing program to all states

The Treasury Department on Thursday announced that the IRS' Direct File program, a free online tax filing program, will be made permanent for the 2025 tax season with all 50 states and Washington D.C. invited to participate.

https://www.axios.com/2024/05/30/irs-taxes-direct-file-free-program?

IRS makes free tax return program permanent and is asking all states to join in 2025

WASHINGTON (AP) — The IRS said Thursday it will make permanent the free electronic tax return filing system that it experimented with this year and is asking all 50 states and the District of Columbia to help taxpayers file their returns through the program in 2025.

https://apnews.com/article/treasury-income-taxes-irs-audits-direct-file-04c3b4b55ca0d37b2c40697a392c78aa?

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The IRS wants to end another major tax loophole for the wealthy and raise $50 billion in the process

WASHINGTON (AP) — The IRS plans to end a major tax loophole for wealthy taxpayers that could raise more than $50 billion in revenue over the next decade, the U.S. Treasury Department says.

https://apnews.com/article/irs-treasury-tax-audit-income-7c10474b3129c11d28a3e6a6cb245743?

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Why The IRS Went Soft On Crime

Michael Welu worked at the IRS for decades as a specialist in helping agents identify and investigate possible tax crimes. In an agency known for offices working in their own silos, Welu had the rare ability to move between divisions, dissecting and learning each office’s particular customs and procedures. But that experience had its own consequence for Welu: Seeing disparities in how the separate divisions treated different tiers of taxpayers left him exasperated and helped drive him into early retirement.

https://www.levernews.com/why-the-irs-went-soft-on-crime/?

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IRS collects milestone $1 billion in back taxes from high-wealth taxpayers

WASHINGTON (AP) — The IRS announced Thursday that it has collected $1 billion in back taxes from high-wealth tax cheats — a milestone meant to showcase how the agency is making use of the money it received as part of the Biden administration’s signature climate, health care, and tax package signed into law in 2022.

https://apnews.com/article/irs-audits-wealthy-taxes-biden-treasury-b12a48b200834a7c9a04dc293e3273c2?

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Will Harris Finally Kill Wall Street’s Infamous Tax Break?

As part of their new 2024 party platform, Democrats have promised to close a notorious tax loophole that has long allowed Wall Street billionaires to pay a far lower tax rate than most Americans. Likewise, Vice President Kamala Harris has reportedly signaled she supports ending this tax break, which could net billions in government revenue. 

https://www.levernews.com/will-harris-finally-kill-wall-streets-infamous-tax-break/?

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Treasury recovers $1.3 billion in unpaid taxes from high-wealth tax dodgers

WASHINGTON (AP) — The IRS has collected $1.3 billion from high-wealth tax dodgers since last fall, the agency announced Friday, crediting spending that has ramped up collection enforcement through President Joe Biden’s signature climate, health care and tax package signed into law in 2022.

https://apnews.com/article/irs-treasury-tax-wealth-ira-2932f286c89b19b9ccecaaca2f4f2c2b?

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Reality TV star Julie Chrisley resentenced to 7 years in bank fraud and tax evasion case

ATLANTA (AP) — A federal judge on Wednesday resentenced Julie Chrisley to seven years in prison for her conviction on bank fraud and tax evasion charges, declining the reality TV star’s request for less time in prison than was originally imposed.

https://apnews.com/article/julie-todd-chrisley-fraud-tax-evasion-sentence-ea5d65c638f06cce3bd82fcfc2c5647c?

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Taxpayers will get bigger standard deductions in 2025, but with smaller boosts than recent years

NEW YORK (AP) — U.S. taxpayers will again see higher standard deductions for 2025, allowing them to shield more of their money from taxation on future returns.

https://apnews.com/article/irs-standard-deduction-tax-year-2025-81195e6c1a57c6e24b663aa875d21c6f?

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IRS recovers $4.7 billion in back taxes and braces for cuts with Trump and GOP in power

WASHINGTON (AP) — IRS leadership on Thursday announced that the agency has recovered $4.7 billion in back taxes and proceeds from a variety of crimes since the nation’s tax collector received a massive glut of funding through Democrats’ flagship tax, climate and health law in 2022.

https://apnews.com/article/irs-tax-audits-treasury-werfel-transition-23aaacc9648a5d319eb23b5213ebe7bd?

ps:Well, well, well, so who's going to have the burden of paying all the taxes??

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Money in the mail

The IRS is sending cash to 1 million tax filers who were eligible for a pandemic-era rebate credit. The payments, which could be as high as $1,400 per individual, should arrive by late January.

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? Tax season begins

Illustration: Natalie Peeples/Axios

Today is the first day you can pay your federal income taxes — and a growing number of Americans will be able to use the IRS' new, streamlined filing system this year, Axios' Kelly Tyko reports. Direct File is mobile-friendly, works on smartphones, tablets and computers, and is available in English and Spanish. It'll be available to about 30 million taxpayers this year in 25 states. By the numbers: More than 3 million people checked to see if they were eligible to use Direct File last year, when access was significantly more limited. More than 140,000 taxpayers actually used it. Direct File users saved an estimated $5.6 million in tax prep fees, the Treasury Department said. Go deeper.

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Tax season has begun. Here’s when you’ll get your refund

NEW YORK (AP) — Tax season is underway, and the IRS expects 140 million people will file returns by April 15. The agency has also debuted a new online tool to help taxpayers check the status of any refund they may be entitled to.

https://apnews.com/article/irs-tax-refunds-e66c3dd4891667f8099c0cb6e6d56828?

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The IRS Is Buying an AI Supercomputer From Nvidia

As the Trump administration and its cadre of Silicon Valley machine-learning evangelists attempt to restructure the administrative state, the IRS is preparing to purchase advanced artificial intelligence hardware, according to procurement materials reviewed by The Intercept.

https://theintercept.com/2025/02/14/irs-ai-nvidia-tax/?

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IRS expected to fire about 6,000 workers in the middle of tax season

The Internal Revenue Service is expected to fire about 6,000 workers Thursday, according to a source familiar with the agency’s plans.

https://www.cnn.com/politics/live-news/trump-administration-news-02-20-25?

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IRS turmoil

It’s the busiest time of year for the Internal Revenue Service, which has been in a state of upheaval thanks to the Department of Government Efficiency. But so far at least, tax professionals say the chaos hasn’t tripped up tax filing and refunds.

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Taxpayer data

The IRS and the Department of Homeland Security are engaged in discussions about sharing highly confidential taxpayer data to help authorities ramp up deportations. Currently, undocumented immigrants can register with the IRS and pay taxes — and the agency is required to keep their private information confidential, except in very specific circumstances specified in the tax code. Two immigrant rights groups have already filed suit to block the effort, but on Wednesday, a district judge declined to issue an emergency order blocking the IRS from sharing the data.

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⚡ IRS nears deal with ICE

After weeks of negotiations, the IRS is nearing an agreement allowing immigration officials to use confidential tax data to confirm names and addresses of suspected undocumented immigrants who have final removal orders, The Washington Post's Jacob Bogage and Jeff Stein report. Why it matters: "The IRS has for years reassured undocumented workers that their tax information is confidential and that it is safe for them to file income tax returns without fear of being deported," The Post notes. Between the lines: The IRS website says undocumented workers "are subject to U.S. taxes in spite of their illegal status." Many immigrants "file tax returns and save them in hopes that a record of paying taxes will one day help them make a case to apply for legal residency," The Post reports. Keep reading (gift link).

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Tax season is a prime time for scams. IRS uncertainty could add to the issues this year

There’s a lot of information (and money) on the table during tax season. Unfortunately, that also makes it a prime time for scams. Read More.   ps:So now that they have fewer workers they're expected to be able to still do there job!!

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The Future of Tax Morale (Alex Goodlett / The Washington Post / Getty)

View in browser Tax season is always a busy time at the IRS. This year has been especially eventful. In February, the agency was told to start firing up to 7,000 workers—before judges ordered that such firings needed to be paused. Some 5,000 more workers have signed up for the government’s deferred-resignation offer, and various departments have been slashed or targeted for cuts. About 50 IT workers were put on administrative leave Friday. Overall, The Washington Post reported, the agency will end May with about 18 percent fewer employees than it had at the start of this year. And people familiar with the matter told The New York Times that the Trump administration’s ultimate goal is to cut the agency’s staffing by half. The stated purpose of these firings, and of DOGE’s other cuts across federal agencies, is to save money. But the cuts may actually translate to a meaningful dip in taxpayer revenue. The IRS is effectively the government’s accounts-receivable department. Staffing cuts set up the IRS to lose money in two ways, Natasha Sarin, a Yale law professor and former Treasury counselor, told me: A reduced IRS has less capacity to collect and enforce taxation, and taxpayers who think they won’t be audited may be more inclined to start cheating. Sarin expects that the agency’s losses will far outweigh the $140 billion DOGE says it has saved (DOGE’s self-reported data is opaque and has been full of errors). She and her colleagues at the Budget Lab at Yale forecast that the plan to cut half of the agency’s workforce alone would conservatively translate to $395 billion in lost revenue in the next decade, and possibly up to $2 trillion. Other expectations have been bleak, too—and have considered factors beyond reductions in force. Amid the chaos of this filing season, the agency is on track to see a more than 10 percent drop in tax receipts by the tax-filing deadline this month, according to predictions from Treasury and IRS officials who spoke anonymously with The Washington Post last month; if that happens, it would translate into more than $500 billion in lost revenue this year. Such changes could be because some people are skirting their duties and hoping that an understaffed IRS will lead to less enforcement, but other people’s filing may just happen later this year. Victims of natural disasters, including the 2025 California wildfires, have received deadline extensions—and, in general, corporate tax receipts may decline if businesses are facing challenges. (A spokesperson for the Treasury department denied that a $500 billion tax-revenue drop is plausible, adding that “baseless claims from those who have promoted wasteful spending for years at the IRS should be dismissed out right.” Representatives of DOGE did not immediately respond to a request for comment.) Recent history provides a case study in what happens when the IRS is diminished: In the 2010s, the IRS’s budget was depleted over several years. The number of agents declined by a third from 2010 to 2017, and the audit rate went down by about 40 percent (and down by about 50 percent for people earning more than $1 million) in that period. The number of agency investigations of people who didn’t file returns went from 2.4 million in 2011 to 362,000 in 2017. The total amount of money lost through weak enforcement during those years amounted to some $95 billion, ProPublica estimated. One theme of the late 2010s and early 2020s was general sloppiness in filing, especially from corporations, Michael Kaercher, the deputy director of the NYU Tax Law Center and a former IRS lawyer, told me. That period, Sarin argued, demonstrates the “direct relationship” between reduced capacity for enforcement and loss of revenue—though the cuts then were much smaller and more spread out than DOGE’s current plan. Of course, even if the public starts to get the impression that there won’t be consequences for evasion, many will continue to do their civic duty and make good on their obligations. But if the IRS doesn’t have enough staff to help people with the (often confusing) process of filing, some people may just make mistakes, too, and start accidentally underpaying. The exact amount the IRS may lose in the years to come will depend on a few factors, including which functions and staff end up ultimately being cut. Since January, the IRS has lost nearly 40 percent of the staff of the Global High Wealth unit, which focuses on audits of very wealthy individuals. Those audits have an extremely high return on investment, Vanessa Williamson, a senior fellow at the Urban-Brookings Tax Policy Center, reminded me—a single audit can lead to millions or tens of millions in revenue. In the 2010s, she noted, the “tax gap”—the amount of taxes that were owed but not paid—rose, which was primarily attributable to high earners underreporting their income. In 2021, the top 1 percent of earners were responsible for more than a third of unpaid taxes, which cost the government nearly $200 billion. As some of the agency’s functions are diminishing, it is being tasked with a new role. The IRS, which holds information about every taxpayer, is close to signing an agreement with Immigration and Customs Enforcement in which it would share addresses and names about migrants. Sending sensitive taxpayer information to authorities would cut against a fairly core aspect of the IRS’s culture, Kaercher told me: The agency has always taken data privacy very seriously. For decades, the IRS has told undocumented people that they need to pay taxes, and that it would not share information with immigration authorities. Now that the agency is reneging on that promise, the changes may deter immigrants from paying taxes, leading to further dips in the revenue the agency can collect. In recent decades, Williamson noted, even through lean IRS eras, what’s called “tax morale,” or a willingness to pay taxes, has remained high in the United States. “Americans are traditionally good taxpayers by international standards,” she said. But trust in the system is predictive of compliance. As that trust diminishes, compliance may go with it too. Related: Why DOGE could actually increase the deficit Tax season just got more confusing.

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? An easy tax season — for the rich. New data shows the Internal Revenue Service department tasked with reviewing billionaires’ tax returns has shrunk 38 percent since January. The country’s richest earners already evade more than $150 billion in taxes every year, in part because the IRS has deprioritized audits of corporations and the superrich, flagging them for criminal referral at a far lower rate than that of small businesses or the self-employed.

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IRS plans to cut up to 25% of staff, starting with closing its civil rights office, AP sources say

WEST PALM BEACH, Fla. (AP) — The IRS plans to cut as many as 20,000 staffers — up to 25% of the workforce — as part of layoffs that began Friday, two people familiar with the situation told The Associated Press.

https://apnews.com/article/irs-layoffs-civil-rights-compliance-trump-musk-d2c5708973cddf91c1a72b392118628c?

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No state has axed its income tax on wages in 45 years. Now 2 Southern states are on a path to do so

About 45 years have passed since a U.S. state last eliminated its income tax on wages and salaries. But with recent actions in Mississippi and Kentucky, two states now are on a path to do so, if their economies keep growing.

https://apnews.com/article/income-tax-cut-repeal-mississippi-kentucky-09c2b1fa83328d3454a17199da273596?

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IRS resignations

Acting IRS Commissioner Melanie Krause informed her staff on Tuesday that she is planning to leave the agency. Krause’s decision comes on the heels of a finalized agreement for the IRS to hand over sensitive taxpayer information to the Department of Homeland Security to help the Trump administration find and deport undocumented immigrants. Krause is the third IRS chief to leave the agency since Trump came back in office. IRS commissioner Danny Werfel resigned on Inauguration Day. Doug O’Donnell, the acting commissioner who succeeded Werfel, refused to sign the data-sharing agreement with DHS in February and retired a short time later. Krause then took over in an acting capacity. To push through the controversial deal, Treasury Secretary Scott Bessent ultimately signed the “memorandum of understanding” with the DHS.

 

IRS acting commissioner is resigning over deal to send immigrants’ tax data to ICE, AP sources say The acting commissioner of the Internal Revenue Service, Melanie Krause, who had served as acting head since February, is resigning over a deal to share immigrants’ tax data with Immigration and Customs Enforcement for the purpose of identifying and deporting people illegally in the U.S., according to two people familiar with the decision. Read more.

Why this matters: The agreement will allow ICE to submit names and addresses of immigrants inside the U.S. illegally to the IRS for cross-verification against tax records. The Treasury Department says the agreement will help carry out President Donald Trump’s agenda to secure U.S. borders and is part of his larger nationwide immigration crackdown.   Advocates say the IRS-DHS information-sharing agreement violates privacy laws and diminishes the privacy of all Americans. Tom Bowman, policy counsel for the Center for Democracy and Technology, said disclosing immigrant tax records to DHS for immigration enforcement “will discourage tax compliance among immigrant communities, weaken contributions to essential public programs, and increase burdens for U.S. citizens and nonimmigrant taxpayers. It also sets a dangerous precedent for data privacy abuse in other federal programs.”

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What to do if you can't pay the taxes you owe

If you know or suspect you can’t pay the taxes you owe this tax season, you should still file a return with that information or file for an extension. That’s the top piece of advice that tax professionals want you to know. Read More.

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? Mapped: Average tax refunds by state

Among filings receiving a refund. Data: IRS. Map: Alex Fitzpatrick/Axios. Average federal tax refunds by state range from $2,700 to nearly $4,000, Axios' Alex Fitzpatrick writes from IRS data. Florida (about $3,900), Texas ($3,800) and Wyoming ($3,700) had the biggest average tax refunds for tax year 2022, the latest data available. Maine ($2,700), Wisconsin ($2,700) and Oregon ($2,800) had the smallest. Interactive map (state-by-state data).