The Commissioner of the IRS, noted that although the full moratorium on processing claims will end by April or May, they are only processing about 1000-2000 claims per week. That is just a small number given the growing backlog at the IRS. At that rate, the problem is growing each day that goes by and based on current numbers it may be likely that all claims are never processed. It is noted in various sources that there may well be over 1 million claims or more pending. No one at the IRS seems to have an exact count. Lawsuits have already been filed on processing the claims over the long and e ..read more

In a recent turn of events, the Internal Revenue Service (IRS) has issued an apology for sending out millions of erroneous bills or notices to taxpayers. It seems that a computer mishap is responsible for this situation, affecting taxpayers who filed a tax return in 2022 and had an outstanding balance. However, this event is more than just an error. It has brought to light the plight of many taxpayers residing in counties affected by natural disasters. These taxpayers have additional time to pay their taxes, a change in schedule that has resulted in significant confusion. The Extension of Dead ..read more

Well, sort of and only for  late filing penalties  for 2019 and 2020 tax returns and for a very limited time; until September 30, 2022 to be exact.  On August 24th the IRS released Notice 2022-36 “Penalty Relief for Certain Taxpayers Filing Returns for Taxable Years 2019 and 2020.”  In essence, as long as you file your 2019 and/or 2020 personal or business income tax return by September 30, 2022, the IRS will automatically abate (remove) failure-to-file penalties for those two years.  There is nothing else you need to do in order to receive this penalty relief.  T ..read more

The Offer in Compromise (OIC) program is a valuable tax problem resolution tool. Taxpayers eligible for an OIC suffer from financial hardship that makes paying the total amount owed and financially surviving impossible. For many, an OIC offers the only path to eliminating tax debt and becoming solvent. However, the OIC program has come with a requirement that devastates taxpayers living on the edge: They must agree to forfeit a tax refund upon which they depend ..read more

In my post earlier today I quoted from IRS Notice 2021-83 issued on April 9th, which stated that the FBAR filing requirement deadline is still April 15, 2021, and that the Notice made no reference to the automatic extension. However, later that day the IRS quietly updated it to indicate that the automatic extension was still available. There was no acknowledgment that they made an error, they just tried to sneak it in. The bottom line is Taxpayers still have until October 15th to file their FBAR ..read more

UPDATE: You have until October 15th. The Internal Revenue Service issued a notice on April 9th  reminding U.S. citizens, resident aliens and any domestic legal entity that the deadline to file their annual Report of Foreign Bank and Financial Accounts (FBAR) is still April 15, 2021. The extension of the federal income tax filing due date and other tax deadlines for individuals to May 17, 2021, does not affect the FBAR requirement. This could cause many Taxpayers to inadvertently file their FBAR late. The deadline to file the FBAR was changed several years ago to coincide with the deadlin ..read more

PPP Loans are an excellent way for small businesses with Covid-19 related financial issues to obtain a very low (one percent) interest loan from the government. Unfortunately, if you haven’t applied yet the time period for submitting an application expired on June 30th.  The good news is that the Senate and the House have passed a bill which extends the deadline to apply to August 8, 2020. President Trump signed the bill into law on July 4, 2020. While it seems that large businesses are the usual recipients of government money, this program reaches the smallest of businesses. At the time ..read more

Recently, Dennis was interviewed by Bankrate.com on his thoughts on tax implications of a cash-out mortgage refinance.  Below is an excerpt of the quote: “Capital improvements must substantially improve your home,” explains Dennis Brager, a certified tax specialist with Los Angeles-based Brager Tax Law Group. “Kitchen and bathroom remodels, room additions, modifications for an elderly parent would all qualify…” This is in regards to answering how to use your cash-out refinance money so it’s tax-deductible Read full article here   ..read more

Due to the ongoing COVID-19 Pandemic, the IRS has provided relief to taxpayers by extending filing and other deadlines. Now, in an internal memorandum from Fred Schindler the Director of Headquarters Collection (SBSE), the IRS continues to provide relief to taxpayers with tax debt by suspending most tax collection activities. These changes mirror the previous relief provided by the IRS, and restates the relief contained in the People First Initiative.  Our tax litigation attorneys are advising our clients that they can expect enforced tax collection activities to be suspended unless there ..read more

On Tuesday evening our tax lawyers sent out an announcement discussing some of the tax filing and payment implications of the Covid-19 virus. We indicated that Secretary of Treasury Mnuchin had announced payment and filing extensions for the 2019 income tax returns. Mnuchin was quoted as saying “We encourage those Americans who can file their taxes to continue to file their taxes on April 15,” Mnuchin said. “Because for many Americans, you will get tax refunds.” We took that to mean that the filing deadline as well as the payment deadline was extended.  This is the problem with tax guidan ..read more