Tax News

The “tax gap” is the spread between what the government thinks it should collect in taxes and what it actually collects. In 2001, the tax gap, after enforcement activities, was $290 billion. In 20...

Spouses who file joint returns usually are liable for the tax on such returns. However, some joint filers can request relief from this liability by claiming to be an innocent spouse. The IRS has annou...

The IRS’s annual report on enforcement shows that the audit rate on millionaires in the government’s fiscal year 2011 (ending September 30, 2011) rose to 12.48%, compared with just 8.36% in the pr...

The 2-percentage-point reduction in Social Security taxes paid by workers in 2011 was extended for the first 2 months of 2012. Congress will try to extend the reduction for the balance of 2012. Assumi...

In 2011, there was a 14% increase in e-filing, according to the IRS Oversight Board’s 2011 Annual Report to Congress on Electronic Filing. Seventy-eight percent of all individual returns were e-file...

If you use your car, truck, or van for certain purposes other than personal reasons, you can deduct the related costs or use an IRS-set mileage rate. The mileage rate for 2012 is: 55.5 cents per m...

The interest rate that individuals will pay on underpayments remains at 3% for the first quarter of 2012. The interest rate that the IRS will pay on overpayments (tax refunds) will also be 3%. Most or...

Have you received a tax refund if you are owed one? The IRS reports that it is looking for 99,123 taxpayers who are owed $153 million in refunds. Their checks were undeliverable because of mailing add...

Congress has voted to repeal the 3% withholding on payments to contractors, a rule that was set to take effect in 2013. As part of the repeal process, Congress also created two new tax credits for bus...

Distributions from an account in a 529 plan to pay qualified higher education costs of the account's beneficiary are not taxable. However, distributions for any other reason are taxable unless there i...

If you make gifts of cash or property to a charity, you can deduct them only if you have the proper substantiation. The rules are different for cash donations and property donations, and can be very c...

The elective deferral limit for employee contributions to 401(k) and similar plans will be $17,000, or $500 more than the limit for 2011. Those who are at least age 50 by the end of the year can add a...

For the majority of Medicare enrollees (those that were held harmless in 2011), the basic 2012 monthly premium for Part B will increase by only $3.50 to $99.90, compared with $96.40 in 2011. The law p...

A joint filer who wants relief from responsibility for the tax on a joint return must file a request for innocent spouse relief. This is done by submitting Form 8857, Request for Innocent Spouse Relie...

The IRS web site has a new look designed to be more user friendly. Tabs and topics have been reshuffled for accessibility. There's a new social media section to view IRS YouTube videos and easily link...

The IRS has extended the due date for filing certain returns and paying estimated taxes for taxpayers in certain counties and municipalities in North Carolina, New Jersey, New York, and Puerto Rico. T...

About 36,706 estate tax returns (Forms 706) were filed for decedents who died in 2007, reporting a combined $224.8 billion in total gross estate. Remember, in 2009, the estate tax exemption was $2 mil...

Large estates of decedents who died in 2011 have an option: Use the new estate tax rules, which include a $5 million exemption and stepped-up basis for heirs, or pay no tax regardless of the size of t...

The IRS announced that it will no longer impose a 2-year limit for a taxpayer to claim equitable innocent spouse relief. A taxpayer whose equitable relief request was previously denied solely due to t...

Starting January 1, 2011, all paid preparers were supposed to obtain new preparer tax identification numbers (PTINs) from the IRS to use on the returns they prepared. Now, the IRS says that about 100,...