Social Security Identity Verification Requirements Change for a Second Time
By: The Social Security Administration has eased some of its new identity verification requirements and delayed implementation from March 31, 2025 to April 14, 2025. The revised rules for identity verification represent a significant procedural change that will affect clients who prefer or need to manage their benefits through phone or in-person channels rather than online. The change is part of the Administration and DOGE’s efforts to curb fraud and abuse at all levels of government. Key Changes Effective April 14, 2025: 1. Different Requirements by Benefit Type: Retirement, Survivors, or Auxiliary Benefits: Require either online identity proofing (via my Social …
IRS Employment in Flux: Reinstatements, Voluntary Separations, and Resignations
The IRS personnel shake-ups continue. Approximately 7,000 probationary IRS employees who were terminated in February are set to return to work by April 14, but the agency has now launched three voluntary separation programs as part of a broader reduction-in-force (RIF) initiative. Acting IRS commissioner Melanie Krause has also resigned, making her the third IRS leader to do so in 2025. Court-Ordered ReinstatementsThe reinstatement comes after federal court interventions forced the IRS to bring back the terminated workers. Initially, the agency placed these employees on administrative leave in March, a move that drew criticism from Judge William Alsup of the Northern …
Executive Order Mandating Electronic Federal Tax Refunds and Payments for Taxes
By: Beginning as early as September 30, 2025, the president’s March 25, 2025, executive order “Modernizing Payments To and From America’s Bank Account” mandates all payments to and from the US Treasury be paid electronically. This includes federal tax payments and federal tax refunds.Timing of Electronic Tax Payments & Refund MandateVerbiage in the order indicates there may be a delay in implementing the order: “As soon as practicable, and to the extent permitted by law, all payments made to the Federal Government shall be processed electronically, except as specified in section 4 of this order.”The order also indicates all federal tax …
A Welcome Relief: FinCEN Lifts Beneficial Ownership Reporting Burden from U.S. Companies
In a rare regulatory win that tax professionals can actually celebrate during the height of tax season, the Financial Crimes Enforcement Network (FinCEN) announced on March 21, 2025, that it has removed beneficial ownership information (BOI) reporting requirements for all U.S. companies and U.S. persons under the Corporate Transparency Act (CTA). Following the Treasury Department’s initial announcement on March 2, 2025, this decision removes yet another administrative burden from the shoulders of already overwhelmed tax practitioners. A Silver Lining: One Less Compliance Burden At a time when tax professionals are drowning in ever-expanding regulatory requirements, the elimination of BOI reporting …
California Corner: New FinCEN Geographic Targeting Order Impacts California Border Region Money Services Businesses
Last week, the Financial Crimes Enforcement Network (FinCEN) issued a significant Geographic Targeting Order (GTO) that will directly impact money services businesses (MSBs) operating in California’s border counties. This new order represents an important development for tax professionals advising clients in the affected regions.What California Tax Professionals Need to KnowThe GTO, released on March 11, 2025, dramatically lowers the Currency Transaction Report (CTR) threshold to just $200 for MSBs operating in specific ZIP codes along the southwest border. This represents a substantial change from the standard $10,000 CTR reporting requirement that most financial institutions follow.For California tax professionals, this order …
Treasury Ends BOI Enforcement
The U.S. Treasury Department announced on March 2 that it will no longer enforce the Corporate Transparency Act (CTA) or its associated Beneficial Ownership Information (BOI) reporting requirements. This decision effectively halts a rule aimed at combating money laundering and shell company formation. In a press release, Treasury Secretary Scott Bessent called the move “a victory for common sense” and stated it aligns with “President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.” The Treasury Department confirmed it will not impose penalties against …
California Corner: Filing 1099s with the Franchise Tax Board (FTB)
By: If you file Forms 1099 via paper or file electronically with the IRS following the IRS Combined Federal/State Filing Program (CFSF) guidelines as outlined in IRS Publication 1220, and the amounts you are reporting to the IRS and FTB are the same, you do not need to file anything separate with FTB—the information will be forwarded to FTB from the IRS. IRS Publication 1220 also lists which forms are included in the CFSF. If you have an exception that requires you to report something different for federal and state purposes, such as a different dollar amount, file separate returns with …
BOI Reporting is Back in Effect
Beneficial ownership reporting requirements are back in effect, and most companies will have a new reporting deadline of March 21, 2025
Yes, IRS Direct File Still Exists — For Now
The IRS’s Direct File program is still here, despite some confusion on social media.On Monday, Elon Musk posted on X that he had “deleted” 18F, a digital services agency within the General Services Administration. 18F helps other government agencies build, buy, and share technology resources—including the IRS Direct File Program.While Musk’s digital declaration has invited speculation about the future of Direct File, the IRS is currently accepting returns through Direct File. As of Thursday, the 18F website is still live, but its X account has been deleted.During his January confirmation hearing, Treasury Secretary Scott Bessent was clear about his intentions …
IRS & State of California Fires Tax Relief – California Los Angeles County Fire & Wind Disaster January 2025
Federal Notices: CA-2025-01 & IR-2025-10IRS notices CA-2025-01 and IR-2025-10, issued January 10th, announced California residents of Los Angeles County, identified by FEMA as a “federally declared disaster area” due to the recent fires and wind conditions now have until October 15, 2025, to file and pay various federal individual and business tax returns and payments.This tax relief postpones until October 15, 2025, several tax filing and payment deadlines beginning on January 7, 2025, and eliminates any penalties or interest for payments made by the new deadline, October 15, 2025. See the exception below for payroll tax forms W-2 and W-3 …
Federal Disaster Relief Act Makes Big Changes to Casualty Loss Deduction: Key Provisions for Tax Practitioners
The Federal Disaster Relief Act of 2023 (enacted December 12, 2024) introduces significant modifications to disaster-related tax provisions that practitioners should consider when advising clients affected by qualified disasters. This analysis covers key provisions and implementation considerations for tax professionals. Effective Dates and Qualification Criteria The Act’s general provisions apply to presidentially declared disasters from January 1, 2020, through February 11, 2025 (60 days post-enactment). However, practitioners should note the special carve-out for California wildfire disasters, which extends retroactively to December 31, 2014. Modified Casualty Loss Treatment The Act fundamentally alters the traditional casualty loss framework for qualified disasters. Key …
BOI Reporting Remains Voluntary: A Tale of Two Injunctions
FinCEN announced Friday morning that beneficial ownership information (BOI) reporting requirements remain voluntary, despite Thursday’s Supreme Court decision that might have suggested otherwise. The situation stems from two separate nationwide injunctions: while the Supreme Court lifted one (Texas Top Cop Shop v. Garland), another (Samantha Smith and Robert Means v. U.S. Department of the Treasury) remains in effect, creating an interesting regulatory scenario where compliance is optional but increasingly inevitable. Implementation Timeline for the Corporate Transparency Act Congress passed the Corporate Transparency Act (CTA) in 2021 as part of an anti-money-laundering initiative. FinCEN initially set a January 1, 2025 deadline …
2025 LA Firestorm: Governor Announces Property Tax Relief
Tax professionals serving Los Angeles County have two significant relief measures to discuss with clients affected by the recent firestorms, following Governor Newsom’s January 16, 2025 executive order.Property owners in designated areas now have automatic extensions for property tax payments. Property taxes due April 10, 2025 and December 10, 2025, are now due April 10, 2026.For clients who had their property damaged or destroyed, the disaster reassessment program can provide immediate reductions to property tax assessments. While the postponement of payments to April 10, 2026 is good, it’s even better if the amounts due in 2026 are reduced. Automatic Extension …
IRS Commissioner Danny Werfel Resigns
IRS Commissioner Danny Werfel has stepped down from his position following a resignation letter sent to IRS employees on Friday, January 17. “After significant introspection and consultation with others, I’ve determined the best way to support a successful transition is to depart the IRS on January 20, 2025,” he wrote.Werfel was appointed as IRS Commissioner in 2023, and his term was set to end in late 2027. IRS Commissioners typically serve 5-year terms that span presidential transitions. However, in December President Trump announced plans to nominate former Missouri congressman Billy Long to the position of IRS commissioner.”While I had always …
LA County Tax Preparers Can Get Relief For Their Out-Of-Area Clients
If you are a tax preparer located in a federally designated disaster area, your clients can be considered as “affected” by the disaster. See FAQs for Disaster Victims posted on the IRS website. Here are two IRS answers that may help you get through the 2025 tax season especially if you, your family, friends, or clients are personally suffering through the CA Wildfires (or Milton or Helene or the many other disasters in the news.)Comment: All of the FAQs are important to you and your clients. You need to make time to review them all. Affected taxpayers: FAQ Q1 Disaster relief …
Treasury Proposes Key Changes to Circular 230
The Treasury Department has proposed the first major updates to Circular 230 since 2014. The comment period ends February 24, 2025, with a public hearing scheduled for March 6, 2025. Yes, in the peak of tax season. The Notice of Proposed Rulemaking can be accessed here. Major Changes Affecting Tax Preparers Tax Return Preparation Standards Following the Loving v. IRS decision, the proposed regulations eliminate provisions related to registered tax return preparers. The standards have been revised to apply only to tax returns prepared, approved, or submitted in connection with representing a client in a matter before the IRS. The …
Tax Relief for California Wildfire Victims: What Tax Professionals Need to Know
The IRS has announced significant tax relief measures for victims of the January 2025 California wildfires and straight-line winds, primarily affecting Los Angeles County. Here’s what tax professionals need to know to serve their affected clients. Scope of Relief The relief applies to any area designated by FEMA under declaration number 4856-DR. While currently limited to Los Angeles County, practitioners should monitor IRS.gov’s disaster situations page for potential additions to the covered areas. Key Deadline Extensions The IRS has established October 15, 2025, as a universal deadline for various filings and payments originally due between January 7 and October 15, …
Disaster Relief – Federal Law Now Conforms to California Law for Certain Settlements
In an effort to ensure California wildfire victims achieve maximum tax relief, in 2022 and 2023 the state enacted legislation that excludes from taxable income settlement proceeds received by these taxpayers. Specifically, California allows an exclusion from gross income for:Settlement payments received from the Fire Victims Trust,Settlement payments received from Southern California Edison for claims relating to the 2017 Thomas Fire or the 2018 Woolsey Fire, andSettlement payments received from Pacific Gas and Electric Company for claims relating to the 2019 Kinkaid Fire or 2020 Zogg Fire.Now, effective December 12, 2024, federal law also excludes these payments from taxable income. …
IRS Recovered $4.7 Billion in 2024 via New Initiatives
You may have missed it during the buzz of the holiday season, but the IRS has released its latest update to the Strategic Operating Plan. The annual update reports that in 2024 the IRS recovered $4.7 billion through new initiatives in three areas:$1.3 billion collected from wealthy individuals who either failed to pay their tax debts or submit tax returns$2.9 billion recovered through IRS Criminal Investigation efforts targeting tax fraud, financial crimes, drug trafficking, cybercrime, and terrorist financing$475 million obtained from civil and criminal cases that originated from whistleblower tips A Renewed Focus on High-Income Non-Filers The IRS has attempted …
FinCEN Extends Beneficial Ownership Information Reporting Deadline Following Court Decision
In a significant development for tax practitioners and their clients, the Financial Crimes Enforcement Network (FinCEN) has extended the deadline for most reporting companies to file their Beneficial Ownership Information (BOI) reports to January 13, 2025. This extension came shortly after the Fifth Circuit Court of Appeals lifted an injunction that had temporarily suspended the reporting requirement. Key Deadline Changes The revised deadlines reflect FinCEN’s recognition that reporting companies need additional time to comply following the period of legal uncertainty. Here are the updated filing requirements: Pre-2024 Entities Companies created or registered before January 1, 2024, now have until January …