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Failure to Pay Employment Taxes Gets Personal When Tax Court Rules Against Tax Professional (United States v. Tax and Bankruptcy Attorney, PLC, and Kenneth Keate., (US District Court for the District of Minnesota, NO. 0:22-CV-02928 (Nov. 27, 2024))
By: In a case that should serve as a cautionary tale for all tax practitioners advising business clients, United States v. Tax and Bankruptcy Attorney, PLC and Kenneth Keate demonstrates the severe personal consequences that can result from improper handling of employment taxes.
Gig Worker Tax Preparation: A Guide for Enrolled Agents
The gig economy continues to expand rapidly, with 64 million Americans now participating in on-demand work through digital platforms. As an Enrolled Agent, you are uniquely positioned to serve this growing demographic. Gig workers need specialized tax guidance that aligns with your expertise in taxation and representation. This guide will outline the challenges and actionable solutions for working with gig economy clients as an Enrolled Agent. Leveraging Your Representation Authority Gig workers face a significantly higher risk of IRS scrutiny due to information reporting gaps, income matching discrepancies, and Schedule C filing complexities. When they receive tax notices or audit …
Tax Prep for Gig Economy Clients: A Guide for CPAs
The gig economy continues to expand, with approximately 64 million Americans now participating in on-demand work, services, or goods provision. This section of the workforce represents an opportunity to expand your practices client base. As CPAs, preparing taxes for these clients presents unique challenges that differ from traditional W-2 employees. This guide outlines tax complications and the actionable steps that you can take to better prepare you for gig economy clients. Understanding Gig Economy Income The IRS defines gig economy income as taxable regardless of whether it’s from part-time, temporary, or side work; whether it’s reported on information returns; or …
Sixth Circuit Reverses Tax Court: IRA Distributions Taxable to Current Owner Even if IRS Took the Money (Lonnie W. Hubbard v. Comm., No. 24-1450, US Court of Appeals for the Sixth Circuit (March 19, 2025))
By: In a significant decision, the Sixth Circuit reversed a Tax Court ruling that had treated the government’s forfeiture of an IRA as a taxable distribution to the account’s former owner.
Noncustodial Parent Denied Dependency Despite Claiming One of Two Children for Years (Melissa Correll v. Comm., TCM 2025-31)
By: When Melissa Correll claimed her 16-year-old son as a dependent on her 2021 return even though he lived full-time with his father in Georgia, the Tax Court strictly applied the qualifying child rules under §152.
Government Secures $1.9 Million FBAR Penalty Judgment Against Estate (US v. Patricia Leeds, DC Idaho, No. 1:22-CV-00379 (Mar. 7, 2025))
In a recent decision, the court granted summary judgment to the government in a case seeking FBAR penalties against the Estate of Richard Leeds.
When a Responsible Person’s Failure to Pay is “Willful” (Kristopher Dreyer v. United States, 9th Cir., No. 24-906, March 28, 2025)
A nearly $188,000 personal tax liability struck board member Kristopher Dreyer when the Ninth Circuit affirmed that his leadership role at a private school made him personally responsible for the organization’s unpaid trust fund taxes.
Gig Economy Clients: Tax Prep Challenges and Solutions for AFSP Preparers
The IRS defines the gig economy as “activity where people earn income providing on-demand work, services or goods, often through a digital platform.” In 2023 alone, 64 million people worked in the gig economy. As an Annual Filing Season Program (AFSP) participant, you’re bound to run into clients earning income through the gig economy. These clients can often have trouble with tracking their expenses, knowing how often to pay their taxes, and what their obligations are. Much like the gig economy, these clients are always in flux. We’ll be exploring the challenges that gig economy clients present and the solutions …
Safeguarding Independent Contractor Classifications: IRS Issues First Major Update to Section 530 Relief in 40 Years (Revenue Procedure 2025-10)
By: Revenue Procedure 2025-10 provides updated guidance on Section 530 relief—the first update since 1985.
Who Needs A PTIN?
The 2026 tax season isn’t here yet, but it’s never too late to start preparing, starting with your PTIN. A Preparer Tax Identification Number (PTIN) serves as the equivalent of a tax professional’s social security number. The IRS uses this to track returns prepared by each tax professional and to monitor their continuing education requirements. Your PTIN appears on tax returns you prepare, allowing the IRS to identify who worked on each submission. But exactly who needs this credential? We’re here to break it down for you. Tax Preparers Who Receive Compensation The IRS regulations are clear: anyone who prepares …
How To Renew A PTIN
How To Renew A PTIN Renewing your Preparer Tax Identification Number (PTIN) is an essential task for any tax return preparer. Whether you’re an Enrolled Agent, CPA, anyone looking to complete the Annual Filing Season Program, or a non-credentialed tax preparer, the IRS requires anyone who prepares federal tax returns for compensation to have a valid PTIN. We’ll walk you through the renewal process step-by-step so that you can be ready for the next tax season. When to Plan on Renewing Your PTIN PTINs expire on December 31st of each year, meaning that you’ve got to plan for your IRS …
How To Apply For A PTIN
A step-by-step guide for aspiring tax preparers on how to apply for a PTIN.
ID Requirement for Energy Efficient Home Improvements Begins In 2025
For 2025, The IRA22 introduces a new requirement that certain energy-efficient home improvements will need product identification numbers to qualify for tax credits. This system, sometimes called the “HEEHRA ID” (Home Energy Efficiency Home Rebate Act ID) or “Product ID” requirement, is designed to verify that products meet the efficiency standards required for the tax credits.Specifically:Manufacturers will need to register qualifying products in a Department of Energy databaseProducts will receive unique identification numbersHomeowners will need these ID numbers when claiming the 25C tax credit (Energy Efficient Home Improvement Credit) on their tax returnsThis applies to windows, doors, insulation, HVAC systems, …
Department of Education Announces Resumption of Federal Student Loan Collections – PTO-for-Student Loan Payments is An Emerging Trend
The U.S. Department of Education announced that its Office of Federal Student Aid (FSA) resumed collections on defaulted federal student loans beginning Monday, May 5th, 2025 (DOE Press Release Apr. 21. 2025). This marks the end of a collections pause that has been in place since March 2020.Key Statistics and Timeline:42.7 million borrowers currently owe more than $1.6 trillion in student debtOnly 38% of borrowers are current on their loan paymentsNearly 10 million borrowers could soon be in default, representing almost 25% of the federal student loan portfolioThe Treasury Offset Program (a program that uses payments like tax refunds or …
IRS Enhances Its Online Account Features (IR-2025-28)
By: In a move that significantly improves digital accessibility for taxpayers, the IRS announced the addition of critical information return documents to the Individual Online Account. This represents another step in the agency’s ongoing modernization efforts and creates new opportunities for more streamlined tax preparation processes. More Documents Available in Online Accounts: Effective February 27, 2025, taxpayers can access Form W-2 (Wage and Tax Statement) and Form 1095-A (Health Insurance Marketplace Statement) directly through their IRS Individual Online Account. These documents are available for tax years 2023 and 2024 under the “Records and Status” tab. Tax Practitioner Planning Considerations: As tax …
What is the Annual Federal Tax Refresher Course (AFTR) and Comprehension Test?
By: If you’re a tax preparer looking to participate in the IRS Annual Filing Season Program (AFSP), one of the key requirements is completing the Annual Federal Tax Refresher (AFTR) course and passing its comprehension test. But what is AFTR and why do you need it to have an AFSP Record of Completion? We’ll break down why AFTR is essential for tax preparers who are interested in or renewing their Record of Completion through the AFSP. What is the AFTR Course? The Annual Federal Tax Refresher course is a six-hour educational program designed to update tax preparers on the latest changes …
How to Complete the Annual Federal Tax Refresher Course (AFTR) and Comprehension Test
Getting ready for tax season can’t start early enough for tax return preparers, especially for those looking to participate in the IRS’s Annual Filing Season Program. Tax return preparers looking to upgrade their careers with credentials through the IRS Annual Filing Season Program can expect to complete the Annual Federal Tax Refresher Course (AFTR) and the accompanying comprehensive test. If you’re planning to earn or renew your AFSP Record of Completion, here’s your step-by-step guide to navigating this important professional milestone. Step 1: Do You Need to Take the AFTR Course? It’s worth noting that not everyone will need to …
A Reminder of Real Estate Professional Status Requirements (Warren v. Comm. (T.C. Summary Opinion 2024-20))
James Michael Warren purchased a single-family home in 2016 with plans to convert it into an assisted living facility. Throughout 2017, he renovated the property while employed full-time as an engineer at Lockheed Martin. Though some rooms remained habitable during renovation, generating $6,000 in rental income (which Warren failed to report), he claimed a $41,733 loss deduction on his Schedule E. The Taxpayer Flunked the Time Test: The IRS disallowed Warren’s claimed losses, determining he didn’t qualify as a real estate professional under Section 469(c)(7). The Tax Court agreed, highlighting two critical points:First, to qualify as a real estate professional, …
How to Complete the IRS’s Annual Filing Season Program
As tax professionals, we understand the importance of maintaining high standards of expertise and professionalism in our industry. The IRS’s Annual Filing Season Program (AFSP) gives non-credentialed tax preparers the opportunity to distinguish themselves in the marketplace by being added to the IRS’s Directory of Federal Tax Return Preparers and gaining limited representation rights before the IRS. If you’re considering participating in this voluntary program, this guide will walk you through the step-by-step process of completing the requirements and obtaining your Record of Completion.If you are interested in the Annual Filing Season Program and want to know more, check out …
FAQs Released for FinCEN Geographic Targeting Order Impacting California and Texas Border Region Money Services Businesses
On March 11, 2025, the Financial Crimes Enforcement Network (FinCEN) issued a Geographic Targeting Order (GTO) that impacts money services businesses (MSBs) operating in California and Texas border counties. The targeting order is an important development for tax professionals advising clients in the affected regions.On March 24, 2025, FAQs were released to answer 21 frequent questions on implementing the reporting requirements. What Affected California and Texas Tax Professionals Need to Know The GTO dramatically lowered 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 …