Income Tax News

The Internal Revenue Service needs to do more to enable whistleblowers to report on fraud, waste and abuse, even if they’ve signed nondisclosure agreements, which should provide anti-gag provisions allowing them to speak out, according to a new report.

The report, released Thursday by the Treasury Inspector General for Tax Administration, comes in response to a congressional request to assess whether the IRS complied with the Whistleblower Protection Enhancement Act of 2012 by including the required anti-gag provision in its NDA and related documentation as required by law. It’s unclear whether the congressional request was related to the IRS whistleblowers who complained about preferential treatment of Hunter Biden’s tax evasion case.

The anti-gag provision informs employees that their rights and obligations to report wrongdoing to Congress, the Inspectors General, or the Office of Special Counsel supersedes an NDA, the TIGTA report noted. 

The IRS estimates that approximately 500 to 1,000 of its employees and 6,000 of its contractors sign an NDA each year. “Without anti-gag provisions in the NDAs, employees and contractors might be reluctant or discouraged to report on fraud, waste, and abuse activities, which would cause reputational harm for the agency,” said the report. 

TIGTA found that the IRS has guidance that references whistleblower protections and addresses prohibited practices of retaliation against whistleblowers. However, specific reference to the anti-gag provision was not included in its NDAs, policies or whistleblower protections training. 

In addition, the IRS’s guidance on prohibited personnel practices under the Whistleblower Protection Enhancement Act document states that the NDA policy, form or agreement must include the anti-gag provision before the policy, form or agreement can be enforced. Because NDAs in use by the IRS at the time of TIGTA’s review did not contain anti-gag provisions, they may not be enforceable, according to the report. 

TIGTA reviewed 22 NDAs signed from August 2018 to April 2024 and found that five contained a partial reference to the anti-gag provision, but 17 did not contain any reference to the anti-gag provision. Some of teh existing internal guidance referenced NDAs and whistleblower protections. However, TIGTA did not see evidence of a dedicated NDA policy that required the anti-gag provision be included.  

The NDA and whistleblower guidance were not easily accessible for employees to find on the IRS intranet site. Training for new hires and annual briefings for all employees, managers and contractors mentioned the Whistleblower Protection Act of 1989, and addressed the prohibited practices of retaliating against whistleblowers. Although it was not required, they did not contain the anti-gag provision. As a result of TIGTA’s evaluation, in July 2024, IRS officials updated the NDA form template for contractors with staff-like access and non-procurement employees involved in procurement activities to include the required anti-gag provision. The IRS also updated its Expert Witness NDA form template in October 2024. 

TIGTA made four recommendations in the report. It recommended the IRS should ensure that NDAs, policies, forms and other guidance documents include the required anti-gag provision. It also suggested the IRS should create a dedicated section for NDAs in its internal guidance that contains the anti-gag provision. The IRS should also include information about the anti-gag provision in training programs covering whistleblower protections (such as new employee orientation and contractor training), the report recommended, and add a link to TIGTA’s Whistleblower Protections web page on its internal web page and pertinent information to the Employee Resource page on its internal webpage to ensure employee awareness of the whistleblower protections as it relates to the anti-gag provision. 

IRS officials agreed with TIGTA’s recommendations. During the evaluation, the IRS updated its NDA template for contractors with staff-like access, non-procurement employees involved in procurement activities, and expert witnesses to include the required anti-gag provision. The IRS also developed updates to the fiscal year 2025 mandatory Prohibited Personnel Practices and Whistleblower training, and the updates are under final legal review. 

“We appreciate your recognition of our references to anti-gag provisions in our documentation and training, and we appreciate your identifying areas where we can improve our notification of whistleblower protections and whistleblower rights,” wrote IRS chief risk officer Michael Wetklow in response to the report.

Originally Appeared Here

The tax credit Idahoans receive for buying groceries would increase from $120 a year to $155 a year under a new bill introduced Monday in the Idaho Legislature.

House Majority Leader Jason Monks, R-Meridian, sponsored the new bill, House Bill 61, saying the state has not increased the tax credit for two years.

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“We’ve seen a lot of inflation taking place lately on the groceries,” Monks said. “It’s important that individuals have the ability to purchase food without having to pay additional taxes on that, and so this particular legislation would increase that credit from $120 to $155.”

Before this bill, the Idaho Legislature last increased the grocery tax credit from $100 to $120 in 2023.

If Monks’ bill is passed into law, the credit would cover about $10,033 in groceries for a family of four every year with a $620 grocery credit, Monks said. That corresponds to covering $861 worth of groceries each month.

As is the case currently, the taxpayer filing the tax return, their spouse and each dependent would be eligible to receive the credit, which is why the credit would be $620 for a family of four.

However, in lieu of the new $155 per credit, Monks’ bill also allows Idaho taxpayers to save all of their grocery receipts for the whole year and submit their receipts to the Idaho State Tax Commission to receive a credit of up to $250 a year – in case they buy more groceries than the standard $155 credit would offset.

How would the new grocery tax credit bill affect Idaho’s seniors?

Under the new bill, the $155 grocery tax credit would apply uniformly to all Idahoans who do not submit itemized receipts. Currently, senior citizens receive a larger credit than the general public. 

Rep. John Gannon, D-Boise, expressed concern for seniors, many of whom may be retired or on a fixed income. 

“It looks to me like seniors are only going to get $15 more on their grocery tax credit,” Gannon said.

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Monks told Gannon the choice to make the $155 credit uniform was deliberate. Monks said he always thought the increased credit for seniors was off because he said in his experience teenagers eat more than seniors. 

While Monks’ bill would increase the tax credit Idaho taxpayers receive each year, it would leave the sales tax in place on groceries so that the state can collect sales tax revenue on groceries that out-of-state visitors buy.

“Being that tourism is one of our largest industries in the state, we get a lot of money that comes in from that, and that wouldn’t change under this scenario,” Monks said. 

A fiscal note attached to the new bill estimates that it would reduce sales tax revenue to the state by about $50 million.

Following a short debate, the House Revenue and Taxation Committee voted to introduce the new bill Monday, which clears the way for the bill to return to the committee for a full public hearing. 

In an emailed statement, House Minority Leader Ilana Rubel and Senate Minority Leader Melissa Wintrow said that Idaho residents “deserve a meaningful break” on grocery costs.

“Yet Republicans are extending a pittance to working families in the form of a $35 increase in the tax credit for groceries,” they said. “Meanwhile, they have proposed a quarter of a billion dollar income tax cut that will overwhelmingly benefit the richest individuals and corporations, while leaving the state unable to adequately fund necessary services. We are frustrated by the priorities of the supermajority party that puts the most wealthy and well-connected ahead of those struggling to afford basic needs, including groceries.”

How to submit testimony to Idaho’s House Revenue and Taxation Committee

House Revenue and Taxation Committee Chairman David Cannon, R-Blackfoot, said his committee is not accepting remote virtual testimony on bills this year. However, Cannon said he will allow Idahoans to submit written email testimony by 4 p.m. the day before a hearing.

To submit written testimony, people should send an email to [email protected] with the subject line clearly marked for legislative testimony. Cannon said everyone submitting email testimony must include their name, legislative district and any organization or group they represent, followed by the bill number they wish to testify on and whether they are for or against the bill. Cannon encouraged email writers to keep their testimony short so that it would last two minutes or less if read aloud.

Cannon said the committee secretary would read some email testimony, giving preference to writers who live farther from the Idaho State Capitol in Boise. 

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Originally Appeared Here

You’ve probably heard that not long after his January 20 inauguration, President Trump kicked off his second term with a flurry of executive orders. By most accounts, he signed a total of approximately 200 various orders, actions, and proclamations on his first day back in office.

The actions cover everything from withdrawing the United States from the Paris Climate Agreement, declaring a national emergency on the Southern Border, and ending birthright citizenship for children born to undocumented parents to pardoning about 1,500 people involved in the January 6 Capitol riot, renaming the Gulf of Mexico to the “Gulf of America,” and delaying the TikTok ban for 75 days.

Meanwhile, another set of orders involves federal workers. Aside from wanting workers to return to offices, the new president has ordered a hiring freeze.

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According to the text of the order, “As part of this freeze, no Federal civilian position that is vacant at noon on January 20, 2025, may be filled, and no new position may be created except as otherwise provided for in this memorandum or other applicable law.”

This move has been portrayed as a cost-cutting measure, but the freeze, which notably applies more harshly to the IRS, could have significant implications beyond budget management. That is particularly true given that tax season starts next week.

Here’s more of what you need to know.

Trump federal hiring freeze 2025

Trump’s federal Hiring Freeze is a 90-day freeze on hiring federal civilian employees across executive departments.

The freeze exempts military, national security, and public safety positions. It requires the Office of Management and Budget (OMB) to develop a plan to reduce the federal workforce through efficiency and attrition. The order to halt hiring came alongside a “Return to In-Person Work” order terminating remote work arrangements for federal employees. That order also:

• Mandates full-time, in-person work at duty stations
• Allows agency heads limited exemptions

Legal backlash: Several lawsuits have already been filed challenging various executive orders signed by President Trump, including against an order to make it easier to terminate career federal employees.

It’s worth noting that while federal hiring freezes are not new (former presidents Jimmy Carter and Ronald Regan implemented them, as did Trump in his first term), they aren’t a universal practice. And interestingly, Trump’s newly implemented hiring freeze carves out a more extended timeframe for the IRS.

“Upon issuance of the OMB plan, this memorandum shall expire for all executive departments and agencies, with the exception of the Internal Revenue Service (IRS). This memorandum shall remain in effect for the IRS until the Secretary of the Treasury, in consultation with the Director of OMB and the Administrator of USDS, determines that it is in the national interest to lift the freeze.”

The timing couldn’t be more precarious as the IRS wanted to boost hiring to improve operations and customer services.

Tax season starts soon

The 2025 tax filing season begins Monday, January 27, and the IRS is simultaneously managing the rollout of its expanded Direct File program in 25 states.

Additionally, the executive order comes as former Commissioner Danny Werfel has just stepped down, although he had years remaining in his term. As Kiplinger has reported, Trump’s pick for Commissioner, Billy Long, a former congressman and auctioneer with limited tax experience, awaits U.S. Senate confirmation.

The hiring freeze IRS carve-out adds to a planned shift from the Biden administration’s policies to modernize and strengthen IRS operations. Among those priorities were initiatives to hire more IRS agents and agency staff and focus on modernization and tax compliance for large corporations, high earners, and wealthy nonfilers.

Republican lawmakers have rallied against several Biden-era changes at the tax agency, including IRS Direct File (a new program available in 25 states that allows eligible taxpayers to file taxes for free directly with the tax agency).

IRS funding, billions of which have been clawed back in various stopgap measures since an initial $80 billion was initially allocated to the agency under the Inflation Reduction Act (IRA), has also been an issue. In recent years, false assertions have been made that thousands of IRS agents are coming for the tax dollars of hard-working Americans. And a recently proposed bill proposes to abolish the IRS and rewrite the tax code.

Separately, Trump has recently floated the idea of an External Revenue Service (ERS) — though it’s unclear whether such an agency would be connected to the IRS.

In any case, the implications of the hiring freeze and other key changes (like the likely dismantling of clean energy tax incentives like the EV tax credit expressed in another executive order) could affect millions of taxpayers preparing to file their 2024 taxes.

Tax refund status: Will IRS refunds be delayed this year?

Now that the tax agency faces the prospect of maintaining critical services with constraints on expanding its workforce, tax refund processing concerns come to mind for many.

In a typical year, the IRS processes over 140 million individual tax returns, with an average refund of around $3,100. Also, this month the IRS is automatically refunding unclaimed rebate recovery credits for eligible taxpayers.

• Audit capabilities could be an area of potential disruption. Some wonder if the freeze could reduce the agency’s ability to investigate tax discrepancies, particularly among high-income earners and large corporations. (The agency was in the process of hiring additional staff to handle such audits.)
• Could customer service suffer? With fewer staff to handle the agency’s many phone calls during tax season (reportedly about 92 million in FY23 ), taxpayers might face extended wait times on phone lines and slower responses to written communications.

So far, Treasury Department officials have been cautious in their public statements, noting that the hiring freeze will remain in effect per the executive order until a comprehensive review determines it serves the “national interest.”

However, AICPA vice president for tax policy and advocacy, Melanie Lauridsen wrote the following in a LinkedIn post.

“There is NO CONCERN for the April 15 tax filing season as far as hiring seasonal employees for the filing season. Seasonal employees should have already been hired and received training to begin working from January through May. The IRS will also reallocate workers from other areas to help cover filing season processing.“

Though, Michael Cohn, Editor-in-Chief of Accounting Today, told the news outlet, The Independent, that the freeze “could prove problematic during tax season.”

For taxpayers, the advice remains consistent: be prepared. For some, that might mean filing taxes early if they need or expect a tax refund. But for most, that means:

• Maintaining good financial records and documentation
• Being patient with potential processing and customer service delays
• Considering professional tax assistance
• Staying tuned to tax changes

As the 2025 tax season unfolds, eyes will be on the IRS to see how it manages the constraints and new leadership. Will the agency adapt and maintain service levels, or will taxpayers experience disruptions?

Only time will tell, but one thing seems inevitable: the landscape of U.S. tax administration is changing, and taxpayers will be among the first to feel the impacts.

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Originally Appeared Here

Danny Werfel, the commissioner of the Internal Revenue Service, will resign Monday, he told employees, as President-elect Donald Trump eyes a successor to undo much of President Joe Biden’s agenda at the tax agency.

Though the commissioner’s term wasn’t due to expire until 2027, Trump had previously announced plans to fire Werfel, who took office in 2023, and nominate Billy Long, a former Missouri congressman without any tax policy experience, to replace him.

Long’s Senate confirmation is not in doubt given the Republican majority in the chamber.

“Once the president announced his plans to bring in a new IRS commissioner, I had to recognize that the incoming team wanted to go in a new direction in terms of who was leading the IRS,” Werfel told The Washington Post. “So I worked to determine what would be the best departure timing that would stay true to my ongoing commitment to the IRS mission and also to my commitment to doing what’s necessary to support a successful transition.”

Deputy IRS Commissioner Doug O’Donnell will lead the agency in the interim, Werfel said. O’Donnell previously served as acting commissioner in 2022 before Werfel took office.

Congressional Democrats urged Werfel to remain in office and force Trump to fire him. Trump in his first term had mused about sending IRS agents after political opponents, and many tax experts are concerned that Long — as other Trump appointees have promised — will try to punish the president-elect’s perceived enemies.

Werfel said he was “confident that there are checks and balances in place to effectively prevent that politicization,” and that his decision to step down was in part aimed at heading off any notion of political allegiance at the agency.

“There’s a precedent for having commissioners complete their five-year terms, and when the president announced his plans to replace the IRS leadership, it signaled that he was moving away from that precedent,” Werfel said. “I am a fan of that precedent. I think that precedent helps for continuity and aligns with the IRS’s nonpartisanship. But I also recognize that the president has the authority to remove a commissioner at will and to select a new commissioner.

“This issue will be debated, and it should be. Right now in this moment, I had to do what I felt was best for the agency, and I didn’t want to be a distraction for the employees and the IRS mission.”

Werfel presided over a transformation at the tax service after Biden and congressional Democrats infused it with tens of billions of dollars in the 2022 Inflation Reduction Act.

The resources allowed the agency to begin modernizing its long-outdated IT systems and roll out a suite of new customer service features to make tax-filing easier. Individuals can upload dozens of forms to the IRS and in a number of states file their taxes directly with the agency free, using a government-backed feature that competes with paid tax-prep software such as Intuit TurboTax and H & R Block.

The results were successful overall, tax experts said. The IRS squashed its once multimillion-page backlog of tax filings and slashed wait times on customer service helplines.

New funding for stricter scrutiny of high-income taxpayers and major corporations netted billions of dollars in overdue payments and penalties, a feather in the Biden administration’s cap as it argued for “tax fairness.”

But Republicans said the new resources amounted to an overreach and a “shakedown” of middle-class taxpayers. The GOP has sought to claw back tens of billions of dollars from the IRS and is poised to rescind even more in a party-line tax and spending bill.

Werfel said he had not met with Trump transition officials aside from remedial briefings on the agency’s work. He offered to remain in his post until Long was confirmed by the Senate, but did not receive any answer to that proposal from Trump officials.

“Danny is not a political guy. He’s a great public servant. He did a great job, and I think was willing to do whatever he could to be helpful,” said John Koskinen, who served as IRS commissioner in the Obama and Trump administrations. “In some ways, his idea of gracefully stepping aside in light of any lack of indication that the new administration wanted him, he thought the most helpful thing to do would be to quietly step aside.”

Werfel said he hoped Long and the incoming Trump economic policy team would preserve the agency’s “momentum.”

“Enough progress has been made that important wins for taxpayers are on the horizon in the coming year or two, and I think the new administration will benefit from taking us across the finish line on some of the projects that are underway,” he said.

Originally Appeared Here

Maryland Gov. Wes Moore (D) on Wednesday revealed his plan to balance the state budget in the face of a $3 billion deficit, detailing wide-reaching cuts that would affect some vulnerable populations, key initiatives that he campaigned on and the state’s ambitious education goals.

At the same time, the governor floated raising income taxes for the state’s wealthiest earners and increasing taxes on some capital gains, gambling and cannabis to fill the looming budget hole. However, the proposed change to the state’s tax system would lower what nearly two-thirds of Maryland taxpayers pay, saving them an average of $173, and up to $300 per year.

For months, Moore has been foreshadowing that the state will face difficult choices as it seeks to address its worst financial crisis in 20 years, leading to budget shortfalls that are projected to balloon to nearly $6 billion by 2030.

Wednesday’s announcement offered the first glimpse into how the governor is willing to carry out the $2 billion in curtailed state spending he announced last week and signaled that he believes the fiscal crisis has met the “high bar” he set for raising new revenue.

Moore cast his plan as an approach that reins in expenditures while also investing $750 million in economic growth, especially in emerging industries such as cybersecurity, defense contracting, quantum computing and life sciences.

Now, Moore is tasked with making the case to lawmakers and the public to justify his proposed cuts and tax plan, the starting point in negotiations over how to address the budget shortfalls and steer Maryland to financial health.

“Where we can find efficiencies and where we can make things work better, we have to be unafraid to do it as a state,” Moore said in an interview Wednesday morning.

Lawmakers and advocates were still combing through the details of Moore’s plan, but many said the $67 billion proposed budget is a good starting point.

Moore’s proposal, which state lawmakers are likely to debate over the next 2½ months, balances the budget and would leave the state with a $106 million positive cash balance.

Sen. Jim Rosapepe (D-Prince George’s), vice chair of the Budget and Taxation Committee, welcomed the idea of asking the state’s wealthiest residents to contribute more in taxes.

Moore’s proposed overhaul of the tax code would result in lower bills for 60 percent of Maryland taxpayers, no change for 22 percent and a tax hike for 18 percent — the increases largely concentrated among those who make $750,000 or more per year, Moore said Wednesday.

Rosapepe said Maryland’s tax plan has been “too regressive for too long” and applauded the governor’s proposal to shift the tax burden away from working people and onto the state’s highest earners.

“Working people feel they pay too much in taxes, and they do,” Rosapepe said.

The governor’s budget plan is roughly 1.2 percent larger than in fiscal 2025 but would slow spending on some key initiatives that Moore campaigned on and that state leaders have touted as major priorities.

Among other cuts, Moore proposed temporarily freezing enrollment in the state’s child-care scholarship program, trimming the anticipated budget of the state’s Developmental Disabilities Administration and decreasing investment in public universities.

The governor has also floated cost-containment measures that will ask local jurisdictions to shoulder more financial burden across multiple programs and require hospitals and insurers to contribute more to the state’s hospital deficit assessment to cover expanding Medicaid expenses.

Sen. Guy Guzzone (D-Howard), chair of the Budget and Taxation Committee, called the governor’s effort to address the state’s deficit a “first step” in a course-correcting process that could take years, adding that he believed Moore’s proposed solutions were “reasonable” — even if Senate lawmakers may ultimately differ on the details.

Guzzone predicted lawmaker concern over Moore’s proposed cuts to programs that help people with disabilities and victims of crime.

“We will look at both of those very carefully,” Guzzone said. “We know how important those are to a number of constituencies.”

The governor is also recommending that the state adopt a policy known as combined reporting, which requires multistate parent companies and subsidiaries to report profits together for state tax purposes. Under Moore’s plan, the state would simultaneously adopt a cut to the corporate income tax rate.

The proposed tax changes also include ending the state’s inheritance tax, which would be offset by lowering the estate tax exemption from $5 million to $2 million. And some habits for Marylanders would get more pricey under Moore’s plan. The governor has suggested raising the tax on sports betting from 15 to 30 percent, raising the table game tax from 20 to 25 percent and hiking the tax on cannabis from 9 to 15 percent.

Whether lawmakers will support Moore’s recommendations to raise taxes for some and lower them for others remains to be seen. Nor is it clear where Democrats, who control both chambers of the General Assembly, will land on the governor’s proposed cuts.

“This is the moment. We’re going to be asking all Marylanders, is this important to you? Are you willing to pay a little extra to do it?” Guzzone said. “That’s what this moment is about.”

Republican lawmakers said they welcome Moore’s emphasis on growing the state’s economy, his proposal to lower corporate taxes and cut income taxes for many Marylanders, but they did not support other parts of the governor’s plan.

“I was very pleased he talked at length about how we have to grow our private sector economy,” said House Minority Leader Jason C. Buckel (R-Allegany). Buckel said investment in making Maryland a more competitive, business-friendly state was the “long-term solution” to budget woes.

Still, Buckel said he would have liked to see deeper cuts to spending and a plan that did not rely on increasing income taxes for nearly 1 in 5 Maryland taxpayers.

Del. David Moon (D-Montgomery), the House majority leader, called Moore’s plan “thoughtful and thorough.”

“I am applauding the governor at the moment for digging in on the deficit,” Moon said.

Last year, House Democrats proposed their own $1.2 billion tax, toll and fee increase package to generate revenue, though the General Assembly ultimately passed more modest changes to avoid major cuts to the state’s transportation budget.

Moon said Moore’s plan doesn’t exactly match their old one and predicted that his members will need to spend time comparing the proposed cuts and revenue to ensure the underlying values align.

“It’s going to be incumbent on the governor to sell the plan to the public,” Moon said.

Moon said one of the “trickier parts” of Moore’s budget plan will be the proposed cuts and delayed rollouts to key elements of the Blueprint.

The governor’s plan would permanently slash funding for behavioral health services in schools from $130 million to $40 million and delay the rollout of designated planning time for teachers, a move that would also affect the underlying formula used to decide how much money schools receive.

“We in the House have a high bar for changes to the Blueprint and public schools spending,” Moon said, adding that his members will need to see “good justification” for Moore’s modifications.

On Wednesday, Moore made the case that wealthier Marylanders — like himself — should be willing to contribute more in the form of higher taxes to help support better schools, safer streets and a stronger economy, even as the state reduces the tax burden for most taxpayers.

“We refuse to balance the budget on the backs of working class,” Moore said.

Originally Appeared Here

Beware, taxpayers! The IRS will start to accept 2024 tax year returns soon in late January 2025, most likely on January 27 or 29, although the exact date hasn’t been announced yet.

Filing your taxes early not only ensures you follow the rules but also speeds up the arrival of any refund you’re entitled to. The IRS recommends filing electronically and using direct deposit for quicker and smoother processing. Online tax platforms or professional preparers can make the process easier, helping you handle the often complicated tax system.

Taxpayers will have almost three months to file their returns, with the deadline set for April 15. That said, it’s better not to wait until the last minute—filing earlier means the IRS can process your refund sooner, if you’re due one.

The IRS is broadening its free program that lets people file their taxes directly with the agency.

Direct File Program Overview

The Direct File program, which enables taxpayers to prepare and submit their returns without needing commercial tax software, will be available to over 30 million individuals across 24 states during the 2025 tax season.

This program was first tested as a pilot in 12 states during the 2024 filing season. IRS Commissioner Daniel Werfel has announced that the program will become permanent, with plans to increase access for more taxpayers.

“We’re making major expansions to Direct File, which will allow millions more people to use the service in 2025,” Werfel said during a call with reporters on Thursday. He also mentioned that additional states might opt to join the program for the 2025 tax season.

States where the Program is Available

The 2024 pilot program was available in select states and catered to individuals with straightforward W-2 filings, allowing them to submit their returns directly to the IRS. According to the IRS, participants claimed over $90 million in refunds through the program.

States where the program was originally available in 2024:

• California
• New York
• Arizona
• Florida
• New Hampshire
• Nevada
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming
• Massachusetts

States to be added in 2025:

• Alaska
• Connecticut
• Idaho
• Kansas
• Maine
• Maryland
• New Jersey
• New Mexico
• North Carolina
• Oregon
• Pennsylvania
• Wisconsin

New Eligibility Guidelines and Benefits

New eligibility guidelines will expand the program to include taxpayers with 1099 income, as well as those claiming credits like the Child and Dependent Care Credit, the Retirement Savings Contributions Credit, and deductions for Health Savings Accounts, among others.

“Other countries have been offering their citizens this kind of option for years,” Treasury Deputy Secretary Wally Adeyemo said during the call with reporters. Several members of the Organization for Economic Cooperation and Development, such as Germany and Japan, use similar systems with pre-filled tax forms.

The idea of direct filing isn’t popular with commercial tax preparation software companies, which have made billions by charging people to use their platforms.

A new report from the IRS inspector general this week highlights that the agency hasn’t maintained adequate safeguards to protect data within the IRS Free File Alliance. This alliance is a long-standing partnership between the IRS and some commercial tax prep companies to offer free services to low- and middle-income taxpayers.

The Free File Alliance operates independently from the Direct File program.

The IRS was directed to explore the creation of a “direct file” system as part of the funding it received through the Inflation Reduction Act, signed into law by President Joe Biden in 2022. The law allocated $15 million and set a nine-month deadline for the IRS to deliver a report outlining how such a program could be implemented.

Filing taxes might not be anyone’s idea of a good time, but at least the IRS is working to make it a little less painful. After all, a system that’s easier to use means fewer headaches—and maybe fewer calls to your accountant at 3 a.m. And hey, if Germany and Japan can handle pre-filled tax forms, maybe we’re finally catching up… one tax season at a time!

Originally Appeared Here

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Originally Appeared Here

In 2025, eligible taxpayers might receive reimbursement under the PATH Act 2025 Refund Dates given by the department. This is because the Path limit causes payment delays, which are expected to be delivered to residents.

The PATH Act imposed restrictions on applicants who wanted to receive their tax refund or tax credit, such as Earned Income Tax and Refundable Credits, on their federal tax returns. The refundable nature of both EITC and CTC enables people to receive a higher refund than the amount they have paid in their taxes.

PATH Act 2025 Refund Dates

The Internal Revenue Service department distributes tax credits among eligible taxpayers. However, there is a report of an exam that concludes that fraud was common among people claiming these credits.

So, they need to have complete information related to the tax benefit. The PATH Act 2025 Refund Dates will give taxpayers a clear indication of the tax credit dates. However, it is also essential for citizens to know that only eligible taxpayers can receive the payment benefit.

PATH Act Refund Dates 2025 Overview

Administering Department	Internal Revenue Service
Program Name	PATH Act 2025 Refund Dates
Country	USA
Delays	May occur for paper checks
Refund Timeframe	3 weeks for e-file, sooner with direct deposit
Payment Date	After February 15, 2025 for EITC and CTC claims
Category	Government Aid
Official Website	https://www.irs.gov/

PATH Act 2025 Refund Dates Details

Beneficiaries who have submitted their tax return electronically, such people will be eligible to receive the refund in three weeks. Meanwhile, the beneficiaries who have e-filed and chosen direct deposit may get processed sooner. The date beneficiaries will receive the refund will be utterly contingent upon when your file return is processed.

The PATH Act 2025 Refund Dates protects the IRS from delivering any benefit before February 15 if you file an EITC and CTC tax credit from the department. It means eligible citizens must be aware that even if they have submitted their tax return early, they still need to wait to get it processed till February 15.

What to Do If Your PATH Act Refund is Delayed

Taxpayers should contact the IRS if their refund status remains unchanged for more than three to four weeks or if they have not received their refund by the specified deadline. Delays are rare when refunds are issued electronically, but physical checks may experience occasional delays.

• IRS authorities are available to help taxpayers identify the cause of delays and guide them on how to receive their reimbursement.
• The tax season in the United States will start one month from now, 2025. Those taxpayers claiming tax credits in their returns might experience delays in receiving tax credits.
• Taxpayers can track the status of their tax credit online and double-check the legitimacy of any accompanying documentation, assuring timely delivery.
• Communication from the IRS allows taxpayers to detect potential issues sooner and, with the agency’s assistance, resolve the matters quickly, receiving the refunds on time.
• Taxpayers can find further details about refund processing and tax credit claims on the official IRS website or from a local office for taxes.

How to Check PATH Act 2025 Refund Dates

To check the status of PATH Act 2025 Refund Dates, citizens need to follow the points which are mentioned below:

• For electronic submission, the taxpayers who submit their taxes can receive the refund in just three weeks, and it’s even sooner with e-filing, which involves a direct deposit feature.
• Refund dates depend on filing, processing times, and specific payment arrangements.
• The PATH Act holds refunds for those claiming the EITC and ACTC until after February 15, 2025.
• Even if taxpayers file their 2025 tax return early, refunds for those claiming these credits will not be processed before February 15.
• Taxpayers can check the PATH Act refund status based on the tax year or the date they filed their tax return.
• It is advised to keep up-to-date on refund updates and to use the IRS tools to track the status of refund claims.

FAQs

Are there any exceptions to the refund delay?

No, refunds for EITC and CTC will always be delayed until after February 15, 2025.

What is the importance of the PATH Act?

The PATH Act helps prevent fraud by delaying refunds for certain tax credits.

When can I expect my refund for the PATH Act 2025?

After February 15, 2025, for those claiming EITC and CTC.

Originally Appeared Here

FutureFuel Corp. (NYSE: FF) has announced receiving Excise Tax Registration approval from the Internal Revenue Service, marking a important first step towards eligibility for the Internal Revenue Code 45Z credit (clean fuel production tax credit). The tax credit, initially approved in August 2022, became effective January 1, 2025. FutureFuel, which has an annual biodiesel production capacity of 60 million gallons, is awaiting further guidance from the IRS regarding the implementation of this tax credit, along with other Renewable Fuel Producers.

FutureFuel Corp. (NYSE: FF) ha annunciato di aver ricevuto l’approvazione per la registrazione dell’imposta sui consumi da parte del Servizio delle Entrate Interno, segnando un importante primo passo verso l’idoneità per il credito d’imposta previsto dal Codice Fiscale 45Z (credito d’imposta per la produzione di carburanti puliti). Il credito d’imposta, inizialmente approvato nell’agosto 2022, entrerà in vigore il 1 gennaio 2025. FutureFuel, che ha una capacità annuale di produzione di biodiesel di 60 milioni di galloni, è in attesa di ulteriori indicazioni dall’IRS riguardo l’attuazione di questo credito d’imposta, insieme ad altri Produttori di Carburanti Rinnovabili.

FutureFuel Corp. (NYSE: FF) ha anunciado que ha recibido la aprobación del Registro de Impuesto Especial por parte del Servicio de Impuestos Internos, marcando un importante primer paso hacia la elegibilidad para el crédito fiscal del Código de Rentas Internas 45Z (crédito fiscal para la producción de combustible limpio). El crédito fiscal, aprobado inicialmente en agosto de 2022, entrará en vigor el 1 de enero de 2025. FutureFuel, que tiene una capacidad anual de producción de biodiésel de 60 millones de galones, está esperando más orientaciones del IRS sobre la implementación de este crédito fiscal, junto con otros Productores de Combustibles Renovables.

FutureFuel Corp. (NYSE: FF)는 내부 수익국으로부터 세금 면세 등록 승인을 받았다고 발표했으며, 이는 내부 세법 45Z 세액 공제(청정 연료 생산 세액 공제)에 대한 자격의 중요한 첫걸음을 의미합니다. 이 세액 공제는 2022년 8월에 처음 승인되었으며, 2025년 1월 1일부터 시행됩니다. FutureFuel는 연간 6000만 갤런의 바이오디젤 생산 능력을 보유하고 있으며, 이 세액 공제의 시행에 대한 추가 지침을 IRS로부터 기다리고 있습니다. 그리고 다른 재생 가능 연료 생산업체들과 함께 있습니다.

FutureFuel Corp. (NYSE: FF) a annoncé avoir reçu l’approbation d’enregistrement de la taxe d’accise par l’Internal Revenue Service, marquant une première étape importante vers l’éligibilité pour le crédit d’impôt du Code des Impôts Internes 45Z (crédit d’impôt pour la production de carburant propre). Le crédit d’impôt, approuvé initialement en août 2022, entrera en vigueur le 1er janvier 2025. FutureFuel, qui a une capacité de production annuelle de biodiesel de 60 millions de gallons, attend de plus amples directives de l’IRS concernant la mise en œuvre de ce crédit d’impôt, ainsi que d’autres producteurs de carburants renouvelables.

FutureFuel Corp. (NYSE: FF) hat angekündigt, die Genehmigung zur Registrierung der Verbrauchsteuer vom Internal Revenue Service erhalten zu haben, was einen wichtigen ersten Schritt zur Berechtigung für das Steuerkredit nach Internal Revenue Code 45Z (Steuerkredit für die Produktion von sauberem Kraftstoff) darstellt. Das Steuerkredit, das ursprünglich im August 2022 genehmigt wurde, wird am 1. Januar 2025 wirksam. FutureFuel, das eine jährliche Biodieselproduktionskapazität von 60 Millionen Gallonen hat, wartet auf weitere Anweisungen vom IRS bezüglich der Umsetzung dieses Steuerkredits, zusammen mit anderen Produzenten erneuerbarer Brennstoffe.

Positive

• Received IRS Excise Tax Registration approval, enabling potential eligibility for clean fuel production tax credits
• Substantial production capacity of 60 million gallons of biodiesel annually

Negative

• Full guidance from IRS still pending, creating uncertainty about actual tax credit benefits

Insights

The IRS excise tax registration approval for FutureFuel marks a important milestone in accessing the IRC 45Z clean fuel production tax credit. This 60 million gallon capacity biodiesel producer is now positioned to potentially benefit from tax credits ranging from $0.20 to $1.00 per gallon depending on the carbon intensity score of their fuel production process.

The Section 45Z credit represents a significant shift from the previous biodiesel tax credit structure, introducing a sliding scale based on lifecycle emissions rather than a flat rate. For a company with FF’s production capacity, this could translate to annual tax benefits between $12 million and $60 million, though actual figures will depend on production volumes and carbon intensity metrics once full IRS guidance is released.

This registration approval comes at an optimal time, coinciding with the credit’s effective date of January 1, 2025. However, investors should note that final guidance from the IRS regarding specific credit calculations and carbon intensity thresholds remains pending, creating some near-term uncertainty about the precise financial impact.

The timing of FutureFuel’s excise tax registration approval aligns perfectly with the biodiesel industry’s transition to the new emissions-based incentive structure. The 60 million gallon annual production capacity positions FF as a significant player in the renewable fuels market, representing meaningful clean energy infrastructure in a growing sector.

While the industry awaits complete IRS guidance, this development signals FF’s proactive approach to maintaining competitive advantages in the biofuels market. The new credit structure is designed to reward producers with lower carbon intensity scores, potentially creating additional value for companies with efficient production processes and sustainable feedstock sourcing strategies.

The market implications extend beyond direct tax benefits – this registration enhances FF’s ability to compete effectively in a sector where margins are heavily influenced by government incentives. The transition to an emissions-based credit system could drive strategic investments in process improvements and technology upgrades to optimize carbon intensity scores.

01/03/2025 – 04:14 PM

CLAYTON, Mo., Jan. 03, 2025 (GLOBE NEWSWIRE) — FutureFuel Corp. (NYSE: FF) (“FutureFuel”), a manufacturer of custom and performance chemicals and biofuels, today announced that it has received Excise Tax Registration approval from the Internal Revenue Service. This registration is the first requirement to be eligible to claim the Internal Revenue Code 45Z credit, also known as the clean fuel production tax credit. The tax credit was first approved in August 2022, to be effective beginning January 1, 2025. FutureFuel along with other Renewable Fuel Producers, are awaiting full guidance from the Internal Revenue Service regarding the tax credit. FutureFuel has the capacity to produce up to 60 million gallons of biodiesel annually.

About FutureFuel

FutureFuel is a leading manufacturer of diversified chemical products, specialty chemical products, and biofuel products. In its chemicals business, FutureFuel manufactures specialty chemicals for specific customers (“custom chemicals”), as well as multi-customer specialty chemicals (“performance chemicals”). FutureFuel’s custom chemicals product portfolio includes proprietary intermediates for major chemical companies and chlorinated polyolefin adhesion promoters and antioxidant precursors for a major chemical company. FutureFuel’s performance chemicals product portfolio includes polymer (nylon) modifiers and several small-volume specialty chemicals for diverse applications. FutureFuel’s biofuels segment primarily produces and sells biodiesel. Please visit www.futurefuelcorporation.com for more information.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements deal with FutureFuel’s current plans, intentions, beliefs, and expectations, and statements of future economic performance. Statements containing such terms as “believe,” “do not believe,” “plan,” “expect,” “intend,” “estimate,” “anticipate,” and other phrases of similar meaning are considered to contain uncertainty and are forward-looking statements. In addition, from time-to-time FutureFuel or its representatives have made or will make forward-looking statements orally or in writing. Furthermore, such forward-looking statements may be included in various filings that the company makes with United States Securities and Exchange Commission (the “SEC”), in press releases, or in oral statements made by or with the approval of one of FutureFuel’s authorized executive officers.

These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause actual results to differ include, but are not limited to, those set forth under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in FutureFuel’s Form 10-K Annual Report, as amended for the year ended December 31, 2023 and in its future filings made with the SEC. An investor should not place undue reliance on any forward-looking statements contained in this document, which reflect FutureFuel management’s opinions only as of their respective dates. Except as required by law, the company undertakes no obligation to revise or publicly release the results of any revisions to forward-looking statements. The risks and uncertainties described in this document and in current and future filings with the SEC are not the only ones faced by FutureFuel. New factors emerge from time to time, and it is not possible for the company to predict which will arise. There may be additional risks not presently known to the company or that the company currently believes are immaterial to its business. In addition, FutureFuel cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. If any such risks occur, FutureFuel’s business, operating results, liquidity, and financial condition could be materially affected in an adverse manner. An investor should consult any additional disclosures FutureFuel has made or will make in its reports to the SEC on Forms 10-K, 10-Q, and 8-K, and any amendments thereto. All subsequent written and oral forward-looking statements attributable to FutureFuel or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this document.

# # #

FAQ

What is the significance of FutureFuel’s (FF) IRS Excise Tax Registration approval?

The approval is the first requirement for FutureFuel to become eligible for the Internal Revenue Code 45Z clean fuel production tax credit, potentially providing financial benefits for their biodiesel production.

When does the clean fuel production tax credit become effective for FutureFuel (FF)?

The clean fuel production tax credit became effective on January 1, 2025, following its initial approval in August 2022.

What is FutureFuel’s (FF) current biodiesel production capacity?

FutureFuel has the capacity to produce up to 60 million gallons of biodiesel annually.

What is the current status of IRS guidance for the clean fuel production tax credit for FutureFuel (FF)?

FutureFuel, along with other Renewable Fuel Producers, is currently awaiting full guidance from the Internal Revenue Service regarding the implementation of the tax credit.

Originally Appeared Here

Institutional investors are harvesting ETF losses for tax purposes, then placing their assets in highly correlated funds — regardless of so-called wash-sale restrictions, a new study found.

In theory, IRS guidelines prohibit investors from buying “substantially identical” securities 30 days before or after selling them. 

In practice, fund managers, pensions, insurance firms, endowments and other institutional investors “engage in substantial swapping” of ETFs with holdings that are 99% or more the same thing to the tune of $417 billion in assets since 2001 and $106 billion in 2022 in transactions that “seem to lack economic substance beyond harvesting capital losses,” according to a working academic paper released this summer and revised last month by four professors of business and management. The findings, which echo those of another working paper from earlier this year, shed more light on how ETFs help financial advisors and their clients offset the taxes on capital gains by booking losses in their portfolios.

“While the economic intent of the wash sale rule is straightforward, significant uncertainty remains as to the permissibility of tax deductions achieved through ETF swaps,” the report’s authors — Michael Dambra of the University of Buffalo and Andrew Glover, Charles M.C. Lee and Phillip Quinn of the University of Washington — wrote in the introduction. “Specifically, the IRS has not ruled on what constitutes a ‘substantially identical’ security, leaving financial advisors to navigate a foggy legal landscape. Some advisors seem to take the regulatory silence as tacit permission to swap ETFs that hold identical securities or that are even benchmarked to the same index (e.g., Lasser 2011). Others argue that if an investor’s economic position has not changed after swapping ETFs, the spirit of the wash sale rule has likely been violated (e.g., Fischer 2010). Against this backdrop of legal uncertainty, the extent to which investors engage in tax avoidance through ETF wash sales remains largely unknown.”

READ MORE: How a newly unified GOP government will affect ETFs

Representatives for the SEC declined to comment on the report’s conclusions and referred questions to the IRS, which didn’t provide a response.

The findings essentially “confirmed what all of us expected,” but “what was striking about the study was being able to demonstrate that the loss harvesting was material enough to be measured,” said Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, a nonpartisan think tank.

Tax strategies around possible wash sales have been “going on for decades and decades and decades,” he noted. The rise of ETFs — which topped $10 trillion in assets for the first time in September in a shift fueled by technology, lower fees and tax advantages — has altered the picture. But it’s not clear whether IRS policymakers or members of Congress will try to rein in the wash-sale practices documented in the report.

“I don’t think they view this as high on their agenda, because there’s other tax evasion that goes on. This is lawful, and the question is whether it’s pushing the limits,” Rosenthal said in an interview. “It’s just easier now. There are more vehicles, there are more opportunities, there is more technology to help plan and there are more people marketing these strategies as a result of the ease.”

The study hasn’t been published by a peer-reviewed journal, and the researchers listed some possible “sources of noise” in the data they tracked from quarterly SEC filings of firms’ holdings known as Form 13F and granular trading records from financial technology firm AbelNoser Solutions, a Trading Technologies company. Some swap trades of correlated ETFs could have occurred at random, between the quarterly filings, at lower than 99% matches in their holdings or at an even greater volume when considering the growth of ETFs, the authors wrote.

“Exchange-traded funds provide an efficient way for investors to circumvent the trading frictions associated with the wash sale rule,” Dambra and the other academics wrote. “Specifically, investors can sell a depreciated ETF security and realize a capital loss while simultaneously purchasing another ‘nearly identical’ ETF security. This form of swap trading allows investors to maintain a substantively identical economic position while harvesting a capital loss that can be used to offset realized gains and other taxable income. With an explosion in available ETFs over the past two decades, these securities have become ideal vehicles for circumventing the wash sale rule.”

READ MORE: The most wonderful time of the year, for tax-loss harvesting

Their research suggests that ETFs can offer even greater tax efficiency than many experts have pointed out in the past — or that the IRS may be ignoring the enforcement of a rule that has restricted loss harvesting maneuvers for more than a century.   

“The expansion of ETFs has provided investors with a new, low-cost tool whereby capital losses can be realized without disturbing an optimal portfolio,” the authors wrote. “Similar to the findings in Li (2024), we find the introduction of a near-identical ETF leads to more volume activity for the incumbent ETF. Next, we find that tax-sensitive institutions hold a more diverse set of highly correlated ETFs, invest a larger portion of their AUM in these ETFs, engage in more swapping between near-identical ETFs and capture more capital losses with this swapping activity. We estimate conservatively that capital loss recognition attributable to annual swapping among tax-sensitive institutional investors is in the tens of billions of dollars. While this behavior is becoming increasingly widespread and economically important, regulators have remained silent on where ETFs fit in their definition of ‘substantially identical securities.’ We contribute to the policy discussion on the potential costs of that continued silence.”

Originally Appeared Here