2019 List of Dirty Dozen Tax Scams

The IRS has released its annual list of the top 12 tax scams that taxpayers should avoid (IR-2019-49). They are essential the same as last year, although some scams are featured more prominently than before. The top tax scams are: Phishing (IR 2019-26): Taxpayers should be alert to the ongoing threat of fake emails or websites…

Parsonage Allowance Is Constitutional

For nearly 70 years, clergy receiving housing (an in-kind benefit) or a housing allowance (a cash benefit) were able to exclude the full amount from gross income. However, the Freedom From Religion Foundation (FFRF) challenged the housing allowance as a violation of the Establishment Clause of the U.S. Constitution. That clause prohibits the federal government…

IRS Expands Penalty Waiver for 2018 Estimated Tax

The IRS has responded to public pressure by expanding estimated tax relief for 2018. We earlier reported that in recognition of the extensive changes brought by the Tax Cuts and Jobs Act, the IRS was waiving estimated tax penalties for taxpayers who paid at least 85% of their 2018 tax liability through withholding and estimated…

Inherited IRAs May Be Exempt in Bankruptcy

Several years ago, the U.S. Supreme Court said heirs who inherited IRAs could not protect these assets under the federal Bankruptcy Code when they filed for bankruptcy (Clark v. Rameker, S.Ct., 573 U.S. 122 (2014)). However, a recent district court decision has shown there may be protection for heirs in some situations (Frederick Michael Arehart,…

Bonus Depreciation Safe Harbor for Vehicles

The Tax Cuts and Jobs Act set bonus depreciation for passenger automobiles at 100% (previously it was 50%), which translates into an additional $8,000 write-off for the year they are purchased and placed in service. As a general rule, if 100% bonus depreciation is claimed, then the remaining basis in excess of the first-year limit…

Pilot Program to Thwart Identity Theft Expanded

Identity theft of an individual’s personal information can enable a thief to erroneously obtain a taxpayer’s refund and cause delays in the processing of a legitimate tax return. Several years ago, the IRS started a pilot program permitting taxpayers in Florida and Georgia, as well as the District of Columbia—locations with the highest incidents of…