This year’s report of the IRS Advisory Council includes recommendations on 37 issues covering a broad range of topics, among the most important of which are IRS funding and oversight of preparers.

The top general report issues also include IRS Strategic Operating Plan assessment and analysis, hiring, online accounts promotion and technical support, capabilities and authorizations for business online accounts, ID theft and the PTIN database and broader continuing education for Enrolled Agents, among other topics.

“IRSAC members have spent numerous hours analyzing issues in tax administration and the transformation work underway across the IRS,” said IRS Commissioner Danny Werfel. “The IRS is grateful for their hard work.” 

Among the issues and recommendations:

• IRS funding: Noting that many Americans do not understand the tax gap or its impact, and that Congress rescinded some of the IRS funding granted under the Inflation Reduction Act and continues denying inflation adjustments to the IRS base budget, IRSAC recommended greatly improved communication to the public regarding the impact of the tax gap.
• Preparer oversight: The report noted that tax prep businesses “continue to train tax preparers they employ according to their own needs and standards” and that “sole proprietors have complete discretion as to their preparation and training.” Among other recommendations, IRSAC proposed a voluntary Filing Season Agent credential modeled on the Enrolled Agent credential. “Research and publish results regarding accuracy rates among [Annual Filing Season Program] record holders, uncredentialed preparers, and preparers otherwise exempt from AFSP test requirements,” the report suggested.
• EA CE: The 72 hours of continuing education required to renew enrollment for EAs should allow up to four hours of practice management, which could include business organization, communications, marketing and IT, among other topics.

The IRSAC serves as a federal advisory committee to the IRS commissioner and executive leadership. It provides a public forum for discussion of relevant issues in tax administration. IRSAC subgroups cover information reporting, large business and international, small business/self-employed, tax exempt/government entities and taxpayer services. 

With the contentious 2024 elections behind us, we can finally focus on President-elect Trump’s agenda for the economy, taxes and jobs. With Republicans flipping the Senate (and White House) and also retaining the majority in the House of Representatives, the president-elect should have control and a voter mandate that could dramatically streamline the legislative process in his second term. As you start year-end planning for your clients, you’ll want to familiarize yourself with the many potential 2025 tax changes to ensure more thorough analyses and productive client discussions. Many tax policy experts believe Republicans are likely to use a process called budget reconciliation, which allows for budget legislation to be passed out of the House and Senate via a simple majority.

Trump’s landmark tax legislation from his first term — the 2017 Tax Cuts and Jobs Act — remains intact even after Democrats won the White House in 2020. But most TCJA provisions are set to expire in 2026 as part of the original legislation passed seven years ago. As such, the TCJA will be the centerpiece of Trump’s new tax and economic platform. However, there are many new additions to the TCJA that you and your clients will want to keep an eye on. Let’s look at the potential impact of 11 of the most important ones, thanks to a skillful analysis of the governmental impact by the Tax Foundation, a nonpartisan, nonprofit independent tax policy research organization. Below the Tax Foundation analysis, we have added our own take on what the proposed changes could mean for you and your clients.

Saving Social Security; sued over an address; more 5471 opinions; and other highlights from our favorite tax bloggers.

You will survive

• U of I Tax School (https://taxschool.illinois.edu/blog/): From fielding endless tax questions to relatives’ barrage of requests for help with returns, the accountants’ survival guide to Thanksgiving.
• Tax Vox (https://www.taxpolicycenter.org/taxvox): Could a pre-tariff buying frenzy kick off a new round of inflation?
• TaxProf Blog (http://taxprof.typepad.com/taxprof_blog/): Congress last reformed the nation’s current tax penalty regime some three decades ago, before the rise of big data and the advent of predictive analytics. Is it time for Congress to weave the latter into the Internal Revenue Code?
• Tax Foundation (https://taxfoundation.org/blog) As Social Security faces looming insolvency, one issue that garners a lot of attention in the debate over solutions is raising the payroll tax cap. Policymakers should also recognize that broader changes in how workers are compensated have contributed to the decline in wages subject to payroll taxes. Expanding the payroll tax base to include all forms of worker compensation should be on the table.
• Institute on Taxation and Economic Policy (https://itep.org/category/blog/): A recent analysis shows that some widespread tariffs are beneficial — and that those now proposed wouldn’t be among them.
• Don’t Mess with Taxes (http://dontmesswithtaxes.typepad.com/): What do holiday shopping and taxes share? The growing potential for ID theft.

Just guess

Tricky stuff

• The Tax Times (https://www.thetaxtimes.com): The Tax Court just opined on another case that thwarts IRS authority to assess 5471 reporting penalties.
• Global Taxes (https://www.globaltaxes.com/blog.php): Seems that in Mukhi v. Commissioner, the Tax Court rejected arguments that a due process hearing was conducted by a partial appeals officer and that non-filing penalties violated the Eighth Amendment’s Excessive Fines Clause. The big win was in the third question.
• Withum (https://www.withum.com/resources/): Latest state updates include Washington’s Supreme Court denying an investment income deduction and new services subject to B&O retailing classification in the state.
• TaxConnex (https://www.taxconnex.com/blog-): Execs go into M&A often blindly jazzed about the deal and thinking they know the landmines, such as employees’ reactions or overpaying the target company. What about the risk of past sales tax exposure?
• Palm Beach Accounting and Financial Services (https://www.pbafs.com/blog): Savings bonds, 529 contributions and the good old-fashioned, rattling piggy bank: Gifts that can teach kids about finances.
• Boyum & Barenscheer (https://www.myboyum.com/blog/): What to remind them about the differences between accounting and tax profitability.
• Avalara (https://www.avalara.com/blog/en/north-america.html: A state-by-state look at clothing taxes.
• Vertex (https://www.vertexinc.com/resources/resource-library/filter/field_asset_type/blog?page=0): What to remind them of the complexities of corporate taxes.
• Armanino (https://www.armanino.com/articles/): The latest on issuing 1099s for next season.
• Sovos (https://sovos.com/blog/): Third-party settlement organizations are also keeping a close watch on IRS guidance regarding their obligations under 1099-K requirements. Recent changes to reporting thresholds, coupled with delayed enforcement and conflicting guidance, have left many TPSOs on marshy ground about their responsibilities.
• MBK (https://www.mbkcpa.com/insights): How business-vehicle deductions can be especially “tricky.”
• Virginia – U.S. Tax Talk (https://us-tax.org/about-this-us-tax-blog/): Overseas Americans are entitled to certain tax breaks, one significant break being the exclusion of amounts provided by an employer for foreign housing.
• Gordon Law (https://gordonlawltd.com/blog/): When big hearts co-exist with small tax brains: What to remind them about taxes and charities this giving season.
• Summing It Up (http://blog.freedmaxick.com/summing-it-up): One of the main provisions of Secure 2.0 kicks in on Jan. 1: automatic enrollment for new employee benefit plans.
• AICPA & CIMA Insights (https://www.aicpa-cima.com/blog): Whether accounting for digital assets or auditing entities in this space, to understand the asset class you need to understand the fundamentals of the underlying technology: blockchain.