Individuals and businesses in parts of West Virginia affected by severe storms, straight-line winds, flooding, landslides and mudslides that began on Feb. 15 now have until Nov. 3 to file various federal individual and business returns and make tax payments. 

The IRS will offer relief to any area designated by the Federal Emergency Management Agency; this currently includes Logan, McDowell, Mercer, Mingo, Wayne and Wyoming Counties.

Individuals and households that reside or have a business in these counties qualify for this filing and payment relief. The same relief will be available to any other counties added later to the disaster area. The current list of eligible localities is on the Tax relief in disaster situations page on IRS.gov. 

Michael Swensen/Photographer: Michael Swensen/Ge

The tax relief postpones various tax filing and payment deadlines that occurred from Feb. 15 through Nov. 3 this year. Affected individuals and businesses will have until this Nov. 3 to file returns and pay taxes originally due during this period.

The November deadline will now apply to: 

• Individual income tax returns and payments normally due on April 15, 2025.
• 2024 contributions to IRAs and health savings accounts for eligible taxpayers.
• Quarterly estimated tax payments normally due on April 15, June 16 and Sept. 15, 2025.
• Quarterly payroll and excise tax returns normally due on April 30, July 31 and Oct. 31, 2025.
• Calendar-year partnership and S corp returns normally due on March 17, 2025.
• Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2025.
• Calendar-year tax-exempt organization returns normally due on May 15, 2025. 

Penalties for failing to make payroll and excise tax deposits due on or after Feb. 15, 2025, and before March 3, 2025, will also be abated if the deposits were made by March 3, 2025. 
The disaster assistance and emergency relief for individuals and businesses IRS page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.  

The IRS automatically provides filing and penalty relief to any taxpayer with an address of record in the disaster area. These taxpayers do not need to contact the agency to get this relief. 

If an affected taxpayer doesn’t have an address of record in the disaster area — because, for example, they moved to the disaster area after filing their return — they could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the IRS Special Services at (866) 562-5227 to update their address and request disaster tax relief. 

In addition, the service will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS Special Services toll-free number above. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Disaster area tax preparers with clients outside the disaster area can choose to use the Bulk Requests from Practitioners for Disaster Relief option, described on IRS.gov. 

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2025 return normally filed next year) or the return for the prior year (2024). Taxpayers have up to six months after the due date of their federal income tax return for the disaster year (without regard to any extension of time to file) to make the election. For individual taxpayers, this means Oct. 15, 2026.

The FEMA declaration number (4861-DR) should be written on any return claiming a loss.

It’s no secret that the accounting profession has grappled with a major talent crisis in recent years. About three quarters of certified public accountants are set to retire in the next decade and we’ve seen fewer candidates sitting for the CPA exam. On top of that, training to become a CPA is no mean feat. The CPA exam is a difficult test — so difficult that even AI couldn’t pass it first time around.

However, there’s a glimmer of hope. Recent data from the National Student Clearinghouse Research Center indicates undergraduate accounting enrollment rose by an impressive 12% in fall 2024 compared to the previous year. This surge brings us close to pre-pandemic levels of accountants-in-training, which could be a positive signal of renewed interest in the field.

While the uptick in student enrollments is encouraging, a growing number of accounting students is not going to solve the problem many firms are facing today. What’s more, the demand for accountants isn’t going anywhere. So, with no shortage of work and likely too few people available to do it, what can firms do to stay ahead? Technology can have an immediate impact on helping to unlock the future of work for tax professionals. Let’s dive into some of the ways advancements in AI and automation are helping firms bridge the talent gap today.

Automating the mundane

Driving efficiency remains the top strategic priority for firms, and streamlining processes and workflows to free up time for accountants to focus on more complex work is essential. Time savings are largely being driven by the automation of repetitive tasks in the tax workflow. That means things like supporting data gathering, simplifying mundane tasks or streamlining the tax preparation process. On top of this, more tax professionals than ever are using AI to assist with tax research. In fact, tax firms believe that investments in AI will save them five hours per week in the first year for each staff member, increasing to 14 hours saved weekly in five years. That’s the equivalent of 250 hours a year saved for every team member.

Strategic advice is in hot demand

With technology handling routine tasks, human judgment and consultation are becoming the areas in which humans can really thrive. Efficiency driven by automation means accountants are freed up to focus on providing valuable advisory services. This pivot in firms’ business models is essential for two reasons. First, it helps firms bring greater value to their clients by illuminating the deeply specialized expertise their teams can apply to supporting their clients’ needs. Second, it creates an avenue of differentiation for firms to evolve to complement the basic tax services that can now be handled by automation and AI.

Two-thirds of firms strongly agree that most clients now want business advice, ranging from tax strategy and financial planning to decision support. Clients today have access to a wealth of information, including real-time data. They’re looking to their accountants as a trusted advisor who can navigate this data-rich landscape. AI can augment that effort too, by providing insights to support firms with elevating their roles from number crunchers to business advisors. Technology empowers accountants to extract valuable insights from massive datasets, and they can apply this intel to the advice and recommendations they put forward to their clients.

Attracting the CPAs of the future

Millennials and Gen Z are the CPAs of the future. These young professionals are digital natives, and they value the use of technology in their work. By showcasing how accounting intersects with technologies like AI, the profession becomes more appealing to tech-savvy students, dispelling the outdated image of accounting as a dry, monotonous field. Additionally, cloud-based software enables remote work, offering the flexibility that’s highly valued by today’s workforce.

Tax and accounting is somewhat notorious for its grueling workload. Striking the right work-life balance is an ongoing challenge for many, particularly during peaks like busy season that bring a relentlessly demanding schedule for CPAs. But time savings brought by AI and automation are alleviating the burden by augmenting the work of humans. Long term, changing the reality of what work-life balance means for accounting professionals could well be the final hurdle in elevating the popularity of the profession as a career choice for generations to come.

While the recent enrollment increase is heartening, technology is the key to this sustained interest. By embracing technological advancements, the accounting profession can transform its image and become more attractive as a destination for an exciting, evolving career path for the accounting workforce of the future.

The regulatory environment for digital assets will have significant implications for state-level reporting requirements. A notable development is Montana’s introduction of the Form 1099-DA mandate, reflecting a broader trend toward increased oversight of digital asset transactions. 

This article provides an overview of the current and expanding 1099-DA state reporting landscape and delves into Montana’s specific requirements. I’ll discuss the limitations of relying solely on combined federal/state filing programs for compliance and outline the key steps that crypto brokers and tax professionals should take to ensure adherence and avoid penalties in 2025.

As digital assets like cryptocurrencies and non-fungible tokens become more prevalent, tax authorities are implementing measures to ensure proper reporting and taxation. The Internal Revenue Service has introduced Form 1099-DA, officially titled “Digital Asset Proceeds from Broker Transactions,” to standardize the reporting of digital asset transactions. This form is designed to capture detailed information about digital asset sales and exchanges, including acquisition dates, cost basis, sale dates and proceeds. The goal is to enhance tax compliance and provide clarity for taxpayers involved in digital asset transactions. 

While the IRS has established federal reporting requirements, individual states are also enacting their own mandates to ensure accurate tax reporting within their jurisdictions. These state-level requirements often complement federal regulations but typically include additional stipulations unique to each state. For instance, some states may require direct submission of forms through state-specific portals, bypassing traditional federal-state combined filing programs.

Montana’s unique 1099-DA reporting requirements

Montana has taken a proactive approach by introducing specific reporting requirements for digital asset transactions (effective with 2025 transactions) in its 2024 Employer and Information Agent Guide. The Montana Department of Revenue mandates that businesses and brokers involved in digital asset transactions submit Form 1099-DA directly through the state’s TransAction Portal. This requirement is distinct from the federal filing process and emphasizes the state’s commitment to accurate and timely reporting of digital asset activities. 

The Combined Federal/State Filing program allows businesses to file certain information returns with the IRS, which then forwards the data to participating states. While this CF/SF program streamlines the reporting process for various forms, it may not fully accommodate the specific requirements that states like Montana have implemented for digital asset transactions.

Montana’s insistence on direct submission through its TAP system of all information returns required to be filed with the state, underscores the limitations of relying solely on the CF/SF program for compliance. The state’s unique reporting mandates mean that businesses cannot depend exclusively on federal filings to meet state obligations. Failure to adhere to Montana’s specific submission protocols could result in non-compliance, leading to potential penalties and increased scrutiny from state tax authorities.

Key steps for crypto brokers and tax professionals to ensure compliance

To navigate the evolving regulatory landscape and ensure compliance with both federal and state reporting requirements, crypto brokers and tax professionals should consider the following steps:

1. Stay informed about regulatory changes: Regularly monitor updates from the IRS and state tax authorities regarding digital asset reporting requirements. Subscribe to official newsletters, attend webinars and consult with professional organizations to stay abreast of any changes.
2. Understand state-specific mandates: Familiarize yourself with the unique reporting requirements of each state in which you operate. For Montana, this includes understanding the TAP system and the specific protocols for submitting Form 1099-DA.
3. Utilize approved software for reporting: Ensure your reporting software is approved by the Montana Department of Revenue for bulk file submissions. This may involve annual registration and testing to confirm compatibility with the state’s systems.
4. Implement robust record-keeping practices: Maintain detailed records of all digital asset transactions, including dates, amounts, asset types and parties involved. Accurate record-keeping is essential for compliance and can aid in the event of an audit.
5. Provide accurate and timely information to clients: Educate clients about their tax obligations related to digital assets and ensure they receive the necessary forms and information in a timely manner. This includes furnishing copies of Form 1099-DA to clients as required.
6. Consult with tax professionals: Given the complexity of digital asset taxation, clients should consider consulting with tax professionals who specialize in this area. They can provide guidance tailored to the client’s specific circumstances and help ensure compliance with all applicable regulations.
7. Prepare for potential audits: Develop internal protocols to respond to potential audits or inquiries from tax authorities. This includes having readily accessible records and a clear understanding of the reporting processes you have implemented.

What are the key challenges and benefits of this new reporting requirement?

As with any new significant tax law or standard that is introduced, its implications can be far-reaching and impact several parties albeit differently based upon the role they play in the process. Here are the expected impacts for the key stakeholders in the implementation of Form 1099-DA. 

For taxpayers

Transparency and simplicity

• Clear record of transactions: The 1099-DA provides a clear record of transactions, eliminating the need for taxpayers to manually compile data from various exchanges.
• Simplified tax reporting: This form simplifies the process of identifying buy and sell transactions, fees and basis, making income tax reporting more straightforward.

Demand for tax information

• Standardized form: Taxpayers have long requested a standardized form to streamline their income tax reporting process. The 1099-DA answers this call, reducing the confusion and effort involved in reporting crypto transactions.

For the IRS

Enhanced compliance

• Third-party reporting: The 1099-DA is a crucial tool for the IRS to enforce income tax compliance by matching reported income with 1099-DA data.
• Accurate tax assessment: This helps the IRS more accurately assess tax liabilities and close the tax gap.

Regulatory efforts

• Regulating the crypto industry: The introduction of the 1099-DA is a significant step in the IRS’s efforts to regulate the crypto industry and gather necessary data to enforce tax laws effectively.

For brokers

Customer service experience

• Optimized tax documents: Providing specialized tax documents helps brokers meet their clients’ tax reporting needs and enhances their financial service offerings.

Risk and liability management

• Compliance benefits: Adhering to 1099-DA reporting requirements helps brokers minimize the risk of audits and penalties, ensuring they remain in compliance with tax regulations while avoiding potential fines and legal complications.

By proactively addressing these areas, crypto brokers and tax professionals can navigate the complexities of digital asset reporting and minimize the risk of noncompliance. As regulations continue to evolve, staying informed and adaptable will be key to maintaining compliance and avoiding potential penalties in 2025 and beyond.