Last week’s Labor Day holiday marked the unofficial end of summer and the beginning of fall for many Americans. While some took the day off, others delved into tax history and trivia. One notable example of tax resistance during wartime occurred during World War II when President Roosevelt vetoed a tax bill, criticizing it as a giveaway to the wealthy.
Moving into more modern times, the IRS has been making advancements in improving taxpayer services through the Digital First Initiative. This initiative aims to modernize and streamline taxpayer services by converting COBOL and Assembly code into Java. While the long-term benefits include reduced operational costs, the short-term process is expensive and labor-intensive.
Historically, the IRS offered the Voluntary Disclosure Practice (VDP) program, where taxpayers could disclose willful conduct and pay any outstanding taxes without facing criminal prosecution. However, recent revisions to the VDP program have introduced significant changes that diverge from the previous version.
In a surprising turn of events, Hunter Biden, the son of President Joe Biden, pleaded guilty to all charges in his federal tax case, utilizing an Alford plea. Prosecutors were caught off guard by this offer, leading to a shocking conclusion to one of the most talked-about criminal tax cases in recent years.
Maintaining good records is essential in avoiding tax trouble, as demonstrated in a recent U.S. Tax Court case, Kalk v. Commissioner. The court ruled against the taxpayer’s claim of business expenses due to lack of substantiation, except for gambling losses related to a casino app development.
A massive Covid fraud scheme was uncovered earlier this year through a homicide investigation, leading to seventeen indictments of individuals defrauding the IRS out of $1.75 million in pandemic relief funds. The fraudsters took advantage of a drafting error on Form 7202 to receive significant tax refunds. Additionally, the IRS is seeking feedback from taxpayers and professionals on a plan to direct contributions to retirement accounts, potentially providing matching funds from the Treasury starting in 2027.
