IRS and Security Summit, Cryptocurrency Transactions, and IRS Audits
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Tax Policy/News:
July 16: Security Summit warns tax pros to remain vigilant against phishing emails and cloud-based attacks
In the second installment of a special series, the IRS and Security Summit partners warned tax professionals about evolving phishing and cloud-based schemes aimed at stealing sensitive taxpayer information.
These email attacks, numbering in the hundreds, target tax professionals year-round. IRS Commissioner Danny Werfel emphasized the need for vigilance and education to protect client data.
This series, part of the "Protect Your Clients; Protect Yourself" summer initiative, includes eight releases and will be highlighted at the Nationwide Tax Forum.
The IRS also stressed the importance of multi-factor authentication for cloud-based systems and provided resources for reporting data breaches and enhancing security measures.
July 16: IRS crypto enforcement could get tougher
The IRS is ramping up its enforcement actions concerning cryptocurrency transactions, signaling a tougher stance on compliance and reporting.
The agency plans to leverage advanced data analytics and blockchain tracing tools to identify unreported crypto income and transactions.
This move comes amid growing concerns about tax evasion and the increasing popularity of digital assets. The IRS’s efforts include working closely with other regulatory bodies and international partners to track cross-border crypto activities.
Taxpayers involved in cryptocurrency are advised to ensure accurate reporting and compliance to avoid potential penalties. This initiative reflects the IRS’s commitment to addressing the complexities of modern digital finance.
July 9: IRS issues FAQs to dispute misleading social media claims
The IRS has released a set of FAQs to counter false claims circulating on social media about federal tax policies and procedures.
The FAQs address common misconceptions, such as erroneous interpretations of tax refund timelines and eligibility for various tax credits. This initiative aims to provide accurate information directly from the IRS to taxpayers, reducing confusion and misinformation.
The IRS emphasizes the importance of consulting official sources for tax-related information and warns against relying on unverified social media posts.
This effort is part of a broader campaign to ensure taxpayers have access to reliable and factual tax guidance.
Economic News/Policy:
July 12: Missouri AG sues Biden administration over withheld small business program documents
Missouri Attorney General Andrew Bailey has sued the Biden Administration’s IRS for not providing documents requested under the Freedom of Information Act (FOIA).
The lawsuit aims to uncover if the IRS obstructed the Employee Retention Credit (ERC), an economic relief measure meant to aid small businesses during the COVID-19 pandemic.
Bailey emphasizes the importance of transparency and claims the IRS's lack of response is illegal, harming Missouri businesses reliant on the ERC.
He initially requested IRS records in May and argues that federal agencies are using delay tactics to avoid FOIA obligations.
The lawsuit seeks a court declaration that the IRS failed its legal duty and an order for document disclosure.
July 11: IRS aims to ramp up audits on the wealthy
The IRS is intensifying efforts to audit wealthy individuals, aiming to reduce the tax gap and increase compliance among high-income taxpayers.
This push aligns with the Biden administration’s broader agenda to ensure that the wealthy pay their fair share of taxes.
The Treasury Department has outlined plans to use enhanced technology and additional resources to scrutinize complex tax returns more effectively.
This initiative seeks to address disparities in tax enforcement and recover billions in unpaid taxes.
The IRS will focus on sophisticated tax avoidance schemes and high-value transactions, utilizing data analytics to identify potential non-compliance. This strategy underscores the administration’s commitment to equitable tax enforcement.
July 10: Era of near-zero interest rates likely over: Powell
Federal Reserve Chair Jerome Powell, testifying before the House Financial Services Committee, stated that the era of super low interest rates is likely over, with the neutral interest rate for achieving 2-percent annual inflation having risen post-pandemic.
Powell indicated that the central bank's interest rate policy is unlikely to return to the near-zero levels seen between 2009 and 2017. He explained that the baseline Fed interest rate necessary for maintaining low unemployment and price stability has increased due to pandemic-induced inflation and subsequent price normalization.
Despite recent improvements in key inflation indicators and rising unemployment, Powell emphasized that rate cuts should be anticipated before inflation hits the 2-percent target due to ongoing price momentum.
Investors hoping for substantial interest rate reductions might need to adjust expectations, as Powell highlighted the impact of slow-moving economic forces, such as the increased national deficit and pandemic-related fiscal measures, on the current neutral rate.
Energy and Environmental Policy/News:
July 15: Project 2025 outlines conservative climate agenda
Project 2025, spearheaded by conservative think tanks, aims to reshape U.S. climate and energy policies if Republicans regain control of the federal government.
The plan advocates for deregulating the energy sector, increasing fossil fuel production, and rolling back Biden-era climate initiatives. It also emphasizes the importance of energy independence and economic growth, proposing investments in technologies like carbon capture and nuclear energy.
Critics argue that the agenda could undermine climate progress and exacerbate environmental issues.
The project highlights the ongoing political divide over climate policy and the potential for significant shifts depending on future elections.
July 11: Biden administration aims to boost US EV production
The Biden administration is pushing for a significant increase in domestic electric vehicle (EV) production to meet its ambitious climate goals and reduce dependency on foreign oil.
This initiative involves substantial investments in EV manufacturing infrastructure and supply chains, coupled with incentives for both producers and consumers.
The administration is also emphasizing the importance of creating union jobs in the EV sector.
Industry stakeholders have welcomed the move, highlighting its potential to spur economic growth and technological innovation.
However, challenges such as securing a steady supply of critical minerals and ensuring robust charging infrastructure remain.
July 9: Bipartisan legislation proposes study on carbon import fees
A new bipartisan bill introduced in Congress proposes a comprehensive study on the implementation of carbon import fees.
This initiative aims to address carbon leakage and ensure that imported goods do not undermine domestic climate policies.
The study will evaluate the economic and environmental impacts of imposing fees on carbon-intensive imports, drawing from international examples and stakeholder input.
Proponents believe this measure could level the playing field for U.S. industries and incentivize global emission reductions.
The legislation underscores the importance of integrated climate strategies in global trade and the need for robust policy frameworks to support sustainable economic growth.
For Fun:
July 9: Voice box transplant at Mayo Clinic offers new hope
The Mayo Clinic has successfully performed a groundbreaking voice box transplant, offering renewed hope for patients who have lost their ability to speak.
This complex surgery, which involved transplanting the larynx and associated structures, marks a significant advancement in the field of reconstructive surgery.
The patient, who had lost her voice due to a car accident over a decade ago, can now speak and breathe normally.
The procedure required a multidisciplinary team and extensive postoperative care, highlighting the potential for restoring lost functions through innovative medical techniques.
This success opens new possibilities for treating severe laryngeal injuries and conditions, providing a lifeline to those affected by voice loss.