It’s that time of year again.
The government closure meant the IRS had to change the original opening date from January 21 (yesterday) to January 31st – just over a week from now. The 2014 date is one day later than the 2013 filing season opening, which started on January 30, 2013, following January tax law changes made by Congress on January 1 under the American Taxpayer Relief Act (ATRA). The extensive set of ATRA tax changes affected many 2012 tax returns, which led to the late January opening.
On another note, the 2014 budget for the IRS has been slashed by $526,000,000 from the 2013 amount. This could be interpreted to mean many things – less enforcement or fewer audits – but I would not count on it. Out of necessity, the IRS will continue to focus on areas yielding large assessments where it has found significant risk of underreporting, including:
- High-income individuals (dentists)
- Worker classification (associates)
- S corporation losses claimed in excess of basis (too much in distributions)
- Rental property losses (passive vs. active)
- General small business underreporting of taxable income
- Form 1099 filing compliance
- Review of international taxpayers & FBAR (off-shore accounts)
- Harsh penalties for tax preparers
As we conclude the first month of 2014, many folks are wondering those “tax extenders” (temporary tax breaks) that expired on December 31st will be reenacted retroactively. Collectively, these expired provisions amount to $54.2 Billion in tax. That will help fund the IRS’s budget! This is a link to a good article listing 55 expired tax extenders.
Below is a partial list for your reading pleasure. Please contact me with any questions about filing tax returns or how a specific tax provision might impact you.