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Fort Worth Tax Law Blog

Making a gift? Be aware of the tax considerations

On the campaign trail, Donald Trump said he would get rid of the federal estate tax if elected president. So far, it's still around. 

To be sure, the estate tax only affects a small percentage of estates. But it's part of a larger tax-planning picture that also includes two other federal taxes.

One of those is the gift tax. The other is the generation-skipping tax.

Tax preparers: How to avoid IRS EITC due diligence audits

The Earned Income Tax Credit, known as the EITC, is an important tax benefit for working taxpayers with low or moderate income levels. But complicated rules, regarding income limits and in many cases, qualifying children, must be closely followed.

Because the EITC has a direct impact on the amount of tax collected by either reducing the amount of tax a taxpayer owes or by qualifying the taxpayer for a refund, the IRS is very concerned that it only be taken by truly qualified taxpayers. Accordingly, federal tax law places specific due diligence requirements on tax preparers to help tighten compliance with EITC qualifications.

Expats and passport renunciation: FATCA and the 'Trump bump'

Congress has required the IRS to come up with a program to deny or revoke passports for individuals with certain types of tax debt. As we noted in yesterday's post, the program will take effect next month.

This is not, however, the only story in play regarding taxes and passports. In recent years, many people are have renounced their passports because of onerous reporting requirements for offshore accounts.

The number of renunciations has escalated in recent months. Unlike the stock market, which has been up since the election, it's been a reverse "Trump bump."

Tax-related passport restrictions to become reality in March

The 2015 Fixing America's Surface Transportation Act added a tool for the IRS to collect large tax debts. This was likely included as a measure to pay some of the cost of the bill.

The IRS working in coordination with the U.S. State Department was granted the power to deny, revoke or limit the ability of seriously delinquent taxpayers (who owe more than $50,000 in back taxes) to use their U.S. passports. In our April 2016 blog post, we answered the question of whether your passport could be seized at the border. Here we'll provide an update.

Clergy housing allowance: Will it survive another court challenge?

As a pastor or a church council member, you know very well how important the tax break on clergy housing benefits is.

To be sure, many ministers would probably trade the break for a FICA payroll-tax match from their employers and not having to pay self-employment tax.

Not taxing a pastor's housing allowance does help make ministry more financially feasible, however for smaller communities with limited resources for clergy compensation.

3 FAQs about the Abusive Return Preparer initiative

The Internal Revenue Service (IRS) is cracking down on fraudulent tax preparer services. The federal agency initiated 252 investigations in 2016 alone, searching out any individual or business that it believes was conducting fraudulent practices while preparing taxes. 72.8 percent of these investigations resulted in incarceration.

Although these efforts are designed to protect the public and the interests of the IRS, they can lead to false allegations of unscrupulous practices. As a result, it is wise for businesses and individuals that are in the tax preparation sector to have a basic understanding of the program.

Tax preparers need to know about Earned Income Credit audits

The IRS announced on Monday that it had started accepting and processing returns. You are probably starting to get appointments from early filer - refund clients.

Preparing tax returns with Earned Income Tax Credit (EITC) refunds comes with delays this year. The IRS has taken a multi prong approach to cutting down on EITC fraud. Holding these refunds is one part of the crackdown.

Auditing taxpayers and preparers is another. For tax return preparers, this means you need to complete the proper due diligence or you could face an audit and significant civil penalties.

The earned income tax credit (EITC): refund delays and audit risks

The earned income tax credit (EITC) is supposed to help people with low income, especially those with children, by providing a refundable tax credit.

In recent years, however, the IRS has stepped up audits of returns that claim the EITC, after critics contended that the credit was awarded too freely.

In this post, we will use a Q & A format to update you on how a new law will delay refunds on returns that claim the EITC.

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