America is now, at least in part, a so-called "side gig" economy. An estimated 25 percent of us now have side jobs to generate additional income. Such things as driving for a ride-share service like Uber or Lyft, dog-walking, renting out a residence part-time through Air BNB or Home Away, and being a freelance digital personal assistant can provide enough extra money to cover expenses, save for a big purchase or pay down debt. These so-called "side hustles" add billions of dollars in income to the national economy each year.
Early proposed ideas to cut personal tax rates and simplify the income tax filing process have already garnered vocal resistance from several key interest groups. Supporters of the proposal to double the standard deduction - a move that is expected to make tax easier by limiting the number of individual filers who itemize - say that such sweeping change is necessary to make the cumbersome tax code more user-friendly.
The tax code is, in a word, complex. It is thousands of pages long, with millions of different entries representing credits, deductions, exemptions, reporting mandates, caveats, loopholes and more. Legislators across the political aisle all agree that significant tax reform is desperately needed by Americans of all economic strata, but concede that it no prospects are currently forthcoming to make viable changes.
The Taxpayer Advocate recently wrote about concerns with the new IRS enforcement program for "seriously delinquent tax debt" that allows for the denial of an passport application or revocation of a passport. The IRS announced that it had started certifying taxpayers to the Department of State in March.
States are struggling to keep up with business innovations. The process of doing business has changed in recent years. Over the last few decades more and more business transactions are occurring online, causing the states to question when a business operates within its borders and is subject to state taxes.
The IRS has a vast arsenal of tools to use when collecting taxes. It has a tool, however, that it can use to cut its losses, so to speak, in a case when full collection from a taxpayer is doubtful: the offer in compromise, sometimes referred to as an OIC.
In spite of repeated instances of tax debt collection scams - some of them serious enough to warrant specific warnings from the IRS - the agency has once again chosen to outsource tax collection efforts to private debt collectors. This means that, in theory, the phone calls and letters you get that you might be tempted to write off as a scam could be legitimate attempts to collect overdue tax payments.
It appears the old "location, location, location" adage for real estate holds true in the world of taxes as well. A recent study by professors out of two prestigious universities in the great state of Texas, the University of Texas at Austin and Texas A&M University, have found that the location of a business can impact the likelihood of a tax audit.
We have been closely following how and when the IRS and Department of State may start to revoke or deny passports for tax debt. Facing the prospect of further budget cuts, how will overall IRS collection activities be affected?
President Donald Trump recently signed a new travel order that limits entrée to the U.S. for people coming from certain countries. This highly publicized notice has many American companies scrambling to work around travel restrictions for remote or traveling employees that could leave them stranded outside the U.S.