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Key Takeaways
- Republicans trying to repeal DeFi reporting requirements.
- Senate two bill plan ready to go.
- Tariffs to come this weekend?
- A handful of proposed tax bills.
- GAO releases report on IRS efficiency.
- IRS hiring freeze.
- IRS PLR says IVF costs are not deductible medical expenses.
- PPP fraud.
- National hot chocolate day!
Happening in Washington
Republicans Want to Kill Tax-Reporting Rule for Some Crypto Trades - Richard Rubin, Wall Street Journal:
The push from Sen. Ted Cruz (R., Texas) and Rep. Mike Carey (R., Ohio) uses a procedure that lets Congress strike down recent rules with simple-majority votes. They are trying to remove a December Biden administration rule that requires decentralized finance, or DeFi, platforms to report transactions to the government just like stock brokerages do and centralized crypto exchanges soon will.
Senate’s reconciliation blueprint is ready to go, Thune says - Jordain Carney, Politico:
Both would be passed under party-line reconciliation procedures, which first requires the adoption of an identical budget resolution by the House and Senate. The text Thune referred to would provide for passage of the first bill; another blueprint teeing up the second bill would follow.
Trump says tariffs on Canada and Mexico coming Saturday, and he’s deciding whether to tax their oil - Josh Boak, AP News. "President Donald Trump said his 25% tariffs on Canada and Mexico are coming on Saturday, but he’s still considering whether to include oil from those countries as part of his import taxes."
Proposed Legislation
Bipartisan Proposal Would Ramp Up Return Preparer Oversight - Benjamin Valdez, Tax Notes ($):
The IRS also would be given the authority to deny, suspend, or revoke PTINs for preparers who don’t meet those requirements or who are deemed incompetent or disreputable under a new set of standards that includes dinging taxpayers for providing misleading tax information or making repeated errors in returns. The proposal would pair those measures with higher penalties for improper tax preparation.
Discussion Draft of Proposed Taxpayer Assistance and Service Act Jointly Released by Ranking Members of Senate Finance Committee for Comment - Ed Zollars, Current Federal Tax Developments:
- The draft legislation proposes "common-sense fixes" to IRS procedures and administration.
- It is designed to improve communication between the IRS and taxpayers.
- The legislation seeks to streamline tax compliance and dispute processes.
- It aims to ensure that taxpayers have access to timely expert assistance.
- The National Taxpayer Advocate, Erin Collins, supports the bill, noting it would significantly strengthen taxpayer rights.
- The goal is to address challenges faced by taxpayers and stakeholders within the federal tax system.
- The Senators are seeking comments on the discussion draft by March 31, 2025.
Bipartisan Bill Would Eliminate Russian FTCs, Deductions - Michael Smith, Tax Notes ($):
The bipartisan bill would add Russia to a list of hostile countries — including Iran, North Korea, Sudan, and Syria — that are ineligible for U.S. FTCs under section 901(j).
H.R. 801 Would Expand Charitable Deduction for Non-Itemizers - Tax Analysts, Tax Notes ($). "H.R. 801, the Charitable Act, introduced by House Ways and Means Committee member Blake D. Moore, R-Utah, would expand the charitable deduction for non-itemizing individuals."
Cruz Bill Would Expand Health Savings Accounts - Tax Analysts, Tax Notes ($). "The Personalized Care Act of 2025, introduced by Sen. Ted Cruz, R-Texas, would expand health savings account eligibility, increase HSA contribution limits, and reduce the penalty for nonqualified distributions to 10 percent, among other modifications."
Blogs and Bits
IRS offers top tips to make tax time easier - IRS. "3. Avoid paper returns. Filing electronically with direct deposit is the fastest way to get a refund."
IRS Struggles to Process Taxpayer Returns on Time, Report Finds - Tyrah Burris, Tax Notes ($):
According to the report, the IRS received and processed more returns in 2024, but the percentage of returns processed by the end of the filing season decreased. The IRS processed 97.9 percent of the 174 million returns it received. In 2023 it processed 98.6 percent of the 171.1 million returns it received.
5 reasons to wait to file your tax return - Kay Bell, Don't Mess with Taxes:
If you also file states taxes, which most U.S. taxpayers do, the potential for mistakes doubles, since most state returns rely on entries from your federal filing. When that duplicated data is wrong, you'll have to re-do that state tax return, too.
But by letting your original federal tax return sit there a bit before you file it, you'll give yourself time to take another look. A pause and follow-up with fresh eyes often makes a mistake suddenly seem amazing obvious.
IRS Finds Most Expenses Related to Taxpayers’ In Vitro Fertilization and Surrogacy Will Not Be Deductible Medical Expenses Under IRC §213 - Ed Zollars, Current Federal Tax Developments:
What day is it?
It's National Hot Chocolate Day!