IRS Highlights Essentials for Tax Filing (IR-2025-23) The IRS encouraged taxpayers to make essential preparations and be aware of significant changes that may affect their 2024 tax returns. The deadline for submitting Form 1040, U.S. Individual Income Ta...
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2025 Standard Mileage Rates Released (Notice 2025-5; IR-2024-312) The IRS released the optional standard mileage rates for 2025. Most taxpayers may use these rates to compute deductible costs of operating vehicles for:business,medical, andcharitable purposesSome mem...
IRS Reminds Taxpayers of Disaster Deadlines (IR-2025-1) The IRS reminded disaster-area taxpayers that they have until February 3, 2025, to file their 2023 returns, in the entire states of Louisiana and Vermont, all of Puerto Rico and the Virgin Islands and...
The Financial Crimes Enforcement Network (FinCEN) has announced that the mandatory beneficial ownership information (BOI) reporting requirement under the Corporate Transparency Act (CTA) is back in effect. Because reporting companies may need additional time to comply with their BOI reporting obligations, FinCEN is generally extending the deadline 30 calendar days from February 19, 2025, for most companies.
The Financial Crimes Enforcement Network (FinCEN) has announced that the mandatory beneficial ownership information (BOI) reporting requirement under the Corporate Transparency Act (CTA) is back in effect. Because reporting companies may need additional time to comply with their BOI reporting obligations, FinCEN is generally extending the deadline 30 calendar days from February 19, 2025, for most companies.
FinCEN's announcement is based on the decision by the U.S. District Court for the Eastern District of Texas (Tyler Division) to stay its prior nationwide injunction order against the reporting requirement (Smith v. U.S. Department of the Treasury, DC Tex., 6:24-cv-00336, Feb. 17, 2025). This district court stayed its prior order, pending appeal, in light of the U.S. Supreme Court’s recent order to stay the nationwide injunction against the reporting requirement that had been ordered by a different federal district court in Texas (McHenry v. Texas Top Cop Shop, Inc., SCt, No. 24A653, Jan. 23, 2025).
Given this latest district court decision, the regulations implementing the BOI reporting requirements of the CTA are no longer stayed.
Updated Reporting Deadlines
Subject to any applicable court orders, BOI reporting is now mandatory, but FinCEN is providing additional time for companies to report:
For most reporting companies, the extended deadline to file an initial, updated, and/or corrected BOI report is now March 21, 2025. FinCEN expects to provide an update before that date of any further modification of the deadline, recognizing that reporting companies may need additional time to comply.
Reporting companies that were previously given a reporting deadline later than March 21, 2025, must file their initial BOI report by that later deadline. For example, if a company’s reporting deadline is in April 2025 because it qualifies for certain disaster relief extensions, it should follow the April deadline, not the March deadline.
Plaintiffs inNational Small Business United v. Yellen, DC Ala., No. 5:22-cv-01448, are not required to report their beneficial ownership information to FinCEN at this time.
The IRS has issued Notice 2025-15, providing guidance on an alternative method for furnishing health coverage statements under Code Secs. 6055 and 6056. This method allows insurers and applicable large employers (ALEs) to comply with their reporting obligations by posting an online notice rather than automatically furnishing statements to individuals.
The IRS has issuedNotice 2025-15, providing guidance on an alternative method for furnishing health coverage statements underCode Secs. 6055and6056. This method allows insurers and applicable large employers (ALEs) to comply with their reporting obligations by posting an online notice rather than automatically furnishing statements to individuals.
UnderCode Sec. 6055, entities providing minimum essential coverage must report coverage details to the IRS and furnish statements to responsible individuals. Similarly,Code Sec. 6056requires ALEs, generally those with 50 or more full-time employees, to report health insurance information for those employees. The Paperwork Burden Reduction Act amended these sections to introduce an alternative furnishing method, effective for statements related to returns for calendar years after 2023.
Instead of automatically providing statements, reporting entities may post a clear and conspicuous notice on their websites, informing individuals that they may request a copy of their statement. The notice must be posted by the original furnishing deadline, including any automatic 30-day extension, and must remain accessible through October 15 of the following year. If a responsible individual or full-time employee requests a statement, the reporting entity must furnish it within 30 days of the request or by January 31 of the following year, whichever is later.
For statements related to the 2024 calendar year, the notice must be posted by March 3, 2025. Statements may be furnished electronically if permitted underReg. § 1.6055-2for minimum essential coverage providers andReg. § 301.6056-2for ALEs.
This alternative method applies regardless of whether the individual shared responsibility payment underCode Sec. 5000Ais zero. The guidance clarifies that this method applies to statements required under bothCode Sec. 6055andCode Sec. 6056.Reg. § 1.6055-1(g)(4)(ii)(B)sets forth the requirements for the alternative manner of furnishing statements underCode Sec. 6055, while the same framework applies toCode Sec. 6056with relevant terminology adjustments. Form 1095-B, used for reporting minimum essential coverage, and Form 1095-C, used by ALEs to report health insurance offers, may be provided under this alternative method.
The IRS has issued the luxury car depreciation limits for business vehicles placed in service in 2025 and the lease inclusion amounts for business vehicles first leased in 2025.
The IRS has issued the luxury car depreciation limits for business vehicles placed in service in 2025 and the lease inclusion amounts for business vehicles first leased in 2025.
Luxury Passenger Car Depreciation Caps
The luxury car depreciation caps for a passenger car placed in service in 2025 limit annual depreciation deductions to:
$12,200 for the first year without bonus depreciation
$20,200 for the first year with bonus depreciation
$19,600 for the second year
$11,800 for the third year
$7,060 for the fourth through sixth year
Depreciation Caps for SUVs, Trucks and Vans
The luxury car depreciation caps for a sport utility vehicle, truck, or van placed in service in 2025 are:
$12,200 for the first year without bonus depreciation
$20,200 for the first year with bonus depreciation
$19,600 for the second year
$11,800 for the third year
$7,060 for the fourth through sixth year
Excess Depreciation on Luxury Vehicles
If depreciation exceeds the annual cap, the excess depreciation is deducted beginning in the year after the vehicle’s regular depreciation period ends.
The annual cap for this excess depreciation is:
$7,060 for passenger cars and
$7,060 for SUVS, trucks, and vans.
Lease Inclusion Amounts for Cars, SUVs, Trucks and Vans
If a vehicle is first leased in 2025, a taxpayer must add a lease inclusion amount to gross income in each year of the lease if its fair market value at the time of the lease is more than:
$62,000 for a passenger car, or
$62,000 for an SUV, truck or van.
The 2025 lease inclusion tables provide the lease inclusion amounts for each year of the lease.
The lease inclusion amount results in a permanent reduction in the taxpayer’s deduction for the lease payments.
The leadership of the Senate Finance Committee have issued a discussion draft of bipartisan legislative proposals to make administrative and procedural improvements to the Internal Revenue Service.
The leadership of the Senate Finance Committee have issued a discussion draft of bipartisan legislative proposals to make administrative and procedural improvements to the Internal Revenue Service.
These fixes were described as"common sense"in a joint press release issued by committee Chairman Mike Crapo (R-Idaho) and Ranking Member Ron Wyden (D-Ore.)
"As the tax filing season gets underway, this draft legislation suggests practical ways to improve the taxpayer experience,"the two said in the joint statement."These adjustments to the laws governing IRS procedure and administration are designed to facilitate communication between the agency and taxpayers, streamline processes for tax compliance, and ensure taxpayers have access to timely expert assistance."
Thedraft legislation, currently named the Taxpayer Assistance and Services Act, covers a range of subject areas, including:
Tax administration and customer service;
American citizens abroad;
Judicial review;
Improvements to the Office of the Taxpayer Advocate;
Tax Return Preparers;
Improvements to the Independent Office of Appeals;
Whistleblowers;
Stopping tax penalties on American hostages;
Small business; and
Other miscellaneous issues.
A summary of the legislative provisions can be foundhere.
Some of the policies include streamlining the review of offers-in-compromise to help taxpayers resolve tax debts; clarifying and expanding Tax Court jurisdiction to help taxpayers pursue claims in the appropriate venue; expand the independent of the National Taxpayer Advocate; increase civil and criminal penalties on tax professionals that do deliberate harm; and extend the so-called"mailbox rule"to electronic submissions to provide more certainty that submissions to the IRS are done in a timely manner.
National Taxpayer Advocate Erin Collins said in a statement that the legislation"would significantly strengthen taxpayer rights in nearly every facet of tax administration."
Likewise, the American Institute of CPAs voiced their support for the legislative proposal.
Melaine Lauridsen, vice president of Tax Policy and Advocacy at AICPA, said in a statement that the proposal"will be instrumental in establishing a foundation that helps simplify some of the laborious tax filing processes and allows taxpayers to better meet their tax obligation. We look forward to working with Senators Wyden and Crapo as this discussion draft moves forward."
A limited liability company (LLC) classified as a TEFRA partnership could not claim a charitable contribution deduction for a conservation easement because the easement deed failed to comply with the perpetuity requirements under Code Sec. 170(h)(5)(A) and Reg. § 1.170A-14(g)(6). The Tax Court determined that the language of the deed did not satisfy statutory requirements, rendering the claimed deduction invalid.
A limited liability company (LLC) classified as a TEFRA partnership could not claim a charitable contribution deduction for a conservation easement because the easement deed failed to comply with the perpetuity requirements underCode Sec. 170(h)(5)(A)andReg. § 1.170A-14(g)(6). The Tax Court determined that the language of the deed did not satisfy statutory requirements, rendering the claimed deduction invalid.
Easement Valuation
The taxpayer asserted that the highest and best use of the property was as a commercial mining site, supporting a valuation significantly higher than its purchase price. However, the Court concluded that the record did not support this assertion. The Court found that the proposed mining use was not financially feasible or maximally productive. The IRS’s expert relied on comparable sales data, while the taxpayer’s valuation method was based on a discounted cash-flow analysis, which the Court found speculative and not supported by market data.
Penalties
The taxpayer contended that the IRS did not comply with supervisory approval process underCode Sec. 6751(b)prior to imposing penalties. However, the Court found that the concerned IRS revenue agent duly obtained prior supervisory approval and the IRS satisfied the procedural requirements underCode Sec. 6751(b). Because the valuation of the easement reported on the taxpayer’s return exceeded 200 percent of the Court-determined value, the misstatement was deemed"gross"underCode Sec. 6662(h)(2)(A)(i). Accordingly, the Court upheld accuracy-related penalties underCode Sec. 6662for gross valuation misstatement, substantial understatement, and negligence.
Green Valley Investors, LLC, TC Memo. 2025-15,Dec. 62,617(M)
The Tax Court ruled that IRS Appeals Officers and Team Managers were not "Officers of the United States." Therefore, they did not need to be appointed under the Appointments Clause.
The Tax Court ruled that IRS Appeals Officers and Team Managers were not"Officers of the United States."Therefore, they did not need to be appointed under the Appointments Clause.
The taxpayer filed income taxes for tax years 2012 (TY) through TY 2017, but he did not pay tax. During a Collection Due Process (CDP) hearing, the taxpayer raised constitutional arguments that IRS Appeals and associated employees serve in violation of the Appointments Clause and the constitutional separation of powers.
No Significant Authority
The court noted that IRS Appeals officers do not wield significant authority. For instance, the officers do not have authority to examine witnesses, unlike Tax Court Special Trial Judges (STJs) and SEC Administrative Law Judges (ALJs). The Appeals officers also lack the power to issue, serve, and enforce summonses through the IRS’s general power to examine books and witnesses.
The court found no reason to deviate from earlier judgments inTucker v. Commissioner (Tucker I), 135 T.C. 114,Dec. 58,279); andTucker v. Commissioner (Tucker II), CA-DC, 676 F.3d 1129,2012-1ustc¶50,312). Both judgments emphasized the court’s observations in the current case. InBuckley v. Valeo, 424 U.S. 1 (per curiam), the Supreme Court similarly held that Federal Election Commission (FEC) commissioners were not appointed in accordance with the Appointments Clause, and thus none of them were permitted to exercise"significant authority."
The taxpayer lacked standing to challenge the appointment of the IRS Appeals Chief, and said officers under the Appointments Clause, and the removal of the Chief under the separation of powers doctrine.
IRC Chief of Appeals
The taxpayer failed to prove that the Chief’s tenure affected his hearing and prejudiced him in some way, under standards inUnited States v. Smith, 962 F.3d 755 (4th Cir. 2020) andUnited States v. Castillo, 772 F. App’x 11 (3d Cir. 2019). The Chief did not participate in the taxpayer's CDP hearing, and so the Chief did not injure the taxpayer. The taxpayer's injury was not fairly traceable to the appointment (or lack thereof) of the Chief, and the Chief was too distant from the case for any court order pointed to him to redress the taxpayer's harm.
If you've made, or are planning to make, a big gift before the end of 2009, you may be wondering what your gift tax liability, if any, may be. You may have to file a federal tax return even if you do not owe any gift tax. Read on to learn more about when to file a federal gift tax return.
If you've made, or are planning to make, a big gift before the end of 2009, you may be wondering what your gift tax liability, if any, may be. You may have to file a federal tax return even if you do not owe any gift tax. Read on to learn more about when to file a federal gift tax return.
When you must file
Most gifts you make are not subject to the gift tax. Generally, you must file a gift tax return, Form 709, U.S. Gift (and Generation-Skipping Transfer) Tax Return, if any of the following apply to gifts you have made, or will make, in 2009:
Gifts you give to another person (other than your spouse) exceed the $13,000 annual gift tax exclusion for 2009.
You and your spouse are splitting a gift.
You gave someone (other than your spouse) a gift of a future interest that he or she cannot actually possess, enjoy or receive income from until some time in the future.
Remember, filing a gift tax return does not necessarily mean you will owe gift tax.
Gifts that do not require a tax return
You do not have to file a gift tax return to report three types of gifts: (1) transfers to political organizations, (2) gift payments that qualify for the educational exclusion, or (3) gift payments that qualify for the medical payment exclusion. Although medical expenses and tuition paid for another person are considered gifts for federal gift tax purposes, if you make the gift directly to the medical or educational institution, the payment will be non-taxable. This applies to any amount you directly transfer to the provider as long as the payments go directly to them, not to the person on whose behalf the gift is made.
Unified credit
Even if the gift tax applies to your gifts, it may be completely eliminated by the unified credit, also referred to as the applicable credit amount, which can eliminate or reduce your gift (as well as estate) taxes. You must subtract the unified credit from any gift tax you owe; any unified credit you use against your gift tax in one year will reduce the amount of the credit you can apply against your gift tax liability in a later year. Keep in mind that the total credit amount that you use against your gift tax liability during your life reduces the credit available to use against your estate tax.
Let's take a look at an example:
In 2009, you give your nephew Ben a cash gift of $8,000. You also pay the $20,000 college tuition of your friend, Sam. You give your 30-year-old daughter, Mary, $25,000. You also give your 27-year-old son, Michael, $25,000. Before 2009, you had never given a taxable gift. You apply the exceptions to the gift tax and the unified credit as follows:
The qualified education tuition exclusion applies to the gift to Sam, as payment of tuition expenses is not subject to the gift tax. Therefore, the gift to Sam is not a taxable gift.
The 2009 annual exclusion applies to the first $13,000 of your gift to Ben, Mary and Michael, since the first $13,000 of your gift to any one individual in 2009 is not taxable. Therefore, your $8,000 gift to Ben, the first $13,000 of your gift to Mary, and the first $13,000 of your gift to Michael are not taxable gifts.
Finally, apply the unified credit. The gift tax will apply to $24,000 of the above transfers ($12,000 remaining from your gift to Mary, plus $12,000 remaining from your gift to Michael). The amount of the tax on the $24,000 is computed using IRS tables for computing the gift tax, which is located in the Instructions for Form 709. You would subtract the tax owe on these gifts from your unified credit of $345,800 for 2009. The unified credit that you can use against the gift tax in a later year (and against any estate tax) will thus be reduced. If you apply the unified credit to the amount of gift tax owe in 2009, you may not have to pay any gift tax for the year. Nevertheless, you will have to file a Form 709.
Filing a gift tax return
You must report the amount of a taxable gift on Form 709. For gifts made in 2009, the maximum gift tax rate is 45 percent. You can make an unlimited number of tax-free gifts in 2009, as long as the gifts are not more than $13,000 to each person or entity in 2009 (or $26,000 if you and your spouse make a gift jointly), without having to pay gift taxes on the transfers.