A taxpayer can generally deduct a bad debt in the year it becomes worthless. But these deductions are disallowed if the debt is owed by a political party. One taxpayer claimed a bad debt deduction for an unpaid loan he made to a now-defunct 501(c)4 organization. He stated the organization wasn’t a political party, but existed to advocate for better public education. In Chief Counsel Advice, the IRS said the 501(c)4 was a political party,
Disaster victims in Wisconsin qualify for tax relief. The IRS announced that victims of severe storms, flooding and landslides in Wisconsin counties designated as federal disaster areas qualifying for individual assistance have more time to make tax payments and file returns. The following Wisconsin counties are designated federal disaster areas: Crawford, Dane, Juneau, La Crosse, Monroe, Richland, Sauk and Vernon. For affected counties, the onset date of the disaster was 8/17/18 and the extended filing deadline is 12/17/18.
Taxpayers that have a tax dispute may request a hearing before the IRS Office of Appeals. They then raise issues to be considered. One taxpayer was found to owe $39,737. Instead of paying it, he sent a check on a related matter, for $1,396, with a letter instructing the IRS that, if this amount didn’t satisfy his full tax bill, the check shouldn’t be cashed. The check was cashed, and he was sent a notice of deficiency for the balance.
President Trump signs the SUPPORT for Patients and Communities Act, allowing religious exemption from the individual mandate under the Affordable Care Act (ACA). Under the ACA, the mandate requires individuals to maintain basic health coverage. It’s been eliminated after 2018. The exemption applies to members of a religious sect who rely solely on a religious method of healing, and for whom the acceptance of medical health services would be inconsistent with their religious beliefs.
President Trump announced he will propose a middle-income tax cut and that Congress would vote on it soon. Trump said that his administration is studying a tax cut for middle-income earners but it’s unclear if or when a vote could happen. While the House has recently passed legislation that would make the individual tax cuts in the Tax Cuts and Jobs Act permanent, the Senate hasn’t taken up the proposed legislation because it’s concerned about increasing the deficit.
The IRS and the Treasury Dept. have issued proposed guidance for the new Opportunity Zone tax incentive. This incentive was passed as part of the 2017 Tax Cuts and Jobs Act, and designates as Opportunity Zones, 8,761 communities in all 50 states, the District of Columbia and five U.S. territories. Investors that make appropriate investments in the zones can defer tax on almost any capital gain achieved, through 12/31/26. To qualify, an investor must have made an election after 12/31/17,
IRS video tax tip: Tax Exempt Organization Search (TEOS) http://bit.ly/2Klxhm5
HBL CPAs is a full-service Certified Public Accounting firm based in Tucson, Arizona. HBL has been providing tax services, accounting services, auditing and attestation services, consulting services, and various other services since 1973.
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