In the blogs: Baloney and stupidity

The cost of free file; ERC withdrawals; making money year-round; and other highlights from our favorite tax bloggers.

Baloney and stupidity

• TaxProf Blog (http://taxprof.typepad.com/taxprof_blog/): Administrations of both parties have made many regulatory and funding decisions with close reference to benefit-cost analysis. There’s been a great deal of scholarly discussion of BCA, but almost no attention to its role in government funding. 
• Institute on Taxation and Economic Policy (https://itep.org/category/blog/): Big names of the tax prep industry have long lobbied to prevent the IRS from providing a tool that would allow Americans to file their taxes online for free. How would the real cost of such a program compare with subsidies for the “leader[s] of the pack” in the prep industry?
• Procedurally Taxing (https://www.taxnotes.com/procedurally-taxing): Sec. 6751(b) generally requires supervisory approval for imposition of penalties. Not a lot of attention was paid to the requirement until recently, when numerous cases challenged penalties’ approval. Proposed regs gave rise to addressing many issues concerning the approval process, including timing, review and the exception for penalties that are “automatically calculated through electronic means.”
• EideBailly (https://www.eidebailly.com/taxblog): Favorite headline of the week: “The Bologna Tax Plan Roundup.”
• Mauled Again (http://mauledagain.blogspot.com/): A high school football stadium in Texas that apparently cost more than the Cotton Bowl raises the inconsistency “exhibited by those who object to ‘excessive government spending’ but who vote for what one person called something ‘monumentally stupid.’ ” 
• Turbotax (https://blog.turbotax.intuit.com): Not a subject you hear a lot about: “Fun Facts About California’s Tax System.”

Our bustling world

• Sikich (https://www.sikich.com/insights/): A calm perspective on the revolution in the buzziest of buzzy topics: Artificial intelligence.
• The Tax Times (https://www.thetaxtimes.com): The rich get poorer: A look at the IRS getting $122 million in back taxes from high-wealth individuals in a new enforcement initiative.
• Tax Foundation (https://taxfoundation.org/blog): The foundation’s annual State Business Tax Climate Index compares states’ tax structures across more than 120 variables. Inevitably it raises such questions as, “If Wyoming and South Dakota lead in the rankings, why aren’t more companies heading for the Black Hills?”
• Boyum & Barenscheer (https://www.myboyum.com/blog/): A recent webinar walks us through the withdrawal process of the naughty Employee Retention Credit.
• Tax Pro Center (https://proconnect.intuit.com/taxprocenter/): Another detailed look at such withdrawals, including all needed forms and adjustments.
• Summing It Up (http://blog.freedmaxick.com/summing-it-up): The “bustling world” of tech startups can teach all industries, including prep and tax firms, about the dangers of a data breach by an insider.
• Peisner Johnson (https://peisnerjohnson.com/blog/): The importance of sales tax exemption certificates for your ecommerce clients.
• Canopy (https://www.getcanopy.com/blog): A recent survey indicates that 74% of companies intend to permanently shift some employees to remote work post-pandemic. The impact of remote work on accounting practices goes beyond apparent benefits, but adapting is crucial to thrive.
• Marcum (https://www.marcumllp.com/insights): Ditto for the prep industry and its nonprofit clients, who might be tempted to hire and develop an individual with less experience but who’s eager to grow into the role needed — which is often easier than trying to find the perfect fit at the right level in today’s sparse market. Where does coaching fit in?
• Meyers Brothers Kalicka (https://www.mbkcpa.com/insights): Many nonprofits lost tens of thousands of dollars — if not a lot more — to fraud last year. How to help such clients institute stronger internal controls.

Time enough at last

• Virginia – US Tax Talk (https://us-tax.org/about-this-us-tax-blog/): Favorite opening of the week: “I’ve been married to a Swiss for almost 40 years. I know the critical importance of timeliness. When you say, ‘I’ll be ready in five minutes,’ believe me, that Swiss watch is ticking.” And so it is with the Tax Court and filing a Tax Court petition in response to an IRS notice of deficiency. 
• Current Tax Developments (https://www.currentfederaltaxdevelopments.com/): Look What They Did to My Boy Dept.: The estate of James Caan contended that he’d accurately rolled over all of an IRA from UBS to Merrill Lynch, a stance with which the IRS largely concurred save for the transfer of an interest in a non-publicly traded hedge fund. This asset encountered numerous challenges during its transfer, was ultimately liquidated and the proceeds transferred to Merrill Lynch — nearly a year after UBS reported the fund’s distribution to Caan. The estate posited two potential explanations: Either UBS never actually disbursed the hedge fund from the IRA or the IRS unjustly declined to grant late rollover relief through a private letter ruling request.
• Surgent Income Tax School (http://www.theincometaxschool.com/blog/): A reminder of what services to add to help your firm make money year-round.
• Parametric (https://www.parametricportfolio.com/blog): Loss harvesting should not be just a year-end tax move. How to incorporate it for clients well before Thanksgiving.
• Taxbuzz (https://www.taxbuzz.com/blog): Your construction clients likely find handling the taxes pertaining to that industry no easy task. Here are tax-planning strategies tailored to construction, including deductions and minimizing liabilities.
• University of Illinois Tax School (https://taxschool.illinois.edu/blog/): What to remind them about the taxability of Social Security and of deductible expenses when closing an estate or trust.
• National Association of Tax Professionals (https://blog.natptax.com/): This week’s “You Make the Call” looks at Lina, who’s preparing a 1041 for estates and trusts and a Schedule K-1 for share of income, deductions and credits for three beneficiaries. Personal information is available for two of the beneficiaries, but the address and TIN are missing for the third. That individual isn’t responding to requests for information. How should Lina file the K-1 for this absent beneficiary?
• Gordon Law (https://gordonlawltd.com/blog/): The absolute latest on the taxing of crypto from those who know that the obligations are anything but virtual.