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World NEWS
Prosecutors in the Trump Organization trial claim that the former president sanctioned tax fraud within the company. The Assistant Manhattan District Attorney cited evidence that Trump was aware his executives were skirting personal income taxes on company perks. Former CFO Allen Weisselberg previously testified that Trump agreed to cover his grandchildren’s private school bill. The defense has countered that Weisselberg acted independently and in his own interests by subtracting these costs from his payroll records.
Disney World’s reinstated CEO Bob Iger seeks to reclaim the special tax status… that formerly allowed the Florida theme park to tax itself to fund water, power, firefighting, and similar services. These allowances were revoked after Disney’s former chief executive, Bob Chapek, came into conflict with conservative lawmakers over the “Don’t Say Gay” bill. Iger is now seeking a new compromise to allow Disney to reclaim self-governing privileges for its 25,000-acre property.
U.S. NEWS
Taxpayers may see a much smaller tax refund from their 2022 returns
Experts are predicting a wave of “refund shock” as recent changes to tax law will likely mean higher tax bills for many Americans. Many of the special measures introduced early in the pandemic have begun to expire. These were largely responsible for last year’s unusually high refunds. In 2021, the average refund check was over $3,000—over 15% higher than the average in 2019.
After receiving a boost from the American Rescue Plan of 2021, both the child tax credit and the child and dependent care tax credit have been reduced for 2022. Though a number of Democratic lawmakers advocated for extending certain credits—the enhanced child tax credit in particular—these efforts were blocked by dissenters within their party and Republican lawmakers.
Similarly, the charitable deduction will be harder to claim. In 2021 single filers were allowed to claim up to $300 in cash donations (or $600 for married couples filing jointly) regardless of whether they itemized their deductions. In 2022, filers will not qualify unless they itemize their deductions and the total exceeds the standard deduction. Typically, about 9% of taxpayers itemize their taxes while the other 91% take the standard deduction.
Additionally, the increased attention to third-party platform payments will affect some taxpayers’ returns. Those who receive compensation through Venmo, PayPal, or similar apps will receive a Form 1099-K to assist in reporting this income. Previously, taxpayers would not receive a 1099-K unless they engaged in over 200 transactions totaling over $20,000. In 2022, the threshold has been significantly lowered to only $600 in compensation for even a single transaction. This does not apply to personal payments—only to transactions where you make a profit.
Tax experts recommend that taxpayers take advantage of education credits, earned income credits, or child/dependent care credits to offset the increase. Another option is to increase your tax withholding or transfer additional money into your 401(k) to reduce your overall income. Lastly, if you are a homeowner, you can explore the possibility of home improvements that may qualify for clean energy tax benefits.
STATE NEWS
Texas’ tax relief plans may negatively impact public schools… which rely on a property tax and sales tax for their state funding. Most states also have a state income tax that funnels revenue toward education, but the system in Texas is not set up this way. As Republican legislators seek to move forward with plans to reduce property taxes, educators are now concerned this may result in financial instability for their schools.
One tax proposal would eliminate the property tax that funds public schools and instead increase the state sales tax to 12%. However, if sales revenue dips, school leaders worry they will find themselves underfunded, especially if a recession does occur.
Texas’ current system bases fund allocation on daily attendance, which is another item of contention. Some have argued that this practice means that schools with higher needs can end up with much fewer resources. These potential changes will be addressed in the next legislative session scheduled for early 2023.
West Virginia tax revenue comes in at over $480 million… almost 31% more than the estimate given by the Department of Revenue. As a result, the state is now sitting on a $112.7 million surplus. As of November, year-to-date tax revenue is at 38% more than its estimate, totaling an impressive $2.5 billion. West Virginia will begin the new year with a $687.5 million surplus.
This surge in revenue can partly be attributed to the severance tax on coal, oil, and natural gas as demand for fossil fuels rose. Severance tax collections for the month of November alone exceeded the estimate by a whopping 368%. Year-to-date severance tax revenue was 443.8% higher than expected. The consumer sales and use tax also saw a $85.8 million surplus for the year.
The only tax that did not exceed expectations was the personal income tax. West Virginia Governor Jim Justice has previously proposed cutting personal income tax rates with a long-term plan to phase it out completely. Justice is expected to propose a 10% cut across all income tax brackets in the new year.
TAX PLANNING
E-Commerce platforms petition to increase the business transaction threshold under the new tax reporting rules. These companies, including Uber and eBay, are finding support from both Democratic and Republican legislators. In 2021, new legislation was introduced requiring companies that employ contract workers to provide 1099-K forms to help these gig workers accurately report their earnings. Starting in 2022, taxpayers with more than $600 in business transactions would have to report that income, regardless of the number of transactions.
Lobbyists are hoping to stop the implementation of this new rule in the current lame-duck session. Advocates for this law argue that gig workers were previously at greater risk of being audited and getting hit with back taxes they were not expecting to pay, since they were not receiving income tax forms unless their transactions exceeded $20,000 over at least 200 transactions. Republican opponents to the new third-party transaction rules are pushing to return to these higher thresholds, while some Democrats are instead suggesting a $5,000 minimum. Only 30% of those earning income through third-party platforms made more than $5,000 in 2016, according to a 2020 report.
Sales tax varies widely by state, introducing complications for small businesses
On top of the many tasks, they juggle from week-to-week, small business owners need to acquaint themselves with the specific sales tax rules in their state. The particulars can be very different in each region, from the rate to the due date to what is considered taxable. For instance, certain states tax both the product and service a business provides, while other states will only tax the products. New business owners may also be unaware that basic client fees—say the design fees charged by an interior designer—are subject to sales tax. Some states also tax real estate construction if the changes don’t amount to capital improvement (changes that increase the value of a property).
The law levies sales tax on the buyer of a product or service, which means customers are technically liable. The vendor must charge the tax and remit it to the IRS—which typically means they will slightly increase the price paid by the customer. In most states, sales tax is due every month, although if your sales fall below a certain threshold, you may only have to file quarterly or yearly. Taxes are due in the month immediately following the month when the sales occurred and can usually be remitted through your state’s website.
Recent Highlights
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CURRENT EDITION
Tax Tales I Let Slip in 2025: From Whistleblowers to Easement Woes and Beyond
One of my greatest frustrations as a tax writer is that I just don’t have the time to cover everything that I notice. Early in my blogging career, when I was younger and had more energy, I set myself on a Monday, Wednesday, Friday schedule like the college professors I envied. Even that did not keep up with everything I noticed, so periodically I would do a post that had short blurbs about interesting things I didn’t dig further on. Here is an example from 2010 of a post that covers an entity not considered a church by the IRS, S corp shareholder basis issues, definition of alimony and two Chief Counsel Advices on TEFRA issues. So here are some things for 2025, that I opened a file on but never managed to make an article with.
The IRS in 2025: A Snapshot of Reality
The IRS is not the same agency we dealt with a decade ago, or even three years ago. The pandemic accelerated operational strain, exposing long-standing infrastructure weaknesses while also prompting overdue investment and modernization. Some areas have improved meaningfully, including digital tools, faster account updates, and improved phone service during filing season. Other areas, however, feel frozen in time. Correspondence units remain slow, backlogs persist, and automated notices often fail to reflect what is actually happening on a taxpayer’s account. This article outlines the practical realities of working with the IRS in 2025, what strategies are working, what remains broken, and how to set clear, healthy expectations so you can deliver results without burning out.
The IRS in 2026: A Strategic Field Guide for Tax Professionals
As we head into the 2026 filing season, tax professionals are operating in an environment unlike any we have seen in recent memory: a smaller and more automated IRS, the new OBBBA, and rapid experimentation with AI-enabled tools inside the Service. This field guide is designed to separate what we know for sure from where the IRS is likely to move next, and to translate both into practical planning moves. It does not predict the future; instead, it offers a structured way to think about enforcement, documentation, and client strategy when the rules, the technology, and the politics are all in motion.
