The audit letter; race-conscious policies; long-short strategy; and other highlights from our favorite tax bloggers.
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Help from Uncle Sam
Don't Mess With Taxes : For folks whose livelihoods depend on Mother Nature offering a climatological hand now and then, the nationwide drought is posing real problems. Farmers have had to abandon fields. Ranchers have had to sell their livestock at lower prices. Many have filed for bankruptcy. But now, some of the ag operations still hanging on are getting a bit of help from Uncle Sam. The IRS has issued guidance on how farmers and ranchers who sold or exchanged livestock because of drought conditions can get an extension of tax relief for those transactions.Dean Dorton : As year-end approaches and many businesses prepare for the Oct. 15 extended filing deadline, construction companies have an important opportunity to review their tax position and implement strategies that can improve cash flow and reduce future tax liability. This blog offers three tax planning opportunities that construction business owners should consider before year-end.Baker Tilly : As multinational businesses approach year-end, tax planning often focuses on projected taxable income, cash needs, potential distributions and upcoming transactions. But the tax attributes accumulated through current- and prior-year cross-border activity can be just as important. FTCs, PTEP and E&P can directly affect the U.S. tax consequences of moving cash, distributing foreign earnings and undertaking other cross-border transactions.
Freezing gas taxes
ITEP : States across the nation are reckoning with their tightening fiscal futures as inflation and economic woes continue to eat into their budgets. In the face of these headwinds, including rising gas prices, some have proposed freezing gas taxes in Massachusetts and Ohio, although both states would struggle to afford the freeze. Elsewhere, the federal government continues a streak of immigration-related proposals to change the tax system, with real impacts on communities and state's bottom lines.Mauled Again : A GAO report estimates that tax fraud accounts for between $116 billion and $304 billion annually. The report estimates the total annual tax gap as $696 billion. The report suggests that the IRS address these issues. Seriously? At a time when the IRS workforce has been gutted and its funding significantly cut, how does the GAO expect the IRS to fund a new effort? A recommendation that is great in theory meets practical reality. And as usual, theory loses.Tax Pro Center : Beginning Oct. 1, the per diem rates used to calculate tax deductions for business travel expenses will be $329 to high-cost locations and $230 to low-cost areas, according to the IRS, up $10 and $5, respectively, from the previous year. The use of a per diem substantiation method is not mandatory. Taxpayers can substantiate the actual allowable expenses if they maintain adequate records or other sufficient evidence for proper substantiation, the IRS said.Abrigo : Education is one of the most important drivers of successful software adoption. A strong, ongoing learning program helps teams fully embrace new technology and build the expertise that supports stronger operational performance over time. For executives evaluating technology partners, the depth of a vendor's education program deserves consideration alongside product capabilities, implementation and support.
Sovereign immunity
Current Federal Tax Developments : Tax practitioners frequently encounter situationally complex client cases where taxpayers, acting without immediate legal or tax counsel, submit informal written requests to the IRS explaining economic hardships or casualty events. When formal amended returns are subsequently submitted past the standard statutory period, the IRS routinely asserts a lack of subject matter jurisdiction claiming sovereign immunity.Taxing Subjects : It might show up months after a return was filed, just as a tax professional is working through extensions or preparing for another filing deadline: the audit letter. For the taxpayer, the letter can be stressful. For the tax professional, it can mean hours of unexpected — and potentially unpaid — work. Audit defense isn't simply about preparing for an audit.National Association of Tax Professionals : With the Oct. 15 extended filing deadline approaching, tax professionals say one of the biggest challenges is not necessarily the return itself, but rather, helping taxpayers understand what an extension actually means. In a September poll from NATP, 90% of tax professionals surveyed said client misunderstandings about tax extensions are very or somewhat common. At the center of the confusion is payment. Nearly half of respondents, 48%, said clients believe an extension gives them additional time to pay their tax bill.Parametic : Long-short investing has been quietly migrating from hedge funds into mainstream wealth management. The appeal is intuitive: A portfolio that can pursue returns on both sides of the market has value for investors seeking pretax excess returns and the potential tax benefits associated with realizing capital losses.
Rapidly growing fiscal problem
Tax Vox : The Treasury reports that last month total federal debt surpassed the $40 trillion mark, equivalent to more than 125% of GDP, and it has continued to rise. Debt held by the public, excluding intragovernmental holdings, is now greater than 100% of GDP. Just 20 years ago, it stood at about 35% of GDP. In other words, the U.S. has a big, rapidly growing fiscal problem.CLA : Proposed regulations issued in September of 2026 could put the tax-exempt status of private schools, colleges and universities at risk over race-conscious policies. The U.S. Treasury and the IRS recently issued proposed regulations to establish a new regulatory framework addressing racial nondiscrimination for private schools.Tax Foundation : How many gallons are in a barrel? While this seems like a simple mathematical conversion, the answer is that it depends. Many states levy taxes on liquids on a per-barrel basis. However, some states define a "barrel" differently than the standard measurement. The landscape of unharmonious units creates complexity and compliance costs for businesses that must pay these taxes in multiple states.
