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Tax Day is fast approaching, with just 17 days left before the deadline. Most taxpayers in America report their wages and salaries on their tax returns, with the deadline for related forms like W-2 and 1099 being January 31, 2024. Additionally, taxpayers reported nearly $2.7 trillion in investment income in 2021, with various forms from investments adding to the complexity of tax reporting. A deeper look into the tax treatment of investments reveals the need for close attention to details when reporting taxes, especially when dealing with more complicated investments like partnerships.

Real estate sales may not be hot right now, but homeowners are still faced with questions regarding tax deductions and ownership arrangements. The issue of claiming home mortgage interest deductions when ownership is blended or doesn’t match the documentation can be murky, with regulations like Regulation Section 1.163-1(b) coming into play. Proving legal ownership with the name on the deed is more straightforward, while proving equitable ownership can be trickier and depends on the facts and circumstances of each case.

Multiple Tax Court cases have gained attention recently, including Farhy v. Commissioner, which challenges the IRS’s authority to assess penalties under certain sections. Another notable case, Valley Park Ranch, LLC, Reed Oppenheimer, Tax Matters Partner v. Commissioner, has invalidated a key regulation that previously disallowed certain conservation easement-related deductions. Additionally, a legal challenge to the Corporate Transparency Act has been filed, highlighting ongoing debates over the reach and constitutionality of certain tax laws and regulations.

Important dates to note include the individual federal income tax return deadline of April 15, 2024 (or April 17 for Maine and Massachusetts), as well as the deadline for tax-exempt organizations’ information tax returns on May 15, 2024. The American Bar Association and the American Institute of CPAs have also provided positions and guidance on various tax-related issues, including the Employee Retention Credit and foreign currency gains or losses under section 987.

The IRS has recently suspended its ERC Voluntary Disclosure Program, aiming to recover funds claimed in error by businesses. While some ERC claims are still being processed, taxpayers have options for recourse if claims are not addressed within a reasonable timeframe. As the tax season continues, taxpayers are urged to navigate the complexities of tax law carefully, especially in light of ongoing changes and controversies surrounding tax regulations and enforcement.

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