The IRS is cracking down on more tax cheats this year but they don't enforce this standard on thousands of their own employees.

While 96% of IRS employees fulfilled their tax obligations last year, a significant share were delinquent, owing almost $50 million in federal taxes, a new oversight report found. This certainly raises questions when we are constantly hearing about the IRS efforts to enforce tax compliance and restore "fairness" in the nation’s tax system by starting with non-compliant taxpayers.

It appears that all that money you make with cryptocurrency can't be hidden anymore.  The Internal Revenue Service has issued final regulations that require custodial brokers to report sales and exchanges of digital assets. These reporting requirements are meant to help taxpayers file accurate tax returns with respect to digital asset transactions, which are already subject to tax under current law.

On March 11, 2024, the new rules that the U.S. Department of Labor created to clarify the classifications between independent contractors and employees went into effect. Many employers and freelance contractors have wanted a better distinction between what constitutes the difference and this document is the final rule on that issue.

Some employers preferred classifying contractors as non-employees because it would save them a lot of money since they would not have to pay them overtime or minimum wages, give employee benefits, withhold taxes, pay for half of their social security/medicare and they would enable them to let them go without any reason.

A lot of small businesses hire independent contractors to do projects that don't require a regular full or part time employee. Part of that process can be have that person fill out a W-9 form so that you have the proper information to give them a 1099-NEC form the next January showing how much you paid them.

That said, do you have to have every person you hire fill out a W-9? The simple answer is no.  The complex answer is maybe.  If you are hiring another business to do a single task for you, then probably not providing they give you invoices for the work.  However, if you are sub-contracting work out to another person or business, then you probably should.  

Those who make more than $400,000 aren't the only people the IRS is looking at regardless of what you hear in the media.

The IRS believes that sole proprietors' underreporting of income and overreporting of expenses cost the government about $182 billion of projected lost revenue not paid voluntarily in tax year 2021 alone.  This figure doesn't even take into consideration underpaid or unpaid self-employment taxes.

Here are some of the suggestions that government auditors are looking at to lower noncompliance:

One of the common misconceptions that divorced parents have is that whatever the divorce agreement says will be honored by the IRS.  This is no longer true.  Starting in 1996, the IRS came up with the custodial parent rules and Form 8332 (or its equivalent) to determine who can legally claim a dependent.   

In brief, the custodial parent is the one where the dependents live more than six months out of the year.  The custodial parent has all rights to claim all credits (child tax credit, additional child tax credit, earned income credit, education credits, child care credits, etc).  In fact, the only credit that the custodial parent can give to the non-custodial parent is the child tax credit.  Let me use an example of how this currently plays out:

Did you know that there are several categories of income are not taxable in the eyes of the IRS?

Here is a list of some common types of nontaxable income. Needles to say, it's good to consult a trusted tax professional or financial adviser if you are uncertain about your tax burden and how to minimize it. 

Here are Some Examples

Note: The following are examples of nontaxable income. (This list is not all-inclusive.) In some cases, you may have to report nontaxable income on your federal income tax return even though it isn't subject to tax.

For more information on what the IRS considers taxable, see IRS Publication 525.

Taxpayers for whom using the technology required to comply with electronic filing requirements conflicts with their religious beliefs may claim a religious exemption and file paper forms instead. IRS Notice 2024-18 provides updated guidance on claiming the religious exemption for taxpayers filing business returns such as Form 1120, Form 1120-S, or Form 1065.

These filers are not subject to the e-filing waiver procedures applicable to other taxpayers, such as those requesting a hardship waiver. Instead, taxpayers who qualify for the religious exemption should print “Religious Exemption” in bold letters on top of the paper-filed return. They should notfile Form 8508, Application for Waiver from Electronic Filing of Information Returns. Notice 2024-18 obsoletes Notice 2010-13.