IRS Still Processing Over 597,000 ERC Claims ------------------------------------------------------------------------------------------ 5/15/25
While the window for filing claims for the employee retention credit (ERC) has closed, the IRS still had more than 597,000 claims in inventory as of early April, according to a recent blog post by National Taxpayer Advocate Erin M. Collins. The post said that, realistically, it could take at least until the end of the 2025 calendar year for the IRS to complete processing the claims. Collins said that was a long time to leave taxpayers who claimed the ERC credit in limbo and called on the IRS to commit as many resources as possible to ensure claims are processed quickly.
Collins also noted that the IRS issued letters for approximately 84,000 returns that either partially or fully disallowed the taxpayers’ claims. However, in many of those cases, the agency has not clearly explained to taxpayers why their claim was disallowed. She called on the IRS to adopt the following recommendations regarding ERC claims:
- Commit to processing all ERC claims by the end of 2025
- Prioritize claims from taxpayers experiencing financial hardship
- Include clear and factual explanations with letters disallowing the claims and give taxpayers sufficient time to respond before the cases are transferred to Appeals
- Protect taxpayers’ rights by tracking the two-year statute of limitations and notifying taxpayers at least six months before it expires
- Allow ERC claimants to fast-track appeals
IRS further postpones various tax deadlines to Sept. 25 for North Carolina storm victims
Due to the lingering effects of Hurricane Helene, the Internal Revenue Service further postponed until Sept. 25, 2025, a wide range of tax deadlines for taxpayers throughout North Carolina. Previously, the deadline had been May 1, 2025, for Form 1040 filers, among many others.
The tax relief postpones various tax filing and payment deadlines that occurred from Sept. 25, 2024, through Sept. 25, 2025 (postponement period). As a result, affected individuals and businesses will have until Sept. 25, 2025, to file returns and pay any taxes that were originally due during this period.
This means, for example, that the Sept. 25, 2025, deadline will now apply to:
- Individual income tax returns and payments normally due on April 15, 2025.
- 2024 contributions to IRAs and health savings accounts for eligible taxpayers.
- 2024 quarterly estimated tax payments normally due on Jan. 15, 2025, and 2025 estimated tax payments normally due on April 15, June 16 and Sept. 15, 2025.
- Quarterly payroll and excise tax returns normally due on Oct. 31, 2024, and Jan. 31, April 30 and July 31, 2025.
- Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2025.
- Calendar-year tax-exempt organization returns normally due on May 15, 2025.
- 990, 1040, 1041 and 1120 filers with a valid extension for tax year 2023. Please note, the payments on these returns are not eligible because they were due last spring before the hurricane.
DOGE Denied Access to Treasury Records
A federal judge has barred the Treasury Department and other federal agencies from disclosing personally identifiable information (PII) with the Department of Government Efficiency (DOGE). The preliminary injunction was issued by a Maryland federal court judge after a group of national labor unions, nonprofit organizations and individuals claimed Treasury Department, the Office of Personnel Management and Department of Education were sharing PII in violation of the Privacy Act of 1974 and other federal laws.
The plaintiffs in the case, American Federation of Teachers v. Bessent, sought the injunction after Treasury Secretary Scott Bessent gave two individuals affiliated with DOGE access to Treasury and other systems with payment records for millions of Americans. The records include Social Security numbers, names, addresses and banking details. The government claimed it was not required to obtain the plaintiff’s consent before releasing the PII information to DOGE. It maintained that it fell under the so-called “need-to-know” exception to the Privacy Act of 1974. However, the judge found the need-to-know exception only applies to intra-agency disclosures and DOGE had not shown it needed the records to perform its duties. The government immediately appealed the decision.
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An extension of time to file only negates the failure to file penalty for 6 months.
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There is no extension for the failure to pay penalty.
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Monthly Penalty: 5% of $1,000 = $50 per month.
- Maximum Penalty: Since the penalty is capped at 25% of the tax due, the maximum penalty would be $250 (25% of $1,000).
BOI reporting back on for March 21, 2025
On Feb. 18, a Texas district court lifted the last remaining nationwide block against enforcing the Corporate Transparency Act (CTA), restoring beneficial ownership information (BOI) reporting requirements.
To allow businesses additional time to comply, FinCEN has extended the BOI filing deadline by 30 days for most companies. The new filing deadline is March 21, 2025, unless a later date applies to businesses in a federally declared disaster area. FinCEN is also considering further modifications to reporting requirements and deadlines, particularly for lower-risk small businesses.
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The Annual gift exclusion allows you and your spouse to each gift up to $18,000.00 per person per year (For calendar year 2025, the amount has been raised to $19,000.00) without using any of your federal estate and gift tax exemptions. Payments may also be made for tuition and medical expenses directly to providers on someone's behalf without relying on the annual exclusion or lifetime exemption.