Accounting Specialists of Asheville, LLC

06/27/2025

IRS Processing Delays Leading to Notices

The IRS acknowledged in a June 12 statement that processing delays for some electronic payments are causing taxpayers who paid on time to receive balance-due notices. Taxpayers who electronically paid taxes due may see their payments listed as pending on their accounts, despite the IRS already receiving payment from the taxpayer’s financial institution. Taxpayers who received notices after they paid their tax bills on time do not need to respond to the notices, and any associated penalties and interest will be automatically adjusted when the IRS corrects the problem.

The IRS explained that the notices may have been initiated before the payment was processed on the account. In other cases, the payment may have been processed but contained errors requiring additional handling before the taxpayer’s account was updated. Taxpayers receiving the notices should check their payment history and pending payments in their online account. If taxpayers do not see the payment processed by July 15, they should call the number on their notice.

05/15/2025

IRS Still Processing Over 597,000 ERC Claims

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.

04/12/2025

IRS Reaches Data-Sharing Deal with DHS

The IRS and Department of Homeland Security (DHS) have finalized an agreement that will provide sensitive taxpayer information to immigration authorities. Under the memorandum of understanding, the IRS will provide DHS with information about undocumented immigrants who are already facing deportation orders and are under federal criminal investigation.

According to the terms of the agreement, U.S. Immigration and Customs Enforcement (ICE) would provide the IRS with the names and addresses of taxpayers it believes have violated federal immigration law. The IRS would then check the information against its existing taxpayer data and confirm its accuracy.

04/11/2025

IRS reminder: Disaster victims have automatic extensions to file and pay their 2024 taxes.

The May 1, 2025, deadline applies to taxpayers affected by FEMA disaster declarations issued during 2024. These include:

Taxpayers in the entire states of Alabama, Florida, Georgia, North Carolina and South Carolina

Parts of the states of Tennessee, Virginia, New Mexico, & Alaska.

03/29/2025

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.

03/24/2025

Failure to File/Pay Penalties for Individual Income Tax Returns:

There are two late penalties for individual income tax returns (Form 1040): Failure to File & Failure to Pay.

An extension of time to file only negates the failure to file penalty for 6 months.

There is no extension for the failure to pay penalty.

Failure to file penalty:

The failure to file penalty is imposed under Section 6651(a)(1) of the Internal Revenue Code (IRC). The penalty is 5% of the tax owed for each month or part of a month that the return is late, up to a maximum of 25% of the tax due.
Example Calculation:
Assume a taxpayer was required to file a return showing a tax liability of $1,000 but failed to do so for 6 months. The penalty would be: $250.00
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).

Failure to Pay:

The failure to pay penalty is imposed under Section 6651(a)(2) of the Internal Revenue Code (IRC). The penalty is ½ of a percent of the amount of tax owed for each month or part of the month after the due date, up to a maximum of 25% of the unpaid tax amount.

Interactions between the penalties:

If both the failure to file penalty and the failure to pay penalty are applied to the same time frame, the amount of the failure to file penalty is reduced by the amount of the failure to pay. The combination of the two penalties does not exceed 5% per month up to a maximum of 25%.

03/12/2025

The Department of Government Efficiency (DOGE) terminated the leases for 61 IRS offices nationwide, according to a list of terminated leases under the Real Estate heading on the department’s website. The lease terminations follow reports that the IRS will close more than 100 taxpayer assistance centers across the country as part of DOGE’s efforts to cut government waste.

DOGE: Department of Government Efficiency

03/11/2025

Reports Say IRS Plans to Cut Staff by Half

The IRS employs roughly 90,000 people nationwide, not including the 7,000 probationary employees laid off in February. A U.S. Office of Management and Budget memo sent to federal agencies in February said agency heads must prepare to initiate large-scale reductions in force no later than March 13.

https://www.opm.gov/policy-data-oversight/latest-memos/guidance-on-agency-rif-and-reorganization-plans-requested-by-implementing-the-president-s-department-of-government-efficiency-workforce-optimization-initiative.pdf?utm_campaign=6958960-2025%20%7C%20Pubs%20%7C%20Member%20Emails&utm_medium=email&_hsenc=p2ANqtz-_a3ez4Ui0K7voKY59oA39QcMDq3-DACry9rCAK9nPmqoyCOFQ2U9w5ZvFNavf5JZjAcRwfKTrvtvc72t_gHtZFVUShSpNB_4Dpczvr8eR2zBzs-B0&_hsmi=350480410&utm_content=350480410&utm_source=hs_email

03/10/2025

With the March 21 BOI reporting deadline fast approaching, the Treasury Department announced it will not enforce penalties or fines related to the beneficial ownership information (BOI) reporting rule. In addition, the Treasury Department plans to issue new regulations that will not enforce any penalties or fines against U.S. citizens, other domestic reporting companies, or their U.S.-based owners. The proposed rule changes are expected to target foreign reporting companies, not domestic companies.

The Treasury Department is announcing today that, with respect to the Corporate Transparency Act, not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penal...

02/23/2025

BOI Reporting Deadline Now March 21

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.

02/10/2025

If your small business was impacted by Hurricane Helene, apply now for the Western North Carolina Small Business Initiative II grant. https://appalachiancommunitycapitalcdfi.org/wnscb-grant/

Small businesses can use the grants to cover expenses related to recovery and reopening in the wake of Hurricane Helene. Eligible uses include repair and replacement of physical damage, environmental cleanup, payment of business-related rents or mortgages, employee retention and hiring, and more.

Applications will be accepted until 11:59 p.m. on February 21, 2025. Applications submitted after this deadline will not be considered. Applicants that advance to the second round of evaluation will be contacted to provide additional information about their business. Subject to availability of funding, an additional round of funding may be opened.

Western North Carolina Small Business Initiative II Welcome to the Western North Carolina Small Business Initiative II Was your small business harmed by Hurricane Helene? The Western North Carolina Small Business Initiative II is here to help. The initiative is partnering with local Community Develo...