Al W Middleton, CPA

05/20/2026

Let's Break Down the Trump IRS Lawsuit & Settlement
In late January 2026, President Trump, his sons Donald Jr. and Eric, and the Trump Organization filed a $10 billion civil lawsuit against the IRS and Treasury Department.

Background:
The suit came after the 2019–2020 leak of Trump’s (and other wealthy individuals’) tax returns by former IRS contractor Charles “Chaz” Littlejohn, who was later convicted. The plaintiffs accused the IRS of failing to protect their confidential information, violating privacy laws.
The case was filed in federal court in Miami. Critics called it unusual — essentially the president suing an agency under his own administration.

The Settlement (May 18, 2026):
Trump and his co-plaintiffs voluntarily dismissed the lawsuit. In exchange:

No direct payout to Trump or his family/businesses. They received a formal government apology, but no damages.

The DOJ created a $1.776 billion “Anti-Weaponization Fund” (taxpayer-funded) to compensate people who claim they were harmed by alleged politicized investigations or “lawfare” during the prior administration — including potential Jan. 6 defendants and others. Trump himself is not eligible for this fund.

A broad release: The government is “forever barred and precluded” from examining, investigating, or pursuing claims based on tax returns filed before the settlement date. This covers prior and pending matters for Trump, his sons, the Trump Organization, and affiliates.

They also dropped other related claims (e.g., over the Mar-a-Lago raid and Russia investigation).

Key Clarifications:
✅ Trump & Company’s main “win” here is the apology and closure on old issues — not a big check.
✅ The Anti-Weaponization Fund is not for Trump — it’s aimed at others who say they were financially ruined by previous political prosecutions.
✅ Trump is NOT shielded from future tax audits. The bar only applies to returns filed before the settlement. New filings remain subject to normal IRS rules.
This is a very fresh development, so expect legal challenges from critics who call it a “slush fund” or question the self-dealing aspects.

What do you think — fair resolution or overreach?

02/27/2026

Now's the time of year you're reminded what you should have done to lower your tax bill last year. Let me suggest something to make it easier next year.

Borah High School is undertaking a project to remodel their Football Locker Room. I think the last time it was remodelled in the 80s they put in some used lockers from an old junior high. About half of them don't close properly, and kids are shuffled between three locker rooms to have coverage.

The beautiful part is the Borah Football Boosters is a 501(c)3 organization that is helping to fund the project. They are offering Locker Sponsorships, Murals, and Wall Tile Sponsorships to raise the funds. They need about 10 more lockers sponsored to get the project rolling (Locker's Ordered). You can put your name/company name/family name - forever enshrined on a plaque on the locker. If the remodel lasts as long as the last one -- you can have your name up there for 50 years.

As a tax advisor -- donations to Idaho School related charities are eligible for up to a 50% tax credit -- so if you sponsor a locker for $1,000 you can get a tax credit back from the state of Idaho for $500. Married filers could sponsor $2000 and get a $1000 credit.

If you need more information -- send me a note/give me a call or donate directly below.

12/10/2025

When I worked part-time preparing taxes alongside my regular job in Corporate Accounting, I was referred a client by my sister—a neighbor who had recently immigrated from Iraq. This was in early 2004, during a period when the United States saw a significant influx of refugees due to the war.

He arrived in the US with his family and found employment as a translator for the local court system, leveraging his fluency in both Farsi and Arabic. The court and several law firms paid him as a contractor, but the complexities of the US tax system were challenging for him to navigate. My sister recommended my tax services, and I assisted him in filing his return. With a family of five and net earnings under $20,000, he qualified for substantial tax benefits, including the Child Tax Credit and the Earned Income Credit (EIC). As a result, he paid no income tax and received a refund of approximately $8,000.

Delighted by his refund, he began recommending my services to other Iraqi immigrants. Soon, I had five to ten clients in similar financial situations. Some had started small businesses—a ho**ah bar, a restaurant, and a grocery store among them. Most had two or three children, and their spouses typically stayed home. In addition, the spouses received $881 per month from SSI/disability due to post-traumatic stress disorder, as coming from a war-torn country qualified them for these benefits.

Looking back, these were the “salad days”—a time marked by inexperience and limited understanding of the system. The facts were striking: $18,000 in income, $8,000 from the IRS, $881 monthly from SSI, and $550 from SNAP (formerly Food Stamps), totaling a net benefit of $43,172.

After a few years, many of those clients moved away or obtained W2 jobs. As their circumstances improved, their children aged out of tax credits, refunds decreased, and some sought new accountants, believing I was at fault for the reduced refunds.

From my perspective, the system was clear: refundable credits like the EIC and Child Tax Credit were paid directly when clients owed no tax. As their earnings increased, they gradually owed tax, and refunds diminished. Ironically, greater financial success did not improve their bottom line, as they lost government benefits and had to work harder for their income.

This raises questions about responsibility within the system. There must have been processes guiding them to apply for disability benefits, which are not straightforward. I only learned about the PTSD qualification because clients provided all their paperwork for tax preparation. They made every effort to comply with the law and pursue the American Dream. However, once government assistance became expected, it diminished their incentive to improve their situation.

How can we reform this process?

04/15/2025

Happy Tax Day!

Joe explains why he has a full blown tax phobia on Comedy Central's new show "Live From the Comedy Cellar" Fridays at 11 / 10 c #...

11/01/2024

In general, people struggle with math. Add a couple zeros to simple math and it glosses their eyes and they guess. This meme is why CPAs exist.

09/19/2024

09/05/2024

Why should you be concerned about taxing unrealized appreciation for taxpayers with over 100M in net worth?

Unless you have over 100M in assets, Kamala's proposal to tax unappreciated gains appears to not apply to you. It only applies to the 1%ers that are probably not paying their fair share.

The first problem with the proposal is that it is a new tax. Regardless of the limits, this is a new type of tax that will need a new type of return. They might combine the reporting with the current income reporting or information reporting, but still it will create more work to report. Bonus for me, as I charge people for doing more work -- probably sucks for you, as you would be paying for my next motorcycle.

Not only is it a new tax, but it opens up a duty or responsibility for the federal government to monitor your assets on an individual level. So while you may not have to file a report to tell them what your assets are -- they will COMMANDEER the ability to find it out, and/or assess the value themselves. Maybe they will require property tax assessments and investment brokers will have to report value instead of just gross proceeds/cost information. It doesn't matter how -- the federal government will now have a new piece of information about you - whether or not you pay the tax, as they will want to make sure that you pay it if you have to.

Income levels and limits change. What used to apply to the 1% now applies to the top 10% or top 15% now. Unless everything is indexed, it is hard to see where it will apply. If you look at the Alternative Minimum Tax -- when it was first enacted in 1969 (precursor to AMT -- "Minimum Tax" which was an add on tax that would only apply to 155 taxpayers, making ludicrously high income (over 200k). The median household income in 1969 was $8,389. household income was $74,580 in 2022 -- down from a peak of $78,250 in 2019-2020.

There are two instances where unappreciated gain is either taxed or avoids tax in our current system. First : if you reach the age of 72, you are required to take minimum distributions from your retirement account (traditional pre-tax accounts such as 401k/IRA/SEP/SIMPLE). This is to ensure that you pay tax on the account before you die - it's a slow burn, as at 72, your life expectancy table only requires a factor of 26.5, so your minimum distribution is (balance divided by 26.5) and slowly increases each year.. If you inherit an pre-tax plan from a non- spouse, that minimum payment is no longer ties to a conservative estimate of your lifespan -- that factor changes to 10 -- so you will have withdrawn the entire thing (and paid tax) in 10yrs. Second is your estate. The way it works now, your basis (cost) has a step-up in basis up to Fair Market Value when you die. This means that when you inherit property, even if you sell it -- you only pay tax on any appreciation after the date of death of the benefactor. It is a tax loophole to make it so estates can stay in a family and no one has to sell the family farm just to pay the taxes. Would it surprise you to know that the Biden/Harris plan in 2020 included doing away with the step-up in basis of ALL ESTATES (not just those eligible for the Estate Tax or over 11M in value). This just means that if the family farm is worth 1M, and is being split between 2 kids, generally one kid "buys" the other kid out at 1/2 the Fair Market Value. This makes it so one kid takes the 1M land (and puts a 500k mtg on it) and the other kid received 500k for the sale, and has no tax due on the gain. If the step-up in basis is removed -- one kid would still get the estate, but the other would be paying 20% long-term capital gains, basing the cost at 1/2 the original cost, and the gross at the 500k. This was actually a part of Biden's 2022 FY Budget Proposal

Ultimately, Biden/Harris did not change the estate tax to do that - but it largely speaks to the intent. The intent in the original plan is basically the same as the tax on unappreciated gains - it would just apply to everyone instead of only the Uber Wealthy, if they sold the property they inherited.

Income limits are rarely indexed. There are several examples in our current tax code that were meant to exclude the "rich" from taking deductions or credits that are excluding "pert near everyone" instead of just the "rich" now. You used to be able to deduct student loan interest if your income was under 125k. When it was first set (1997) , 125k was among the "top 5%" of income earners. Now, it is the equivalent of ~$300k, but that $125k limit is still there, so anyone above 125k don't get to deduct student loan interest (there is a small phase out, so they might get to deduct a little, but it is limited).

If you think the Uber Wealthy won't find a way around it, you're fooling yourself. The tax will eventually trickle down to people who don't have lawyers and CPAs on staff just to avoid this kind of thing. -- translation, you will pay the tax.... Good luck.

12/01/2023

Ever wonder why tax prep websites can offer free tax prep to you? They are selling your information...

https://www.cpapracticeadvisor.com/2022/11/29/report-tax-prep-websites-sent-clients-financial-data-to-facebook/73830/?fbclid=IwAR3GFn0avlebKRn-H4fCz34551oWqLcaLVIkyhdErG41AdT0tpdrKje-UNs

Taxpayers’ financial information was being transmitted through a widely used code called the Meta Pixel.

09/22/2023

Sitting down at the IRS working through some client issues. The agent I am working with is training a new hire (the $80 Billion increase at work). You'd be surprised how many times she has corrected the new hire's spelling of "abatement". It started politely, "no, it's a-b-a-t, not a-b-a-i-t", and eventually "NO! NO! NO! A-B-A-T - you're going to have to get this, you'll be using this every day all the time...."

Good times. If you have IRS penalties, I can help. You should weigh the amount of the penalty and how much I'll charge you for sitting down in the IRS office, but I'll only charge you if I get results.

09/01/2023

Sure, people that understand math will always be able to do their own taxes, but people that THINK they understand math (but don't) will be why tax firms can still be successful in a TurboTax world We clean up the mess when the IRS comes knocking...

https://fb.watch/mO3pHwc1TW/?mibextid=NnVzG8