GWB & Associates

02/17/2026

The IRS has admitted to sharing information with an Immigration and Customs Enforcement (ICE) Unit last year in court filings in response to a lawsuit over the administration's push to deport immigrants.

Last April, the Service provided the names and addresses of individuals believed to be living in the U.S. illegally. Information on approximately 47,000 taxpayers was tendered after Department of Homeland Security requested information on 1.2 million people before federal courts blocked the move

Employees of the Department of Government Efficiency provided access to the confidential taxpayer information, despite safeguards under federal law, leading to the departures of several high-level IRS Officials. However, the IRS has reportedly now discovered it inadvertently shared more confidential information than that on thousands of taxpayers with DHS.

A group of Senatorial Democrats wrote a letter last month to acting IRS Commissioner and Treasury Secretary Scott Bessent seeking more information on the sharing of taxpayer information with DHS. The Service and DHS have faced numerous lawsuits over the sharing of such information.

When I first heard about this last year I was confused because for decades every major governmental agency involved in the collection of income taxes has been trying to get immigrants to file and pay taxes. The Service even created a special type of Social Security Number known as an Individual Taxpayer Identification Number (ITIN), that allows people who have not yet received their full citizenship to complete an income tax return.

Now that taxpayer records are being used to track down and deport illegals, how many of those people do you think are going to file and pay taxes either now or at any time in the future? Probably not too many.

And the only ones that might file are the individuals who don't pay income tax given the refundable Earned Income Tax Credit or Refundable Child Tax Credits. They'll walk into a quickie refund service, give them a fake address, and walk out with a check for thousands of dollars further increasing the deficit and burdening the system.

Those immigrants who actually made significant amounts of money who were paying into the system, are probably now just a lost cause.

Let me leave you with this...

A heartbreaker of a case walked into my office a month ago that I wanted to share with you.

Twenty-five years ago this client filed her taxes, and paid what she owed. Of course, like anyone else, she thought that any possible situation as a result had ended decades ago.

She just received a tax bill for $60K in taxes, $12K in penalties, and $225K in interest on a return that was filed a quarter of a century ago.

If the statute of limitations on income tax returns is 36 months, how is this possible? How can the IRS come after a person after this amount of time has lapsed? How is this legal?

Under a little-known interpretation of the fraud exception to the statute of limitations, misconduct by your tax preparer rather than you, can keep an IRS audit window open indefinitely. They could go back to the first income tax return you filed back in high school or college and hit you with a tax bill if it was found that your preparer completed the return in a fraudulent manner.

The problem I have is what can I possibly do to help this woman? She doesn't have her records from twenty-five years ago.

How can I defend a situation where I have nothing to work with? When you add in the problem of the Service already having determined that the practitioner completed the return in a fraudulent manner, where am I actually going to take this case?

Here's my point.

Be careful who you use to file your taxes. If they aren't cleaner than my Grandmother's kitchen floor, you could have a problem that doesn't have a solution twenty-five years from now.

If you're worried about this sort of situation or are having any difficulties with your accounting and tax work, I'm waiting for you to contact me. We'd love to help.

We're all going to get through this. Let's get through it together.

02/05/2026

https://www.govexec.com/management/2026/02/setting-agency-failure-amid-staffing-crunch-irs-taps-employees-no-relevant-experience-assist-during-filing-season/411192/?oref=ge-category-lander-featured-river

The tax agency is taking unusual steps to prepare for its busy season after watchdog finds it is severely underprepared.

02/02/2026

For most W-2 workers, employee expenses are not tax deductible on federal returns.

The Tax Cuts and Jobs Act of 2017 suspended these deductions, and recent legislation in 2025 made this change permanent for the vast majority of employees.

Who Can Still Deduct Expenses?

A few specific groups can still claim "ordinary and necessary" work-
related expenses:

Educators: K-12 teachers and aides can deduct up to $300 for
classroom supplies.

Armed Forces Reservists: Can deduct travel expenses for drills if
they are over 100 miles from home.

Qualified Performing Artists: Eligible if they meet specific income
and employment requirements.

Fee-basis Government Officials: If compensated in whole or part
by fees.

Disabled Employees: Can deduct impairment-related work
expenses.

Key Rules & Tips
Reimbursement is Key: If you don't fall into the categories above,
you should seek reimbursement from your employer.
Reimbursed expenses are typically tax-free for you and
deductible for the company.

State Taxes: While federal deductions are restricted, some states
(like California, New York, and Pennsylvania) may still allow you
to deduct these expenses on your state tax return.

Self-Employed: If you are a freelancer or contractor (1099), you
can still fully deduct business expenses on Schedule C.
Requirements: Any deductible expense must be both "ordinary"
common in your field) and "necessary" (helpful and appropriate
for the job).

For more details, refer to IRS Publication 529 or IRS Publication 463.

George W. Brown, Jr., EA
GWB & ASSOCIATES
1043 East 95th Street
Chicago, IL 60619
Voice 773-336-5722
Facsimile 773-336-5724
Mobile 773-842-6577
[email protected]

01/29/2026

A 1099-NEC form is required if your business paid an independent contractor, freelancer, or sole proprietor $600 or more for services ($2,000+ for 2026 and beyond) within a calendar year. Payments must be made in the course of business, not for personal reasons, and are generally for non-corporate entities.

Key Requirements and Thresholds
Payment Threshold: \(\ge \$600\) for 2024/2025; \(\ge \$2,000\) for 2026.

Non-Employee Status: The recipient is not a W-2 employee.

Business Context: Payments made in the course of trade or business (including nonprofits).

Recipient Type: Individual, partnership, estate, or LLC (rarely, corporations if for legal/medical services).

Services Only: Includes fees, commissions, and parts/materials used to perform the service.

Backup Withholding: If federal income tax was withheld (regardless of amount), a 1099-NEC is required.

Information Needed for 1099-NEC
Form W-9: Always collect a signed W-9 from contractors before payment to ensure you have their name, address, and TIN (SSN or EIN).

Total Amount Paid: Sum of all payments in Box 1 of Form 1099-NEC.

Exceptions

Payments made to C or S corporations (except for legal services).

Payments made via third-party processors like PayPal or Venmo (these are reported on 1099-K instead).

Personal payments.

Deadlines
January 31 (or next business day) of the following year, for both filing with the IRS and sending to the recipient.

12/20/2025

11/04/2025

The One Big Beautiful Bill Act (OBBBA) allows the seller of a qualifying small business to not pay Capital Gains Tax on the first $15M in qualifying gains. This new law can provide millions in tax savings to entrepreneurs.
There are many factors that qualify a business to be considered Qualified Small Business Stock (QSBS) which is necessary for the savings. But the biggest stumbling block for many will be converting to a C Corp and holding the stock for the waiting period before selling the company.
To convert from an S Corp to a C Corp, you must revoke your S Corp status by sending a statement of revocation to the IRS. While the process is relatively simple for an existing corporation, it involves careful consideration of the tax implications and shareholder consent.
Steps To Convert Your S Corp
You must secure consent from shareholders who collectively own more than 50% of the corporation's voting and non-voting stock. It is recommended to document this agreement with a formal Shareholder Resolution.
Mail a signed statement of revocation to the IRS Service Center where you originally filed your S Corp election. The statement must include...
1 - A declaration that the corporation is revoking its S Corp election.
2 - The effective date of the revocation.
3 - The corporation's name, address, and Employer Identification Number (EIN).
4 - The names, addresses, and taxpayer identification numbers of the shareholders, and the number of shares each holds.
5 - The signature of an authorized person, such as a corporate officer.
The effective date of the change determines your filing schedule. The timing can affect whether you need to file one or two tax returns for the year:
If you file the revocation by the 15th day of the third month of the tax year, the conversion can be effective on the first day of that year. If you file after the 15th day of the third month, the change will take effect on the first day of the following tax year.
Let me leave you with this...
The important considerations and tax implications in this conversion are almost too numerous to list and dependent on your individual circumstances. But some include...
1 - You should carefully consider whether to distribute previously taxed S Corp earnings (Accumulated Adjustments Account or AAA) before the conversion. The corporation's post-termination transition period allows a limited time to make cash distributions tax-free, but any remaining AAA essentially disappears afterward.
2 - As a C Corp, the company's profits will be taxed at the corporate level, and any dividends distributed to shareholders will be taxed again at the individual level. This is the most significant tax difference compared to an S Corp's pass-through taxation.
Most C Corp Owners take a larger salary to not pay most of the taxes a second time, but this also increases their payroll tax burden.
3 - An S Corp that has converted from a C Corp is subject to a Built-In Gains (BIG) tax on any appreciated assets it sells within ten years of its S Election. It is critical to do a consultation to understand how this impacts a conversion back to a C Corp.
4 - After converting to a C Corp, the company generally must wait five years before it can elect S Corp status again.
I know how complicated this is. It's challenging even for someone like me who does this for a living.
That's why I wrote three columns about it, but the potential tax savings when selling a business are huge.
If you're thinking about selling your business in the reasonably near future, then we should probably do some planning. It could make a big difference in your retirement.
If you have questions, please call my office and schedule a consultation.
We're all going to get through this. Let's get through it together.
GWB & Associates stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, Accounting and Tax Work, Tax Planning, or Tax Representation, you have but to ask. I'm here and I remain,
Sincerely yours,
George W. Brown, Jr. EA
GWB & Associates
1043 E. 95th Street
Chicago, IL 60619
773-336-5722

Tax Preparation, Tax Resolution, Offer and Compromise Please scroll down to view full video