ORP, OR LLC
L MEANS NEW DEDUCTIONS — HEADACHES FOR THE IRS
Adjustments to Tax Brackets and Deductions The bill maintains the current tax brackets established by the 2017 TCJA but introduces several notable changes: • Child Tax Credit: Increases the credit to $2,500 per child through 2028, with a return to $2,000 thereafter. • State and Local Tax (SALT) Deduction: Raises the cap from $10,000 to $40,000 for taxpayers earning below $500,000. • New Deductions: Introduces deductions for tips and overtime pay, and establishes MAGA savings accounts with a $1,000 government contribution per child age 8 or younger born before January 2024. Potential Impact on Audits and Collections The introduction of new deductions and credits may increase the complexity of tax filings,
Medicaid and the Supplemental Nutrition Assistance Program (SNAP), and reducing funding for certain social programs. • Defense and Border Security: Allocating an additional $150 billion for defense spending and increasing border security funding. The Congressional Budget Office estimates that the bill would add approximately $3.8 trillion to the national debt over the next 10 years.
potentially leading to a higher risk of errors and non-compliance. The IRS may need to adjust its audit strategies to address these changes, focusing on areas with increased potential for misuse or misunderstanding.
Why It Matters For Clients
Taxpayers should be aware of the potential changes to deductions and credits that could affect their tax liabilities. Planning ahead and consulting with tax professionals can help navigate the evolving tax landscape.
Implications for IRS Funding and Enforcement
While the OBBBA does not directly address IRS funding, the significant tax code changes would necessitate updates to forms, guidance, and enforcement procedures. The complexity of new provisions, such as the MAGA savings accounts and revised deductions, may strain IRS resources and affect audit and collection activities.
For Referral Partners Financial advisors, attorneys, and other
professionals should stay informed about the bill’s provisions to provide accurate guidance to clients and determine when to refer them to tax specialists.
This client approached us feeling overwhelmed and anxious, having gone several years without filing taxes for herself or her business. WIN OF THE MONTH: Aloha, Debt! CASE SNAPSHOT Client: Maui Resident Type of IRS Issue: Personal and Business
This recipe is quick, easy, and promises a restaurant-quality meal from your own kitchen. It’s perfect over pasta or a green salad. Impress guests or indulge yourself on a weeknight! INGREDIENTS
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3 tbsp olive oil
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1/2 tsp black pepper 1 pound large shrimp, peeled and deveined
4 cloves garlic, minced 1/2 cup grated Parmesan cheese 1 tsp Italian seasoning
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2 tbsp chopped fresh parsley
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Juice of 1 lemon
1/2 tsp salt
DIRECTIONS
We immediately started planning so we could take the appropriate action, and after we explained the entire plan, we started moving forward. It took us 31 months to complete an Offer in
Tax Years in Question: 2015–2021 Total IRS Liability: $502,918.35 Savings Secured: $488,790.35
1. Preheat oven to 400 F. 2. In a bowl, combine olive oil, garlic, Parmesan cheese, Italian seasoning, salt, and pepper. 3. Add shrimp to the bowl and toss until fully coated. 4. Arrange the shrimp in a single layer on a baking sheet. 5. Roast in the oven for 7–9 minutes or until the shrimp are pink and slightly golden. 6. Remove from the oven and sprinkle with chopped parsley and fresh lemon juice before serving.
Compromise. Our plan changed slightly over time, but we were able to pivot and file the tax returns and get the IRS to approve the liabilities to be written off in the amount of $488,790.35! The client was able to say “Aloha” to the $502,918.35 original liability and pay under $15,000 to settle her debt!
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