Line items

Olympians win a tax break

The United States Appreciation for Olympians and Paralympians Act of 2016, P.L. 114-239, enacted in October, excludes from gross income the value of any medal awarded in, or prize money received from, the U.S. Olympic Committee on account of competition in the Olympic or Paralympic Games. In new Sec. 74(d), the exclusion is available only to taxpayers with adjusted gross income (AGI) (before the exclusion), of $1 million or less ($500,000 for married taxpayers filing separately). The exclusion applies (before the $1 million AGI limitation) for purposes of AGI limitations or phaseouts of several provisions listed in Sec. 74(d)(2)(B), including deductions of qualified retirement contributions, qualified tuition and related expenses, and interest payments on student loans.

Dozens charged in IRS impersonation ring

Federal agents arrested 20 individuals in the United States and charged 32 others and five call centers in India in late October in connection with phone calls in which the defendants allegedly impersonated officials of the IRS or U.S. Citizenship and Immigration Services to extort money. An indictment in Texas alleges that, using information obtained from data brokers, call center operators threatened victims with arrest, imprisonment, fines, or deportation if they did not pay taxes or penalties to the government. If the victims agreed to pay, the callers would use U.S.-based "runners" to obtain the money with prepaid debit cards or wire transfers. The fraudulent schemes resulted in hundreds of millions of dollars in losses by tens of thousands of victims, the Justice Department said in a release.

Voluntary offshore disclosure collections reach $10 billion

More than 100,000 taxpayers have come into compliance with their offshore account disclosure obligations through the IRS's voluntary disclosure programs, paying more than $10 billion in taxes, interest, and penalties, the IRS reported in October 2016 (IR-2016-137). The Offshore Voluntary Disclosure Program logged 55,800 participants paying more than $9.9 billion since 2009, and another 48,000 settled with $450 million through the separate Streamlined Filing Compliance Procedures. The latter program has resulted in the filing of more than 96,000 delinquent and amended income tax returns, the IRS said, noting that automatic third-party account reporting under the Foreign Account Tax Compliance Act (part of the Hiring Incentives to Restore Employment Act of 2010, P.L. 111-147) had entered its second year.


Get your clients ready for tax season

These year-end tax planning strategies address recent tax law changes enacted to help taxpayers deal with the pandemic, such as tax credits for sick leave and family leave and new rules for retirement plan distributions, as well as techniques for putting your clients in the best possible tax position.


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