Line items


Travel per-diem rates updated

In Notice 2019-55, the IRS released the Oct. 1, 2019, through Sept. 30, 2020, per-diem rates for taxpayers to use in substantiating ordinary and necessary expenses for lodging, meals, and incidental costs paid or incurred for business-related travel away from home. The rates are $297 per diem for travel in the continental United States (CONUS) to any high-cost locality and $200 for any other CONUS locality, under the high-low substantiation method. The incidental-expenses rate remains $5 per day for all CONUS localities. The special rates for meals and incidental expenses for taxpayers in the transportation industry remain $66 for any CONUS locality and $71 outside the CONUS.

IRS offers expatriate tax relief

The IRS announced in IR-2019-151 new procedures for certain persons who have expatriated or intend to expatriate from the United States and wish to come into compliance with their U.S. income tax and reporting obligations and avoid being taxed as a "covered expatriate" under Sec. 877A. These procedures are outlined on the IRS website. The relief applies to individuals who relinquished or will relinquish their U.S. citizenship after March 18, 2010, and meet a number of other criteria. Under Sec. 877A, most property of "covered expatriates" is treated as sold for its fair market value on the day before the day of expatriation, and the resulting net gain over $725,000 (for 2019) is includible in their income. The IRS provides answers to 23 frequently asked questions about the relief and several examples.

Voluntary compliance shrinks slightly

Only about 83.6% of taxes owed in 2011 through 2013 was voluntarily paid, leaving a "tax gap" of $441 billion per year on average, the IRS reported in late September (Publication 1415, Federal Tax Compliance Research: Tax Gap Estimates for Tax Years 2011—2013; News Release IR-2019-159). The previous estimate, covering tax years 2008 through 2010, was of a voluntary compliance rate of 83.8%, two-tenths of a percentage point higher, and an average annual tax gap of $394 billion. After factoring in late payments and enforcement efforts, the more recent period's net compliance rate rose to 85.8%, the IRS estimated. The IRS currently collects more than $3 trillion annually in taxes, penalties, interest, and user fees.

SPONSORED REPORT

Get your clients ready for tax season

Upon its enactment in March, the American Rescue Plan Act (ARPA) introduced many new tax changes, some of which retroactively affected 2020 returns. Making the right moves now can help you mitigate any surprises heading into 2022.

100th ANNIVERSARY

Black CPA Centennial, 1921–2021

With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession.