ShomoPolite Tax Service

IRS Offer in Compromise Program – Did You Know?

People who cannot pay their tax bills in full may have options to resolve the situation. One of these options is the Offer in Compromise (OIC) program, which allows eligible taxpayers to settle their debts with the IRS for less than the full amount owed.

Anyone considering an OIC should first check whether they qualify using the IRS Pre-Qualifier tool online (link below). Eligible taxpayers may then submit an application. In most cases, the application must be accompanied by a $205 fee and an initial payment toward the tax debt, although these requirements may be waived for lower-income applicants.

An OIC application requires detailed financial information and must be carefully prepared. Beware of aggressive ads promising to settle tax debts quickly for a small fraction of the amount owed. Companies behind these ads, often referred to as OIC mills, may charge substantial fees while submitting applications for people who have little chance of qualifying. A trusted tax professional can help ensure that an OIC application is complete, accurate, and has a reasonable chance of acceptance.

OIC Pre-Qualifier Online Tool: https://irs.treasury.gov/oic_pre_qualifier/

Quarterly Estimated Tax Payments – Reminder

If you are making quarterly estimated tax payments to the IRS, the due date for the April 1–May 31, 2026, payment period is coming up next Monday, June 15, 2026.

If you use IRS Direct Pay, payments can generally be made until 11:45 p.m. ET on the due date. If you pay by credit or debit card through an IRS-authorized payment processor, payments can generally be made until 11:59 p.m. ET on the due date.

TAX RELEASE #6 EMERGENCY — FOR QUICK ACTION!
1. Widespread Confusion - IRS Notice CP53E My tax clients have been receiving IRS Notice CP53E even though they have a balance due on their 2025 Form 1040. The request asks for bank account information.

Be aware that scammers are sending fraudulent versions of the CP53E. Be advised to only use the official irs.gov website to submit information. Note: Clients receiving a CP53E should only use their IRS online account and reply within 30 days of the notice. (http://www.irs.gov/payments/online-account-for-individuals).

2. Stay Updated on the Kwong Case. Help is available! The new AICPA Resource Center is an excellent resource for updates and to find answers to frequently asked questions (FAQs) and tools, including a client alert email template to help navigate what you may need.

In Kwong v. United States (179 Fed. Cl. 382, 2025), the U.S. Court of Federal Claims ruled that the IRS improperly assessed certain penalties and underpayment interest during the COVID-19 federally declared disaster. The court determined that pandemic-era tax deadlines were automatically postponed from January 20, 2020, through July 10, 2023.

Millions of individuals, companies, and non-profit organizations may be eligible for a refund or abatement of penalties and interest that accrued during this window.

Penalties and Interest: Failure-to-file penalties, failure-to-pay penalties, and late payment/underpayment interest. Act Now!!

* Eligible Period: From January 20, 2020, through July 10, 2023. ®
Affected taxpayers must file for a refund by July 10, 2026.

Tax professionals are surprised at the number of clients to whom we have the Kwong case applied. Carefully review your tax accounts for the specific tax years to identify any improperly assessed penalties and interest. Seek a refund or abatement of these payments.

Tax professionals can download and file the official IRS Form 843 (Claim for Refund and Request for Abatement) to formally ask the IRS to review and refund the improperly assessed penalties and interest.

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Summer Activities and Taxes – Did You Know?

Summer is a time to relax and have fun, but some seasonal activities may have tax consequences. Being aware of them now may save you time and hassle later.

If your child attends a day camp so you can work or look for work, some of the cost may qualify for the Child and Dependent Care Credit. Be sure to keep records and obtain the camp's tax identification information.

Students with summer jobs may be entitled to tax refunds if income tax is withheld from their pay. Adults earning income from seasonal, part-time, or gig work may need additional withholding or quarterly estimated tax payments.

Summer is also a popular wedding season. If you change your name after marriage, update your records with the Social Security Administration. If you move, update your address with the IRS and submit a new Form W-4 to your employer so your withholding reflects your current tax situation.

National 529 Day – Did You Know?

If you put money into a 529 education savings plan, earnings may be withdrawn federal income tax-free when used for qualified education expenses. Qualified expenses can include tuition, fees, books, supplies, computers, and for students enrolled at least half-time, certain room and board costs.

While 529 contributions are not deductible for federal income tax purposes, many states offer a full or partial state income tax deduction or credit for contributions. Some states and plan sponsors may also offer special incentives around National 529 Day.

Recent law changes expanded the use of 529 plans. In 2026, up to $20,000 per year, per student, may be used for qualified K–12 education expenses at public, private, or religious schools. Prior years were generally limited to $10,000 annually.