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The US Tax Court just approved a vehicle deduction for a side gig.

A recent case Gonzales, TC Summary opinion 2022-13 7/18/22 the court decided that it is allowable to deduct vehicle expenses related to a second job.

In general, you can deduct ordinary and necessary business-related expenses when you use your car. Now, commuting to and from work was never deductible.

If deductible you can use either the actual expenses or the cents per mile determined by the IRS annually.

For 2022 the mileage rate is 58.5 cents per mile for the first half of the year and 62.5 cents per mile for the second half of the year.

The burden of proof for the proper use of the car and either the mileage or the actual expenses are always on the taxpayer. Since the potential for abuse exists the IRS closely monitors such deductions.

As with most complicated matters, you would be wise to consult with a licensed, experienced, and competent tax professional.

Call us First Call Tax Advocates at 718-400-9250

IRS Statement on balance due notices (CP-14)

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July 27, 2022

The IRS is aware that some payments made for 2021 tax returns have not been correctly applied to joint taxpayer accounts, and these taxpayers are receiving erroneous balance due notices (CP-14 notices) or notices showing the incorrect amount.

Who is affected: Generally, these are payments made by the spouse (second taxpayer listed) on a married filed joint return submitted through their Online Account. Some other taxpayers may also be affected outside of this group.

No immediate action or phone call needed: Taxpayers who receive a notice but paid the tax they owed in full and on time, electronically or by check, should not respond to the notice at this time. The IRS is researching the matter and will provide an update as soon as possible. Taxpayers who paid only part of the tax reported due on their 2021 joint return, should pay the remaining balance or follow instructions on the notice to enter into an installment agreement or request additional collection alternatives. Taxpayers can ensure that their payment is on their account by checking Online Account under the SSN that made the payment. Note that any assessed penalties and interest will be automatically adjusted when the payment(s) are applied correctly.

Additional information for tax professionals:
In general, when certain payments are processed, programming does not move the payment to the married filing jointly account when the payment is:

not electronic and is made by the secondary spouse.
electronic, is made by the secondary spouse, and posts before the joint return indictor is present to identify the primary taxpayer.
made by the secondary spouse using the Online Account (OLA) Make a Payment functionality

If you claim or ACTC, the law requires to hold the tax refund for a period to review. Barring other issues, the first of these refunds should be available by the first week of March. See

When to Expect Your Refund if You Claimed the Earned Income Tax Credit or Additional Child Tax Credit | Internal Revenue Service Find out when to expect your refund if you claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC).

New York State’s COVID-19 Pandemic Small Business Recovery Grant Program
Home|Finances, New York State|New York State’s COVID-19 Pandemic Small Business Recovery Grant Program
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NYS COVID-19 Pandemic Small Business Recovery Grant Program

If your business is still struggling to recover due to the pandemic, New York State’s COVID-19 Pandemic Small Business Recovery Grant Program may help. Grants of up to $50,000 are available to eligible applicants.

Who is eligible? Small businesses, micro-businesses, and for-profit independent arts and cultural organizations that are currently viable and began operation on or before March 1, 2019, and continue to be in operation as of the date of application (maybe shuttered due to COVID restrictions) are eligible.

However, note that businesses that received awards from the SBA Restaurant Revitalization Grant Program, landlords and passive real estate businesses, nonprofits, religious institutions and certain other industry or business types are not eligible for this program.

To qualify, applicants must show loss of gross receipts as a result of the COVID-19 pandemic or compliance with COVID-19 health and safety protocols which resulted in business modifications, interruptions, or closures. How to show proof of loss is detailed on the state website mentioned below.

How can applicants use the grant money? The grants must be used for COVID-19 related losses or expenses incurred between March 1, 2020 and April 1, 2021. These include payroll costs, mortgage payments, commercial rent, insurance, utility costs, equipment and other relevant expenses. Grant money may not be used to re-pay or pay down any portion of a loan obtained through a federal COVID-19 relief package for business assistance or any New York State business assistance programs.

How much can businesses get? Grant awards are calculated based on a business’s annual gross receipts for 2019. At this time, awards are determined as follows:

Annual gross receipts: $25,000 – $49,999.99: Award is $5,000 / business
Annual gross receipts: $50,000 – $99,999.99: Award is $10,000 / business
Annual gross receipts: $100,000 – $2,500,000 [as of 08/25/21]: Award is 10% of gross receipts (maximum grant is $50,000)
It is important to apply as soon as possible as there is limited funding. Priority is given to socially and economically disadvantaged business owners including, but not limited to, people with disabilities, service-disabled veteran-owned businesses, and veteran-owned businesses, or businesses located in communities that were economically distressed prior to March 1, 2020, as determined by the most recent Census data.

For more details and to apply, go to https://nysmallbusinessrecovery.com/.

State of New York Pandemic Small Business Recovery Grant Program State of New York Pandemic Small Business Recovery Grant Program. Lendistry is the sole entity designated as the Administrator of the New York State COVID-19 Pandemic Small Business Recovery Grant Program

IRS is sending out CP12 Notices to taxpayers. Here’s what it means.

Tax experts say it’s not a hoax and you shouldn’t ignore it.

Author: Kevin Landers
Published: 5:43 PM EDT October 8, 2021
Updated: 5:43 PM EDT October 8, 2021
COLUMBUS, Ohio — The Internal Revenue Service is sending our warning “math error” notices to millions of Americans in what’s called a CP12 Notice.

“It's a serious thing don't ignore it like some pesky bill or credit card statement," said Mark Steber, who is the chief tax information officer for Jackson Hewitt Tax Services.

Nine million notices have been sent. So what do they mean?

According to Steber, the notices mean the IRS either has questions or changes are being made to your tax return.

The notices may also mean an error was on your federal tax form.

“You might have put the wrong numbers for your W2, or withholdings or 1099 was left off. You might have included the wrong employment id number,” says Steber.

Steber also mentioned that you more than likely received a notice because you have qualified for a rebate recovery credit under the government's economic stimulus packages.

But that's not always the case.

“They are not always accurate and it may just be a simple question of data that you need to provide,” he says.

According to the IRS website, if you receive a notice, be sure to review it and compare the changes to the information on your tax return.

If you don't agree with the changes, contact the IRS within 60 days from the date of your notice.

There's no need to respond if you do agree to the changes and you should receive a refund check in four to six weeks.

From Accounting today

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Service levels hit new lows at swamped IRS
By Roger Russell
October 05, 2021, 2:26 p.m. EDT
3 Min Read
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The Internal Revenue Service is inundated with the volume of returns yet to be processed and phone calls for assistance, and is working hard to remedy the situation. While there are many factors contributing to this, it is overwhelming to the agency, according to Stephen Mankowski, tax chair of the National Conference of CPA Practitioners, who attended a recent IRS meeting for stakeholders.

“The National Taxpayer Advocate reported they are working to remedy this in multiple ways. The level of service is at its lowest historically, with more calls coming in daily than ever,” he said.

“Hiring and training take time. The automated callback program has been successful, but the number of people in the queue is limited to the number of assistants available,” he said. “The number of calls coming in, particularly regarding the Child Tax Credit, are exacerbating the problem.”

“Paper returns have piled up — there are 5.5 million Form 1040s and over 4 million business returns that have been opened but not processed. The goal is that by year-end, the paper returns will be processed. However, there are an additional 4 million returns anticipated by mid-October,” he said.

National Taxpayer Advocate Erin Collins is empathetic, Mankowski commented. “She truly feels our pain. She understands the taxpayer issues that exist, and the problems getting through to the IRS. She’s dealing with a lot of calls from practitioners and taxpayers trying to get resolution on issues. It’s just a matter of not having enough bodies to do the work.”

National Taxpayer Advocate Erin Collins testifying before a congressional committee in October 2020.Tasos Katopodis/Bloomberg
It’s not a static situation, Mankowski emphasized, noting that while the service is catching up on returns already filed, more returns are coming in.

And it’s more than just having the money to hire additional personnel, he suggested: “Even if they had the money and had the people willing to work, they couldn’t just snap their fingers and put 50, 100 or 500 people to work manning the phone lines. It takes at least 12 to 18 weeks to train someone to answer and assist callers. They have to understand the systems, and be able to understand and interpret what’s going on.”

In some cases they need to have people with better knowledge or information to help on practitioner lines, Mankowski observed. “But in a lot of cases, it’s easier to explain the issues to a practitioner than it is to taxpayers,” he said. “There’s a lot of training that is necessary to have someone able to assist all levels of taxpayers.”

The late December 2020 changes affected the 2021 filing season, he noted. “The reconciliation of the Economic Impact Payments is anticipated to be fixed within the computer system shortly, and they are hoping for the same with the Child Tax Credits. The IRS is looking to send out notices to taxpayers verifying their child tax payments, and the data is expected to also be available on the IRS portal.”

Other developments that were discussed at the meeting included the launch on July 18 of Tax Pro Accounts. “So far, over 37,000 sessions have logged into the accounts,” Mankowski said. “Nine thousand of these have initiated [power of attorney] requests, with 3,000 of those fully created and authenticated.”

A lot of the early users were “tire kickers,” according to Mankowski. “They might have been wanting to go through the motions. They had a general idea of how it works from watching the videos, but wanted to try out a dummy case just to test drive the system.”

The Secure Access Digital Identity, or SADI, was also launched with respect to the Child Tax Credits, with 4.1 million users seeking to gain credentials. SADI will be implemented into Tax Pro Accounts in November 2021. “The goal is that SADI will assist in allowing taxpayer authentication,” Mankowski explained

Hurricane Ida Tax Relief: October 15 Deadline as Well as Other Dates Extended to January 3, 2022
/ 2 September 2021 / 0 Comments
Hurricane Ida Tax Relief: October 15 Deadline as Well as Other Dates Extended to January 3, 2022
Victims of Hurricane Ida that began on August 26 now have until January 3, 2022, to file various individual and business tax returns and make tax payments, the Internal Revenue Service has announced.

The IRS is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance. Currently this includes the entire state of Louisiana, but taxpayers in Ida-impacted localities designated by FEMA in neighboring states will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

“During this difficult time, the IRS stands ready to help victims of Hurricane Ida,” said IRS Commissioner Chuck Rettig. “We want people affected by this devastating hurricane focused on their safety and recovery for themselves and their families. To provide assistance now and in the weeks ahead, we have a variety of different types of relief available to help people and businesses affected by this disaster.”

The tax relief postpones various tax filing and payment deadlines that occurred starting on August 26, 2021. As a result, affected individuals and businesses will have until January 3, 2022, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return due to run out on October 15, 2021, will now have until January 3, 2022, to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief.

The January 3, 2022, deadline also applies to quarterly estimated income tax payments due on September 15, 2021, and the quarterly payroll and excise tax returns normally due on November 1, 2021. It also applies to tax-exempt organizations, operating on a calendar-year basis, that had a valid extension due to run out on November 15, 2021. Businesses with extensions also have the additional time including, among others, calendar-year corporations whose 2020 extensions run out on October15, 2021.

In addition, penalties on payroll and excise tax deposits due on or after August 26 and before September 10, will be abated as long as the deposits are made by September 10, 2021.

The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2021 return normally filed next year), or the return for the prior year (2020). Be sure to write the FEMA declaration number – 4611 − for Hurricane Ida in Louisiana on any return claiming a loss. See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by Hurricane Ida and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.

Home | disasterassistance.gov You can find more information on the Coronavirus (COVID-19) page and the Centers for Disease Control and Prevention (CDC) website.

Divorce can be a challenging and emotional time in your life. What you need is qualified expert advice and analysis. At First Call Tax Advocates, we have the proper training and expertise to offer that advice to you.

Understanding your financial situation will help you feel in control of your life. Your financial situation can be broken down into four categories: assets, liabilities, income, and expenses. It is important to keep yourself in the reality of your situation. Let us help you lower your stress level during this time.