If you requested an extension to file your 2025 federal income tax return, October 15, 2026, is an important date.

But there is one point that often confuses:

The extension gave you more time to file your return. It did not give you more time to pay the tax you owed.

For most taxpayers, any 2025 federal income tax due was still payable by April 15, 2026. If you have not yet filed because you know you owe more than you can currently pay, waiting longer may not improve the situation.

The better approach is usually to separate two questions:

1. Can you complete and file the return by October 15?
2. How will you address the balance you cannot pay immediately?

Those are related issues, but they are not the same problem.

October 15 Is a Filing Deadline — Not a New Payment Deadline

The IRS has been reminding extension filers not to wait until the last minute. In its August 26, 2026 announcement, the IRS encouraged taxpayers who requested an extension to file their 2025 federal tax return as soon as possible rather than waiting until October 15. An extension protects the additional time you received to prepare and file the return. It does not postpone the original payment obligation. That distinction becomes especially important if you expect to owe money. If your return is ready, avoiding the filing simply because you cannot pay everything at once can create another problem on top of the existing tax balance.

File the Return Even If You Cannot Pay the Full Balance

The IRS specifically advises taxpayers who cannot pay in full to still file and pay as much as they can. Filing the return establishes what you actually owe based on the completed return. From there, you can look at the balance more clearly and decide what payment or resolution path may fit your circumstances. You do not necessarily need to solve the entire tax-debt problem before filing your return.

The immediate priorities are:

• complete the return accurately;
• file it within the applicable deadline;
• determine the amount you owe;
• pay what you reasonably can; and
• review the available options for the remaining balance.

If you already made estimated payments or paid an amount when requesting the extension, those payments should also be considered when determining the remaining balance.

Paying Something Can Still Matter

If you cannot pay the entire amount, the IRS advises taxpayers to pay as much as they can. That is important because unpaid federal tax can continue to accumulate interest and applicable late-payment penalties. Waiting until you can afford to pay everything at once may therefore be a poor strategy. Instead, understand the amount due and determine what you can realistically pay now without making assumptions about what the IRS will accept for the remainder.

What If You Need More Time to Pay?

The IRS provides several possible routes for taxpayers who cannot immediately pay their full balance.

IRS Payment Plan

A payment plan allows qualifying taxpayers to pay an IRS balance over time rather than in one payment. The appropriate arrangement depends on the amount owed, the taxpayer’s circumstances and whether IRS filing and payment requirements have been met. If you believe you can repay the balance over time, this may be one of the first options to review. Learn more about how payment arrangements work through IRS Audit Group’s IRS Payment Plan guidance.

Offer in Compromise

For some taxpayers facing a more significant financial problem, an Offer in Compromise may be worth evaluating. An Offer in Compromise allows qualifying taxpayers to settle a federal tax debt for less than the full amount owed. It is not available simply because paying the tax is inconvenient, and qualification depends on the taxpayer’s financial circumstances and IRS requirements. If your tax balance appears to be beyond what you can realistically repay, learn more about Offer in Compromise before assuming that a standard installment arrangement is your only option.

Temporary Collection Delay

The IRS may also temporarily delay collection when a taxpayer cannot pay because doing so would prevent the person from meeting basic living expenses. This does not eliminate the tax debt. Interest and applicable penalties can continue while collection is delayed. This type of situation normally requires a closer review of income, expenses, assets, and overall financial circumstances.

Already Receiving IRS Notices? Do Not Treat Them as Routine Mail

For some extension filers, the concern is no longer just an unpaid balance. They may already be receiving IRS notices relating to prior tax years, existing balances, or other unresolved issues.

Read each notice carefully.

Look at:

• the tax year involved;
• the amount the IRS says is due;
• the response or payment deadline;
• whether the IRS is requesting information; and
• what action the notice says may occur next.

Do not assume that filing your 2025 return automatically resolves an older tax issue.

When several years, notices, or balances are involved, getting the situation organized before responding can prevent unnecessary confusion.

What Should You Do Before October 15, 2026?

If you requested a valid extension and still have not filed your 2025 return, focus on getting clarity rather than avoiding the problem. File the return. Confirm the balance. Pay what you can. Then review the right path for what remains. A tax balance does not automatically mean every taxpayer needs the same solution. One person may be able to manage an installment arrangement. Another may need a broader review of financial hardship or other available resolution options. The important point is to understand the situation before choosing a path.

IRS Audit Group Can Help You Review the Next Step

If you are approaching the October 15, 2026 filing deadline and already know you cannot pay the full amount, IRS Audit Group can help you review the situation in a structured way. That may include helping you understand the balance involved, reviewing relevant IRS notices, organizing the information needed to evaluate payment options, and determining which resolution paths may warrant further consideration.

Don’t Panic… But Don’t Delay!

Getting the return filed is one step. Understanding what to do with the unpaid balance is the next. Contact IRS Audit Group to discuss your situation and the next steps available to you.

The IRS recently flagged certain trust-based transactions for closer tax reporting attention. Specifically, the Treasury Department and IRS issued final regulations identifying certain arrangements that claim to be Charitable Remainder Annuity Trusts, or CRATs, as listed transactions.

This does not mean every charitable trust is a problem. It also does not mean every taxpayer using trust planning has done something wrong. But it does mean taxpayers should be careful before filing a return that includes a complex trust arrangement, especially if the structure was promoted as a way to reduce or eliminate taxable income or capital gain.

The practical message is simple: if a tax strategy involves a trust, appreciated property, annuity payments, or a promise to sharply reduce taxable income, review it carefully before filing.

What Did the IRS Announce?

On July 8, 2026, the IRS announced final regulations naming certain Charitable Remainder Annuity Trust transactions as listed transactions. The IRS described the issue as involving “certain arrangements purporting to be Charitable Remainder Annuity Trusts (CRATs) as listed transactions.”

The IRS is not saying that all CRATs are abusive. It is focusing on certain arrangements that purport to be CRATs and are being used in a way the IRS views as problematic.

The IRS also stated that “material advisors and certain participants in these listed transactions are required to file disclosures with the IRS and are subject to penalties for failure to disclose.”

The concern is not only whether the taxpayer believes the strategy is valid. Once a transaction is identified as a listed transaction, disclosure obligations can become a separate issue. Missing those requirements may create additional penalty exposure.

What Is a Listed Transaction?

A listed transaction is a transaction that the IRS has specifically identified as a tax-avoidance concern. These transactions receive special reporting attention.

For most taxpayers, the important point is not the technical label. The important point is if a transaction is listed, it may need to be disclosed to the IRS, and failure to disclose can create consequences.

This is why taxpayers should not treat complex tax planning as a simple filing position. If a structure has been flagged by the IRS, the taxpayer should review the transaction before filing, confirm whether disclosure forms are required, and keep records that explain the position taken on the return.

What Type of Trust Arrangement Is the IRS Concerned About?

The IRS release describes a transaction where taxpayers try to eliminate ordinary income and/or capital gain on the sale of property. According to the IRS, the transaction can involve property with a fair market value higher than its basis, such as closely held business interests or business-related assets. The property is transferred to a purported CRAT. The CRAT then sells the property and uses some or all of the proceeds to buy a single premium immediate annuity, also called a SPIA.

The IRS says the taxpayer or beneficiary then claims that the CRAT annuity is taxable only to the extent of the income portion of the SPIA annuity payment by misapplying certain tax rules.

In simpler terms, the IRS is concerned about arrangements where a taxpayer moves appreciated property into a trust structure, sells that property, buys an annuity, and then claims a tax result that significantly reduces the income or gain that would otherwise be reported.

This is why the issue matters for business owners and high-income taxpayers. The IRS specifically refers to property such as interests in a closely held business and assets used or produced in a trade or business.

Who Should Pay Attention Before Filing?

This IRS announcement is especially relevant for taxpayers who have used, or are considering, trust-based tax planning involving appreciated assets.

Taxpayers should review the issue carefully if they:

• transferred appreciated property into a trust;
• transferred closely held business interests into a trust;
• sold assets through a trust structure;
• received or expected annuity payments connected to a trust;
• were told a structure could eliminate or sharply reduce ordinary income or capital gain;
• worked with a promoter or advisor who recommended a CRAT-based strategy;
• received advice that disclosure was unnecessary despite the transaction having aggressive tax benefits.

Not every one of these facts means the taxpayer participated in a listed transaction. But they are enough to justify a careful pre-filing review.

A taxpayer should not wait until an IRS notice arrives to understand how the transaction was reported.

What Should Taxpayers Review Before Filing?

Before filing a return that includes a complex trust transaction, taxpayers should slow down and review the core documents.

1. First, review the trust documents. Understand what type of trust was created, when it was created, and what property was transferred into it.
2. Second, review the asset transfer. Was appreciated property moved into the trust? Was it a business interest, real estate, or another asset with a value above its tax basis?
3. Third, review the sale documents. If the trust sold the asset, confirm how the sale was reported and who reported the income or gain.
4. Fourth, review any annuity purchase. If a single premium immediate annuity was purchased, understand how it fits into the transaction and how the payments are being treated for tax purposes.
5. Fifth, review the tax return position. Look closely at whether the strategy reduced or eliminated ordinary income or capital gain. If the tax benefit is large, the explanation and documentation should be strong.
6. Sixth, review disclosure obligations. If the transaction is listed or substantially similar to a listed transaction, the taxpayer may have reporting requirements.
7. Seventh, review advisor communications. Keep copies of memos, emails, planning documents, and engagement letters. If the IRS asks questions later, these materials may help explain what advice was received and what the taxpayer understood at the time.

Why Disclosure Matters

Disclosure is a major part of this issue.

The IRS release makes clear that certain participants and material advisors may be required to file disclosures and may face penalties for failure to disclose. That means the filing risk is not limited to the income tax calculation itself. A taxpayer may also need to consider whether the transaction was properly reported as a listed transaction.

This is where taxpayers can get into trouble. A taxpayer may focus only on whether the return preparer entered the numbers correctly. But for listed transactions, the question may also be whether the transaction was properly disclosed.

If a taxpayer participated in a transaction that is now listed, or substantially similar to one that is listed, the taxpayer should review the filing position before submitting the return.

Common Mistakes to Avoid

• Assuming that a trust structure is safe simply because it has a charitable label. A charitable element does not automatically make every tax result acceptable.
• Relying only on the promoter’s explanation. If a strategy was sold as a way to eliminate tax on appreciated property, that should be reviewed carefully.
• Ignoring the listed transaction label. Once the IRS identifies a transaction for special reporting, disclosure requirements may become important.
• Filing without organizing records. Trust documents, sale records, annuity documents, valuation materials, contribution records, and tax advice should be kept together.
• Waiting for an IRS notice before understanding the transaction. If the taxpayer cannot explain the position before filing, responding later may be much harder.

What If the IRS Sends a Notice?

If the IRS sends a notice related to a trust transaction, the first step is to read the notice carefully. Do not assume it is a routine letter. Do not ignore the deadline. Do not send a rushed response without understanding what the IRS is asking.

The taxpayer should gather the relevant documents, including the trust agreement, asset transfer documents, sale records, annuity documents, tax return schedules, disclosure forms, and advisor communications.

The response should match the issue raised in the notice. If the IRS is asking about disclosure, the response should address disclosure. If the IRS is asking about income or gain, the response should address how the tax treatment was determined. If the IRS is asking for documents, the taxpayer should provide organized records, not a scattered set of unrelated files.

Understand the notice. Organize the records. Respond with a plan.

That approach is especially important when complex tax planning is involved.

The IRS announcement on certain CRAT transactions is a reminder that complex tax strategies should be reviewed carefully before filing. A trust is not automatically a problem. But when a transaction involves appreciated property, a trust structure, an annuity purchase, and a claimed reduction in taxable income or gain, taxpayers should be cautious.

The safest approach is to review the documents, understand the tax position, check disclosure obligations, and keep organized records.

If the IRS questions a trust-related filing position, a calm and structured response matters.

IRS Audit Group can help taxpayers understand the notice, organize the facts, and consider the next step.

IRS AUDIT GROUP

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles, California, and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices nationwide.  Please get in touch with us for more information.

Telephone Number: (310) 498-7508

info@irs-audit-group.com

Starting in tax year 2027, some taxpayers will be able to claim a new federal tax credit for donating to scholarship programs. The IRS has already published details on this credit called the Federal Scholarship Tax Credit (FSTC) and a growing list of states are already signing up to participate.

Before you plan around this credit, it is important to check three things:

1. Does your state participate
2. Does the organization you’re giving to qualify
3. Does your contribution meet the IRS’s rules

Taxpayers should be careful before assuming the credit automatically applies to them. Like many tax credits, the details matter. The state must participate. The organization receiving the contribution must qualify. The contribution must meet the applicable rules. And the taxpayer should keep clear records before claiming anything on a federal tax return.

What Exactly Is the Federal Scholarship Tax Credit?

This isn’t a general “education tax break.” Taxpayers can’t claim it for tuition payments, school supplies, or a donation to just any education nonprofit.

The FSTC applies specifically to cash contributions to Scholarship Granting Organizations (SGOs). SGOs are nonprofits that fund scholarships for K-12 students. If your donation doesn’t go to a qualifying SGO, it doesn’t count for this credit, no matter how education-related it feels.

When Does This Credit Begin?

The IRS states that the Federal Scholarship Tax Credit begins on January 1, 2027, for eligible individual taxpayers. That means, a donation made in 2026, even to a qualifying SGO does not create this federal credit unless the IRS issues further guidance saying otherwise.

A taxpayer who hears about the credit in 2026 should not assume that a current-year contribution automatically creates a federal credit. For taxpayers who like to plan ahead, 2026 may be the year to understand the program. But 2027 is the year the IRS currently identifies as the starting point for the credit.

How much you can claim

The actual amount you can claim depends on your eligibility, your contribution amount, and the program’s specific rules but the maximum claim can be $1,700. But taxpayers must contribute to an SGO located in any state that elects to participate in the FSTC program and submits a list of qualified SGOs.

Why State Participation Matters

One of the most important parts of the program is state participation. The IRS has said that a state, or the District of Columbia, must choose to participate before taxpayers can donate to an SGO in that state and claim the Federal Scholarship Tax Credit.

This is where many taxpayers could become confused. Seeing a national IRS announcement does not mean the credit is automatically available in every state. It also does not mean that every education-related nonprofit or scholarship organization qualifies.

The IRS news release announced that 28 states had elected to participate as of June 22, 2026. Because the IRS says it will maintain and update the official list, taxpayers should rely on the most current IRS or state information before making decisions.

In practical terms, taxpayers should ask three basic questions before donation or check whether the credit applies:

1. Does my state participate in the FSTC program?
2. Has my state submitted its approved SGO list to the IRS?
3. Is the specific organization I’m giving to actually on that qualified list?

Before You Make a Contribution

Run through this checklist:

• State participation — confirm your state has opted in.
• Organization status — confirm the recipient is a qualified SGO, not just a school-related nonprofit that sounds similar.
• Type of contribution — the credit applies to cash contributions. Don’t assume in-kind donations or indirect support count.
• Timing — since the credit starts January 1, 2027, know exactly which tax year your contribution falls into.
• Documentation — save proof of payment, receipts, written confirmation from the SGO, and any state/IRS records showing the organization was qualified at the time you gave.

Good records won’t guarantee your credit gets approved — but they’re your best defense if the IRS asks questions later.

Five Mistakes to Avoid

1. Assuming it’s available everywhere. State participation is not automatic.
2. Assuming any education donation counts. Only qualifying SGO contributions count.
3. Assuming you’ll get the maximum credit. “Up to $1,700” is a ceiling, not a guarantee.
4. Skipping documentation. No records, no easy defense if questioned.
5. Relying on old news instead of current guidance. The IRS itself warns that news releases go stale — check the live FSTC page.

Understand the notice. Organize the records. Respond with a plan.

That approach is far better than guessing, ignoring the letter, or sending documents without a clear explanation.

What If the IRS Questions a Claimed Credit Later?

If the IRS sends a notice about a claimed tax credit, the first step is not panic. The first step is to understand what the notice is asking.

1. Understand what’s being asked. A notice may request clarification, supporting records, or a response by a specific deadline. The taxpayer should review the notice carefully, gather the relevant documents, and avoid sending a rushed or incomplete response.
2. Gather your records. For a credit like the Federal Scholarship Tax Credit, useful records may include contribution receipts, proof of payment, SGO information, state participation details, and a copy of the filed return. The response should be organized around the specific issue raised by the IRS.
3. Respond directly to the issue raised. Don’t send a generic pile of documents — address what the notice actually asks.

Final Takeaway

The Federal Scholarship Tax Credit could be a real benefit starting in 2027 — but it’s not automatic. Before you claim it:

• Confirm your state participates or not
• Confirm the organization is a qualified SGO as shared by the states to the IRS
• Confirm your contribution meets the cash-contribution rules
• Track the correct tax year
• Keep clean, organized records

A new tax credit can create opportunity, but it can also create confusion. The safest approach is preparation.

If you receive an IRS notice or have questions about how to respond to a tax issue, IRS Audit Group can help you understand the notice, organize your records, plan next steps and also represent you in the IRS audit.

IRS AUDIT GROUP

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles, California, and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices nationwide.  Please get in touch with us for more information.

Telephone Number: (310) 498-7508

info@irs-audit-group.com

Contact

As Tax Season 2026 unfolds, many taxpayers and business owners are asking the same question: where is the IRS focusing its enforcement attention now?

The short answer is that the IRS is not approaching enforcement randomly. Its public statements, strategic plan, and recent enforcement announcements show a defined pattern. The agency is concentrating more resources on areas it sees as complex, underreported, and high-risk, while continuing to expand data matching, digital reporting, and enforcement against abusive structures. For taxpayers, that means tax season 2026 is less about broad-based fear and more about understanding where scrutiny is intensifying — and preparing accordingly.

One of the clearest priorities is high-income and high-wealth noncompliance. The IRS has repeatedly said that its enforcement resources are being directed toward taxpayers with greater complexity and greater capacity to underpay. In public remarks tied to the Strategic Operating Plan, the IRS stated that it would focus IRA enforcement resources on “high-income and high-wealth individuals, complex partnerships, and large corporations.” That language matters because it signals a deliberate targeting approach rather than a diffuse increase in routine examinations across the board.

This focus is not merely rhetorical. The IRS also announced that it recovered $1.3 billion from high-income, high-wealth individuals under Inflation Reduction Act initiatives, and specifically described a campaign aimed at taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt. In practical terms, that tells taxpayers two things. First, the IRS is using additional resources where it believes the compliance yield is high. Second, unpaid balances, especially among higher earners, remain a live enforcement priority going into the tax season 2026.

A second major priority is complex partnerships and large business structures. The IRS has publicly tied its enforcement expansion to complex entities that can obscure income, basis, ownership, or deductions. In 2024, the agency announced additional steps to combat what it described as abusive uses of partnerships by wealthy taxpayers. That matters for tax season 2026 because partnership structures often involve precisely the kind of complexity the IRS says it is building out staffing and technical capability to review, including accountants, attorneys, engineers, economists, and data scientists.

A third area to watch is digital assets and crypto reporting. The IRS has made clear that digital assets are no longer a side issue. The agency’s strategic implementation materials explicitly identify digital assets as part of the “complex, high-risk, and emerging issues” it intends to pursue. On top of that, Treasury and the IRS finalized broker reporting regulations for digital asset sales and exchanges, with Form 1099-DA reporting beginning for transactions on or after January 1, 2025. That means Tax Season 2026 sits in a reporting environment where digital asset visibility is increasing and where mismatches, omissions, or casual reporting assumptions carry more risk than before.

This is especially important because the IRS also continues to remind taxpayers that they must answer the digital asset question on the return and report related income. For taxpayers who have treated crypto casually in prior years, 2026 is not the time to assume the IRS lacks reporting infrastructure. The direction of travel is the opposite: more third-party reporting, more formal guidance, and better ability to connect reported activity to filed returns.

A fourth priority is abusive tax shelters, listed transactions, and engineered avoidance structures. The IRS states that it has a “comprehensive strategy” to combat abusive tax shelters and transactions, including audits, summons enforcement, litigation, and other enforcement methods. That language signals that the agency is not treating shelter activity as a niche issue. It is treating it as a structured enforcement category with multiple tools. Businesses and individuals involved in aggressive deductions, basis-shifting transactions, or promoter-driven arrangements should read that as a warning that substance, disclosure, and professional review matter more than ever.

A fifth theme is better data, better matching, and more targeted selection. The IRS Strategic Operating Plan is not only about enforcement headcount. It is also about technology, modernized systems, and improved detection of noncompliance. That matters because many audits and notices start with document inconsistencies, mismatches, or patterns revealed through reporting systems. In tax season 2026, enforcement is increasingly about the IRS becoming more capable of identifying where reported information does not align — whether that relates to brokerage reporting, entity structures, underreported income, or prior unpaid liabilities.

At the same time, taxpayers should not miss the broader context: the IRS is also pushing a strong “Get Ready” message for the 2026 tax filing season. The agency has said that taxpayers should prepare early, organize records, and pay attention to law changes that may affect returns, credits, and deductions. That is not separate from enforcement; it is part of the same compliance environment. The more the IRS improves service, data intake, and digital systems, the less tolerance there is likely to be for disorganized responses, missing support, or unsupported return positions.

So, what should taxpayers and business owners do with all of this?

First, do not reduce “IRS targeting” to social media scare language. The IRS has been relatively clear about its direction: it is prioritizing higher-risk, higher-complexity, and higher-dollar issues. Second, if you have exposure in any of the main focus areas — high income with unpaid liabilities, partnership complexity, digital assets, or aggressive tax positioning — this is the time to tighten documentation and review filing positions. Third, if you receive a notice or audit inquiry, early process discipline matters. Deadlines, records, and response framing can materially affect how the matter develops.

That is where IRS Audit Representation becomes relevant. Representation does not change the law or guarantee an outcome, but it can help taxpayers respond in a structured, accurate, and timely way when the IRS is focusing more intensely on complex cases. In a 2026 environment shaped by smarter enforcement and more targeted scrutiny, preparation is no longer optional. It is a risk-management necessity

Why IRS Audit Group Matters

For businesses and individuals within the above exposure, partnering with a firm like IRS Audit Group means you’re not just filing forms — you’re building a defense strategy. Our CPAs specialize in audit prevention, compliance, and representation, ensuring peace of mind in a complex tax environment.

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles, California; however, our certified professionals cooperate and work with all IRS offices nationwide. Please get in touch with us for more information.

Telephone Number: (310) 498-7508

info@irs-audit-group.com

The Tax Season 2026 has brought renewed attention to tax compliance in the United States. While most taxpayers file accurate returns every year, the IRS continues to strengthen its enforcement programs. As a result, the likelihood of facing a Tax Audit is changing—especially for certain categories of taxpayers.

Understanding how tax audits work and why they occur can help taxpayers reduce risk and respond effectively if the IRS reviews their return.

Understanding the Scale of IRS Activity

The IRS manages one of the largest tax systems in the world. According to the IRS, the agency processed more than 266 million tax returns and related forms in fiscal year 2024, including approximately 161 million individual income tax returns. The agency also performs hundreds of thousands of audits each year. IRS statistics show that 505,514 tax return audits were closed in fiscal year 2024, resulting in more than $29 billion in recommended additional tax assessments.

Why IRS Audits May Increase in the Coming Years

Several changes within the IRS suggest stronger enforcement activity during Tax Season 2026 and beyond.

1. Expanded Enforcement Efforts

The U.S. Treasury Department has directed the IRS to focus more enforcement resources on high-income taxpayers and complex financial structures to ensure tax compliance.  For example, audit coverage rates are significantly higher for high-income taxpayers. IRS data shows:

• Taxpayers with income over $10 million had an audit coverage rate of 11%.
• Taxpayers with income between $5 million and $10 million had a rate of 3.1%.
• Taxpayers earning $1 million to $5 million had a rate of 1.6%.

These numbers highlight that higher-income and complex returns receive greater scrutiny.

2. Use of Advanced Technology and Analytics in Tax Season 2026

The IRS is increasingly using data analytics and artificial intelligence (AI) to identify suspicious patterns in tax returns. Modern enforcement systems allow the IRS to compare taxpayer data with third-party information, such as employer reports, financial records, and investment income statements. These tools help detect inconsistencies and potential underreporting more efficiently. As these technologies improve, the IRS can review returns faster and identify potential audit cases with greater accuracy.

Types of IRS Audits Taxpayers May Face

An IRS Audit does not always involve an in-person investigation. Most audits occur through written communication. The three most common audit types include:

• Correspondence Audit: The IRS requests additional documents to verify specific items on a return.
• Office Audit: Taxpayers meet with an IRS examiner at a local IRS office to review documents.
• Field Audit: An IRS agent conducts a detailed examination at a taxpayer’s home or business.

Each type requires clear documentation and careful communication with the IRS.

Common Reasons Tax Returns Are Audited

An IRS audit does not always mean a taxpayer did something wrong. Often, tax audits simply occur because a return contains unusual or inconsistent information.

Common audit triggers include:

• Income discrepancies: If the income reported on a tax return does not match information provided by employers or financial institutions.
• Large deductions or credits: Deductions that appear unusually high compared to income levels.
• Business losses reported repeatedly: Businesses that show losses year after year may attract attention from the IRS.
• Unreported investment or digital asset income: Failure to report certain types of financial activity can increase audit risk.
• Accuracy and documentation are the most effective ways to reduce audit exposure.

Forms Frequently Reviewed During Audits

During a tax audit, the IRS often requests copies of tax forms and supporting documents.

For individual taxpayers, the most commonly examined return is the U.S. Individual Income Tax Return.

For reference, taxpayers can review the official form here:
• Form 1040 – U.S. Individual Income Tax Return (PDF)

Supporting documents may include:

• Wage statements (Forms W-2)
• Income statements (Forms 1099)
• Business expense records
• Receipts for deductions
• bank and investment statements

Maintaining organized records throughout the year makes responding to IRS inquiries much easier.

What Happens If the IRS Selects Your Return for Audit

If a return is selected for an IRS Audit, the IRS will notify the taxpayer by official mail. The notice explains the issue being reviewed and the documents required.

Taxpayers generally have three options:

1. Provide the requested documentation and respond directly to the IRS.
2. Request clarification if the notice is unclear.
3. Seek professional representation to handle the audit process.

Ignoring an IRS notice is not recommended. Failure to respond may lead to additional penalties or tax assessments.

Why Professional IRS Audit Representation Matters

An IRS audit can be stressful and complex. Tax law contains detailed rules about deductions, credits, and reporting requirements.

Professional tax representation helps taxpayers:

• Communicate effectively with the IRS
• Prepare required documentation
• Respond to IRS inquiries correctly
• Reduce the risk of penalties or additional tax assessments

Tax Professionals who regularly deal with IRS examinations understand how the audit process works and how to resolve disputes efficiently. In many cases, proper representation can help taxpayers clarify misunderstandings or provide additional evidence that supports the original tax return.

Preparing for IRS Audits in Tax Season 2026

For most taxpayers, the best strategy is prevention.

Key preparation steps include:

• Filing accurate and complete tax returns
• Keeping detailed financial records
• Reporting all income sources
• Maintaining documentation for deductions and credits
• Responding promptly to any IRS correspondence

Taxpayers should also review IRS guidance regularly through the official website: IRS Official Website. Staying informed about IRS rules and procedures helps reduce compliance risks.

While most taxpayers will never face an IRS Audit, the IRS continues to strengthen enforcement and improve how it identifies potential issues in tax returns. For Tax Season 2026, taxpayers should focus on accurate filings, proper documentation, and responding quickly to any IRS notice. If an IRS audit occurs, the process can become complex and time-consuming without the right guidance.

Professional representation can make the process easier. Firms like IRS Audit Group assist taxpayers with IRS Audit representation, communication with the IRS, and resolving tax disputes. With experienced support, taxpayers can better navigate IRS inquiries and work toward an efficient resolution.

Please contact us for more information.

Telephone Number: (310) 498-7508

info@irs-audit-group.com

Contact

As Tax Season 2026 approaches, the Internal Revenue Service (IRS) has intensified its focus on reviewing Employee Retention Credit (ERC) claims. Over the past several years, the ERC program has helped thousands of businesses recover from the economic impact of the COVID-19 pandemic. However, the IRS has also identified a significant number of incorrect or potentially fraudulent claims, leading the agency to prioritize compliance reviews and documentation requests.

Many taxpayers who filed ERC claims may now receive IRS notices requesting documentation to support those claims. These notices are commonly called substantiation requests. They are part of the IRS process for verifying that a claim meets eligibility requirements under federal tax law.

Understanding why the IRS is focusing on ERC claims—and how taxpayers should respond to substantiation requests—can help businesses avoid penalties, claim disallowances, and repayment demands.

Understanding the Employee Retention Credit

The Employee Retention Credit was created during the COVID-19 pandemic to help employers keep workers on payroll. The credit was introduced under the CARES Act and later expanded through additional relief legislation.

Eligible employers could claim the credit if they experienced either:

• A significant decline in gross receipts, or
• A full or partial suspension of operations due to government orders related to COVID-19.

The credit allowed businesses to claim refundable payroll tax relief based on qualified wages paid to employees during specific periods in 2020 and 2021. Taxpayers who did not originally claim the credit could later file an amended payroll tax return to request the refund. This is typically done using Form 941-X, which allows employers to correct previously filed employment tax returns. Official ERC eligibility guidance can be reviewed on the IRS website:
https://www.irs.gov/coronavirus/employee-retention-credit.

Why the IRS Is Prioritizing ERC Claims in Tax Season 2026

Because the credit could be worth up to $26,000 per employee, it quickly became one of the largest pandemic-era tax relief programs for businesses.

High Volume of Questionable Claims

The IRS has warned that a significant number of ERC claims may not meet eligibility requirements. Many claims were submitted after aggressive marketing campaigns promoted the credit to businesses that may not have qualified. Some third-party promoters encouraged companies to claim ERC refunds based on incomplete or incorrect interpretations of IRS rules. These promoters often charged large contingency fees tied to the refund amount. Due to this widespread activity, the IRS has increased compliance efforts to verify claims and identify improper filings. Official IRS guidance about ERC compliance concerns can be found here:
https://www.irs.gov/newsroom/businesses-should-review-employee-retention-credit-rules-and-resolve-incorrect-claims-soon

Large Backlog of ERC Claims

Millions of ERC claims were filed after the program was introduced. This created a substantial processing backlog for the IRS. To address the backlog, the agency implemented new risk-review procedures. Claims are now screened more closely before refunds are approved. In many cases, the IRS may request documentation before releasing funds. As the IRS continues to work through these claims, ERC reviews have become a major enforcement priority leading into Tax Season 2026.

Increased Fraud Risk

The IRS has also identified patterns suggesting potential fraud or widespread eligibility errors. Some claims included incorrect wage calculations. Others claimed the credit without meeting the required revenue decline or shutdown conditions. To protect the tax system, the IRS has expanded enforcement initiatives targeting improper ERC claims.

Additional IRS warnings regarding incorrect ERC filings can be reviewed here:
https://www.irs.gov/newsroom/irs-shares-new-warning-signs-of-incorrect-claims-for-employee-retention-credit

What do IRS ask in a Substantiation Request?

A substantiation request is part of the IRS review process and does not automatically mean the claim is incorrect. The IRS simply needs evidence confirming that the taxpayer meets the program’s eligibility requirements. Substantiation requests typically ask for records such as:

• Payroll records showing qualified wages
• Financial statements demonstrating revenue declines
• Copies of government shutdown orders affecting business operations
• Employment tax filings used to claim the credit
• Documentation showing that wages were not used for multiple tax relief programs

Providing complete and accurate documentation helps the IRS verify the claim and move the review forward.

Steps Taxpayers Should Take After Receiving a Substantiation Request

Review the IRS Notice Carefully

The first step is to read the IRS notice thoroughly. Each request explains the information required and provides instructions for submitting documents. Taxpayers should also review the response deadline included in the notice. Missing the deadline could delay the review or lead to claim denial.

Gather Supporting Documentation

Taxpayers should collect all records related to the ERC claim before responding. This documentation should clearly demonstrate eligibility under IRS rules. Important records may include:

• Quarterly financial statements showing revenue trends
• Payroll records detailing qualified wages
• The government orders that restricted business operations
• Original payroll tax filings and amended returns

Organized documentation helps ensure the response addresses the IRS request completely.

Review the Accuracy of the Claim

In some cases, taxpayers may discover that their ERC claim contains errors. The IRS encourages businesses to review claims carefully and correct mistakes when necessary.

If a claim appears inaccurate, taxpayers may explore options to amend or resolve the issue before enforcement actions escalate. IRS information on resolving incorrect ERC claims can be reviewed here:
https://www.irs.gov/newsroom/businesses-should-review-employee-retention-credit-rules-and-resolve-incorrect-claims-soon

Submit the Response on Time

Timely responses are critical. If the IRS does not receive the requested documentation by the deadline, the agency may disallow the ERC claim. Submitting a complete response within the timeframe helps taxpayers avoid unnecessary complications.

Potential Consequences of Unsupported ERC Claims

If taxpayers cannot provide sufficient documentation supporting their claim, the IRS may deny the credit and require repayment of any refund already issued.

Additional consequences may include:

• Repayment of the ERC refund
• Interest on the refunded amount
• Accuracy-related penalties
• Additional tax assessments

Businesses that relied on aggressive ERC promoters may face unexpected financial exposure if claims cannot be substantiated.

Preparing for IRS ERC Reviews During Tax Season 2026

Because ERC enforcement will remain a major focus during Tax Season 2026, taxpayers should review their records now to ensure documentation is complete. Businesses should confirm that they can demonstrate eligibility through revenue records, payroll data, and documentation of government shutdown orders. Maintaining organized records will help taxpayers respond quickly if the IRS issues a substantiation request.

How Tax Professional Assistance Can Help During an ERC Review

Responding to an IRS substantiation request can be complex, especially when the IRS requires detailed payroll records, eligibility analysis, and documentation supporting an ERC claim. In many cases, taxpayers benefit from working with experienced tax professionals who understand IRS procedures and documentation requirements.

IRS Audit Group specializes in helping taxpayers navigate IRS compliance reviews, including Employee Retention Credit documentation requests. Their team assists businesses by reviewing ERC claims, organizing supporting records, and preparing formal responses to IRS notices. They also help evaluate whether a claim meets IRS eligibility standards and provide guidance if corrections or additional documentation are required.

By working with tax professionals familiar with IRS audit processes, taxpayers can ensure their responses are accurate, complete, and aligned with current IRS guidelines. This type of support can help reduce the risk of claim denial, penalties, or extended IRS examinations.

Please get in touch with us for more information.

Telephone Number: (310) 498-7508

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What Is Form 1099‑K?

Form 1099‑K is issued by payment processors (PayPal, Venmo, Cash App, eBay, Etsy, etc.) to report transactions for goods and services. It helps the IRS track income from online platforms and gig work.

The Big Change in Tax Season 2026

In the previous tax season, the IRS had planned to enforce a $600 reporting threshold (meaning anyone earning $600 or more through payment apps would receive a 1099‑K). This caused widespread concern among gig workers and casual sellers. However, in tax season 2026, the One Big Beautiful Bill Act (OBBBA) reversed that rule. The threshold reverted to the previous standard: $20,000 in payments AND 200 transactions per year.

Comparison: Tax Season 2026 vs. 2025

Tax Season	Reporting Threshold	Who Receives 1099‑K	Key Impact
2025	Planned $600 (single transaction or more)	High‑volume sellers, established gig workers, and marketplace businesses	Would have dramatically expanded reporting, creating confusion and paperwork
2026	$20,000 AND 200 transactions	High‑volume sellers, established gig workers, marketplace businesses	Limits reporting to more professional sellers; casual users spared

Why the Change?

Lawmakers and the IRS faced backlash over the $600 threshold, which would have flooded taxpayers with forms for small, casual transactions (like selling used furniture or splitting dinner bills). The tax season 2026 revision aims to balance compliance with practicality.

What Hasn’t Changed?

• Personal Transfers: Payments between friends/family (gifts, reimbursements) are not taxable income.
• Income Reporting: Taxpayers must still report all taxable income, even if they don’t receive a 1099‑K.
• Deadline: Payment apps must issue 1099‑K forms to taxpayers and the IRS by January 31, 2026.

Who Is Affected in Tax Season 2026?

• Gig Workers: Freelancers using apps like Upwork, Fiverr, or PayPal for client payments.
• Online Sellers: Individuals selling on eBay, Etsy, Amazon Marketplace, or Facebook Marketplace.
• High‑Volume Resellers: Those exceeding $20,000 in sales and 200 transactions.

Casual sellers (e.g., selling a few personal items online) are no longer burdened with 1099‑K forms unless they cross the threshold.

What does this Matters to You for Tax Season 2026?

A common misconception is that if you don’t receive a 1099-K, the money is “tax-free.” This is incorrect.

• The IRS considers all income taxable, whether it is reported on a form or not.
• Even without a 1099-K, you are legally required to report your gig earnings on Schedule C or Schedule 1.
• The OBBBA only changed the reporting requirement for platforms like PayPal and Venmo; it did not change the taxability of the income.

Practical Guidance for Taxpayers

• Track Income Independently: Even if you don’t receive a 1099‑K, you must report taxable income.
• Separate Personal & Business Accounts: Helps avoid confusion between taxable and non‑taxable transfers.
• Stay Updated: IRS FAQs on Form 1099‑K are updated regularly; check for clarifications.

Tax Season 2026 rollback of the $600 threshold means fewer unnecessary forms and a return to the more manageable $20,000/200 transaction standard. Still, gig workers and online sellers should remember that thresholds don’t eliminate income reporting requirements. Staying informed, organized, and proactive is the best way to navigate these changes.

Why IRS Audit Group Matters

For businesses and individuals preparing for Tax Season 2026, partnering with a firm like IRS Audit Group means you’re not just filing forms — you’re building a defense strategy. Their CPAs specialize in audit prevention, compliance, and representation, ensuring peace of mind in a complex tax environment.

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles, California, however, our certified professionals cooperate and work with all IRS offices nationwide. Please get in touch with us for more information.

Telephone Number: (310) 498-7508

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Small businesses entering Tax Season 2026 are facing a harsh reality. Whether it’s natural disasters, system failures, or banking delays, payroll tax obligations remain legally binding and compliance doesn’t pause during disruption. When deposits are late, penalties escalate quickly. However, the IRS has expanded tax relief mechanisms, especially in disaster situations to support small businesses struggling to stay compliant. This guide explains how Tax Season 2026 tax relief programs apply to payroll deposits, what relief options exist, and how businesses can avoid unnecessary penalties.

WHAT IS PAYROLL TAX DEPOSIT

Payroll tax deposits are funds employers collect and hold for the federal government.

These include:

• Federal income tax withheld from employee wages
• Social Security taxes
• Medicare taxes
• The employer’s share of Social Security and Medicare

These funds are not the employer’s money. They are trust funds held on behalf of employees. Similar to previous years, in Tax Season 2026, the IRS continues strict enforcement of deposit schedules based on payroll size and frequency. When deposits are late, the IRS can assess penalties along with interest that increase based on how late the payment is. For a full explanation of employment taxes and deposit schedules, taxpayers can review the IRS page here.

WHEN THE IRS GRANTS DISASTER RELIEF

The IRS provides tax relief when an area receives a federal disaster declaration. Relief is typically available after FEMA declares a major disaster.

Tax relief may include:

• Extended deadlines to file returns
• Extended deadlines to pay taxes
• Postponed payroll tax deposit deadlines
• Automatic penalty abatement for certain late deposits

Most disaster relief is automatic for taxpayers located in affected ZIP codes. Taxpayers can always check current disaster relief announcements at the IRS Website. To verify whether a county or state is officially declared, FEMA maintains the federal declaration list on the FEMA Website.

AUTOMATIC PENALTY RELIEF FOR LATE PAYROLL DEPOSITS

In many federally declared disasters, the IRS automatically abates penalties on late payroll and excise tax deposits. This automatic relief generally applies when:

• The deposit was due during the disaster period
• The deposit is made by the extended deadline announced by the IRS

The IRS typically publishes a specific date by which deposits must be made to qualify for penalty abatement. For example, the IRS has previously announced disaster relief, postponing deadlines in affected states, including payroll deposit relief. One such announcement for Tax Season 2026 for the state of Louisiana can be reviewed here in IRS Website. There is no dedicated page to see announcements for all the states and the IRS will release public notice via https://www.irs.gov/newsroom.

Employers should carefully read each disaster notice. Automatic relief does not apply to every tax or every situation. If automatic abatement does not apply, employers may still qualify under other penalty relief programs.

FIRST-TIME PENALTY ABATEMENT (FTA)

First-Time Penalty Abatement (FTA) is an administrative relief program available to eligible taxpayers with a clean compliance history.

Small businesses may qualify if:

• Required returns were filed
• Taxes were paid or a payment plan was established
• The employer has not had significant penalties in recent years

FTA can remove certain penalties, including some payroll-related penalties. It is not always applied automatically. Full details on penalty relief, including FTA, are available here at IRS Website.

REASONABLE CAUSE RELIEF

Reasonable cause relief applies when a taxpayer exercises ordinary business care but was still unable to comply due to circumstances beyond their control.

Common examples include:

• Natural disasters
• Bank processing errors
• Payroll processor system failures
• Serious illness
• Death of a responsible individual
• Records destroyed by fire or flood

The IRS reviews all facts and circumstances. Documentation is critical. Employers should maintain:

• Bank statements
• Email records
• Payroll system logs
• Insurance claims
• Repair invoices

A written explanation outlining what happened and why the delay occurred strengthens the request. General Penalty relief guidance can be reviewed here at IRS Website.

IRS PAYMENT PLANS FOR PAYROLL TAXES

When employers cannot pay payroll taxes in full, the IRS provides payment options such as

• Instalment agreements

• Short-term payment plans
• Online application options

The IRS Online Payment Agreement tool allows many employers to apply without calling: Online Payment Agreement. Employers can also use EFTPS to schedule future payments electronically: EFTPS (Electronic Federal Tax Payment System).

IMPORTANT WARNING ABOUT TRUST FUND TAXES

Payroll withholding taxes belong to employees. Employers hold these funds in trust.

Failure to deposit withholding taxes can trigger the Trust Fund Recovery Penalty (TFRP). This penalty can make responsible individuals personally liable for unpaid trust fund taxes. Responsible persons may include:

• Business owners
• Officers
• Payroll managers
• Anyone with authority over financial decisions

Details about the Trust Fund Recovery Penalty are available here at IRS Website.

FINAL CHECKLIST FOR SMALL EMPLOYERS

Small employers can reduce risk by following these steps:

• Confirm whether the area has a federal disaster declaration
  FEMA declarations: https://www.fema.gov/disaster/declarations
• Review the IRS disaster relief page: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations
• Document all disruptions, outages, and bank communications
• Make deposits by any extended deadlines announced by the IRS
• If penalties are assessed, review eligibility for:
  • First-Time Penalty Abatement
  • Reasonable Cause Relief
• Apply for a payment plan if necessary
  • Online Payment Agreement: https://www.irs.gov/payments/online-payment-agreement-application
• Use EFTPS for scheduling deposits: https://www.irs.gov/payments/eftps-electronic-federal-tax-payment-system

IRS AUDIT GROUP

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles, California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices nationwide.  Please get in touch with us for more information.

Telephone Number: (310) 498-7508

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Taxpayers think of a Certified Public Accountant (CPA) as someone sitting at a desk, punching numbers into tax software, and filing forms with the IRS. However, in reality, a professional CPA is far more than a form filler. The professional is your shield against costly mistakes, your strategist for tax season, and your best defense against the dreaded IRS audit. For businesses and individuals alike, especially during Tax Season 2026, the role of a CPA is about foresight, compliance, and protection.

What Is an IRS Audit?

IRS audit is a review of your financial records to ensure that the information reported on your tax return is accurate. The IRS may examine income, deductions, credits, and other details to verify compliance with tax laws. Importantly, being selected for an audit doesn’t automatically mean you’ve done something wrong — sometimes returns are chosen randomly, or because of statistical formulas. For a detailed explanation of the audit process, see the IRS’s official guide: Publication 3498: The Examination Process. IRS Audit Group has a proprietary audit process that is well-aligned with IRS official guidelines.

Common IRS Audit Triggers

IRS doesn’t disclose every detail of its audit selection process, but some common triggers include:

• Unreported Income: If your reported income doesn’t match IRS records (like W-2s or 1099s), expect scrutiny.
• Excessive Deductions: Claiming unusually high deductions compared to your income can raise red flags.
• Abusive Tax Schemes: Participation in fraudulent or abusive tax schemes is a major audit trigger.
• Cash-Heavy Businesses: Restaurants, salons, and other businesses dealing mostly in cash often face audits.

How CPAs Help You Avoid These Triggers

• Form Accuracy: CPAs double-check forms like Form 1040 to ensure consistency and accuracy.
• Documentation Support: They advise on keeping receipts, invoices, and records that back up your claims.
• Strategic Planning: CPAs guide you on legitimate tax strategies that reduce liability without raising suspicion.
• Tax Audit Representation: If you are audited, CPAs can represent you before the IRS, ensuring professional communication and defense.

Why CPAs are Essential in Audit Prevention

CPA does much more than prepare returns. Here’s how they actively reduce your audit risk:

• Accurate Reporting: CPAs ensure that income, deductions, and credits are reported correctly, minimizing discrepancies that trigger tax audits.
• Compliance with IRS Forms: They know which forms apply to your situation and how to complete them properly. For example, if you’re claiming certain deductions, the CPA ensures the right supporting schedules are filed.
• Audit Red Flag Awareness: CPAs understand what the IRS considers suspicious — such as excessive deductions compared to income — and help you avoid these pitfalls.
• Taxpayer Rights Protection: CPAs safeguard your rights under the Taxpayer Bill of Rights, ensuring you are treated fairly.

Your Rights During an Audit

Every taxpayer has rights during an audit, including:

• The Right to Be Informed: You must know why you’re being audited.
• The Right to Quality Service: IRS employees must treat you professionally.
• The Right to Challenge and Appeal: You can dispute IRS findings and appeal decisions.

For more details, see the IRS’s Taxpayer Bill of Rights

A professional CPA is not a form-filler. He is your strategist, your compliance expert, and your advocate. By ensuring accurate reporting, avoiding audit triggers, and protecting your taxpayer rights, CPAs help you navigate tax season with confidence. As Tax Season 2026 approaches, remember: investing in a CPA is investing in protection against audits, penalties, and unnecessary stress.

Why IRS Audit Group Matters

For businesses and individuals preparing for Tax Season 2026, partnering with a firm like IRS Audit Group means you’re not just filing forms — you’re building a defense strategy. Their CPAs specialize in audit prevention, compliance, and representation, ensuring peace of mind in a complex tax environment.

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles, California; however, our certified professionals cooperate and work with all IRS offices nationwide. Please get in touch with us for more information.

Telephone Number: (310) 498-7508

info@irs-audit-group.com

Contact

As Tax Season 2026 begins, many taxpayers may get more time to file due to disaster-related tax relief. When natural disasters strike, the IRS often extends tax filing and payment deadlines for people and businesses in affected areas. Knowing whether you qualify for these automatic extensions can help taxpayers avoid penalties and reduce stress during an already difficult recovery period.

What Is IRS Disaster Relief?

When the President or FEMA declares a region a federal disaster area, the IRS typically responds by offering automatic tax relief. This relief usually includes extended filing and payment deadlines for individuals and businesses in affected areas. The goal is to provide financial breathing room during recovery, ensuring taxpayers can focus on rebuilding without worrying about immediate tax penalties.

Key Disasters Covered in Tax Year 2025

In 2025, several natural disasters prompted IRS relief measures:

• Wildfires in New Mexico
• Floods in West Virginia
• Hurricanes and severe storms across the Southeast
• Tornado outbreaks in the Midwest

For each federally declared disaster, the IRS announced specific extensions, often pushing deadlines by several months. On the IRS “Around the Nation” page, you can find a state-by-state rundown of recent disaster-related tax relief announcements. It shows which states and local areas have had tax filing and payment deadlines postponed due to federally declared emergencies. The “Around the Nation” page makes it easy for taxpayers to check if their home or business address qualifies for extended deadlines.

What Taxes Are Covered?

The relief isn’t just for your individual income tax return (Form 1040). It typically includes:

1. 2024 Individual and Business Returns: Originally due in March or April 2025.
2. Estimated Tax Payments: Quarterly payments originally due in January, April, June, and September 2025.
3. Payroll and Excise Tax Returns: Quarterly filings due throughout the year.
4. IRA and HSA Contributions: The deadline to contribute to these accounts for the prior tax year is also extended to the new disaster deadline.

Note: You do not need to apply for this relief. If your registered address is within the FEMA-declared disaster zone, the IRS computer systems automatically apply the extension and abate late-filing/late-payment penalties.

How Extensions Work?

• Automatic Relief: Taxpayers in disaster zones don’t need to apply; the IRS uses address data to identify eligible filers.
• Extended Deadlines: Filing and payment deadlines (including quarterly estimated taxes, payroll filings, and business returns) are postponed. Each state and its tax relief postponed due dates can be viewed from the “Around the Nation” page.
• Penalty Waivers: Late filing and payment penalties are waived for the duration of the extension.

For example, taxpayers in New Mexico affected by wildfires had their April 15, 2025, deadline extended to August 15, 2025. Similarly, businesses in West Virginia flood zones received extensions into the fall.

Why This Matters?

Disaster relief is more than just extra time—it prevents compounding financial stress. Without extensions, taxpayers could face penalties and interest while simultaneously dealing with property loss, insurance claims, and rebuilding costs.

Action Steps for Taxpayers in Disaster Areas

1. Check IRS Disaster Relief Announcements: Visit the IRS “Tax Relief in Disaster Situations” page for updated lists of eligible counties. This page has redirects to the “Around the Nation” page to show counties affected by different disasters.
2. Confirm Eligibility: Ensure your address is within the federally declared disaster zone.
3. Keep Documentation: Maintain FEMA declarations, insurance claims, and IRS notices for records.
4. File When Ready: Even with extensions, filing early can help secure refunds or credits sooner.

IRS AUDIT GROUP

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles, California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices nationwide. Please get in touch with us for more information.

Telephone Number: (310) 498-7508

info@irs-audit-group.com

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