Tax News Update - 7th Edition

IRS mailing millions of underpayment letters to taxpayers

This IRS will send millions of letters to taxpayers who allegedly have underpaid the U.S. Treasury. The letter, called a CP14, is sent to nearly 9 million taxpayers every year.

While the IRS suspended the mailing of other letters to taxpayers, the CP14 letter was not among those that were suspended.

If a taxpayer has a balance of more than $5 on their account, a CP14 will be issued. The letter will state how much you owe and ask for payment within 21 days. The IRS is required to send CP14 notices within 60 days after the IRS computes a taxpayer's liability.

If you believe the information contained in the CP14 letter is incorrect, you can respond to the letter with evidence that backs up your claim. Believe it or not, sometimes the IRS is wrong.

Proposed Tax Legislation

The following is an overview of several recent tax proposals discussed or introduced in Congress over the past several weeks. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Permanent Extension of Rate Cuts and Extension of National Tax Simplification Act of 2022 (House of Representatives Bill 8214): This bill, introduced June 23, proposes to amend the Internal Revenue Code of 1986 to make permanent certain provisions of Public Law 115-97 affecting individuals.

Equal Access to Reproductive Care Act (House of Representatives Bill 8190): This bill, introduced June 22, proposes to amend the Internal Revenue Code of 1986 to treat certain assisted reproduction expenses as medical expenses of the taxpayer.

Healthy Homes Act (House of Representatives Bill 7990): This bill, introduced June 8, proposes to amend the Internal Revenue Code of 1986 to temporarily expand the low-income housing tax credit for healthcare-oriented housing.

The above are proposals. There are many steps each bill must go through before they are signed into law. Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342