XQ CPA

In 2024 and 2025, the IRS prevented $7 billion in fraudulent tax refunds and used identity theft filters to flag about 7.5 million tax returns for additional review, according to a May 13 audit report from the Treasury Inspector General for Tax Administration (TIGTA). Advanced filters and manual reviews help identify suspicious tax filings while minimizing disruptions to legitimate returns. TIGTA recommended moving up the March 31 filing deadline for certain information returns, such as many 1099 forms and Form W-2G, “Certain Gambling Winnings.” The IRS agreed, estimating that an earlier deadline could help protect an additional $944 million in revenue for fiscal years 2025 through 2034.

Final regulations released by the IRS stipulate that partnerships no longer need to provide detailed gain and loss information to selling partners by January 31. This deadline had become a contentious issue. The tax code requires that any portion of a partnership’s sale proceeds attributable to the partner’s share of unrealized receivables and inventory items be reported as ordinary income. Other sale proceeds are generally taxed as capital gains. But partnerships complained that the reporting deadline was hard to meet. Now, partnerships can provide such information to partners according to their natural end-of-year tax compliance cycle, on or with Schedule K-1.