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TaxBuzz Top 5 - IRS Cracks Down on Corporate Jet Misuse, Oklahoma to Eliminate Grocery Tax & More

TaxBuzz Top 5 - IRS Cracks Down on Corporate Jet Misuse, Oklahoma to Eliminate Grocery Tax & More

Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.

We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.

1. IRS Cracks Down on Corporate Jet Misuse

Credit: Tom Sowerby/Getty Images

The Internal Revenue Service (IRS) is launching audits on business aircraft usage, focusing on allocation between business and personal reasons. With increased funding from the Inflation Reduction Act, these audits target large corporations, partnerships, and high-income taxpayers. In an official release, IRS Commissioner Danny Werfel emphasized the importance of tax compliance, stating, "These aircraft audits will help ensure high-income groups aren’t flying under the radar with their tax responsibilities."

The IRS Large Business and International division's "campaign" program will oversee these audits, addressing non-compliance risks. Additionally, the IRS aims to enhance tax compliance in other areas, including pursuing millionaires with unpaid tax debts and ramping up audits of large partnerships using artificial intelligence. Werfel affirmed the IRS's commitment to ensuring high-income taxpayers pay their fair share, signaling more actions to come in this regard.

Corporate and private jet misuse has long been a tax issue on Capitol Hill and in the private sector. In October 2022, for example, U.S. Senator Ron Johnson (R-WI) and his family came under fire for writing off the purchase price of a private plane on their taxes.

2. Millionaires and Billionaires Evading Over $150 Billion In Taxes Annually

As the Internal Revenue Service (IRS) intensifies efforts to crack down on tax evasion by the nation’s wealthiest individuals and companies, IRS Commissioner Danny Werfel told CNBC that millionaires and billionaires are evading over $150 billion annually in taxes.

With billions in new funding, the IRS has launched extensive programs targeting taxpayers with complex returns to combat tax evasion and ensure fair contributions from every taxpayer. 

Despite initial skepticism from some Republicans in Congress, the Treasury Department estimates that enhanced IRS enforcement could generate an additional $561 billion in tax revenue between 2024 and 2034. The IRS is already seeing success with its program to collect unpaid taxes from millionaires, having recouped over $480 million from 1,600 millionaire taxpayers with outstanding tax debts.

This news comes in the wake of the aforementioned corporate jet misuse audits, and the IRS's heightened commitment to ensuring tax compliance across all income brackets.

3. Oklahoma Is Set to Eliminate Its State Grocery Tax

Credit: Luis Alvarez/Getty Images

Both chambers of the Oklahoma legislature have approved a proposal to eliminate the state grocery tax, with Senate President Pro Tempore Greg Treat (R) highlighting the importance of providing relief to Oklahomans struggling with rising grocery costs.

While Governor Kevin Stitt (R) has advocated for personal income tax cuts, Treat emphasized the need to address the immediate burden on families. The bill not only removes the state tax but also imposes a moratorium on local grocery and sales taxes until June 2025. Despite a delay in the tax cut's implementation, estimated to cost an additional $200 million, Speaker of the House Charles McCall expressed relief that the legislation has finally passed after a prolonged wait. With an expected decrease in state revenue by $418 million, Senator Julie Daniels (R-Bartlesville) stressed the significance of grocery tax relief amid inflation. Governor Stitt hailed the measure as the largest single-year tax cut in state history, promising continued efforts for limited government and lower taxes.

Per Oklahoma City's KFOR news network, Daniels said, “Eliminating the state sales tax on groceries will bring much-needed tax relief to Oklahomans reeling from inflated prices, due to bad policies in Washington, D.C. They will start to benefit this year and every time they purchase groceries. t was important to make this decision now so we can move ahead crafting the state budget as that must be done by the end of May.”

4. West Virginia Doctor Charged With 41 Counts of Tax Fraud

In a massive tax evasion case, an Elkins, West Virginia gastroenterologist is facing federal charges on 41 counts of tax fraud, in addition to other charges. Medical practice owner Nitesh Ratnakar allegedly withheld payroll taxes from employees' paychecks but failed to remit them to the IRS. The U.S. Attorney's Office in the Northern District of West Virginia claims Ratnakar withheld over $2.4 million in payroll taxes between 2018 and 2022.

In addition to the 41 tax fraud charges, he faces counts of obstruction of a federal grand jury investigation, filing false tax returns for 2020-2022, and causing false documents to be provided in response to a subpoena. The IRS Criminal Investigation Division led the probe. Despite the charges, Ratnakar currently remains listed as a provider in local health systems, including Davis Health System and Weirton Medical Center. According to WBOY, his practice reportedly extends to Weirton, West Virginia, and Martins Ferry, Ohio.

5. Straight Talk Wireless Hosts Second Annual Miami Tax Event

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Straight Talk, a leading prepaid wireless service provider, conducted its second annual "Straight Talk Wireless™ Tax Stress Index" to gauge consumer sentiment around tax time. Surprisingly, the survey revealed that 1 in 5 people have felt frustrated enough over their taxes to want to throw their phone. To help alleviate stress, Straight Talk is hosting a "Tax Breaks" event in Miami on February 23-24, allowing residents to vent by throwing a phone and receive a free Samsung Galaxy A14. Additionally, customers nationwide can get the same phone for free by signing up for the Straight Talk Extended Silver Unlimited Plan online.

Per Yahoo! Finance, Cheryl Gresham, CMO of Verizon Value, emphasized the importance of providing relief during tax season, stating that "Value comes in many ways." Straight Talk is partnering with Bravo personality Lindsay Hubbard to offer tips for managing tax-time anxiety, including taking advantage of cost-saving promotions and finding healthy outlets for frustration. At the event, Straight Talk is collaborating with Human-I-T to ensure proper reuse or recycling of old phones exchanged for new ones.

It is unknown if this Miami, Florida-based event will ever extend to other cities during tax season.

Feature Image Credit: Johannes Kroemer/Getty Images

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