IRS

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U.S. Senator Tom Cotton to Werfel: Partisan Voter Registration Drives Violate Federal Law

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Washington, D.C. — Senator Tom Cotton (R-Arkansas) today wrote a letter to the Internal Revenue Service Commissioner, Danny Werfel urging an investigation into the Voter Participation Center’s alleged partisan activities. This charity is targeting likely Democrat voters while excluding likely Republican voters through its voter-registration ads on social media. The IRS prohibits 501(c)(3) organizations from conducting partisan voter-education or voter-registration activities.

In part, Senator Cotton wrote:

Wikimedia Image

“According to the Washington Free Beacon, the Voter Participation Center is targeting likely Democrat voters and excluding likely Republican voters through its voter-registration ads on social media. The Voter Participation Center has instructed Facebook to exclude users from seeing ads if they expressed interest in ‘John Wayne,’ ‘Redneck Mud Club,’ ‘Daytona 500,’ ‘Duck Dynasty,’ and other topics associated with conservatives. On the other hand, the group instructed Facebook to target users interested in ‘hot yoga,’ ‘Charli XCX’ (who is closely associated with Kamala Harris’s presidential campaign), ‘Pitchfork Media,’ and other topics that tend to interest progressives.”

Full text of the letter may be found here and below.

October 3, 2024

The Honorable Danny Werfel

Commissioner

Internal Revenue Service

1111 Constitution Avenue, Northwest

Washington, DC 20224

Dear Commissioner Werfel,

I write regarding a tax-exempt charity that may be violating federal law. The Voter Participation Center is a 501(c)(3) charitable organization that reportedly engages in partisan voter-registration drives.

The IRS prohibits 501(c)(3) organizations from conducting partisan voter-education or voter -registration activities. The IRS states that a 501(c)(3) organization may only conduct voter-registration drives “if they are conducted in a neutral, non-partisan manner.” It further warns that a private foundation is subject to a tax if it uses funds for partisan voter-registration drives.

According to the Washington Free Beacon, the Voter Participation Center is targeting likely Democrat voters and excluding likely Republican voters through its voter-registration ads on social media. The Voter Participation Center has instructed Facebook to exclude users from seeing ads if they expressed interest in “John Wayne,” “Redneck Mud Club,” “Daytona 500,” “Duck Dynasty,” and other topics associated with conservatives. On the other hand, the group instructed Facebook to target users interested in “hot yoga,” “Charli XCX” (who is closely associated with Kamala Harris’s presidential campaign), “Pitchfork Media,” and other topics that tend to interest progressives.

The Voter Participation Center has spent over a million dollars on this ad drive. It has also paid over $50 million to Democrat micro-targeting firms. According to 26 U.S. Code § 4945(d)(2), these partisan expenditures must be taxed.

The IRS should immediately open an investigation into this organization.

Sincerely,

Tom Cotton

U.S. Senator 

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Extension financial expert offers filing tips for 2023 tax season

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By Rebekah Hall
U of A System Division of Agriculture

LITTLE ROCK — With the start of tax season on Jan. 29, the Internal Revenue Service has begun accepting and processing 2023 tax year returns. The standard deduction, which is adjusted annually for inflation, increased for tax year 2023 and will also increase for tax year 2024.

TAX TIPS — Laura Hendrix, extension associate professor of personal finance and consumer economics for the University of Arkansas System Division of Agriculture, said it's important for taxpayers to gather and organize necessary documents and information before filing for the 2023 tax year. (Division of Agriculture photo.) 

Laura Hendrix, extension associate professor of personal finance and consumer economics for the University of Arkansas System Division of Agriculture, said a taxpayer may choose to take the standard deduction or to itemize their deductions.

“There are several factors that can influence a taxpayer’s choice, including changes to their tax situation, any changes to the standard deduction amount and recent tax law changes,” Hendrix said. “Generally, most taxpayers use the option that gives them the lowest overall tax, and most people take the standard deduction, which changes each year for inflation.”

Hendrix said deductions are subtracted from a taxpayer’s income to determine adjusted gross income, or AGI, which is the amount on which an individual pays taxes.

“The more deductions you have, the lower your AGI and the less you will pay in taxes,” Hendrix said. “Deductions can reduce the amount of a taxpayer’s income before they calculate the tax they owe.”

Itemized deductions that taxpayers may claim include state and local income or sales tax, real estate and personal property taxes, home mortgage interest, personal casualty and theft losses from a federally declared disaster, gifts to a qualified charity and unreimbursed medical and dental expenses that exceed 7.5 percent of AGI.

Hendrix said the amount of one’s standard deduction depends on a taxpayer’s filing status, age, whether they are blind and whether the taxpayer is claimed as a dependent by someone else.

“Generally, if a taxpayer’s itemized deductions are larger than their standard deduction, it makes sense for them to itemize,” she said. “Taxpayers who choose to itemize deductions should read the instructions for Schedule A and complete Form 1040, Itemized Deductions.”

Standard deduction amounts for tax year 2023, filing in 2024:

  • For married couples filing jointly: $27,000, up $1,800 from 2022

  • For single taxpayers and married individuals filing separately: $13,850, up $900 from 2022

  • For heads of households: $20,800, up $1,400 from 2022

Standard deduction amounts for tax year 2024, filing in 2025:

  • For married couples filing jointly: $29,200, up $1,500 from 2023

  • For single taxpayers and married individuals filing separately: $14,600, up $750 from 2023

  • For heads of households: $21,900, up $1,100 from 2023

Preparation is key

The IRS expects more than 128 million individual tax returns to be filed by the April 15, 2024, tax deadline. Hendrix said it’s important for individuals and families to keep organized records for tax filing.

“It’s like getting all your ingredients ready before preparing a meal, though not as fun,” Hendrix said.

To do things “quickly and the right way,” Hendrix said taxpayers should have the following information ready before sitting down to file:

  • Social security numbers for yourself, your spouse and any dependents

  • Last year’s tax returns — federal and state

  • All of your W-2 forms if you were paid as an employee

  • All of your 1099 forms if you were paid, for example, as an independent contractor

  • Forms received from bank and investment accounts detailing interest earned, capital gains and losses and retirement account contributions

  • If you run your own business, a list of business expenses to see if they are deductible

  • Mortgage and property tax statements

  • Charitable contributions

  • Unreimbursed medical expenses

  • Education expenses

  • Child or dependent care expenses

Tax credits

Hendrix said the Earned Income Tax Credit is a refundable credit. “If you have worked and earned income under $59,187 in 2023, you may qualify,” she said. “Even if you know you won’t owe any taxes, you should still file for EITC. The credit will be sent to you as a refund.”

  • Child Tax Credit (CTC) and Additional Child Tax Credit (ACTC) are tax credits for filers with qualifying dependents. The Child Tax Credit is worth a maximum of $2,000 per qualifying child. Up to $1,600 is refundable as the Additional Child Tax Credit. CTC is applied to the tax bill, and ACTC is refundable. Children must be under the age of 17 and must have lived with the taxpayer for more than half the year.

  • Child and Dependent Care Credit: Tax filers may claim between 20 and 35 percent of care expenses, up to $3,000 for one qualifying individual or $6,000 for two or more qualifying individuals. Expenses paid for the care of a qualifying individual are eligible expenses if the primary reason for paying the expense is to assure the individual's well-being and protection. The percentage claim allowed (20-35 percent) is based on income, with lower-income filers receiving a higher percentage allowed for the credit.

The IRS Tax Assistant at  www.irs.gov/help/ita is an online tool and calculator that can help filers determine qualification and estimate amounts.

Filing resources

The IRS encourages taxpayers to file electronically with direct deposit, as this is the fastest and easiest way to receive a refund.

“Avoid advanced refund options offered by tax preparers that charge high fees,” Hendrix added.

IRS Free File

  • If your income is $79,000 or less, you qualify for a free federal tax return. Access free online tax preparation and filing at an IRS partner site through IRS Free File.

  • If your income is more than $79,000, you can access fillable forms to prepare your own return without assistance.

  • irs.gov/filing/free-file-do-your-federal-taxes-for-free

MyFreeTaxes

  • United Way provides MyFreeTaxes in partnership with the IRS’s Volunteer Income Tax Assistance (VITA) program to help filers prepare their tax returns on their own or have their return prepared for them for free. Consumers making less than $60,000 qualify for free tax prep.

  • myfreetaxes.com

In-person tax prep

Tax filing assistance for Military

  • MilTax e-filing software is free for service members, eligible family members and survivors.

  • mil/financial-legal/taxes/miltax-military-tax-services/

For more information, visit IRS.gov. For extension resources on personal finance, visit uaex.uada.edu/money.

To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on X and Instagram at @AR_Extension. To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.edu. Follow on X at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on X at @AgInArk. 

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Tax filing season opens Jan. 23; extension offers tips for preparation, filing

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By Tracy Courage
U of A System Division of Agriculture

Tax seasons officially starts Jan. 23, when the Internal Revenue Service will begin accepting and processing 2022 tax year returns. For those who haven’t started preparations yet, now is the time to collect documents and understand the changes to tax credits and deductions that may affect their finances.

The IRS expects more than 168 million individual tax returns to be filed, with the majority of those coming before the April 18 tax deadline. People have three extra days to file this year, as April 15 is a Saturday and the Emancipation Day holiday is observed on April 17 in Washington, D.C.

“For tax year 2022, some tax credits that were expanded in 2021 will return to 2019 levels,” said Laura Hendrix, an accredited financial counselor and associate professor of personal finance with the University of Arkansas System Division of Agriculture. “This means that some tax filers could receive a smaller refund than last year.”

Hendrix offers these tips for preparing to file this year:

Be aware of changes for credits and deductions

For tax year 2022 some tax credits that were expanded in 2021 will return to 2019 levels. Changes include amounts for the Child Tax Credit (CTC), Earned Income Tax Credit (EITC) and Child and Dependent Care Credit.

  • Those who received $3,600 per dependent in 2021 for the Child Tax Credit will, if eligible, get $2,000 for the 2022 tax year.

  • For the Earned Income Tax Credit, eligible taxpayers with no children who received roughly $1,500 in 2021 will now get $500 in 2022.

  • The Child and Dependent Care Credit returns to a maximum of $2,100 in 2022 instead of $8,000 in 2021.

Unlike 2020 and 2021, there were no new stimulus payments for 2022 so taxpayers should not expect to get an additional payment in their 2023 tax refund.

During COVID, taxpayers were able to take up to a $600 charitable donation tax deduction on their tax returns. However, for tax year 2022, taxpayers who don’t itemize and who take the standard deduction, won’t be able to deduct their charitable contributions.

If you bought a new, qualified plug-in electric vehicle in 2022 or before, you may be eligible for a clean vehicle tax credit.

Get your refund fast

One of the fastest ways to get your refund is to file electronically and use direct deposit. The IRS discourages people submitting paper forms to avoid potential delays. Tax refunds can be deposited in up to three accounts, and Hendrix recommends people deposit some of their refunds into a savings account to build financial security. Use IRS form 8888 for direct deposit.

Filers should also avoid using advance refund loans, which often have high fees.

Save money by filing for free

Several organizations offer free assistance to filers who meet income and age criteria.

“Taking advantage of these services means you can keep more of your refund because you don’t have to pay a tax-preparation service,” Hendrix said.

 Some of these include the following:

VITA (Volunteer Income Tax Assistance):

AARP Foundation Tax-Aide:

MyFreeTaxes:

IRS Free File:

MilTax

Organize records for tax time

Whether you are doing your own taxes, using a paid tax preparation service, or using one of the free file options, you will need to gather the following information:

  • Birth dates and Social Security numbers for yourself, your spouse and dependents on the tax return.

  • Wage and earning statements (Form W-2, W-2G, 1099-R,1099-Misc) from all employers.

  • Interest and dividend statements from banks (Forms 1099).

  • Health Insurance Exemption Certificate, if received.

  • A copy of last year’s federal and state returns, if available.

  • Bank account routing and account numbers for direct.

  • Total paid for daycare provider and the daycare provider's tax identifying number such as their Social Security number or business Employer Identification Number.

  • Forms 1095-A, B and C, Health Coverage Statements.

  • Copies of income transcripts from IRS and state, if applicable.

  • If using a free or paid tax preparation service, you will need to show proof of identification, such as a driver’s license.

  • If married and filing jointly, both you and your spouse will need to sign the tax return.

For more information, visit IRSgov. For extension resources on personal finance, visit uaex.uada.edu/money. To learn more about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on Twitter and Instagram at @AR_Extension. To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.edu/. Follow on Twitter at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on Twitter at @AgInArk.

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Attorney General Rutledge Secures $141 Million for American Consumers Deceived by Intuit's TurboTax

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LITTLE ROCK – Attorney General Leslie Rutledge secured a settlement with the owner of TurboTax, Intuit Inc. (Intuit), for deceiving consumers in to paying for tax services that should have been free. As a result of a multistate agreement, Intuit will pay $141 million in restitution to millions of consumers across the nation who were unfairly charged. In addition, Intuit must suspend TurboTax’s “free, free, free” ad campaign that lured customers with promises of free tax preparation services, only to deceive them into paying for those services. All 50 states and the District of Columbia have signed onto the agreement. Almost 36,000 Arkansas consumers will share the $1.067 million in restitution payments.

“Intuit deliberately deceived consumers in to paying for their Turbo Tax service that was actually supposed to be free,” said Attorney General Rutledge. “Intuit profited from its lies to Arkansans, and now with this settlement, Intuit will pay over $1 million to Arkansans for its fraud.”

A multistate investigation found that Intuit engaged in several deceptive and unfair trade practices that limited consumers’ participation in the IRS Free File Program. The company used confusingly similar names for both its IRS Free File product and its commercial “freemium” product. Intuit bid on paid search advertisements to direct consumers who were looking for the IRS Free File product to the TurboTax “freemium” product instead. Intuit also purposefully blocked its IRS Free File landing page from search engine results during the 2019 tax filing season, effectively shutting out eligible taxpayers from filing their taxes for free.

Under the agreement, Intuit will provide restitution to millions of consumers. Consumers are expected to receive a direct payment of approximately $30 for each year that they were deceived into paying for filing services. Impacted consumers will automatically receive notices and a check by mail.

Intuit has also agreed to reform its business practices, including:

  • Refraining from making misrepresentations in connection with promoting or offering any online tax preparation products;

  • Enhancing disclosures in its advertising and marketing of free products;

  • Designing its products to better inform users whether they will be eligible to file their taxes for free; and

  • Refraining from requiring consumers to start their tax filing over if they exit one of Intuit’s paid products to use a free product instead.

Intuit withdrew from the IRS Free File program in July 2021.

New York and Tennessee led the multistate investigation with support from the attorneys general of Florida, Illinois, New Jersey, North Carolina, Pennsylvania, Texas, and Washington. All 50 states and the District of Columbia joined this agreement.