Spring is in the air. I can feel it. To be fair, I’m at my mom’s home in North Carolina, where the temps have been in the 60s, so that helps. But rumor has it that it’s warming up all over.

A more telltale sign? Major League Baseball Opening Day for the 2026 season officially begins in a few weeks. The first game of the season will be a night game on March 25, 2026.

Of course, tax season is already in full swing (see what I did there?), and we have a few events, including a Reddit AMA (Ask Me Anything) and a Forbes webinar coming your way. In both cases, we’ll be fielding questions about the tax filing season. The timing couldn’t be better since taxpayers are already grappling with changes including those new, temporary deductions.

For example, taxpayers were recently thrown a curveball on Trump’s new, temporary deduction for qualified tips. While the rule is relatively straightforward for employees, it becomes far more complicated for self-employed workers. Notably, about a month after the 2025 filing season began, the IRS updated the Form 1040 instructions that change how the deduction is calculated for self-employed taxpayers—potentially reducing the benefit for some gig-economy workers and creating headaches for those who already filed using the earlier instructions.

The revised instructions clarify that the deduction must be reduced not only by Schedule C expenses but also by several other deductions tied to self-employment income, including the deductible portion of self-employment tax, self-employed health insurance, and retirement plan contributions. The interpretation arguably better reflects the statutory language, but the timing has caught many taxpayers and practitioners off guard. For some workers—especially those whose businesses show little profit or a loss after expenses—the change may significantly shrink or even eliminate the deduction.

Those sorts of questions make it super important that you—or your tax preparer, if you’re not doing your own return—are on top of your game. Millions of taxpayers rely on paid preparers each year, but in most states, almost anyone can prepare tax returns for pay—even without meeting minimum competency standards, including any sort of continuing education. While all paid preparers must obtain a Preparer Tax Identification Number (PTIN), only about 40% hold professional credentials such as CPA, attorney, or enrolled agent. Research from the U.S. Government Accountability Office (GAO) has repeatedly found that error rates can be high, particularly among unenrolled preparers, sometimes resulting in incorrect refunds and potential penalties or audits for taxpayers.

Congress is now considering changes through the bipartisan Taxpayer Assistance and Service Act, introduced by Mike Crapo (R-Idaho) and Ron Wyden (D-Ore.). The bill would strengthen enforcement against preparer misconduct—such as using invalid identification numbers or altering returns without a taxpayer’s permission—and give the Treasury Department clearer authority to suspend or revoke PTINs. But it stops short of requiring testing or continuing education for all preparers, leaving unresolved the long-running debate over whether the IRS should have authority to set minimum standards.

When paid preparers don’t sign your return or include their PTIN, they are called ghost preparers. Ghost preparers made the IRS’s annual “Dirty Dozen” list, which highlights common scams aimed at taxpayers and tax professionals. The list—part of a broader effort by the Security Summit—focuses on schemes that aim to steal money or sensitive personal data during filing season, when large amounts of financial information are transmitted.

This year’s list also includes familiar threats like IRS impersonation scams (phishing emails, texts, and spoofed phone calls), fake charities, and misleading tax advice on social media. Newer scams have also shown up, including AI-assisted impersonation calls, fraudulent refund claims involving Form 2439, and promotions for bogus “self-employment tax credits.”

In many cases, the schemes promise unusually large refunds or pressure taxpayers to act quickly. The IRS reminds taxpayers to avoid clicking unsolicited links or sharing personal information, to verify charities before donating, and to rely on reputable tax professionals or official IRS guidance—not on viral social media tax hacks or aggressive refund promises.

Of course, one way to deal with bad behavior is to blow the whistle. But in those cases, confidentiality may be a real worry. According to a recent GAO report, the IRS takes that concern seriously. The IRS Whistleblower Office keeps identifying information about whistleblowers in separate confidential files, and generally neither confirms nor denies to taxpayers that a whistleblower exists. Strong confidentiality rules under section 6103 of the tax code also limit what the IRS can disclose about tax-related information tied to a whistleblower submission.

In practice, the agency also tries to structure audits so they appear to arise from routine enforcement rather than a tip. The GAO report notes that the IRS typically consults with whistleblowers before considering them as witnesses—a step that is rarely necessary in tax cases. Congress also added anti-retaliation protections to the whistleblower statute in 2019, so there’s another layer of protection.

It’s a reminder that the tax system works best when people are willing to speak up–and when taxpayers stay informed. With filing season underway, taxpayers who stay alert and rely on trusted sources are more likely to finish the season on a winning note. ⚾

Kelly Phillips Erb (Senior Writer, Tax)

This is a published version of the Tax Breaks newsletter, you can sign-up to get Tax Breaks in your inbox here.

This week, a reader asks:

I won my SSDI appeal in 2025, filed in 2021. I received an SSA-1099 tax form. Throughout my appeal, my SSDI attorney told me that my actual monthly benefits would be taxable, but the lump-sum back pay would not.

I have been working on my 2025 taxes, and it says I owe over $14,000! This scares me. How can that be? What law is now in effect?

There hasn’t been a new law making SSDI back pay taxable. The rules for taxing SSDI are the same as always.

What’s causing the big bill is how the tax rules handle a lump-sum payment for past years. Your SSDI back payments are taxable. But your SSA-1099 reports the entire amount in the year you received it, so your tax software treats it as if all those benefits were paid in one year (in your case, 2025). That can temporarily make your income look much higher and produce a scary tax estimate.

There is some good news. You can opt for a “lump-sum” calculation which assigns benefits to the years they were originally intended for. This allows you to recalculate how much of your benefits would have been taxable in those earlier years, which can lower the overall taxable amount.

It does not require amending prior tax returns, and you don’t send separate payments for those years. So even though the math looks at your previous income, any tax due is still paid only with your 2025 return. The prior years are used as a reference to prevent the entire lump sum from being taxed as if it all belonged to the same year (remember, whether benefits are taxable depends on your income from year to year).

There is one quick note: Don’t be surprised by attorney fees. The SSA-1099 usually reports the gross benefit amount before subtracting what you paid your lawyer, and under current tax rules, those fees typically can’t be deducted on a federal return. As a result, the form may show more income than you actually received, making the initial tax figure look much higher than expected.

Do you have a tax question that you think we should cover in the next newsletter? We'd love to help if we can. Check out our guidelines and submit a question here.

Statistics, Charts, and Graphs

Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Calif.) have introduced the “Make Billionaires Pay Their Fair Share Act,” which would impose a 5% annual tax on the net worth of U.S. billionaires—those with at least $1 billion in wealth. An economic analysis by economists Emmanuel Saez and Gabriel Zucman draws on Forbes’ billionaire wealth estimates and examines how such a tax could affect the growth of very large fortunes over time. The analysis also projects significant revenue from the tax, even after accounting for some avoidance.

Supporters of the proposal say those funds could help finance a variety of policy initiatives, including direct payments to lower- and middle-income households, expanded Medicare benefits, childcare subsidies, affordable housing, and higher minimum salaries for public school teachers. Economists also suggest that a recurring wealth tax could narrow the gap between the growth in billionaire wealth and income gains for the average American family.

The legislation faces major political and legal hurdles. Republicans currently control both chambers of Congress, making passage unlikely in the near term. And because the United States has never enacted a federal tax on net worth, any such law would likely face constitutional challenges—an issue the Supreme Court sidestepped in Moore v. United States, leaving any wealth-tax questions unresolved.

Taxes From A To Z: I Is For Installment Sale

An installment sale is exactly what it sounds like: a sale or disposition of property in which payments are received in more than one year.

As the seller, you can get tax-favored treatment by using the installment method. That’s because you’ll recognize gain as you receive the payments rather than reporting all of the gain and paying all of the tax in the year of sale. That can be better than a lump sum, since including all of that income in one year can move you into a higher marginal tax bracket.

Here’s how it works. You’ll figure the tax by dividing the payments into three parts: return of basis (non-taxable), gain (taxable), and interest (ordinary income). The taxable portion is calculated as the gross profit percentage (gross profit/contract price) applied to each payment.

The installment method is commonly used in real estate and closely held business sales. But there are limitations—you can’t use it in certain transactions like dealer dispositions (with exceptions for timeshares and residential lots), inventory sales, and publicly traded securities. And while an installment sale can be tax advantageous, depreciation recapture is generally recognized in the year of sale which can eat up any advantage (you can’t defer depreciation under the installment method).

That said, you might want to opt out of installment treatment, typically to recognize gain upfront–for example, to utilize losses or lower rates in the year of sale.

Best advice? When considering an installment sale, run the numbers and talk with your tax professional.

Payroll taxes are an area where the IRS has long taken a hard line. When employers withhold income tax, Social Security, and Medicare from employee wages, those amounts are considered “trust fund” taxes that belong to the government and must be paid over promptly. If that doesn’t happen, the IRS can assess a Trust Fund Recovery Penalty against any “responsible person”—often owners, officers, or anyone with authority over company finances or check signing. That penalty is a 100% civil penalty, and holds the responsible person personally liable for the unpaid taxes.

In more serious cases, payroll tax violations can become criminal. A recent example involves Donna M. Savoy, a Denver bridal studio owner, who pleaded guilty to intentionally failing to pay employment taxes for more than a decade. According to court documents, Savoy withheld income tax, Social Security, and Medicare taxes from employees’ wages but did not send them to the IRS or file the required employment tax returns for a decade (2014 to 2024).

Instead, prosecutors say the withheld funds were used to cover personal and business expenses. The resulting tax loss to the government exceeded $1.3 million. Savoy is scheduled for sentencing in June 2026 and faces a maximum penalty of five years in prison—an example of how payroll tax issues can escalate quickly when withheld taxes are not turned over to the government.

With spring on the way, let’s talk baseball. Which team paid the most Major League Baseball luxury tax last season?

(A) Los Angeles Dodgers

(D) Philadelphia Phillies

Find the answer at the bottom of this newsletter.

Positions And Guidance

The IRS proposed regulations allowing digital asset brokers to provide Form 1099-DA electronically by default, without requiring paper delivery or allowing customers to opt out, as long as brokers meet enhanced electronic notice and access requirements. The change aims to reduce printing and mailing burdens given that digital asset transactions occur almost entirely online, and would apply to statements furnished starting in 2027.

Turkey has introduced a bill imposing 10% tax on crypto gains plus a 0.03% transaction tax on trades through platforms. ⁠The country ranks among the world's leaders in crypto volume, reaching nearly $200 billion in 2025, according to U.S.-based blockchain research company Chainalysis.

A message on the South Carolina Department of Revenue website states that 2025 return processing is taking longer than usual because South Carolina does not currently conform to OBBBA. Most error-free tax returns will be processed in up to eight weeks.

Armstrong Teasdale announced that Brandon Bickerton joined as a partner in its St. Louis office. Brandon is a tax attorney with experience in comprehensive tax planning, compliance and advisory services.

If you have tax and accounting career or industry news, submit it for consideration here or email me directly.

The links, clips, and tax takes readers loved (and a few you may have missed):

IRS Filing Season Still Trails 2025, But Refunds Are Up More Than 10%

How To Pay Less And Stay Safe As The Tax Code Changes And The IRS Crumbles

You can find the entire newsletter here.

Tax Filings And Deadlines

📅 March 16, 2026. Deadline for partnership and S corporation returns to be filed with the IRS (or to request an extension).

📅 April 15, 2026. Deadline for individual tax returns to be filed with the IRS (or to request an extension).

Tax Conferences And Events

📅 May 7-9, 2026. American Bar Association Section of Taxation May Tax Meeting. Marriott Marquis, Washington, DC. Registration required.

📅 June 3-6, 2026. Tax Retreat—The Anticonference. San Antonio, Texas. Registration required.

📅 June 8-11, 2026. AICPA Engage. ARIA Resort & Casino, Las Vegas & live online. Registration required.

Do you have a tax conference or event that you think our readers would be interested in? Let me know.

The answer is (A) Los Angeles Dodgers.

The World Series champs were tops with a record-setting bill of about $169.4 million. Second-place New York Mets paid roughly $91.6 million, and the New York Yankees paid about $61.8 million. My own Philadelphia Phillies came in fourth, paying a whopping $56.1 million in penalties for exceeding the tax threshold.

How does it work? MLB’s luxury tax — officially the Competitive Balance Tax — isn’t a hard salary cap. Instead, teams that exceed a set payroll threshold pay a percentage of the overage to the league, with the rate increasing for repeat offenders and for clubs that blow past higher surcharge tiers. The more (and more often) you exceed the limit, the steeper the bill.

We’ve made a few changes to the newsletter for 2026 and would love your thoughts. What’s helpful? What’s confusing? What tax topics do you want more of? Email me directly—I read every message.

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