This week, on Tax Breaks, Forbes Senior Writer Kelly Phillips Erb explores the end of tax season, U.S. companies receiving a break on beneficial ownership information (BOI) reporting, and changes at the IRS and the Social Security Administration. She also delves into reporting last year's bonus pay, reveals tax filing season statistics and discusses the tax implications of Name, Image, and Likeness (NIL) income for college athletes.
Subscribe To The Tax Breaks Newsletter:
https://www.forbes.com/sites/kellyphillipserb/2025/03/29/tax-breaks-the-end-to-tax-season-is-just-around-the-corner-edition/
Arch Manning tax:
https://www.forbes.com/sites/nathangoldman/2025/03/24/arch-mannings-65-million-nil-valuation-includes-a-big-tax-advantage/
Italy social media/tax:
https://www.forbes.com/sites/andrewleahey/2025/03/26/italy-where-creating-a-social-media-account-may-be-a-taxable-event/
BOI reporting:
https://www.forbes.com/sites/kellyphillipserb/2025/03/23/revised-beneficial-ownership-information-boi-rule-exempts-us-companies-from-reporting/
Bisagnano hearing:
https://www.forbes.com/sites/kellyphillipserb/2025/03/26/senators-grill-nominee-as-fears-mount-over-threats-to-social-security/
SSA phone service change:
https://www.forbes.com/sites/kellyphillipserb/2025/03/26/social-security-changes-position-on-controversial-phone-service-cuts/
No more paper checks:
https://www.forbes.com/sites/kellyphillipserb/2025/03/28/next-up-for-social-security-and-the-irs-no-more-paper-checks/
IRS filing stats:
https://www.forbes.com/sites/kellyphillipserb/2025/03/26/irs-statistics-show-dip-in-taxpayer-filings-for-seventh-straight-week/
Billy Long nod:
https://www.forbes.com/sites/kellyphillipserb/2024/12/04/trump-picks-former-representative-billy-long-as-next-irs-commissioner/
IRS revolving door:
https://www.forbes.com/sites/kellyphillipserb/2025/03/06/rotating-doors-at-the-irs-as-another-new-acting-commissioner-takes-over/
Data security:
https://www.forbes.com/sites/kellyphillipserb/2025/02/20/irs-taxpayer-data-is-tightly-restricted-by-law-will-this-stop-trump-musk-and-doge-from-gaining-access/
SNAP:
https://www.forbes.com/sites/elainemaag/2025/03/27/irs-data-would-likely-be-unhelpful-when-validating-snap-eligibility/
Werfel Op-Ed:
https://news.bloombergtax.com/daily-tax-report/doge-getting-irs-data-like-giving-custodians-vault-keys-werfel
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Subscribe To The Tax Breaks Newsletter:
https://www.forbes.com/sites/kellyphillipserb/2025/03/29/tax-breaks-the-end-to-tax-season-is-just-around-the-corner-edition/
Arch Manning tax:
https://www.forbes.com/sites/nathangoldman/2025/03/24/arch-mannings-65-million-nil-valuation-includes-a-big-tax-advantage/
Italy social media/tax:
https://www.forbes.com/sites/andrewleahey/2025/03/26/italy-where-creating-a-social-media-account-may-be-a-taxable-event/
BOI reporting:
https://www.forbes.com/sites/kellyphillipserb/2025/03/23/revised-beneficial-ownership-information-boi-rule-exempts-us-companies-from-reporting/
Bisagnano hearing:
https://www.forbes.com/sites/kellyphillipserb/2025/03/26/senators-grill-nominee-as-fears-mount-over-threats-to-social-security/
SSA phone service change:
https://www.forbes.com/sites/kellyphillipserb/2025/03/26/social-security-changes-position-on-controversial-phone-service-cuts/
No more paper checks:
https://www.forbes.com/sites/kellyphillipserb/2025/03/28/next-up-for-social-security-and-the-irs-no-more-paper-checks/
IRS filing stats:
https://www.forbes.com/sites/kellyphillipserb/2025/03/26/irs-statistics-show-dip-in-taxpayer-filings-for-seventh-straight-week/
Billy Long nod:
https://www.forbes.com/sites/kellyphillipserb/2024/12/04/trump-picks-former-representative-billy-long-as-next-irs-commissioner/
IRS revolving door:
https://www.forbes.com/sites/kellyphillipserb/2025/03/06/rotating-doors-at-the-irs-as-another-new-acting-commissioner-takes-over/
Data security:
https://www.forbes.com/sites/kellyphillipserb/2025/02/20/irs-taxpayer-data-is-tightly-restricted-by-law-will-this-stop-trump-musk-and-doge-from-gaining-access/
SNAP:
https://www.forbes.com/sites/elainemaag/2025/03/27/irs-data-would-likely-be-unhelpful-when-validating-snap-eligibility/
Werfel Op-Ed:
https://news.bloombergtax.com/daily-tax-report/doge-getting-irs-data-like-giving-custodians-vault-keys-werfel
Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1
Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:
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LearningTranscript
00:00Welcome to Tax Breaks. I'm your host, Kelly Phillips-Erb. I'm a senior writer for Forbes,
00:10and you might have seen me around the web as Tax Girl. I'm also a tax attorney, and
00:15I work with tax professionals and taxpayers like you every day. There's a lot to talk
00:21about, so let's get started. The season has begun. No, not tax season. That opened on
00:27January 27, 2025, and it's nearly over. I'm talking about baseball season. If you're a
00:34regular reader or you follow me on social media, you know that I'm a huge baseball fan.
00:40I love baseball, so of course I was front and center on opening day. My Phillies had
00:44a real nail-biter, but they pulled it off. I've mentioned before that I attribute my
00:48love of baseball to my grandfather. Like many Americans, when my grandfather reached what
00:54we would consider retirement age, he was still working. In his mid-70s, he would suit
00:58up as a security guard and work long nights at the local hospital. He was gone a lot.
01:04But on those hot, sticky summers in coastal North Carolina when he had a free moment,
01:09he and I would sit and watch baseball on the old TV in the family room. And for the record,
01:14he was a Cubs fan, not a Phillies fan. Those are some of the most special moments of my
01:19life, and I'm sure it's why I love baseball to this day. I'll bet that you have a similar
01:24story and maybe it's not baseball. It could be another sport like basketball, football,
01:29or in the case of my girls, ice hockey. Sports are a little different today, including college
01:35sports. Players are now both student-athletes and paid-athletes, earning potentially significant
01:41amounts of money from Name, Image, and Likeness, or NIL. The NIL income has significant tax
01:47consequences, and many states are using their tax laws to maximize NIL's efficiency and
01:54effectiveness for their public universities. One that's making news right now? Arch Manning.
02:00Yes, of those Mannings. According to On3 NIL valuations, the presumptive starting quarterback
02:07for the University of Texas next season has an NIL valuation of $6.5 million per season.
02:14During his recruitment, Manning chose to play at Texas over the University of Alabama and the
02:20University of Georgia. While it's likely that Manning considered many factors when choosing
02:24Texas, it's possible that tax played a part in his decision. It's a certainty that Manning will be
02:31a darling on social media, garnering him potentially additional significant income, so long
02:37as he's not in Italy. Italian tax authorities are advancing a landmark value-added tax, or that case,
02:44against big tech. That is sort of like sales tax, although there are some key differences. Here's
02:50what those Italian tax authorities are arguing. When users sign up for a social media platform,
02:56they receive a valuable service in exchange for their personal data. Because that exchange
03:02involves consideration, again, you're paying for services with personal data instead of money,
03:07it should be, they claim, subject to VAT. As a result, Italy has reportedly handed META a
03:14bill for 900 million euro, with smaller claims lodged against the parent companies of X and
03:20LinkedIn. Since VAT is harmonized across the European Union, this isn't necessarily a local
03:27tax issue. It's a potential template for taxing tech giants across the community. Figuring out
03:34reporting and tax obligations may be difficult for some U.S. businesses abroad, but in the U.S.,
03:41U.S. companies are getting a break. U.S. businesses no longer have to comply with the
03:46Beneficial Ownership Information, or BOI, reporting filing requirements of the Corporate Transparency
03:52Act, or CTA. That's the result of an interim final rule issued this month by the Trump administration
03:59that removes the requirement for U.S. companies and U.S. persons to report Beneficial Ownership
04:05Information to the Financial Crimes Enforcement Network, or FINCEN. If finalized, the rule,
04:11which was an effort to crack down on money laundering and other potential crimes,
04:16would exempt more than 99% of entities from the reporting requirement that Congress passed in
04:212021. While the Trump administration has been busy cutting reporting requirements for corporations,
04:28it has been making a slew of proposed rule changes and personnel cuts at the Social Security
04:33Administration, or SSA, which could create more administrative burdens for individuals.
04:39Frank Bencinano, President Trump's nominee to lead the Social Security Administration,
04:44faced questions about these issues during his confirmation hearing to lead the agency
04:49responsible for paying $1.6 trillion per year to 72.5 million beneficiaries, including retirees,
04:58the disabled, and children who are the survivors of covered workers. One controversial proposal
05:05being pushed by the Elon Musk-led Department of Government Efficiency, or DOGE, would limit
05:11Social Security phone services, forcing Americans to sign up for benefits or switch the bank
05:16accounts where they receive them to do it online or in person at a Social Security office. But
05:22under questioning, Bencinano described phone service as, quote, a part of meeting beneficiaries
05:28where they want to get met, end quote. Apparently, folks at the SSA took their potential future boss
05:35at his word. A day after the hearing, the agency changed course, announcing that it would now allow
05:41phone service for certain beneficiaries. The agency announced that as of April 14, 2025,
05:48those who are applying for Social Security Disability Insurance, or SSDI, Medicare, or
05:55Supplemental Security Income, or SSI, and who cannot use a personal online Social Security
06:02account can complete their claim entirely by telephone. Those applying for regular retirement
06:08or survivor benefits, however, will have to do it online or go to a Social Security Administration
06:14office. The Social Security news didn't stop there. This past week, President Trump signed an
06:20executive order declaring that the federal government must stop issuing paper checks by
06:26September 30, 2025, in favor of direct deposit, prepaid cards, or some other digital account option.
06:34That includes Social Security benefits as well as payments from other agencies, including tax
06:40refunds. According to the order, using paper checks is expensive and wasteful, and Department
06:46of the Treasury checks are 16 times more likely to be reported lost or stolen, returned undeliverable,
06:54or altered compared to electronic funds transfers, or EFT. The new rule also applies to federal
07:01government receipts, like paying taxes. Of course, federal agencies have been fighting the battle
07:06against paper for years. My favorite paper check rule? In 2015, the Federal Reserve announced that
07:13it would no longer accept checks larger than $99,999,999. Luckily, this hasn't been a problem
07:23for me. Speaking of taxes, there are just a couple weeks left in tax season. Enjoy the rest of the
07:30tax, baseball, college, basketball, your favorite season here season. Now let's answer a taxpayer
07:37question. This week, a reader asked, I just received a retroactive bonus for the 2024 year,
07:44but I've already filed my taxes. Do I need to amend my return? So first of all, congrats on the bonus.
07:51But here's my answer. Luckily, you don't need to do anything for 2024. Your employer must report
07:57payments and the year in which they are paid. For you, that's 2025, even if the payments are
08:03attributable to work that was performed in a previous year. So you'll report your bonus on
08:08your 2025 tax return, even though it was for work that happened in 2024. That's true for bonuses,
08:15as well as your regular wages. Those hours that you worked on December 30 or December 31, 2024,
08:21but you were paid in 2025, those get reported in 2025 on your 2025 tax return. This also applies
08:29to corrected wages. That's when your boss pays you later for wages that were underpaid in a previous
08:35year. The same rule generally applies to other payments as well, including social security
08:40benefits that are received as a lump sum payment. You typically receive the taxable portion of the
08:46lump sum payment that you receive in the current year in your income for that year, even if the
08:52payment covers benefits paid for other years. If you have a tax question or matter that you think
08:58we should consider in the next episode, please let us know. You can find more information in the show
09:03notes. Of course, if you follow me on Forbes, you know that I love looking at statistics and a good
09:10map or chart. This week, I'm focusing on tax filing season statistics. Stop me if you've heard this
09:16before, but taxpayers do not appear to be excited to file this filing season. IRS data from the
09:23seventh week of the tax filing season, the week ending March 14, 2025, shows that numbers for tax
09:30filing and processing of tax returns for individuals have dipped again, a trend that hasn't
09:35changed since the season opened on January 27, 2025. The data shows that the IRS received
09:43$70,370,000 individual income tax returns as of March 14, 2025, compared to $71,587,000
09:53as of March 15, 2024. That's more than $1,000,000 fewer individual income tax returns to date in
10:002025 as compared to 2024. Two more sets of data points stand out to me. First, the number of
10:08e-filed returns prepared by professionals is nearly neck and neck with the number of e-filed returns
10:13that are self-prepared. The IRS received $34,467,000 individual income tax returns
10:21e-filed by tax professionals and $34,880,000 self-prepared e-filed returns. That's consistent
10:28with predictions. In January, the IRS noted that it expected about half of all tax returns to be
10:35filed this year with the help of a tax professional. Second, tax refund numbers are up. That's true
10:42not only for the number of tax refunds issued to date, despite the dip in filing, but also for the
10:48dollar values involved. The average tax refund so far this year is $3,271. The direct deposit
10:55numbers are even a little higher at $3,330. Now it's time for a little tax trivia. All this talk
11:03about Social Security has made me wonder, who was the first Social Security beneficiary? Your choices
11:10are A. Ernest Ackerman B. Fred Happel C. Grace Dorothy Owen D. John David Sweeney. I'll give you a minute.
11:25The answer is A, Ernest Ackerman. In 1937, retired Cleveland motorman named Ernest Ackerman
11:46became Social Security's first beneficiary. A nickel was withheld from his wages for the one
11:51day he worked under the new program. In return, he received a one-time lump sum retirement payment
11:58of 17 cents. Not a bad return. The other choices happen to be real people with a connection to
12:05Social Security. Fred Happel of Albany, New York designed the original Social Security card in 1936
12:12and he was paid $60 for his work. Grace Dorothy Owen of Concord, New Hampshire applied for her
12:18Social Security number on November 24, 1936. She received the lowest Social Security number,
12:250010010001. The lowest area numbers were assigned to New Hampshire. This was apparently done so that
12:34the number could be given to the Social Security Board Chairman and three-time Governor of New
12:39Hampshire, John G. Winnett. However, Winnett declined. That meant that the first applicant
12:45from New Hampshire, that's Grace Dorothy Owen, was issued the card with the lowest possible number.
12:52Owen wasn't, however, the first person to receive a Social Security number. That was John David
12:57Sweeney of New Rochelle, New York, who received the first Social Security number 055090001
13:06on December 1, 1936. Sweeney died of a heart attack in 1974 at the age of 61 without ever
13:14receiving any benefits. His widow, however, was able to receive his benefits based on his work
13:20until she died in 1982. Now it's time for a deeper dive and it's a look at the changes at the IRS.
13:29Acting IRS Commissioner Melanie Krauss has told employees that the Treasury hasn't yet provided
13:35the agency with its reduction in force or RIF plan yet. There are still discussions regarding
13:41the scope and how many employees are going to be cut. It's also unclear whether those RIF numbers
13:47will include the 7,000 probationary employees who were terminated and subsequently reinstated.
13:54They're currently on paid administrative leave. Tax professionals, including me,
13:59are concerned about the effect that these cuts may have on service and collections,
14:04especially given that the terminations so far have disproportionately affected enforcement personnel
14:10like revenue agents and revenue officers. There are also concerns about leadership.
14:15Former Missouri Representative Billy Long has been picked by President Trump to serve
14:19as the next IRS Commissioner following the departures of former IRS Commissioner Danny
14:25Werfel and former Acting Commissioner Doug O'Donnell. Lawmakers on the Hill are still
14:30waiting for all of the paperwork for Long and they haven't scheduled a hearing date yet.
14:35Yet another concern is the security of taxpayer data. The DOJ team reportedly wants to use
14:44IRS data to investigate potential fraud at the Supplemental Nutrition Assistance Program,
14:50or SNAP, currently known as food stamps. Prior analysis at the Urban Institute,
14:56focused on improving tax administration, shows that even if IRS did share that data,
15:01differences between how tax data and SNAP programs are administered likely make the data
15:07of limited value. Why? They don't use the same data points. Now for something a little more brief,
15:13some quick tax and accounting newsmakers. In an op-ed for Bloomberg Tax, former IRS Commissioner
15:20Danny Werfel explains that the IRS has, over the years, given some of its employees access to
15:26taxpayer data. But he notes that it was rare for anyone of the IRS to have access to all of the
15:31data. Werfel says that even if he, as the former IRS Commissioner, had requested access to all of
15:38the data in all of the IRS systems, quote, the agency's data security team would rightfully say
15:44no. I would have no compelling need and there was no legal basis for me to demand it, end quote.
15:50That's why he says DOE's requests to access all data should be met with questions.
15:57The 50th anniversary of the Earned Income Tax Credit, or EITC, was Saturday, March 29, 2025.
16:05The EITC was originally signed into law by President Gerald Ford on March 29, 1975. What
16:12began as a modest means of providing financial support for working families has evolved into
16:17one of the federal government's largest anti-poverty programs. As of December 2024,
16:23approximately 23 million workers and families received about $64 billion from the EITC.
16:31And finally, Oregon recently celebrated registering more than 100,000 electric cars.
16:37The move towards fuel-efficient cars has resulted, however, in a dip in tax revenues
16:43since electric vehicles, about 5% of the cars registered in Oregon over the past decade,
16:49aren't subject to the gas tax. That's causing state tax officials to consider what to do next.
16:55And that's a wrap. Thanks to all of you who continue to watch, comment, and share the show.
17:01I'd love to know what you thought of this episode. You can send an email with your feedback
17:06to kerb at forbes.com. And if you liked it, please share. You can find the link to the audio
17:12of each episode on forbes.com. And thanks for listening, because paying taxes is painful,
17:19but hearing about them shouldn't have to be.