Accurate Accounting Service LLC

New IRS Automatic Exemption from Penalty Program

Beginning in summer 2026, the IRS is implementing a new system that will waive certain failure-to-file, failure-to-pay and failure-to-deposit penalties for eligible taxpayers with a strong compliance history. To qualify for the Automatic Exemption from Penalty (AEP) program, a taxpayer generally must have met all filing and payment deadlines for the previous three years, or 12 consecutive quarters for quarterly filers.

Unlike First Time Abate, eligible taxpayers will not need to request AEP relief. The IRS will apply it automatically and send a notice. For eligible returns due on or after January 1, 2027, AEP will replace First Time Abate, although reasonable-cause relief will remain available.

Not all IRS penalties qualify for automatic relief. For example, information-return penalties and accuracy-related penalties generally will not qualify. AEP applies only to eligible penalties, not to the underlying tax or interest due.

Our week off has come to an end but we had so much fun 😁

Charitable Cash Donation Deductions

Historically, only people who itemized deductions on their tax returns could deduct contributions to charities. However, beginning this year, taxpayers may now qualify to deduct up to $1,000 in cash donations (up to $2,000 for joint filers), regardless of whether they itemize or use a standard deduction.

Only contributions to qualified, tax-exempt charitable organizations (not individuals) are deductible. You can check the official IRS list of tax-exempt charities (link below) to verify an organization's eligibility to receive tax-deductible donations. For monetary contributions, save bank records, canceled checks and/or receipts showing each organization's name, along with the date and amount of each donation. The IRS requires a written acknowledgement from the charity for each individual contribution of $250 or more, showing both the donation amount and the value of anything you receive in return (such as tee shirts, totes, etc.).

You still need to itemize in order to deduct contributions of property, and must have detailed records showing how you determined reasonable dollar values for the donations. For valuable items like collectibles or artwork, you may need a professional appraisal.

Tax Exempt Organization Search: https://www.irs.gov/charities-non-profits/search-for-tax-exempt-organizations

Our office will be closed next week from July 27-31 for our whole office to have our second annual Accurate Accounting Retreat in the NH mountains ⛰️ We will post pictures of the fun!!

Form 1099-K – Did You Know?

If you receive a Form 1099-K, review it for payments that may not be taxable, such as reimbursements from friends or family. If these payments were mistakenly included, ask the payment processor to issue a corrected form. Keep in mind that some transactions involving personal items may still have tax consequences, particularly if you sold an item for more than you paid for it.

Increased Standard Mileage Rates Starting July 1, 2026

Due to higher fuel prices, the IRS has increased the standard mileage rate for business driving to 76 cents per mile for mileage incurred on or after July 1, 2026. The rates for medical travel and eligible moving expenses have also increased to 23.5 cents per mile.

The charitable mileage rate remains unchanged at 14 cents per mile, while the previously announced 2026 rates continue to apply to mileage incurred before July 1.

Employer-Provided Childcare Tax Credit – Did You Know?

Businesses that offer childcare benefits to employees may qualify for the Employer-Provided Childcare Tax Credit for some of the expenses involved. Eligible costs may include acquiring, constructing, or improving a childcare facility, operating an on-site childcare program, contracting with a qualified childcare provider, or paying for childcare resource and referral services.

Beginning in 2026, the credit generally equals 40% of qualified childcare expenditures (or 50% for eligible small businesses) plus 10% of qualified childcare resource and referral expenses. The maximum annual credit has also increased to $500,000, or $600,000 for eligible small businesses.

Digital Asset Tax Reporting – Did You Know?

If you use a broker for digital asset transactions, such as selling, exchanging, or otherwise disposing of cryptocurrency or other digital assets, you may receive Form 1099-DA. Keep this form with your tax records, as you will need it to accurately report those transactions on your tax return.

During the months of July and August you won't find me in the office every week - I save my time off after the tax season to be in the beautiful NH mountains with my family. The office remains open M-F 9-2 so there is always someone to help you but it will not be me! Enjoy the summer everyone!! ~ Julie

New IRS Portal for Reporting Fraud and Scams

The IRS has launched a new portal that makes it easier to report instances of tax fraud, identity theft, IRS impersonation and other tax-related scams. On the new webpage (link below), people and businesses can report:

- Fake IRS phone calls, emails, and text and social media messages. Scammers posing as government agents often threaten people with arrest unless they submit immediate payments, often in a specific format like gift cards. The IRS does not operate in this way.
- Suspected tax fraud, such as tax evasion schemes or illegal use of offshore accounts.
- Identity theft, which should always be reported to the IRS immediately, even if other government and law enforcement agencies know about the crime.
- Suspicious tax preparation practices, such as a paid tax preparer refusing to sign your return or altering your income figures.

Citizen reporting often plays a critical role in catching scammers and bringing them to justice. This new system makes the process of filing a report less confusing and much more convenient.

IRS Fraud Reporting Site: https://www.irs.gov/help/report-fraud