The IRS is issuing John Doe Summons to Catch Crypto Traders

Steve Perry

Published on: 07/06/2025

Many virtual currency traders once believed their transactions weren’t taxable, but the IRS has since cracked down. Traders often misunderstood that exchanges—like banks—can be compelled to disclose user data through a legal tool called a **John Doe Summons**, without notifying the taxpayer. A landmark court case involving **Coinbase** affirmed the IRS's authority to use this method, rejecting challenges based on the Fourth and Fifth Amendments due to the exchange’s status as a third party. This case serves as a clear warning: **Don’t try to hide income from the IRS.** The agency has powerful tools to uncover unreported income and assets, especially in crypto. Failing to report can result in steep penalties and interest. On the other hand, reporting a non-taxable transaction has no downside. Always be transparent with your tax professional. For expert guidance on cryptocurrency tax issues, call **Books, Taxes & More** at **678-717-9818** and ask for **Steve**.

Tax education articles and IRS representation advice for individuals and small businesses

Insuring Acceptance of Correspondence by the IRS

Steve Perry

Published on: 06/06/2025

The IRS is only obligated to act on a tax form or document **once it has been received and acknowledged**. This crucial point often leads to confusion, especially when taxpayers assume submission equals acceptance. Recently, clients have claimed their returns or documents were sent, only to have the IRS deny receipt. This typically occurs in **two scenarios**: electronic submission or traditional mail. For **electronic filings**, such as e-filed tax returns or Form 2848 (Power of Attorney), the IRS issues an **acknowledgement (MEF ACK)** once the submission is accepted or rejected. This acknowledgment typically arrives within 24 hours and should be securely provided to the taxpayer by the preparer within two business days. **No MEF ACK means no filed return**—and this can create serious consequences. For **mailed submissions**, regular first-class mail is **not reliable**. Under **IRC Section 7502**, proof of mailing is only valid if the document is sent **certified or registered mail**, with a receipt requested. Without this, the IRS is not required to consider the filing as timely, and taxpayers have **no legal defense** if a deadline is missed. In short, whether electronic or by mail, **confirmation of receipt is essential**. Always obtain proof when filing anything with the IRS to protect your rights.

Tax education articles and IRS representation advice for individuals and small businesses

Employee Retention Credit

Steve Perry

Published on: 05/06/2025

The **Employee Retention Credit (ERC)** was created during the pandemic to reward employers who kept staff on payroll despite business hardships. Eligible businesses either faced **government-mandated shutdowns** or saw **significant revenue declines** in 2020 and early 2021. **Recovery startup businesses** could also qualify for later quarters in 2021. While the credit—up to **\$26,000 per employee**—offered real relief, it came with strict eligibility rules and limitations, particularly for those who also claimed PPP forgiveness or other credits. Unfortunately, the ERC has become a **magnet for scams**. Aggressive marketers promise big refunds and “no payment unless you collect,” while failing to amend necessary tax returns or prepare clients for audits. The IRS has issued **multiple warnings** and listed ERC abuse as #1 on its **Dirty Dozen scams list**. With over **866,000 claims** submitted and **over \$1 billion** in potentially fraudulent filings under investigation, the IRS is cracking down hard. Some offenders are already facing **federal charges and prison time**. ERC audits can be long and intrusive—especially if **fraud is suspected**, since that removes any time limit on IRS review. To avoid disaster, businesses should work only with **qualified professionals**. At **Books, Taxes & More**, we carefully assess ERC eligibility and stand by our clients throughout the process.

Tax education articles and IRS representation advice for individuals and small businesses

Energy Tax Credits

Steve Perry

Published on: 04/06/2025

The **Inflation Reduction Act of 2022** has revived valuable **home energy tax credits** for homeowners who make qualifying energy-efficient improvements. Two key credits are available: the **Energy Efficient Home Improvement Credit** and the **Residential Clean Energy Credit**. These apply primarily to a homeowner’s **main residence** and can vary if the home is partially used for business. For example, if a home office comprises more than 20% of the space, only the non-business portion qualifies for the credit. The **Energy Efficient Home Improvement Credit** covers upgrades like insulation, energy-efficient doors, windows, HVAC systems, and home energy audits. For 2022, the credit is 30% of qualifying costs, capped at **\$500 lifetime**. From 2023 through 2032, the credit remains 30% but allows up to **\$1,200 per year**, with **no lifetime limit**. Biomass systems have a separate **\$2,000 annual limit**. The **Residential Clean Energy Credit** includes solar panels, wind turbines, geothermal systems, and battery storage (from 2023). The credit is also 30%, but **only for new systems**. These credits are **nonrefundable** and cannot be carried over, making careful tax planning essential. With varying qualifications and interaction with rebates or state incentives, these credits are best calculated by a knowledgeable professional like **Steve Perry at Books, Taxes & More**.

Tax education articles and IRS representation advice for individuals and small businesses