WHY IT’S GOOD TO BE GRATEFUL
On February 23, 2018, The Wall Street Journal published an article, “How to Raise More Grateful Children.” The subtitle for the article stated: “A sense of entitlement is a big problem among young people today, but it’s possible to teach gratitude.” This last idea is what I hope to do with my clients.
WHY IT’S GOOD TO BE GRATEFUL
On February 23, 2018, The Wall Street Journal published an article, “How to Raise More Grateful Children.” The subtitle for the article stated: “A sense of entitlement is a big problem among young people today, but it’s possible to teach gratitude.” This last idea is what I hope to do with my clients.
Much of what I’ve learned about Gratitude has come from personal experience. When I look back, every personal crisis I’ve had has ultimately led me to Gratitude. Whether it’s a serious, life threatening illness for me, my wife, or loved ones; a major setback in business; or a natural disaster like Hurricane Sandy, I now see the positives in those events and feel more grateful for what I‘ve learned from them. I’ve learned that adversity can be a great teacher, if you pay attention to the lessons, but, it wasn’t always that way.
Like most people, I grew up complaining about the way things were and resenting those who I viewed as “lucky” because they were born into families with monetary wealth. Now, I view it as a blessing that I had to work hard for everything I now have. I’ve learned to be grateful that I chose the career that I have and that I can help so many people with the knowledge and experience I’ve gained. I’ve learned to appreciate the material wealth that I have, modest as it is, and to be content making an honest living and serving others.
I’ve also learned a lot about Gratitude from my coach, Lee Brower, at Strategic Coach. Like myself, he and members of his family have had health issues, but we have all learned to appreciate and not take good health for granted. Through Lee’s teachings on Gratitude, I have learned the value of having family members who get along and care about each other; as well as, the value of friendship and being part of a community where I feel like I belong. Most of all, Lee and members of his firm, Empowered Wealth, have emphasized that Gratitude is a lifestyle. A practice that starts with self-respect and respect for others, grows into appreciation for the many blessings we all have, and inspires the spirit of generosity that gives fulfillment and meaning to the way we live our lives.
Charles Sarowitz, CPA/PFS
Acknowledging the good that you already have in your life is the foundation for all abundance.
Eckhart Tolle
TAXES AND GRATITUDE?
You probably never thought you would see these two words paired together. Let me share my perspective on how this unique combination arises.
TAXES AND GRATITUDE?
You probably never thought you would see these two words paired together. Let me share my perspective on how this unique combination arises.
During this time of year, many clients come into my office upset about taxes and expressing concerns about how the upcoming changes in the tax code will impact them, their interests, their finances, and their legacies. Many people are willing to go to extraordinary lengths to avoid taxes and let their fear of the unchartered waters of the new tax polices keep them from leaving port. And while my professional career largely incorporates minimizing the amount of taxes my clients owe, in an effort to maximize the amount of money they can have, now and in the future, I have learned to recognize that there are more important things to focus on than simply tax minimization.
I advise them to consider “What's more important to you than money?” I wonder, would they:
- Sacrifice their health for more money? Health is vital to one’s happiness and well-being, yet too many of us are allowing stress and overworking to ruin our health.
- Compromise their closest relationships for more money? Too many people put their quest for more money above their connection to their family and friends.
- In order of importance, value having money higher than their moral, ethical, or spiritual beliefs? I've seen people of great wealth live empty lives and suffer at the end of life.
Wouldn't you rather have the satisfaction of living a good, honest life – a life of simple joys and pleasures, a life of health and well-being, a life of close relationships – than only having more money?
In the course of my career, I have come to realize and believe that there is much more to “true wealth” than just accumulating money and minimizing taxes. In my experience, the key to “true wealth” is the practice of gratitude. Gratitude leads us all to a happier, fulfilled, and more meaningful life.
Charles Sarowitz, CPA/PFS
Gratitude is a currency that we can mint for ourselves, and spend without fear of bankruptcy.
Fred De Witt Van Amb
THE STORY OF THE GRATITUDE ROCK
How I started practicing Gratitude
My coach and mentor, Lee Brower, is well-known as a thought leader on Gratitude. He’s been featured on television, in articles, and in the movie, “The Secret,” on the topic of Gratitude. But Lee, by his own admission, wasn’t always a grateful person. In fact, one of the defining moments of his life started out as one of his most ungrateful moments.
THE STORY OF THE GRATITUDE ROCK
How I started practicing Gratitude
My coach and mentor, Lee Brower, is well-known as a thought leader on Gratitude. He’s been featured on television, in articles, and in the movie, “The Secret,” on the topic of Gratitude. But Lee, by his own admission, wasn’t always a grateful person. In fact, one of the defining moments of his life started out as one of his most ungrateful moments.
It happened more than two decades ago. Lee was at the apex of his rise as a successful estate planner in Salt Lake City, Utah. He was both a leader in his church and a respected member of his local business community. Yet, he had a personal challenge within his family: His teenage daughter developed a substance abuse problem. Lee initially saw her problem as a personal and family embarrassment. He wondered how something like this could happen to him and thought that other people must be judging him negatively.
But one day, while walking on the beach, he picked up a rock that, to his eye, had the image of a butterfly embedded in it. Suddenly he felt differently because, coincidentally, his daughter’s nickname was “Mariposa,” meaning “butterfly” in Spanish. He saw it as the hand of God speaking to him, reminding him of how precious his daughter is to him. Ever since then, he carries that rock in his pocket as a daily reminder that he should be grateful for the blessings in his life.
Inspired by Lee’s story, I’ve done my best to do the same, to be grateful for the good fortune I have and to help others realize that we’re all so much better off than we perceive from moment to moment. My wish for you is that it doesn’t take a personal crisis for you to experience the difference that Gratitude can make in your life.
ABOUT THIS LETTER
This is no ordinary letter to clients or newsletter briefing. When I had a recent health scare, it was Gratitude for the many blessings in my life (and, really, all of our lives) that got me through the tough time I went through. Now, I want to help you, and all of our clients, to live happier, more-fulfilled, and more meaningful lives. To me, there’s no better way to start than through practicing and living Gratitude daily. Please enjoy and share this message if it inspires you as well.
Charles Sarowitz, CPA/PFS
Contributions to Trump accounts will be treated as completed gifts that are not future interests in property and the gift tax annual exclusion amount will apply under a safe harbor for certain donors making contributions to Trump accounts created under Code Sec. 530A.
Contributions to Trump accounts will be treated as completed gifts that are not future interests in property and the gift tax annual exclusion amount will apply under a safe harbor for certain donors making contributions to Trump accounts created under Code Sec. 530A.
Pursuant to the rules of Code Sec. 530A, distributions from Trump accounts are limited during the growth period, which is the period ending on January 1 of the year in which the account beneficiary attains age 18. During the growth period, annual contributions are limited to $5,000 per year, as adjusted for inflation after 2027. Gifts of future interests in property are not eligible for the annual gift tax exclusion and must be reported on a federal gift tax return.
The safe harbor applies for a particular year if the following requirements of section 4.02 are met:
- The taxpayer is an individual;
- The only taxable gifts made by the taxpayer during the calendar year are cash contributions to one or more Trump accounts, each made before the calendar year in which the account beneficiary attains age 18;
- The taxpayer's total gifts during the calendar year to each individual who is an account beneficiary, including contributions to that individual beneficiary's Trump account, do not exceed the Code Sec. 2503(b) annual exclusion;
- Such contributions to Trump accounts during the calendar year do not generate for that year either a gift or generation-skipping transfer (GST) tax liability after application of the taxpayer's remaining applicable credit amount against the gift tax or remaining GST exemption; and
- Disregarding the Trump account contributions described in section 4.02(2) of the revenue procedure, a gift tax return is not required to be filed, and no gift tax return is otherwise filed for that calendar year by or on behalf of the taxpayer for any other purposes.
If these requirements are satisfied, each Trump account contribution made by the taxpayer during the calendar year will be treated as a completed gift to the account beneficiary that is not a future interest in property and to which the annual exclusion applies for purposes of gift and GST tax reporting. As a result, taxpayers within the scope of the safe harbor will not be required to file a gift tax return reporting the such contributions.
Rev. Proc. 2026-25
IR 2026-80
The IRS has issued final regulations identifying certain Charitable Remainder Annuity Trust (CRAT) transactions and substantially similar transactions as listed transactions subject to the reportable transaction disclosure rules. The regulations require participants and material advisors to disclose these transactions to the IRS while clarifying that charitable organizations whose only interest is as charitable remaindermen are not treated as participants or parties to prohibited tax shelter transactions. The regulations are effective July 9, 2026.
The IRS has issued final regulations identifying certain Charitable Remainder Annuity Trust (CRAT) transactions and substantially similar transactions as listed transactions subject to the reportable transaction disclosure rules. The regulations require participants and material advisors to disclose these transactions to the IRS while clarifying that charitable organizations whose only interest is as charitable remaindermen are not treated as participants or parties to prohibited tax shelter transactions. The regulations are effective July 9, 2026.
Under Code Secs. 6011 and 6707A, the IRS may identify transactions with tax avoidance potential as listed transactions. The final regulations add Reg. §1.6011-15, identifying transactions in which appreciated property is contributed to a purported CRAT, sold by the trust, and the sale proceeds are used to purchase an annuity, with the beneficiary improperly treating the annuity payments under Code Sec. 72 instead of applying the distribution ordering rules of Code Sec. 664(b).
Although participants and material advisors remain subject to the applicable disclosure requirements, organizations described in Code Sec. 170(c) that merely receive the charitable remainder interest are excluded from participant status and are not treated as parties to prohibited tax shelter transactions under Code Sec. 4965 solely because of that interest. The IRS finalized the regulations without substantive changes from the proposed regulations issued in 2024.
T.D. 10051
IR 2026-82
A portion of litigation settlement proceeds consisting of attorney’s fees and costs was includible in the gross income of two individuals (taxpayers). Said portion was not deductible under Code Sec. 62(a)(20). The Fair Credit Reporting Act’s (FCRA) (P.L. 91-508) fee-shifting provisions were inapplicable in this case.
A portion of litigation settlement proceeds consisting of attorney’s fees and costs was includible in the gross income of two individuals (taxpayers). Said portion was not deductible under Code Sec. 62(a)(20). The Fair Credit Reporting Act’s (FCRA) (P.L. 91-508) fee-shifting provisions were inapplicable in this case.
Background
The taxpayers sued multiple credit reporting agencies under FCRA provisions. They eventually settled with each agency. In all relevant Forms 1099–MISC the settlement amounts were reflected without the attorney’s fees and costs.
Civil Rights Interpretation for FCRA Claims Denied
The taxpayers’ FCRA claims of unlawful discrimination did not fall under Code Sec. 62(e)(18)(i). Said claims were based on fair and accurate credit reporting and not consumer privacy. Particularly, the taxpayers’ concerns did not fall under “highly sensitive” and “intimate personal information” categories.
J.W. Eiler, 167 T.C. No. 3, Dec. 62,865
The IRS has reminded taxpayers that major life events can affect tax filing requirements, eligibility for tax benefits and the amount of tax withheld from paychecks. The agency explained that changes such as marriage, the birth or adoption of a child, divorce or the death of a loved one may require updates to tax information and a review of filing status.
The IRS has reminded taxpayers that major life events can affect tax filing requirements, eligibility for tax benefits and the amount of tax withheld from paychecks. The agency explained that changes such as marriage, the birth or adoption of a child, divorce or the death of a loved one may require updates to tax information and a review of filing status. A name change following marriage should be reported to the Social Security Administration so the updated name matches Social Security records. An address change should be reported to the IRS by filing Form 8822, Change of Address, and employers, financial institutions and the U.S. Postal Service should also be notified. Marriage may also require submission of a new Form W-4, Employee's Withholding Certificate, to ensure the correct amount of tax is withheld.
Additionally, the IRS noted that the birth or adoption of a child may make a taxpayer eligible for valuable tax benefits, including the Child Tax Credit, Adoption Credit and Child and Dependent Care Credit, if applicable requirements are satisfied. Divorce or the death of a spouse may also affect filing status, tax withholding and eligibility for certain tax benefits. The IRS encouraged prompt updates to tax records, careful evaluation of changes affecting tax obligations and use of available IRS resources to better understand the tax consequences of major life events. Early action can help avoid filing issues, support accurate tax reporting, maximize available tax benefits and improve preparation for the next tax filing season.
IRS Tax Tip 2026-55
The Internal Revenue Service received and processed less returns during 2026, according to the Treasury Inspector General for Tax Administration.
The Internal Revenue Service received and processed less returns during 2026, according to the Treasury Inspector General for Tax Administration.
In a recently released report, TIGTA stated that from March 1, 2025, through February 28, 2026, the IRS received 51.5 million tax returns, down from 52. 4 million in the previous year, though it did see a significant drop in paper returns received from 1.2 million in 2025 to 618,000 in 2026. Of the returns received in 2026, the agency processed 50.9 million returns, down from 51.8 million.
From the beginning of the 2026 tax filing season to the end of February 2026, TIGTA reported that the inventory backlog in key tax return processing programs increased from 1.9 million to 2.4 million. Additionally, nearly 75 percent of the amended return inventory is over-aged during the 2026 tax filing season.
“Generally, inventories increase during the filing season as the IRS balances efforts to answer phone calls and reduce inventories,” TIGTA stated in the report. “However, with the reduction in staff, increases in key inventories could become a concern.”
The number of refunds dipped to 36.5 million from 36.9 million, although there was a $360 increase in the average refund from $3,382 in 2025 to $3,742.
TIGTA also reported that the IRS did not meet its hiring goals for the 2026 tax filing season. The agency had been approved to hire 1,900 employees for submission processing (these workers process original and amended returns and resolve tax return errors) but only onboarded 800 individuals. Likewise, it was approved to hire 3,500 account management employees (handlers of taxpayer contacts through telephone and mail and process adjustments) but brought 2,300 on board.
Submission processing management said it would be onboarding new hires throughout the tax season, while account management leadership had no plans to hire new employees and would only be onboarding those who previously received offers but had delays in the hiring process.
In a positive from the 2026 season, TIGTA reported that the new and modified “e-file business rules associated with the child tax Credit, state and local tax deduction, and adoption credit are working as intended.”
Taxpayer Assistance Centers offered incorrect tax guidance during nearly half of unannounced visits by Treasury Inspector General for Tax Administration staff.
Taxpayer Assistance Centers offered incorrect tax guidance during nearly half of unannounced visits by Treasury Inspector General for Tax Administration staff.
According to a recent TIGTA report, during the 2025 tax filing season, the Treasury watchdog made 91 unannounced visits to TACs nationwide at various time (regular and extended hours), at the 61 visits where TIGTA staff did receive assistance, “TAC employees did not provide the correct tax law guidance during 28 of those visits (46 percent).”
TAC employees were presented with questions across one of the three areas – injured spouse, selling your main home, and American Opportunity Tax Credit. The report notes that for questions related to tax law topics, “TAC employees must use the Interactive Tax Law Assistant ITLA) tool to respond to taxpayers. The ITLA tool asks a series of questions, then generates accurate and complete responses based on the taxpayer’s situation. The tool is designed for TAC employees and is intended to improve operational performance in the areas of quality, efficiency, customers satisfaction, and employee satisfaction.”
TIGTA noted that during the 2025 filing season, “managers counseled several TAC employees for not using the ITLA tool during taxpayer interactions. During our site visits, we also observed that TAC employees did not always the ITLA tool to answer our tax law questions.”
Additionally, of those 91 visits, TIGTA “did not receive full assistance during 30 of our 91 visits due to incomplete or inaccurate responses to tax law questions, denial of entry by security or unexpected TAC closures.”
