Artificial Intelligence Is Reshaping Daily Life
Artificial intelligence (AI) is no longer a futuristic concept—it’s embedded in our daily routines. Whether you’re using virtual assistants like Siri or Google Assistant, relying on autocorrect, or receiving personalized recommendations on Spotify or Netflix, AI is behind the scenes. It’s also making its way into personal finance and tax services.
According to Bain & Company, 95% of U.S. businesses have adopted generative AI in some form, marking a 12% increase in just over a year. Public and private sectors alike are investing in AI infrastructure to integrate it into broader strategies. Danny Werfel, former IRS Commissioner and now strategic advisory board member at alliant, notes that the tax space is no exception.
The IRS Embraces AI
During Werfel’s tenure from 2023 to 2025, the IRS confronted the aftermath of the COVID-19 pandemic, which included significant backlogs and staffing shortages. These challenges prompted the agency to innovate with technology. AI was first introduced in call centers and later expanded to chatbots and fraud detection tools to better assist taxpayers.
“AI is an opportunity and a risk,” Werfel emphasized, pointing to its dual role in aiding operations and attracting scammers.
Protecting Students from Scams
Scammers are increasingly targeting younger populations. A 2024 Federal Trade Commission study found that over half of fraud victims under 19 lost a total of $55 million. Adults aged 20 to 29 reported losses of $430 million, showing that although older individuals lose more per incident, young people fall victim more frequently.
Students, especially those heading to college, are prime targets due to their increased online activity and limited financial experience. Scams involving textbooks or apartment rentals are common traps. Darius Kingsley from Chase advises families to stay vigilant and educate students about online fraud.
Micah Parsons and State Income Taxes
In sports news, Micah Parsons’ trade from the Dallas Cowboys to the Green Bay Packers made headlines. While Dallas has no state income tax, Wisconsin ranks among the highest. With Parsons’ $188 million contract, he could now owe millions more in taxes annually. However, the move may offer a better shot at a championship.
The Dallas Cowboys remain the NFL’s most valuable team, with a $13 billion valuation, despite decades without a championship.
Form W-2 Updates and IRS Strategy
Taxpayers can expect changes to Form W-2—but not until 2026. The IRS released draft forms addressing updated reporting requirements for tips and overtime. However, 2025 forms will remain unchanged to avoid disrupting the filing season and to give adequate time for implementation.
The changes are mostly technical, such as box code revisions. These updates reflect the IRS’s broader push to modernize and streamline tax processing using technology.
Alimony and Tax Law Explained
A recent reader question highlighted ongoing confusion about alimony rules. Under the Tax Cuts and Jobs Act (TCJA), alimony is no longer deductible for the payer or taxable to the recipient for agreements signed after January 1, 2019. Older agreements still follow the previous rules unless modified and referenced under the new law.
To qualify as alimony, payments must be made under a legal agreement or court order, in cash or cash equivalent, and must cease upon the death of the recipient. Voluntary payments, child support, or property settlements do not qualify as alimony.
Private Equity Eyes Retirement Accounts
President Trump’s recent executive order aims to reduce regulatory barriers that limit private equity (PE) investments in retirement accounts. Although not banned, PE has traditionally been avoided due to risk concerns. With Americans holding $15.2 trillion in IRAs and $12.4 trillion in workplace plans, the stakes are high.
Traditional IRAs offer tax-deferred growth, while Roth IRAs provide tax-free withdrawals. Employer-sponsored plans like 401(k)s may also include Roth options. The new order promotes alternative assets—like cryptocurrency and real estate—within retirement plans but does not change existing contribution or tax rules.
Transfer Pricing: A Hot Topic
Transfer pricing, the method multinational companies use to allocate profits across jurisdictions, is under scrutiny. The IRS is cracking down on companies shifting profits to low-tax countries. Recent high-profile cases include Facebook and Coca-Cola.
Facebook’s dispute centered on the valuation of a platform contribution from its Irish subsidiary. While the IRS initially valued it at $20 billion, the Tax Court sided with Facebook’s $6.3 billion estimate, settling at $7.8 billion. Coca-Cola’s case involves royalty allocations and an old profit-sharing agreement.
Other companies like Medtronic and 3M are also facing appeals, which could set new legal precedents in tax law.
Key Tax Deadlines and Events
- September 15, 2025: Estimated tax payments due.
- October 15, 2025: Filing deadline for those affected by California wildfires.
- November 3, 2025: Deadline for Arkansas and Tennessee storm victims.
Tax Forums and Conferences
- September 9-16: IRS Tax Forum in various cities.
- September 17-18: National Tax Professionals Forum in Las Vegas.
- September 26-27: Philadelphia Tax Forum.
Trivia and Miscellaneous
Did you know? The first Forms W-2 were issued in 1944 under the Current Tax Payment Act of 1943. The form was later modernized in 1978 with the familiar box layout.
The IRS also announced that interest rates for Q4 2025 will remain unchanged, with individual overpayment and underpayment rates at 7% annually.
This article is inspired by content from Original Source. It has been rephrased for originality. Images are credited to the original source.