Every year I have the same conversation with clients in December. They want to lower their tax bill, and I have to be honest with them: most of their options closed months ago.
August is different. You have real numbers from the first half of the year, and there’s still time to do something with them. Here’s what I was talking to clients about this month.
The IRS made first-time penalty relief automatic
This is one of those things I wish more people knew about.
If you’ve been filing on time and generally keeping things in order, the IRS will forgive a penalty the first time you slip up. That has been true for years under the First Time Abate program — but you had to know it existed and ask for it.
As of July, you don’t. The IRS replaced First Time Abate with a new Automatic Exemption from Penalty, and the name is the point: if you qualify, it applies on its own and you get a notice confirming it. No phone call, no letter, no argument.
It covers failure-to-file, failure-to-pay, and failure-to-deposit penalties. You qualify by having filed and paid on time for the three prior years — or twelve consecutive quarters, for quarterly filers. Information returns and occasional filings like estate and gift tax returns are excluded. The new process is phasing in now and fully replaces First Time Abate for returns due on or after January 1, 2027.
What to do: we already look for this on every client notice that comes through our office. But if you’ve had something from the IRS recently and you’ve been handling it yourself, don’t write the check before someone looks at it.
Source: IRS news release IR-2026-83, July 8, 2026
If you hold crypto, the IRS is about to have the same information you do
For a long time, loose crypto reporting went unchallenged simply because the IRS didn’t have the data to challenge it. That’s ending.
Brokers began issuing Form 1099-DA for 2025 transactions, but that first year reported gross proceeds only — what you sold, not what you paid. Beginning with 2026, cost basis comes with it. Which means the IRS can do the gain calculation itself, automatically, without a human ever opening your return.
Exchange or hardware wallet doesn’t change the math. If what you report doesn’t line up with what they received, you’ll hear about it — and the mismatch letters are generated by a computer, so “nobody will notice” isn’t a strategy anymore.
What to do: if you bought, sold, or earned any crypto this year, let’s reconcile it before filing season rather than during it. Basis records are much easier to reconstruct now than in March.
Source: IRS — final regulations and guidance for broker reporting on digital assets
Your estimated payments were set in April. A lot has changed since.
Here’s what I see every year. Someone sets up estimated payments in April based on what they thought the year would look like, and then life happens. A new client. A slow quarter. A bonus nobody planned for. And nobody goes back and adjusts.
That’s how you end up with a penalty in April that was entirely avoidable.
Estimated payments aren’t a set-and-forget item. They’re a projection, and a projection is only as good as the assumptions underneath it. If anything moved for you this year — income, a job change, a property sale, even just a slower stretch — the number you set in April probably isn’t the right number now.
What to do: a mid-year check takes very little time and is one of the few tax moves that pays for itself immediately. Quarterly due dates are April 15, June 15, September 15, and January 15.
Thinking about a business purchase? Think about it now, not in December.
I want to be specific here, because I’ve watched clients lose this deduction by a matter of days.
You can currently write off 100% of qualifying equipment in the year you buy it. But it has to be placed in service — up and running — before December 31, not merely ordered. If something needs to be installed, configured, or built out, a November purchase can easily miss the window.
The reverse is also a real risk. Buying equipment your business isn’t ready to use, purely for the deduction, is how a tax saving turns into an operating problem. The write-off should follow the business decision, not drive it.
Laptops, vehicles, office furniture, software. If a purchase has been sitting in the back of your mind, now is when it’s worth a conversation.
What to do: how you structure it — Section 179 versus bonus depreciation — can make a meaningful difference, and the better choice depends on your income picture for the year. Talk to us before you order, not after.
Were you sold a charitable trust strategy in the last few years?
Certain charitable remainder annuity trust arrangements — CRATs — were marketed aggressively for a stretch, sometimes to people who had very little idea what they were signing.
In July, Treasury and the IRS issued final regulations identifying specific CRAT arrangements as listed transactions. If you hold one that fits the description, that classification can carry a disclosure obligation, and the penalties for not disclosing are significant. They also don’t wait for filing season.
The regulations describe a particular structure, not charitable remainder trusts generally. Plenty of CRATs are perfectly ordinary planning tools. The question is which kind you have.
What to do: if you’re not sure whether this touches you, it’s worth twenty minutes to find out. Better to know now than during an examination.
Source: Treasury and IRS final regulations, T.D. 10051 / IR-2026-82, Federal Register July 9, 2026
Inherited an IRA? Please don’t move it before you call.
I’ve had this conversation more than once and it’s always a hard one. Someone inherits an IRA, decides to move it to a different institution, and instead of a direct trustee-to-trustee transfer they take a distribution first and redeposit it.
One step in the wrong order can create a tax bill on the entire balance. On a large account, that’s a six-figure mistake that didn’t have to exist — and it generally can’t be undone.
Moving an inherited IRA directly between institutions, custodian to custodian, is not a taxable event. That’s long-settled and not new. The problem is that most people don’t know there’s a wrong way until they’ve already taken it.
What to do: if you’ve recently inherited a retirement account, investments, or property, call before you move anything. It’s a short conversation and it can save an enormous amount.
Where this leaves you
Four of the six items above are decisions, not deadlines. That’s the thing about August — you can still act on almost all of it.
If something here made you think I should probably deal with that, trust the instinct. Reply or give us a call, and we’ll work out what’s actually worth your attention.
This is general information, not tax advice for your specific situation. Reach out and we’ll look at your facts.
Previous
