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This was (and is) a one-way trend for document corroboration. Before 1987 a taxpayer could pretty well claim any itemized deductions with no documents required. Even before then, the "TEFRA" act (1982) began the issuance of 1099s to recipients for services rendered. Nowadays look at the itemized deductions. Mortgage interest deductions are supported by 1098s, education credits supported by 1098-T, student interest supported by 1098-E, etc. Not to mention the standard deductions are so large most people cannot itemize anyway. Also, in earlier days, tax rates were higher, such that tighter control of expenses could justify lower rates (which were broadly announced to delight the public) And we also have the thinly disguised effort to make auditors of taxpayers via the 8867. Although the IRS denies it - the mechanics of correctly navigating through the 8867 really means much of the busiwork of an audit has been transferred to the preparer. Self-prepared returns don't require an 8867. And the legislation making its way through congress does nothing to reverse the trends.

IRA accounts aren’t limited to low-interest instruments - never have been. My tIRA and RothIRA accounts are held in IRA brokerage accounts with Fidelity and Vanguard. I can invest them in any manner I wish. For me, that is 50% fixed income (CDs, govt bonds, etc) and 50% equity (in the Vanguard Total Market Index ETF). And I rebalance periodically to maintain the 50-50 ratio as market conditions ebb and flow. So don’t fall into the trap of thinking IRA’s can only be held in bank Money Market accounts or other low-paying instruments. And I would never suggest that someone toss their money into a crypto scheme and call it an investment. By that’s just me …

"Before 1987, taxpayers could claim dependents by simply listing their names. The Tax Reform Act of 1986 changed that, requiring taxpayers to include the SSNs of dependents over the age of five when filing their taxes. The following year, seven million FEWER dependents were claimed on individual federal income tax returns, resulting in a $2.8 billion increase in tax revenue."

Wow!

I agree with Abby Normal on the crypto investing. As for your second question, if you are simply suggesting that the client considers an IRA and are explaining the effects it would have on their tax return, then you are not giving investment advice.

Crypto is a pyramid scam that will come crashing down someday, and it's also very bad for the environment because of the huge amount of electricity it consumes. When summers get really hot and you have to cut back on cooling or even have a blackout, remember the strain that crypto puts on our electric grids. And IRAs only earn pennies in interest if you have them in cash investments. Although these days, interest rates are providing better returns on safe investments. I have some CDs in my IRAs, but stocks should eventually give better returns.

This is a copy of a post on the OSCPA Board from Tuesday: "I have a client that received an IRS notice dated April 30, 2025, regarding not filing their 2025 tax return. It is LTR 112C. This is frankly baffling Have others received this notice? Is this a harbinger of things to come with the IRS going forward? Are we going to have to be constantly responding to notices that are totally bogus, while the IRS customer service declines due to a reduction in force? Is this what AI will look like at the IRS?"