IRS Tax News

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  • 28 Mar 2024 2:53 PM | Anonymous

    WASHINGTON ― The Internal Revenue Service announced today that almost 940,000 people across the nation have unclaimed refunds for tax year 2020 but face a May 17 deadline to submit their tax returns. 

    The IRS estimates more than $1 billion in refunds remain unclaimed because people haven’t filed their 2020 tax returns yet. The average median refund is $932 for 2020, and the state-by-state table below shows how many people are potentially eligible for these refunds in each state along with the median average refund by state. 

    “There’s money remaining on the table for hundreds of thousands of people who haven’t filed 2020 tax returns,” said IRS Commissioner Danny Werfel. “We want taxpayers to claim these refunds, but time is running out for people who may have overlooked or forgotten about these refunds. There’s a May 17 deadline to file these returns so taxpayers should start soon to make sure they don’t miss out.” 

    Under the law, taxpayers usually have three years to file and claim their tax refunds. If they don’t file within three years, the money becomes the property of the U.S. Treasury. 

    But for 2020 tax returns, people have a little more time than usual to file to claim their refunds. Typically, the normal filing deadline to claim old refunds falls around the April tax deadline, which is April 15 this year for 2023 tax returns. But the three-year window for 2020 unfiled returns was postponed to May 17, 2024, due to the COVID-19 pandemic emergency. The IRS issued Notice 2023-21 on Feb. 27, 2023, providing legal guidance on claims required by the postponed deadline. 

    The IRS estimates the midpoint for the individual refund amounts for 2020 to be $932 — that is, half of the refunds are more than $932 and half are less. This estimate does not include the Recovery Rebate Credit or other credits that may be applicable; the IRS has previously reminded those who may be entitled to the COVID-era Recovery Rebate Credit in 2020 that time is running out to file a tax return and claim their money. 

    “People faced extremely unusual situations during the pandemic, which may have led some people to forget about a potential refund on their 2020 tax returns,” Werfel said. “People may have just overlooked these, including students, part-time workers and others. Some people may not realize they may be owed a refund. We encourage people to review their files and start gathering records now, so they don’t run the risk of missing the May deadline.” 

    By missing out on filing a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2020. Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC). For 2020, the EITC was worth as much as $6,660 for taxpayers with qualifying children. The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2020 were: 

    • $50,594 ($56,844 if married filing jointly) for those with three or more qualifying children:
    • $47,440 ($53,330 if married filing jointly) for people with two qualifying children;
    • $41,756 ($47,646 if married filing jointly) for those with one qualifying child, and;
    • $15,820 ($21,710 if married filing jointly) for people without qualifying children. 

    The IRS reminds taxpayers seeking a 2020 tax refund that their funds may be held if they have not filed tax returns for 2021 and 2022. In addition, any refund amount for 2020 will be applied to amounts still owed to the IRS or a state tax agency and may be used to offset unpaid child support or other past due federal debts, such as student loans. 

    Current and prior year tax forms (such as the tax year 2020 Forms 1040 and 1040-SR) and instructions are available on the IRS.gov Forms and Publications page or by calling toll-free 800-TAX-FORM (800-829-3676).

    High-income non-filers: IRS compliance letters coming

    The IRS also announced Feb. 29 a new effort focused on high-income taxpayers who have failed to file federal income tax returns in more than 125,000 instances since 2017 with taxes being owed in many of those cases.

    The new initiative, made possible by Inflation Reduction Act funding, began with IRS compliance letters going out in February on more than 125,000 cases where tax returns haven’t been filed since 2017. The mailings include more than 25,000 to those with more than $1 million in income, and over 100,000 to people with incomes between $400,000 and $1 million between tax years 2017 and 2021. 

    Need to file a 2020 tax return? Several options to get key documents 

    Although it’s been a few years since 2020, the IRS reminds taxpayers there are ways they can still gather the information they need to file this tax return. But people should start early to make sure they have enough time to file before the May deadline for 2020 refunds. Here are some options: 

    • Request copies of key documents: Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years, 2020, 2021 or 2022 can request copies from their employer, bank or other payers. 
    • Use Get Transcript Online at IRS.gov. Taxpayers who are unable to get those missing forms from their employer or other payers can order a free wage and income transcript at IRS.gov using the Get Transcript Online For many taxpayers, this is by far the quickest and easiest option. 
    • Request a transcript. Another option is for people to file Form 4506-T with the IRS to request a “wage and income transcript.” A wage and income transcript shows data from information returns received by the IRS, such as Forms W-2, 1099, 1098, Form 5498 and IRA contribution information. Taxpayers can use the information from the transcript to file their tax return. But plan ahead – these written requests can take several weeks; people are strongly urged to try the other options first.

    State-by-state estimates of individuals who may be due 2020 income tax refunds

    Based on tax information currently available, the IRS estimated how many people in each state may be entitled to a tax refund. The actual refund amount will vary based on a household’s tax situation. 

    State or District

    Estimated Number of Individuals

    Median Potential Refund

    Total Potential Refunds*

    Alabama

    15,200

    $926

    $16,839,800

    Alaska

    3,700

    $931

    $4,335,300

    Arizona

    25,400

    $871

    $26,939,600

    Arkansas

    8,700

    $923

    $9,392,600

    California

    88,200

    $835

    $94,226,300

    Colorado

    18,500

    $894

    $20,109,900

    Connecticut

    9,800

    $978

    $11,343,600

    Delaware

    3,600

    $945

    $4,156,500

    District of Columbia

    2,900

    $968

    $3,503,800

    Florida

    53,200

    $891

    $58,210,500

    Georgia

    36,400

    $900

    $39,175,600

    Hawaii

    5,200

    $979

    $5,972,600

    Idaho

    4,500

    $761

    $4,369,600

    Illinois

    36,200

    $956

    $40,608,000

    Indiana

    19,200

    $922

    $20,893,000

    Iowa

    9,600

    $953

    $10,601,700

    Kansas

    8,700

    $900

    $9,285,600

    Kentucky

    10,600

    $920

    $11,236,300

    Louisiana

    15,100

    $957

    $17,357,300

    Maine

    3,800

    $923

    $4,030,200

    Maryland

    22,200

    $991

    $26,365,400

    Massachusetts

    21,800

    $975

    $25,071,800

    Michigan

    34,900

    $976

    $38,274,800

    Minnesota

    13,500

    $818

    $14,043,900

    Mississippi

    8,100

    $861

    $8,685,000

    Missouri

    19,500

    $893

    $20,803,400

    Montana

    3,400

    $851

    $3,632,100

    Nebraska

    4,700

    $901

    $5,007,300

    Nevada

    10,200

    $890

    $11,143,900

    New Hampshire

    4,200

    $982

    $4,923,100

    New Jersey

    24,400

    $920

    $27,408,300

    New Mexico

    6,500

    $868

    $7,032,700

    New York

    51,400

    $1,029

    $60,837,400

    North Carolina

    27,500

    $895

    $29,304,100

    North Dakota

    2,200

    $953

    $2,482,600

    Ohio

    31,400

    $909

    $32,939,900

    Oklahoma

    14,300

    $902

    $15,566,900

    Oregon

    15,300

    $847

    $15,857,800

    Pennsylvania

    38,600

    $1,031

    $43,412,900

    Rhode Island

    2,600

    $986

    $2,980,500

    South Carolina

    11,900

    $840

    $12,564,900

    South Dakota

    2,200

    $892

    $2,346,300

    Tennessee

    16,800

    $909

    $18,007,000

    Texas

    93,400

    $960

    $107,130,200

    Utah

    7,800

    $836

    $8,191,700

    Vermont

    1,700

    $911

    $1,818,600

    Virginia

    25,900

    $914

    $28,944,600

    Washington

    26,200

    $976

    $31,110,300

    West Virginia

    3,800

    $950

    $4,130,400

    Wisconsin

    11,800

    $837

    $12,139,400

    Wyoming

    2,100

    $961

    $2,416,300

    Totals

    938,800

    $932

    $1,037,161,300


  • 28 Mar 2024 2:45 PM | Anonymous

    Notice 2024-32 provides guidance for qualified student loan bonds to clarify certain requirements for tax-exempt bond financing for loan programs of general application approved by a State under § 144(b)(1)(B) (State Supplemental Loan programs).  Specifically, this notice addresses eligibility of borrowers of loans through State Supplemental Loan programs and the loan size limitation for State Supplemental Loans.  This notice also provides guidance on whether an issue of State or local bonds the proceeds of which are used to finance or refinance qualified student loans or to finance qualified mortgage loans is a refunding issue. 

    Notice 2024-32 will be in IRB: 2024-16, dated April 15, 2024.


  • 28 Mar 2024 2:45 PM | Anonymous

    WASHINGTON — The Internal Revenue Service today further postponed until Aug. 7, 2024, various tax-filing and tax-payment deadlines for individuals and businesses affected by the Aug. 8, 2023, wildfires in Hawaii. Previously, the deadline was Feb. 15, 2024.

    In general, this means that affected individuals, businesses and tax-exempt organizations will now have until Aug. 7, 2024, to file their 2023 returns and pay any taxes due. This is in addition to the expansive relief, announced last August, shortly after the wildfires occurred.

    The IRS is offering relief to Maui and Hawaii counties, the two areas designated by the Federal Emergency Management Agency (FEMA). Individuals and households that reside or have a business in these localities qualify for tax relief. The current list of eligible localities is always available on the Tax relief in disaster situations page on IRS.gov.

    Filing and payment relief

    The tax relief postpones various tax filing and payment deadlines that occurred from Aug. 8, 2023, through Aug. 7, 2024 (postponement period). As a result, affected individuals and businesses will have until Aug. 7, 2024, to file returns and pay any taxes that were originally due during this period.

    This means, for example, that the Aug. 7, 2024, deadline will now apply to:

    • Individual income tax returns and payments normally due on April 15, 2024.
    • 2023 contributions to IRAs and health savings accounts for eligible taxpayers.
    • Quarterly estimated income tax payments normally due on Sept. 15, 2023, and Jan. 16, April 15 and June 17, 2024.
    • Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, April 30 and July 31, 2024.
    • Calendar-year partnership and S corporation returns normally due on March 15, 2024.
    • Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2024.
    • Calendar-year tax-exempt organization returns normally due on May 15, 2024.

    In addition, individuals, businesses and tax-exempt organizations who had valid extensions to file their 2022 returns will now have until Aug. 7, 2024, to file them. However, payments on these returns are not eligible for relief because they were originally due before the wildfires occurred. The Disaster assistance and emergency relief for individuals and businesses page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.

    The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.

    It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated or call the IRS at 866-562-5227 to receive disaster tax relief.

    In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

    Reminder about extensions

    The IRS urges anyone who needs an additional tax-filing extension, beyond Aug. 7, 2024, for their 2023 federal income tax return to request it electronically by April 15, 2024. Though a disaster-area taxpayer qualifies to request an extension between April 15 and Aug. 7, 2024, a request filed during this period can only be submitted on paper. Whether requested electronically or on paper, the taxpayer will then have until Oct. 15, 2024, to file, though payments are still due on Aug. 7, 2024. Visit IRS.gov/Extensions for details.

    Additional tax relief

    Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed this year), or the return for the prior year (2022). Taxpayers have extra time – up to six months after the due date of the taxpayer’s federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. For individual taxpayers, this means Oct. 15, 2024. Be sure to write the FEMA declaration number – 4724-DR − on any return claiming a loss. See Publication 547, Casualties, Disasters, and Thefts, for details.

    Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. See Publication 525, Taxable and Nontaxable Income, for details.

    Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.

    The tax relief is part of a coordinated federal response to the damage caused by these wildfires and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.

    Reminder about tax return preparation options

    Another Free File option is Free File Fillable Forms. These are electronic federal tax forms, equivalent to a paper 1040 and are designed for taxpayers who are comfortable filling out IRS tax forms. Anyone, regardless of income, can use this option.

    • MilTax, a Department of Defense program, offers free return preparation software and electronic filing for federal tax returns and up to three state income tax returns. It’s available for all military members and some veterans, with no income limit.


  • 28 Mar 2024 2:43 PM | Anonymous

    WASHINGTON – Four years after the enactment of a key pandemic-era law, the Internal Revenue Service released updated numbers showing Criminal Investigation (CI) has investigated 1,644 tax and money laundering cases related to COVID fraud potentially totaling $8.9 billion, with well over half that amount coming from cases opened in the last year.

    These cases include a wide range of criminal activity, including fraudulently obtained loans, credits and payments meant for American workers, families and small businesses under the Coronavirus Aid, Relief and Economic Security (CARES) Act.

    As of Feb. 29, 795 people have been indicted for their alleged COVID-related crimes and 373 individuals have been sentenced to an average of 34 months in federal prison. During the last four years, CI has obtained a 98.5% conviction rate in prosecuted COVID fraud cases.

    “The work by IRS Criminal Investigation provides a vital role in protecting against fraud and serves a key part in the agency’s wider efforts to ensure fairness in the nation’s tax system,” said IRS Commissioner Danny Werfel. “Protecting taxpayers against fraud in pandemic-era programs is just one example of the important role that CI plays in the law enforcement community. A healthy budget for the IRS helps us get the job done, and the work of CI provides a critical safety net to protect the nation against fraud.”

    Looking ahead, CI’s ongoing fraud-protection work will be bolstered by the additional funding the IRS received through the Inflation Reduction Act, which is providing the agency with additional resources to ensure fair enforcement of the laws as well as improved taxpayer service, new technology and wider IRS transformation efforts.

    “In the last year alone, we have opened nearly 700 new COVID fraud investigations that collectively add up to $5 billion in potential fraud,” said CI Chief Guy Ficco. “While COVID may no longer be top of mind to the average American when they wake up, the fraud committed through these different programs is very much top of mind to CI. Our special agents continue to seek out fraudsters who stole money from government loan programs for their personal gain.”

    Recent sentencings include:

    Long Island man sentenced to 10 years in prison for sprawling COVID-19 loan fraud:

    In March 2024, Rami Saab, also known as “Rami Hasan,” was sentenced to 10 years in prison and required to pay $9.6 million in restitution for his role as the mastermind behind a sprawling conspiracy to fraudulently obtain loans amid the COVID-19 pandemic. Saab and a network of co-conspirators fraudulently applied for more than $32 million in loans from the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL) on behalf of shell corporations they controlled. Relying on false information and fabricated documentation supplied by Saab and his conspirators, the Small Business Administration (SBA) and private banks administrating the PPP and EIDL programs granted at least 20 such applications, resulting in Saab and his fellow conspirators receiving $9.6 million in emergency-relief funds intended for distressed small businesses. Using a web of more than 50 otherwise dormant bank accounts, Saab and others laundered the proceeds before using the funds for their own self-enrichment.

    Toledo area man sentenced to 94 months in prison for COVID fraud:

    Terrence L. Pounds was sentenced in March 2024 to 94 months in prison and ordered to pay more than $4.2 million dollars to the SBA after being convicted of conspiracy to commit wire fraud, wire fraud and money laundering. Pounds and his co-defendants devised a scheme to obtain SBA-financed loans from the EIDL Program and the PPP under false pretenses, often claiming the loans were for nonprofit, faith-based organizations with over $1 million in revenue and 15 employees. He successfully obtained millions of dollars in loans and then used the money to purchase several new vehicles, which were later forfeited to the U.S. government.

    The CARES Act was signed into law on March 27, 2020, to provide emergency financial assistance to millions of Americans suffering from the economic effects of the COVID-19 pandemic.

    CI encourages the public to share information regarding known or suspected fraud tied to the CARES Act by contacting their local CI field office. Contact information for each CI field office is listed in the division’s annual report.

    CI is the law enforcement arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a nearly 90% federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.


  • 28 Mar 2024 2:43 PM | Anonymous

    WASHINGTON —The Internal Revenue Service today kicked off the annual Dirty Dozen list with a warning for taxpayers to be aware of evolving phishing and smishing scams designed to steal sensitive taxpayer information.

    With taxpayers continuing to be bombarded by email and text scams, the IRS and the Security Summit partners warned individuals and businesses to remain vigilant against these attacks. Fraudsters and identity thieves attempt to trick the recipient into clicking a suspicious link, filling out personal and financial information or downloading a malware file onto their computer.

    "Scammers are relentless in their attempts to obtain sensitive financial and personal information, and impersonating the IRS remains a favorite tactic,” said IRS Commissioner Danny Werfel. “People can be anxious to get the latest information about their refund or other tax issues, so scammers frequently try using the IRS as a way to trick people. The IRS urges people to be extra cautious about unsolicited messages and avoid clicking any links in an unsolicited email or text if they are uncertain.”

    Started in 2002, the IRS' annual Dirty Dozen campaign lists 12 scams and schemes that put taxpayers, businesses and the tax professional community at risk of losing money, personal information, data and more. While the Dirty Dozen is not a legal document or a formal listing of agency enforcement priorities, the education effort is designed to raise awareness and protect taxpayers and tax pros from common tax scams and schemes.

    As a member of the Security Summit, the IRS has worked with state tax agencies and the nation’s tax industry for nine years to cooperatively implement a variety of internal security measures to protect taxpayers. The collaborative effort by the Summit partners also has focused on educating taxpayers about scams and fraudulent schemes throughout the year, which can lead to tax-related identity theft. Through initiatives like the Dirty Dozen and the Security Summit program, the IRS strives to protect taxpayers, businesses and the tax system from cyber criminals and deceptive activities that seek to extract information and money.

    Phish or smish: Don’t take the bait

    The IRS continues to see a barrage of email and text scams targeting taxpayers and others. These schemes frequently peak during tax season but they continue throughout the year. Taxpayers face a wide variety of these scams and schemes. And tax professionals, payroll providers and human resource departments remain favorite targets of email and text scams since they have sensitive personal and financial information. One common example remains the “new client” scamthat can target tax pros and others.

    That means taxpayers and tax professionals should be alert to fake communications posing as legitimate organizations in the tax and financial community, including the IRS and state tax agencies. These messages arrive in the form of unsolicited texts or emails to lure unsuspecting victims to provide valuable personal and financial information that can lead to identity theft. There are two main types:

    • Phishing: An email sent by fraudsters claiming to come from the IRS. The email lures the victims into the scam with a variety of ruses such as enticing victims with a phony tax refund or threatening them with false legal or criminal charges for tax fraud.
    • Smishing: A text or smartphone SMS message where scammers often use alarming language such as, "Your account has now been put on hold," or "Unusual Activity Report," with a bogus "Solutions" link to restore the recipient's account. Unexpected tax refunds are another potential lure for scam artists.

    Never click on any unsolicited communication claiming to be the IRS as it may surreptitiously load malware. It may also be a way for malicious hackers to load ransomware that keeps the legitimate user from accessing their system and files.

    In some cases, phishing emails may appear to come from a legitimate sender or organization that has had their email account credentials stolen. Setting up two-factor or multi-factor authentication with their email provider can reduce the risk of individuals having their email account compromised.

    Posing as a trusted organization, friend or family member remains a common way to target individuals and tax preparers for various scams. Individuals should verify the identity of the sender by using another communication method, for instance, calling a number they independently know to be accurate, not the number provided in the email or text.

    The IRS initiates most contacts through regular mail and will never initiate contact with taxpayers by email, text or social media regarding a bill or tax refund.

    What to do
    Individuals should never respond to tax-related phishing or smishing or click on the URL link. Instead, report all unsolicited email - including the full email headers - claiming to be from the IRS or an IRS-related function to phishing@irs.gov. If someone experienced any monetary losses due to an IRS-related scam incident, they should report it to the Treasury Inspector General for Tax Administration (TIGTA), the Federal Trade Commission and the Internet Crime Complaint Center (IC3).

    If a taxpayer receives an email claiming to be from the IRS that contains a request for personal information, taxes associated with a large investment, inheritance or lottery.

    • Don't reply.
    • Don't open any attachments. They can contain malicious code that may infect the computer or mobile phone.
    • Don't click on any links. If a taxpayer inadvertently clicked on links in a suspicious email or website and entered confidential information, visit the IRS’ identity protection page.
    • Send the full email headers or forward the email as-is to phishing@irs.gov. Don't forward screenshots or scanned images of emails because this removes valuable information.
    • Delete the original email.

    If a taxpayer receives a text claiming to be from the IRS that contains a request for personal information, taxes associated with a large investment, inheritance or lottery.

    • Don't reply.
    • Don't open any attachments. They can contain malicious code that may infect the computer or mobile phone.
    • Don't click on any links. If a taxpayer clicked on links in a suspicious SMS and entered confidential information, they should visit Identity Theft Central.
    • Report the message to 7726 (SPAM).
    • Include both the Caller ID and the message body in an email and send to phishing@irs.gov. Copy the Caller ID from the message by pressing and holding on the body of the text message, then select Copy, paste into the email. If the taxpayer is unable to copy the Caller ID or message body, forward a screenshot of the message.
    • Delete the original text.
    • For more information see the IRS video on fake IRS-related text messages.

    The Report Phishing and Online Scams page at IRS.gov provides complete details. The Federal Communications Commission's Smartphone Security Checker is a useful tool against mobile security threats.

    Report fraud
    As part of the Dirty Dozen awareness effort regarding tax schemes and unscrupulous tax return preparers, the IRS urges individuals to report those who promote abusive tax practices and tax preparers who intentionally file incorrect returns.

    To report a tax scheme or a dishonest tax return preparer individuals should send a completed Form 14242, Report Suspected Abusive Tax Promotions or Preparers, (along with any supporting materials) via mail or fax to the IRS Lead Development Center in the Office of Promoter Investigations.

    Mail:
    Internal Revenue Service Lead Development Center
    Stop MS5040
    24000 Avila Road
    Laguna Niguel, California 92677 3405
    Fax: 877-477-9135

    Taxpayers and tax professionals can also submit this information to the IRS Whistleblower Office, where they may be eligible for a reward. For details, refer to the sections on Abusive Tax Schemes and Abusive Tax Return Preparers.

    More information:


  • 25 Mar 2024 9:33 AM | Anonymous

    Inside This Issue

    1. March 22 ERC deadline rapidly approaching
    2. IRS seeks to hire revenue agents nationwide
    3. Registration open for IRS Nationwide Tax Forum
    4. Ficco becomes IRS Criminal Investigation chief
    5. New Digital Assets webpage
    6. Physical presence education requirement waiver extended for enrolled actuaries 
    7. News from the Justice Department’s Tax Division

    1.  March 22 ERC deadline rapidly approaching

    The IRS reminds businesses of the March 22 deadline for the Employee Retention Credit (ERC) Voluntary Disclosure Program. Businesses are urged to review the Employee Retention Credit (ERC) guidelines to avoid future compliance action for improper claims. “The window of opportunity is closing for those with questionable claims to fix things before they receive follow-up compliance action. Taking action now will avoid potentially hefty penalties and interest if the IRS takes action later. The deals available now are good, and the cost and risk for bad claims will sharply escalate over time,” said IRS Commissioner Danny Werfel.

    The IRS offers two programs to voluntarily resolve improper claims and reduce costs and follow-up steps for businesses. They are the ERC Voluntary Disclosure Program and the claim withdrawal process. The IRS will continue a wide range of tax compliance activities on ERC claims in the future, so the agency urges a close look at these special programs.

    Back to top

    2.  IRS seeks to hire revenue agents nationwide

    Tax pros: With the IRS hiring thousands of revenue agents, the agency encourages members of the tax professional community to consider applying for one of the many career opportunities:

    These positions will be filled using a Direct Hire Authority (DHA), which accelerates the hiring process and helps to fill IRS mission-critical positions immediately. Tax pros should note that recruitment incentives may be offered. For more information, visit the IRS Careers page.

    Back to top

    3.  Registration open for IRS Nationwide Tax Forum

    Tax Pros: Registration is now open for the 2024 IRS Nationwide Tax Forum. Register today to ensure your space this summer in one of the five following cities:

    • Chicago: July 9 – 11                                                         
    • Orlando: July 30 – Aug. 1                                               
    • Baltimore: Aug. 13 – 15                                                       
    • Dallas: Aug. 20 – 22
    • San Diego: Sep. 10 – 12

    The IRS Nationwide Tax Forum offers continuing education and networking opportunities to enrolled agents, certified public accountants, attorneys and other tax professionals. Each forum offers more than 40 seminars and workshops on a wide variety of federal and state tax issues presented by experts from the IRS and its partner associations. Attendees may earn up to 18 continuing education credits.

    Visit 2024 IRS Nationwide Tax Forum for information on the program, accommodations and registration.

    Back to top

    4.  Ficco becomes IRS Criminal Investigation chief

    The IRS announced its new IRS Criminal Investigation chief. Effective April 1, Guy Ficco, the current Deputy Chief and a 29-year agency veteran, will lead a staff of more than 3,200 Criminal Investigation employees, including 2,200 special agents. In addition to serving as CI’s deputy chief, Ficco served in leadership positions across the agency, ranging from supervisory special agent to executive director of Global Operations, Policy and Support. He is also a certified fraud examiner. “Guy has enjoyed a remarkable career as a CI special agent and leader who brings a wealth of experience to this job,” said IRS Commissioner Danny Werfel.

    Back to top

    5.  New Digital Assets webpage

    The IRS has announced an improved Digital Assets webpage on IRS.gov.

    The redesigned webpage features:

    • Current IRS information on digital assets, and how to answer the digital asset question on a tax return: when to check yes or no;
    • Streamlined information for ease of understanding; and                 
    • A user-friendly layout featuring links at the top of the page to help viewers quickly find key information.

    More information is available at IRS.gov and Frequently Asked Questions on virtual currency transactions.

    Back to top

    6.  Physical presence education requirement waiver extended for enrolled actuaries

    The Joint Board for the Enrollment of Actuaries is extending the temporary waiver of its physical presence requirement for continuing professional education (CPE) programs. The Joint Board issued proposed regulations to eliminate the physical presence requirement altogether. The extended waiver applies to all enrolled actuaries and will remain in effect until proposed regulations are finalized.

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    7.  News from the Justice Department’s Tax Division

    The Justice Department filed a complaint seeking to bar Chicago-area tax return preparer Sir-Michael Davenport from owning or operating a tax return preparation business and preparing tax returns for others. By repeatedly understating his customers’ tax liabilities, the complaint alleges the United States has been harmed by Davenport’s conduct, resulting in a significant loss in tax revenue of an estimated $715,407.

    A complaint seeking to bar Florida-area return preparer Kenia Rodriguez, also known as Kenia Legon, was filed in the U.S. District Court for the Middle District of Florida. The civil complaint alleges that Rodriguez willfully prepared false returns on behalf of her clients and that the United States has been harmed by her conduct, leading to a tax loss of more than $6 million since 2021. In addition to seeking an injunction against Rodriguez, the government requests an order of disgorgement to prevent her from profiting from violating the internal revenue laws.

    The United States filed a civil complaint in the U.S. District Court for the Southern District of Texas against Houston-based return preparer Morshanda Lewis. The complaint alleges Lewis prepared tax returns that claimed false credits despite several warnings from the IRS. For tax years 2019 to 2021, Lewis’ conduct caused a significant loss in tax revenue, estimated at over $1 million.


  • 25 Mar 2024 9:29 AM | Anonymous

    WASHINGTON – With a key March 22 deadline rapidly approaching, the Internal Revenue Service renewed calls for businesses to review the Employee Retention Credit (ERC) guidelines to avoid future compliance action for improper claims.

    Amid aggressive marketing that misled many businesses into filing claims for ERC, the IRS has sharply increased compliance action through audits and criminal investigations – with more activity planned in the future. To help those who were misled, the IRS has made a limited-time offer available to employers through March 22 to correct improper claims at a sharp discount.

    “The window of opportunity is closing for those with questionable claims to fix things before they receive follow-up compliance action,” said IRS Commissioner Danny Werfel. “We strongly urge businesses to review the Employee Retention Credit guidelines immediately before a key disclosure program closes, especially if they encountered a high-pressure push to apply for these credits. Taking action now will avoid potentially hefty penalties and interest if the IRS takes action later. The deals available now are good, and the cost and risk for bad claims will sharply escalate over time.”

    Employers who improperly claimed ERC can avoid penalties and interest – and even get a discount on repayments if they apply by March 22, 2024, to the ERC Voluntary Disclosure Program. The IRS also offers a special claim withdrawal process for businesses whose claim is still pending. Taking steps now to resolve these issues can help businesses get right and avoid future IRS actions.

    The IRS is urging this review because some ERC promoters shared misleading information or misrepresented eligibility rules and lured businesses to apply for the ERC when they didn’t qualify. Some promoter groups may have called the credit by another name, such as a grant, business stimulus payment, government relief or other names, so even if the terms Employee Retention Credit and Employee Retention Tax Credit don’t sound familiar, businesses should still review their records.

    The IRS has two programs to voluntarily resolve improper claims and reduce costs and follow-up steps for businesses who fell for misinformation and aggressive marketing about the ERC.

    • The ERC Voluntary Disclosure Program, available through March 22, 2024, is for employers who need to repay ERC they received by December 21, 2023, either as a refund or as a credit on a tax return. This option lets a taxpayer repay the incorrect ERC, minus 20 percent, for any tax period they weren’t eligible for ERC. Generally, businesses who enter this program don’t have to amend other returns affected by the incorrect ERC and don’t have to repay interest they received from the IRS on an ERC refund.
    • Businesses should quickly pursue the claim withdrawal process if they need to ask the IRS not to process an ERC claim for any tax period that hasn’t been paid yet. Taxpayers who received an ERC check but haven’t cashed or deposited it can also use this process to withdraw the claim and return the check. The IRS will treat the claim as though the taxpayer never filed it. No interest or penalties will apply.

    After these programs end, the IRS will continue a wide range of tax compliance activities on ERC claims to protect taxpayers and enforce the tax law. If the IRS finds an ERC claim to be incorrect after these programs end, the agency can disallow unpaid claims or require repayment with penalties and interest from taxpayers who received ERC. The taxpayer also may need to amend related returns. The IRS is required to use a variety of collection tools to recapture incorrect ERC payments or credits.

    “We have good solutions for taxpayers to do the right thing now and avoid hassles and expenses for themselves later – but March 22 is rapidly approaching,” Werfel said. “The domino effect of an incorrect claim can cost a business valuable time, energy and money down the road. We urge businesses to talk to a trusted tax professional and review their situation.”

    Under the ERC Voluntary Disclosure Program, a business that incorrectly claimed and received $50,000 for a tax period when it wasn’t entitled to ERC would need to repay only $40,000 after the program’s 20% discount – and no penalties or interest if the taxpayer pays the amount in full.

    Alternatively, if the business doesn’t apply to the VDP and the IRS identities an incorrect claim, the business would owe $50,000, and might also owe penalties and interest computed from the date the business received the ERC. For some, this was two to three years ago. Interest compounds daily and the failure-to-pay penalty accrues monthly and can build to 25%. Other penalties could apply to certain situations. So that’s $50,000 – plus possibly penalties and compounding interest, which is far more costly compared to the voluntary options available. A business in this situation may also need to amend related returns, which can add more cost.

    Some promoters told taxpayers every employer qualifies for ERC. The IRS and the tax professional community emphasize that this is not true. Eligibility depends on specific facts and circumstances. The IRS has dozens of resources to help people learn about and check ERC eligibility and businesses can also consult their trusted tax professional. Key IRS materials include:

    Businesses that can’t pay in full can apply to ERC Voluntary Disclosure Program

    Taxpayers who can’t pay the full amount of ERC, minus 20%, by the time they return their signed closing agreement can still apply to the ERC Voluntary Disclosure Program and request an Installment Agreement to pay over time. Businesses who need an installment plan need to submit Form 433-B, Collection Information Statement for Businesses with their VDP application by March 22 along with any required documents to support it. They also may need a signed Form 2750, Waiver Extending Statutory Period for Assessment of Trust Fund Recovery Penalty. See Payment options for accepted ERC-VDP applications for details.

    If a taxpayer is unable to pay the full amount of ERC, minus 20%, then an IRS collection team member will be assigned the case after the closing agreement is executed and will look to offer a resolution that fits the taxpayer’s current financial condition and ability to pay.

    Under an Installment Agreement, the business must make monthly payments. Interest and penalties that normally apply to a tax liability will apply starting from the ERC Voluntary Disclosure Program closing agreement date. This date, however, is better for businesses than an agreement outside of the ERC Voluntary Disclosure Program where the penalties and interest date back to when the business received the incorrect ERC.

    Processing updates

    On Sept. 14, 2023, amid concerns about aggressive ERC marketing, the IRS announced a moratorium on processing new claims. A specific resumption date hasn’t been determined.

    The IRS continues to process ERC claims submitted before the moratorium, but with more scrutiny and at a much slower rate than before the agency’s approach changed last year.

    More information:


  • 22 Mar 2024 1:21 PM | Anonymous

    WASHINGTON –The Internal Revenue Service today issued Notice 2024-30 that expands certain rules for determining what an energy community is for the production and investment tax credits.

    The IRS also released Appendix 1, identifying additional Metropolitan Statistical Areas (MSAs) and non-MSAs that meet the Fossil Fuel Employment threshold, and Appendix 2, identifying additional MSAs and non-MSAs that qualify as energy communities in 2023 by meeting the Fossil Fuel Employment threshold and the unemployment rate requirement for calendar year 2022.

    The Inflation Reduction Act allows for increased credit amounts or rates if certain requirements pertaining to energy communities are satisfied.

    There are three categories of energy communities:

    • Brownfield sites,
    • Certain metropolitan statistical areas and non-metropolitan statistical areas based on unemployment rates (MSA/non-MSA), and
    • Census tracts where a coal mine closed after 1999 or where a coal-fired electric generating unit was retired after 2009 (and directly adjoining census tracts).

    The increased credit amount or rate available for meeting the requirements of the energy community provisions is generally 10 percent for the production tax credit and 2 percentage points for the investment tax credit. If prevailing wage and apprenticeship requirements or certain other requirements are met, 10 percentage points.

    This notice expands the Nameplate Capacity Attribution Rule in Notice 2023-29 to include additional attribution property. It also adds two 2017 North American Industry Classification System (NAICS) industry codes to the table in section 3.03(2) of Notice 2023-29 for purposes of determining the Fossil Fuel Employment rate.

    The IRS also updated the frequently asked questions for energy communities.

    More information can be found on the Inflation Reduction Act of 2022 page on IRS.gov.


  • 22 Mar 2024 1:20 PM | Anonymous

    Notice 2024-30 modifies Notice 2023-29 by expanding the Nameplate Capacity Attribution Rule under section 4.02(1)(b) to include additional attribution property and by adding two 2017 North American Industry Classification System (NAICS) industry codes to the table in section 3.03(2) for purposes of determining the Fossil Fuel Employment rate.

    Notice 2024-30 will be in IRB: 2024-15, dated April 8, 2024.


  • 21 Mar 2024 1:27 PM | Anonymous

    WASHINGTON — As the end of tax season draws near, the Internal Revenue Service reminds taxpayers there’s an easy way to get a tax filing extension through the Free File program.

    A tax filing extension guarantees the taxpayer six additional months to file – with an extended deadline of Oct. 15, 2024. The IRS Free File program is one of the easiest ways to get an extension.

    Although an extension grants extra time to file, it does not extend the obligation to pay taxes due on April 15, 2024. To avoid penalties and late fees, taxpayers who owe should pay either their full tax bill or at least what they can afford to pay by the April 15 deadline. Taxpayers in Maine and Massachusetts have until April 17 to file and pay taxes due this year. This is because these states observe the Patriots’ Day holiday on April 15 this year and April 16 is the Emancipation Day holiday in the District of Columbia.

    Free File makes filing an extension easier
    An easy way to file an extension is through IRS Free File on IRS.gov. All individual filers can use the program software to request an extension on Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, regardless of income. Taxpayers must estimate their tax liability and file by the deadline to receive the extension.

    Free File also is one of the options available to help taxpayers file their taxes. Now in its 22nd filing season, taxpayers across the nation can access free software products provided by IRS Free File trusted partners by visiting IRS.gov. Through this public-private partnership, tax preparation and filing software providers make their online products available to eligible taxpayers. Eight private-sector Free File partners provide online guided tax software products this year to any taxpayer with an Adjusted Gross Income (AGI) of $79,000 or less in 2023. Free access to online products is only available by starting from IRS Free File.

    Make a payment, get an extension
    Other quick and efficient ways to get an extension are through the Electronic Federal Tax Payment System (EFTPS), paying with a credit, debit card or digital wallet, and IRS Direct Pay. The IRS will automatically grant an extension when a taxpayer makes an electronic payment and indicates it’s for an extension. In that case, there is no need for that taxpayer to file Form 4868.

    Extensions are automatic for some taxpayers
    Some taxpayers will automatically get extra time to file their tax return, even if they do not request an extension:

    • Members of the military on duty outside the United States and Puerto Rico receive an automatic two-month extension to file. This year they have until June 17 to file. However, tax payments are still due April 15 or interest will be charged. Details are available in Publication 3, Armed Forces’ Tax Guide.
    • Those serving in combat zones have up to 180 days after they leave the combat zone to file returns and pay any taxes due.
    • U.S. citizens and resident aliens who live and work outside of the United States and Puerto Rico get an automatic two-month extension to file their tax returns. This year they have until June 17 to file. However, tax payments are still due April 15 or interest will be charged.
    • When the U.S. president declares a disaster in an area, the IRS can postpone certain taxpayer deadlines for residents and businesses in the affected area. Taxpayers in certain disaster areas are not required to submit an extension electronically or on paper. Information on the most recent tax relief for disaster situations is available on the IRS website.

    Keep in mind
    Taxpayers should be aware that payments are still due by the original April 15 deadline, unless in Maine or Massachusetts, regardless of whether they request an extension of time to file a tax return. Taxpayers should file an extension even if they cannot pay the full amount owed. By filing either a return on time or requesting an extension by the April 15 filing deadline, taxpayers can avoid the late-filing penalty.

    Taxpayers reduce the overall amount of tax subject to interest and penalty charges by paying as much as they can by the due date. The interest rate for an individual’s unpaid taxes is currently 8%, compounded daily. The late-filing penalty is generally 5% per month and the late-payment penalty is normally 0.5% per month, both of which max out at 25%.

    The IRS will work with taxpayers who cannot pay the full amount of tax they owe. Other options to pay, such as getting a loan or paying by credit card, may help resolve a tax debt. Most people can set up a payment plan on IRS.gov to pay off their balance over time.


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