Dear IVES Participants, 

The Wage and Investment (W&I) Division has been renamed Taxpayer Services (TS). As a result, the Income Verification Express Service (IVES) Participant Assistance mailbox has changed to ts.ives.participant.assistance@irs.gov.

The IVES team will monitor both mailboxes until August 1, 2024. After this date, the W&I mailbox wi.ives.participant.assistance@irs.gov will be retired and any inquires sent to the retired mailbox will not be addressed.

Moving forward, please email ts.ives.participant.assistance@irs.gov, if you have any questions regarding the IVES program.

 

Thank you,

IRS IVES Team

WASHINGTON — The U.S. Department of the Treasury and the Internal Revenue Service today issued final regulations requiring custodial brokers to report sales and exchanges of digital assets, including cryptocurrency. These reporting requirements will help taxpayers to file accurate tax returns with respect to digital asset transactions, which are already subject to tax under current law. 

These final regulations reflect consideration of more than 44,000 public comments received last fall on the proposed regulations. They require brokers to report certain sale and exchange transactions that take place beginning in calendar year 2025 and will be reported on the soon-to-be released Form 1099-DA. The regulations implement reporting requirements by the Infrastructure Investment and Jobs Act, enacted in 2021. 

“We reviewed thousands of public comments and believe this new guidance addresses those concerns while striking a balance between industry implementation challenges and closing the tax gap related to digital assets,” said IRS Commissioner Danny Werfel. “These regulations are an important part of the larger effort on high-income individual tax compliance. We need to make sure digital assets are not used to hide taxable income, and these final regulations will improve detection of noncompliance in the high-risk space of digital assets. Our research and experience demonstrate that third-party reporting improves compliance. In addition, these regulations will provide taxpayers with much needed information, which will reduce burden and simplify the process of reporting their digital asset activity.”                                                                                                                                       

“Our work to address potential non-compliance in digital currency is another reason why it is so critical to fully fund IRS operations,” Werfel added. “These new assets expand the complexity of our tax system, and the technology and personnel necessary for the IRS to keep pace with these changes is resource intensive. Ultimately, this IRS funding helps address emerging issues and creates significantly more savings than costs to the government’s bottom line.”     

The final regulations require reporting by brokers who take possession of the digital assets being sold by their customers. These brokers include operators of custodial digital asset trading platforms, certain digital asset hosted wallet providers, digital asset kiosks, and certain processors of digital asset payments (PDAPs). The majority of digital asset transactions today occur using these brokers. By focusing first on this group, the IRS intends these regulations to cover the greatest number of taxpayers while allowing the IRS and U.S. Treasury Department more time to consider the nuances of transactions involving non-custodial and decentralized brokers. 

The final regulations do not include reporting requirements for brokers that do not take possession of the digital assets being sold or exchanged. These brokers are commonly called decentralized or non-custodial brokers. The U.S. Treasury Department and the IRS intend to provide rules for these brokers in a different set of final regulations. 

In addition to the broker reporting rules, the regulations provide rules for taxpayers to determine their basis, gain, and loss from digital asset transactions. The regulations also provide backup withholding rules.

The IRS is aware of the challenges that implementing new reporting requirements can pose, which is why the agency is also providing transitional and penalty relief from reporting and backup withholding rules on certain transactions to help phase-in implementation. 

Real estate professionals are also required to report the fair market value of digital assets paid by buyers and received by sellers in real estate transactions with closing dates on or after January 1, 2026.

The final regulations provide for an optional, aggregate reporting method for certain sales of stablecoins and certain non-fungible tokens (NFTs) applicable only after sales of these stablecoins and NFTs exceed de minimis thresholds. For PDAP transactions, the regulations require reporting on a transactional basis only if the customer’s sales are above a de minimis threshold. 

Finally, basis reporting will be required by certain brokers, for transactions occurring on or after January 1, 2026. 

Additional guidance to provide transitional relief regarding digital asset transactions includes: 

Transitional relief Notice 2024-56 provides general transitional relief from reporting penalties and backup withholding for any broker who does not timely and accurately file information returns and furnish payee statements for sales and exchanges of digital assets during calendar year 2025, provided that the broker makes a good faith effort to comply with the reporting obligations. Additionally, the Notice provides more limited relief from backup withholding for certain sales of digital assets during 2026 for brokers using the IRS’s TIN-matching system in place of certified TINs. Finally, the Notice also provides backup withholding relief for exchanges of digital assets in return for specified NFTs and real property and for certain sales effected by PDAPs. 

Delay on information reporting for certain transactions until future guidance is issued Notice 2024-57 informs brokers that until the U.S. Treasury Department and the IRS issue further guidance, brokers will not have to file information returns or furnish payee statements on digital asset sales and exchanges for the following six types of transactions: 

1. Wrapping and unwrapping transactions,
2. Liquidity provider transactions,
3. Staking transactions,
4. Transactions described by digital asset market participants as lending of digital assets,
5. Transactions described by digital asset market participants as short sales of digital assets, and
6. Notional principal contract transactions. 

Transition from universal or multi-wallet approach to allocating basis in digital assets to wallet by wallet or account by account approach. Revenue Procedure 2024-28 generally permits taxpayers to rely on any reasonable allocation of units of unused basis to wallets or accounts that hold the same number of remaining digital asset units based on the taxpayers’ records of unused bases and remaining units in those wallets or accounts. 

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued final regulations that provide taxpayers and tax professionals with guidance on how to report and pay the 1 percent excise tax owed on corporate stock repurchases. 

The Inflation Reduction Act imposed a new excise tax on stock repurchases equal to 1 percent of the aggregate fair market value of stock repurchased by certain corporations during the taxable year, subject to adjustments. The stock repurchase excise tax applies to repurchases after Dec. 31, 2022. 

These final regulations require that the stock repurchase excise tax be reported on Form 720, Quarterly Federal Excise Tax Return, due for the first full calendar quarter after the end of the corporation’s taxable year, with the Form 7208, Excise Tax on Repurchase of Corporate Stock, attached. The Form 7208 is used to figure the amount of stock repurchase excise tax owed. 

Forms 720 and 7208 due for taxable years ending after Dec. 31, 2022, and on or before June 30, 2024, must be filed by the third quarter due date for Form 720, which is Oct. 31, 2024. 

If a corporation has more than one taxable year ending after Dec. 31, 2022, and on or before June 30, 2024, the corporation should file a single Form 720 with two separate Forms 7208 (one for each taxable year) attached by Oct. 31, 2024. 

The final regulations affect publicly traded domestic corporations that repurchase their stock or whose stock is acquired by certain affiliates after Dec. 31, 2022. The regulations also affect certain publicly traded foreign corporations that repurchase their stock or whose stock is acquired by certain affiliates after Dec. 31, 2022. 

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

Notice 2024-56 provides transition relief with respect to the reporting of information and backup withholding on digital assets by brokers under section 6045. 

Notice 2024-57 provides that brokers are not required to report certain identified digital asset transactions under section 6045 until further notice. 

Notices 2024-56 and 2024-57 will be published in Internal Revenue Bulletin 2024-29 on July 15, 2024. 

Revenue Procedure 2024-28, subject to certain requirements, generally permits taxpayers to rely on any reasonable allocation of units unattached basis to a wallet or account that holds the same number of remaining digital asset units based on the taxpayer’s records of such unattached basis and remaining units.  The allocation must be a reasonable allocation as defined in section 5.02 of this Revenue Procedure and must be made as of January 1, 2025.  However, the taxpayer may identify the method of allocation and may comply with the requirements set forth in section 4.02 of this Revenue Procedure at a later date to the extent permitted by section 5.02(4) or 5.02(5) of this Revenue Procedure. 

Final regulations are being published under section 6045 of the Internal Revenue Code that require brokers to file information returns, furnish payee statements, and backup withhold on certain digital asset sales and exchange transactions effected on or after January 1, 2025.  These final regulations require taxpayers to specifically identify units of digital assets disposed of for purposes of determining basis and holding period on a wallet by wallet or account by account basis. Comments received in response to the Notice of Proposed Rulemaking for the broker reporting regulations mentioned that, prior to the issuance of the NPRM, taxpayers had interpreted IRS Virtual Currency FAQs 39-41 as permitting, or at least not prohibiting, use of a universal or multi-wallet basis allocation methodology, in which a taxpayer would treat all of its units of a particular cryptocurrency held across all of the taxpayer’s wallets as a single pool for purposes of basis allocation.  The Treasury Department and the IRS have determined that guidance to taxpayers regarding how to transition from the universal basis approach to the wallet by wallet or account by account approach required by the broker reporting regulations is necessary. 

Revenue Procedure 2024-28, will be published in Internal Revenue Bulletin 2024-31 on July 27, 2024.

Inside This Issue

1. IRS Nationwide Tax Forum: Chicago and Orlando sold out; register soon for Baltimore, Dallas
2. ETAAC 2024 Annual Report includes recommendations for IRS, Congress
3. National Taxpayer Advocate issues midyear report to Congress
4. Treasury, IRS issue final rules requiring brokers report sales and exchanges of digital assets that are subject to current tax law
5. IRS reminds taxpayers that marijuana remains a schedule I controlled substance
6. IRS to send settlement offer letters in July to taxpayers who took part in Syndicated Conservation Easement transactions
7. Tax relief for disaster victims in Mississippi
8. IRS Whistleblower Office collects $338 million based on Whistleblower information
9. IRS extends office hours to assist with IRA/CHIPS pre-filing registration process
10. Upcoming webinar for tax practitioners
11. Technical Guidance

1.  IRS Nationwide Tax Forum: Chicago and Orlando sold out; register soon for Baltimore, Dallas

The IRS Nationwide Tax Forum at Chicago (July 9-11) and Orlando (July 30-Aug. 2) have sold out, but space remains available at Baltimore, Aug. 13-15, Dallas, Aug. 20-22, and San Diego, Sept. 10-12.

The IRS encourages tax professionals to sign up at the remaining locations today.

The Nationwide Tax Forum provides continuing education credit for enrolled agents, certified public accountants, Annual Filing Season Program participants and California Tax Education Council participants. Attendees can earn up to 19 credits this year. The tax forum seminar schedule and seminar descriptions outline the curriculum.

This year attendees can once again bring their toughest unresolved IRS case to the Case Resolution Room. Taxpayer Advocate Service employees and IRS representatives with specialized expertise will be available to meet by appointment with tax professionals. For complete details, visit the Case Resolution Information Page.

For information on special events and to register, visit IRS Nationwide Tax Forum.

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2.  ETAAC 2024 Annual Report includes recommendations for IRS, Congress

The IRS Electronic Tax Administration Advisory Committee (ETAAC) this week released its 2024 annual report with a total of 12 recommendations – nine for IRS and three for Congress.

“ETAAC members serve as trusted advisors to the IRS on key issues of interest to tax administration and taxpayers,” said IRS Commissioner Danny Werfel. “The committee has helped on a variety of fronts to help improve tax administration. The IRS leadership team will carefully review the recommendations in this report.”

Members of the ETAAC represent state and local government, the software industry, tax and payroll professionals and individual taxpayers. Members work closely with the IRS Security Summit.

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3.  National Taxpayer Advocate issues midyear report to Congress

National Taxpayer Advocate Erin Collins this week released her midyear report to Congress.

“For most taxpayers, the filing season is the only time they interact with the IRS,” Collins wrote. “After several years of abysmal taxpayer service during the COVID-19 pandemic, the IRS has now delivered two filing seasons that demonstrate the agency has restored service to pre-pandemic levels and has improved in most, but not all, areas of service. This is excellent news for most taxpayers.”
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4.  Treasury, IRS issue final rules requiring brokers report sales and exchanges of digital assets that are subject to current tax law

The Department of Treasury and the IRS issued final regulations requiring custodial brokers to report sales and exchanges of digital assets, including cryptocurrency. These reporting requirements will help taxpayers to file accurate tax returns with respect to digital asset transactions, which are already subject to tax under current law.

These final regulations reflect consideration of more than 44,000 public comments received last fall on the proposed regulations. They require brokers to report certain sale and exchange transactions that take place beginning in calendar year 2025 and will be reported on the soon-to-be released Form 1099-DA. The regulations implement reporting requirements by the Infrastructure Investment and Jobs Act, enacted in 2021. 

"We reviewed thousands of public comments and believe this new guidance addresses those concerns while striking a balance between industry implementation challenges and closing the tax gap related to digital assets," said IRS Commissioner Werfel. 

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5.  IRS reminds taxpayers that marijuana remains a schedule I controlled substance

Until a final federal rule is published, the Internal Revenue Service today reminded taxpayers that marijuana remains a Schedule I controlled substance and is subject to the limitations of Internal Revenue Code. The law with respect to the schedule or classification of marijuana has not changed. Taxpayers seeking a refund of taxes paid related to Internal Revenue Code Section 280E by filing amended returns are not entitled to a refund or payment.

Although the law has not changed, some taxpayers are filing amended returns. The grounds for filing such claims vary, but these claims are not valid. The IRS is taking steps to address these claims.

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6.  IRS to send settlement offer letters in July to taxpayers who took part in Syndicated Conservation Easement transactions

The IRS announced a time-limited settlement offer for certain taxpayers who participated in Syndicated Conservation Easements (SCE) and substantially similar transactions that are under audit in the IRS’s Large Business & International and Small Business and Self-Employed divisions. Eligible taxpayers will be notified by letter with the applicable terms and timelines to respond. Taxpayers who don't receive a letter are not entitled for this resolution, and the IRS will continue enforcement-related actions. Taxpayers with cases pending in the United States Tax Court are not eligible for this settlement offer.

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7.  Tax relief for disaster victims in Mississippi

The IRS is providing tax relief for individuals and businesses in Mississippi that were impacted by severe storms, straight-line winds, tornadoes and flooding that began on April 8. Taxpayers now have until Nov. 1, to file various federal individual and business tax returns and make tax payments. The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). Currently, individuals and households that reside or have a business in Hancock, Hinds, Humphreys, Madison, Neshoba and Scott counties qualify for tax relief. The same relief will be available to any other counties added later to the disaster area.

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8.  IRS Whistleblower Office collects $338 million based on Whistleblower information

The Whistleblower Office Report to Congress was recently released, including information showing a 10-year history of awards, the whistleblower claim processing flowchart, average claim processing time by major process, an analysis of length of time for various claim processes and a 5-year analysis of claims built and submissions received. In addition, the report included more information on administrative priorities for the Whistleblower Program. In fiscal year 2023, the Whistleblower Office made 121 awards to whistleblowers totaling more than $88 million (before sequestration). This included 21 awards under IRC section 7623(b). Proceeds collected were $338 million.

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9.  IRS extends office hours to assist with IRA/CHIPS pre-filing registration process

The IRS offers additional office hours to help entities with the pre-filing registration process on the new IRA/CHIPS Pre-filing Registration Tool. Pre-filing registration is a required step for applicable entities and eligible taxpayers to take advantage of elective payment or transfer of credits available in the Inflation Reduction Act and CHIPS Act. Representatives from the IRS will be available to answer your pre-filing registration questions over Microsoft Teams. Registration is required and can be completed by clicking on the links:

• July 2, 2024 from 12:30-2 p.m. ET
• July 17, 2024 from 1-2:30 p.m. ET
• July 31, 2024 from 1-2:30 p.m. ET
• August 14, 2024 from 1-2:30 p.m. ET
• September 4, 2024 from 1-2:30 p.m. ET
• September 18, 2024 from 1-2:30 p.m. ET
• October 2, 2024 from 1-2:30 p.m. ET

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10.  Upcoming webinar for tax practitioners

The IRS offers the upcoming live webinar to the tax practitioner community:

Understanding Form 2290 - Heavy Highway Vehicle Use Tax on July 18, at 2 p.m. ET. Earn up to 2 CE credits (Federal tax). Certificates of completion are being offered.

For more information or to register, visit Webinars for tax practitioners webpage.

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11.  Technical Guidance

WASHINGTON — The Internal Revenue Service announced today tax relief for individuals and businesses in Mississippi that were affected by severe storms, straight-line winds, tornadoes and flooding that began on April 8, 2024. 

These taxpayers now have until Nov. 1, 2024, to file various federal individual and business tax returns and make tax payments. 

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). This means that individuals and households that reside or have a business in Hancock, Hinds, Humphreys, Madison, Neshoba and Scott counties qualify for tax relief. 

The same relief will be available to any other counties added later to the disaster area. 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 April 8, 2024, through Nov. 1, 2024 (postponement period). As a result, affected individuals and businesses will have until Nov. 1, 2024, to file returns and pay any taxes that were originally due during this period. 

This means, for example, that the Nov. 1, 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 April 15, June 17 and Sept. 16, 2024.
• Quarterly payroll and excise tax returns normally due on April 30, July 31 and Oct. 31, 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, penalties for failing to make payroll and excise tax deposits due on or after April  8, 2024, and before April 23, 2024, will be abated, as long as the deposits were made by April 23, 2024. 

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 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. 

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. Disaster area tax preparers with clients located outside the disaster area can choose to use the Bulk Requests from Practitioners for Disaster Relief option, described on IRS.gov. 

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 2024 return normally filed next year), or the return for the prior year (the 2023 return filed this year). 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, 2025. Be sure to write the FEMA declaration number – 4790-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 IRS may provide additional disaster relief in the future. 

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

Reminder about tax return preparation options 

• Eligible individuals or families can get free help preparing their tax return at Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) sites. To find the closest free tax help site, use the VITA Locator Tool or call 800-906-9887. Note that normally, VITA sites cannot help claim disaster losses.
• To find an AARP Tax-Aide site, use the AARP Site Locator Tool or call 888-227-7669.
• Any individual or family whose adjusted gross income (AGI) was $79,000 or less in 2023 can use IRS Free File’s Guided Tax Software at no cost. There are products in English and Spanish.
• 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.

WASHINGTON — The Internal Revenue Service Electronic Tax Administration Advisory Committee (ETAAC) released its 2024 annual report today with a total of 12 recommendations – three to Congress and nine to the IRS. 

Among the recommendations to the IRS, the committee recommended enabling application programming interface access to taxpayer information, removing barriers to electronic filing by developing an alternative to the current self-select PIN as well as promoting greater information sharing between the IRS, states and industry partners. 

“ETAAC members serve as trusted advisors to the IRS on key issues of interest to tax administration and taxpayers,” said IRS Commissioner Danny Werfel. “The committee has helped on a variety of fronts to help improve tax administration. The IRS leadership team will carefully review the recommendations in this report.” 

The recommendations to Congress included a request for authority for IRS to regulate non-credentialed tax return preparers, support for effective tax administration through consistent, reliable funding of the IRS and greater funding for the National Taxpayer Advocate. 

The report was released today at a public meeting in Washington, D.C. 

At the session today releasing the report, IRS Deputy Commissioner Douglas O’Donnell thanked 11 members of the committee whose terms ended today: 

• Jared Ballew, vice president of government relations, Taxwell.
• Peter Barca, former secretary, Wisconsin Department of Revenue.
• Mark Godfrey, manager, digital tax administration and government services, Ernst & Young.
• Robert Grennes, commissioner, Indiana Department of Revenue.
• Jihan Jude, attorney, Trivergent Trust Company.
• Jonathan Lunardini, section manager, California Franchise Tax Board.
• James Paille, chief compliance officer, myPay Solutions, IRIS Worldwide.
• Hallie Parchman, senior manager of product management, Amazon.
• Andrew Phillips, director, H&R Block Tax Institute.
• Terri Steenblock, compliance director, Federation of Tax Administrators.
• Timur Tuluy, ETAAC Chair and founder, FileYourTaxes.com. 

About ETAAC

ETAAC members represent various segments of the tax community, including individual and business taxpayers, tax professionals and preparers, tax software developers, payroll service providers, the financial industry and state and local governments. 

The ETAAC operates under the rules of the Federal Advisory Committee Act. It works closely with the Security Summit, a joint effort of the IRS, state tax administrators and the nation's tax industry, established in 2015 to fight tax-related identity theft and cybercrime. 

For more information, visit: www.irs.gov/etaac.

WASHINGTON — The Internal Revenue Service Electronic Tax Administration Advisory Committee (ETAAC) released its 2024 annual report today with a total of 12 recommendations – three to Congress and nine to the IRS. 

Among the recommendations to the IRS, the committee recommended enabling application programming interface access to taxpayer information, removing barriers to electronic filing by developing an alternative to the current self-select PIN as well as promoting greater information sharing between the IRS, states and industry partners. 

“ETAAC members serve as trusted advisors to the IRS on key issues of interest to tax administration and taxpayers,” said IRS Commissioner Danny Werfel. “The committee has helped on a variety of fronts to help improve tax administration. The IRS leadership team will carefully review the recommendations in this report.” 

The recommendations to Congress included a request for authority for IRS to regulate non-credentialed tax return preparers, support for effective tax administration through consistent, reliable funding of the IRS and greater funding for the National Taxpayer Advocate. 

The report was released today at a public meeting in Washington, D.C. 

At the session today releasing the report, IRS Deputy Commissioner Douglas O’Donnell thanked 11 members of the committee whose terms ended today: 

• Jared Ballew, vice president of government relations, Taxwell.
• Peter Barca, former secretary, Wisconsin Department of Revenue.
• Mark Godfrey, manager, digital tax administration and government services, Ernst & Young.
• Robert Grennes, commissioner, Indiana Department of Revenue.
• Jihan Jude, attorney, Trivergent Trust Company.
• Jonathan Lunardini, section manager, California Franchise Tax Board.
• James Paille, chief compliance officer, myPay Solutions, IRIS Worldwide.
• Hallie Parchman, senior manager of product management, Amazon.
• Andrew Phillips, director, H&R Block Tax Institute.
• Terri Steenblock, compliance director, Federation of Tax Administrators.
• Timur Tuluy, ETAAC Chair and founder, FileYourTaxes.com. 

About ETAAC

ETAAC members represent various segments of the tax community, including individual and business taxpayers, tax professionals and preparers, tax software developers, payroll service providers, the financial industry and state and local governments. 

The ETAAC operates under the rules of the Federal Advisory Committee Act. It works closely with the Security Summit, a joint effort of the IRS, state tax administrators and the nation's tax industry, established in 2015 to fight tax-related identity theft and cybercrime. 

For more information, visit: www.irs.gov/etaac.

WASHINGTON — The Internal Revenue Service sincerely apologizes to Mr. Kenneth Griffin and the thousands of other Americans whose personal information was leaked to the press. 

Charles Littlejohn was a government contractor providing services to the IRS at the time he made the illegal disclosures. He violated the terms of his contract and betrayed the trust that the American people place in the IRS to safeguard their sensitive information. 

The IRS takes its responsibilities seriously and acknowledges that it failed to prevent Mr. Littlejohn’s criminal conduct and unlawful disclosure of Mr. Griffin’s confidential data. Accordingly, the IRS assures Mr. Griffin and the other victims of Mr. Littlejohn’s actions that it has made substantial investments in its data security to strengthen its safeguarding of taxpayer information. 

These investments address potential weaknesses in the IRS’s systems as identified by the Treasury Inspector General for Tax Administration (TIGTA), which provides independent oversight of the IRS. 

Additionally, the IRS continues, and will continue on a going-forward basis after this resolution, to work with TIGTA, the Government Accountability Office, other government agencies and independent third parties to assess the IRS’s systems for potential vulnerabilities. 

The IRS routinely reports to the Senate Committee on Finance and the House Committee on Ways and Means, which exercise Congressional oversight of the IRS, on its efforts to strengthen any security deficiencies identified by the IRS, TIGTA, GAO and third parties. 

The agency believes that its actions and the resolution of this case will result in a stronger and more trustworthy process for safeguarding the personal information of all taxpayers.

WASHINGTON — The Internal Revenue Service today announced the mailing of a time-limited settlement offer for certain taxpayers who participated in Syndicated Conservation Easements (SCE) and substantially similar transactions that are under audit in the IRS’s Large Business & International and Small Business and Self-Employed divisions. 

The IRS will notify eligible taxpayers by letter with the applicable terms and timelines to respond. The settlement offer requires substantial concession of the income tax benefits and the application of penalties. Taxpayers under examination who receive a letter but opt not to participate, will continue to face IRS enforcement actions, including potential full disallowance of charitable contributions associated with the SCE and the imposition of all applicable penalties.  

Taxpayers who don't receive a letter are not eligible for this resolution, and the IRS will continue enforcement-related actions. Taxpayers with cases pending in the United States Tax Court are not eligible for this settlement offer. 

Combatting abusive SCE transactions 

The IRS has consistently disallowed the tax benefits claimed by taxpayers in abusive SCE transactions, which have appeared on the IRS’s Dirty Dozen list of tax scams multiple times. 

The U.S. Tax Court has also issued many opinions, including the following: 

• Plateau Holdings, LLC v. Commissioner, T.C. Memo. 2020-93,
• TOT Property Holdings, LLC v. Commissioner, T.C. Docket No. 5600-17 (unpublished bench op., Nov. 22, 2019),
• Mill Road 36 Henry, LLC v. Commissioner, T.C. Memo. 2023-129,
• Oconee Landing Property, LLC v. Commissioner, T.C. Memo. 2024-25,
• Savannah Shoals, LLC v. Commissioner, T.C. Memo. 2024-35, and
• Buckelew Farm, LLC v. Commissioner, T.C. Memo. 2024-52) in which the true value of the easement was found to be a small fraction of the claimed value. 

In addition, there have been at least nine guilty pleas and two promoters found guilty and sentenced to 25 and 23 years in prison. 

In December 2022, Congress passed the SECURE 2.0 Act, which applies to contributions of property made after Dec. 29, 2022, to the help curb SCE abuse by limiting deductions for certain charitable contributions under Internal Revenue Code section 170. 

After careful consideration and input from external stakeholders, the IRS is taking this additional step of offering time-limited settlements in the interest of sound tax administration. The IRS encourages taxpayers and their advisors to carefully review the settlement offer. The settlement offer is the most effective and efficient way for taxpayers to bring finality to the transactions and achieve tax certainty.