Revenue Procedure 2024-31 provides the procedures and requirements that a manufacturer of specified property must follow to be treated as a “qualified manufacturer” (QM) under § 25C(h) of the Internal Revenue Code.  Section 25C(h)(1) provides that no credit will be allowed under § 25C(a) with respect to any item of specified property placed in service after December 31, 2024, unless such item is produced by a QM and the taxpayer includes the qualified product identification number (PIN) of such item on the taxpayer’s tax return for the taxable year.  This revenue procedure provides that a manufacturer that wishes to become a QM must register and enter into an agreement with the Internal Revenue Service (IRS), assign a PIN unique to each item of specified property, label such items, and make periodic written reports to the IRS of the PINs so assigned. 

Revenue Procedure 2024-31 will be in IRB:  2024-46, dated 11/12/2024.

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued Revenue Procedure 2024-31 and proposed regulations to provide guidance for the energy efficient home improvement credit.  

The revenue procedure provides procedures and requirements that a manufacturer of specified property must follow to be treated as a qualified manufacturer (QM). To become a QM, a manufacturer must: 

• Register and enter into an agreement with the IRS.
• Assign a qualified product identification number (PIN) unique to each item of specified property.
• Label such items with PINs.
• Make periodic reports to the IRS of PINs assigned.  

Soon manufacturers will be able to use IRS Energy Credits Online Portal (IRS ECO) to register with the IRS. IRS ECO is a free electronic service that is secure and requires no special software, making it accessible to large and small businesses alike. 

Taxpayers can use the IRS ECO platform to register and provide information to the IRS for filing purposes. In addition, IRS ECO incorporates validation checks and other risk-mitigation measures and allows for monitoring in real time of key metrics to include identification of customer-service enhancements and fraudulent activity. 

For property placed in service beginning in 2023, a taxpayer may take a credit equal to 30% of the total amount paid for certain energy efficient products or for a home energy audit.  

The credit is limited to certain amounts, per taxpayer and per tax year. A taxpayer may claim a total credit of up to $3,200, with a general total limit of $1,200, and a separate total limit of $2,000 for electric or natural gas heat pump water heaters, electric or natural gas heat pumps, and biomass stoves or boilers that meet certain requirements.  

The $1,200 general limit also includes additional limitations specific to certain types of property that meet the requirements: 

• $600 for any item of qualified energy property.
• $600 in total for exterior windows and skylights.
• $250 for an exterior door.
• $600 in total for exterior doors. 
• Home energy audits are limited to $150. 

Beginning in 2025, for each item of specified property placed in service, no credit will be allowed unless the item was produced by a QM and the taxpayer includes the PIN for the item on the taxpayer’s tax return.  

Resources

• Publication 5967, Energy Efficient Home Improvement Credit (25C) 
• Publication 5976, How to claim an Energy Efficient Home Improvement tax credit RESIDENTIAL ENERGY PROPERTY 
• Publication 5978, How to claim an Energy Efficient Home Improvement tax credit HOME ENERGY AUDIT 
• Publication 5979, How to claim an Energy Efficient Home Improvement tax credit EXTERIOR DOORS, WINDOWS, SKYLIGHTS AND INSULATION MATERIALS 

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today granted a filing exception for tax-exempt organizations; they do not have to file Form 4626, Alternative Minimum Tax – Corporations, for tax year 2023.

The Inflation Reduction Act of 2022 created an alternative minimum tax for corporations – a 15% minimum tax on the adjusted financial statement income (AFSI) of corporations that have average annual AFSI greater than $1 billion, beginning in 2023. For tax-exempt organizations, the corporate alternative minimum tax applies only to the AFSI of any unrelated trades or businesses.  

Tax-exempt organizations should maintain Form 4626 in their books and records for purposes of documenting whether they are an applicable corporation for purposes of the alternative minimum tax and, if so, for determining any corporate alternative minimum tax liability. In addition, any tax-exempt organization that is liable for the alternative minimum tax must pay the tax and report the amount on Part II, Line 5 of Form 990-T, Exempt Organization Business Income Tax Return.

In Notice 2023-7 and in the proposed regulations published on Sept. 13, 2024, Treasury and the IRS provided a simplified method for determining whether a corporation is an applicable corporation, but this method did not take into account the specific AFSI adjustment provided by the statute for tax-exempt organizations. Comments on the proposed regulations are due Dec. 12, 2024.

To give taxpayers and the IRS time to consider the comments on the proposed regulations, including comments relating to reporting for tax-exempt entities and on the application of the simplified method for tax-exempt entities, tax-exempt organizations are exempted from the obligation to file Form 4626 for tax year 2023.

WASHINGTON – The Department of the Treasury and the Internal Revenue Service today issued final regulations that provide guidance regarding the implementation of the Advanced Manufacturing Investment Credit, established by the CHIPS Act of 2022. 

The final regulations provide the eligibility requirements for the credit and provide clarity on the amended investment credit recapture provisions. 

This credit will incentivize the manufacturing of semiconductors and semiconductor manufacturing equipment within the United States. The credit is available to taxpayers that meet certain eligibility requirements, and there is the ability for taxpayers to make an elective payment election to be treated as making a refundable payment against the tax equal to the amount of the credit.  

A partnership or S corporation can make an elective payment election to receive a payment, instead of claiming the credit. 

The Advanced Manufacturing Investment Credit for any taxable year is generally equal to 25% of an eligible taxpayer’s qualified investment in an advanced manufacturing facility. An eligible taxpayer’s qualified investment equals its basis in any qualified property placed in service during the taxable year.  The qualified property must be integral to the operation of the advanced manufacturing facility. The credit is generally available for qualified property placed in service after Dec. 31, 2022.

WASHINGTON -- The Internal Revenue Service today announced the new pass-through field operations unit announced last fall has officially started work in its Large Business and International (LB&I) division to more efficiently conduct audits of pass-through entities.

The creation of a new unit specifically devoted to ensuring compliance of pass-throughs of every size and form -- including partnerships, S-corporations and trusts -- reflects the IRS’s broader efforts to focus more attention and resources on an area that has historically been under-scrutinized.

Previously, pass-through exams were divided between LB&I and the Small Business/Self-Employed (SB/SE) division based on the size of the entity. Going forward, revenue agents in pass-through field operations will be assembled into geographically based teams that are responsible for primary exams of pass-through entity returns. LB&I will be responsible for starting pass-through exams, regardless of entity size. SB/SE will continue to examine pass-through entities as part of a related exam of a tax return.

Consolidating the case-working expertise and removing the entity-size barrier helps the IRS achieve its goal of increased audit rates in this complex area, streamlines workflows and provides a more consistent experience for taxpayers.

"The establishment of pass-through field operations is a significant step in our goal to increase fairness in enforcement while improving service,” said IRS Commissioner Danny Werfel. "By using Inflation Reduction Act funding and enhancing our expertise in this area, we will be able to reverse our historically low audit rates for complex arrangements employed by certain high-wealth individuals and large entities, while at the same time improving the taxpayer experience through a more tailored exam approach.”

A pass-through is a business entity in which the profits “pass through” to the owner(s) of that business and are taxed at the individual tax rate. They are frequently used by higher-income groups and can be complex tax arrangements.

Over the last year, LB&I has made strides building the foundation of this specialized group with internal and external hiring efforts to ensure it’s well-staffed with a blend of expertise from current IRS employees and new hires. In addition to staffing, the dedicated stand-up team also focused on collaboration between LB&I and SB/SE to review and enhance support frameworks, training programs and other internal processes.

"This combination of LB&I and SB/SE’s diverse expertise is an important milestone,” said Holly Paz, LB&I Commissioner. "This group will undoubtedly have a lasting impact as we continue building a modern pass-through compliance structure that is passionate about taxpayer service and fair enforcement.”

The IRS has also embarked on other important changes to help dedicate resources and support to this complex compliance space.

• The IRS launched examinations of 76 of the largest partnerships with average assets over $10 billion that includes hedge funds, real estate investment partnerships, publicly traded partnerships, large law firms and many other industries. These audits can take years depending on the size and complexity of the partnerships.
• IRS Chief Counsel announced the creation of a new associate office that will focus exclusively on partnerships, S-corporations, trusts and estates. This office will be drawn from the current Passthroughs and Special Industries (PSI) Office.

The stand-up of pass-through field operations meets one of the priorities of the Strategic Operating Plan under Objective Three: Fairness in Enforcement. It is also a significant part of the overall expanded enforcement efforts that focus on high-income and high-wealth individuals, partnerships and large corporations that have seen sharp drops in audit rates during the past decade.

WASHINGTON — The Internal Revenue Service today announced that Preparer Tax Identification Number (PTIN) renewals for 2025 are now being processed. 

The nation’s more than 810,000 tax return preparers must renew their PTIN for the coming year. All current PTINs will expire on Dec. 31, 2024. 

Anyone who prepares or assists in preparing federal tax returns for compensation must have a valid PTIN before preparing returns. All Enrolled Agents must also have a valid PTIN. The PTIN should be included as the identifying number on any return or claim for refund filed with the IRS. Failure to have and use a valid PTIN may result in penalties. 

The fee to renew or obtain a PTIN is $19.75 for 2025. The PTIN fee is non-refundable. 

Tax return preparers with a 2024 PTIN should use the online renewal process, which takes about 15 minutes to complete. A paper option, Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal, along with instructions, is also available for PTIN applications and renewals. The paper form can take up to six weeks to process. 

To renew a PTIN online: 

• Access PTIN account – If users already have an online PTIN account, they can log in there.
• Renew PTIN – Complete the online renewal application by verifying personal information and answering a few questions. View a checklist of what’s needed before getting started.
• Pay the fee – Pay the $19.75 renewal fee via credit/debit/ATM card or eCheck. Upon completion of the application and payment, applicants will receive confirmation that a PTIN has been renewed. 

The online system not only allows PTIN renewal, but tax return preparers can: 

• Check their continuing education.
• View a summary of the number of filed returns on which their PTIN has appeared in the current year.
• Receive communications through a secure mailbox from the IRS Return Preparer Office.
• Track their progress for participation in the IRS Annual Filing Season Program. 

First time PTIN applicants can also apply for a PTIN online. 

To apply for a PTIN online: 

• Create an account – First, create an account by providing a name and email address. Tax professionals should use an email address to which they always have access. The system will then email a temporary password, which can be updated after going back to enter the information in the PTIN application.
• Apply for a PTIN – Complete the online application by providing personal information, information about the previous year’s tax return, professional credentials and more. View a checklist of what’s need before getting started.
• Pay the fee – Pay the $19.75 application fee via credit/debit/ATM card or eCheck.
• Get a PTIN – After completion of the online application and payment, a PTIN is provided online. 

Opportunity for non-credentialed tax return preparers 

The Annual Filing Season Program is a voluntary IRS program geared toward tax return preparers who are not Enrolled Agents, attorneys or certified professional accountants. It’s intended to encourage those non-credentialed tax return preparers to take continuing education courses to increase their knowledge and improve their filing season readiness. 

Those who choose to participate must renew their PTIN, complete up to 18 hours of continuing education from IRS-approved CE providers by Dec. 31, 2024, and consent to adhere to specific obligations in Treasury Department Circular 230, Regulations Governing Practice before the Internal Revenue Service. 

After completing the steps, the tax return preparer receives an Annual Filing Season Program Record of Completion from the IRS. Program participants are then included in a public directory of tax return preparers with credentials and select qualifications on the IRS website. 

The searchable IRS directory helps taxpayers find tax return preparers in their area who have completed the program or hold professional credentials recognized by the IRS. 

Watch Tax Pros: Here’s how to participate in the IRS Annual Filing Season Program for more details about the program.  

Enrolled Agent credential 

The Enrolled Agent credential is a certification issued by the IRS to tax professionals who demonstrate special competence in federal tax planning, individual and business tax return preparation and representation matters. Enrolled Agents have unlimited rights to practice before the IRS, allowing them to represent any client before the IRS on any tax matter. 

As non-credentialed tax return preparers think about next steps in their professional career, the IRS encourages them to consider becoming an Enrolled Agent. 

All Enrolled Agents, regardless of whether they prepare tax returns, must renew their PTIN annually to maintain their active status.

Notice 2024-76provides guidance on the corporate bond monthly yield curve for September 2024, the corresponding spot segment rates used under § 417(e)(3), and the 24-month average segment rates under § 430(h)(2) of the Internal Revenue Code. In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I).

Notice 2024-76 will be published in Internal Revenue Bulletin 2024-45, on November 4, 2024.

Inside This Issue

1. PTIN renewal season now underway
2. IRS launches 2024 IRS Nationwide Tax Forum Online with 18 new seminars
3. Tax Professional Awareness Week begins Oct. 21
4. IRS warns taxpayers of hurricane charity scams; shares tools to help verify legitimate groups
5. Third-party payers’ consolidated claims for ERC must include statement
6. IRS offers free webinar on Nov. 18 to assist large businesses with Compliance Assurance Process
7. Upcoming webinars for tax practitioners
8. Technical Guidance

1.  PTIN renewal season now underway

PTIN (Preparer Tax Identification Number) renewal season is now underway for all tax professionals. The fee to obtain or renew a PTIN for 2025 is $19.75. All current PTIN holders will receive formal notification from the IRS Return Preparer Office in the coming weeks.

All PTINs expire on Dec. 31, and must be renewed annually. Tax professionals and enrolled agents must have a valid PTIN to prepare any federal tax returns for compensation.

More information about PTINs can be found at www.irs.gov/ptin.

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2.  IRS launches 2024 IRS Nationwide Tax Forum Online with 18 new seminars

The IRS this week launched the 2024 Nationwide Tax Forum Online, giving tax professionals access to 18 seminars recorded at the 2024 IRS Nationwide Tax Forum. The Nationwide Tax Forum Online features information on tax legislation, IRS procedures, and key topics for the upcoming tax season.

Each seminar includes a 50-minute interactive video presentation with synchronized slides, downloadable materials and transcripts. Courses can be taken for continuing education (CE) credit for a fee of $29, or they can be reviewed for free (no CE credit).

The IRS Nationwide Tax Forum Online is a continuing education provider certified by the National Association of State Boards of Accountancy (NASBA) and the IRS Return Preparer Office. Visit the Nationwide Tax Forum Online website to learn more.

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3.  Tax Professional Awareness Week begins Oct. 21

Tax Professional Awareness Week begins Oct. 21, featuring educational initiatives to equip tax professionals with tools and information they need before filing season to help them prepare accurate returns.

Paid tax professionals play an important role in assisting taxpayers with their filing obligations. More than half of taxpayers who claim refundable credits like the Earned Income Tax Credit or Child Tax Credit rely on paid tax professionals to accurately file their return.

For more information, please visit the Tax Professional Awareness Week page on IRS.gov.

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4.  IRS warns taxpayers of hurricane charity scams; shares tools to help verify legitimate groups

The IRS this week warned taxpayers of scammers who use fictious charities to obtain sensitive personal and financial data from unwary donors in the wake of Hurricanes Milton and Helene. Fake charities are frequently established by fraudsters to exploit peoples’ generosity during natural disasters.

Those who wish to donate should first check the Tax Exempt Organization Search (TEOS) tool on IRS.gov to locate or confirm eligible, reputable charities. With this tool, people can:

• Verify the legitimacy of a charity
• Check its eligibility to receive tax-deductible charitable contributions, and
• Search for information about an organization's tax-exempt status and filings

The IRS also urges individuals encountering a fake or suspicious charity to see the FBI’s resources on Charity and Disaster Fraud.

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5.  Third-party payers’ consolidated claims for ERC must include statement

The IRS recently announced a consolidated process for third-party payers to resolve clients’ incorrect claims for the Employee Retention Credit. Any consolidated claim the IRS receives after Oct. 17, 2024, must have the full statement provided at Preparing your consolidated claim. The statement verifies that the consolidated claim:

• Includes only business clients that were part of a previous ERC claim; and
• Doesn’t increase the amount of ERC claimed by clients.

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6.  IRS offers free webinar on Nov. 18 to assist large businesses with Compliance Assurance Process

The IRS announced a free webinar to help large businesses taxpayers better understand the Compliance Assurance Process (CAP). The webinar will take place Nov. 18, from 1 p.m. to 2:30 p.m. ET. Tax professionals can register on the CAP program webinar registration page. Space is limited to the first 1,000 registrants.

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7.  Upcoming webinars for tax practitioners

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

• Energy Efficient Home Improvements Credit & Residential Clean Energy Property Credit: How the Inflation Reduction Act revised these credits on Nov. 14, at 2 p.m. ET. Earn up to one continuing education credit (Federal Tax). Certificates of completion are being offered. Click here to register.
• Beneficial Ownership Information Presented by Financial Crimes Enforcement Network (FinCEN) on Nov. 19, at 2 p.m. ET. No continuing education credit is being offered. Click here to register. 

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8.  Technical Guidance

Notice 2024-71 provides a safe harbor under section 213 of the Internal Revenue Code.

Notice 2024-75 expands the list of preventive care benefits permitted to be provided by a high deductible health plan (HDHP) under section 223(c)(2)(C) of the Internal Revenue Code without a deductible, or with a deductible below the applicable minimum deductible for the HDHP.

Notice 2024-77 provides guidance in the form of questions and answers on sections 414(aa) and 402(c)(12) of the Internal Revenue Code (Code) as added by section 301(b) of Division T of the SECURE 2.0 Act of 2022.

Revenue Ruling 2024-24 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, and the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by Section 1274.

WASHINGTON – The Treasury Department and Internal Revenue Service today issued Notice 2024-74 for the Sustainable Aviation Fuel (SAF) credit created by the Inflation Reduction Act. 

The SAF credit ranges from $1.25 to $1.75 for each gallon of sustainable aviation fuel in a qualified mixture. To qualify for the credit, the sustainable aviation fuel must have a minimum reduction of 50% in lifecycle greenhouse gas emissions. 

The Treasury Department and IRS have issued several notices regarding the SAF credit, including Notice 2024-37, which allows a SAF producer to use the 40BSAF-GREET 2024 model, to calculate the greenhouse gas emissions reduction percentage for purposes of the SAF credits.  

The DOE released an updated version of the 40BSAF-GREET 2024 model and accompanying user manual in October 2024 that addresses a calculation issue related to catalyst inputs for the Alcohol to Jet (ATJ) SAF pathways.  

Notice 2024-74 provides that a taxpayer who uses a 40BSAF-GREET 2024 safe harbor in Notice 2024-37 to calculate its emissions reduction percentage with respect to claims that relate to the sale or use of a SAF qualified mixture after the effective date, must use the October 2024 version of the 40BSAF-GREET 2024 model. 

Notice 2024-74 provides additional guidance to taxpayers using the safe harbors in Notice 2024-37 with respect to the sustainable aviation fuel (SAF) credit. Notice 2024-74 provides that a taxpayer using a 40BSAF-GREET 2024 safe harbor to calculate its emissions reduction percentage with respect to claims that relate to the sale or use of a SAF qualified mixture after the effective date of the notice must use the newly released October 2024 version of the 40BSAF-GREET 2024 model. 

Notice 2024-74 will be in IRB:  2024-45, dated 11/04/2024.