IRS Tax News

  • 07 Oct 2024 10:48 AM | Anonymous

    Inside This Issue

    1. Tax relief available to disaster victims in parts of Illinois and those impacted by Hurricane Helene
    2. Dyed diesel penalty relief granted because of Hurricane Helene 
    3. IRS deploys 500 employees to help FEMA with Hurricane Helene efforts
    4. Volunteers needed to provide free tax services
    5. IRS invites public feedback on draft Form 7217
    6. 2024 IRS Nationwide Tax Forum Online to launch Oct. 14
    7. IRS launches “Corporate Group Mailbox” pilot program
    8. News from the Justice Department’s Tax Division
    9. Technical Guidance

    1.  Tax relief available to disaster victims in parts of Illinois and those impacted by Hurricane Helene

    The IRS is providing tax relief to the following individuals and businesses who have been affected by severe storms and wildfires:

    • Disaster-area taxpayers in parts of Illinois affected by severe storms and flooding that began on July 13 have until Feb. 3, 2025, to file various individual and business tax returns and make tax payments. Currently, this includes Cook, Fulton, Henry, St. Clair, Washington, Will and Winnebago counties. The same relief will be available to other Illinois localities added later to the disaster area.
    • Taxpayers in Washington state affected by wildfires that began on June 22 now have until Feb. 3, 2025, to file various federal individual and business tax returns and make tax payments. Currently, this includes the Confederated Tribes and Bands of the Yakama Nation. Individuals and households that reside or have a business in these localities qualify for tax relief. The same relief will be available to any other localities added later to the disaster area.
    • IRS declared tax relief in seven states impacted by Hurricane Helene. Individuals and businesses in all of Alabama, Georgia, North and South Carolina, as well as portions of Florida, Tennessee and Virginia have until May 1, 2025, to file various federal individual and business tax returns and make required payments. 

    The IRS offers relief to any area designated by the Federal Emergency Management Agency (FEMA), and the same relief will be available to other states and localities that receive FEMA disaster declarations. The current list of eligible localities is available on the Tax relief in disaster situations page on IRS.gov.

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    2.  Dyed diesel penalty relief granted because of Hurricane Helene 

    In response to Hurricane Helene-related disruptions, the IRS will not impose a penalty when dyed diesel fuel with a sulfur content that does not exceed 15 parts-per-million is sold for use or used on the highway throughout Alabama, Georgia, North Carolina and South Carolina. Selected counties in Florida, Tennessee and Virginia will be subject to the same rules.

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    3.  IRS deploys 500 employees to help FEMA with Hurricane Helene efforts

    The IRS deployed over 500 workers to assist with the Federal Emergency Management Agency (FEMA) disaster relief efforts to aid Hurricane Helene victims. To assist FEMA with phone operations, the IRS sent representatives from Dallas and Philadelphia earlier this week. Employees of the IRS will take the initial information from callers, assist with federal relief as IRS Criminal Investigation (IRS-CI) agents will help with search and rescue efforts and other relief work.

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    4.  Volunteers needed to provide free tax services

    The Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs are currently seeking volunteers for the upcoming filing season. The IRS’s peak period for enlisting volunteers is October through January. Individuals can enroll during other months, but their information will be held until IRS partners are accepting volunteers for the next filing season. No experience is necessary to become a VITA or TCE volunteer; free specialized training is provided by the IRS. Available positions are not limited to tax preparation and can include interpreters, greeters and computer specialists. Volunteers have the option to participate at both in-person and virtual sites. Hours are flexible with many sites operating at night and on weekends. Locating a nearby free tax help site is simple. They can often be found in local libraries, community centers, schools and churches. Locate the VITA/TCE site closest to you by using the VITA Locator Tool.

    For additional information or to learn more about becoming a VITA/TCE volunteer, visit IRS tax volunteers.

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    5.  IRS invites public feedback on draft Form 7217

    Tax Pros: The IRS welcomes public feedback on draft Form 7217 and its accompanying instructions. On Aug. 28, the IRS released draft Form 7217, with the new title “Partner’s Report of Property Distributed by a Partnership.” The new tax form will be used for distributions to partners made in the 2024 tax year. The form’s objective is to document every property distribution that a partner gets from a partnership. According to draft instructions posted by the IRS on Sept. 3, any partner receiving a property distribution from a partnership is required to file Form 7217. Comments can be submitted to the IRS about drafts, instructions or publications on the IRS Draft tax forms page.

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    6.  2024 IRS Nationwide Tax Forum Online to launch Oct. 14

    The 2024 IRS Nationwide Tax Forum Online will go live on Oct. 14, providing tax professionals access to interactive video seminars and downloadable resources and materials from the 2024 IRS Nationwide Tax Forum. This year, the Nationwide Tax Forum Online will launch 18 new seminars featuring IRS subject matter experts offering insights into the latest developments in tax law and IRS procedures. Courses can be taken for continuing education (CE) credit for a fee of $29, or they can be reviewed for free (no CE credit). Don’t miss this opportunity to stay informed about important tax changes and further your professional knowledge. Visit the Nationwide Tax Forum Online website to learn more.

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    7.  IRS launches “Corporate Group Mailbox” pilot program

    As part of its continuous transformation efforts to increase the number of online tools and enhance user experiences, the IRS’s Independent Office of Appeals has initiated a new pilot program. The “Corporate Group Mailbox” pilot program is designed to improve secure messaging for large business taxpayers with multiple representatives. The use of this new feature permits qualified business taxpayers with a team of representatives to request a Group Mailbox to communicate with the Appeals employee assigned to their case. The pilot program is available now through March 31.

    Corporate Group Mailboxes will help Appeals deliver:

    • Prompt taxpayer service with 24/7 online access to secure digital messages
    • Streamlined communication with central access available for multiple authorized individuals
    • Secure records sharing and 
    • Faster case resolution

    Large business taxpayers represented by multiple individuals with an open case in Appeals should ask their assigned Appeals employee if this pilot is available for them.

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    8.  News from the Justice Department’s Tax Division

    The United States issued a permanent injunction in the U.S. District Court for the Southern District of Florida to permanently bar Gregory Salgado and his tax return preparation business from preparing federal income tax returns for others. According to the complaint, Salgado entered a guilty plea in 2012 for filing a false return for himself and another taxpayer. The IRS levied civil penalties against Salgado totaling more than $500,000 for intentionally underreporting tax on returns he prepared for customers. The complaint alleges neither Salgado’s conviction, 33-month incarceration nor civil penalties corrected his behavior. After his release from prison in August 2015, Salgado continued to prepare thousands of returns. Salgado is required by the court’s order to pay $85,000 and notify all the individuals for whom he or his business prepared federal tax returns between January 2019 and the present of the injunction.

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    9.  Technical Guidance

    Notice 2024-70 explains the circumstances under which the four-year replacement period under section 1033(e)(2) is extended for livestock sold on account of drought.

    Notice 2024-72 postpones various time-sensitive deadlines for taxpayers affected by the terrorist attacks in Israel throughout 2023 and 2024.

    Notice 2024-73 provides guidance regarding discrete issues related to the application of the nondiscrimination rules of section 403(b)(12) with respect to the ERISA long-term, part-time (LTPT) employee rules for a section 403(b) plan.

    Revenue Ruling 2024-23 holds that European Energy Exchange is a “qualified board or exchange” within the meaning of section 1256(g)(7)(C).


  • 03 Oct 2024 8:38 PM | Anonymous

    WASHINGTON – The Internal Revenue Service announced today that Direct File will be available for the 2025 tax filing season in double the number of states than last year’s pilot, and it will cover a wider range of tax situations, greatly expanding the number of taxpayers eligible to use the free e-filing service.  

    State and eligibility expansion

    For the 2025 tax filing season, eligible taxpayers in 24 states will be able to use Direct File: 12 states that were part of the pilot last year, plus 12 new states where Direct File will be available in the upcoming filing season. 

    During the pilot last year, Direct File was available in Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington State and Wyoming. For the 2025 tax filing season, Direct File will also be available in Alaska, Connecticut, Idaho, Kansas, Maine, Maryland, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania and Wisconsin

    In 2025, more than 30 million taxpayers in those 24 states will be eligible to use Direct File. Additional states could still join Direct File in 2025, and several states have expressed interest or announced that they will participate in Direct File in 2026. 

    In addition to doubling the number of states where Direct File will be available, the service will also cover a wider range of tax situations for the 2025 filing season. During the pilot last year, Direct File covered limited tax situations, including wage income reported on a W-2 form, Social Security income, unemployment compensation and certain credits and deductions. For the 2025 filing season, Direct File will support 1099’s for interest income greater than $1,500, retirement income and the 1099 for Alaska residents reporting the Alaska Permanent Fund dividend. 

    During the pilot, Direct File supported taxpayers claiming the Earned Income Tax Credit, Child Tax Credit and Credit for Other Dependents. This year, Direct File will also cover taxpayers claiming the Child and Dependent Care Credit, Premium Tax Credit, Credit for the Elderly and Disabled, and Retirement Savings Contribution Credits. In addition to covering taxpayers claiming the standard deduction and deductions for student loan interest and educator expenses, this year, Direct File will support taxpayers claiming deductions for Health Savings Accounts. Over the coming years, the IRS will gradually expand Direct File’s scope to support most common tax situations, focusing – in particular – on tax situations that impact working families. 

    “We’re excited about the improvements to Direct File and the millions more taxpayers who will be eligible to use the service this year,” said IRS Commissioner Danny Werfel. “Above all, our goal is to improve the experience of tax filing itself and help taxpayers meet their obligations quickly and easily. Direct File will be a critical part of achieving that goal as we expand and improve the service.” 

    Direct File service improvements

    Direct File is a web-based service that works on mobile phones, laptops, tablets or desktop computers. It guides taxpayers through a series of questions to prepare their federal tax return step-by-step. Last year, thousands of Direct File users got help from IRS customer service representatives through a live chat feature in English and Spanish. Once taxpayers have completed their federal tax return, the Direct File system automatically guides them to state tools to complete their state tax filings.  

    For the 2025 filing season, Direct File will include new features to make filing taxes quicker and easier. Direct File users can try a new chat bot to help guide them through the eligibility checker. Live chat will again be available in English and Spanish, and users can opt into additional authentication and verification, which will allow customer service representatives to provide more information. 

    “User experience, both within the Direct File tool and the integration with state tax systems, will continue to be the foundation for Direct File moving forward,” Werfel said. “We will focus – first and foremost – on continuing to get it right. Accuracy and comprehensive tax credit uptake will be paramount concerns to ensure taxpayers file a correct return and get the refund to which they’re entitled.”  

    Direct File’s role in the tax system

    Following a successful pilot during the 2024 tax filing season, where more than 140,000 taxpayers across 12 states used Direct File, the IRS undertook a comprehensive review of the service and its role in the broader tax system.  

    Taxpayers across the country told the IRS they want more no-cost electronic filing options. The IRS heard directly from hundreds of organizations across the country, more than 100 members of Congress, individual Direct File users and from those that are interested in using Direct File. Millions of taxpayers who did not live in one of the12 pilot states visited the Direct File website to learn more about the service or asked live chat assistors to make Direct File available in their state. 

    In May 2024, the IRS announced that Direct File would be a permanent tax filing option, and the service is working with all states interested in participating. In the coming years, Direct File will continue to be one option among many from which taxpayers can choose, and it will complement important options, such as preparation by tax professionals or through commercial software providers, who are critical partners with the IRS in delivering a successful tax system for the nation.  

    The IRS also noted another side effect of the Direct File pilot was increased attention on all free filing options, including an increase in usage of Free File. The IRS remains committed to the ongoing relationship with Free File, Inc., which has served taxpayers for two decades in the joint effort to provide free commercial software. Last spring, the IRS signed a five-year extension with industry to continue Free File. As the IRS works to expand Direct File, it will work to strengthen all free filing options for taxpayers, including Free File, the Volunteer Income Tax Assistance program (VITA) and the Tax Counseling for the Elderly program (TCE) – all of which saw increased usage and interest last year.  

    “Direct File is an important component of a stronger, more comprehensive tax system that gives taxpayers electronic filing options that best suit their needs,” Werfel said. “It is a critical tool in the IRS’ effort to meet taxpayers where they are, give them options to interact with us in ways that work for them and help them meet their tax obligations as easily and quickly as possible.” 

    Direct File will begin accepting tax returns when the filing season opens.


  • 03 Oct 2024 3:25 PM | Anonymous

    Notice 2024-73 provides guidance regarding discrete issues related to the application of the nondiscrimination rules of section 403(b)(12) with respect to the ERISA long-term, part-time (LTPT) employee rules for a section 403(b) plan. The ERISA LTPT rules were added under section 125 of the SECURE 2.0 Act of 2022 and are effective for plan years beginning after December 31, 2024.

    This notice also (1) provides that the Department of the Treasury and the Internal Revenue Service anticipate issuing proposed regulations with respect to section 403(b)(12)(D) and guidance with respect to sections 202(c) and 203(b)(4) of ERISA, (2) announces that the final regulation that the Treasury Department and the IRS intend to issue related to long term, part time employees under section 401(k) plans will apply no earlier than to plan years that begin on or after January 1, 2026, and (3) asks for comments on the content of this notice. 

    Notice 2024-73 will be in IRB:  2024-43, dated 10/21/2024.


  • 03 Oct 2024 3:24 PM | Anonymous

    WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued guidance addressing long-term, part-time employees in 403(b) retirement plans under the SECURE 2.0 Act, which applies to 403(b) plans beginning in 2025. These plans are similar to 401(k) plans but are generally for employees of charities and public schools. 

    Notice 2024-73 includes a question-and-answer section on the application of the nondiscrimination rules for 403(b) plans with respect to long-term, part-time employees, including application of the rules to permitted exclusions from participation for part-time employees and student employees. The notice informs the public that the Treasury Department and the IRS plan to issue additional guidance with respect to section 125 of the SECURE 2.0 Act, including proposed regulations with respect to the rules in today’s notice. 

    The notice also announces that the final regulation the Treasury Department and the IRS plan to issue for 401(k) plans on long-term, part-time employees will apply no earlier than to plan years beginning on or after Jan. 1, 2026. A proposed regulation related to the rules for long-term, part-time employees in 401(k) plans was issued on Nov. 27, 2023. 

    The Treasury Department and the IRS welcome public comments on this notice, which provides details on how to submit comments.


  • 03 Oct 2024 12:23 PM | Anonymous

    WASHINGTON — The Internal Revenue Service today announced disaster tax relief for individuals and businesses in the Confederated Tribes and Bands of the Yakama Nation in Washington state affected by wildfires that began on June 22, 2024. 

    Affected taxpayers now have until Feb. 3, 2025, 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, this includes the Confederated Tribes and Bands of the Yakama Nation in Washington state.

    Individuals and households that reside or have a business in these localities qualify for tax relief. The same relief will be available to any other localities 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 beginning on June 22, 2024, and ending on Feb. 3, 2025 (postponement period). As a result, affected individuals and businesses will have until Feb. 3, 2025, to file returns and pay any taxes that were originally due during this period. 

    This means, for example, that the Feb. 3, 2025, deadline will now apply to: 

    • Any individual, business or tax-exempt organization that has a valid extension to file their 2023 federal return. The IRS noted, however, that payments on these returns are not eligible for the extra time because they were due last spring before the storms occurred. 
    • Quarterly estimated income tax payments normally due on Sept. 16, 2024, and Jan. 15, 2025.
    • Quarterly payroll and excise tax returns normally due on July 31, Oct. 31, 2024, and Jan. 31, 2025. 

    In addition, penalties for failing to make payroll and excise tax deposits due on or after June 22, 2024, and before July 8, 2024, will be abated, as long as the deposits were made by July 8, 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 – 4823-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 wildfires and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov

    Reminder about tax return preparation options 

    • 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.


  • 01 Oct 2024 2:43 PM | Anonymous

    Notice 2024-72 postpones various time-sensitive deadlines for taxpayers affected by the terrorist attacks in Israel throughout 2023 and 2024. The notice defines the covered area, identifies categories of “affected taxpayers,” and provides a list of the acts postponed. The postponement period is September 30, 2024, to September 30, 2025.  The separate determination of terroristic action and grant of relief in this notice will also postpone acts that were postponed by Notice 2023-71 until September 30, 2025 for taxpayers eligible for relief under both notices. 

    Notice 2024-72 will be in IRB:  IRB 2024-43, dated 10/21/2024.


  • 01 Oct 2024 2:42 PM | Anonymous

    WASHINGTON — The Internal Revenue Service announced today that due to recent terrorist attacks in Israel, the agency is providing additional tax relief to affected individuals and businesses, postponing until Sept. 30, 2025, a wide range of deadlines for filing federal returns, making tax payments and performing other time-sensitive tax-related actions. 

    Notice 2024-72, posted today on IRS.gov, covers similar groups but is separate from Notice 2023-71, which originally provided relief to taxpayers affected by the Oct. 7, 2023 attacks in Israel. 

    In both Notice 2023-71 and Notice 2024-72, the IRS is providing relief to taxpayers who, due to the terrorist attacks, may be unable to meet a tax-filing or tax-payment obligation, or may be unable to perform other time-sensitive tax-related actions. 

    Today’s notice (along with Notice 2023-71) postpones various tax filing and payment deadlines that occurred or will occur during the period from Oct. 7, 2023, through Sept. 30, 2025, for taxpayers eligible for relief under both notices. As a result, affected individuals and businesses have until Sept. 30, 2025, to file returns and pay any taxes that are due during this period. See Notice 2024-72 for additional relief provided and who qualifies for the relief. 

    The IRS automatically identifies taxpayers whose principal residence or principal place of business is located in the covered area based on previously filed returns and applies relief. Other eligible taxpayers, or their representatives, whose filing address is outside the covered area can obtain relief by calling the IRS disaster hotline at 866-562-5227. Alternatively, international callers may call 267-941-1000. 

    Reminder about tax-preparation assistance 

    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 available in English and Spanish. 

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


  • 01 Oct 2024 12:15 PM | Anonymous

    WASHINGTON — The Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs are currently recruiting volunteers for the upcoming filing season. 

    Each year, thousands of volunteers help their community and gain invaluable professional experience. Volunteers often include students, tax professionals, retirees and those looking to help their community. 

    VITA/TCE sites can be found nationwide and prepare millions of tax returns each year for low-to moderate-income taxpayers at no cost. The free tax program is generally available for individuals and families with low to moderate incomes and help underserved populations such as persons with disabilities, limited English speakers, senior citizens and more. 

    No experience is necessary to become a VITA or TCE volunteer. Free specialized training is provided by the IRS. Available positions are not limited to tax preparation and can include interpreters, greeters and computer specialists. 

    Volunteers have the option to participant at both in-person and virtual sites. Hours are often flexible with many sites operating at night and on weekends. Finding a nearby free tax help location is easy. They can often be found in local libraries, community centers, schools and churches. Locate the VITA/TCE site closest to you by using the VITA Locator Tool

    The IRS’ peak period for recruiting volunteers is October through January. Individuals can sign up during other months, but their information will be held until IRS partners are accepting volunteers for the next filing season. Those who signed up within the last two months do not need to sign up again unless their contact information has changed.  

    To learn more about becoming a VITA/TCE volunteer, visit IRS Tax Volunteers. Those interested can sign up using the VITA/TCE Volunteer and Partner Sign Up. Approximately 14 days after signing up, the IRS will provide a list of available local VITA/TCE sites and an invite to a virtual orientation.


  • 01 Oct 2024 12:14 PM | Anonymous

    WASHINGTON — The Internal Revenue Service today announced disaster tax relief for individuals and businesses in parts of Illinois affected by severe storms, tornadoes, straight-line winds and flooding that began on July 13, 2024. 

    Affected taxpayers now have until Feb. 3, 2025, 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, this includes Cook, Fulton, Henry, St. Clair, Washington, Will and Winnebago counties in Illinois. 

    Individuals and households that reside or have a business in any one of these localities 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 beginning on July 13, 2024, and ending on Feb. 3, 2025 (postponement period). As a result, affected individuals and businesses will have until Feb. 3, 2025, to file returns and pay any taxes that were originally due during this period. 

    This means, for example, that the Feb. 3, 2025, deadline will now apply to: 

    • Any individual, business or tax-exempt organization that has a valid extension to file their 2023 federal return. The IRS noted, however, that payments on these returns are not eligible for the extra time because they were due last spring before the storms occurred. 
    • Quarterly estimated income tax payments normally due on Sept. 16, 2024, and Jan. 15, 2025.
    • Quarterly payroll and excise tax returns normally due on July 31, Oct. 31, 2024, and Jan. 31, 2025. 

    In addition, penalties for failing to make payroll and excise tax deposits due on or after July 13, 2024, and before July 29, 2024, will be abated, as long as the deposits were made by July 29, 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 – 4819-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 

    • 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.


  • 27 Sep 2024 4:12 PM | Anonymous


    Issue Number:  2024-39

    Inside This Issue


    1. IRS opens new process for payroll companies, third-party payers to help clients resolve incorrect claims for the Employee Retention Credit
    2. Chief of IRS Independent Office of Appeals selected
    3. Technical Guidance

    1.  IRS opens new process for payroll companies, third-party payers to help clients resolve incorrect claims for the Employee Retention Credit

    The IRS is opening a supplemental claim process to help third-party payers and their clients resolve incorrect claims for the Employee Retention Credit (ERC). Third-party payers report and pay clients’ federal employment taxes under the third-party payer’s Employer Identification Number. They handle clients’ payroll and tax reporting duties. Some of these TPPs filed ERC claims for multiple employers. If a third-party payer’s client has since determined it is ineligible for the ERC and wants to resolve their claim, it is the third-party payer that needs to correct it. This supplemental claim process lets a third-party payer that filed a prior claim with multiple clients “withdraw” only some clients while maintaining the claims of the qualifying clients.

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    2.  Chief of IRS Independent Office of Appeals selected

    The IRS announced that Elizabeth Askey has been selected to serve as the Chief of the IRS Independent Office of Appeals. Askey will set strategy and oversee the operations of Appeals, which resolves tax controversies between taxpayers and the IRS without litigation. Askey has served as the Deputy Chief of Appeals since December 2022 and has been acting as the Appeals Chief since April, responsible for approximately 1,750 Appeals employees nationwide. Appeals is independent of the IRS compliance functions, including the examination and collection areas that make tax assessments and initiate collection actions.

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    3.  Technical Guidance

    Revenue Ruling 2024-22 holds that Bourse de Montréal (MX) is a “qualified board or exchange” within the meaning of section 1256(g)(7)(C). MX is a regulated exchange of Québec, Canada that offers electronic trading. Revenue Ruling 2024-22 will be published in IRB: 2024-43 DATED: October 21, 2024

    Revenue Procedure 2024-38 provides guidance on the effect on the income requirements under sections 142(d) and 42 of the alternative income eligibility requirements for the Department of Housing and Urban Development–Veterans Affairs Supportive Housing (HUD–VASH) program. Revenue Procedure 2024-38 will be in IRB-2024-43, dated October 21, 2024.

    Notice 2024-68 announces the special per diem rates effective October 1, 2024, which taxpayers may use to substantiate the amount of expenses for lodging, meals, and incidental expenses when traveling away from home. This notice provides the special transportation industry rate, the rate for the incidental expenses only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method. Use of a per diem substantiation method is not mandatory.

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