IRS Tax News

  • 17 Dec 2024 10:26 AM | Anonymous

    Revenue Procedure 2025-08 modifies section 7 of Rev. Proc. 2024-23, 2024-23 I.R.B. 1334, to modify the procedures under section 446 of the Internal Revenue Code and §1.446-1(e) of the Income Tax Regulations for obtaining automatic consent of the Commissioner of Internal Revenue to change methods of accounting for research or experimental expenditures paid or incurred in taxable years beginning after December 31, 2021. The attached revenue procedure expands the waiver of the eligibility rules in section 5.01(1)(d) and (f) of Rev. Proc. 2015-13 to accounting method changes described in section 7.01 of Rev. Proc. 2024-23 that are made for any taxable year beginning in 2022, 2023, or 2024. This revenue procedure also permits a taxpayer to make a change under section 7.01 of Rev. Proc. 2024-23 regardless of whether the taxpayer made a change for the same item for any other taxable year beginning in 2022, 2023, or 2024. The attached revenue procedure will be effective for Forms 3115, Application for Change in Accounting Method, filed on or after the date this revenue procedure is released to the public. 

    Revenue Procedure 2025-08 will be in IRB:  2025-4, dated January 21, 2025.


  • 16 Dec 2024 2:24 PM | Anonymous

    Notice 2025-01 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for November 2024 used under § 417(e)(3)(D), the 24-month average segment rates applicable for December 2024, and the 30-year Treasury rates, as reflected by the application of § 430(h)(2)(C)(iv).

    Notice 2025-01will be published in Internal Revenue Bulletin 2025-3, on Jan. 13, 2025.


  • 12 Dec 2024 12:45 PM | Anonymous

    WASHINGTON — The Internal Revenue Service today provided the regular quarterly update to the Strategic Operating Plan, outlining key milestones in criminal investigations, improvements to taxpayer services and advancements in digital modernization that have transformed agency operations while protecting billions of taxpayer dollars. 

    The IRS has now recovered $4.7 billion from new initiatives underway. This includes more than $1.3 billion from high-income, high-wealth individuals who have not paid overdue tax debt or filed tax returns, $2.9 billion related to IRS Criminal Investigation work into tax and financial crimes, including drug trafficking, cybercrime and terrorist financing, and $475 million in proceeds from criminal and civil cases attributable to whistleblower information.   

    The IRS also announced today new results from the focus on high-income non-filers who have not filed taxes since 2017. The IRS has now collected an initial $292 million from more than 28,000 non-filers, an increase of $120 million since September 2024. These are cases where IRS has received third party information—such as through Forms W-2 and 1099s—indicating these people received income between $400,000 and $1 million or more than $1 million, but failed to file a tax return. The non-filer program ran sporadically since 2016 due to severe budget and staff limitations that did not allow these cases to be pursued. With additional funding, the IRS had the capacity to resume this core tax administration work earlier this year. 

    “The IRS continues to show dramatic progress on a wide array of the agency’s transformation efforts, producing real-world improvements to help taxpayers and businesses while also taking important steps in the law-enforcement and compliance arena to protect billions from ongoing schemes, ensure high-income individuals file returns and pay their taxes and penalties, and battle everything from terrorist financing to drug traffickers,” said IRS Commissioner Danny Werfel. 

    Pursuing drug traffickers, cybercrime, terrorist financing

    IRS Criminal Investigation (IRS-CI) is charged with investigating tax and financial crimes, including drug trafficking, cybercrime and terrorist financing. In Fiscal Year 2024 (FY24), IRS-CI identified more than $9.1 billion in fraud, obtained court orders totaling $1.7 billion in restitution to U.S. taxpayers and seized criminal assets totaling approximately $1.2 billion. 

    Examples of IRS-CI Cases 

    As part of the Organized Crime Drug Enforcement Task Force (OCDETF), CI has helped investigate numerous cases in partnership with other law enforcement agencies. CI’s financial expertise in following the money not only helped unravel financial and tax crimes, but other crimes including organized drug trafficking. According to public court records, these include: 

    • In October, Jason Brown was sentenced to 18 years in federal prison for trafficking fentanyl and attempting to provide material support to the Islamic State of Iraq and al-Sham, also known as ISIS. On three occasions in 2019, Brown provided $500 in cash to an individual with the understanding that the money would be wired to an ISIS soldier engaged in terrorist activity in Syria. Unbeknownst to Brown, the individual to whom he provided the money was confidentially working with law enforcement, and the purported ISIS fighter was actually an undercover law enforcement officer. Also in 2019, Brown trafficked fentanyl and other drugs from California to the Chicago suburbs and illegally possessed several loaded handguns in furtherance of his drug trafficking activities. 
    • IRS-CI provided significant assistance in an investigation that led to drug dealer George Pherai-Bogeajis being sentenced in November to 19 years and 7 months in federal prison for conspiring to distribute methamphetamine and fentanyl and possessing firearms in furtherance of drug trafficking. Pherai-Bogeajis also forfeited four vehicles and four firearms used in the offense, along with $867,265 of drug proceeds. In April, law enforcement executed a search warrant at his Florida home, seizing nearly 50 kilograms of methamphetamine, thousands of grams of MDMA, more than two kilograms of cocaine and nearly a kilogram of other narcotics, including fentanyl. 
    • Christian Grajeda-Varela was sentenced in October to nearly four years in prison for fentanyl trafficking and money laundering. He admitted to selling roughly 1.5 pounds of fentanyl in July 2023 to a drug dealer in San Francisco. Upon a search of Grajeda-Varela’s Oakland residence, federal agents found 109 grams of fentanyl, more than six pounds of mannitol (a common mixing agent used to cut or dilute fentanyl), cocaine base, cocaine and heroin as well as drug distribution tools. Grajeda-Varela also admitted that, between March and August 2022, he laundered more than $200,000 in cash tied to the drug trade at America Latina, a money service business in Oakland; the funds were wired to recipients in Mexico and Honduras in the form of roughly 125 international wires. 

    Assistance from Whistleblowers 

    Whistleblowers continue to provide valuable contributions in both criminal and civil cases. Whistleblower information has led to successful criminal investigations, prosecutions and the collection of tax, fines, penalties, interest and other amounts. In FY24, the IRS paid awards totaling $123.5 million to whistleblowers for aiding in the collection of $474.7 million in proceeds on cases that included unreported/underreported income, hidden offshore assets, overstated deductions, general allegations of tax fraud and abusive international transactions.  

    Improving Taxpayer Service 

    As part of the Digital First Initiative, the IRS is continuing to expand features in Business Tax Account, an online self-service tool for business taxpayers. C corporations can now activate a Business Tax Account, bringing the total number of business entities eligible for this online self-service tool into the millions. Highlights include: 

    • Authorized individuals of C corporations and S corporations who can legally act on behalf of their corporation are now able to view and pay tax balances and Federal Tax Deposits. 
    • The IRS also introduced a new feature that helps to speed up the lending process by providing sole proprietors and authorized individuals with access to the long-standing IRS Income Verification Express Service (IVES) to approve or reject a tax transcript authorization request from a lending company. 
    • Business taxpayers can now access available tax returns, account and most entity transcripts in Spanish. 

    These changes follow upgrades announced in September that allow business taxpayers to view and submit balance-due payments. 

    In addition, the IRS has expanded the types of Transcript Delivery System (TDS) transcripts available to business taxpayers, historically an underserved population. Previously, taxpayers and their representatives had to call to request information not available through a TDS transcript. Customer service representatives would provide an internal print with the requested information, manually masking the personally identifiable information before providing the prints to the caller. Masking the transcripts was time consuming. Now taxpayers and their representatives can access these new transcripts through online self-help tools that include Business Tax Account and e-Services TDS. 

    Business Entity and Form 94X Series Tax Return transcripts are now available through TDS for tax professionals and reporting agents with access to TDS through e-Services. IRS employees can access these transcripts through the Employee User Portal, and authorized users of Business Tax Account can download these transcripts. Transcript expansion will continue in a phased approach through December 2026. Future releases will include the Form 990 series, Form 1041, Form 2290, Form 1042, Form 706, and transcripts in Spanish. 

    More details on the Digital First Initiative; more digital tools launched in the last 2 years than the previous 20 years 

    The IRS is significantly improving taxpayer service in person, over the phone and online. The IRS is working to deliver the same modern online experience that taxpayers experience with their bank or financial institutions. The IRS has created and enhanced popular and convenient online tools that save taxpayers time and money by providing easy, secure self-service options to get information and resolve issues. For example, in Filing Season 2024, the IRS updated the “Where’s My Refund?” tool to provide more detailed refund status information in plain language, increasing use by nearly 30%. 

    The IRS has launched more digital tools in the last two years than the previous 20 years, including: 

    • More than two dozen new features and enhancements to Individual Online Account and Tax Pro Account.
    • The launch of Business Tax Account.
    • The release of more than 60 digital mobile-adaptive forms.
    • The ability for taxpayers to receive their refund status via a conversational hotline.
    • A mobile-friendly web tool for “Where’s My Refund?”. 

    Through the Digital First Initiative, the IRS is pursuing a vision where taxpayers can complete all their transactions with the IRS digitally if they prefer. At the core of that improved digital experience for taxpayers are enhancements to Individual Online Account, including the ability to self-correct withholding amounts, redesigned notices for better user experience, provided digital mobile-adaptive tax forms, transcript requests in Spanish and sign-up for paperless and email preferences. Expanded payment options including Offer-in-Compromise and multiple payments in one session. Other expanded services include:  

    • A lien payoff calculator that can generate an IRS letter that they can share with authorized third parties to confirm the payoff balance. 
    • The ability to see their correspondence audit status. 
    • For taxpayers whose employer has received a “lock in” letter requiring a minimum amount of federal tax to be withheld from each paycheck, they can now find information about actions needed to release or modify the lock in amount.  
    • The ability to use a self-service Offer-in-Compromise (OIC) eligibility check to determine if they meet the major eligibility requirements for submitting an OIC. 
    • Single Transaction for Multiple Payments, allowing taxpayers to add and delete multiple payments to a shopping cart for a single transaction within their online account. 
    • Transcripts available in English and Spanish. 
    • Selection for paperless contact and email preferences. 
    • Request an Identity Protection PIN. 

    The IRS has also expanded Tax Pro Account, helping tax professionals manage their authorization relationship with taxpayers, view the taxpayers’ information and act on the taxpayers’ behalf. New capabilities include:   

    • The ability to view individual and business taxpayer payment activity. 
    • A new virtual assistant that allows tax professionals access to an automated chatbot to resolve tax issues, with the ability to escalate to live chat for help with collection related issues. 
    • The ability to view and act on behalf of individual taxpayers to set up and revise payment plans.  
    • The option to make up to five same day payments on behalf of authorized clients using a checking or savings account. 

    When fully developed, Tax Pro Account will become a robust online tool, including the ability to initiate POA/TIA for business taxpayers that they can review and approve in their Business Tax Account, link and manage business CAF access, view refund and audit status for individual and business taxpayers and much more.  

    Additional progress in developing digital tools for taxpayers includes: 

    • Redesigning notices to be more clear as part of the Simple Notice Initiative: The IRS has redesigned 247 of the most common notices, with additional notices scheduled to deploy in the coming months. All notices have recently been added to Individual Online Account for taxpayers to view. 
    • Mobile-adaptive forms through the Paperless Processing Initiative: The IRS now has more than 60 forms available for mobile use, allowing taxpayers to fill out common non-tax forms on cell phones and tablet devices. Taxpayers have submitted more than 100k forms since the September 2023 launch. The most recent forms feature “save and draft” capabilities, which allow the taxpayer to start a form, save it and return to it later. The addition of save and draft allows for future capabilities including the ability for multiple spouses to sign a form. It will also allow a taxpayer to sign a form, save the form and send to a second taxpayer to sign using their Individual Online Account. Seventeen additional forms went live on Dec. 8, 2024, bringing the total to 67 mobile-adaptive forms currently available.   
    • Through the Paperless Processing Initiative, Document Upload Tool use continues to increase: The Document Upload Tool makes it easier for taxpayers and tax professionals to correspond digitally with the IRS. Thanks to the tool, taxpayers can digitally submit correspondence and responses to notices and letters to the IRS. The tool launched in March 2021 and expanded in 2023. The Document Upload Tool has surpassed over 1.5 million submissions with 1,669,625 submissions to date. It is estimated that 94% of taxpayers no longer need to send mail to the IRS, decreasing a substantial amount of paper correspondence entering the IRS. 


  • 12 Dec 2024 12:44 PM | Anonymous

    The Internal Revenue Service continues to open its Business Tax Account (BTA) to a growing number of business taxpayers, expanding the useful features available. 

    The latest expansion makes this online self-service tool for business taxpayers available to C corporations. In addition, a person who can legally bind the corporation, known as a Designated Official (DO), can now access BTA on behalf of their S corporation or C corporation. 

    New features also include tax return, tax account and entity transcripts for the current tax year and some previous tax years, with some transcripts now available in Spanish. 

    Available in both English and Spanish, BTA is a key part of the agency’s wide-ranging transformation initiative, transforming service at the IRS by offering taxpayers a seamless and convenient digital experience and helping them easily meet their tax obligations. 

    With the latest expansion, Designated Officials can view and pay their corporation’s tax balances and make Federal Tax Deposits (FTDs). In addition, DOs and sole proprietors can now use BTA to approve or reject a tax transcript authorization request from a lender through the IRS Income Verification Express Service (IVES).

    What is a Designated Official? 

    A person who is legally authorized to bind the corporation and a current employee who received a W-2 form from the corporation for the most recent tax-filing year. By registering as a DO, this person will have full access to the corporation’s tax information and can act on behalf of the corporation within BTA. Although a corporation can have more than one DO, every DO must be one of these officials. 

    Designated Official titles: 

    • President
    • Vice President 
    • Chief Executive Officer (CEO)
    • Chief Financial Officer (CFO)
    • Chief Operating Officer (COO)
    • Secretary
    • Treasurer
    • Limited liability company (LLC) Managing Member 

    What is Income Verification Express Service? 

    IVES helps both borrowers and lenders speed up the lending process. Through IVES, mortgage companies, banks, credit unions and other lenders can easily access a taxpayer’s tax records to verify the income of those applying for mortgages and other loans. The IRS can only provide a lender access to this information if a taxpayer authorizes it. Tax records include transcripts of a taxpayer’s tax returns, as well as 1099s and other forms filed by banks and other payors reporting business income to the IRS. Through BTA and IVES, business taxpayers can now quickly and easily approve or reject these authorization requests from lenders. 

    What’s available through Business Tax Account? 

    Business taxpayers can view: 

    • Their balance due.
    • Their payment history, including payments made through BTA, the Electronic Federal Tax Payment System (EFTPS) online, payroll processor payments, wire transfers, checks or money orders, and if any payments were returned or refused.
    • Authorization requests from a lender submitted through IVES.
    • Transcripts for various income, payroll and excise tax returns.
    • Digital copies of select IRS notices.
    • Their business name and address on file.
    • A tax compliance report or a tax certificate for award use.
    • Business entity transcripts with their business name, mailing address and location address (limited to sole proprietors). 

    Business taxpayers can also: 

    • Make an electronic payment on a tax balance or Federal Tax Deposit.
    • Set up a future payment or cancel a scheduled payment.
    • Approve or reject a tax transcript authorization request from a lender.
    • Download transcripts and select IRS notices.
    • Give account access to employees of the business (limited to sole proprietors). 

    Who qualifies to use BTA? 

    Most business taxpayers can now activate and use their Business Tax Account. This includes: 

    • A sole proprietor who has an Employer Identification Number (EIN) issued by the IRS.
    • An individual partner or individual shareholder with both:
    • A Social Security number (SSN) or an Individual Taxpayer Identification Number (ITIN) and
    • A Schedule K-1 on file (for partners, from 2012-2023; for shareholders, from 2006-2023).
    • The President, Vice President, CEO, CFO, COO, Secretary, Treasurer or LLC Managing Member of a corporation. 

    Single-member LLCs (SMLLCs) with an EIN that are reporting business income on Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship), can’t currently access BTA. A tax preparer or representative of a company will not have access to BTA and in the future will use Tax Pro to support their business taxpayers. Under the agency’s Digital First Initiative, these businesses, as well as other entities including tax-exempt organizations, government agencies and partnerships, will be able to access BTA in the future. 

    How to get ready for BTA 

    The IRS urges every eligible business to activate and use their BTA. The first step is to gather all required tax records. This can include: 

    Then, using their existing or newly established ID.me profile, complete the activation process at Business Tax Account

    How to register as a DO 

    First, gather all required tax records. Some of the same records needed to activate the BTA are also needed for DO registration. This includes the corporation’s EIN, federal tax return--either Form 1120 or Form 1120-S—and mailing address from the most recent IRS records. 

    Next, sign into the corporation’s existing Business Tax Account. 

    Finally, register as a DO by requesting a PIN. The PIN is unique to the requesting user and cannot be transferred to another user and is sent to the most recent business mailing address. The DO will receive the PIN within five to ten business days. 

    All DOs must re-validate annually using BTA. Though not required, a corporation can help ensure continued business access to BTA by having multiple DOs. 

    What new features will be added to BTA in the future? 

    When fully developed, BTA will be a robust online self-service tool allowing many types of business taxpayers and other entities to check their tax history, make payments, view notices, authorize powers of attorney and conduct other business with the IRS. 

    For more information visit Business Tax Account, view the Business Tax Account Overview video or review Publication 5904, Access Your Business Tax Account.


  • 11 Dec 2024 3:42 PM | Anonymous

    WASHINGTON — The Internal Revenue Service today reminded those aged 73 and older of the deadline to take Required Minimum Distributions from Individual Retirement Arrangements (IRAs) and other retirement plans, and highlighted updates introduced by the SECURE 2.0 Act. 

    Required Minimum Distributions (RMDs) are amounts that many retirement plan and IRA account owners must withdraw annually. These withdrawals are considered taxable income and may incur penalties if not taken on time. The IRS.gov Retirement Plan and IRA Required Minimum Distributions FAQs webpage provides detailed information regarding the new provisions in the law. 

    SECURE 2.0 Act: The new law raised the age that account owners must begin taking RMDs, while eliminating RMDs for Designated Roth accounts in 401(k) and 403(b) retirement plans. 

    The minimum distribution rules generally apply to original account holders and their beneficiaries in these types of plans: 

    • IRAs: IRA withdrawals from traditional IRAs and IRA-based plans occur every year once people reach age 73, even if they’re still employed.
    • Retirement plans: The RMD rules apply to employer-sponsored plans, with delays allowed until retirement unless the participants own more than 5% of the sponsoring business.
    • Roth IRAs: Roth IRA owners are not required to take withdrawals during their lifetime, however beneficiaries are subject to the RMD rules after the account owner’s death.  

    Designated Roth accounts in a 401(k) or 403(b) plan will not be subject to the RMD rules while the account owner is still alive for 2024. The RMD Comparison Chart outlines key RMD rules for IRAs and defined contribution plans. 

    Penalties for missed distributions

    If an account owner fails to withdraw the full amount of the RMD by the due date, the owner is subject to a 25% excise tax on the amount not withdrawn. The 25% excise tax rate is reduced to 10% if the error is corrected within two years. 

    RMD calculations

    IRA trustees or plan administrators must either report the RMD amount to the account owner or offer to calculate it. Each IRA plan’s RMD must be calculated separately, however owners can withdraw the total required amount from one or more accounts of their choice as long as the annual requirement is met. An IRA trustee or plan administrator may calculate the RMD, but the account owner is ultimately responsible for ensuring the correct RMD is taken. The IRS provides required minimum distribution worksheets to help calculate the RMD amounts and payout periods. 

    Account owners should file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, with their federal tax return for the year the full amount of the RMD was required but not taken. 

    Inherited IRAs  

    Beneficiaries of inherited IRAs, retirement plan accounts, or Roth IRAs may be required to take RMDs. For guidance on taking RMDs from an inherited account and reporting taxable distributions as part of gross income, refer to Retirement Topics - Beneficiary and Required Minimum Distributions for IRA Beneficiaries. Help for those in charge of the estate to complete and file federal income tax returns can be found in Publication 559, Survivors, Executors and Administrators. The factors that affect the distribution requirements for inherited retirement plan accounts and IRAs include: 

    • Whether the account owner died after 2019, as the SECURE Act introduced new RMD rules for beneficiaries in these cases.
    • The beneficiary’s relationship to the account owner and their specific characteristics, such as being a spouse, minor child, disabled or chronically ill individual, entity other than an individual.
    • Whether the original account owner passed away before or after the date required to begin taking RMDs. 

    Taxpayers can find easy-to-use tools such as forms, instructions and publications at IRS.gov.


  • 09 Dec 2024 12:27 PM | Anonymous

    Helping taxpayers prepare for 2025 filing season

     

    In this edition

    Steps to prepare for filing

    Husband and wife preparing paperwork

    The IRS reminds people of simple steps they can take now to prepare to file their 2024 federal tax returns.

    Prepare for 2025 filing season with online tools and key reminders

    Sign up for an IRS Online Account

    man working on laptop at home office

    Taxpayers can securely access and view their IRS tax information anytime through their individual Online Account. They can see important information when preparing to file their tax return or following up on balances, notices, payments, tax records and more.

    Information about Online Account

    Protect yourself from tax fraudsters

    Get an identity protection PIN

    Taxpayers can add an extra layer of protection between their tax returns and identity thieves using the identity protection personal identification number (IP PIN) program at the start of the 2025 tax season.

    Guard against fraudsters with an IRS identity protection PIN

    Beware of bad tax advice on social media

    Wildly inaccurate tax claims continue building across social media. These scams take many different forms and make outlandish promises to inflate refunds.

    Watch out for bad tax advice on social media

    New guidance on reporting income on Form 1099-K

    Form 1099 K Merchant transaction record

    Payment apps and online marketplaces will be required to report transactions when the amount of total payments for those transactions is more than $5,000 in 2024.

    Form 1099-K threshold is $5,000 for calendar year 2024

    Hooded hacker online security on laptop

    Volunteers needed for tax help programs

    Woman pointing to volunteer uniform smiling over isolated white background

    The Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs are seeking volunteers for filing season 2025.

    Help your community by becoming a VITA/TCE volunteer.

    More resources


  • 06 Dec 2024 6:07 PM | Anonymous


    ue Number:  2024-49

    Inside This Issue

    1. National Tax Security Awareness Week: IRS, Security Summit partners warn of potential scams and more
    2. IRS warns: Beware of charitable contribution scams and other fraudulent schemes 
    3. ETAAC is accepting membership applications through Jan. 31
    4. IRS-CI releases 2024 annual report; notes agency’s billion-dollar impact, global reach
    5. Grants announced for the Tax Counseling for the Elderly and Volunteer Income Tax Assistance Program
    6. Tax pros: New continuing education seminars available on IRS Nationwide Tax Forum Online
    7. Upcoming webinars for tax professionals
    8. News from the Justice Department’s Tax Division
    9. Technical Guidance

    1.  National Tax Security Awareness Week: IRS, Security Summit partners warn of potential scams and more

    The IRS and the Security Summit partners recently kicked off the 9th annual National Tax Security Awareness Week with information for tax professionals and taxpayers on how to avoid scams and protect sensitive personal information:

    For additional information, visit National Tax Security Awareness Week 2024.

    Back to top

    2.  IRS warns: Beware of charitable contribution scams and other fraudulent schemes 

    The IRS cautioned taxpayers against falling victim to scammers of fraudulent tax schemes involving donations of ownership interests in closely held businesses, which are sometimes sold as “Charitable LLCs.” The IRS views these promotions, which frequently target high-income individuals, as abusive transactions.

    Taxpayers can report abusive tax schemes using:

    Back to top

    3.  ETAAC is accepting membership applications through Jan. 31

    The IRS is seeking qualified applicants for nomination to the Electronic Tax Administration Advisory Committee (ETAAC), an organized public forum for discussion of issues in electronic tax administration, such as prevention of identity theft and refund fraud. The IRS is looking for qualified individuals who will serve three-year terms beginning in September 2025. Applications will be accepted through Jan. 31. For more information about ETAAC, the application process and qualification criteria, email publicliaison@irs.gov.

    Back to top

    4.  IRS-CI releases 2024 annual report; notes agency’s billion-dollar impact, global reach

    The IRS Criminal Investigation (IRS-CI) published its Fiscal Year 2024 (FY24) Annual Report, which includes investigative statistics, improved domestic and international partnerships and noteworthy cases involving crimes ranging from tax fraud to cybercrime.

    “FY24 was one for the history books. For years, IRS-CI has been known as the agency that took down Al Capone, but this year, our cases hold their own place in U.S. history,” said IRS-CI Chief Guy Ficco. “As with Al Capone, financial trails eventually lead to criminals’ downfall. Our agents are the best at following the money trail, and that’s why they have an integral role in bringing down criminals ranging from national security threats to drug traffickers.”

    Back to top

    5.  Grants announced for the Tax Counseling for the Elderly and Volunteer Income Tax Assistance Program 

    The IRS announced the award of $53 million in Tax Counseling for the Elderly (TCE) and Volunteer Income Tax Assistance (VITA) grants to organizations that provide free federal tax return preparation.

    Back to top

    6.  Tax pros: New continuing education seminars available on IRS Nationwide Tax Forum Online

    The IRS encourages tax professionals to register for the IRS Nationwide Tax Forum Online to get access to 18 seminars recorded at the 2024 IRS Nationwide Tax Forum. The Nationwide Tax Forum Online offers tax professionals a convenient way to stay informed about current legislation, IRS procedures and key topics for the upcoming tax season.

    Each seminar features a 50-minute interactive video presentation with synchronized slides, downloadable materials and complete 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).

    Back to top

    7.  Upcoming webinars for tax professionals

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

    • Digital Assets Existing and New Reporting Requirements on Dec. 19, at 2 p.m. ET. Earn up to one continuing education credit (Federal Tax). Certificates of Completion are being offered. Click here to register.

    Back to top

    8.  News from the Justice Department’s Tax Division

    Anthony Judd, of White Plains, Maryland, pleaded guilty to preparing and filing a false tax return for a client. According to court documents and statements made in court, Judd was a full-time special police officer staffed at the National Archives and Records Administration and a part-time return preparer. Judd prepared and filed each client’s tax return as a “ghost preparer” and did not identify himself as the preparer on the returns. Judd caused a tax loss to the IRS of approximately $484,525. Sentencing is scheduled on April 16, 2025. He faces a maximum penalty of three years in prison. He also faces a period of supervised release, restitution and monetary penalties.

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    9.  Technical Guidance

    Notice 2024-82 sets forth the 2024 Required Amendments List (2024 RA List). The 2024 RA List applies to individually designed plans qualified under section 401(a) of the Internal Revenue Code and individually designed plans that satisfy the requirements of section 403(b).

    Back to top


  • 06 Dec 2024 10:54 AM | Anonymous

    WASHINGTON – On the final day of National Tax Security Awareness Week, the Internal Revenue Service and its Security Summit partners urged tax professionals to reassess their plans for protecting themselves and their clients’ sensitive information amid increasing attempts by identity thieves to steal tax data. 

    Identity thieves on the hunt for taxpayer data aren’t just targeting taxpayers, they’re going after the tax professionals, who hold enormous amounts of sensitive taxpayer data, in hopes of filing fraudulent tax returns. This year, the IRS has already received more than 250 reports of data breach incidents from tax professionals affecting approximately 200,000 clients. 

    Amid these continuing reports of tax professionals encountering data breaches, the Security Summit partners urged practitioners to review the newly updated Written Information Security Plan (WISP)

    Tax professionals are required by federal law to have written plans identifying foreseeable data security risks and safeguards, and a plan of action to take in the event of a security breach. To simplify this complex task, a special team of Security Summit members from the tax community released an updated WISP that tax professionals can use as a roadmap to apply to their own practice. 

    The IRS also reminds taxpayers that additional safeguards, like multi-factor authentication (MFA), are required by federal law to better protect themselves and their clients. MFA provides an extra layer of security to ensure the proper people are accessing sensitive accounts and systems. 

    “Countering identity theft is a collective effort, and tax pros are the first line of defense when it comes to protecting taxpayer information,” said IRS Commissioner Danny Werfel. “Millions of taxpayers entrust their personal data to tax professionals, and we want to make it as easy as possible for tax pros to know what they need to do to keep themselves and their clients’ information safe. The Written Information Security Plan forms an essential part of the tax professionals’ defense against data breaches and identity thieves, helping protect their clients and protect themselves.” 

    The WISP, available in IRS Publication 5708, Creating a Written Information Security Plan for your Tax & Accounting Practice, walks tax professionals through the steps of assembling a plan, including understanding security compliance requirements and professional responsibilities. It also provides a sample template that tax professionals can use as they draft a plan for their business.

     The new version of the WISP, the result of a year-long collaborative effort between the IRS and its Security Summit partners, includes several updates, like highlighting best practices for implementing multi-factor authentication. 

    During National Tax Security Awareness Week, now in its ninth year and concluding today, the Security Summit partnership of the IRS, tax professionals, tax software and financial companies as well as state tax agencies work to raise awareness among taxpayers and tax professionals about the importance of safeguarding information to protect against identity theft. The Security Summit formed in 2015 to combat tax-related identity theft through better public-private sector coordination as well as strengthening internal protections in the tax community and raising public awareness about security threats. 

    Tax pros are on the front lines of defense in protecting taxpayer information. The Summit partners highlighted several key steps that tax pros – regardless of the size of their practice – should take to protect their systems and comply with federal standards. 

    WISPs and MFA are crucial – and necessary 

    Members of the Summit's tax professional team developed a helpful guide that allows practitioners to quickly develop their own WISP to provide a blueprint for information security.  

    “This helpful guide with sample templates provides a starting point for businesses large or small, and can be scaled for a company's size, scope of activities, complexity and customer data sensitivity,” said Kimberly Rogers, the IRS Return Preparer Office director and co-chair of the Summit’s tax pro group. “There's not a one-size-fits-all WISP. A sole practitioner can use a more abbreviated and simplified plan than a 10-partner accounting firm. This flexibility is reflected in the sample policies and pre-populated templates included in the publication.” 

    Addressing security issues for a tax professional can be difficult and expensive. A WISP addresses risk considerations for inclusion in an effective plan and provides a blueprint of applicable actions in the event of a security incident, data loss or theft. 

    Tax pros can also review IRS Publication 5709, How to Create a Written Information Security Plan for Data Safety, for more information on WISPs. 

    In addition to requirements to have a WISP, the IRS also reminds the tax community that the Federal Trade Commission last year updated its safeguards standards and now require tax professionals to use MFA to protect client information. MFA, which can include sending text/SMS verification codes to a user or asking additional questions to confirm the identity of a person logging into a system, provides an extra layer of security to ensure the proper people are accessing sensitive accounts and systems. 

    "Building and maintaining a resilient security plan is more than just a requirement — it's a safeguard for both tax professionals and their clients," said Jared Ballew, president of the National Association of Computerized Tax Processors and one of the Summit members who helped develop the WISP. 

    "There’s no single silver bullet for security; effective protection requires multiple layers of defense,” Ballew continued. “Our goal with these resources is to help tax pros create and reinforce those layers, with the WISP providing a solid foundation to start or enhance that process. The Security Summit partners remain committed to helping every tax professional stay proactive and protected in today’s digital landscape." 

    IRS Tax Pro Account: Protects pros and their clients’ data and saves time, too 

    The IRS and Summit partners also emphasize another way to help protect sensitive information from identity thieves is through secure online tools such as the Tax Pro Account. These tools can help manage client information to safeguard sensitive taxpayer and financial data from cyberthreats. 

    The Tax Pro Account is a secure, mobile-friendly, digital, self-service application that enables tax professionals to act on a taxpayers' behalf, view the taxpayers' information and manage their authorization relationships more efficiently.  

    As part of IRS transformation efforts, the IRS will continue adding new features to the Tax Pro Account in the future to help tax professionals securely and efficiently serve their clients. 

    Currently, tax professionals can use Tax Pro Account to send Power of Attorney and Tax Information Authorization requests directly to a taxpayer's individual IRS Online Account. Once the taxpayer approves the request, it's processed in real time — no faxing, mailing, uploading or long waits. 

    Visit the Tax Professionals page on IRS.gov to learn more about E-Services, Tax Pro Account, Employer Identification Numbers, filing, forms, third-party authorizations as well as other safe and secure online tools to serve clients. 

    Data breaches: What to do when the worst happens 

    The IRS also recommends tax professionals create an action plan to outline the steps to take in the event of a breach or data theft, in addition to the required Written Information Security Plan. Tax pros now need to report a security event affecting 500 or more people to the Federal Trade Commission as soon as possible, but no later than 30 days from the date of discovery. 

    A key component to an effective action plan is knowing who to contact. In addition to reporting data loss to the IRS, tax professionals should contact law enforcement, the appropriate states, clients and security professionals. 

    Places to get help in case of a data breach: 

    • IRS Stakeholder Liaison – The IRS recommends reporting data theft to the local Stakeholder Liaison first. Liaisons will notify IRS Criminal Investigation and others within the agency on the tax professional's behalf. Speed is critical. If reported quickly, the IRS can take steps to block fraudulent returns in clients' names.
    • Federal Trade Commission – Data breaches involving 500 or more people are now required to be reported to the FTC as soon as possible, but no later than 30 days from the date of discovery.
    • Federal Bureau of Investigation – the local office.
    • Secret Service – the local office (if directed).
    • Local police – to file a police report on the data breach. 

    Contacting states in which tax pros prepare state returns: 

    Additional resources 

    Tax professionals should also stay connected to the IRS through subscriptions to e-News for tax professionals and its social media sites

     


  • 03 Dec 2024 10:11 AM | Anonymous

    National Tax Security Awareness Week, Day 2: IRS, Security Summit partners urge people to watch out for bad tax advice on social media

    WASHINGTON – The Internal Revenue Service and the Security Summit partners issued a consumer alert today about the growing threat of bad tax advice on social media that continues to dupe people into filing inaccurate tax returns. 

    On day two of the ninth annual National Tax Security Awareness Week, the IRS and the Security Summit partners are spotlighting the wildly inaccurate tax claims that continuing building across social media. These scams take many different forms and make outlandish promises to inflate refunds. 

    “The growth of bad tax advice on social media continues to grow, luring unsuspecting taxpayers into filing bad tax returns,” said IRS Commissioner Danny Werfel. “We urge people to do some research before falling for these scams. Finding a trusted tax professional or visiting IRS.gov is a better way to research a tax issue than relying on someone talking in their car or their kitchen about a non-existent tax hack.”  

    For years, members of the Security Summit - representing state tax agencies, tax professionals, tax software companies and the financial industry - have worked to raise awareness about tax-related identity theft and related tax scams. To counter this growing threat of tax scams, many of the Summit members have joined together to launch a related group, the Coalition Against Scam and Scheme Threats (CASST).  

    Throughout the past year, the IRS and the Summit partners saw an escalation of new scams and bad advice surface on social media that promise to magically enrich taxpayers. This year, the public has seen the emergence and rapid spread of financial scams ranging from the Fuel Tax Credit on federal tax returns to “pig-butchering” scams that involve investments in fake cryptocurrencies that ultimately leave the victims penniless. 

    The newly formed CASST alliance, comprising dozens of public and private sector organizations, is working cooperatively to combat these growing scams and protect taxpayers against filing of inaccurate tax returns fueled by social media advice. Increasing awareness of new and emerging tax schemes on social media is one part of a multi-pronged effort by the CASST coalition to combat tax scams and fraud. 

    Scams that promise easy money through claiming inaccurate credits or other schemes are seen in social media and in other places. Some producers of misleading content on social media are driven by a criminal profit motive, while others are simply trying to gain attention and clicks, with little regard for the risks it poses to their followers. 

    “Common wisdom dictates that if it sounds too good to be true, it often is, and that’s especially with some of the crazy ideas about taxes being spread on social media,” Werfel said. “Social media platforms are rife with influencers making claims about tax credits or deductions that stretch the truth or are outright lies, aimed at gaining themselves clout or pushing up their views. At the same time, this puts their audience’s tax returns and personal finances at risk. If people want good tax information on social media, they should follow options like a trusted tax professional or the IRS social media platforms.” 

    What to watch out for on social media 

    The IRS is aware of various filing season hashtags and social media topics leading to inaccurate and potentially fraudulent information. A common theme among many of these examples involves people trying to use legitimate tax forms for the wrong reason. 

    The IRS has seen a spike this year in the following types of scams on social media: 

    "Self Employment Tax Credit": Promoters on social media have made misleading claims that taxpayers – particularly self-employed individuals and gig economy workers -- can get up to $32,000 through the so-called “Self Employment Tax Credit.” 

    In reality, there is no “Self Employment Tax Credit”; rather, scammers are advising taxpayers to incorrectly use Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, to improperly claim the specialized and very limited Sick Leave and Family Leave Credit on their income. 

    People who were self-employed could claim credits for Sick and Family Leave only for limited COVID-19 related circumstances in 2020 and 2021; the credit is not available for 2023 or 2024 tax returns. The IRS has a detailed set of FAQs describing the very technical requirements for meeting this provision of the law. 

    Household employment taxes: In a variation on the “Self Employment Tax Credit” scheme, taxpayers are being advised to “invent” fictional household employees and then file Schedule H (Form 1040), Household Employment Taxes, to claim a refund based on false sick and family medical leave wages they never paid. 

    Fuel Tax Credit: This specialized credit is designed for off-highway business and farming use. Taxpayers need a business purpose and a qualifying business activity such as running a farm or purchasing aviation gasoline to be eligible for the credit. 

    The vast majority of individual taxpayers do not qualify for the Fuel Tax Credit. It is only for businesses that use certain types of fuel (not for the gas people put in their car). Yet promoters increasingly advise ineligible taxpayers to claim it, and then the promoters line their own pockets by charging the individual a hefty fee. 

    Inflated income and withholding: This scheme encourages people to use tax software to manually fill out Form W-2, Wage and Tax Statement, and include false income information. Scam artists suggest people make up large income and withholding figures, as well as the employer from which it’s coming. They then instruct people to file the bogus tax return electronically in hopes of getting a substantial refund – sometimes as much as five figures – due to the large amount of withholding. 

    Claim of Right: In this long-seen scheme, taxpayers are advised to file tax returns and attempt to take a deduction equal to the entire amount of their wages. Promoters advise them to label the deduction as “a necessary expense for the production of income” or “compensation for personal services actually rendered.” The deduction is based on a complete misinterpretation of the Internal Revenue Code and has no basis in law. 

    The IRS has seen hundreds of thousands of dubious claims like these, leading to refunds being delayed and the need for taxpayers to show legitimate documentation to support their claims – which they often don’t have. Many of these scams were highlighted during this spring’s annual Dirty Dozen series. The IRS is on the lookout for each of these types of false tax claims as well as others. 

    The IRS and Summit partners urge taxpayers to exercise caution when filing their tax returns and ensure they only claim credits to which they’re entitled. Taxpayers who did fall victim need to follow steps to verify their eligibility for the claim. Otherwise, they could face audits and expensive fines; in some cases, they could be subject to federal criminal prosecution and imprisonment

    If individuals have doubts about the legitimacy of a particular tax credit, they should review the many resources available on IRS.gov or seek advice from a qualified tax professional and, in some cases, file an amended return to remove claims for which they’re ineligible to avoid potential penalties. 

    ‘Tis the season 

    These threats are present year-round, but the approach of the 2025 tax filing season means that misinformed influencers and outright scammers will intensify efforts to persuade the public to take their bad advice. 

    Instead of looking to shady or ill-informed influencers on social media, a better option for taxpayers to learn how to properly use tax forms and claim credits is to go to IRS.gov and follow IRS social media channels. 

    • IRS.gov has a forms repository with legitimate and detailed instructions for taxpayers on how to fill out the forms properly.
    • Use IRS.gov to find the official IRS social media accounts, or other government sites, to fact check information. 

    Taxpayers should also consider consulting a tax pro if they’re thinking of applying tax advice seen on social media to their own tax situations. 

    Pass it on 

    The IRS encourages the public to report improper and abusive tax schemes, as well as tax return preparers who knowingly prepare improper returns, including “ghost preparers.” 

    To report an abusive tax scheme or a tax return preparer, people should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or Preparers, and any supporting material to the IRS Lead Development Center in the Office of Promoter Investigations. 

    Mail: 

    Internal Revenue Service

    Lead Development Center MS7900

    1973 N. Rulon White Blvd

    Ogden, UT 84404

    Fax: 877-477-9135 

    Alternatively, taxpayers and tax professionals may report the information to the IRS Whistleblower Office for possible monetary award. 

    Taxpayers can also report scams to the Treasury Inspector General for Tax Administration or the Internet Crime Complaint Center. The Report Phishing and Online Scams page at IRS.gov provides complete details.


  • 25 Nov 2024 1:01 PM | Anonymous

    WASHINGTON —The Internal Revenue Service today reminded low- and moderate-income taxpayers that they can save for retirement now and possibly earn a tax credit in 2025 and future years.

    The Retirement Savings Contributions Credit, also known as the Saver’s Credit, helps taxpayers offset a portion of the first $2,000 ($4,000 if married filing jointly) they voluntarily contribute to Individual Retirement Arrangements (IRAs), 401(k) plans and similar workplace retirement programs.

    The credit also helps eligible persons with a disability who are the designated beneficiary of an Achieving a Better Life Experience (ABLE) account and contributes to that account. For more information about ABLE accounts, see Publication 907, Tax Highlights for Persons with Disabilities, on IRS.gov.

    The maximum Saver’s Credit is $1,000 ($2,000 for married couples). The credit can increase a taxpayer’s refund or reduce the tax owed but is affected by other deductions and credits. Rollover contributions do not qualify for the credit, and distributions from a retirement plan or ABLE account reduce the contribution amount used to figure the credit.

    Who is eligible?

    Taxpayers can use the Interactive Tax Assistant tool for the Saver’s Credit to determine their eligibility. A taxpayer is eligible for the credit if they’re:

    • Age 18 or older,
    • Not claimed as a dependent on another person’s return, and
    • Not a full-time student.

    Furthermore, the Saver’s Credit can be claimed by:

    • Married couples filing jointly with adjusted gross incomes up to $76,500.
    • Heads of household with adjusted gross incomes up to $57,375.
    • Married individuals filing separately and singles with adjusted gross incomes up to $38,250.
    • Qualified surviving spouse filers.

    Contribution deadlines

    Individuals with IRAs have until April 15, 2025 - the due date for filing their 2024 return - to set up a new IRA or add money to an existing IRA for 2024. Both Roth and traditional IRAs qualify.

    Individuals with workplace retirement plans still have time to make qualifying retirement contributions and possibly get the Saver’s Credit on their 2024 tax return. Contributions to workplace retirement plans must be made by December 31 to a:

    • 401(k) plan.
    • 403(b) plan for employees of public schools and certain tax-exempt organizations.
    • Governmental 457 plan for state or local government employees.
    • Thrift Savings Plan (TSP) for federal employees.

    See the instructions to Form 8880, Credit for Qualified Retirement Savings Contributions, for a list of qualifying workplace retirement plans and additional details. Finally, visit the Saver’s Credit page on IRS.gov to learn about rules, contribution rates and credit limits.


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