IRS Tax News

  • 05 Feb 2024 9:32 AM | Anonymous

    IRS to offer an Employee Retention Credit webinar on Feb. 8; provide updates on Voluntary Disclosure Program, moratorium

    WASHINGTON — As part of an ongoing process to educate and inform people about the Employee Retention Credit (ERC), the Internal Revenue Service will host a free ERC Voluntary Disclosure Program webinar on Thursday, Feb. 8 at 2 p.m. EST.

    The 75-minute webinar will focus on:

    • Who can participate and how to apply for the ERC Voluntary Disclosure Program.
    • The advantages of the program and what happens after applying.
    • ERC resources available from the IRS.

    Though primarily aimed at tax professionals, who can earn one continuing education (CE) credit for participation, the webinar may also be useful to others interested in this topic, such as employers who are exploring options to resolve an inaccurate ERC claim that was processed and paid. The webinar also includes a live question-and-answer session. Those who want to attend need to register for the Employee Retention Credit Voluntary Disclosure Program webinar.

    Protecting taxpayers

    The ERC Voluntary Disclosure Program, announced in December, is part of a larger effort at the IRS to help employers who were misled by aggressive marketing and misinformation around ERC eligibility. The program helps employers who want to pay back the money they received after filing ERC claims in error. The key benefit of the program is that they only have to pay back 80% of the ERC.

    Earlier, the IRS introduced a moratorium on processing new ERC claims in September to protect small business owners and organizations from scams.

    ERC withdrawal

    special ERC withdrawal initiative announced in October is still available. It offers the option to withdraw a questionable claim that has not yet been processed or paid. The IRS created it to help small business owners and others who were pressured or misled by ERC marketers or promoters into filing ineligible claims. Claims that are withdrawn will be treated as if they were never filed. The IRS will not impose penalties or interest.

    For more information on ERC eligibility, the IRS has prepared special information to help businesses understand the complex guidelines about the credit, sometimes referred to as the Employee Retention Tax Credit or ERTC. The special information includes ERC frequently asked questions and the ERC Eligibility Checklist, which is available as an interactive tool or as a printable guide. The interactive tool provides an easy, interactive way for businesses to check their eligibility.

    To learn about other upcoming webinars, visit the Webinars for Tax Practitioners page on IRS.gov.


  • 31 Jan 2024 11:05 AM | Anonymous

    IRS: Free Jan. 30 webinar to focus on navigating through restart of automated collection notices, penalty relief

    WASHINGTON — The Internal Revenue Service will hold a free webinar, designed primarily for tax professionals whose clients were affected by the delayed notices during the COVID pandemic.

    The webinar will take place on Tuesday, Jan. 30, at 2 p.m. ET. It will reflect last month's announcement that in general, the IRS will restart collection notices reminding taxpayers of their balance due this year and provide penalty relief on millions of tax returns.

    During this free webinar the IRS will:

    • Discuss the restart of collection notices and letters, including:
      • Special reminder letter, LT38 - Reminder, Notice Resumption.
      • Changes to typical sequence of automated notices.
      • Gradual approach to sending notices during filing season.
    • Explain penalty relief for tax years 2020 and 2021.
    • Share helpful IRS resources to resolve tax debt.
    • Plus, the IRS will host a live Question and Answer session.

    Certificates of completion are being offered. Tax professionals earn up to one continuing education (CE) credit in the category federal tax.

    Closed captioning will be offered.

    To register for the webinar, visit the Internal Revenue Service webinar website.

    Questions? Email cl.sl.web.conference.team@irs.gov.

     


  • 31 Jan 2024 11:02 AM | Anonymous

    IRS, partners highlight EITC Awareness Day with tax resources that benefit millions of low- and moderate-income workers

    WASHINGTON – The Internal Revenue Service and partners around the nation today launched the annual Earned Income Tax Credit Awareness Day outreach campaign to help millions of low-to-moderate income working Americans that are eligible to claim the Earned Income Tax Credit (EITC).

    For the past 18 years, the IRS has invited community organizations, elected officials, state and local governments, schools, employers and other interested parties to join this national grassroots effort.

    According to the most recent figures, approximately 23 million workers and families received about $57 billion in EITC for tax year 2022, and the average amount of EITC received was about $2,541. The IRS estimates that about one in five of EITC eligible taxpayers don’t claim this valuable credit, a statistic that stresses the importance of the annual EITC Awareness Day outreach campaign.

    “The IRS and our partners across the nation urge people to look into this frequently overlooked tax credit that can help millions of taxpayers,” said IRS Commissioner Danny Werfel. “On EITC Awareness Day and throughout the filing season, the IRS and our partners work hard to reach eligible taxpayers and provide useful information and resources to help people determine their eligibility and how to properly claim this valuable credit. Even people who don’t normally file might still be eligible for the Earned Income Tax Credit, which can be thousands of dollars.”

    Werfel attended a special EITC Awareness Day event Friday in Baltimore sponsored by the CASH (Creating Assets, Savings and Hope) Campaign of Maryland. IRS leaders across the nation are also participating in local events this month highlighting the importance of EITC, which helps millions of taxpayers each year.

    The IRS administers the EITC, which Congress originally approved in 1975. It was developed in part to offset the burden of Social Security taxes and provide an incentive to work.

    Who is eligible to claim the EITC?
    Workers must meet certain requirements and file a tax return, even if they are not required to file due to earned income levels. The IRS estimates that a third of those who qualify for EITC became eligible for the first time this year due to changes in their marital, parental or financial status.

    The IRS encourages workers to use the EITC Assistant to check for eligibility or visit Child-Related Tax Benefits Comparison for basic eligibility rules.

    Eligible workers must have valid Social Security numbers for themselves, their spouse if filing a joint return, and for each qualifying child claimed for the EITC. There are special rules for those in the military or those out of the country.

    Those with qualifying children can receive a maximum of $7,430 when claiming the EITC, up from $6,935 in 2022.

    Eligible workers between the ages of 25 and 64 with no dependents can also receive up to $600 by claiming the EITC. Married but separated spouses who do not file a joint return may qualify to claim EITC if they meet certain requirements.

    EITC is for workers whose income does not exceed the following limits in 2023:

    • $56,838 ($63,398 married filing jointly) with three or more qualifying children who have valid Social Security numbers (SSNs).
    • $52,918 ($59,478 married filing jointly) with two qualifying children who have valid SSNs.
    • $46,560 ($53,120 married filing jointly) with one qualifying child who has a valid SSN.
    • $17,640 ($24,210 married filing jointly) with no qualifying children with valid SSNs.
    • Investment income must be $11,000 or less.

    Filing options to choose from when claiming the EITC
    To get the EITC, workers must file a tax return and claim the credit. The IRS also reminds taxpayers that the quickest way to get a tax refund is by filing an accurate tax return electronically and choosing direct deposit for their refund.

    Here are some options on how to claim the EITC:

    When to expect EITC refunds
    Most EITC or Additional Child Tax Credit (ACTC) related refunds should be available in bank accounts or on debit cards by Feb. 27 if taxpayers chose direct deposit and there are no other issues with their tax return. Taxpayers can check Where’s My Refund? for their personalized refund date. Where's My Refund? will be updated with projected deposit dates for most early EITC/ACTC refund filers by February 17.

    Take advantage of other valuable tax credits
    Taxpayers should make IRS.gov their first stop to find valuable info this filing season. Even if a taxpayer does not qualify for the EITC, they may be eligible for other credits or deductions. The Interactive Tax Assistant is a helpful tool for taxpayers to see if they qualify for the Child Tax Credit, Additional Child Tax Credit or Credit for Other Dependents.

    Related items


  • 26 Jan 2024 1:06 PM | Anonymous

    Notice 2024-23 provides relief from the 12-month limitation for taxpayers making rollovers to certain 529 plans. The Maryland Prepaid College Trust, which is a qualified tuition plan under section 529 has experienced numerous system issues in recent years. Many taxpayers moved their money out of MPCT because of the issues. In July, MPCT determined it owed taxpayers additional money, and section 529 only allows one tax-free rollover per 12-month period (generally).

    Notice 2024-23 will be in IRB: 2024-7, dated Monday 02/12/2024.


  • 26 Jan 2024 1:05 PM | Anonymous

    Treasury, IRS announce special relief for certain rollovers to or from Maryland Prepaid College Trust accounts

    WASHINGTON — The Department of the Treasury and the Internal Revenue Service issued Notice 2024-23 announcing special relief for taxpayers impacted by recent system issues affecting the Maryland Prepaid College Trust as described in the notice.

    Generally, federal tax law only allows one tax-free rollover in a 12-month period from one qualified tuition program to another for the benefit of the same beneficiary. The notice issued today provides that the 12-month limitation for taxpayers making such rollovers will not be asserted by the IRS provided the rollover in question meets the criteria described in Notice 2024-23.

    Under the newly issued notice, a qualified tuition program distribution will be treated as a qualified rollover (as defined in the notice) if the following criteria are met:

    • The taxpayer makes a rollover to or from the designated beneficiary’s Maryland Prepaid College Trust account before Jan. 1, 2025;
    • The 12-month limitation described above would otherwise apply to the rollover to or from the Maryland Prepaid College Trust account; and
    • The rollover was preceded by a qualified rollover from that same designated beneficiary’s Maryland Prepaid College Trust account after Dec. 31, 2021.

    If a taxpayer eligible for the relief described in Notice 2024-23 receives a Form 1099-Q that includes a distribution that is treated as a qualified rollover under Notice 2024-23, then the amount corresponding to the qualified rollover is not includible in gross income, and the taxpayer is not required to report the amount on the taxpayer’s tax return.

    Taxpayers eligible for relief under Notice 2024-23 are not required to file Form 5329, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts, for such a distribution and the 10% addition to tax does not apply.

    More detailed information regarding section 529 of the Internal Revenue Code may be found on the IRS.gov webpage at Topic No. 313, Qualified Tuition Programs (QTPs).


  • 23 Jan 2024 9:08 AM | Anonymous

    Taxpayers should continue to report all cryptocurrency, digital asset income


    WASHINGTON - The Internal Revenue Service today reminded taxpayers that they must again answer a digital asset question and report all digital asset related income when they file their 2023 federal income tax return, as they did for their 2022 federal tax returns.


    The question appears at the top of Forms 1040, Individual Income Tax Return; 1040-SR, U.S. Tax Return for Seniors; and 1040-NR, U.S. Nonresident Alien Income Tax Return, and was revised this year to update wording. The question was also added to these additional forms: Forms 1041, U.S. Income Tax Return for Estates and Trusts; 1065, U.S. Return of Partnership Income; 1120, U.S. Corporation Income Tax Return; and 1120S, U.S. Income Tax Return for an S Corporation.


    Depending on the form, the digital assets question asks this basic question, with appropriate variations tailored for corporate, partnership or estate and trust taxpayers:


    "At any time during 2023, did you: (a) receive (as a reward, award or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?"


    What is a digital asset?

    A digital asset is a digital representation of value that is recorded on a cryptographically secured, distributed ledger or any similar technology. Common digital assets include:


      *  Convertible virtual currency and cryptocurrency.

      *  Stablecoins.

      *  Non-fungible tokens (NFTs).


    Everyone must answer the question

    Everyone who files Forms 1040, 1040-SR, 1040-NR, 1041, 1065, 1120, 1120 and 1120S must check one box answering either "Yes" or "No" to the digital asset question. The question must be answered by all taxpayers, not just by those who engaged in a transaction involving digital assets in 2023.


    When to check "Yes"

    Normally, a taxpayer must check the "Yes" box if they:


      *  Received digital assets as payment for property or services provided;

      *  Received digital assets resulting from a reward or award;

      *  Received new digital assets resulting from mining, staking and similar activities;

      *  Received digital assets resulting from a hard fork (a branching of a cryptocurrency's blockchain that splits a single cryptocurrency into two);

      *  Disposed of digital assets in exchange for property or services;

      *  Disposed of a digital asset in exchange or trade for another digital asset;

      *  Sold a digital asset; or

      *  Otherwise disposed of any other financial interest in a digital asset.


    How to report digital asset income

    In addition to checking the "Yes" box, taxpayers must report all income related to their digital asset transactions. For example, an investor who held a digital asset as a capital asset and sold, exchanged or transferred it during 2023 must use Form 8949, Sales and other Dispositions of Capital Assets, to figure their capital gain or loss on the transaction and then report it on Schedule D (Form 1040), Capital Gains and Losses. A taxpayer who disposed of any digital asset by gift may be required to file Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.


    If an employee was paid with digital assets, they must report the value of assets received as wages. Similarly, if they worked as an independent contractor and were paid with digital assets, they must report that income on Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship). Schedule C is also used by anyone who sold, exchanged or transferred digital assets to customers in connection with a trade or business.


    When to check "No"

    Normally, a taxpayer who merely owned digital assets during 2023 can check the "No" box as long as they did not engage in any transactions involving digital assets during the year. They can also check the "No" box if their activities were limited to one or more of the following:


      *  Holding digital assets in a wallet or account;

      *  Transferring digital assets from one wallet or account they own or control to another wallet or account they own or control; or

      *  Purchasing digital assets using U.S. or other real currency, including through electronic platforms.


    For a set of frequently asked questions (FAQs) and other details, visit the Digital Assets page on IRS.gov.




  • 23 Jan 2024 9:02 AM | Anonymous

    Notice 2024-20 provides taxpayers with a list of eligible census tracts in advance of the 2023 filing season and to explain how taxpayers can identify the 11-digit census tract identifier for the location where the property is placed in service. The IRS intends to propose regulations including this information in the future, but taxpayers may rely on the notice until proposed regulations are published.

  • 23 Jan 2024 8:58 AM | Anonymous

    Notice 2024-19 provides relief from certain penalties imposed solely for failure of a partnership with unrealized receivables or inventory items to furnish Part IV of Form 8308, Report of a Sale or Exchange of Certain Partnership Interests, by January 31, 2024, to the transferor and transferee in certain transfers of partnership interests that occurred in calendar year 2023.

    Notice 2024-19 will be in IRB: 2024-5, dated 01/29/2024.

  • 18 Jan 2024 4:34 PM | Lisa Noon (Administrator)

    Announcement of the official start date of the 2024 Tax Season with an overview of the expanded IRS tools and resources available.

    The IRS and Security Summit partners warn of surge in “new client” scams aimed at tax pros.

    Monday, January 29, 2024 has been announced by the IRS as the official start date for the 2024 Tax Season for individual returns. The filing deadline for most of the nation is Monday, April 15, 2024 with the exception of taxpayers in Maine or Massachusetts who are required to file resident returns by Wednesday, April 17, 2024 due to holidays specific to those states.

    Tax filing tips highlighted in the news alert include a reminder for Tax Pros to encourage their clients to use direct deposit for the fastest refunds. Tax returns with EITC or ACTC credits resulting in a refund situation will be available for those taxpayers on or after February 27, 2024. Read the full news alert here.

    Key filing dates for the 2024 Tax Season:

    • January 12: IRS Free File opens.
    • January 16: The IRS will begin accepting all business tax returns through Modernized e-File (MeF) at 9 AM EST.    
    • January 16: Due date for 2023 fourth quarter estimated tax payments.
    • January 26: Earned Income Tax Credit Awareness Day.
    • January 29: Filing season start date for individual tax returns through Modernized e-File (MeF) at 9 AM EST.  
    • February 27: First Date Refunds Available for Taxpayers Claiming EITC or ACTC.
    • April 15: Due date of filing a tax return or to request an extension for most of the nation.
    • April 17: Due date for Maine and Massachusetts.
    • October 15: Due date for extension filers.

    An additional release was issued by the IRS alerting tax professionals to be vigilant of increased threats in the form of fradulent emails. This new round of filing season-related email schemes include scenarios where cybercriminals pose as potential clients. Read the full news alert here for additional information.

    Those who receive any phishing emails from the IRS or IRS-related functions should forward the full emails including headers to phishing@irs.gov.


  • 18 Jan 2024 4:25 PM | Lisa Noon (Administrator)

    The Internal Revenue Service and the Treasury Department reached a major milestone in implementation of key provisions in the Inflation Reduction Act with more than 1,000 projects registered through the new IRS Energy Credits Online (ECO) tool.

    The Inflation Reduction Act created two new credit delivery mechanisms—elective pay (otherwise known as “direct pay”) and transferability — that enable state, local and Tribal governments; non-profit organizations, U.S. territories; and other entities to take advantage of clean energy tax credits.

    “The IRS is working hard to put in place tools that can help taxpayers and the wider tax community, and this important new online tool reflects our progress in this area. We have surpassed a major milestone with more than 1,000 facility registrations through the tool,” said IRS Commissioner Danny Werfel. “This new tool helps key groups with these clean energy credits as well as improves communication and reduces compliance issues. This effort is part of our larger transformation effort underway across the IRS as our efforts continue to accelerate.”

    To facilitate taxpayers receiving a direct payment, transferring a clean energy credit, or claiming a CHIPS credit, the IRS built ECO for taxpayers to complete the pre-file registration process and receive a registration number. The registration number must be included on the taxpayer’s annual return when making a direct payment or transfer election for a clean energy credit.

    The IRS and Treasury have conducted a robust and wide-ranging educational campaign on these new provisions to benefit taxpayers, including hosting office hours sessions where representatives from the IRS are available to answer questions related to the pre-registration process.

    For the IRS ECO direct pay, transferability, and CHIPS functionality, as of this week approximately 145 entities have requested registration numbers for more than 1,290 projects or facilities located in 40 states and territories, with more than 1,170 projects or facilities pursuing transferability and more than 110 projects or facilities pursuing direct pay. The value of the tax credits for these projects will be determined when the credit recipient files their taxes.

    The IRS has published detailed information on how to complete pre-filing registration, including Publication 5884, Inflation Reduction Act (IRA) and CHIPS Act of 2022 (CHIPS) Pre-Filing Registration Tool -- User Guide.


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