IRS Tax News

  • 17 Oct 2023 8:16 AM | Lisa Noon (Administrator)

    IRS: Taxpayers impacted by the terrorist attacks in Israel qualify for tax relief; Oct. 16 filing deadline, other dates postponed to Oct. 7, 2024

    Oct. 13, 2023

    WASHINGTON — The Internal Revenue Service today announced tax relief for individuals and businesses affected by the terrorist attacks in the State of Israel. These taxpayers now have until Oct. 7, 2024, to file various federal returns, make tax payments and perform other time-sensitive tax-related actions.

    In Notice 2023-71PDF, posted today on IRS.gov, the IRS provided relief to certain 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. The IRS will continue to monitor events and may provide additional relief.

    Filing and Payment Relief

    Today's notice postpones various tax filing and payment deadlines that occurred or will occur during the period from Oct. 7, 2023, through Oct. 7, 2024 (postponement period). As a result, affected individuals and businesses will have until Oct. 7, 2024, to file returns and pay any taxes that were originally due during this period. Among other things, this includes:

    • Individuals who had a valid extension to file their 2022 return due to run out on Oct. 16, 2023. The IRS noted, however, that because tax payments related to these 2022 returns were due on April 18, 2023, those payments are not eligible for this relief. So, these individuals filing on extension have more time to file, but not to pay.
    • Calendar-year corporations whose 2022 extensions run out on Oct. 16, 2023. Similarly, these corporations have more time to file, but not to pay.
    • 2023 individual and business returns and payments normally due on March 15 and April 15, 2024. So, these individuals and businesses have both more time to file and more time to pay.
    • Quarterly estimated income tax payments normally due on Jan. 16, April 15, June 17 and Sept. 16, 2024.
    • Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, April 30 and July 31, 2024.
    • Calendar-year tax-exempt organizations whose extensions run out on Nov. 15, 2023.
    • Retirement plan contributions and rollovers.

    Other tax-related deadlines are postponed as well. See Notice 2023-71 and Rev. Proc. 2018-58 for details.

    In addition, the penalty for failure to make payroll and excise tax deposits due on or after Oct. 7, 2023 and before Nov. 6, 2023, will be abated as long as the deposits are made by Nov. 6, 2023.

    Who Qualifies for Relief?

    • Any individual whose principal residence or business entity or sole proprietor whose principal place of business is in Israel, the West Bank or Gaza (the covered area).
    • Any individual, business or sole proprietor, or estate or trust whose books, records or tax preparer is located in the covered area.
    • Anyone killed, injured, or taken hostage due to the terrorist attacks.
    • Any individual affiliated with a recognized government or philanthropic organization and who is assisting in the covered area, such as a relief worker.

    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 can obtain this relief by calling the IRS disaster hotline at 866-562-5227. Alternatively, international callers may call 267-941-1000.

    If an affected taxpayer receives 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


  • 29 Sep 2023 3:50 PM | Anonymous

    WASHINGTON — The Internal Revenue Service today reminded taxpayers about the upcoming tax filing extension deadline. To avoid a possible late filing penalty, those who requested an extension to file their 2022 tax return should file their Form 1040 on or before Monday, Oct. 16.

    Disaster-area taxpayers in most of California and in parts of Alabama and Georgia also have until Oct. 16, 2023, to file various federal individual and business tax returns and make tax payments.

    Those with an IRS address of record in other areas covered by Federal Emergency Management Agency disaster declarations and those returning from a combat zone may have additional time to file. They include:

    • Taxpayers affected by flooding in Illinois and Alaska. They have until Oct. 31, 2023, to file.
    • Those affected by flooding in Vermont. They have until Nov. 15, 2023, to file.
    • Taxpayers affected by recent natural disasters including those impacted by the recent Maui fires and hurricane Idalia in parts of Florida, South Carolina and Georgia. Those in the counties of Maui, Hawaii, and many counties in Florida, South Carolina and Georgia have until Feb. 24, 2024, to file various individual and business tax returns. This list continues to be updated regularly. Taxpayers potentially affected by recent storms should visit the disaster relief page on IRS.gov for the latest information.
    • Members of the military and others serving in a combat zone. They typically have 180 days after they leave the combat zone to file returns and pay any taxes due.

    IRS Free File and other online resources
    IRS Free File is available through Oct. 16 and lets qualified taxpayers prepare and file federal income tax returns online using guided tax preparation software. It’s available to any person or family with an adjusted gross income (AGI) of $73,000 or less in 2022. Taxpayers can use IRS Free File to claim the Child Tax Credit, the Earned Income Tax Credit, and other important credits. IRS Free File Fillable Forms is available for taxpayers whose 2022 AGI was greater than $73,000 and are comfortable preparing their own tax return.

    Taxpayers can get answers to many tax law questions by using the IRS's Interactive Tax Assistant tool. Additionally, taxpayers can view tax information in several languages by clicking on the "English" tab located on the IRS.gov home page.

    The IRS Online Account feature provides information to help taxpayers file an accurate return including AGI amounts from last year’s return, estimated tax payment amounts and refunds applied as a credit.

    Schedule and pay electronically
    Taxpayers can file anytime and schedule their federal tax payments up to the Oct. 16 due date. They can pay online, by phone or with their mobile device and the IRS2Go app. Some other key points to keep in mind when filing and paying federal taxes electronically include:

    • Convenience. Electronic payment options are easy and flexible. Taxpayers can pay when they file electronically using online tax software. Those who use a tax preparer should ask the preparer to make the tax payment through an electronic funds withdrawal from a bank account.
    • IRS Direct Pay. This feature allows taxpayers to pay online directly from a checking or savings account for free and schedule payments up to 365 days in advance. An IRS Online Account is needed, however, to use IRS Direct Pay.
    • Pay by card. Payments can be made with a credit card, debit card or a digital wallet option. These are available through a payment processor. The payment processor, not the IRS, charges a fee for this service.
    • IRS2Go. The IRS2Go mobile app provides access to mobile-friendly payment options, including Direct Pay and debit or credit card payments.
    • Electronic Federal Tax Payment System (EFTPS). Convenient, safe and easy, EFTPS allows for payments online or by phone using the EFTPS Voice Response System. EFTPS payments must be scheduled by 8 p.m. ET at least one calendar day before the tax due date.
  • 28 Sep 2023 4:18 PM | Anonymous

    Notice 2023-65 provides guidance on the new energy efficient home credit under section 45L of the Internal Revenue Code (§ 45L credit), as amended by the Inflation Reduction Act of 2022. The § 45L credit is allowed to an eligible contractor that constructs a qualified new energy efficient home (qualified home) that is acquired by a person from the eligible contractor for use as a residence during the taxable year. A qualified home is a dwelling unit located in the United States, the construction of which is substantially completed after August 8, 2005, that meets the energy saving requirements of § 45L(c). The applicable amount of the credit is contingent on which set of energy saving requirements the dwelling unit meets, and is $500, $1,000, $2,500, or $5,000. For certain dwelling units that meet the prevailing wage requirements of § 45L(g), the $500 amount is increased to $2,500 and the $1,000 amount is increased to $5,000. The energy saving requirements of § 45L(c) incorporate certain Energy Star program requirements (available on an Environmental Protection Agency (EPA) webpage) and certain zero energy ready home program requirements (available on a Department of Energy (DOE) webpage).

  • 27 Sep 2023 2:22 PM | Anonymous

    WASHINGTON − The Internal Revenue Service today reminded eligible farmers and ranchers forced to sell livestock due to drought may have an extended period of time in which to replace the livestock and defer tax on any gains from the forced sales.

    The IRS posted Notice 2023-67 listing the applicable areas, a county or other jurisdiction, designated as eligible for federal assistance on IRS.gov. This includes 49 states, the District of Columbia, two U.S. Territories and two independent nations in a Compact of Free Association with the United States.

    The relief generally applies to capital gains realized by eligible farmers and ranchers on sales of livestock held for draft, dairy or breeding purposes. Sales of other livestock, such as those raised for slaughter or held for sporting purposes, or poultry, are not eligible.

    The sales must be solely due to drought, causing an area to be designated as eligible for federal assistance. Livestock generally must be replaced within a four-year period, instead of the usual two-year period. The IRS is authorized to further extend this replacement period if the drought continues.

    The one-year extension, announced in the notice, gives eligible farmers and ranchers until the end of their first tax year after the first drought-free year to replace the sold livestock. Details, including an example of how this provision works, can be found in Notice 2006-82, available on IRS.gov.

    The IRS provides this extension to eligible farmers and ranchers that qualified for the four-year replacement period, if the applicable region is listed as suffering exceptional, extreme or severe drought conditions during any week between Sept. 1, 2022, and Aug. 31, 2023. This determination is made by the National Drought Mitigation Center.

    As a result, eligible farmers and ranchers whose drought-sale replacement period was scheduled to expire on Dec. 31, 2023, in most cases, now have until the end of their next tax year to replace the sold livestock. Because the normal drought-sale replacement period is four years, this extension impacts drought sales that occurred during 2019. The replacement periods for some drought sales before 2019 are also affected due to previous drought-related extensions affecting some of these localities.

    More information on reporting drought sales and other farm-related tax issues can be found in Publication 225, Farmer’s Tax Guide, available on IRS.gov.

  • 26 Sep 2023 5:06 PM | Anonymous

    WASHINGTON — The Internal Revenue Service today announced the availability of expanded chatbot technology to help quickly answer basic questions for people receiving notices about possibly underreporting their taxes.

    The new chatbot feature will assist taxpayers who receive notices CP2000, CP2501 and CP3219A. These mailings inform taxpayers if the tax information the IRS received from third parties doesn’t match the information they provided themselves to the IRS.

    This technology expansion is supported through the Inflation Reduction Act funding to transform the IRS and improve services to help taxpayers.

    “Through our transformation efforts, we are working to expand technologies to help taxpayers and tax professionals interact with us in the ways they prefer, including expanded digital, phone and in-person assistance options,” said IRS Commissioner Danny Werfel. “We understand receiving a notice from the IRS can be concerning, and people frequently have questions. The use of chatbots in call centers has emerged as an effective practice in both the private and public sectors, making it easier for people to quickly get basic information to resolve their issues and avoid wait times on the phone. Deploying chatbots at the IRS call center helps taxpayers get their issues resolved quicker, and it helps free up valuable phone resources for other taxpayers with questions on more complex issues.”

    Rollout of this chatbot builds on prior IRS successes using the technology to help improve taxpayer service. Since January 2022, IRS voice and chatbots, both in English and Spanish, helped more than 13 million taxpayers avoid wait times by resolving their tax issues, including setting up roughly $151 million in payment agreements.

    The chatbot simulates human interaction with taxpayers through a web or mobile app on a computer or mobile screen by responding to questions or requests in a chat feature. Also, at the end of the conversation, taxpayers can press the “representative” button to speak to a live assistor.
    The new IRS chatbot is available to help taxpayers with questions such as:

    • What to do if they received a notice.
    • What to do if they need more time to respond to a notice.
    • How to find out if the IRS received their response.

    The IRS plans to continue additional bot technology features in the future to assist taxpayers with more complex issues.

    The IRS transformation efforts provided by Inflation Reduction Act Funding are outlined in the Strategic Operating Plan released in April.

    Additional self-service resources

  • 25 Sep 2023 2:25 PM | Anonymous

    Notice 2023-68 announces the special per diem rates effective October 1, 2023, 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. 

    Rev. Proc. 2019-48 provides the rules for using per diem rates, rather than actual expenses, to substantiate the amount of expenses for lodging, meals, and incidental expenses for travel away from home.  Taxpayers who use per diem rates to substantiate the amount of travel expenses under Rev. Proc. 2019-48 may use the federal per diem rates published annually by the General Services Administration.  Rev. Proc. 2019-48 allows certain taxpayers to use a special transportation industry rate or to use rates under a high-low substantiation method for certain high-cost localities.  The IRS announces these rates and the rate for the incidental expenses only deduction in an annual notice.

    Use of a per diem substantiation method is not mandatory.  A taxpayer may substantiate actual allowable expenses if the taxpayer maintains adequate records or other sufficient evidence for proper substantiation.

  • 22 Sep 2023 4:14 PM | Anonymous

    As work continues to focus more attention on high-income compliance issues, the IRS plans to establish a special area to focus on large or complex pass-through entities. The new work unit will be housed in the IRS Large Business and International (LB&I) division and will include the people joining the IRS under the new IRS hiring initiative recently announced. "This is another part of our effort to ensure the IRS holds the nation's wealthiest filers accountable to pay the full amount of what they owe," said IRS Commissioner Danny Werfel. "We are honing-in on areas where we believe non-compliance among our wealthiest filers has proliferated over the last decade of IRS budget cuts, and pass-throughs are high on our list of concerns. This new unit will leverage Inflation Reduction Act funding to disrupt efforts by certain large partnerships to use pass-throughs to intentionally shield income to avoid paying the taxes they owe.”

  • 19 Sep 2023 10:24 AM | Anonymous

    With the rise in cybersecurity risks it is important that tax professionals take steps to secure their client’s data. A Written Information Security Plan (WISP) will provide a blueprint of action in the event of a security incident.

    Join us for a quick information session where we discuss the WISP. During this session we will explain:

    ·         What a WISP is
    ·         Why a WISP is required
    ·         The basic considerations for a WISP

    We will also discuss the Identity Protection PIN and why you should encourage your clients to apply for one.

    September 28, 2023

    10:00 AM – 10:3O AM EST

    REGISTER HERE

    This event will be held on Microsoft Teams

    This event will not be recorded

  • 18 Sep 2023 11:49 AM | Anonymous

    Amid rising concerns about a flood of improper Employee Retention Credit (ERC) claims, the IRS ordered an immediate moratorium through at least the end of the year on processing new claims for the pandemic-era relief program to protect honest small business owners from scams. The IRS continues to work previously filed ERC claims received prior to the moratorium but renewed a reminder that increased fraud concerns means processing times will be longer. IRS Commissioner Danny Werfel ordered the immediate moratorium, beginning Sept. 14 through at least Dec. 31, following growing concerns inside the tax agency, from tax professionals as well as media reports that a substantial share of new claims from the aging program are ineligible and increasingly putting businesses at financial risk. 

  • 14 Sep 2023 4:28 PM | Anonymous

    Notice 2023-64 provides additional interim guidance that is intended to further clarify the application of the new corporate alternative minimum tax (CAMT), as added to the Code by the Inflation Reduction Act of 2022. The Treasury Department and the IRS anticipate that forthcoming proposed regulations will provide rules that are consistent with the interim guidance. Specifically, it describes rules for determining a taxpayer’s applicable financial statement and adjusted financial statement income (AFSI), including rules applicable to tax consolidated groups and certain foreign corporations. It provides rules for AFSI adjustments for the depreciation of section 168 property, the amortization of qualified wireless spectrum, the treatment of certain taxes, and to prevent certain duplications and omissions. It also describes rules regarding the determination of applicable corporation status, the CAMT foreign tax credit, and financial statement net operating losses. Finally, it provides a request for comments and the procedure for submitting such comments.

    Notice 2023-64 will be in IRB: 2023-40, dated 10/02/2023.

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