Issue Number:  2024-51

Inside This Issue

1. IRS announces special payments going this month to 1 million taxpayers who did not claim 2021 Recovery Rebate Credit
2. Get ready now to file 2025 taxes
3. Taxpayers can now submit Form 8898 digitally
4. e-Filing requirement for Information Returns
5. Treasury and IRS propose regulations to update rules for tax professionals who can practice before the IRS
6. ETAAC is accepting membership applications through Jan. 31
7. IRS needs your feedback on Form 6765 draft instructions
8. Tax pros: New continuing education seminars available on IRS Nationwide Tax Forum Online
9. News from the Justice Department’s Tax Division
10. Technical Guidance

1.  IRS announces special payments going this month to 1 million taxpayers who did not claim 2021 Recovery Rebate Credit

The Internal Revenue Service will issue automatic payments later this month to eligible people who did not claim the Recovery Rebate Credit on their 2021 tax returns. The IRS announced the special step Friday after reviewing internal data showing many eligible taxpayers who filed a return but did not claim the credit. The Recovery Rebate Credit is a refundable credit for individuals who did not receive one or more Economic Impact Payments (EIP), also known as stimulus payments.

No action is needed for eligible taxpayers to receive these payments, which will go out automatically in December and should arrive in most cases by late January 2025. The payments will be automatically direct deposited or sent by paper check; eligible taxpayers will also receive a separate letter notifying them of the payment. 

Back to top

2.  Get ready now to file 2025 taxes

Tax pros: Remind your clients to get ready now to file their taxes in 2025. Visit the Get Ready page to view key information such as steps to make tax filing easier, gathering and organizing tax records, life changes that can affect a refund, what to do with a Form 1099-K, home and energy related credits, avoiding refund delays, understanding refund timing and more.

Back to top

3.  Taxpayers can now submit Form 8898 digitally

Effective Dec. 8, taxpayers can submit IRS Form 8898, Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Territory using the IRS Digital Mobile Application Format (DMAF). Many of these submissions originate from outside the 50 states and mailing these forms to ensure timely receipt may require extra effort. Using this format will provide taxpayers with:

• Paperless option to file Form 8898,
• Faster and easier submission process,
• Guaranteed timely receipt and
• Reduced burden.

To access this form, filers can go to IRS.gov and:

• Select Find Forms & Instructions.
• Select Mobile–friendly forms from the list on the left sidebar.
• Select F8898 from the menu.

There is no need to submit a paper copy to the IRS, and the filer can download or print a copy of what was submitted.

Back to top

4.  e-Filing requirement for Information Returns

The IRS reminds taxpayers of the filing requirements for information returns that must be filed on or before Jan. 1. Electronic submission is required for those who are filing 10 or more information returns. This includes Forms W-2, e-filed with the Social Security Administration. In addition, taxpayers may prepare to file information returns electronically by applying for a Transmitter Control Code (TCC) from the IRS as soon as possible, as it may take up to 45 days for processing. (Note: A TCC is not required to electronically file Form W-2, although registration with Business Services Online at SSA.gov is required. Form 8809, Application for Extension of Time to File Information Returns can be used to request an extension if a taxpayer needs more time to file information returns. E-Filing options can be found at IRS.gov/inforeturn. 

Back to top

5.  Treasury and IRS propose regulations to update rules for tax professionals who can practice before the IRS

The Department of the Treasury and the Internal Revenue Service today issued proposed regulations to update the rules for certain tax professionals who can practice before the IRS; these rules are contained in Treasury Department Circular 230.

The IRS Office of Professional Responsibility generally has responsibility for matters related to practitioner conduct, and exclusive responsibility for discipline, including disciplinary proceedings and sanctions. The proposed regulations, if finalized, would amend Circular 230 in various ways to account for changes in the law and the evolving nature of tax practice. Among other changes, the proposed regulations would remove or update the parts of Circular 230 related to registered tax return preparers and tax return preparation, as well as contingent fees to reflect changes in the law since the prior amendments to Circular 230 in 2011 and 2014. The proposed regulations would also revise or eliminate other provisions that are out of date.

Back to top

6.  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. New members 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

7.  IRS needs your feedback on Form 6765 draft instructions

Draft instructions for Form 6765, Credit for Increasing Research Activities, commonly referred to as the research credit, were released by the IRS today. The IRS is looking for feedback on the draft instructions, particularly on the Section G reporting for controlled groups, ASC 730 Directive, Section G business component detail and statistical sampling.

Feedback regarding the tax year 2024 draft or final instructions can be submitted to lbi.rt.team@irs.gov through June 30, 2025, using the subject line: “Instructions for Form 6765.” All responses will be considered to ensure the tax year 2025 (processing year 2026) instructions provide clear and updated guidance on completing the form. The IRS remains committed to engaging with stakeholders in preparation for tax year 2025 (processing year 2026).

For additional information, visit Form 6765, Credit for Increasing Research Activities on IRS.gov to learn more.

Back to top

8.  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

9.  News from the Justice Department’s Tax Division

Monica McGinley was charged with tax fraud and theft of government funds in an indictment delivered by a federal grand jury in Greenbelt, Md. According to the indictment, McGinley assisted with the preparation and filing false tax returns, so that she may receive large refunds from the IRS to which she was not entitled from 2014 to 2024. McGinley allegedly claimed nonexistent payments or withholdings and requested nearly $12 million in refunds. The IRS issued refunds to McGinley totaling over $1.5 million. In one example, she allegedly received a U.S. Treasury check for over $1 million. McGinley faces a maximum penalty of 10 years in prison for the theft of government funds charge and a maximum penalty of three years in prison for each of the six counts of aiding and assisting in the preparation and presentation of false tax returns. IRS Criminal Investigation is investigating the case.

Back to top

10.  Technical Guidance

Announcement 2025-02 provides that the Treasury Department and the IRS anticipate that certain portions of future regulations finalizing the proposed regulations will apply beginning in the 2026 distribution calendar year.

Notice 2025-01 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for November 2024 used under section 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 section 430(h)(2)(C)(iv).

Notice 2025-04 announces that the Department of the Treasury and the Internal Revenue Service intend to issue proposed regulations that, for purposes of applying section 482, provide a new simplified and streamlined approach ("SSA") for pricing certain controlled transactions involving baseline marketing and distribution activities.

Notice 2025-05 provides the optional 2025 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.

Revenue Procedure 2025-08 modifies section 7 of Revenue Procedure 2024-23, 2024-23 I.R.B. 1334, to modify the procedures under section 446 of the Internal Revenue Code and section1.446-1(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 Dec. 31, 2021.

Revenue Ruling 2025-01 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, and the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by section 1274.

Back to top

WASHINGTON — The Internal Revenue Service today announced the release of draft Instructions for Form 6765, Credit for Increasing Research Activities, also known as the research credit. 

The IRS is seeking feedback regarding the draft instructions but specifically about Section G reporting for controlled groups, ASC 730 Directive, Section G business component detail and statistical sampling. 

Feedback regarding the tax year 2024 draft or final instructions can be submitted to lbi.rt.team@irs.gov through June 30, 2025, using the subject line: “Instructions for Form 6765.” All feedback will be considered to ensure the tax year 2025 (processing year 2026) instructions provide clear and updated guidance on completing the form. The IRS remains committed to engaging with stakeholders in preparation for tax year 2025 (processing year 2026). 

These instructions will be used in conjunction with revised draft Form 6765 released on Dec. 12, 2024, which includes a new Section E seeking other business information, a new Section F summarizing the qualified research expenses and a new Section G for reporting business component details. The IRS encourages taxpayers and their representatives to review and consider using the new format when preparing their tax year 2024 return. 

The IRS anticipates publishing the final tax year 2024 Form 6765 and Instructions by the end of January 2025. 

Section G will be optional for all filers for tax year 2024 (processing year 2025). For tax year 2025 (processing year 2026) and beyond, Section G will be mandatory for all filers with optional reporting for: 

• Qualified Small Business (QSB) taxpayers, defined under section 41(h)(1) & (2) of the Internal Revenue Code who check the box to claim a reduced payroll tax credit; or

• Taxpayers with total qualified research expenses (QREs) equal to or less than $1.5 million, determined at the control group level and equal to or less than $50 million of gross receipts, as determined under section 448(c)(3) (without regard to subparagraph (A) thereof), claiming a research credit on an original filed return. 

The Form 6765 improvement effort was informed by stakeholder feedback. The IRS released an early preview of Form 6765 changes on Sept. 15, 2023, and invited comments from interested parties on the proposed changes. In response, the IRS received numerous helpful comments from various external stakeholders and revised the form as discussed in the prior news release on June 21, 2024.  

Annually, the IRS receives thousands of returns claiming the research credit that involve hundreds of millions of dollars. There are a substantial number of cases examining research credit issues, which consume significant resources of both taxpayers and the IRS. Improvements to Form 6765 are intended to make tax reporting more consistent, improve the information received for tax administration and build an ongoing effort to manage resources in a more effective and efficient way. 

For more information visit IRS.gov to learn more about Form 6765

Notice 2025-05 provides the optional 2025 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.  This notice also provides the amount taxpayers must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate plan.  Additionally, this notice provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2025 for which employers may use the fleet-average valuation rule in § 1.61-21(d)(5)(v) or the vehicle cents-per-mile valuation rule in § 1.61-21(e). 

Notice 2025-05 will be in IRB: 2025-4, dated January 21, 2025.

WASHINGTON — The Internal Revenue Service today announced that the optional standard mileage rate for automobiles driven for business will increase by 3 cents in 2025, while the mileage rates for vehicles used for other purposes will remain unchanged from 2024. 

Optional standard milage rates are used to calculate the deductible costs of operating vehicles for business, charitable and medical purposes, as well as for active-duty members of the Armed Forces who are moving. 

Beginning Jan. 1, 2025, the standard mileage rates for the use of a car, van, pickup or panel truck will be: 

• 70 cents per mile driven for business use, up 3 cents from 2024.
• 21 cents per mile driven for medical purposes, the same as in 2024.
• 21 cents per mile driven for moving purposes for qualified active-duty members of the Armed Forces, unchanged from last year.
• 14 cents per mile driven in service of charitable organizations, equal to the rate in 2024. 

The rates apply to fully-electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles. 

While the mileage rate for charitable use is set by statute, the mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes, meanwhile, is based on only the variable costs from the annual study. 

Under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. And only taxpayers who are members of the military on active duty may claim a deduction for moving expenses incurred while relocating under orders to a permanent change of station. 

Use of the standard mileage rates is optional. Taxpayers may instead choose to calculate the actual costs of using their vehicle. 

Taxpayers using the standard mileage rate for a vehicle they own and use for business must choose to use the rate in the first year the automobile is available for business use. Then, in later years, they can choose to use the standard mileage rate or actual expenses. 

For a leased vehicle, taxpayers using the standard mileage rate must employ that method for the entire lease period, including renewals. 

Notice 2025-5 contains the optional 2025 standard mileage rates, as well as the maximum automobile cost used to calculate mileage reimbursement allowances under a fixed-and variable rate (FAVR) plan. The notice also provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in 2025 for which employers may calculate mileage allowances using a cents-per-mile valuation rule or the fleet-average-valuation rule

WASHINGTON — With the 2025 filing season quickly approaching, the Internal Revenue Service  encouraged taxpayers to take key steps now to prepare for filing their 2024 federal income tax returns next year. 

The IRS continues to improve taxpayer services to help people prepare for tax season with more digital tools and options available. The IRS encourages taxpayers to sign up now for an IRS Online Account to make tax season easier and help safeguard their tax information. 

There are a number of things taxpayers can do to get ready as the end of 2024 nears and the start of the 2025 tax season approaches. 

The IRS’s Get Readypage on IRS.gov offers practical tips and resources to help taxpayers prepare. It highlights key updates and important steps for taxpayers to consider to make tax filing easier in 2025. 

This reminder is part of a series designed to help taxpayers “Get Ready” for the upcoming filing season. Taking action now can reduce stress and ensure a smoother filing process next year. 

Do more with an IRS Online Account 

Individuals can create or access their IRS Online Account at Online account for individuals. With an IRS Online Account, they can:

• View key details from their most recent tax return, such as adjusted gross income.
• Request an Identity Protection PIN.
• Get account transcripts to include wage and income records.
• Sign tax forms like powers of attorney or tax information authorizations.
• View and edit language preferences and alternative media.
• Receive and view over 200 IRS electronic notices.
• View, make and cancel payments.
• Set up or change payment plans and check their balance.

 

Get an Identity Protection Personal Identification Number (IP PIN) 

An IP PIN is a six-digit number that prevents someone else from filing a federal tax return using an individual’s Social Security number or Individual Taxpayer Identification Number. It’s a vital tool for ensuring the safety of taxpayers’ personal and financial information. 

New for the 2025 filing season, the IRS will accept Forms 1040, 1040-NR and 1040-SS even if a dependent has already been claimed on a previously filed return, as long as the primary taxpayer on the second return includes a valid IP PIN. This change will reduce the time for the agency to receive the tax return and accelerate the issuance of tax refunds for those with duplicate dependent returns. 

The best way to sign up for an IP PIN is through the IRS Online Account. If an individual is unable to create an Online Account, alternative methods are available, such as in-person authentication at a Taxpayer Assistance Center. More information is available on how to sign up at Get an identity protection PIN (IP PIN).  

Deadline for 2024 last quarterly estimated payment is Jan. 15, 2025 

Taxpayers with non-wage income—such as unemployment benefits, self-employment income, annuity payments or earnings from digital assets—may need to make estimated or additional tax payments. The Tax Withholding Estimator on IRS.gov can help wage earners determine if they need to make an additional payment to avoid an unexpected tax bill when filing their return. 

1099-K reporting changes 

Taxpayers who received more than $5,000 in payments for goods and services through an online marketplace or payment app in 2024 should expect to receive a Form 1099-K in January 2025. A copy of this form will be sent to the IRS as well.

Although the IRS is taking a phased in approach to implementation of the Form 1099-K reporting threshold, there have been no changes to the taxability of income. All income, including proceeds from part-time work, side jobs or the sale of goods and services is taxable. Taxpayers must report all income on their tax return unless it's excluded by law, whether they receive a Form 1099-K or not. The law doesn’t allow taxpayers to avoid taxes on income earned just because they didn’t get a form reporting the payments received. 

It is important for taxpayers to understand why they received a Form 1099-K and how to use it along with their other records to figure and report the correct amount of income on their tax return. It is also important for taxpayers to know what to do if they received a Form 1099-K but shouldn't have. In either situation, good recordkeeping is key. Having good records will help make tax filing easier. 

Prepare to include digital assets on taxes in 2025 

Just like previous filing years, taxpayers must report all digital asset-related income when they file their 2024 federal income tax return. A digital asset is property that is stored electronically and can be bought, sold, owned, transferred or traded. Examples include convertible virtual currencies and cryptocurrencies, stablecoins and non-fungible tokens (NFTs).   

If a taxpayer had digital asset transactions last year, they should be sure to keep records that prove their purchase, receipt, sale, exchange or any other disposition of the digital assets and that includes the fair market value, as measured in U.S. dollars of all digital assets received as income or as a payment in the ordinary course of a trade or business.  

When filing 2024 federal income tax returns, taxpayers will be asked to answer “Yes” or “No” to the following question: 

“At any time during the tax year, 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)?” 

Taxpayers should be prepared to answer the question by reviewing the digital assets landing page and FAQ available on IRS.gov. In addition to checking the "Yes" box, taxpayers must report all income related to their digital asset transactions. Information on how to report digital asset transactions, including calculating capital gain or loss, determining basis and reporting the income on the correct form can also be found on the digital assets landing page. 

Understand refund timing and how to avoid delays 

Several factors can influence the timing of a refund after the IRS receives a tax return. While the IRS issues most refunds in less than 21 days, taxpayers are advised not to depend on receiving a 2024 federal tax refund by a specific date for major purchases or bill payments. Some returns may require additional review and take longer to process if there are possible errors, missing information, or indications of identity theft or fraud. 

Additionally, under the PATH Act, the IRS cannot issue refunds for tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) before mid-February. The IRS must hold the entire refund—not just the portion associated with these credits—until the review is complete. 

Gather and organize 2024 tax documents 

To make tax time easier, taxpayers should establish an effective record-keeping system, either electronic or paper, to organize all important documents in one place. This includes year-end income forms such as Forms W-2 from employers, Forms 1099 from banks or other payers, Forms 1099-K from third-party payment networks, Forms 1099-NEC for nonemployee compensation, Forms 1099-MISC for miscellaneous income, Forms 1099-INT for interest income and records of all digital asset transactions. 

Having all necessary documentation ensures taxpayers can file an accurate return and reduces the likelihood of processing delays or refund issues. 

Use direct deposit for a faster refund 

Filing electronically and selecting direct deposit remains the fastest and safest way for taxpayers to receive their 2024 tax refunds. Direct deposit ensures quicker access to refunds compared to receiving a paper check. 

For those without a bank account, resources are available to help. Individuals can learn how to open an account at an FDIC-insured bank or use the national Credit Union Locator tool. Veterans can explore the Veterans Benefits Banking Program for financial services at participating banks. 

Tax refunds can also be deposited onto prepaid debit cards or through mobile payment apps, provided they have routing and account numbers. Taxpayers should confirm with the mobile app provider or financial institution which numbers to use when completing their tax return. 

Free filing options 

Seventy percent of all taxpayers can use free brand name tax software to prepare and file their federal income tax return electronically using IRS Free File. All taxpayers, regardless of income level, can also use IRS Free File Fillable Forms. 

Taxpayers living in participating states with relatively simple tax returns can use Direct File and file their tax return online directly with the IRS. The Direct File program is another option for taxpayers to file their taxes. Taxpayers can see if they are eligible for Direct File. 

Older adults, members of the military and many other taxpayers—depending on their income—may also qualify for free tax return preparation and electronic filing by IRS-trained volunteers through the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs.

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.

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.

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. 

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).

• Individual partners and individual shareholders of limited liability companies (LLC) reporting income on Form 1065, U.S. Return of Partnership Income or Form 1120-S, U.S. Income Tax Return for an S Corporation, can access BTA. They must also have both the SSN/ITIN and K-1.

• 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: 

• Their Social Security number or Individual Taxpayer Identification Number.
• Their Employer Identification Number found on an EIN confirmation or verification letter or on a federal tax return.
• Federal tax documents: 

• • Schedule C, (Form 1040), Profit or Loss from Business Sole Proprietorship,
  • Form 1065, U.S. Return of Partnership Income,
  • Form 1120, U.S. Corporation Income Tax Return or
  • Form 1120-S, U.S. Income Tax Return for an S Corporation,
  • Schedule K-1 of a partnership or of an S corporation.
• Their business or mailing address from the most recent IRS records. 

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.

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.