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

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

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

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

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

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

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

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

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

What to watch out for on social media 

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

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

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

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

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

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

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

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

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

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

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

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

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

‘Tis the season 

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

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

• IRS.gov has a forms repository with legitimate and detailed instructions for taxpayers on how to fill out the forms properly.

• Use IRS.gov to find the official IRS social media accounts, or other government sites, to fact check information. 

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

Pass it on 

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

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

Mail: 

Internal Revenue Service

Lead Development Center MS7900

1973 N. Rulon White Blvd

Ogden, UT 84404

Fax: 877-477-9135 

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

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

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

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

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

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

Who is eligible?

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

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

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

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

Contribution deadlines

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

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

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

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

WASHINGTON — As the nation's tax season approaches, the Internal Revenue Service is reminding people of simple stepsthey can take now to prepare to file their 2024 federal tax returns. 

This reminder is part of the IRS's "Get Ready" campaign to help everyone prepare for the upcoming filing season in early 2025. 

“Our focus at the IRS continues to be on making tax filing easier and more accessible for everyone,” said IRS Commissioner Danny Werfel. “We’ve added more digital tools to help taxpayers. But as tax season quickly approaches, the IRS reminds taxpayers there are important steps they can take now to get ready for 2025. From reviewing withholding to signing up for an IRS Online Account, there are multiple ways for people to help make the 2025 filing season easier.”

As the IRS continues its historic transformation work, the agency continues introducing new online tools as well as expanding and updating other digital tools. These are designed to help taxpayers and make tax filing easier.

Access IRS Online Account for helpful information 

Taxpayers can create or access their IRS Online Account, where they can find all their tax related information for the 2025 filing season. New users will need to have a photo ID ready to verify their identity. Through their IRS Online Account, taxpayers 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 (such as braille, large print, etc.).
• Receive and view over 200 IRS electronic notices.
• View, make and cancel payments.
• Set up or change payment plans and check their balance. 

Gather and organize tax documents 

Having well-organized tax records can make filing a complete and accurate return easier and help avoid errors that can delay refunds. This may also help identify deductions or credits that may have been overlooked. 

Most income is taxable, including unemployment compensation, refund interest and income from the gig economyand digital assets. Taxpayers should watch for and gather essential forms, such as Forms W-2, Wage and Tax Statement, and other income documents. 

It’s also important to notify the IRS of any address changesand the Social Security Administration of any legal name changes. 

Check withholding before the end of 2024 

The IRS Tax Withholding Estimator on IRS.gov can help taxpayers make sure the correct amount of tax is withheld from their paychecks. This tool is especially useful for individuals who owed taxes or received large refunds last year, or those who have experienced life changes such as marriage, divorce, or the welcoming of a child. Taxpayers who need to adjust their withholding can update their information with their employer using Form W-4, Employee’s Withholding Allowance Certificate. 

Time is running out to make changes for 2024, as only a few pay periods remain in the year. Taxpayers need to act quickly to make any adjustments. 

Get refunds faster with direct deposit 

The fastest and most secure way to receive a tax refund is through direct deposit. Taxpayers can direct their refund to a bank account, banking app or reloadable debit card by providing their routing and account numbers. If the routing and account number cannot be located, taxpayers should contact their bank, financial institution or app provider.

According to Treasury’s Bureau of the Fiscal Service, paper refund checks are 16 times more likely to be lost, misdirected, stolen or uncashed compared to those paid using direct deposit.

Individuals without a bank account can explore options for opening one through FDIC-insured banks or a credit union using the National Credit Union Locator tool. Veterans can use the Veterans Benefits Banking Program to find participating financial institutions. 

Volunteer to help others with their taxes 

The IRS and its community partners are seeking volunteers from around the country to join the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs. These programs offer free tax preparation services to eligible taxpayers. Interested individuals can learn more and sign up by visiting IRS.gov. 

Helpful IRS resources and online tools 

IRS.gov is a valuable resource for taxpayers, offering a variety of online tools like the Individual Online Account available 24/7. These tools help individuals file and pay taxes, track refunds, access account information and get answers to tax questions. Taxpayers are encouraged to bookmark these resources for easy access. 

Choosing a tax professional 

Tax professionals play an essential role in the U.S. tax system. Certified public accountants, Enrolled Agents, attorneys and others without formal credentials are just a few of the professionals who help taxpayers file their returns accurately. It is important to choose a professional who is skilled and trustworthy. 

Most tax return professionals provide great service but picking the wrong one can hurt taxpayers financially. The IRS offers tips for choosing a tax preparer. 

People can use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to find qualified professionals

Announcement 2024-38 notifies the public that the IRS intends to issue opinion letters on November 29, 2024, or, as soon as possible thereafter, for § 403(b) pre-approved plans that were updated for changes with respect to the requirements of § 403(b), including the 2022 Cumulative List, and that were filed during the second remedial amendment cycle for § 403(b) pre-approved plans. This announcement also notifies the public of the date by which an adopting employer intending to maintain a § 403(b) pre-approved plan for the second cycle must adopt that plan, and announces the beginning and ending dates of the period during which an adopting employer may file for an individual determination letter under the second remedial amendment cycle. This announcement also discusses a procedural restatement rule that applies to all pre-approved plans and provides a reminder for adopting employers of § 403(b)(9) retirement income account plans of a requirement provided by § 403(b)(9). 

Announcement 2024-38 will be in IRB:  2024-50, dated 12/9/2024.

WASHINGTON — The Internal Revenue Service Advisory Council (IRSAC) today issued its annual public report, including recommendations to the IRS on new and continuing issues in tax administration. 

The 2024 IRSAC Public Report includes recommendations on 37 issues covering a broad range of topics. 

“IRSAC members have spent numerous hours analyzing issues in tax administration and the transformation work underway across the IRS,” said IRS Commissioner Danny Werfel. “The IRS is grateful for their hard work and valuable insights they spent on this year’s report, and we look forward to reviewing their recommendations.” 

The top 13 general report issues are: 

• IRS funding.
• Strategic Operating Plan assessment and analysis.
• Reporting level of service data.
• Hiring.
• Online Accounts promotion.
• Online Accounts technical support.
• Capabilities for business online tax accounts.
• Authorization techniques to enable businesses to utilize online accounts.
• Identity theft prevention and resolution.
• PTIN database and renewal system.
• Oversight of return preparers.
• Broadening continuing education for Enrolled Agents to include practice management topics.
• Process for issuing new and revised forms and obtaining comments. 

The full 2024 IRSAC Public Report was posted today to IRS.gov. 

The IRSAC serves as a federal advisory committee to the IRS commissioner and executive leadership. It provides an organized public forum for discussion of relevant issues in tax administration. IRSAC members offer observations and advice regarding current or proposed IRS policies, programs and procedures. 

In addition to receiving the public report today, Werfel thanked 12 members of the council whose terms end this year: 

• Amanda Aguillard – Aguillard served on the Small Business/Self-Employed Subgroup.
• Samuel Cohen – Cohen served on the Tax Exempt/Government Entities Subgroup.
• Alison Flores – Flores served as Chair of the Taxpayer Services Subgroup.
• Jodi Kessler – Kessler served on the Tax Exempt/Government Entities Subgroup.
• Mason Klinck – Klinck served on the Taxpayer Services Subgroup.
• Jeffrey Porter – Porter served as Chair of the Small Business/Self-Employed Subgroup.
• Dawn Rhea – Rhea served on the Large Business & International Subgroup.
• Jon Schausten – Schausten served on the Information Reporting Subgroup.
• Tara Sciscoe – Sciscoe served on the Tax Exempt/Government Entities Subgroup.
• Wendy Walker – Walker served as Chair of the Information Reporting Subgroup.
• Sean Wang – Wang served on the Information Reporting Subgroup.
• Katrina Welch – Welch served as Chair of the Large Business & International Subgroup. 

The IRSAC is administered under the Federal Advisory Committee Act by the IRS Communications & Liaison Division, Office of National Public Liaison. 

Members represent the taxpaying public, the tax professional community, small and large businesses, tax-exempt and government entities, the payroll industry and academia. The IRSAC is organized into five subgroups: Information Reporting, Large Business & International, Small Business/Self-Employed, Tax Exempt/Government Entities and Taxpayer Services. 

For more information, visit www.IRS.gov/IRSAC.

WASHINGTON — The Internal Revenue Service today announced that interest rates will decrease for the calendar quarter beginning Jan. 1, 2025.

For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily.

Here is a complete list of the new rates:

• 7% for overpayments (payments made in excess of the amount owed), 6% for corporations.
• 4.5% for the portion of a corporate overpayment exceeding $10,000.
• 7% for underpayments (taxes owed but not fully paid).
• 9% for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced today are computed from the federal short-term rate determined during October 2024. See the revenue ruling for details.

Revenue Ruling 2024-25 announcing the rates of interest will appear in Internal Revenue Bulletin 2024-49, dated Dec. 2, 2024.

WASHINGTON – As part of International Fraud Awareness Week, the Internal Revenue Service reminds taxpayers how to report tax-related fraud in their community to protect personal and financial information from scam artists and tax schemes.

During International Fraud Awareness Week, Nov. 17-23, the IRS Office of Fraud Enforcement and IRS Criminal Investigation aim to raise awareness of fraud, scams and schemes affecting taxpayers across the country.

The IRS also encourages individuals, businesses and tax professionals to take time now to learn to recognize red flags and to ensure defenses are in place to stop scammers and those who promote unscrupulous tax schemes.

The Security Summit, a public-private partnership between the IRS, state tax agencies and the nation’s tax industry, also works to protect taxpayers, businesses and the tax system from identity thieves and warn people to watch out for common scams and schemes.

Reporting tax fraud

Tax fraud can come in many forms, including scams targeting individuals, tax-related schemes pitched by unscrupulous promoters and fraud committed by taxpayers who knowingly file incomplete or inaccurate information with the IRS.

The public can assist the IRS in identifying and investigating possible fraud of individuals and businesses by filing Form 3949-A, Information Report Referral. Form 3949-A is a tax-related public use form submitted voluntarily by individuals to report alleged violations of tax law by individuals and businesses. A Form 3949-A submission remains confidential.

Individuals can report suspected tax law violations such as:

• False exemptions and deductions.
• Multiple tax filings.
• Organized crime, public/political corruption and kickbacks.
• Unsubstantiated and unreported income.
• Narcotics income.
• Wagering/gambling income.
• Failures to pay tax, withhold tax and file returns.

These are only some of the suspected violations individuals can report. The IRS will review submissions and determine the appropriate action to take based on the information provided. These actions may include a referral for audit or a referral for criminal prosecution.

The IRS Office of Fraud Enforcement promotes compliance with tax laws by strengthening the IRS response to fraud and mitigating emerging threats. This includes improving fraud detection, identifying areas of high risk, enhancing enforcement and helping develop and submit fraud referrals to IRS Criminal Investigation where appropriate.

Tax-exempt organizations

If an individual suspects a tax-exempt organization is not complying with tax laws, they can submit Form 13909, Tax-Exempt Organization Complaint. These organizations may include exempt organizations, employee plans, Indian tribal governments and other governmental units.

The details and information provided can help hold tax-exempt entities and organizations accountable for following tax law.

Possible monetary award

Information submitted by individuals regarding fraudulent tax-related activity can sometimes lead to a possible monetary award. Individuals requesting consideration for an award should submit Form 211, Application for Award of Original Information.

The Form 211 and any attachments must include specific and credible information concerning the person that the whistleblower believes will lead to the collection of proceeds. The IRS Whistleblower Office evaluates Form 211 submissions.

Fraudulent schemes, promoters or preparers

Each year, the IRS compiles a Dirty Dozen list that brings public awareness to a variety of common scams that taxpayers may encounter. This year’s list included phishing and smishing scams, questionable Employee Retention Credits, Fuel Tax Credit claims, Offer in Compromise mills and fake charities exploiting taxpayer generosity.

Anyone experiencing these scams, or taxpayers encountering promoters or tax preparers peddling these schemes, are encouraged to submit Form 14242, Report Suspected Abusive Tax Promotions or Preparers.

People should mail or fax a completed Form 14242 and any supporting materials to the IRS Lead Development Center:

Internal Revenue Service
Lead Development Center MS7900
1973 N. Rulon White Blvd
Ogden, UT 84404

Fax: 877-477-9135

The Lead Development Center within the Office of Promoter Investigations follows up on each referral and ensures cases involving abusive tax schemes and improper tax return preparation are appropriately sent for further action to the IRS. Referrals may lead to injunctions against preparers or promoters, monetary penalties or referrals to criminal enforcement action.

Interest rates decrease for the first quarter of 2025

WASHINGTON — The Internal Revenue Service today announced that interest rates will decrease for the calendar quarter beginning Jan. 1, 2025.

For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily.

Here is a complete list of the new rates:

• 7% for overpayments (payments made in excess of the amount owed), 6% for corporations.
• 5% for the portion of a corporate overpayment exceeding $10,000.
• 7% for underpayments (taxes owed but not fully paid).
• 9% for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced today are computed from the federal short-term rate determined during October 2024. See the revenue ruling for details.

Revenue Ruling 2024-25 announcing the rates of interest will appear in Internal Revenue Bulletin 2024-49, dated Dec. 2, 2024.

Inside This Issue

1. Businesses must report Beneficial Ownership Information to Treasury by Jan. 1; free webinar can help
2. Offer in Compromise instructional videos now on IRS YouTube channel
3. IRA reminder: Qualified owners may contribute up to $105,000 to charity in 2025
4. Technical Guidance

1.  Businesses must report Beneficial Ownership Information to Treasury by Jan. 1; free webinar can help

Businesses that were established or registered prior to Jan. 1, 2024, are required to submit their initial Beneficial Ownership Information (BOI) by Jan. 1, 2025.

To assist companies that are required to submit their Beneficial Ownership Information to the Treasury Department’s Financial Crimes Enforcement Network, the IRS will sponsor a free one-hour webinar on Tuesday, Nov. 19, at 2:00 p.m. ET.

In this complimentary webinar, FinCEN will:

• Explain the Corporate Transparency Act.
• Provide Beneficial Ownership reporting resources.
• Analyze the BOI reporting requirement using the Small Entity Compliance Guide.
• Describe what happens if a company does not timely report BOI to FinCEN.
• Feature live question-and-answer session.

No continuing education credit is being offered. Click here to register. 

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2.  Offer in Compromise instructional videos now on IRS YouTube channel

The IRS has added an Offer in Compromise Overview playlist to its YouTube channel. The series of videos walks viewers step-by-step through how to complete the forms needed to submit an offer in compromise, or OIC. An OIC allows taxpayers to settle their tax debt for less than the full amount they owe. And by working directly with the IRS instead of through a third-party company, taxpayers can save themselves both time and money. Visit the OIC webpage for more information, including FAQs and the Pre-Qualifier tool.

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3.  IRA reminder: Qualified owners may contribute up to $105,000 to charity in 2025

The Internal Revenue Service reminds owners of Individual Retirement Arrangement (IRA) who are 70½ years of age or older that they can make qualified charitable distributions in 2024 that allow them to donate up to $105,000 tax-free. Compared to previous years, that is an increase of $5,000.

Qualified charitable distributions (QCDs) also count toward the year's required minimum distribution (RMD) for individuals over age 73. IRA distributions are typically taxable, but QCDs remain tax-free if sent directly to a qualified charity by the trustee. To make a QCD for 2024, IRA owners should contact their IRA trustee soon to ensure the transaction completes by year-end.

For additional information, refer to Publication 526, Charitable Contributions and Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs).

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4.  Technical Guidance

Notice 2024-81 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for October 2024 used under section 417(e)(3)(D), the 24-month average segment rates applicable for November 2024, and the 30-year Treasury rates, as reflected by the application of section 430(h)(2)(C)(iv). 

WASHINGTON — The Internal Revenue Service reminds individual retirement arrangement (IRA) owners age 70½ and older that they can make up to $105,000 in tax-free charitable donations during 2024 through qualified charitable distributions. That’s up from $100,000 in past years.

For those age 73 or older, qualified charitable distributions (QCDs) also count toward the year's required minimum distribution (RMD).

Generally, IRA distributions are taxable, but QCDs remain tax-free if sent directly to a qualified charity by the trustee. To make a QCD for 2024, IRA owners should contact their IRA trustee soon to ensure the transaction completes by year-end.

Each eligible IRA owner can exclude up to $105,000 in QCDs from taxable income. Married couples, if both meet qualifications and have separate IRAs, can donate up to $210,000 combined. QCDs don’t require itemizing deductions.

For those planning ahead, starting this year, the QCD limit is subject to annual adjustment, based on inflation. For that reason, the annual QCD limit will rise to $108,000 in 2025.

Reporting and documenting QCDs

For 2024, QCDs should be reported on the 2024 tax return. IRA trustees will issue Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., in early 2025 documenting IRA distributions.

The full amount of any IRA distribution goes on Line 4a of Form 1040, U.S. Individual Income Tax Return, or Form 1040-SR, U.S. Tax Return for Seniors. Enter “0” on Line 4b if the full amount is a QCD, marking it as such.

Donors must obtain a written acknowledgement from the charity showing the contribution date, amount and confirmation that no goods or services were received.

For more details, see Publication 526, Charitable Contributions, and Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs)