1. IRS shares more warning signs of incorrect ERC claims; businesses urged to resolve erroneous claims to avoid penalties, interest, audit
2. IRS Nationwide Tax Forum: Registration still open for Baltimore, Dallas
3. Security Summit partners urge continued vigilance against evolving scams to tax professionals, businesses and clients
4. IRS online resources and taxpayer services continue to hit significant milestones with IRA funding
5. Tax relief available to hurricane Beryl victims in Texas
6. IRS updates FAQs on new, previously owned and qualified commercial clean vehicle credits
7. Technical Guidance

1.  IRS shares more warning signs of incorrect ERC claims; businesses urged to resolve erroneous claims to avoid penalties, interest, audit

The IRS released five new warning indicators it has seen on incorrect claims made by businesses, as the agency steps up its efforts on the Employee Retention Credit (ERC). The updated list is based on frequent problems that the IRS compliance teams have encountered during the examination and processing of ERC claims.

“The IRS continues working aggressively to pursue improper claims as well as increase payments going out to businesses with legitimate claims on these complex credits,” said IRS Commissioner Danny Werfel. “We want businesses to be aware of common errors our compliance teams are seeing, many of which reflect bad advice coming from promoters. The IRS continues to urge people with pending claims or previously approved payments to talk to a trusted tax professional rather than a promoter and see if any of these red flags apply to them.”

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2.  IRS Nationwide Tax Forum: Registration still open for Baltimore, Dallas

With some locations already sold out, the IRS encourages tax professionals to register soon for a spot at the upcoming IRS Nationwide Tax Forum in Baltimore, Aug. 13-15, or Dallas, Aug. 20-22. Each forum offers tax professionals a total of 45 different continuing education seminars. Attendees can earn up to 19 continuing education credits.

To assist attendees needing personalized help, the IRS will have employees on-site. For example, those needing assistance with their toughest client case involving a tax matter can make an appointment with a representative in the Taxpayer Advocate Service’s Case Resolution Room. If they need help with creating an IRS Online Account or resolving a Preparer Tax Identification Number (PTIN) or Centralized Authorization File (CAF) issue, there will be appointments available in the Digital Account Services Room. For other IRS related questions, there will be staff on-hand in the IRS Zone and at various tables outside the seminar rooms.

For information and to register, visit IRS Nationwide Tax Forum. You can learn more about this year’s program on the following videos produced independently by Tax Talk Today:

• Tax Talk Today looks at Five Things to Know about the Tax Forum
• Tax Talk Today interviews at the Chicago Tax Forum

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3.  Security Summit partners urge continued vigilance against evolving scams to tax professionals, businesses and clients

In the third installment of the “Protect Your Clients; Protect Yourself” special series, the IRS and its Security Summit partners urge tax professionals to recognize the warning signs of data theft so they can take immediate action to safeguard their clients’ information and their businesses. The IRS and Security Summit partners have observed an ongoing wave of identity thieves attempting to prey on tax professionals to obtain sensitive client tax information. Tax professionals should exercise caution to avoid becoming victims of these attacks, which put their businesses and clients at risk. To report stolen data right away, a tax professionals may do the following:

• Share information with the appropriate state tax agency by visiting the special Report a Data Breach;
• Obtain an identity protection PIN or complete Form 14039, Identity Theft Affidavit, if applicable; and
• Report the incident to their local IRS stakeholder liaison.

Visit the Data Theft information for tax professionals webpage to learn more.

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4.  IRS online resources and taxpayer services continue to hit significant milestones with IRA funding

As part of ongoing transformation efforts, the IRS announced continued progress on several taxpayer service and technology projects that increase online tools and digital services. The IRS is working to update its core technology infrastructure and compliance initiatives while these projects continue to enhance taxpayer service and increase the availability of online tools. IRS Commissioner Danny Werfel emphasized these initiatives during a quarterly update on the IRS Strategic Operating Plan.

“Funding from the Inflation Reduction Act is helping spur innovation and improvement across the IRS to transform our operations in our work to help taxpayers and the nation,” said Commissioner Werfel. “This progress can be seen in our continued expansion of our online accounts to provide more features, increased use of new digital tools and additional special activities to help taxpayers in-person. By providing digital forms, making payments easier and continuing work to reduce paper-based processes that have long hampered the IRS and frustrated taxpayers, our progress is accelerating to make long-overdue improvements.” 

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5.  Tax relief available to hurricane Beryl victims in Texas

Disaster-area taxpayers in 67 Texas counties affected by Hurricane Beryl that began on July 5 now have until Feb. 3, 2025, to file various federal individual and Business tax returns and make tax payments. The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). This currently covers 67 counties; however, any additional counties that are later added to the disaster area will be eligible for the same tax relief. The current list of eligible localities is always available on the Tax relief in disaster situations page on IRS.gov.

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6.  IRS updates FAQs on new, previously owned and qualified commercial clean vehicle credits

The IRS revised frequently asked questions (FAQs) in Fact Sheet 2024-26, which renders guidance on dealer registration, income restrictions, eligibility requirements and transfer policies for New, Previously Owned and Qualified Clean Vehicle Credits. These FAQs supersede earlier FAQs that were posted in FS-2024-14 on April 16, 2024.

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7.  Technical Guidance

Notice 2024-60 describes the information that must be included in a written report described in section 1.45Q-4(c)(2) (LCA Report) and provides the procedures a taxpayer must follow to submit the LCA Report and required supporting information to the IRS and the Department of Energy for review under section 1.45Q-4(c)(5) before any credit for carbon oxide sequestration allowed under section 45Q(a)(2)(B)(ii) or (a)(4)(B)(ii) is determined for qualified carbon oxide utilized by any taxpayer in the manner described in section 45Q(f)(5) as implemented by section 1.45Q-4 (section 45Q utilization credit).

WASHINGTON – As the Internal Revenue Service intensifies work on the Employee Retention Credit, the agency today shared five new warning signs being seen on incorrect claims by businesses.  

The new list comes from common issues the IRS compliance teams have seen while analyzing and processing ERC claims. The new items are in addition to seven problem areas the IRS previously highlighted. 

The IRS urged businesses with pending claims to carefully review their filings to confirm their eligibility and ensure credits claimed don’t include any of these 12 warning signs or other mistakes. Businesses with these indicators should talk to a trusted tax professional and consider using special ERC Withdrawal Program that remains available. Business considering applying for the complex credit also should follow the same steps before submitting a claim. 

Businesses with previously approved claims should also review the filings as the IRS intensifies compliance efforts in this area. Businesses should act soon to resolve incorrect claims and avoid future issues such as audits, repayment, penalties and interest. 

The IRS issued today’s five new warning signs to give businesses and tax professionals additional time to prepare for an upcoming announcement involving new steps being taken to counter improper ERC claims. In coming days, the IRS plans to issue more information on new compliance work involving high-risk ERC claims as well as details about an anticipated short-term reopening of the Voluntary Disclosure Program and an important update about impending processing of low-risk payments to help small business with legitimate claims. This follows up on last month’s announcement that the IRS was denying more of the highest-risk ERC claims. 

“The IRS continues working aggressively to pursue improper claims as well as increase payments going out to businesses with legitimate claims on these complex credits,” said IRS Commissioner Danny Werfel. “As we prepare for the next major announcement, we want businesses to be aware of common errors our compliance teams are seeing, many of which reflect bad advice coming from promoters. The IRS continues to urge people with pending claims or previously approved payments to talk to a trusted tax professional rather than a promoter and see if any of these red flags apply to them.” 

Aggressive promoters lured many businesses to mistakenly claim this pandemic-era credit when they’re not eligible. To protect against improper claims, the IRS announced in June that it digitized and analyzed about 1 million ERC claims representing more than $86 billion. To protect taxpayers from getting an improper refund they’d have to repay, the agency will deny tens of thousands of ERC claims that show clear signs of being erroneous. 

The agency is also scrutinizing hundreds of thousands more claims that show risk of being incorrect as well as beginning additional processing of low-risk claims to those with eligible claims. 

As the IRS begins to process additional lower-risk claims, the agency reminds businesses that they may receive payments for some valid tax periods – generally quarters – while the IRS reviews other periods for eligibility. The IRS emphasizes ERC eligibility can vary from one tax period to another if, for example, government orders were no longer in place or a business’s gross receipts increased. Alternately, qualified wages may vary due to a forgiven PPP loan or because an employer already claimed the maximum amount of qualified wages in an earlier tax period. 

Work on ERC compliance efforts around erroneous claims has now topped more than $2 billion since last fall as the agency continues intensifying activity in this area.  

The IRS urges taxpayers to work with a trusted tax professional who understands the complex ERC rules. Tax professionals can help businesses recheck their claims and discuss next steps; this is especially important for those who used a promoter to file claims instead of a tax professional. 

Five newly announced signs of an incorrect ERC claim  

IRS compliance teams have identified these additional five common signs that have been a recurring theme seen on ERC claims. None of these qualify under the rules passed by Congress. The new red flags cover these areas: 

• Essential businesses during the pandemic that could fully operate and didn’t have a decline in gross receipts. Promoters convinced many essential businesses to claim the ERC when, in many instances, essential businesses weren’t eligible because their operations weren’t fully or partially suspended by a qualifying government order. Modifications that didn’t affect an employer’s ability to operate, like requiring employees to wash hands or wear masks, doesn’t mean the business operations were suspended. The IRS urges essential businesses to review eligibility rules and examples related to government orders.  

• Business unable to support how a government order fully or partially suspended business operations. Whether a business was fully or partially suspended depends on its specific situation. When asked for proof on how the government order suspended more than a nominal portion of their business operations, many businesses haven’t provided enough information to confirm eligibility.  

• Business reporting family members’ wages as qualified wages. If business owners claimed the ERC using wages paid to related individuals, those claims are likely for the wrong amount or ineligible. Wages paid to related individuals aren’t qualified wages for the ERC. Generally, related individuals are the majority owner and their:  

• Business using wages already used for Paycheck Protection Program loan forgiveness. The U.S. Small Business Administration offered the Paycheck Protection Program, which provided SBA-backed loans that helped businesses keep their workforce employed during the pandemic. The PPP ended May 31, 2021, but borrowers could still apply for PPP loan forgiveness.  

If SBA forgave the loan, businesses can’t claim the ERC on wages that they reported as payroll costs to get PPP loan forgiveness. Participating in the PPP affects the amount of qualified wages used to calculate the ERC. Payroll costs up to the amount SBA forgave aren’t eligible for ERC. Taxpayers can use the rest of their qualified wages to figure their credit. 

• Large employers claiming wages for employees who provided services. Special rules applied to large eligible employers, which are those that averaged:  

Large eligible employers can only claim wages paid to employees who were not providing services. Many large employers’ claims incorrectly included wages for employees who were providing services during these periods. The ERC comparison chart provides more details.  

Previously shared signs of an incorrect ERC claim 

The IRS also reminded businesses about these other common issues being seen. The agency has continued to issue warnings involving these seven areas:

• Too many quarters being claimed. Some promoters have urged employers to claim the ERC for all quarters that the credit was available. Qualifying for all quarters is uncommon, and this could be a sign of an incorrect claim. Employers should carefully review their eligibility for each quarter.

• Government orders that don’t qualify. Some promoters have told employers they can claim the ERC if any government order was in place in their area, even if their operations weren’t affected or if they chose to suspend their business operations voluntarily. This is false. To claim the ERC under government order rules: 

·        

• Too many employees and wrong calculations. Employers should be cautious about claiming the ERC for all wages paid to every employee on their payroll. The law changed throughout 2020 and 2021. There are dollar limits and varying credit amounts, and employers need to meet certain rules for wages to be considered qualified wages, depending on the tax period. The IRS urges employers to carefully review all calculations and to avoid overclaiming the credit, which can happen if an employer erroneously uses the same credit amount across multiple tax periods for each employee. For details about credit amounts, see the Employee Retention Credit - 2020 vs 2021 Comparison Chart.  
• Business citing supply chain issues. Qualifying for ERC based on a supply chain disruption is very uncommon. A supply chain disruption by itself doesn’t qualify an employer for ERC. An employer needs to ensure that their supplier’s government order meets the requirements. Employers should carefully review the rules on supply chain issues and examples in the 2023 legal memo on supply chain disruptions. 

• Business claiming ERC for too much of a tax period. It's possible, but uncommon, for an employer to qualify for ERC for the entire calendar quarter if their business operations were fully or partially suspended due to a government order during a portion of a calendar quarter. A business in this situation can claim ERC only for wages paid during the suspension period, not the whole quarter. Businesses should check their claim for overstated qualifying wages and should keep payroll records that support their claim. 

• Business didn’t pay wages or didn’t exist during eligibility period. Employers can only claim ERC for tax periods when they paid wages to employees. Some taxpayers claimed the ERC but records available to the IRS show they didn’t have any employees. Others have claimed ERC for tax periods before they even had an employer identification number with the IRS, meaning the business didn’t exist during the eligibility period. The IRS has started disallowing these claims, and more work continues in this area as well as other aspects of ERC. 

• Promoter says there’s nothing to lose. Businesses should be on high alert with any ERC promoter who urged them to claim ERC because they “have nothing to lose.” Businesses that incorrectly claim the ERC risk repayment requirements, penalties, interest, audit and potential expenses of hiring someone to help resolve the incorrect claim, amend previous returns or represent them in an audit. 

Options for resolving incorrect ERC claims 

The IRS has several options to help businesses who have discovered they have questionable ERC claims. 

• Claim withdrawal: Given the large number of questionable claims identified in the recent review, the IRS continues to urge ineligible businesses with unprocessed claims to consider the ERC Withdrawal Program to avoid future compliance issues. The IRS will treat the claim as though the taxpayer never filed it. No interest or penalties will apply. 

• Amending a return: Businesses that overclaimed the ERC can amend their returns to correct the amount of their claim.

WASHINGTON — The Internal Revenue Service today updated frequently asked questions in Fact Sheet 2024-26 to provide guidance related to eligibility rules, income limitations, transfer rules and dealer registration for the New, Previously Owned and Qualified Commercial Clean Vehicle Credits. 

These FAQs supersede earlier FAQs that were posted in FS-2024-14on April 16, 2024. 

The FAQs revisions are as follows: 

• Topic A: Eligibility rules for the New Clean Vehicle Credit: updated questions 2, 7, 8, 12 and 18, and added questions 15-17. 
• Topic B: Income and Price Limitations for the New Clean Vehicle Credit: updated questions 3, 4, and 7-10, and added questions 12-14. 
• Topic C: When the New Requirements Apply to the New Clean Vehicle Credit: updated questions 4 and 6. 
• Topic D: Eligibility Rules for the Previously Owned Clean Vehicles Credit: updated questions 3 and 12 and added questions 13-15. 
• Topic E: Income and Price Limitations for Previously Owned Clean Vehicles: updated question 2. 
• Topic F: Claiming the Previously Owned Clean Vehicles Credit: updated question 3. 
• Topic H: Transfer of New Clean Vehicle Credit and Previously Owned Clean Vehicle Credit: updated questions 1-3, 11, 12, 14-15 and 18, and added questions 23-30. 
• Topic I: Registering a Dealer/Seller for Seller Reporting and Clean Vehicle Tax Credit Transfers: updated questions 4, 13 and 14, and added questions 19-30. 

More information on IRS FAQs can be found on IRS.gov. 

IRS-FAQ

Quarterly update highlights expansion on Individual, Business Online Accounts; Document Upload Tool hits 1 million submissions and more amended returns can be filed electronically 

WASHINGTON – As part of ongoing transformation efforts, the Internal Revenue Service announced today continued progress on a variety of taxpayer service and technology projects using Inflation Reduction Act (IRA) funding that expand online tools and digital services. 

The IRS highlighted improvements, including six new features to help taxpayers using the Individual Online Account, a new Spanish version of the Business Tax Account tool and the availability of amended business forms that can be filed electronically. In addition, the IRS announced hitting the milestone of 1 million submissions through the Document Upload Tool and more special Community Assistance Visits to help taxpayers in underserved parts of the country. 

“Funding from the Inflation Reduction Act is helping spur innovation and improvement across the IRS to transform our operations in our work to help taxpayers and the nation,” said IRS Commissioner Danny Werfel. “This progress can be seen in our continued expansion of our online accounts to provide more features, increased use of new digital tools and additional special activities to help taxpayers in-person.  By providing digital forms, making payments easier and continuing work to reduce paper-based processes that have long hampered the IRS and frustrated taxpayers, our progress is accelerating to make long-overdue improvements.”

Werfel highlighted these efforts as part of a quarterly update on the IRS Strategic Operating Plan, the transformational effort using IRA funding. As these initiatives continue to improve taxpayer service and  expand online tools, the agency is also working to modernize its core technology infrastructure and compliance efforts focused on neglected problem areas involving high-income taxpayers, partnerships and corporations.

New features, key milestones reached on online, digital products

Taxpayers deserve the same functionality in their online accounts that they experience with their bank or other financial institutions. As detailed in the Strategic Operating Plan, the IRS is working to transform its operations to enable a future in which all taxpayers can meet their responsibilities, including interactions with the IRS, in a digital manner if they prefer. As part of this vision, taxpayers will be able to securely file all documents and respond to all notices online as well as securely access and download their data and account history. The IRS has hit or is progressing toward several milestones toward these goals, including: 

• The IRS continues to expand the functionality of its online platforms, including several new features in Individual Online Account that give taxpayers the ability to: 

• With the latest expansion, Business Tax Account is now available in Spanish. In addition, eligible business taxpayers can see their balance due and make the payment all in one place. Previously, the balance due had to be viewed in a separate place from where the payment was made, adding another complicating step for businesses making payments. Sole proprietors can now download business entity transcripts from their Business Tax Account. This transcript shows entity information like business name, address, location address and more for the Employer Identification Number on file.  

• File new amended returns electronically: Additional business Forms 940, 941, 943 and 945, including the Spanish version of Forms 941 and 943, can now be filed electronically. Through this improved process, IRS employees can now access taxpayer return information electronically, allowing them to provide more complete and accurate answers to taxpayer questions. In addition, the IRS can now accept related electronic payments while minimizing errors normally associated with processing paper returns. Taxpayers can still choose to submit a paper version. 

• Respond to notices online hits 1 million uploads: IRS digitalization efforts reached another key milestone in the agency’s transformation work with the Document Upload Tool accepting its one millionth taxpayer submission. Initially launched in 2021 in a limited format and greatly expanded in 2023 with funding from IRA, the tool offers taxpayers and tax professionals the option to respond digitally to eligible IRS notices by securely uploading required documents online through IRS.gov. For anyone with a smart phone or computer, this means that replying to IRS notices is now often as easy as scanning required documents and uploading them to the tax agency. 

• Use mobile-adaptive forms: IRS now has a total of 30 forms available for mobile use, allowing taxpayers to fill out common non-tax forms on cell phones and tablet devices and then submit them to the IRS digitally. Taxpayers have submitted more than 72,000 mobile-friendly forms since the September 2023 launch. Providing taxpayers with common forms in this new format offers them a safe and fast way to electronically engage with the IRS. This can also help reduce mail and paper when they send forms to the IRS, a part of the Paperless Processing Initiative. Forms adapt to any screen size and ensure information is entered into all required data fields. This can help reduce errors, which can delay processing. In addition, taxpayers can access five of these forms that require signatures in their Online Account, including: 

• Redesigning notices: The IRS has redesigned 100 of the most common notices that individual taxpayers receive, part of the ongoing work to prepare for the 2025 filing season as part of the Simple Notice Initiative. These notices make up about 90% of total notice volume sent to individual taxpayers, representing about 150 million notices sent to individual taxpayers in 2022. 

More in-person help offered; special programs offered in underserved areas 

The IRS continues to focus on helping taxpayers get it right the first time, helping them to interact with the agency in the ways that work best for them on the phone, in-person and online. The IRS is expanding in-person service, particularly those in underserved and rural communities. 

During the filing season, IRS Taxpayer Assistance Centers had a 37% increase in face-to-face contacts, with the IRS working with nearly 1.3 million taxpayers for this calendar year through July 13. The IRS also received 2.7 million volunteer prepared returns to date compared to 2.5 million last year, an increase of 9.1%. 

This summer, the IRS is continuing its special series of Community Assistance Visits to give taxpayers living in areas far from the agency’s in-person offices an opportunity to meet face-to-face with IRS customer service representatives. These visits, which began last year with IRA funding, provide help for taxpayers who live about a two-hour drive away from an IRS office. 

The IRS has already hosted events in Roma, Texas; Humboldt, Iowa; Hazlehurst, Georgia; and Orocovis, Puerto Rico. This week, the agency is offering face-to-face help at a temporary Taxpayer Assistance Center in Gallup, New Mexico. Upcoming Community Assistance Visits include: 

• Aug. 5-9, Thomasville, Alabama
• Aug. 19-23, Great Bend, Kansas
• Sept. 9-13, West Plains, Missouri
• Sept. 23-27, Clarkston, Washington
• Oct. 7-11, Fairbanks, Alaska
• Oct. 21-25, Potsdam, New York 

More information on these events will be available on IRS.govcloser to the event date. 

Modernizing foundational technology

In addition to improvements to customer-facing technology, the IRS is modernizing decades-old systems and equipment:  

• Digitalization: The IRS continues to make significant progress scanning and electronically filing paper returns. The IRS has replaced scanning equipment that is older than five years and installed automated mail-sorter machines in the six highest-volume IRS locations, streamlining the process of mail sorting, opening and scanning. As of the end of June, the IRS had scanned more than 2 million pieces of paper. Digitization has far-reaching implications for how the IRS can improve service and will enable the IRS to create completely digital workflows. 

• Online Account payment plans. The IRS recently delivered a data service that improves the taxpayer experience through Individual Online Account, allowing tax professionals to access and create payment plans on behalf of individual taxpayers. 

Beyond the improvements made in direct support of taxpayers, foundational technology has continued the incremental improvements needed to increase operational effectiveness and efficiency for IRS employees, which ultimately helps taxpayers: 

• Updating outdated Human Resource IT systems. Due to more than a decade of funding cuts to the agency, the IRS has hundreds of disparate, legacy human resources (HR) information technology (IT) systems with thousands of workflows. The transformation and streamlining of the HR IT applications using IRA funding is key to cultivating a robust organization, with a healthy HR function at its core. This multi-year project is a partnership with Treasury’s CIO and leverages cutting-edge technology to modernize IRS’s legacy HR applications, automate manual processes and make use of Treasury’s existing shared service offerings. These HR technology improvements in talent acquisition, workforce planning, labor and employee relations and other key HR processes will enhance the employee experience, improve productivity and help retain a strong and high-quality workforce needed to deliver customer service improvements for taxpayers. 

• Increasing network bandwidth to help employees, taxpayers. IRS has doubled the network bandwidth at many of our worksites to meet increased workforce demand and improve taxpayer service. The IRS is on track to complete this phase of network expansion at all sites ahead of filing season 2025. 

Ensuring complex partnerships, large corporations and high-income, high-wealth individual taxpayers pay taxes owed 

The IRS is also continuing work to ensure large corporate, large partnership and high-income individual filers pay the taxes they owe. Prior to the Inflation Reduction Act, more than a decade of budget cuts prevented the IRS from keeping pace with the increasingly complicated set of tools that the wealthiest taxpayers use to hide their income and evade paying their share. The IRS is now taking a variety of steps to close this gap. 

The IRS has ramped up efforts to pursue high-income, high-wealth individuals who have either not filed their taxes or failed to pay recognized tax debt, with dozens of revenue officers focused on these high-end collection cases. These efforts are concentrated among taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt.  Earlier this month, the IRS announced that it has collected more than $1 billion from high-wealth taxpayers as part of an effort to ensure these individuals pay what they owe. The $1 billion collected represents collections as of April 2024, with work continuing in this area. 

More improvements planned for 2025 as filing season work intensifies

In addition to these areas mentioned above, the IRS has a number of initiatives where changes related to the Inflation Reduction Act will accelerate later this year and into the 2025 filing season. Here are some examples: 

·         Continuing to focus on enhancing live assistance through improved efficiency in call centers, reducing paper and continued expanded staffing levels at Taxpayer Assistance Centers, while working to ensure taxpayers are aware of all available credits and benefits.

·         Expanding online services by expanding the features available in Online Account, including digital copies of notices, status updates, secure two-way messaging and expanded payment options.

·         Accelerating digitalization by providing new non-tax forms in digital mobile-friendly formats, in addition to the 20 delivered in fiscal year 2024, as well as scanning at the point of entry virtually all paper-filed tax and information returns.

·         Increased taxpayer information by expanding information available on important issues ranging from the availability of important tax credits and benefits, as well as more consumer-focused information raising awareness about emerging tax scams and schemes. 

More information on these and other improvements related to the 2025 tax season will be available later this fall.

For further information: 

·         Strategic Operating Plan

·         gov tools

·         Taxpayer Online Account

·         Tax information in non-English languages

WASHINGTON — With several locations already sold out, the Internal Revenue Service today encouraged tax professionals to register soon for a spot at the upcoming IRS Nationwide Tax Forum in Baltimore, Aug. 13-15, or Dallas, Aug. 20-22.  

The 2024 Nationwide Tax Forum has already sold out in Orlando, Florida, July 30-Aug. 1, and San Diego, Sept. 10-12. Space is limited for Baltimore and Dallas, but spots still remain. 

Each forum offers tax professionals a total of 45 different continuing education seminars. Attendees can earn up to 19 continuing education credits.  

In addition to tax law and ethics, this year’s agenda includes multiple sessions on cybersecurity, clean energy credits, digital assets, 1099 reporting, examinations and fraud awareness and prevention. This year six of the most popular sessions will also be offered in Spanish. 

Through the forum, the IRS provides continuing education credits to Enrolled Agents, certified public accountants, Annual Filing Season Program participants and California Tax Education Council participants. 

To assist attendees needing personalized help, the IRS will have employees on site. For example, those needing assistance with their toughest case involving a tax matter can make an appointment with a representative in the Taxpayer Advocate Service’s Case Resolution Room. If they need help with creating an IRS Online Account or resolving a Preparer Tax Identification Number (PTIN) or Centralized Authorization File (CAF) issue, there will be appointments available in the Digital Account Services Room. For other IRS related questions, there will be staff on hand in the IRS Zone, and at various tables outside the seminar rooms. 

In addition to the seminar lineup, attendees at the Nationwide Tax Forum can participate in any of several special events, including discussions on tax practice management, identifying and avoiding scams and schemes, a meeting with the National Taxpayer Advocate and a session on Beneficial Ownership Information reporting requirements. 

For full information and to register, visit www.irstaxforum.com.   

Deadlines approaching for standard rate pricing 

Potential Baltimore attendees should act by July 30 to take advantage of the standard registration rate of $309. On-site registration is $390. The standard rate is available for Dallas until Aug. 6. 

To learn more about the IRS Nationwide Tax Forum, see these YouTube videos: 

• IRS Commissioner Werfel’s YouTube welcome video.

Notice 2024-60 describes the information that must be included in a written report described in § 1.45Q-4(c)(2) (LCA Report) and provides the procedures a taxpayer must follow to submit the LCA Report and required supporting information to the IRS and the Department of Energy for review under § 1.45Q-4(c)(5) before any credit for carbon oxide sequestration allowed under § 45Q(a)(2)(B)(ii) or (a)(4)(B)(ii) is determined for qualified carbon oxide utilized by any taxpayer in the manner described in § 45Q(f)(5) as implemented by § 1.45Q-4 (§ 45Q utilization credit).  As required by § 1.45Q-4(c)(6), the IRS must approve the lifecycle analysis (LCA) of greenhouse gas emissions (as defined in § 1.45Q-4(c)(1)) documented in the LCA Report with respect to carbon capture property placed in service on or after February 18, 2018, before any § 45Q utilization credit otherwise satisfying the applicable requirements of § 45Q and §§ 1.45Q-1, 1.45Q-2, and 1.45Q-4 is determined.  Accordingly, the IRS must approve the taxpayer’s LCA before the taxpayer may claim any § 45Q utilization credit determined with respect to a taxpayer on any federal income tax return for a taxable year beginning on or after January 13, 2021 (that is, the taxable years to which § 1.45Q-4 applies).   

Notice 2024-60 will be in IRB:  2024-34, dated August 19, 2024.

WASHINGTON — The Internal Revenue Service today issued Notice 2024-60 to provide initial guidance on the credit for the sequestration of carbon oxide. This credit was amended significantly by the Inflation Reduction Act of 2022 (IRA). 

The notice provided today describes information that must be included in a written report known as the lifecycle analysis (LCA) report and provides the procedures a taxpayer must follow to submit the report along with required supporting information to the IRS and the Department of Energy for review. 

Before any credit is determined, the IRS must approve the lifecycle analysis of greenhouse gas emissions documented in the LCA report with respect to carbon capture property placed in service on or after Feb. 18, 2018.  

Accordingly, the IRS must approve the taxpayer’s LCA before the taxpayer may claim the utilization of carbon oxide credit. 

More information may be found on the Inflation Reduction Act of 2022 page on IRS.gov.

Week 3 of “Protect Your Clients; Protect Yourself” series focuses on security warning signs

WASHINGTON — In the third part of a special series, the Internal Revenue Service and the Security Summit partners today urged tax professionals to learn the signs of data theft so they can respond quickly to protect their business and their clients.

The IRS and the Security Summit partners continue to see a relentless string of attempts by identity thieves to target tax professionals in hopes of gaining valuable client tax information. With stronger fraud defenses put in place by the IRS and Security Summit partners, identity thieves have shifted their attention to tax pros to get more detailed information to help prepare bogus tax returns.

"We continue to see instances where tax professionals have had their systems compromised, and they didn’t realize it for week or months,” IRS Commissioner Danny Werfel said. “Identity thieves are creative, and they can find ways of quietly penetrating systems. There are important warning signs tax pros should watch out for that can help alert them more quickly to a security issue, and speed is critical to protect clients and their businesses from a security incident.” 

The IRS, state tax agencies and the nation's tax industry – working together as the Security Summit – reminded tax professionals that they should contact the IRS immediately when there's an identity theft issue while also contacting cybersecurity experts and insurance companies to assist them with determining the cause and extent of the loss.

This is the third week of an eight-part "Protect Your Clients; Protect Yourself" summer series, part of an annual education effort by the Security Summit, a group that includes tax professionals, industry partners, state tax agencies and the IRS. The public-private partnership has worked since 2015 to protect the tax system against tax-related identity theft and fraud.

These security tips will be a key focus of the Nationwide Tax Forum, being held this summer in five cities throughout the U.S. In addition to the series of eight news releases, the tax professional security component will be featured at the forums, which are three-day continuing education events. The next forum begins next week in Orlando, Florida, and is already sold out, followed by the week of August 13 in Baltimore, August 20 in Dallas and September 10 in San Diego. The IRS reminds tax pros that registration deadlines are quickly approaching for the Baltimore and Dallas forums, as San Diego has also sold out.

Each year at the tax forums, the IRS hears from tax professionals attending the sessions who realize that they’re victims of a data theft or a security breach, but they hadn’t realized the warnings signs. Here are some things that can help.

Tax pros: Know the warning signs from clients, their systems

Tax pros should be on the lookout for these critical warning signs from their clients:

• Clients receive notice that an IRS Online Account was created without their consent or that:
• • Someone accessed their IRS Online Account without their knowledge.
  • The IRS disabled their Online Account, either their individual or business Online Account.
• Tax pro clients receive a tax transcript they didn't request. 
• Balance due or other notices from the IRS are received that are not correct based on the tax return filed. 
• Clients reach out to the tax pro about calls or emails the tax pro didn't make. 
• Clients receive refunds without filing a tax return.

Tax professionals should also watch for these red flags when their business experiences these situations:

• Slow or unexpected computer or network responsiveness such as:
• • Software is slow or actions take longer to process than usual.
  • Computer cursor moves or changes numbers without touching the mouse or keyboard.
  • Unexpectedly being locked out of a network or computer. 
• Client tax returns are being rejected because their Social Security number was already used on another return. 
• IRS authentication letters (5071C, 6331C, 4883C, 5747C) are being received even though a tax return hasn't been filed. 
• Getting more e-file receipt acknowledgements than the tax pro actually filed.
• The IRS disabled the tax professional’s online account.
• Transcripts are being delivered to the tax pro’s Secure Object Repository (SOR) that they did not order.
• Notification from the IRS that the tax professional’s Centralized Authorized File (CAF) number has been compromised. If they suffer a data compromise, they should take proactive steps to protect their CAF number and consider requesting a new one to protect themself and their clients.
• Notification from the IRS regarding a client that they do not represent.

While these are only a few examples, tax pros should ensure they have the highest security possible and be ready to react quickly to protect themselves and their clients. To help tax pros, the Summit partners created the written information security plan or WISP. The newly updated 29-page, easy-to-understand document was developed by and for tax and industry professionals to help keep client and business information safe and secure.

Tax pros should report data theft immediately

If a tax pro or their firm are the victim of data theft, they should:

• Tax professionals should be proactive with clients who could have been impacted and suggest appropriate actions, such as obtaining an Identity Protection PIN or completing a Form 14039, Identity Theft Affidavit, if applicable.

Find more information at Data theft information for tax professionals.

Additional resources

• Publication 5293, Data Security Resource Guide for Tax Professionals, provides an overview and resources about how to avoid data theft.
• Tax professionals can also get help with security recommendations by reviewing IRS Publication 4557, Safeguarding Taxpayer Data, and the IRS' Identity theft information page for tax pros.
• Small Business Information Security: The Fundamentals, by the National Institute of Standards and Technology.

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

WASHINGTON — The Internal Revenue Service announced today tax relief for individuals and businesses in 67 Texas counties affected by Hurricane Beryl that began on July 5, 2024. 

These taxpayers now have until Feb. 3, 2025, to file various federal individual and business tax returns and make tax payments. 

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). This means that individuals and households that reside or have a business in Anderson, Angelina, Aransas, Austin, Bowie, Brazoria, Brazos, Burleson Calhoun, Cameron, Camp, Cass, Chambers, Cherokee, Colorado, Dewitt, Fayette, Fort Bend, Freestone, Galveston, Goliad, Gregg, Grimes, Hardin, Harris, Harrison, Hidalgo, Houston, Jackson, Jasper, Jefferson, Kenedy, Kleberg, Lavaca, Lee, Leon, Liberty, Madison, Marion, Matagorda, Milam, Montgomery, Morris, Nacogdoches, Newton, Nueces, Orange, Panola,  Polk, Refugio, Robertson, Rusk, Sabine, San Augustine, San Jacinto, San Patricio, Shelby, Trinity, Tyler, Upshur, Victoria, Walker, Waller, Washington, Webb, Wharton and Willacy counties qualify for tax relief. 

The same relief will be available to any other counties added later to the disaster area. The current list of eligible localities is always available on the Tax relief in disaster situations page on IRS.gov. 

Filing and payment relief 

The tax relief postpones various tax filing and payment deadlines that occurred from July 5, 2024, through Feb. 3, 2025 (postponement period). As a result, affected individuals and businesses will have until Feb. 3, 2025, to file returns and pay any taxes that were originally due during this period. 

This means, for example, that the Feb. 3, 2025, deadline will now apply to: 

• Any individual, business or tax-exempt organization that has a valid extension to file their 2023 federal return. The IRS noted, however, that payments on these returns are not eligible for the extra time because they were due last spring before the hurricane occurred. 
• Quarterly estimated income tax payments normally due on Sept. 16, 2024, and Jan. 15, 2025.
• Quarterly payroll and excise tax returns normally due on July 31 and Oct. 31, 2024, and Jan. 31, 2025. 

In addition, penalties for failing to make payroll and excise tax deposits due on or after July 5, 2024, and before July 22, 2024, will be abated, as long as the deposits are made by July 22, 2024. 

The Disaster assistance and emergency relief for individuals and businesses page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.  

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief. 

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these unique circumstances, the affected taxpayer could receive 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. 

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization. Disaster area tax preparers with clients located outside the disaster area can choose to use the Bulk Requests from Practitioners for Disaster Relief option, described on IRS.gov. 

Additional tax relief 

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2024 return normally filed next year), or the return for the prior year (the 2023 return filed this year). Taxpayers have extra time – up to six months after the due date of the taxpayer’s federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. For individual taxpayers, this means Oct. 15, 2025. Be sure to write the FEMA declaration number – 4798-DR − on any return claiming a loss. See Publication 547, Casualties, Disasters, and Thefts, for details. 

Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. See Publication 525, Taxable and Nontaxable Income, for details. 

Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow. 

The IRS may provide additional disaster relief in the future. 

The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov. 

Reminder about tax return preparation options

• Eligible individuals or families can get free help preparing their tax return at Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) sites. To find the closest free tax help site, use the VITA Locator Tool or call 800-906-9887. Note that normally, VITA sites cannot help claim disaster losses.
• To find an AARP Tax-Aide site, use the AARP Site Locator Tool or call 888-227-7669.
• Any individual or family whose adjusted gross income (AGI) was $79,000 or less in 2023 can use IRS Free File’s guided tax software at no cost. There are products in English and Spanish.
• Another Free File option is Free File Fillable Forms. These are electronic federal tax forms, equivalent to a paper 1040 and are designed for taxpayers who are comfortable filling out IRS tax forms. Anyone, regardless of income, can use this option.

• MilTax, a Department of Defense program, offers free return preparation software and electronic filing for federal tax returns and up to three state income tax returns. It’s available for all military members and some veterans, with no income limit.

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued final regulations updating the required minimum distribution (RMD) rules.

The final regulations reflect changes made by the SECURE Act and the SECURE 2.0 Act impacting retirement plan participants, IRA owners and their beneficiaries. At the same time, Treasury and IRS issued proposed regulations, addressing additional RMD issues under the SECURE 2.0 Act.

While certain changes were made in response to comments received on the proposed regulations issued in 2022, the final regulations generally follow those proposed regulations.

Specifically, Treasury and IRS reviewed comments suggesting that a beneficiary of an individual who has started required annual distributions should not be required to continue those annual distributions if the remaining account balance is fully distributed within 10 years of the individual’s death as required by the SECURE Act. However, Treasury and IRS determined that the final regulations should retain the provision in the proposed regulations requiring such a beneficiary to continue receiving annual payments.

The new proposed regulations include provisions for which Treasury and IRS are soliciting public comments, including provisions addressing other changes relating to RMDs made by the SECURE 2.0 Act. For details on how to submit comments, see the proposed regulations.