IRS Tax News

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  • 25 Mar 2024 9:33 AM | Anonymous

    Inside This Issue

    1. March 22 ERC deadline rapidly approaching
    2. IRS seeks to hire revenue agents nationwide
    3. Registration open for IRS Nationwide Tax Forum
    4. Ficco becomes IRS Criminal Investigation chief
    5. New Digital Assets webpage
    6. Physical presence education requirement waiver extended for enrolled actuaries 
    7. News from the Justice Department’s Tax Division

    1.  March 22 ERC deadline rapidly approaching

    The IRS reminds businesses of the March 22 deadline for the Employee Retention Credit (ERC) Voluntary Disclosure Program. Businesses are urged to review the Employee Retention Credit (ERC) guidelines to avoid future compliance action for improper claims. “The window of opportunity is closing for those with questionable claims to fix things before they receive follow-up compliance action. Taking action now will avoid potentially hefty penalties and interest if the IRS takes action later. The deals available now are good, and the cost and risk for bad claims will sharply escalate over time,” said IRS Commissioner Danny Werfel.

    The IRS offers two programs to voluntarily resolve improper claims and reduce costs and follow-up steps for businesses. They are the ERC Voluntary Disclosure Program and the claim withdrawal process. The IRS will continue a wide range of tax compliance activities on ERC claims in the future, so the agency urges a close look at these special programs.

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    2.  IRS seeks to hire revenue agents nationwide

    Tax pros: With the IRS hiring thousands of revenue agents, the agency encourages members of the tax professional community to consider applying for one of the many career opportunities:

    These positions will be filled using a Direct Hire Authority (DHA), which accelerates the hiring process and helps to fill IRS mission-critical positions immediately. Tax pros should note that recruitment incentives may be offered. For more information, visit the IRS Careers page.

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    3.  Registration open for IRS Nationwide Tax Forum

    Tax Pros: Registration is now open for the 2024 IRS Nationwide Tax Forum. Register today to ensure your space this summer in one of the five following cities:

    • Chicago: July 9 – 11                                                         
    • Orlando: July 30 – Aug. 1                                               
    • Baltimore: Aug. 13 – 15                                                       
    • Dallas: Aug. 20 – 22
    • San Diego: Sep. 10 – 12

    The IRS Nationwide Tax Forum offers continuing education and networking opportunities to enrolled agents, certified public accountants, attorneys and other tax professionals. Each forum offers more than 40 seminars and workshops on a wide variety of federal and state tax issues presented by experts from the IRS and its partner associations. Attendees may earn up to 18 continuing education credits.

    Visit 2024 IRS Nationwide Tax Forum for information on the program, accommodations and registration.

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    4.  Ficco becomes IRS Criminal Investigation chief

    The IRS announced its new IRS Criminal Investigation chief. Effective April 1, Guy Ficco, the current Deputy Chief and a 29-year agency veteran, will lead a staff of more than 3,200 Criminal Investigation employees, including 2,200 special agents. In addition to serving as CI’s deputy chief, Ficco served in leadership positions across the agency, ranging from supervisory special agent to executive director of Global Operations, Policy and Support. He is also a certified fraud examiner. “Guy has enjoyed a remarkable career as a CI special agent and leader who brings a wealth of experience to this job,” said IRS Commissioner Danny Werfel.

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    5.  New Digital Assets webpage

    The IRS has announced an improved Digital Assets webpage on IRS.gov.

    The redesigned webpage features:

    • Current IRS information on digital assets, and how to answer the digital asset question on a tax return: when to check yes or no;
    • Streamlined information for ease of understanding; and                 
    • A user-friendly layout featuring links at the top of the page to help viewers quickly find key information.

    More information is available at IRS.gov and Frequently Asked Questions on virtual currency transactions.

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    6.  Physical presence education requirement waiver extended for enrolled actuaries

    The Joint Board for the Enrollment of Actuaries is extending the temporary waiver of its physical presence requirement for continuing professional education (CPE) programs. The Joint Board issued proposed regulations to eliminate the physical presence requirement altogether. The extended waiver applies to all enrolled actuaries and will remain in effect until proposed regulations are finalized.

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    7.  News from the Justice Department’s Tax Division

    The Justice Department filed a complaint seeking to bar Chicago-area tax return preparer Sir-Michael Davenport from owning or operating a tax return preparation business and preparing tax returns for others. By repeatedly understating his customers’ tax liabilities, the complaint alleges the United States has been harmed by Davenport’s conduct, resulting in a significant loss in tax revenue of an estimated $715,407.

    A complaint seeking to bar Florida-area return preparer Kenia Rodriguez, also known as Kenia Legon, was filed in the U.S. District Court for the Middle District of Florida. The civil complaint alleges that Rodriguez willfully prepared false returns on behalf of her clients and that the United States has been harmed by her conduct, leading to a tax loss of more than $6 million since 2021. In addition to seeking an injunction against Rodriguez, the government requests an order of disgorgement to prevent her from profiting from violating the internal revenue laws.

    The United States filed a civil complaint in the U.S. District Court for the Southern District of Texas against Houston-based return preparer Morshanda Lewis. The complaint alleges Lewis prepared tax returns that claimed false credits despite several warnings from the IRS. For tax years 2019 to 2021, Lewis’ conduct caused a significant loss in tax revenue, estimated at over $1 million.


  • 25 Mar 2024 9:29 AM | Anonymous

    WASHINGTON – With a key March 22 deadline rapidly approaching, the Internal Revenue Service renewed calls for businesses to review the Employee Retention Credit (ERC) guidelines to avoid future compliance action for improper claims.

    Amid aggressive marketing that misled many businesses into filing claims for ERC, the IRS has sharply increased compliance action through audits and criminal investigations – with more activity planned in the future. To help those who were misled, the IRS has made a limited-time offer available to employers through March 22 to correct improper claims at a sharp discount.

    “The window of opportunity is closing for those with questionable claims to fix things before they receive follow-up compliance action,” said IRS Commissioner Danny Werfel. “We strongly urge businesses to review the Employee Retention Credit guidelines immediately before a key disclosure program closes, especially if they encountered a high-pressure push to apply for these credits. Taking action now will avoid potentially hefty penalties and interest if the IRS takes action later. The deals available now are good, and the cost and risk for bad claims will sharply escalate over time.”

    Employers who improperly claimed ERC can avoid penalties and interest – and even get a discount on repayments if they apply by March 22, 2024, to the ERC Voluntary Disclosure Program. The IRS also offers a special claim withdrawal process for businesses whose claim is still pending. Taking steps now to resolve these issues can help businesses get right and avoid future IRS actions.

    The IRS is urging this review because some ERC promoters shared misleading information or misrepresented eligibility rules and lured businesses to apply for the ERC when they didn’t qualify. Some promoter groups may have called the credit by another name, such as a grant, business stimulus payment, government relief or other names, so even if the terms Employee Retention Credit and Employee Retention Tax Credit don’t sound familiar, businesses should still review their records.

    The IRS has two programs to voluntarily resolve improper claims and reduce costs and follow-up steps for businesses who fell for misinformation and aggressive marketing about the ERC.

    • The ERC Voluntary Disclosure Program, available through March 22, 2024, is for employers who need to repay ERC they received by December 21, 2023, either as a refund or as a credit on a tax return. This option lets a taxpayer repay the incorrect ERC, minus 20 percent, for any tax period they weren’t eligible for ERC. Generally, businesses who enter this program don’t have to amend other returns affected by the incorrect ERC and don’t have to repay interest they received from the IRS on an ERC refund.
    • Businesses should quickly pursue the claim withdrawal process if they need to ask the IRS not to process an ERC claim for any tax period that hasn’t been paid yet. Taxpayers who received an ERC check but haven’t cashed or deposited it can also use this process to withdraw the claim and return the check. The IRS will treat the claim as though the taxpayer never filed it. No interest or penalties will apply.

    After these programs end, the IRS will continue a wide range of tax compliance activities on ERC claims to protect taxpayers and enforce the tax law. If the IRS finds an ERC claim to be incorrect after these programs end, the agency can disallow unpaid claims or require repayment with penalties and interest from taxpayers who received ERC. The taxpayer also may need to amend related returns. The IRS is required to use a variety of collection tools to recapture incorrect ERC payments or credits.

    “We have good solutions for taxpayers to do the right thing now and avoid hassles and expenses for themselves later – but March 22 is rapidly approaching,” Werfel said. “The domino effect of an incorrect claim can cost a business valuable time, energy and money down the road. We urge businesses to talk to a trusted tax professional and review their situation.”

    Under the ERC Voluntary Disclosure Program, a business that incorrectly claimed and received $50,000 for a tax period when it wasn’t entitled to ERC would need to repay only $40,000 after the program’s 20% discount – and no penalties or interest if the taxpayer pays the amount in full.

    Alternatively, if the business doesn’t apply to the VDP and the IRS identities an incorrect claim, the business would owe $50,000, and might also owe penalties and interest computed from the date the business received the ERC. For some, this was two to three years ago. Interest compounds daily and the failure-to-pay penalty accrues monthly and can build to 25%. Other penalties could apply to certain situations. So that’s $50,000 – plus possibly penalties and compounding interest, which is far more costly compared to the voluntary options available. A business in this situation may also need to amend related returns, which can add more cost.

    Some promoters told taxpayers every employer qualifies for ERC. The IRS and the tax professional community emphasize that this is not true. Eligibility depends on specific facts and circumstances. The IRS has dozens of resources to help people learn about and check ERC eligibility and businesses can also consult their trusted tax professional. Key IRS materials include:

    Businesses that can’t pay in full can apply to ERC Voluntary Disclosure Program

    Taxpayers who can’t pay the full amount of ERC, minus 20%, by the time they return their signed closing agreement can still apply to the ERC Voluntary Disclosure Program and request an Installment Agreement to pay over time. Businesses who need an installment plan need to submit Form 433-B, Collection Information Statement for Businesses with their VDP application by March 22 along with any required documents to support it. They also may need a signed Form 2750, Waiver Extending Statutory Period for Assessment of Trust Fund Recovery Penalty. See Payment options for accepted ERC-VDP applications for details.

    If a taxpayer is unable to pay the full amount of ERC, minus 20%, then an IRS collection team member will be assigned the case after the closing agreement is executed and will look to offer a resolution that fits the taxpayer’s current financial condition and ability to pay.

    Under an Installment Agreement, the business must make monthly payments. Interest and penalties that normally apply to a tax liability will apply starting from the ERC Voluntary Disclosure Program closing agreement date. This date, however, is better for businesses than an agreement outside of the ERC Voluntary Disclosure Program where the penalties and interest date back to when the business received the incorrect ERC.

    Processing updates

    On Sept. 14, 2023, amid concerns about aggressive ERC marketing, the IRS announced a moratorium on processing new claims. A specific resumption date hasn’t been determined.

    The IRS continues to process ERC claims submitted before the moratorium, but with more scrutiny and at a much slower rate than before the agency’s approach changed last year.

    More information:


  • 22 Mar 2024 1:21 PM | Anonymous

    WASHINGTON –The Internal Revenue Service today issued Notice 2024-30 that expands certain rules for determining what an energy community is for the production and investment tax credits.

    The IRS also released Appendix 1, identifying additional Metropolitan Statistical Areas (MSAs) and non-MSAs that meet the Fossil Fuel Employment threshold, and Appendix 2, identifying additional MSAs and non-MSAs that qualify as energy communities in 2023 by meeting the Fossil Fuel Employment threshold and the unemployment rate requirement for calendar year 2022.

    The Inflation Reduction Act allows for increased credit amounts or rates if certain requirements pertaining to energy communities are satisfied.

    There are three categories of energy communities:

    • Brownfield sites,
    • Certain metropolitan statistical areas and non-metropolitan statistical areas based on unemployment rates (MSA/non-MSA), and
    • Census tracts where a coal mine closed after 1999 or where a coal-fired electric generating unit was retired after 2009 (and directly adjoining census tracts).

    The increased credit amount or rate available for meeting the requirements of the energy community provisions is generally 10 percent for the production tax credit and 2 percentage points for the investment tax credit. If prevailing wage and apprenticeship requirements or certain other requirements are met, 10 percentage points.

    This notice expands the Nameplate Capacity Attribution Rule in Notice 2023-29 to include additional attribution property. It also adds two 2017 North American Industry Classification System (NAICS) industry codes to the table in section 3.03(2) of Notice 2023-29 for purposes of determining the Fossil Fuel Employment rate.

    The IRS also updated the frequently asked questions for energy communities.

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


  • 22 Mar 2024 1:20 PM | Anonymous

    Notice 2024-30 modifies Notice 2023-29 by expanding the Nameplate Capacity Attribution Rule under section 4.02(1)(b) to include additional attribution property and by adding two 2017 North American Industry Classification System (NAICS) industry codes to the table in section 3.03(2) for purposes of determining the Fossil Fuel Employment rate.

    Notice 2024-30 will be in IRB: 2024-15, dated April 8, 2024.


  • 21 Mar 2024 1:27 PM | Anonymous

    WASHINGTON — As the end of tax season draws near, the Internal Revenue Service reminds taxpayers there’s an easy way to get a tax filing extension through the Free File program.

    A tax filing extension guarantees the taxpayer six additional months to file – with an extended deadline of Oct. 15, 2024. The IRS Free File program is one of the easiest ways to get an extension.

    Although an extension grants extra time to file, it does not extend the obligation to pay taxes due on April 15, 2024. To avoid penalties and late fees, taxpayers who owe should pay either their full tax bill or at least what they can afford to pay by the April 15 deadline. Taxpayers in Maine and Massachusetts have until April 17 to file and pay taxes due this year. This is because these states observe the Patriots’ Day holiday on April 15 this year and April 16 is the Emancipation Day holiday in the District of Columbia.

    Free File makes filing an extension easier
    An easy way to file an extension is through IRS Free File on IRS.gov. All individual filers can use the program software to request an extension on Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, regardless of income. Taxpayers must estimate their tax liability and file by the deadline to receive the extension.

    Free File also is one of the options available to help taxpayers file their taxes. Now in its 22nd filing season, taxpayers across the nation can access free software products provided by IRS Free File trusted partners by visiting IRS.gov. Through this public-private partnership, tax preparation and filing software providers make their online products available to eligible taxpayers. Eight private-sector Free File partners provide online guided tax software products this year to any taxpayer with an Adjusted Gross Income (AGI) of $79,000 or less in 2023. Free access to online products is only available by starting from IRS Free File.

    Make a payment, get an extension
    Other quick and efficient ways to get an extension are through the Electronic Federal Tax Payment System (EFTPS), paying with a credit, debit card or digital wallet, and IRS Direct Pay. The IRS will automatically grant an extension when a taxpayer makes an electronic payment and indicates it’s for an extension. In that case, there is no need for that taxpayer to file Form 4868.

    Extensions are automatic for some taxpayers
    Some taxpayers will automatically get extra time to file their tax return, even if they do not request an extension:

    • Members of the military on duty outside the United States and Puerto Rico receive an automatic two-month extension to file. This year they have until June 17 to file. However, tax payments are still due April 15 or interest will be charged. Details are available in Publication 3, Armed Forces’ Tax Guide.
    • Those serving in combat zones have up to 180 days after they leave the combat zone to file returns and pay any taxes due.
    • U.S. citizens and resident aliens who live and work outside of the United States and Puerto Rico get an automatic two-month extension to file their tax returns. This year they have until June 17 to file. However, tax payments are still due April 15 or interest will be charged.
    • When the U.S. president declares a disaster in an area, the IRS can postpone certain taxpayer deadlines for residents and businesses in the affected area. Taxpayers in certain disaster areas are not required to submit an extension electronically or on paper. Information on the most recent tax relief for disaster situations is available on the IRS website.

    Keep in mind
    Taxpayers should be aware that payments are still due by the original April 15 deadline, unless in Maine or Massachusetts, regardless of whether they request an extension of time to file a tax return. Taxpayers should file an extension even if they cannot pay the full amount owed. By filing either a return on time or requesting an extension by the April 15 filing deadline, taxpayers can avoid the late-filing penalty.

    Taxpayers reduce the overall amount of tax subject to interest and penalty charges by paying as much as they can by the due date. The interest rate for an individual’s unpaid taxes is currently 8%, compounded daily. The late-filing penalty is generally 5% per month and the late-payment penalty is normally 0.5% per month, both of which max out at 25%.

    The IRS will work with taxpayers who cannot pay the full amount of tax they owe. Other options to pay, such as getting a loan or paying by credit card, may help resolve a tax debt. Most people can set up a payment plan on IRS.gov to pay off their balance over time.


  • 21 Mar 2024 11:20 AM | Anonymous

    Revenue Procedure 2024-17 adds Ukraine, Belarus, Sudan, Haiti, Niger, and Iraq to the list of waiver countries for tax year 2023 for which the minimum time requirements are waived. Generally, U.S. citizens or resident aliens living and working abroad are taxed on their worldwide income. However, if their tax home is in a foreign country and they meet either the bona fide residence test or the physical presence test, they can choose to exclude from their income a limited amount of their foreign earned income (up to $120,000 for 2023). Both the bona fide residence test and the physical presence test contain minimum time requirements. Revenue Procedure 2024-17 provides a waiver under section 911(d)(4) for the time requirements for individuals electing to exclude their foreign earned income who must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country.

    Revenue Procedure 2024-17 will be in IRB: 2014-15, dated Monday, April 8, 2024.


  • 21 Mar 2024 11:18 AM | Anonymous

    Notice 2024-29 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for February 2024 used under § 417(e)(3)(D), the 24-month average segment rates applicable for March 2024, and the 30-year Treasury rates, as reflected by the application of § 430(h)(2)(C)(iv).

    Notice 2024-29 will be in IRB: 2024-14, dated April 1, 2024.


  • 21 Mar 2024 11:17 AM | Anonymous

    Notice 2024-31 provides for adjustments to the limitation on housing expenses for purposes of section 911 of the Internal Revenue Code for the 2024 tax year. These adjustments are made on the basis of geographic differences in housing costs relative to housing costs in the United States. If the limitation on housing expenses is higher for the 2024 tax year than the adjusted limitations on housing expenses provided in Notice 2023-26, qualified taxpayers may apply the adjusted limitations in this notice for the 2024 tax year to their 2023 tax year.

    Notice 2024-31 will be in IRB: 2024-15, dated Monday, April 8, 2024.


  • 21 Mar 2024 11:15 AM | Anonymous

    WASHINGTON — To counter promoters that marketed misleading information about the Employee Retention Credit (ERC), the Internal Revenue Service urged businesses to review seven suspicious signs of a bad claim and see if the agency’s special programs can help them avoid future compliance issues.

    To combat a wave of dubious ERC claims, the IRS has sharply increased compliance action through audits and criminal investigations – with more activity planned in the future. To help those businesses that were misled, the IRS has created special programs to help, including a limited-time offer through March 22 for employers to correct improper ERC claims at a sharp discount.

    Employers who improperly claimed ERC can avoid penalties and interest – and even get a discount on repayments if they apply by March 22, 2024, to the ERC Voluntary Disclosure Program. The IRS also offers a special claim withdrawal process for businesses whose claim is still pending. Taking steps now to resolve these issues can help businesses get right and avoid future IRS action, and the agency urged businesses to immediately seek the help of a trusted tax professional to get help.

    “Time is running out to take advantage of special IRS programs designed to help businesses misled into making questionable Employee Retention Credit claims,” said IRS Commissioner Danny Werfel. “We have set up a special program that allows repayment of bad claims at a steep discount, and we’re also offering those with pending claims to withdraw with no strings attached. Good people have gotten caught up in the frenzy around this credit, and the IRS wants to help those who want to get right through these special, limited-time programs. There are seven important red flags that businesses should review to determine if their claim is questionable.”

    Seven suspicious signs an ERC claim could be incorrect

    • Too many quarters being claimed. Some promoters urged employers to claim the ERC for all quarters that the credit was available. Qualifying for all quarters is uncommon. Employers should carefully review their eligibility for each quarter.
    • Government orders that don’t qualify. Some promoters 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:
      • Government orders must have been in effect and the employer’s operations must have been fully or partially suspended by the government order during the period for which they’re claiming the credit.
      • The government order must be due to the COVID-19 pandemic.
      • The order must be a government order, not guidance, a recommendation or a statement.

    Some promoters suggest that an employer qualifies based on communications from the Occupational Safety and Health Administration (OSHA). This is generally not true. See the ERC FAQ about OSHA communications and the 2023 legal memo on OSHA communications for details and examples.

    The frequently asked questions about ERC – Qualifying Government Orders section of IRS.gov has helpful examples. Employers should make sure they have documentation of the government order related to COVID-19 and how and when it suspended their operations. Employers should avoid a promoter that supplies a generic narrative about a government order.

    • 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. Employers should review all calculations to avoid overclaiming the credit. They should not use the same credit amount across multiple tax periods for each employee. For details on credit amounts, see the ERC 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, penalties, interest, audit and other expenses.

    The IRS has an interactive ERC Eligibility Checklist that tax professionals and taxpayers can use to check potential eligibility for ERC. It’s also available as a printable guide. The IRS’s frequently asked questions on ERC also include links to additional resources and some helpful examples.

    More details on ERC Voluntary Disclosure Program, special withdrawal option

    The IRS has two programs to voluntarily resolve improper claims and reduce costs and follow-up steps for businesses who fell for misinformation and aggressive marketing about the ERC.

    • The ERC Voluntary Disclosure Program, available through March 22, 2024, is for employers who need to repay ERC they received by Dec. 21, 2023, either as a refund or as a credit on a tax return. This option lets a taxpayer repay the incorrect ERC, minus 20%, for any tax period they weren’t eligible for ERC. Generally, businesses who enter this program don’t have to amend other returns affected by the incorrect ERC and don’t have to repay interest they received from the IRS on an ERC refund.
    • Businesses should quickly pursue the claim withdrawal process if they need to ask the IRS not to process an ERC claim for any tax period that hasn’t been paid yet. Taxpayers who received an ERC check but haven’t cashed or deposited it can also use this process to withdraw the claim and return the check. The IRS will treat the claim as though the taxpayer never filed it. No interest or penalties will apply.


  • 19 Mar 2024 10:00 AM | Anonymous

    WASHINGTON - As the April 15 filing deadline approaches, the Internal Revenue Service issued a reminder to taxpayers on ways to prevent typical errors on their federal tax returns to help speed potential refunds.

    Collect all tax-related paperwork
    Taxpayers should collect all key documents, including Forms W-2 and 1099, as well as any supporting paperwork for tax deductions or credits such as educational credits or mortgage interest payments. Additionally, having the previous year's tax return accessible is advisable as it may be required.

    Use electronic filing
    The IRS advises taxpayers and their tax advisors use electronic filing methods such as IRS Free File or alternative e-file service providers. The Direct File pilot is available for some taxpayers in 12 states. Electronic filing minimizes mathematical errors and identifies potential tax credits or deductions for which the taxpayer qualifies.

    It's essential for taxpayers to carefully review their tax returns to ensure accuracy. Opting for electronic filing and selecting direct deposit is the fastest and safest way to receive a refund.

    Ensure filing status is correct
    Tax software serves to prevent errors in selecting a tax return filing status. For taxpayers unsure of their filing status, the Interactive Tax Assistant on IRS.gov can assist in choosing the correct status, particularly when multiple statuses might apply.

    Make sure names, birthdates and Social Security numbers are correct
    Taxpayers must accurately provide the name, date of birth and Social Security number for each dependent listed on their individual income tax return. The SSN and individual's name should be entered precisely as indicated on the Social Security card.

    In cases where a dependent or spouse lacks a SSN and is ineligible to obtain one, an assigned Individual Tax Identification Number (ITIN) should be listed instead of a SSN.

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

    See IRS.gov Digital Assets | Internal Revenue Service for details on when to check “yes” and how to report the income.

    Report all taxable income
    Keep in mind that most income is subject to taxation. Failing to accurately report income may result in accrued interest and penalties. This includes various sources of income such as interest earnings, unemployment benefits and income derived from the service industry, gig economy and digital assets. For further details, consult Publication 525, Taxable and Nontaxable Income.

    Make sure banking routing and account numbers are correct
    Taxpayers have the option to request direct deposit of a federal refund into one, two or even three accounts. Provide correct banking information: If expecting a refund, ensure the routing and account numbers provided for direct deposit are accurate to avoid delays or misdirected refunds.

    Additionally, taxpayers can use their refund to buy U.S. Savings Bonds.

    Remember to sign and date the return
    When submitting a joint return, it is required for both spouses to sign and date the return. If taxpayers are preparing their taxes independently and filing electronically, they need to sign and authenticate their electronic tax return by inputting their adjusted gross income (AGI) from the prior year. Taxpayers can refer to "Validating Your Electronically Filed Tax Return" for guidance if they have any inquiries.

    Ensure address is correct if mailing paper returns
    Taxpayers and tax professionals are urged to choose electronic filing whenever possible. However, for those who must submit a paper tax return, it's essential to verify the accurate mailing address either on IRS.gov or in the instructions provided with Form 1040 to prevent processing delays.

    Keep a copy of the tax return
    Upon readiness to file, taxpayers should create duplicates of their signed return and any accompanying schedules for their personal records. Maintaining copies can help them prepare future tax returns and figure mathematical computations in the event of filing an amended return. Typically, taxpayers should retain records supporting income, deductions or credits claimed on their tax return until the period of limitations for that specific tax return expires.

    Request an extension, if needed
    Taxpayers requiring more time to file their taxes can easily request a six-month extension until October 15, thereby avoiding late filing penalties. This extension can be requested either through IRS Free File or by submitting Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, by April 15. It's important to note that while an extension provides extra time for filing, tax payments are still due on April 15 for most taxpayers.

    Alternatively, taxpayers can seek an extension by making a full or partial payment of their estimated income tax and indicating that the payment is for an extension. This can be done using Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or a debit/credit card or digital wallet. By doing so, taxpayers avoid the necessity of filing a separate extension form and receive a confirmation number for their records.

     


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