Inside This Issue

1. IRS moves forward with Employee Retention Credit claims; expedites work on complex credit; remains vigilant against fraudulent claims
2. Tax relief available for Hurricane Debby victims in four states
3. Security Summit partners urge use of multi-factor authentication to protect against evolving scams to tax professionals, businesses and clients
4. IRS Nationwide Tax Forum: Limited time remaining to register for Baltimore, Dallas
5. IRS revamps draft version of Form 1099-DA, Digital Asset Proceeds from Broker Transactions; requests feedback for 2025
6. Treasury, IRS shares Inflation Reduction Act clean energy statistics
7. Upcoming webinar for tax practitioners
8. Technical Guidance

1.  IRS moves forward with Employee Retention Credit claims; expedites work on complex credit; remains vigilant against fraudulent claims

The IRS takes more steps to support small businesses and stop improper payments in the Employee Retention Credit (ERC) program. These steps include increasing the pace at which payments are made and carrying out compliance work on the intricate pandemic-era credit that saw a surge in claims as a result of deceptive marketing.

“The Employee Retention Credit is one of the most complex tax provisions ever administered by the IRS, and the agency continues working hard to balance our work to protect taxpayers from improper claims while also making payments to qualifying businesses,” said IRS Commissioner Danny Werfel. “It has been a time-consuming process to separate valid claims from invalid ones. During the past year, we maintained a steady cadence of both ERC approvals and disapprovals.”

“The IRS is committed to continuing our work to resolve this program as Congress contemplates further action, both for the good of legitimate businesses and tax administration,” Werfel added.

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2.  Tax relief available for Hurricane Debby victims in four states

Disaster-area taxpayers affected by Hurricane Debbie in South Carolina, North Carolina, Florida and Georgia now have until Feb. 3 to file various federal individual and business tax returns and make required payments. The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA), and the same relief will be available to any other counties added later to the disaster areas. The current list of eligible localities is always available on the Tax relief in disaster situations page on IRS.gov.

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3.  Security Summit partners urge use of multi-factor authentication to protect against evolving scams to tax professionals, businesses and clients

In the fifth installment of the “Protect Your Clients; Protect Yourself” special series, the IRS and its Security Summit partners informed tax professionals that multi-factor authentication is now required by federal law, in addition to being a crucial security measure for their businesses and their clients. The Federal Trade Commission’s safeguards rule now mandates that all tax professionals use multi-factor authentication, or MFA, to secure sensitive client data.

“Multi-factor authentication is now more than just a good idea for tax professionals; it’s a requirement,” said IRS Commissioner Danny Werfel. “This is an effective way to increase security and protect tax professionals and their clients from a data breach. Multi-factor authentication is a little like a deadbolt on a door; its additional security supplementing the doorknob lock. This is an important step to protect not just tax professionals and their firms, but also the sensitive taxpayer information from their clients.”

Tax professionals may do the following to report stolen data:

• Share information with the appropriate state tax agency by visiting Report a Data Breach;
• Review Publication 5293, Data Security Resource Guide for Tax Professionals;
• 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 Nationwide Tax Forum: Limited time remaining to register for Baltimore, Dallas

Last-minute registrants: Space is still available at the upcoming IRS Nationwide Tax Forum in Baltimore, Aug. 13-15, and Dallas, Aug. 20-22. The San Diego Tax Forum, Sept. 10-12, is sold out.

Each IRS Tax Forum offers tax professionals 45 different continuing education seminars. Attendees can earn up to 19 continuing education credits.

Other forum features include the Taxpayer Advocate Service’s Case Resolution Room - where attendees can get assistance on a tough client case – and the Digital Account Services Room, which provides help on IRS Online Accounts, Preparer Tax Identification Numbers (PTINs) and Centralized Authorization File (CAF) issues. Multiple IRS experts will be on hand to answer questions on digital assets, cybersecurity, and scams, while recruiting staff will be interviewing for IRS revenue agent and officer positions.

For a description of the program 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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5.  IRS revamps draft version of Form 1099-DA, Digital Asset Proceeds from Broker Transactions; requests feedback for 2025

The IRS published a draft version of Form 1099-DA, Digital Assets, which brokers must use to report specific exchange and sale transactions involving digital assets starting in 2025. Typically, in early 2026, taxpayers and IRS will receive separate copies of these forms. The updated Form 1099-DA draft incorporates the transitional relief outlined in Notice 2024-56, Notice 2024-57 and Revenue Procedure 2024-28 and conforms to the final regulations for custodial broker reporting regulations.

Comments regarding the draft can be submitted to the IRS through the forms and publications comments page on IRS.gov.

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6.  Treasury, IRS shares Inflation Reduction Act clean energy statistics

The Department of Treasury and the IRS released data regarding the clean energy tax credits under the Inflation Reduction Act for the 2023 tax year. Taxpayers can now claim more tax credits for residential and energy efficient homes. More than $6 billion in tax credits have been claimed by taxpayers for home energy investments and more than $2 billion will be used for energy-efficient home improvements thanks to the Inflation Reduction Act.

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7.  Upcoming webinar for tax practitioners

The IRS offers the upcoming live webinar to the tax practitioner community:

• In the know with RPO: An update from the Return Preparer Office on August 22, at 2 p.m. ET. Earn up to 1 CE credit (Federal Tax). Certificates of completion are being offered.

For more information or to register, visit Webinars for tax practitioners webpage.

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8.  Technical Guidance

Revenue Procedure 2024-32 updates Rev. Proc. 2017-55 to set forth the procedure by which the sponsor of a defined benefit plan that is subject to the funding requirements of section 430 may request approval from the IRS for the use of plan-specific substitute mortality tables in accordance with section 430(h)(3)(C) and section 1.430(h)(3)-2.

WASHINGTON – The Internal Revenue Service announced today additional actions to help small businesses and prevent improper payments in the Employee Retention Credit program, including accelerating more payments and continuing compliance work on the complex pandemic-era credit that was flooded with claims following misleading marketing. 

The IRS is continuing to work denials of improper ERC claims, intensifying audits and pursuing civil and criminal investigations of potential fraud and abuse. The findings of the IRS review, announced in June, confirmed concerns raised by tax professionals and others that there was an extremely high rate of improper ERC claims in the current inventory of ERC claims. 

In recent weeks, the IRS has sent out 28,000 disallowance letters to businesses whose claims showed a high risk of being incorrect. The IRS estimates that these disallowances will prevent up to $5 billion in improper payments. Thousands of audits are underway, and 460 criminal cases have been initiated. The IRS has also identified 50,000 valid ERC claims and is quickly moving them into the pipeline for payment processing in coming weeks. These payments are part of a low-risk group of claims. 

Given the complexity of the ERC and to reduce the risk of improper payments, the IRS emphasized it is moving methodically and deliberately on both the disallowances as well as additional payments to balance the needs of businesses with legitimate claims against the promoter-fueled wave of improper claims that came into the agency. 

“The Employee Retention Credit is one of the most complex tax provisions ever administered by the IRS, and the agency continues working hard to balance our work to protect taxpayers from improper claims while also making payments to qualifying businesses,” said IRS Commissioner Danny Werfel. “It has been a time-consuming process to separate valid claims from invalid ones. During the past year, we maintained a steady cadence of both ERC approvals and disapprovals.” 

“The IRS is committed to continuing our work to resolve this program as Congress contemplates further action, both for the good of legitimate businesses and tax administration,” Werfel added. 

The ERC program began as an effort to help businesses during the pandemic, but as time went on the program increasingly became the target of aggressive marketing – and potentially predatory in some cases – well after the pandemic ended. Some promoter groups called the credit by another name, such as a grant, business stimulus payment, government relief or other names besides ERC or the Employee Retention Tax Credit (ERTC). 

To counter the flood of claims, the IRS announced last fall a moratorium on processing claims submitted after Sept. 14, 2023, to give the agency time to digitize information on the large study group of ERC claims, which are made on amended paper tax returns. The subsequent analysis of the results during this period helped the IRS evaluate next steps, providing the agency valuable information to improve the accuracy of ERC claims processing going forward. 

The detailed review during the moratorium allowed the IRS to move into this new stage of the program with more payments and disallowances. In addition, the IRS will remain in close contact with the tax professional community to help navigate through the complex landscape. 

“This has been a resource-intensive credit for IRS teams to evaluate,” Werfel said.  “Unfortunately, the situation was compounded by misleading marketing flooding businesses to claim these credits, creating a perfect storm that added risk of improper payments for taxpayers and the government while complicating processing for the IRS and slowing claims to legitimate businesses.” 

Work continues on improper claims as IRS closely monitors feedback; appeals process available for denied claims 

With the recent issuance of 28,000 disallowance letters, the IRS is aware of concerns raised by tax professionals about potential errors. While we are still evaluating the results of this first significant wave of disallowances in 2024, early indications indicate errors are relatively isolated and that more than 90% of disallowance notices were validly issued. 

The IRS will continue to remain in contact with the tax community and monitor the situation and make any adjustments to minimize burden on businesses and their  representatives. Specifically, the IRS will adjust its processes and filters for determining invalid claims following each wave of disallowances. While the IRS is still evaluating the results of this first significant wave of disallowances in 2024, early indications indicate errors are isolated. 

The IRS also noted that in limited cases where claims can be proven to have been improperly denied, the agency will work with taxpayers to get it right. 

The IRS also reminds businesses that when they receive a denial of an ERC claim they have options available to file an administrative appeal by responding back to the address on the denial letter. IRS.gov also has additional information on administrative appeals with the IRS independent Office of Appeals. 

The IRS learned that some of the recent early mailings have inadvertently omitted a paragraph highlighting the process for filing an appeal to the IRS or District Court, and the agency is taking steps to ensure this language is mailed to all relevant taxpayers. Regardless of the language in the notice, the IRS emphasizes taxpayers have administrative appeals rights available to them and reminds all taxpayers that details on the process for filing an appeal or otherwise challenging an IRS determination can be found throughout the agency’s literature and on IRS.gov. 

Additional payments for 50,000 valid claims moving into processing; more in the fall 

In the latest step, the IRS announced today that low-risk ERC claims will be paid out quickly. The IRS is moving 50,000 of these claims. After processing is complete, the claims will be paid out to taxpayers. The IRS projects payments will begin in September with additional payments going out in subsequent weeks. The IRS anticipates adding another large block of additional low-risk claims for processing and payment in the fall. 

The IRS also noted that it is a making a shift in the moratorium period on new claims now that it has additional information. Previously, the agency was not processing claims filed after Sept. 14, 2023. As the agency moves forward, it will now start judiciously processing claims filed between Sept. 14, 2023, and Jan. 31, 2024. Like the rest of the ERC inventory, work will focus on the highest and lowest risk claims at the top and bottom end of the spectrum. This means there will be instances where the agency will start taking actions on claims submitted in this time period when the agency has seen a sound basis to pay or deny a refund claim. 

As the IRS begins to process additional claims, the agency reminds businesses that they may receive payments for some valid tax periods – generally quarters – while the IRS continues to review other periods for eligibility. 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. Alternatively, qualified wages may vary due to a forgiven Paycheck Protection Program loan or because an employer already claimed the maximum amount of qualified wages in an earlier tax period. 

ERC compliance work continues 

The IRS continues analyzing ERC claims, intensifying audits and pursing promoter and criminal investigations. Beyond the disallowance letters, current initiatives results include:  

• ERC Claim Withdrawal Program: The claim withdrawal process for unprocessed ERC claims has led to more than 7,300 entities withdrawing $677 million.
• ERC Voluntary Disclosure Program: During the VDP, which ended in March, the IRS received more than 2,600 applications from ERC recipients that disclosed $1.09 billion worth of credits.
• Criminal investigations: As of July 1, 2024, IRS Criminal Investigation has initiated 460 criminal cases, with potentially fraudulent claims worth nearly $7 billion. In all, 37 investigations have resulted in federal charges so far, with 17 investigations resulting in convictions and nine sentencings with an average sentence of 20 months.
• Promoter investigations: The IRS is gathering information about suspected abusive tax promoters and preparers improperly promoting the ability to claim the ERC. The IRS’s Office of Promoter Investigations has received hundreds of referrals from internal and external sources. The IRS will continue civil and criminal enforcement efforts of these unscrupulous promoters and preparers.
• Audits: The IRS has thousands of ERC claims currently under audit. 

Additional information 

• Warning sign indicators about potentially improper claims.
• ERC Claim Withdrawal Program.

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued statistics on the Inflation Reduction Act clean energy tax credits for tax year 2023. 

The Inflation Reduction Act, or IRA, extended and expanded tax credits that allow taxpayers to claim residential and energy efficient home energy credits. 

Taxpayers have claimed more than $6 billion in credits for residential clean energy investments—which include solar electricity generation, solar water heating and battery storage—and more than $2 billion for energy efficient home improvements — which include heat pumps, efficient air conditioners, insulation, windows and doors — on 2023 tax returns filed and processed through May 23, 2024.

Residential and Energy Efficient Home Improvement Credit

Credit	Number of returns​	Credit value​
Residential Clean Energy Credit	1,246,440	Total: $6.3 billion, Average per return: $5,084
Rooftop solar	752,300	Up to 30% of cost
Batteries	48,840	Up to 30% of cost
Energy Efficient Home Improvement Credit	2,338,430	Total: $2.1 billion, Average per return: $882
Home insulation	669,440	Up to 30% of cost​c
Windows and skylights	694,450	Up to 30% of cost or $600​c
Central air conditioners	488,050	Up to 30% of cost or $600​c
Doors	400,070	Up to 30% of cost, $250 per door, or $500 total​
Heat pumps	267,780	Up to 30% of cost or $2,000
Heat pump water heaters	104,180	Up to 30% of cost or $2,000

 

Week 5 of “Protect Your Clients; Protect Yourself” series focuses on strengthening account security  

WASHINGTON — The Internal Revenue Service and the Security Summit partners remind tax professionals that using multi-factor authentication is now more than an important protection for their businesses and their clients – it’s now a federal requirement. 

All tax professionals are now required under the Federal Trade Commission’s safeguards rule to use multi-factor authentication, or MFA, to protect clients’ sensitive information. The June 2023 change mandates MFA to strengthen account security by requiring more than just a username and password to confirm an identity when accessing any system, application or device. 

“Multi-factor authentication is now more than just a good idea for tax professionals; it’s a requirement,” said IRS Commissioner Danny Werfel. “This is an effective way to increase security and protect tax professionals and their clients from a data breach. Multi-factor authentication is a little like a deadbolt on a door; it’s additional security supplementing the doorknob lock. This is an important step to protect not just tax professionals and their firms, but also the sensitive taxpayer information from their clients.” 

This is the fifth 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. 

Security is 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 is featured at the three-day continuing education events. The forums continue the weeks of August 12 in Baltimore, August 19 in Dallas and September 9 in San Diego. The IRS reminds tax pros that registration deadlines are quickly approaching for the Baltimore and Dallas forums, as San Diego has already sold out. 

In upcoming weeks, the news release series and the IRS Tax Forums will provide timely tips to help protect sensitive taxpayer data that tax professionals hold while also protecting their own businesses from identity thieves. 

A key part of tax pro security now revolves around MFA. The extra layers of different authentication factors include something only a user knows, like a username and password; something they have, like a token or random number sequence sent to their cell phone; or something unique, like biometric information. These provide extra assurance that a tax pro’s client, not an impostor, is gaining access. 

The Summit partners noted that implementing MFA is one of the most cost-effective ways to increase security and reduce a tax pro’s fraud and data breach risks. Once in place, MFA helps protect against phishing, social engineering and other types of technology attacks that exploit weak or stolen passwords. 

Common MFA examples   

The general public makes wide use of MFA these days, so tax pro clients shouldn’t be surprised by the extra scrutiny asked of them. 

For example, many smartphone users are accustomed to fingerprint or facial recognition that authenticates their identity before unlocking their device. Certain smartphone applications can also rely on that biometric factor along with a PIN or password for app-level MFA. 

Many online banks, financial applications and payroll services use MFA to verify account holders’ identities before granting access or allowing high-risk transactions, such as money transfers. 

In addition, taxpayers connecting to the IRS will be asked to set up MFA to create an IRS Online Account. After that, to sign in, they will first log in with an email address and password, then receive a one-time passcode by text or call to one’s chosen device and finally enter the passcode into the account to complete sign-in. A bad actor cannot access one’s account without also having their passcode. 

MFA required by law   

Under the new FTC MFA rules, there’s a requirement to use at least two of the following factors for anyone accessing customer information: something a user knows like a username; something sent to them like numbers texted to a cell phone; or a physical part of them like a fingerprint or facial scan. 

In addition, MFA should be used to secure client information on a tax pro’s computer or network, but it should also be used to access client information stored within their tax preparation software. MFA is required by law for all companies – not just tax professionals. The size of the company does not matter. Opting out of using MFA in tax prep software is a violation of the FTC safeguards rules. 

Best implementation practices   

Tax pros should implement MFA across all their services and data access points. 

In addition, they should regularly evaluate current MFA methods, standards and new technologies to stay protected against the latest threats, and they should offer a variety of authentication factors to suit the needs of different users. 

Finally, tax pros should always enable MFA within tax software products and cloud storage services containing sensitive client data, and they should never share usernames. 

Additional resources   

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

• Report the incident to their local IRS Stakeholder Liaison. Speed is critical. IRS stakeholder liaisons will ensure all the appropriate IRS offices are alerted. If reported quickly, the IRS can take steps to block fraudulent returns in the clients' names and assist tax pros through the process.
• Visit the Federation of Tax Administrators to find state contact information. Tax professionals can share information with the appropriate state tax agency by visiting the special “Report a Data Breach.”
• Review Publication 5293, Data Security Resource Guide for Tax Professionals, which 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.
• Read Small Business Information Security: The Fundamentals, by the National Institute of Standards and Technology. 

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

Inside This Issue

1. Security Summit partners urge continued vigilance against evolving scams to tax professionals, businesses and clients
2. IRS business forms now electronic
3. IRS Nationwide Tax Forum: Registration still open for Baltimore, Dallas
4. IRS celebrates National Whistleblower Day; collects over $7 billion thanks to whistleblowers
5. Technical Guidance

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

In the fourth installment of the “Protect Your Clients; Protect Yourself” special series, the IRS and its Security Summit partners reminded taxpayers and tax professionals about the IRS online accounts and the special Identity Protection PIN program, which can help prevent identity theft related to taxes.

“To protect against continuing and evolving threats from identity thieves, these two special tools provide an extra layer of security for taxpayers and tax professionals,” IRS Commissioner Danny Werfel said. “The IRS and the Security Summit urge people to sign up for both IP PINs and the Online Account to help protect their valuable information as well as avoid tax problems down the road.”

Tax professionals may do the following to report stolen data:

• Share information with the appropriate state tax agency by visiting 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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2.  IRS business forms now electronic

Taxpayers can now electronically file business Forms 940, 941, 943 and 945, including the Spanish version of Forms 941 and 943. In addition, the IRS can now accept related electronic payments while minimizing errors normally associated with processing paper returns.

Visit the Modernized eFile for Employment Taxes FAQ page for more information on electronically filing employment taxes.

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

Tax pros: It’s not too late to reserve your space at the upcoming IRS Nationwide Tax Forum in Baltimore, Aug. 13-15, and 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. In addition, the IRS will have employees on-site to assist attendees who need personalized help. For example, those in need of assistance with a client case can make an appointment with a representative in the Case Resolution Room. Those who need help creating an IRS Online Account or resolving a Preparer Tax Identification Number (PTIN) or Centralized Authorization File (CAF) issue should visit the Digital Account Services Room. There will also be staff available to assist with e-Services, cybersecurity, digital assets, Form 1099-K, Low Income Taxpayer Clinics and more.

For information and to register, visit IRS Nationwide Tax Forum.

You can learn more about this year’s program on the following videos produced 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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4.  IRS celebrates National Whistleblower Day; collects over $7 billion thanks to whistleblowers

July 30 is National Whistleblower Appreciation Day because on that day in 1778, the Continental Congress passed the nation’s first whistleblower law. The first law related to whistleblowers on tax violations was enacted almost 90 years later in March 1867.

The IRS Whistleblower Office acknowledges the critical role whistleblowers play in the nation’s tax administration. The agency has paid over $1.2 billion in awards since issuing its first award in 2007, representing the successful collection of $7 billion from taxpayers who were not in compliance.

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5.  Technical Guidance

Revenue Procedure 2024-32 updates Rev. Proc. 2017-55 to set forth the procedure by which the sponsor of a defined benefit plan that is subject to the funding requirements of section 430 may request approval from the IRS for the use of plan-specific substitute 

Week 4 of “Protect Your Clients; Protect Yourself” series focuses on special protection tools  

WASHINGTON — In the fourth part of a special summer series, the Security Summit partners today reminded tax professionals and taxpayers about the special IRS Identity Protection PIN program and the IRS online accounts that can help protect against tax-related identity theft. 

These two tools help protect against the threat of tax-related identity theft, both for the taxpayers who sign up and the tax professionals who hold their sensitive tax information. 

Identity Protection PINs, also referred to as IP PINs, serve as a critical defense against identity thieves. The IRS is encouraging all tax pros and taxpayers to establish their IRS Online Account that allows access to IRS account information online, but it also guards against fraudsters trying to trick tax pros and taxpayers into creating such an account. 

“To protect against continuing and evolving threats from identity thieves, these two special tools provide an extra layer of security for taxpayers and tax professionals,” IRS Commissioner Danny Werfel said. “The IRS and the Security Summit urge people to sign up for both IP PINs and the Online Account to help protect their valuable information as well as avoid tax problems down the road.” 

The IRS, state tax agencies and the nation's tax industry – working together as the Security Summit – need assistance from tax professionals to let their clients know that IP PINs and the IRS Online Account are available to anyone who can verify their identity. 

In addition to enrolling in the IP PIN program, the IRS is encouraging all people to establish their IRS Online Account. Doing so not only provides access to IRS account information that’s now available online, but it also guards against fraudsters trying to trick tax pros and taxpayers into creating such an account. Tax pros also have access to the Tax Pro Account. 

This is the fourth 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. 

Security is a key focus of the Nationwide Tax Forum, being held in five cities this summer 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 forums continue today in Orlando, Florida, though the event is already sold out, and carry on 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. 

More than 10.4 million taxpayers have taken the steps to obtain an IP PIN, a six-digit number that once issued to a taxpayer must be included on their tax return prior to filing electronically. Many, many more taxpayers should consider getting one to add another layer of protection against identity theft. 

To do so, taxpayers should visit the IRS Get an IP PIN online tool. Doing that will establish a taxpayer’s access to their IRS Online Account, making themselves less likely to fall victim to social engineering schemes that trick taxpayers into setting up an IRS Online Account controlled by a bad actor. 

Beginning this summer, taxpayers who enroll in the program will have the ability to unenroll if for some reason they decide they no longer want to participate in the future. 

ETAAC notes IP PIN “effectively locks out” many fraudsters   

The Electronic Tax Administration Advisory Committee, or ETAAC, is again this year highlighting the importance of the IP PIN to taxpayers and tax professionals, echoing past endorsements from the same independent IRS advisory group. 

“The IP PIN method provides strong protection against stolen identity tax refund fraud and effectively locks out many fraudsters from e-filing using that taxpayer’s social security number,” said ETAAC’s annual report to Congress. 

But the report added that IP PINS should be more widely used, calling it an overlooked tool in the fight against fraud. Underscoring the point, the ETAAC report said only 525,000 taxpayers opted into the IP PIN program in 2022, even though the Federal Trade Commission received more than 1.1 million reports of identity theft that same year. 

The importance of someone’s IP PIN can be a tempting target for identity thieves, given the IP PINs' inherent strength. Summit partners urged taxpayers and tax professionals to be careful and protect the IP PIN from identity thieves, and noted these key tips: 

• Taxpayers should share their IP PIN only with their trusted tax provider.
• Tax professionals should never store clients' IP PINs on computer systems. This reduces taxpayer risk if a tax pro's system is compromised by an identity thief or cyberattack.
• The IRS will never call, email or text either taxpayers or tax professionals to request the IP PIN. This is a sign of a scam. 

Tax professionals who experience a data theft can assist clients by urging them to quickly obtain an IP PIN. Even if a thief already has filed a fraudulent return, an IP PIN would still offer protections for later years and prevent taxpayers from being repeat victims of tax-related identity theft. 

Key facts about IP PINs   

Here are a few other things taxpayers and tax professionals should know about the IP PIN: 

• It's a six-digit number known only to the taxpayer and the IRS.
• The opt-in program is voluntary, though strongly encouraged.
• In cases of proven identity theft, an IP PIN is assigned to a taxpayer to use for future filings.
• The IP PIN should be entered on the electronic tax return when prompted by the software product or on a paper return next to the signature line.
• The IP PIN is valid for one calendar year; a new IP PIN is generated each year.
• Only taxpayers who can verify their identities may obtain an IP PIN.
• IP PIN users should never share their number with anyone but the IRS and their trusted tax preparation provider. The IRS will never call, email or text a request for the IP PIN.
• Tax professionals cannot obtain an IP PIN on behalf of clients. Taxpayers must obtain their own IP PIN. 

Taxpayers have the opportunity to opt out if they previously opted into the program. Taxpayers who are confirmed victims of identity theft will not have the option to opt out of the program. 

How to get an IP PIN   

To obtain an IP PIN, the best option is to start at Get an IP PIN. Taxpayers need to validate their identities through ID.me to access the tool and their IP PIN. Before attempting this thorough process, the IRS recommends taxpayers first check out How to register for IRS online self-help tools. 

If taxpayers are unable to validate their identity online and if their income is less than $79,000 for individuals or $158,000 for married couples, they may file Form 15227, Application for an Identity Protection Personal Identification Number. The IRS will call the telephone number provided on Form 15227 to validate their identity. Once verified, the taxpayer will receive an IP PIN via the U.S. Postal Service within four to six weeks. 

Taxpayers who cannot validate their identities online or on the phone with an IRS employee after submitting a Form 15227, or who are ineligible to file a Form 15227, may call the IRS to make an appointment at a Taxpayer Assistance Center. They'll need to bring one picture identification document and another identification document to prove their identity. Once verified, the taxpayer will receive an IP PIN via U.S. Postal Service within three weeks. 

The IP PIN process for confirmed victims of identity theft remains unchanged. These victims will automatically receive an IP PIN each year. 

Additional resources   

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

• Report the incident to their local IRS Stakeholder Liaison. Speed is critical. IRS stakeholder liaisons will ensure all the appropriate IRS offices are alerted. If reported quickly, the IRS can take steps to block fraudulent returns in the clients' names and will assist tax pros through the process.
• Visit the Federation of Tax Administrators to find state contact information. Tax professionals can share information with the appropriate state tax agency by visiting the special “Report a Data Breach.”
• Review Publication 5293, Data Security Resource Guide for Tax Professionals, which 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.
• Read Small business information security: The fundamentals, by the National Institute of Standards and Technology. 

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

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