WASHINGTON — The Internal Revenue Service today announced the availability of expanded chatbot technology to help quickly answer basic questions for people receiving notices about possibly underreporting their taxes.

The new chatbot feature will assist taxpayers who receive notices CP2000, CP2501 and CP3219A. These mailings inform taxpayers if the tax information the IRS received from third parties doesn’t match the information they provided themselves to the IRS.

This technology expansion is supported through the Inflation Reduction Act funding to transform the IRS and improve services to help taxpayers.

“Through our transformation efforts, we are working to expand technologies to help taxpayers and tax professionals interact with us in the ways they prefer, including expanded digital, phone and in-person assistance options,” said IRS Commissioner Danny Werfel. “We understand receiving a notice from the IRS can be concerning, and people frequently have questions. The use of chatbots in call centers has emerged as an effective practice in both the private and public sectors, making it easier for people to quickly get basic information to resolve their issues and avoid wait times on the phone. Deploying chatbots at the IRS call center helps taxpayers get their issues resolved quicker, and it helps free up valuable phone resources for other taxpayers with questions on more complex issues.”

Rollout of this chatbot builds on prior IRS successes using the technology to help improve taxpayer service. Since January 2022, IRS voice and chatbots, both in English and Spanish, helped more than 13 million taxpayers avoid wait times by resolving their tax issues, including setting up roughly $151 million in payment agreements.

The chatbot simulates human interaction with taxpayers through a web or mobile app on a computer or mobile screen by responding to questions or requests in a chat feature. Also, at the end of the conversation, taxpayers can press the “representative” button to speak to a live assistor.
The new IRS chatbot is available to help taxpayers with questions such as:

• What to do if they received a notice.
• What to do if they need more time to respond to a notice.
• How to find out if the IRS received their response.

The IRS plans to continue additional bot technology features in the future to assist taxpayers with more complex issues.

The IRS transformation efforts provided by Inflation Reduction Act Funding are outlined in the Strategic Operating Plan released in April.

Additional self-service resources

• Individual Tax Tools
• Get your tax records
• Payment options
• More info about CP2000 notices

Notice 2023-68 announces the special per diem rates effective October 1, 2023, which taxpayers may use to substantiate the amount of expenses for lodging, meals, and incidental expenses when traveling away from home.  This notice provides the special transportation industry rate, the rate for the incidental expenses only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method. 

Rev. Proc. 2019-48 provides the rules for using per diem rates, rather than actual expenses, to substantiate the amount of expenses for lodging, meals, and incidental expenses for travel away from home.  Taxpayers who use per diem rates to substantiate the amount of travel expenses under Rev. Proc. 2019-48 may use the federal per diem rates published annually by the General Services Administration.  Rev. Proc. 2019-48 allows certain taxpayers to use a special transportation industry rate or to use rates under a high-low substantiation method for certain high-cost localities.  The IRS announces these rates and the rate for the incidental expenses only deduction in an annual notice.

Use of a per diem substantiation method is not mandatory.  A taxpayer may substantiate actual allowable expenses if the taxpayer maintains adequate records or other sufficient evidence for proper substantiation.

As work continues to focus more attention on high-income compliance issues, the IRS plans to establish a special area to focus on large or complex pass-through entities. The new work unit will be housed in the IRS Large Business and International (LB&I) division and will include the people joining the IRS under the new IRS hiring initiative recently announced. "This is another part of our effort to ensure the IRS holds the nation's wealthiest filers accountable to pay the full amount of what they owe," said IRS Commissioner Danny Werfel. "We are honing-in on areas where we believe non-compliance among our wealthiest filers has proliferated over the last decade of IRS budget cuts, and pass-throughs are high on our list of concerns. This new unit will leverage Inflation Reduction Act funding to disrupt efforts by certain large partnerships to use pass-throughs to intentionally shield income to avoid paying the taxes they owe.”

With the rise in cybersecurity risks it is important that tax professionals take steps to secure their client’s data. A Written Information Security Plan (WISP) will provide a blueprint of action in the event of a security incident.

Join us for a quick information session where we discuss the WISP. During this session we will explain:

We will also discuss the Identity Protection PIN and why you should encourage your clients to apply for one.

September 28, 2023

10:00 AM – 10:3O AM EST

REGISTER HERE

This event will be held on Microsoft Teams

This event will not be recorded

Amid rising concerns about a flood of improper Employee Retention Credit (ERC) claims, the IRS ordered an immediate moratorium through at least the end of the year on processing new claims for the pandemic-era relief program to protect honest small business owners from scams. The IRS continues to work previously filed ERC claims received prior to the moratorium but renewed a reminder that increased fraud concerns means processing times will be longer. IRS Commissioner Danny Werfel ordered the immediate moratorium, beginning Sept. 14 through at least Dec. 31, following growing concerns inside the tax agency, from tax professionals as well as media reports that a substantial share of new claims from the aging program are ineligible and increasingly putting businesses at financial risk. 

Notice 2023-64 provides additional interim guidance that is intended to further clarify the application of the new corporate alternative minimum tax (CAMT), as added to the Code by the Inflation Reduction Act of 2022. The Treasury Department and the IRS anticipate that forthcoming proposed regulations will provide rules that are consistent with the interim guidance. Specifically, it describes rules for determining a taxpayer’s applicable financial statement and adjusted financial statement income (AFSI), including rules applicable to tax consolidated groups and certain foreign corporations. It provides rules for AFSI adjustments for the depreciation of section 168 property, the amortization of qualified wireless spectrum, the treatment of certain taxes, and to prevent certain duplications and omissions. It also describes rules regarding the determination of applicable corporation status, the CAMT foreign tax credit, and financial statement net operating losses. Finally, it provides a request for comments and the procedure for submitting such comments.

Notice 2023-64 will be in IRB: 2023-40, dated 10/02/2023.

WASHINGTON — The Department of Treasury and the Internal Revenue Service today issued Notice 2023-64 to provide additional interim guidance designed to help corporations determine whether the new corporate alternative minimum tax (CAMT) applies to them and how to compute the tax.

Notice 2023-64, clarifies and supplements Notice 2023-07 and Notice 2023-20, issued earlier this year. Treasury and IRS anticipate that forthcoming proposed regulations will be consistent with this interim guidance.

The Inflation Reduction Act created the CAMT, which imposes a 15% minimum tax on the adjusted financial statement income (AFSI) of large corporations for taxable years beginning after Dec. 31, 2022. The CAMT generally applies to large corporations with average annual financial statement income exceeding $1 billion.

Considering the challenges of determining CAMT liability, Notice 2023-42 provides that the IRS will waive the penalty for a corporation’s estimated income tax with respect to its CAMT for a taxable year that begins after Dec. 31, 2022, and before Jan. 1, 2024.

Among other things, today’s notice provides a list of financial statements that meet the definition of an applicable financial statement (AFS) as well as priority rules for identifying a taxpayer’s AFS.

The guidance also provides general rules for determining a taxpayer’s financial statement income and AFSI, including when the taxpayer’s financial results are reported on a consolidated financial statement.

Finally, the notice includes guidance on when corporations are subject to CAMT, CAMT foreign tax credits, tax consolidated groups, foreign corporations, depreciable property, wireless spectrum, duplications and omissions of certain items, and financial statement net operating losses. 

Revenue Procedure 2023-31 supersedes Rev. Proc. 2015-47, 2015-39 IRB 419, which sets forth procedures for filers of Forms 8955-SSA and 5500-EZ to request a hardship waiver of the requirement to file those forms electronically. Rev. Proc. 2015-47 is being superseded because of recently issued Treasury regulations which (among other things): (1) implement a lowered threshold for mandatory electronic filing of Forms 8955-SSA and 5500-EZ (as authorized by the Taxpayer First Act of 2019), and (2) provide a new administrative exemption with respect to electronic filing of Form 8955-SSA.  Rather than set forth specific procedures, this revenue procedure refers filers to applicable publications, forms, instructions, or other guidance, including postings on the IRS.gov website, for the procedures for seeking a hardship waiver or administrative exemption from the requirements to file Forms 8955-SSA and 5500-EZ electronically. This revenue procedure is effective with respect to Forms 8955-SSA and 5500-EZ required to be filed for plan years beginning on or after January 1, 2024.  

WASHINGTON — The Internal Revenue Service today issued a frequently asked question in Fact Sheet 2023-20 to provide guidance to pass-through entities for electronically filing Schedules K-2 and K-3 to the IRS to report negative amounts.

For tax year 2022 the schema for Schedule K-2 and K-3 do not permit negative values. This FAQ provides guidance to pass through entities about how to report these amounts.

More information about reliance is available.

IRS-FAQ

Tax pros: Starting Jan. 1, 2024, businesses are required to electronically file Form 8300, Report of Cash Payments Over $10,000, instead of filing a paper return. This new requirement follows final regulations amending e-filing rules for information returns, including Forms 8300. Visit IRS.gov for related information about waiver applications, exemptions and more.