The IRS and its Security Summit partners encourage tax professionals to take advantage of its security plan template designed to make data security planning easier. The Written Information Security Plan (WISP) is an easy-to-understand document developed by and for tax and industry professionals to keep customer and business information safe and secure. This is the first in a five-part "Protect Your Clients; Protect Yourself" summer series from the Security Summit, a public-private partnership that works to protect the tax system against tax-related identity theft and fraud. Given the importance of security plans, the WISP will be a special focus at the IRS Nationwide Tax Forums this year. 

Revenue Ruling 2023-13 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, and the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by § 1274. 

The rates are published monthly for purposes of sections 42, 382, 412, 642, 1288, 1274, 7520, 7872, and various other sections of the Internal Revenue Code.

Revenue Ruling 2023-13 will be published in Internal Revenue Bulletin 2023-32 on Aug. 7, 2023.

Tax pros, be on the lookout for a new tax scam that tries to mislead people into believing they are owed a refund. The new scheme involves a mailing coming in a cardboard envelope from a delivery service. The enclosed letter includes the IRS masthead and wording that the notice is "in relation to your unclaimed refund." The letter tells the recipients they need to provide "Filing Information" for their refund, as well as more sensitive information including cell phone number, bank routing information, Social Security number and bank account type. This letter contains a variety of warning signs, including odd punctuation and a mixture of fonts as well as inaccuracies.

"This is just the latest in the long string of attempts by identity thieves posing as the IRS in hopes of tricking people into providing valuable personal information to steal identities and money, including tax refunds," said IRS Commissioner Danny Werfel. "These scams can come in through email, text or even in special mailings. People should be careful to watch out for red flags that clearly mark these as IRS scams." This news release is also available in Spanish and Simplified Chinese.

Electronic Tax Administration Advisory Committee issues annual report with 26 recommendations to Congress and IRS

WASHINGTON — The Internal Revenue Service Electronic Tax Administration Advisory Committee (ETAAC) today released its annual report for 2023 featuring recommendations to Congress and the IRS that focus on electronic tax administration and cybersecurity.

The report was released at a public meeting at IRS headquarters in Washington, D.C.

“ETAAC plays a critical role for our nation’s tax system and taxpayers,” said IRS Commissioner Danny Werfel. “Members bring a wide range of perspectives on critical issues ranging from electronic filing and online services to identity theft and other security issues. Their recommendations help make improvements in the tax system. The IRS appreciates the hard work and public service provided by the committee members.”

Among its 26 recommendations, the ETAAC annual report advises Congress to provide timely tax legislation and consistent multi-year funding while it urges the IRS to prioritize IRS.gov modernization and search engine optimization.

The report illustrates the “journey of a taxpayer,” offering “ways to enhance the taxpayer experience and voluntary compliance.”

The full report can be found at: https://www.irs.gov/pub/irs-pdf/p3415.pdf.

At today's meeting, Werfel thanked six members of the committee whose terms are ending:

• Nikia Gainey, founder of Carriers Choice Logistics, LLC.
• Eric Inkrott, vice president of government and partner relations at Green Dot.
• Carlos Lopez, founder and president of Lopez Tax Service and the Latino Tax Professionals Association.
• Sherice McCarthy-Hill, director of payroll at Dartmouth College.
• Kim Pederzani, director of training & compliance at Dimension Hospitality.
• Lindsey West, founder and former CEO of Track1099.com.

About ETAAC
ETAAC members represent various segments of the tax community, including individual and business taxpayers, tax professionals and preparers, tax software developers, payroll service providers, the financial industry and state and local governments.

The ETAAC operates under the rules of the Federal Advisory Committee Act. It works closely with the Security Summit, a joint effort of the IRS, state tax administrators and the nation's tax industry, established in 2015 to fight tax-related identity theft and cybercrime.

IRS, Treasury update notice 2023-29 related to energy community bonus credit amounts under the Inflation Reduction Act

WASHINGTON – The Internal Revenue Service today issued Notice 2023-45, which updates Notice 2023-29, that describes certain rules that the IRS intends to include in forthcoming proposed regulations for determining what constitutes an energy community for the production and investment tax credits.

Notice 2023-45 addresses the update to Notice 2023-29 that occurred on April 7, 2023, which added to Section 4.01(2), Special Rule for Beginning of Construction, clarifying that this guidance applies to taxpayers that begin construction on or after Jan. 1, 2023.

Notice 2023-45 also adds an additional clarification pertaining to the brownfield site safe harbor under Section 5.02(3). Specifically, for projects with a nameplate capacity of not greater than 5MW (AC), it is required that a Phase I Assessment identify the presence or potential presence on the site of a hazardous substance or a pollutant or contaminant.

Also, the IRS posted frequently asked questions today related to the increased amount of credit for energy communities. These FAQs provide detail on how areas may qualify as an energy community, how to determine whether a project is in an energy community, and brownfield sites for purposes of the energy community bonus credit.

Finally, the IRS released Notice 2023-47, that publishes information that taxpayers may use to determine whether they meet certain requirements under the Statistical Area Category or the Coal Closure Category in Notice 2023-29 for purposes of qualifying for energy community bonus credit.

These lists are provided in Appendix 1, Appendix 2 and Appendix 3 of this notice. Appendices 1 and 2 of this notice pertain to the Statistical Area Category, and Appendix 3 of this notice pertains to the Coal Closure Category.

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

WASHINGTON — The Internal Revenue Service today issued proposed regulations that provide guidance regarding the implementation of the elective payment provisions of the Advanced Manufacturing Investment Credit, established by the Creating Helpful Incentives to Produce Semiconductors Act of 2022, commonly known as the CHIPS Act.

This credit will incentivize the manufacture of semiconductors and semiconductor manufacturing equipment within the United States. The credit is available to taxpayers that meet certain eligibility requirements, and taxpayers can choose to receive the credit as an elective payment. Today’s proposed regulations describe how an entity can choose to make an elective payment election, which will be treated as a payment against the tax liability that is equal to the amount of the credit. A partnership or S corporation can make an elective payment election to receive a payment instead of claiming the credit.

The advanced manufacturing investment credit for any taxable year is generally equal to 25% of an eligible taxpayer's qualified investment in an advanced manufacturing facility. An eligible taxpayer's qualified investment equals its basis in any qualified property placed in service during the taxable year. The qualified property must be integral to the operation of the advanced manufacturing facility. The credit is generally available for qualified property placed in service after Dec. 31, 2022.

The proposed regulations include special rules applicable to partnerships and S corporations, repayment of excessive payments, and basis reduction and recapture. In addition, the proposed regulations provide rules related to an IRS pre-filing registration process that would be required.

The Department of the Treasury and the IRS welcome public comments on these proposed regulations. For details on submitting comments, see the proposed regulations.

Remind your clients about the upcoming 2023 second quarter estimated tax payment deadline. Taxpayers who pay estimated taxes should consider the June 15 deadline to stay current with their taxes. Visit IRS.gov for more information about who must pay estimated tax, how to avoid an underpayment penalty, understanding Form 1099-K and more. 

IRS grants penalty relief for corporations that did not pay estimated tax related to the new corporate alternative minimum tax

WASHINGTON — The Department of Treasury and the Internal Revenue Service today issued Notice 2023-42, which will grant penalty relief for corporations that did not pay estimated tax in connection with the new corporate alternative minimum tax (CAMT).

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

Considering the challenges associated with determining the amount of a corporation’s CAMT liability and whether a corporation is an applicable corporation subject to the CAMT, the IRS will waive the penalty for a corporation’s failure to pay estimated income tax with respect to its CAMT for a taxable year that begins after Dec. 31, 2022, and before Jan. 1, 2024.

Procedural updates affecting Form 4506-C have been implemented. Form 4506-C is used to request return transcripts, account transcripts, record of account transcripts, and wage & income transcripts for the primary taxpayer listed on line 1a. The taxpayer listed on line 2a will only receive wage and income transcripts (W-2, 1098-E, 1099-G, etc.).

IVES participants will need to ensure their customers fill out Form 4506-C as they intend it to be processed. Only list a spouse on line 2a if the spouse is requesting a wage and income transcript and will be signing the request. Taxpayers listed are required to complete their assigned signature section. Forms with missing signature(s), unchecked signatory attestation box, or missing date(s) will be rejected.

For further guidance, please see attached links for Form 4506-C criteria and requirements which can be found on www.IRS.gov.

Internal Revenue Manual 3.5.20.4.2.4 Processing IVES Requests in TDS (irs.gov).

Internal Revenue Manual 3.5.20 Processing Requests for Tax Return/Return Information | Internal Revenue Service (irs.gov).

Form 4506-C instructions. Form 4506-C Published Version (govdelivery.com)

Any questions about Form 4506-C updates should be directed to the IVES Participant Assistance email at wi.ives.participant.assistance@irs.gov.