Revenue Ruling 2022-18 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.

WASHINGTON — The Internal Revenue Service announced today the opening of the application period for the 2023 Compliance Assurance Process (CAP) program. The application period runs from September 15 to November 15, 2022 . The IRS will inform applicants if they’re accepted into the program in February 2023.

Launched in 2005, CAP employs real-time issue resolution, through transparent and cooperative interaction between taxpayers and the IRS, to improve federal tax compliance by resolving issues prior to the filing of a tax return. 

 To be eligible to apply for CAP, new applicants must:

•  Have assets of $10 million or more,
• Be a U.S. publicly traded corporation with a legal requirement to prepare and submit SEC Forms 10-K, 10-Q, and 8-K, and
• Not be under investigation by, or in litigation with, any government agency that would limit the IRS’s access to current tax records.

To be eligible to participate in CAP, taxpayers must adhere to CAP program limits on the number of open years.

General program information and the 2023 application details are available on the CAP webpage. 

Revenue Procedure 2022-36 provides the domestic asset/liability percentages and domestic investment yields needed by foreign life insurance companies and foreign property and liability insurance companies to compute their minimum effectively connected net investment income under section 842(b) of the Internal Revenue Code for taxable years beginning after December 31, 2020.

Notice 2022-39 provides rules that claimants must follow to make a one-time claim for the credit and payment allowable under §§ 6426(d) and 6427(e) of the Internal Revenue Code for alternative fuels sold or used during the first, second, and third calendar quarters of 2022.  The rules are prescribed pursuant to § 13201(g) of Public Law 117-169, 136 Stat. 1818 (August 16, 2022), commonly known as the Inflation Reduction Act.  Notice 2022-39 also provides instructions for how a taxpayer’s liability for the excise tax imposed by § 4081 may be reduced by claiming the alternative fuel mixture credit allowable under § 6426(e) for the first and second calendar quarters of 2022.   

Today, the IRS published the latest executive column, “A Closer Look,” which features Sunita Lough, Commissioner, Tax Exempt/Government Entities Division, discussing the past, present and future of the Form 1023-EZ, which was launched in 2014 to help small charitable organizations seeking federal tax-exempt status.

 “Form 1023-EZ has reduced the burden on the smallest organizations applying for tax-exempt status and increased the efficiency of the Exempt Organization division’s operations,” said Lough. “In TE/GE, we are committed to succeeding in our mission to provide our customers with top quality service by helping them understand and comply with tax laws and to protect the public interest by applying the tax law with integrity and fairness to all.” Read more here. Read the Spanish version here. 

“A Closer Look” is a column from IRS executives that covers a variety of timely issues of interest to taxpayers and the tax community. It also provides a detailed look at key issues affecting everything from IRS operations and employees to issues involving taxpayers and tax professionals.

The IRS will be hosting a live webinar with important information for tax practitioners and withholding agents, discussing:

• Overview of Form 1042-S
• Overview of each section of the Form 1042-S
• Common Errors on Form 1042-S
• Overview of Form 1042-T
• Live Q&A

When: Thursday, September 22, 2022, at 2:00 pm Eastern

How to Register: Click Here to Register

WASHINGTON – The Internal Revenue Service reminds taxpayers who pay estimated taxes that the deadline to submit their third quarter payment is Sept. 15, 2022.

Taxpayers not subject to withholding, such as those who are self-employed, investors or retirees, may need to make quarterly estimated tax payments. Taxpayers with other income not subject to withholding, including interest, dividends, capital gains, alimony, cryptocurrency and rental income, also normally make estimated tax payments.

In most cases, taxpayers should make estimated tax payments if they expect:

• To owe at least $1,000 in taxes for 2022 after subtracting their withholding and tax credits.
• Their withholding and tax credits to be less than the smaller of:
• • 90% of the tax to be shown on their 2022 tax return or
  • 100% of the tax shown on their 2021 tax return. Their 2021 tax return must cover all 12 months.

Special rules apply to some groups of taxpayers, such as farmers, fishermen, casualty and disaster victims, those who recently became disabled, recent retirees and those who receive income unevenly during the year. Publication 505, Tax Withholding and Estimated Tax, provides more information on estimated tax rules. The worksheet in Form 1040-ES, Estimated Tax for Individuals, or Form 1120-W, Estimated Tax for Corporations, has details on who must pay estimated tax.

How to figure estimated tax
To figure estimated tax, individuals must figure their expected Adjusted Gross Income (AGI), taxable income, taxes, deductions and credits for the year.

When figuring 2022 estimated tax, it may be helpful to use income, deductions and credits for 2021 as a starting point. Use the 2021 federal tax return as a guide. Taxpayers can use Form 1040-ES to figure their estimated tax.

The Tax Withholding Estimator on IRS.gov offers taxpayers a clear, step-by-step method to have their employers withhold the right amount of tax from their paycheck. It also has instructions to file a new Form W-4 to give to their employer to adjust the amount withheld each payday.

How to avoid an underpayment penalty
Taxpayers who underpaid their taxes may have to pay a penalty. This applies whether they paid through withholding or through estimated tax payments. A penalty may also apply for late estimated tax payments even if someone is due a refund when they file their tax return.

To see if they owe a penalty, taxpayers should use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts. Taxpayers can also see the Form 2210 instructions under the “Waiver of Penalty” section. The IRS may waive the penalty if someone underpaid because of unusual circumstances and not willful neglect. Examples include:

• Casualty, disaster or another unusual situation.
• An individual retired after reaching age 62 during a tax year when estimated tax payments applied.
• An individual became disabled during a tax year when estimated tax payments applied.
• Specific written advice from an IRS agent given in response to a specific written request. The taxpayer must provide copies of both.

The fourth and final 2022 estimated tax payment is due Jan. 17, 2023.

Other IRS.gov resources

• The Pay tab on the front page of IRS.gov provides complete tax payment information, how and when to pay, payment options and more.
• Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts
• Form 2220, Underpayment of Estimated Tax by Corporations

WASHINGTON — September is National Preparedness Month. With the height of hurricane season fast approaching and the ongoing threat of wildfires in many places, the Internal Revenue Service urges everyone to develop an emergency preparedness plan, or if they already have one, update it for 2022.

Everyone, from individuals to organizations and businesses, can start now by:

In the aftermath of a disaster, having the updated documents and other information readily available can help victims apply for the relief available from the IRS and other agencies. Disaster assistance and emergency relief may help taxpayers and businesses recover financially from the impact of a disaster, especially when the federal government declares their location to be a major disaster area.

Start secure

Taxpayers should keep critical original documents inside waterproof containers in a secure space. These include tax returns, birth certificates, deeds, titles, insurance policies and other similarly important items. In addition, consider having a relative, friend or other trusted person retain duplicate copies of these documents at a location outside the potentially impacted disaster area.

Make copies

If original documents are available only on paper, try scanning them into a digital file format. Saving them in a secure digital location, like a cloud-based storage application, can provide added security and portability.

Document valuables

Maintain a detailed inventory of your property and business contents. Taxpayers can take photos or videos to record their possessions but should also write down descriptions including year, make and model numbers, where appropriate. After a disaster hits, this kind of documentation can help support claims for insurance or tax benefits. The IRS disaster-loss workbooks can help individuals and businesses compile lists of belongings or business equipment.

Employer fiduciary bonds

Employers using payroll service providers should check if their provider has a fiduciary bond in place to protect the employer against a possible provider default.

Most employers already use the Electronic Federal Tax Payment System (EFTPS) to make their federal tax deposits and business tax payments. Because these payments can easily be made either by phone or online, EFTPS offers an especially convenient option when a disaster may displace many businesses and their employees. It’s also easy to track tax payments and receive email alerts through EFTPS. Any business that doesn’t have one can create an EFTPS account by visiting EFTPS.gov.

Know where to go

Reconstructing records after a disaster may be required for tax purposes, getting federal assistance or insurance reimbursement. Most financial institutions can provide statements and documents electronically, an option that can aid the reconstruction process. For tips on reconstructing records, visit IRS's Reconstructing Records.

IRS is ready to help

Following a federal disaster declaration, the IRS may postpone various tax filing and tax payment deadlines or provide other relief. For a list of localities qualifying for relief and details on relief available, visit the IRS Tax Relief in Disaster Situations webpage or Around the Nation on IRS.gov.

The IRS identifies taxpayers located in the covered disaster area and automatically applies filing and payment relief. This means taxpayers whose IRS address of record is located in the disaster area do not need to contact the IRS to get disaster tax relief.

In addition, many taxpayers living outside the disaster area may also qualify for relief. This includes those assisting with disaster relief and taxpayers whose records necessary to meet a filing or payment deadline postponed during the relief period, are located in the disaster area. Eligible individuals and businesses located outside the disaster area can request relief by calling the IRS disaster hotline at 866-562-5227.

In addition, a special rule allows both individuals and businesses to choose to deduct uninsured or unreimbursed disaster losses on either the tax return for the year the disaster occurred, or the return for the previous year. For more information, see Publication 547, Casualties, Disasters, and Thefts, available on IRS.gov. 

For more information about National Preparedness Month, visit Ready.gov/September.

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