IRS Tax News

  • 30 May 2024 9:30 AM | Anonymous

    WASHINGTON – The Internal Revenue Service reminds taxpayers living and working outside the United States to file their 2023 federal income tax return by Monday, June 17.

    This deadline applies to both U.S. citizens and resident aliens abroad, including those with dual citizenship.

    Qualifying for the June 17 extension

    U.S. citizens or resident aliens residing overseas or on duty in the military outside the U.S. are allowed an automatic two-month extension to file their tax return and pay any amount due. A taxpayer qualifies for the June 17 extension to file and pay if:

    • They are living outside of the United States and Puerto Rico and their main place of business or post of duty is outside the United States and Puerto Rico, or
    • They are serving in the military outside the U.S. and Puerto Rico on the regular due date of their tax return.

    To use the automatic two-month extension, taxpayers must attach a statement to their tax return explaining which of the two situations listed earlier applies.

    Additional extensions

    As a reminder, an extension of time to file a return does not grant an extension of time to pay taxes owed.  Eligible taxpayers should estimate and pay any owed taxes by the June 17 deadline.

    The IRS encourages anyone needing additional time to file an extension electronically. Filers may use IRS Free File, regardless of income, to request an automatic extension of time to file, or choose from several options at IRS.gov/Extensions.

    File to claim benefits

    Many taxpayers living outside the U.S. qualify for tax benefits, such as the Foreign Earned Income Exclusion and the Foreign Tax Credit, but they are available only if a U.S. return is filed.

    In addition, the IRS encourages families to check out expanded tax benefits such as the Child Tax Credit, Credit for Other Dependents and Credit for Child and Dependent Care expenses, and claim them if they qualify. Though taxpayers abroad often qualify, the calculation of these credits differs depending upon whether they lived in the U.S. for more than half of 2023. For more information, see the instructions to Schedule 8812, Credits for Qualifying Children and Other Dependents, and the instructions to Form 2441, Child and Dependent Care Expenses.

    Reporting required for foreign accounts and assets

    U.S. citizens or resident aliens’ world-wide income is generally subject to U.S. income tax, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to complete and attach Schedule B, Interest and Ordinary Dividends, to their Form 1040 series tax return. Part III of Schedule B asks about the existence of foreign accounts such as bank and securities accounts and usually requires U.S. citizens to report the country in which each account is located.

    In addition, certain taxpayers may also have to complete and attach to their return Form 8938, Statement of Specified Foreign Financial Assets. Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on this form if the aggregate value of those assets exceeds certain thresholds. For details, see the instructions for this form.

    Further, separate from reporting specified foreign financial assets on a tax return, certain foreign financial accounts, such as bank accounts or brokerage accounts, must be reported by electronically filing Form 114, Report of Foreign Bank and Financial Accounts (FBAR), with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). The FBAR requirement applies to U.S. persons with an interest in, or signature or other authority over foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2023.

    The IRS encourages U.S. persons with foreign assets, even relatively small ones, to check if this filing requirement applies to them. The form is available only through the Bank Secrecy Act E-Filing System. The deadline for filing the annual FBAR is April 15, 2024. However, FinCEN grants those who missed the April deadline an automatic extension until Oct. 15, 2024. There’s no need to request this extension. See FinCEN’s website for further information.

    Report in U.S. dollars

    Any income received or deductible expenses paid in foreign currency must be reported on a U.S. tax return in U.S. dollars. Likewise, any tax payments must be made in U.S. dollars.

    IRS Form 8938 requires the use of a Dec. 31 exchange rate for all transactions, regardless of the actual exchange rate on the date of the transaction. Generally, the IRS accepts any posted exchange rate that is used consistently. For more information on exchange rates, see Foreign Currency and Currency Exchange Rates.

    The instructions for FinCEN Form 114 state that for accounts with non-United States currency, a filer should convert the maximum account value into United States dollars by using the U.S. Treasury Department’s Bureau of the Fiscal Service’s exchange rates as of the last day of the calendar year at issue. If no Bureau of the Fiscal Service rate is available, a filer can use another verifiable foreign currency exchange rate.

    Making tax payments

    To ensure tax payments are credited promptly, the IRS urges taxpayers to consider the convenience of paying their U.S. tax obligations electronically. The fastest and easiest way to do that is via their IRS Online Account, IRS Direct Pay and the Electronic Federal Tax Payment System (EFTPS). These and other electronic payment options are available at IRS.gov/Payments.

    Reporting for expatriates

    Taxpayers who relinquished their U.S. citizenship or ceased to be lawful permanent residents of the U.S. during 2023 must file a dual-status tax return and attach Form 8854, Initial and Annual Expatriation Statement. A copy of Form 8854 must also be filed with the IRS by the due date of the tax return (including extensions). See the instructions for this form and Notice 2009-85, Guidance for Expatriates Under Section 877A, for further details.

    Other resources:


  • 30 May 2024 9:28 AM | Anonymous

    WASHINGTON — The Department of Treasury, Internal Revenue Service and Department of Energy (DOE) announced today that the application portal for the 2024 Low-Income Communities Bonus Credit Program is now open.

    Applications are being accepted beginning today at 9:00am ET, with a 30-day initial application window which concludes at 11:59 pm ET on June 27. During this 30-day initial application window all applications will be considered as submitted at the same date and time. Applications submitted after the 30-day application window will then be evaluated on a rolling basis.

    Created by the Inflation Reduction Act, the Low-Income Communities Bonus Credit Program provides a 10 or 20 percentage point increase to the energy investment credit for solar and wind facilities under five megawatts (AC) that apply for and receive an allocation of environmental justice solar and wind capacity limitation.

    Taxpayers that receive an allocation and properly place the facility in service may then claim the increased energy investment credit in the year that the facility is placed in service.

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


  • 30 May 2024 9:28 AM | Anonymous

    WASHINGTON — The Department of Treasury, Internal Revenue Service and Department of Energy (DOE) announced today that the application portal for the 2024 Low-Income Communities Bonus Credit Program is now open.

    Applications are being accepted beginning today at 9:00am ET, with a 30-day initial application window which concludes at 11:59 pm ET on June 27. During this 30-day initial application window all applications will be considered as submitted at the same date and time. Applications submitted after the 30-day application window will then be evaluated on a rolling basis.

    Created by the Inflation Reduction Act, the Low-Income Communities Bonus Credit Program provides a 10 or 20 percentage point increase to the energy investment credit for solar and wind facilities under five megawatts (AC) that apply for and receive an allocation of environmental justice solar and wind capacity limitation.

    Taxpayers that receive an allocation and properly place the facility in service may then claim the increased energy investment credit in the year that the facility is placed in service.

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


  • 28 May 2024 6:18 PM | Anonymous

    State laws satisfying the requirements of Treas. Reg. Section 1.501(c)(3)-1(b)(4)

    Treasury Regulations (Treas. Reg.) Section 1.501(c)(3)-1(b)(4) includes requirements for Section 501(c)(3) organizations related to the distribution of assets upon dissolution (dissolution requirements). Revenue Procedure 82-2 identified the states and circumstances in which an organization could satisfy these requirements by operation of state law. The conclusions in the revenue procedure were based on state laws in effect at the time of its publication, many of which have since changed. Because Rev. Proc. 82-2 no longer provides an accurate list of the states with laws that operate to ensure the distribution of assets for exempt purposes upon dissolution, it has been obsoleted by Rev. Proc. 2024-22 on May 24, 2024. 

    On April 23, 2024, Associate Chief Counsel, Employee Benefits, Exempt Organizations and Employment Taxes (ACC:EEE) issued Program Manager Technical Advice Memorandum 2024-02 (PMTA), with updated guidance on state laws that satisfy the dissolution requirements of Treas. Reg. Section 1.501(c)(3)-1(b)(4).  The PMTA was issued to the Tax Exempt and Government Entities (TEGE) Exempt Organizations Rulings and Agreements and Examinations offices, which will use the advice in processing applications for recognition of exemption and undertaking examinations. The PMTA includes tables identifying states with laws that operate to ensure the dedication of assets to exempt purposes. Separate tables are provided for nonprofit corporations, inter vivos charitable trusts, testamentary charitable trusts, and unincorporated nonprofit associations.

    Subsequent changes to state law by statute or court decision may affect the accuracy of this information.

    State laws satisfying the Section 508(e) private foundation governing instrument requirements

    Internal Revenue Code (IRC) Section 508(e) includes requirements for the governing instruments of private foundations exempt from taxation under IRC Section 501(a). Rev. Rul. 75-38 identified 48 states and the District of Columbia as jurisdictions with statutory provisions in effect at the time of its publication that satisfied the requirements of IRC Section 508(e) and noted certain exceptions. The conclusions in the revenue ruling were based on state laws in effect at the time of its publication, a number of which have since changed. Because Rev. Rul. 75-38 no longer provides an accurate list of the states with statutory provisions that satisfy the requirements of IRC Section 508(e) or of such exceptions, it has been obsoleted by Rev. Rul 2024-10 on May 24, 2024. 

    On April 23, 2024, ACC:EEE issued PMTA 2024-03 with updated guidance on state laws that satisfy the private foundation governing instrument requirements of IRC Section 508(e). The PMTA was issued to the TEGE Exempt Organizations Rulings and Agreements and Examinations offices, which will use the advice in processing applications for recognition of exemption and undertaking examinations.  The PMTA includes a table identifying whether and under what circumstances each state has enacted laws satisfying the requirements of IRC Section 508(e) for nonprofit corporations, trusts, and unincorporated nonprofit associations covered by those laws and exceptions. Subsequent changes to state law by statute or court decision may affect the accuracy of this information.


  • 28 May 2024 2:26 PM | Anonymous
    1. Storm victims in seven states have until June 17 to file and pay
    2. IRS Nationwide Tax Forum: The benefits of attending
    3. Treasury, IRS issue new rules on capacity limitation carryover amounts for 2024 program year
    4. Treasury, IRS and DOE announce new allocation round for the qualifying advanced energy project credit
    5. Upcoming webinars for tax practitioners
    6. News from the Justice Department’s Tax Division
    7. Technical Guidance

    1.  Storm victims in seven states have until June 17 to file and pay

    Individuals and businesses in parts of seven states that were affected by storms have until June 17 to file various federal individual and business tax returns and make tax payments. For areas designated by the Federal Emergency Management Agency (FEMA), the IRS offers relief, including delaying various tax filing and payment deadlines. The June 17 deadline applies to taxpayers impacted by seven different disaster declarations. These include:

    The current list of eligible localities is always available on the Tax relief in disaster situations page on IRS.gov.
           

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    2.  IRS Nationwide Tax Forum: The benefits of attending

    What do you get when you attend the IRS Nationwide Tax Forum? The tax forum registration fee includes all conference activities including seminars, exhibits and special events as well as the welcome reception on Tuesday and the networking reception on Wednesday. Registered attendees have full access to:

    • More than 40 continuing education (CE) courses. Attendees can earn up to 19 credits. The conference agenda will be available by early June.
    • The Exhibit Hall for information on tax products and services that can help you and your business. Visit the IRS Zone to learn more about the IRS's vision for transformation and digitization and share your perspective with IRS representatives.
    • The Case Resolution Program for personalized assistance with your toughest tax case. IRS experts will be on-site for a one-on-one conversation, to conduct research on your case and endeavor to resolve your tax matter on site.
    • Focus groups on a broad array of topics. Come share your opinion.
    • Special bonus sessions on practice management, scams and schemes, and the new Treasury Department Beneficial Ownership Information reporting requirements.

    Register now and take advantage of the Early Bird rate (available until 5 p.m. June 17). Attendees who register early will have their badges mailed to them prior to the forum.

    For more information about this year’s Nationwide Tax Forum, view the video, Five things to Know about the IRS Nationwide Tax Forum.

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    3.  Treasury, IRS issue new rules on capacity limitation carryover amounts for 2024 program year

    The Treasury Department and the IRS announced proposed regulations that offer taxpayers new guidance concerning the total amount of unallocated environmental justice solar and wind capacity limitation that has been carried over from the 2023 Low-Income Communities Bonus Credit program year to the 2024 program year. Announcement 2024-25 states the distribution of the carried over capacity limitation among the facility categories, category 1 sub-reservations, and application options for the 2024 program year.

    Visit the DOE program homepage for additional guidance, final regulations and program resources to help applicants prepare their submissions.

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    4.  Treasury, IRS and DOE announce new allocation round for the qualifying advanced energy project credit

    The Treasury Department, IRS and Department of Energy (DOE) announced a new round of allocations for the qualifying advanced energy project credit. The DOE Qualified Advanced Energy Project Credit Program Applicant Portal (48C Portal) is now open for applicants interested in registering for a new round of allocations. Applicants must submit their concept papers by June 21.

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    5.  Upcoming webinars for tax practitioners

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

    • Tax Considerations for H-2A Visa Holders (Agricultural Workers) and Employers on June 6, 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 the Webinars for tax practitioners webpage.

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    6.  News from the Justice Department’s Tax Division

    The U.S. District Court for the District of Connecticut issued a civil injunction suit to permanently bar Juan Carlos Frias and his tax return preparation businesses from preparing federal tax returns for others. In the Justice Department’s complaint, Frias and his companies prepared more than 10,000 tax returns for customers, exhibit a pattern of filing tax returns that understated customers’ liabilities and inflated their refunds by falsifying business expenses. Frias and his businesses consented to entry of the injunction, which permits the United States is allowed to conduct post-judgment discovery to monitor compliance with the order.

    Kent Ellsworth of Arizona pleaded guilty to assisting in the preparation of false income tax returns. In total, Ellsworth prepared more than 500 false tax returns and caused a tax loss to the IRS of approximately $17 million. He will be sentenced on Aug. 14 and faces a maximum penalty of three years in prison for each count of preparing and filing false tax returns. Ellsworth also faces a maximum fine of $250,000, a period of supervised release and the costs of prosecution for each count. IRS-Criminal Investigation is investigating the case.

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    7.  Technical Guidance

    Announcement 2024-25 provides the total amount of unallocated environmental justice solar and wind capacity limitation (Capacity Limitation) that has been carried over from the 2023 Low-Income Communities Bonus Credit Program (Program) year to the 2024 Program year.

    Notice 2024-43 amends regulations under sections 59A and 6038A to defer the applicability date of certain provisions of the regulations relating to the reporting of qualified derivative payments (“QDPs”).

    Notice 2024-44 provides guidance for complying with the final regulations with respect to dividend equivalents under IRC sections 871(m), 1441, 1461 and 1473 (collectively referred to as the section 871(m) regulations) in 2025, 2026 and 2027, extending the transition relief provided in Notice 2022-37, 2022-37 I.R.B. 234, for two years.

    Rev. Proc. 2024-22 obsoletes Rev. Proc. 82-2, 1982-1 C.B. 367, which identified the circumstances in which an organization could satisfy § 1.501(c)(3)-1(b)(4) (requiring that the assets of a section 501(c)(3) organization be dedicated to an exempt purpose) by operation of the law of certain States or the District of Columbia.

    Rev. Rul. 2024-10 obsoletes Rev. Rul. 75-38, 1975-1 C.B. 161, which identified the District of Columbia and each State with statutory provisions that, in 1975, satisfied the private foundation governing instrument requirements of section 508(e). 


  • 28 May 2024 2:24 PM | Anonymous

    Notice 2024-41 modifies the existing domestic content safe harbor in Notice 2023-38, provides a new elective safe harbor for determining the domestic content bonus credit amounts under §§ 45, 45Y, 48, and 48E of the Internal Revenue Code, and requests comments regarding the new elective safe harbor to inform the development of any future updates.


  • 28 May 2024 2:23 PM | Anonymous

    WASHINGTON – The Department of Treasury and Internal Revenue Service today released a corrected version of Notice 2024-41. A prior version was released on May 16, 2024.

    Today’s corrected version reflects text that was inadvertently omitted while releasing the document.

    Specifically, on page 16, in the left column of the Solar PV Table in Table 1 – New Elective Safe Harbor, the following applicable project components (APC) were omitted from Table 1: Steel Photovoltaic Module Racking, Pile or Ground Screw, and Steel or Iron Rebar in Foundation, and the word “Total.”

    Notice 2024-41 modifies an existing safe harbor and provides a new elective safe harbor for determining domestic content bonus credit amounts. For more information about Notice 2024-41 see IR-2024-140.


  • 24 May 2024 12:18 PM | Anonymous

    Dear IVES Participants,

    On May 16, 2024, through May 17,2024, we recognized technical issues on the Income Verification Express Services (IVES) E-Fax system. The fax lines were restored on May 23, 2024, by close of business. 

    Participants are asked to refrain from re-submitting missing requests or disputing missing items that have not been processed per the dates above. Transcript requests are placed in the processing queue and will be worked in first-in, first-out order.

    We appreciate your patience, and we apologize for any inconvenience this may have caused.

    Thank you,

    IRS IVES Team


  • 23 May 2024 2:55 PM | Anonymous

    Notice 2024-44 provides guidance for complying with the final regulations with respect to dividend equivalents under IRC sections 871(m), 1441, 1461, and 1473 (collectively referred to as the section 871(m) regulations) in 2025,  2026, and 2027, extending the transition relief provided in Notice 2022-37, 2022-37 I.R.B. 234, for two years.


  • 23 May 2024 2:54 PM | Anonymous

    Notice 2024-43 amends regulations under sections 59A and 6038A to defer the applicability date of certain provisions of the regulations relating to the reporting of qualified derivative payments (“QDPs”).


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