IRS Tax News

  • 26 Feb 2024 8:41 AM | Anonymous

    IRS begins audits of corporate jet usage; part of larger effort to ensure high-income groups don’t fly under the radar on tax responsibilities

    WASHINGTON – Using Inflation Reduction Act funding and as part of ongoing efforts to improve tax compliance in high-income categories, the Internal Revenue Service announced today plans to begin dozens of audits on business aircraft involving personal use.

    The audits will be focused on aircraft usage by large corporations, large partnerships and high-income taxpayers and whether for tax purposes the use of jets is being properly allocated between business and personal reasons.

    The IRS will be using advanced analytics and resources from the Inflation Reduction Act to more closely examine this area, which has not been closely scrutinized during the past decade as agency resources fell sharply. The number of audits related to aircraft usage could increase in the future following initial results and as the IRS continues hiring additional examiners.

    “During tax season, millions of people are doing the right thing by filing and paying their taxes, and they should have confidence that everyone is also following the law,” said IRS Commissioner Danny Werfel. “Personal use of corporate jets and other aircraft by executives and others have tax implications, and it’s a complex area where IRS work has been stretched thin. With expanded resources, IRS work in this area will take off. These aircraft audits will help ensure high-income groups aren’t flying under the radar with their tax responsibilities.”

    Business aircraft are often used for both business and personal reasons by officers, executives, other employees, shareholders and partners. In general, the tax code passed by Congress allows a business deduction for expenses of maintaining an asset, such as a corporate jet, if that asset is utilized for a business purpose. However, the use of a company aircraft must be allocated between business use and personal use. This is a complex area of tax law, and record-keeping can be challenging.

    For someone such as an executive using the company jet for personal travel, the amount of personal usage impacts eligibility for certain business deductions. Use of the company jet for personal travel typically results in income inclusion by the individual using the jet for personal travel and could also impact the business’s eligibility to deduct costs related to the personal travel.

    The examination of corporate jet usage is part of the IRS Large Business and International division’s “campaign” program. Campaigns apply different compliance streams to help address areas with a high risk of non-compliance. These efforts include issue-focused examinations, taxpayer outreach and education, tax form changes and focusing on particular issues that present a high risk of noncompliance.

    The IRS will begin conducting examinations in the near future as part of the agency’s commitment to ensuring fairness in tax administration.

    This is part of a larger effort the IRS is taking to ensure large corporate, large partnerships 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 shelter or manipulate their income to avoid taxes. The IRS is now taking swift and aggressive action to close this gap.

    In addition to work on corporate jets, the IRS has a variety of efforts underway to improve tax compliance in complex, overlooked high-dollar areas where the agency did not have adequate resources prior to Inflation Reduction Act funding.

    For example, the IRS is continuing to pursue millionaires that have not paid hundreds of millions of dollars in tax debt. The IRS has already collected $482 million in ongoing efforts to recoup taxes owed by 1,600 millionaires with action continuing in this area. Elsewhere, the IRS is pursuing multi-million-dollar partnership balance sheet discrepancies, ramping up audits of more than 75 of the largest partnerships using artificial intelligence (AI) as well as other areas.

    "The IRS continues to increase scrutiny on high-income taxpayers as we work to reverse the historic low audit rates and limited focus that the wealthiest individuals and organizations faced in the years that predated the Inflation Reduction Act,” Werfel said. “We are adding staff and technology to ensure that the taxpayers with the highest income, including partnerships, large corporations and millionaires and billionaires, pay what is legally owed under federal law. The IRS will have more announcements to make in this important area."

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  • 26 Feb 2024 8:41 AM | Anonymous

    Interest rates remain the same for the second quarter of 2024

    WASHINGTON — The Internal Revenue Service today announced interest rates will remain the same for the calendar quarter beginning April 1, 2024.

    For individuals, the rate for overpayments and underpayments will be 8% per year, compounded daily. Here’s a complete list of the new rates:

    • 8% for overpayments (payments made in excess of the amount owed), 7% for corporations.
    • 5.5% for the portion of a corporate overpayment exceeding $10,000.
    • 8% for underpayments (taxes owed but not fully paid).
    • 10% for large corporate underpayments.

    Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus three percentage points.

    Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points and the overpayment rate is the federal short-term rate plus two percentage points. The rate for large corporate underpayments is the federal short-term rate plus five percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

    The interest rates announced today are computed from the federal short-term rate determined during January 2024. See the revenue ruling for details.

    Revenue Ruling 2024-6 announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2024-10, dated March 4, 2024.

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  • 26 Feb 2024 8:40 AM | Anonymous

    Taxpayer Advocacy Panel seeks civic-minded volunteers to apply for the 2025 member year

    Interested candidates from all states are encouraged to apply by March 15

    WASHINGTON — The Internal Revenue Service today announced vacancies in 29 states and territories for the volunteer-led Taxpayer Advocacy Panel (TAP).

    Applications for the 2025 TAP year are now being accepted from all civic-minded citizens looking for new ways to serve their community and speak up about issues that impact taxpayers living in the U.S. and abroad – no previous tax experience is required.

    TAP members volunteer to serve a three-year term and are expected to devote 200 to 300 hours per year (or about 5 hours each week) to panel activities. TAP continues to make a difference in the U.S. tax system, and new members have a unique opportunity to join this dynamic group.

    “More people interact with the IRS than any other government agency, so TAP volunteers have a truly unique opportunity to give back to their community by advocating for ways to improve the IRS and improve the American tax system,” said National Taxpayer Advocate Erin M. Collins. “TAP volunteers consistently work to identify issues, and most importantly, come up with solutions they can take directly to the IRS to get those problems fixed. Serving as a TAP member is not only rewarding it is important work and I encourage anyone with a passion for service to apply.”

    TAP members are selected to achieve demographic and geographic diversity, providing balanced representation from all 50 states, the District of Columbia, Puerto Rico and an additional member representing the interests of taxpayers working, living or doing business abroad.

    Since its founding, over 700 TAP members with a sense of civic duty, patriotism and a belief in an effective, well-regarded tax system have acted on behalf of taxpayers to improve the IRS.

    Each year TAP members work on a large number of referrals that come in from public forums, grassroots outreach and taxpayer submissions. Since 2002 TAP has submitted nearly 3,000 recommendations to the IRS to improve satisfaction with IRS services, products and procedures. These recommendations have advocated for improvements such as:

    • Allowing longer extension time to file tax returns;
    • Providing taxpayers the option to get copies of their tax returns when using Free File;
    • Establishing Customer Callback Technology over a majority of IRS toll-free telephone lines; and
    • Initiating quality improvements in the Volunteer Income Tax Assistance (VITA) tax return preparation program.

    Who can apply?

    Federal advisory committees such as TAP are required to have a balanced representation of different viewpoints. Therefore, applicants from under-represented groups, such as Native Americans and non-tax professionals, are particularly encouraged to apply.

    TAP is currently seeking candidates in the following states and territories: Alabama, Arkansas, California, Connecticut, Delaware, Hawaii, Indiana, International, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Minnesota, Mississippi, Montana, Nevada, New Hampshire, New York, North Dakota, Ohio, Puerto Rico, Rhode Island, Tennessee, Texas, Utah, Virginia, Vermont and West Virginia.

    However, candidates residing in all locations are encouraged to apply, as alternates will be chosen to fill any vacancies that may occur. All timely applications submitted by March 15, 2024, will be considered.

    TAP members must be U.S. citizens who are current with their federal tax obligations and able to commit 200 to 300 volunteer hours during the year. TAP members must also pass a Federal Bureau of Investigation criminal background check and cannot be federally registered lobbyists or current employees of the Department of the Treasury or the IRS. Former Treasury or IRS employees and former TAP members can be considered for appointment three years after their employment or previous TAP membership has ended. Additionally, tax practitioner applicants must be in good standing with the IRS (meaning not currently under suspension or disbarment).

    New TAP members will serve a three-year term starting in December 2024. Applicants chosen as alternate members will be considered to fill any vacancies in their areas during the next three years. Applications must be submitted by March 15, 2024, to be considered.

    Visit USAJOBS for more details about how to apply to become a TAP member.

    More about the Taxpayer Advocacy Panel

    TAP is a federal advisory committee that serves an important role in tax administration. TAP members are a diverse group of citizens who believe in an effective and well-regarded tax system.

    TAP members volunteer their time and energy to improve IRS services and taxpayer satisfaction by listening to taxpayers, identifying issues and making recommendations to improve IRS service and customer satisfaction.

    Oversight and program support for TAP is provided by the Taxpayer Advocate Service, an independent organization within the IRS led by the National Taxpayer Advocate. TAS helps resolve taxpayer account problems and makes administrative and legislative recommendations to mitigate systemic problems in tax administration.

    For additional information about TAP, visit ImproveIRS.org or call toll-free at 888-912-1227 and select prompt number five. Callers outside the U.S. may call 202-317-3087 (not a toll-free number) or email TAP staff at tap.recruitment@irs.gov. You can also watch the TAP recruitment video for more information about TAP and how to contribute to this dynamic group of volunteers.

    For media inquiries, contact TAS Media Relations at TAS.media@irs.gov or call the media line at (202) 317-6802.

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  • 26 Feb 2024 8:38 AM | Anonymous

    Treasury, IRS issue frequently asked questions related to the United States Department of Agriculture’s Discrimination Financial Assistance Program

    WASHINGTON —The Internal Revenue Service today issued frequently asked questions (FAQs) in Fact Sheet 2024-05 related to the United States Department of Agriculture’s (USDA) Discrimination Financial Assistance Program.

    The Inflation Reduction Act of 2022 (IRA) provides financial assistance for farmers, ranchers, and forest landowners who experienced discrimination by the USDA in farm lending prior to 2021.

    As a result, USDA created the USDA Discrimination Financial Assistance Program (Program).

    To be eligible to participate in the Program, an individual must have experienced discrimination by USDA in USDA farm lending or be a debtor with assigned or assumed USDA farm lending debt that was the subject of USDA discrimination.

    The Program covers discrimination based on race, color, or national origin/ethnicity (including status as a member of an Indian Tribe); sex, sexual orientation, or gender identity; religion; age; marital status; disability; or reprisal/retaliation for prior civil rights activity.

    More information about the Program may be found in the Discrimination Financial Assistance Program.

    More information about reliance is available.

    IRS-FAQ

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    Treasury, IRS issue frequently asked questions related to the United States Department of Agriculture’s Discrimination Financial Assistance Program
  • 26 Feb 2024 8:37 AM | Anonymous

    Inside This Issue

    1. Webinar: Scams, tax related identity theft and identity protection PIN for National Consumer Protection Week
    2. IRS ramps up business jet audits to ensure large corporations pay taxes owed
    3. Second quarter interest rates unchanged
    4. Avoid penalty, interest charges; pay taxes by April 15 deadline
    5. IRS shares March 1 deadline for many farmers and fishers
    6. 2024 Tax Time Guide: What to know before completing a tax return
    7. Special Saturday hours available at more than 50 Taxpayer Assistance Centers across the country
    8. Taxpayer Advocacy Panel seeks volunteers for 2025
    9. News from the Justice Department’s Tax Division

    1.  Webinar: Scams, tax related identity theft and identity protection PIN for National Consumer Protection Week

    The IRS and the Federal Trade Commission will host the webinar Scams, tax related identity theft and identity protection PIN on March 6 at 1 p.m. EST. Learn about tax-related identity theft scams, IRS Identity Protection Personal Identification Number (PIN) Program, reporting and recovery methods and more. To register for this webinar and for additional information on future webinars hosted by the IRS, visit the Webinars for Tax Practitioners webpage.

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    2.  IRS ramps up business jet audits to ensure large corporations pay taxes owed

    The IRS plans to begin dozens of audits on business aircraft involving personal use. The audits will focus on aircraft usage by large corporations, large partnerships and high-income taxpayers and whether the use of jets is being properly allocated between business and personal reasons. Advanced analytics and Inflation Reduction Act resources will be used to conduct the audits. This is part of a larger effort the IRS is taking to ensure large corporate, large partnerships and high-income individual filers pay the taxes they owe.

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    3.  Second quarter interest rates unchanged

    The IRS announced no change in second quarter interest rates beginning April 1. The interest rates are computed from the federal short-term rate determined during January 2024. See Revenue Ruling 2024-6 for details.

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    4.  Avoid penalty, interest charges; pay taxes by April 15 deadline

    Avoid interest and penalty charges by filing your clients’ returns and paying any amounts due by the April 15 deadline. For more information, watch the video Avoiding Interest and Penalty Charges. The video is also available in SpanishChinese and Korean.

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    5.  IRS shares March 1 deadline for many farmers and fishers

    Tax pros: Your farmer and fisher clients who chose to forego making estimated tax payments by Jan. 16 must file their 2023 federal income tax return and pay all taxes due by March 1. The deadline allows farmers and fishers to avoid any estimated tax penalties. Those who made a qualifying payment by Jan. 16, 2024, can wait until April 15 to file and still avoid estimated tax penalties. For details, see Publication 505, Tax Withholding and Estimated Tax. The deadline in Maine and Massachusetts is April 17.

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    6.  2024 Tax Time Guide: What to know before completing a tax return

    In an effort to provide more resources for taxpayers during this filing season, the IRS kicked off its 2024 Tax Time Guide series to help remind taxpayers of key items needed to file a 2023 tax return. The four-part weekly series explains the essentials to filing an accurate tax return, changes to credits and deductions, Form 1099-K reporting requirements and more. The IRS also has a variety of information available on IRS.gov to help taxpayers, including a special free help page.

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    7.  Special Saturday hours available at more than 50 Taxpayer Assistance Centers across the country

    The IRS has announced special Saturday hours at specific Taxpayer Assistance Centers (TACs)for the next four months. The special Saturday hours of operation will take place from 9 a.m. to 4 p.m., on Feb. 24, March 16, April 13 and May 18 at participating TAC locations. Normally, TACs are only open Monday through Friday, with appointments needed. However, during these Saturday hours, appointments are not required. IRS advises taxpayers to visit the special Saturday hours webpage on IRS.gov for a list of participating TAC locations.

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    8.  Taxpayer Advocacy Panel seeks volunteers for 2025

    The IRS announced vacancies in 29 states and territories for the volunteer-led Taxpayer Advocacy Panel (TAP). Applications for the 2025 TAP year are now being accepted from individuals looking for new ways to serve their community and speak up about issues that impact taxpayers. No previous tax experience is required.

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    9.  News from the Justice Department’s Tax Division

    The Justice Department filed a complaint seeking to bar Julius T. Price and his tax return preparation business, Price’s Accounting Firm Inc., from preparing federal income tax returns for others. By repeatedly understating his clients’ tax liabilities, the complaint alleges that the United States has been harmed by Price’s conduct resulting in the significant loss in tax revenue of an estimated $1.5 million. 

    Tax return preparer Joseph Korha, of Phoenix, Arizona, and formerly of North Dakota, pleaded guilty to five counts of preparing false tax returns. In total, Korha prepared more than 100 false returns and caused a tax loss to the IRS of approximately $294,000. Korha is scheduled to be sentenced on June 3. He faces a maximum penalty of three years in prison for each count as well as a period of supervised release, restitution and monetary penalties.

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  • 16 Feb 2024 1:39 PM | Anonymous

    Dear IVES Participants,

    On February 7 ,2024, we identified technical issues on the Income Verification Express Services (IVES) E-Fax system that appear to have begun Saturday January 20, 2024. Some faxed requests that were successfully transmitted to the IRS experienced a routing issue as some batches were corrupted before entering the processing queue. The issue was resolved as of February 13, 2024, at 8:00 AM EST. 

    As a result, any original batches that were submitted prior to February 13, 2024, at 8:00 AM EST that have not received an acknowledgement or received their results/rejection will need to be re-submitted. Additionally, any disputes that were submitted to the dispute line prior February 7, 2024, at 4:00 PM EST that have not been processed will need to be resubmitted. Please ensure any re-submissions utilize the original coversheet, batch content and batch number to prevent duplicate processing and/or billing issues. Any original submissions will need to be resubmitted to the normal processing line; any disputes will need to be resubmitted to the dispute line. 

    Thank you for your patience as we work through these issues,

    IRS IVES Team

  • 05 Feb 2024 9:32 AM | Anonymous

    IRS to offer an Employee Retention Credit webinar on Feb. 8; provide updates on Voluntary Disclosure Program, moratorium

    WASHINGTON — As part of an ongoing process to educate and inform people about the Employee Retention Credit (ERC), the Internal Revenue Service will host a free ERC Voluntary Disclosure Program webinar on Thursday, Feb. 8 at 2 p.m. EST.

    The 75-minute webinar will focus on:

    • Who can participate and how to apply for the ERC Voluntary Disclosure Program.
    • The advantages of the program and what happens after applying.
    • ERC resources available from the IRS.

    Though primarily aimed at tax professionals, who can earn one continuing education (CE) credit for participation, the webinar may also be useful to others interested in this topic, such as employers who are exploring options to resolve an inaccurate ERC claim that was processed and paid. The webinar also includes a live question-and-answer session. Those who want to attend need to register for the Employee Retention Credit Voluntary Disclosure Program webinar.

    Protecting taxpayers

    The ERC Voluntary Disclosure Program, announced in December, is part of a larger effort at the IRS to help employers who were misled by aggressive marketing and misinformation around ERC eligibility. The program helps employers who want to pay back the money they received after filing ERC claims in error. The key benefit of the program is that they only have to pay back 80% of the ERC.

    Earlier, the IRS introduced a moratorium on processing new ERC claims in September to protect small business owners and organizations from scams.

    ERC withdrawal

    special ERC withdrawal initiative announced in October is still available. It offers the option to withdraw a questionable claim that has not yet been processed or paid. The IRS created it to help small business owners and others who were pressured or misled by ERC marketers or promoters into filing ineligible claims. Claims that are withdrawn will be treated as if they were never filed. The IRS will not impose penalties or interest.

    For more information on ERC eligibility, the IRS has prepared special information to help businesses understand the complex guidelines about the credit, sometimes referred to as the Employee Retention Tax Credit or ERTC. The special information includes ERC frequently asked questions and the ERC Eligibility Checklist, which is available as an interactive tool or as a printable guide. The interactive tool provides an easy, interactive way for businesses to check their eligibility.

    To learn about other upcoming webinars, visit the Webinars for Tax Practitioners page on IRS.gov.


  • 31 Jan 2024 11:05 AM | Anonymous

    IRS: Free Jan. 30 webinar to focus on navigating through restart of automated collection notices, penalty relief

    WASHINGTON — The Internal Revenue Service will hold a free webinar, designed primarily for tax professionals whose clients were affected by the delayed notices during the COVID pandemic.

    The webinar will take place on Tuesday, Jan. 30, at 2 p.m. ET. It will reflect last month's announcement that in general, the IRS will restart collection notices reminding taxpayers of their balance due this year and provide penalty relief on millions of tax returns.

    During this free webinar the IRS will:

    • Discuss the restart of collection notices and letters, including:
      • Special reminder letter, LT38 - Reminder, Notice Resumption.
      • Changes to typical sequence of automated notices.
      • Gradual approach to sending notices during filing season.
    • Explain penalty relief for tax years 2020 and 2021.
    • Share helpful IRS resources to resolve tax debt.
    • Plus, the IRS will host a live Question and Answer session.

    Certificates of completion are being offered. Tax professionals earn up to one continuing education (CE) credit in the category federal tax.

    Closed captioning will be offered.

    To register for the webinar, visit the Internal Revenue Service webinar website.

    Questions? Email cl.sl.web.conference.team@irs.gov.

     


  • 31 Jan 2024 11:02 AM | Anonymous

    IRS, partners highlight EITC Awareness Day with tax resources that benefit millions of low- and moderate-income workers

    WASHINGTON – The Internal Revenue Service and partners around the nation today launched the annual Earned Income Tax Credit Awareness Day outreach campaign to help millions of low-to-moderate income working Americans that are eligible to claim the Earned Income Tax Credit (EITC).

    For the past 18 years, the IRS has invited community organizations, elected officials, state and local governments, schools, employers and other interested parties to join this national grassroots effort.

    According to the most recent figures, approximately 23 million workers and families received about $57 billion in EITC for tax year 2022, and the average amount of EITC received was about $2,541. The IRS estimates that about one in five of EITC eligible taxpayers don’t claim this valuable credit, a statistic that stresses the importance of the annual EITC Awareness Day outreach campaign.

    “The IRS and our partners across the nation urge people to look into this frequently overlooked tax credit that can help millions of taxpayers,” said IRS Commissioner Danny Werfel. “On EITC Awareness Day and throughout the filing season, the IRS and our partners work hard to reach eligible taxpayers and provide useful information and resources to help people determine their eligibility and how to properly claim this valuable credit. Even people who don’t normally file might still be eligible for the Earned Income Tax Credit, which can be thousands of dollars.”

    Werfel attended a special EITC Awareness Day event Friday in Baltimore sponsored by the CASH (Creating Assets, Savings and Hope) Campaign of Maryland. IRS leaders across the nation are also participating in local events this month highlighting the importance of EITC, which helps millions of taxpayers each year.

    The IRS administers the EITC, which Congress originally approved in 1975. It was developed in part to offset the burden of Social Security taxes and provide an incentive to work.

    Who is eligible to claim the EITC?
    Workers must meet certain requirements and file a tax return, even if they are not required to file due to earned income levels. The IRS estimates that a third of those who qualify for EITC became eligible for the first time this year due to changes in their marital, parental or financial status.

    The IRS encourages workers to use the EITC Assistant to check for eligibility or visit Child-Related Tax Benefits Comparison for basic eligibility rules.

    Eligible workers must have valid Social Security numbers for themselves, their spouse if filing a joint return, and for each qualifying child claimed for the EITC. There are special rules for those in the military or those out of the country.

    Those with qualifying children can receive a maximum of $7,430 when claiming the EITC, up from $6,935 in 2022.

    Eligible workers between the ages of 25 and 64 with no dependents can also receive up to $600 by claiming the EITC. Married but separated spouses who do not file a joint return may qualify to claim EITC if they meet certain requirements.

    EITC is for workers whose income does not exceed the following limits in 2023:

    • $56,838 ($63,398 married filing jointly) with three or more qualifying children who have valid Social Security numbers (SSNs).
    • $52,918 ($59,478 married filing jointly) with two qualifying children who have valid SSNs.
    • $46,560 ($53,120 married filing jointly) with one qualifying child who has a valid SSN.
    • $17,640 ($24,210 married filing jointly) with no qualifying children with valid SSNs.
    • Investment income must be $11,000 or less.

    Filing options to choose from when claiming the EITC
    To get the EITC, workers must file a tax return and claim the credit. The IRS also reminds taxpayers that the quickest way to get a tax refund is by filing an accurate tax return electronically and choosing direct deposit for their refund.

    Here are some options on how to claim the EITC:

    When to expect EITC refunds
    Most EITC or Additional Child Tax Credit (ACTC) related refunds should be available in bank accounts or on debit cards by Feb. 27 if taxpayers chose direct deposit and there are no other issues with their tax return. Taxpayers can check Where’s My Refund? for their personalized refund date. Where's My Refund? will be updated with projected deposit dates for most early EITC/ACTC refund filers by February 17.

    Take advantage of other valuable tax credits
    Taxpayers should make IRS.gov their first stop to find valuable info this filing season. Even if a taxpayer does not qualify for the EITC, they may be eligible for other credits or deductions. The Interactive Tax Assistant is a helpful tool for taxpayers to see if they qualify for the Child Tax Credit, Additional Child Tax Credit or Credit for Other Dependents.

    Related items


  • 26 Jan 2024 1:06 PM | Anonymous

    Notice 2024-23 provides relief from the 12-month limitation for taxpayers making rollovers to certain 529 plans. The Maryland Prepaid College Trust, which is a qualified tuition plan under section 529 has experienced numerous system issues in recent years. Many taxpayers moved their money out of MPCT because of the issues. In July, MPCT determined it owed taxpayers additional money, and section 529 only allows one tax-free rollover per 12-month period (generally).

    Notice 2024-23 will be in IRB: 2024-7, dated Monday 02/12/2024.


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