Inside This Issue

1. IRS announces 2024 Nationwide Tax Forum seminars lineup; register today
2. Key milestone reached by Document Upload Tool with 1 million submissions received
3. New guidance on payments to victims impacted by Ohio train disaster
4. Technical Guidance

1.  IRS announces 2024 Nationwide Tax Forum seminars lineup; register today

The IRS has announced the seminar lineup for the 2024 Nationwide Tax Forum, which includes 45 continuing education sessions, including six in Spanish. Attendees can earn up to 19 credits by attending the forum. The agenda includes a keynote address and a special plenary session that will cover the future of tax administration, the taxpayer experience and IRS transformation.

In addition to continuing education, Tax Forum attendees also get:

Special events, including sessions on practice management, avoiding scams and schemes, beneficial ownership information reporting and a meeting with the National Taxpayer Advocate. The Case Resolution Program, where you can receive one-on-one help from IRS representatives on one of your toughest, unresolved case. The Expo Hall, where you’ll have opportunities to engage with industry experts, IRS representatives and exhibitors displaying a wide selection of products and services that may help enhance your business operations.

The IRS Nationwide Tax Forum kicks off in less than five weeks. Register today and reserve your spot in Chicago, July 9-11; Orlando, July 30-Aug. 1; Baltimore, Aug. 13-15; Dallas, Aug. 20-22; or San Diego, Sept. 10-12.

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2.  Key milestone reached by Document Upload Tool with 1 million submissions received

The IRS announced that the Document Upload Tool (DUT) has accepted the one millionth taxpayer submission, marking another significant milestone in IRS transformation efforts. More than 265,000 taxpayers have used the tool during the first six months of this fiscal year, and the number continues to grow.

“The Document Upload Tool is a key part of our ambitious initiative to transform the IRS into a virtually paperless agency, and we continue to see increased use of this by taxpayers,” said IRS Commissioner Danny Werfel. “This tool saves time for taxpayers and helps IRS employees process responses faster and more efficiently. A growing number of taxpayers are using their smart phones or computers to scan and upload their responses to IRS correspondence, rather than the more time-consuming option of writing a letter or mailing in documents.”

For more information about the Document Upload Tool, visit IRS.gov/dut.

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3.  New guidance on payments to victims impacted by Ohio train disaster

The IRS issued guidance concerning case payments received by individuals affected by last year’s train derailment in East Palestine, Ohio. Notice 2024-46 explains that the Feb. 3, 2023, derailment qualifies as “an event of a catastrophic nature.” Therefore, various payments made to affected individuals by the common carrier that operated the derailed train are “qualified disaster relief payments,” which, by law, are excluded from gross income. The exclusion from taxation is available to individual taxpayers in cases where the costs reimbursed by insurance or other sources are not offset by the qualified disaster relief payments provided by the common carrier. Additional information may be found on the East Palestine train derailment frequently asked questions webpage. 

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4.  Technical Guidance

Notice 2024-48 publishes lists of information that taxpayers may use to determine whether they meet certain requirements under the Statistical Area Category or the Coal Closure Category as described in sections 3.03 and 3.04 of Notice 2023-29 for purposes of qualifying for energy community bonus credit amounts or rates under sections 45, 45Y, 48, and 48E of the Internal Revenue Code.

Notice 2024-48 publishes lists of information that taxpayers may use to determine whether they meet certain requirements under the Statistical Area Category or the Coal Closure Category as described in sections 3.03 and 3.04 of Notice 2023-29 for purposes of qualifying for energy community bonus credit amounts or rates under sections 45, 45Y, 48, and 48E of the Internal Revenue Code. These lists are provided in Appendix 1 and Appendix 2 to this notice. Appendix 1 to this notice pertains to the Statistical Area Category, and Appendix 2 to this notice pertains to the Coal Closure Category.

Notice 2024-48 will be in IRB: 2024-26, dated 6/24/2024.

WASHINGTON — The Department of the Treasury and Internal Revenue Service today issued Notice 2024-48 that publishes information 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 the Energy Community Bonus Credit.

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

In addition to the guidance issued today, the IRS also updated the frequently asked questions for energy communities.

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

Attention: Software Developers, Return Transmitters and Authorized IRS e-File Providers/EROs

Tax Year 2024/Processing Year 2025, Business Rules and Schema

·       Form 1040 Series 2024v1.0

·       Form 4868 2024v1.0

·       Form 2350 2024v1.0

·       Form 9465 CUv27.0

Software Developers and State organizations may download Modernized e-File (MeF) schemas and business rules from their e-Services mailbox. To access these files, you must have:

• An active e-Services account
• An e-File application with the Software Developer or State provider option with the associated tax type of 1040, 2350, 4868, 56 or 9465

Please visit the Modernized e-File (MeF) Schemas and Business Rules page on IRS.gov for more information about MeF Schemas and Business Rules.

You may have several messages in your account. Please open all of them to find the set you would like to download. After 60 days the messages are purged. If you have the appropriate role and do not have these files available for download within 48 hours, please contact MeF Mailbox with the Company Name, ETIN and schema package(s) with tax year needed

WASHINGTON — The Internal Revenue Service announced today that in many cases payments received by individuals affected by last year’s train derailment in East Palestine, Ohio, are not taxable.

In Notice 2024-46, posted today on IRS.gov, the IRS determined that the Feb. 3, 2023, derailment qualifies as “an event of a catastrophic nature.”  As a result, various payments made to affected individuals by the common carrier that operated the derailed train are “qualified disaster relief payments,” which, by law, are excluded from gross income.  Individual taxpayers qualify for the exclusion only if the expenses covered by the qualified disaster relief payments made by the common carrier are not otherwise paid for by insurance or other reimbursement.

According to the IRS notice, the common carrier issued Forms 1099-MISCto recipients of various payments, some of which are taxable and some of which are not because they are qualified disaster relief payments.

Tax-free qualified disaster relief payments made by the common carrier are:

• One-time $1,000 “inconvenience” payments to affected individuals;
• Relocation expenses and expenses for replacing clothing and personal items;
• Cost of repairing or rehabilitating homes and the surrounding environment;
• Compensation to homeowners who sold their homes after the derailment; and
• Medical expenses.

Taxable payments include:

• Lost wages;
• Access payments to property owners to allow the common carrier access to the train track for remediation and to clean nearby creeks and streams; and
• Payments to businesses.

How to report: Returns should state “East Palestine Derailment Relief”

Any taxpayer who has not yet filed their 2023 return does not need to report qualified disaster relief payments on their tax return, even if reported to them on Form 1099-MISC. However, taxable payments must be reported.

If filing Form 1040 electronically, attach to the Form 1040 a .pdf attachment with filename “EPTDR-East Palestine Train Derailment Relief.”  The attachment should state “East Palestine Train Derailment Relief.”

If filing Form 1040 on paper, state “East Palestine Train Derailment Relief” at the top of Form 1040. Mail the Form 1040 to the address in the Form instructions.

Any taxpayer who has already filed their 2023 tax return and reported their qualified disaster relief payments as taxable can amend their return, report the exclusion and claim any refund of taxes paid, by filing Form 1040-X. The IRS urges anyone who e-filed their 2023 return to e-file their amended return to speed processing. Visit File an amended returnfor details.

If filing Form 1040-X electronically, attach a .pdf attachment with filename “EPTDR-East Palestine Train Derailment Relief.”  The attachment should state “East Palestine Train Derailment Relief.”  Individuals may also state, “East Palestine Train Derailment Relief,” at the beginning of Part III, Explanation of Changes.

If filing Form 1040-X on paper, state, “East Palestine Train Derailment Relief,” at the top of Form 1040-X, as well as at the beginning of Part II, Explanation of Changes. Mail the completed form to the address in the Form instructions.

For more information see East Palestine Train Derailment Relief FAQs.

Reminder about tax return preparation options

• Eligible individuals or families can get free help preparing their tax return at Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) sites. To find the closest free tax help site, use the VITA Locator Tool or call 800-906-9887.
• To find an AARP Tax-Aide site, use the AARP Site Locator Tool or call 888-227-7669.
• Any individual or family whose adjusted gross income (AGI) was $79,000 or less in 2023 can use IRS Free File’s Guided Tax Software at no cost. There are products in English and Spanish.
• Another Free File option is Free File Fillable Forms. These are electronic federal tax forms, equivalent to a paper 1040 and are designed for taxpayers who are comfortable filling out IRS tax forms. Anyone, regardless of income, can use this option.
• MilTax, a Department of Defense program, offers free return preparation software and electronic filing for federal tax returns and up to three state income tax returns. It’s available for all military members and some veterans, with no income limit.

Notice 2024-46announces that the Commissioner of Internal Revenue (Commissioner) has determined that the February 3, 2023, derailment of a freight train operated by a common carrier in East Palestine, Ohio (Derailment), is a qualified disaster for purposes of § 139 of the Internal Revenue Code (Code). As a result of this determination, certain payments made by the common carrier to individuals affected by the Derailment (affected individuals) are excludable from gross income as qualified disaster relief payments under § 139(a).

Notice 2024-46will be published in Internal Revenue Bulletin 2024-26, on June 24, 2024.

WASHINGTON The Internal Revenue Service announced today reaching another key milestone in the agency’s transformation work with the Document Upload Tool accepting its one millionth taxpayer submission.

Use of the Document Upload Tool, sometimes referred to as DUT, continues to grow. During the first six months of this fiscal year, more than 265,000 taxpayers used the tool, and the number continues to grow each month.

Initially launched in 2021 in a limited format and greatly expanded in 2023 with funding from the Inflation Reduction Act (IRA), the tool offers taxpayers and tax professionals the option to respond digitally to eligible IRS notices by securely uploading required documents online through IRS.gov. For anyone with a smart phone or computer, this means that replying to IRS notices is now often as easy as scanning required documents and uploading them to the tax agency.

“The Document Upload Tool is a key part of our ambitious initiative to transform the IRS into a virtually paperless agency, and we continue to see increased use of this by taxpayers,” said IRS Commissioner Danny Werfel. “This tool saves time for taxpayers and helps IRS employees process responses faster and more efficiently. A growing number of taxpayers are using their smart phones or computers to scan and upload their responses to IRS correspondence, rather than the more time-consuming option of writing a letter or mailing in documents.”

The Document Upload Tool has shown steady growth over time as well. Since 2022, average monthly use of the DUT has more than doubled every year, from around 16,000 in 2022, to around 37,000 in 2023 and finally almost 84,000 so far in 2024. The document submissions cover a wide range of tax issues, including responding to IRS Notice CP2000, where the agency notifies taxpayers of potentially underreported income.

The IRS receives about 76 million paper tax returns and forms, as well as 125 million pieces of correspondence, notice responses and non-tax forms each year. In the past, the agency’s limited capability to accept these forms digitally or to digitize paper has added time-consuming steps that has created challenges for taxpayers, tax professionals and IRS employees. For decades, the only option available was to have taxpayers or their representatives mail or fax these documents to the tax agency.

The IRS estimates that more than 94% of individual taxpayers will have the option of no longer having to send mail to the IRS, potentially replacing up to 125 million paper documents per year, easing the paperwork burden for both them and the IRS.

The IRS team of leaders that oversaw last year’s sweeping DUT expansion is now a finalist for the 2024 Samuel J. Heyman Service to America Medals. Known as the Sammies, the Samuel J. Heyman Service to America Medals are considered to be the “Oscars” of public service.

To learn more about the Document Upload Tool, visit IRS.gov/DUT.

Inside This Issue

1. U.S. taxpayers living, working abroad must file tax return by June 17
2. Register for the 2024 IRS Nationwide Tax Forum
3. Tax relief available for disaster area victims in Massachusetts; new deadline July 31
4. IRS names new Chief Taxpayer Experience Officer
5. Treasury, IRS and DOE announce opening of application portal for the low-income communities bonus credit program
6. Treasury, IRS release proposed regulations on qualified clean electricity facilities and energy storage technologies
7. Treasury, IRS issue correction to Notice 2024-41
8. Upcoming webinars for tax practitioners
9. News from the Justice Department’s Tax Division
10. Technical Guidance

1.  U.S. taxpayers living, working abroad must file tax return by June 17

Tax pros, if you have clients working and living outside of the U.S., remind them that they must file their 2023 federal income tax return by June 17. This deadline applies to both U.S. citizens and resident aliens abroad, including those with dual citizenship. Such citizens 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:

• Their primary place of business or post of duty is outside of the U.S. and Puerto Rico, and they reside outside of both countries or
• They are serving in the military outside of the U.S. and Puerto Rico on the regular due date of their tax return.

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2.  Register for the 2024 IRS Nationwide Tax Forum

Register today to attend an upcoming IRS Nationwide Tax Forum. This year, the IRS’s premier outreach and education program will take place in Chicago, Orlando, Baltimore, Dallas and San Diego. Each forum is a three-day event, running Tuesday through Thursday, with more than 40 continuing education seminars, networking opportunities and more.

The IRS encourages attendees to maximize their time at the forum by participating in special pre-forum events on Monday, including the annual filing season program refresher course and a special practice management session during which IRS association partners will provide advice and strategies on how to improve their individual tax businesses.

Visit IRSTaxForum.com for information on the program, accommodations and registration. 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.

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3.  Tax relief available for disaster area victims in Massachusetts; new deadline July 31

Disaster-area taxpayers in parts of Massachusetts affected by severe storms and flooding that began on September 11 now have until July 31 to file various federal individual and business tax returns and make payments. The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). Currently, this includes Bristol and Worcester counties. The same relief will be available to any other Massachusetts localities added later to the disaster area.

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4.  IRS names new Chief Taxpayer Experience Officer

The IRS announced its new Chief Taxpayer Experience Officer, Fumino (Fumi) Tamaki. “The Chief Taxpayer Experience Officer plays a critical role at the agency and will pave the way for continuous improvements for taxpayers and the tax community across our key service delivery channels,” said IRS Commissioner Danny Werfel. “In this role, Fumi will work closely with IRS leaders and the transformation team to make improvements as well as with taxpayers and the tax community to develop capabilities to improve interactions in service and compliance.” In addition to identifying opportunities for ongoing improvements for taxpayers and the tax professional community, Tamaki will oversee the strategic direction for enhancing the agency’s taxpayer experience.

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5.  Treasury, IRS and DOE announce opening of application portal for the low-income communities bonus credit program

The Low-Income Communities Bonus Credit Program application portal has opened, as announced by the Treasury Department, IRS and Department of Energy (DOE). The portal is now open through June 27 for interested applicants.

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 who 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.

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6.  Treasury, IRS release proposed regulations on qualified clean electricity facilities and energy storage technologies

The Treasury Department and the IRS issued proposed regulations for owners of qualified clean electricity facilities and energy storage technology that might wish to apply for applicable tax credits. The proposed regulations offer direction for specific types of facilities placed in service after 2024 and invite comments from the public on the proposed regulations. Additional information can be found on the Inflation Reduction Act of 2022 page on IRS.gov.

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7.  Treasury, IRS issue correction to Notice 2024-41

The Treasury Department and the IRS released an amendment to Notice 2024-41. Notice 2024-41 modifies an existing safe harbor and provides a new elective safe harbor for determining domestic content bonus credit amounts. Text that was unintentionally omitted when the document was released is now included in the updated version. An earlier version of Notice 2024-41 was issued on May 16.

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8.  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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9.  News from the Justice Department’s Tax Division

The Justice Department filed a civil injunction suit against Miami tax return preparers, Niclas Pierre and Elius Bessard, and their tax return preparation businesses, seeking to bar them from owning or operating a tax preparation business and preparing tax returns. The complaint alleges that Pierre and Bessard, through their companies, prepared more than 8,000 tax returns for customers. The two hid their fraudulent activity by not identifying themselves as the return preparer, and instead listed another person as the return preparer or listed no one at all. The defendants’ deceitful actions have cost the United States millions of dollars in lost tax revenue. The exact loss is difficult to estimate because of the complexity of their schemes and their failure to consistently identify themselves as the tax return preparers.

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10.  Technical Guidance

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 sections 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.

Notice 2024-49 provides guidance on the registration requirements for the clean fuel production credit. A taxpayer must be registered as a producer of clean fuel at the time of production to be eligible to claim the clean fuel production credit.

Notice 2024-49 provides guidance on the registration requirements for the clean fuel production credit.  A taxpayer must be registered as a producer of clean fuel at the time of production to be eligible to claim the clean fuel production credit.  It provides guidance regarding the registration requirement, including information about the time, form, and manner of such registration with the Internal Revenue Service.  A taxpayer must have a signed registration letter dated on or before January 1, 2025, for the taxpayer to be eligible to claim the clean 

Outreach Connection FY24-08 Disaster tax relief Each year, taxpayers are affected by major disasters or emergencies in different parts of the country. The IRS makes it a priority to help taxpayers and businesses in need, and the agency works closely with other federal agencies in times of disaster. In this edition Eligibility Protect information assets — Individuals Protect information assets — Businesses Resources Eligibility Taxpayers and businesses in an area affected by a natural disaster may be eligible to receive tax relief. When the IRS can offer disaster-related tax relief IRS disaster assistance (PDF) Protect information assets — Individuals Click on image to play IRS YouTube video: Preparing for Disasters The IRS recommends taxpayers review and protect important tax and financial information as part of a disaster emergency plan. Safeguard information in case of natural disasters Casualty, disaster and theft loss workbook Protect information assets — Businesses When business owners put together an emergency preparedness plan, it should include copies of vital records and financial information. Include financial records in business emergency preparedness plans Business casualty, disaster and theft loss workbook (PDF) Resources Here are resources about disaster declarations, disaster tax relief, recommendations on preparation and what to do during recovery after a disaster. Latest disaster declaration by the Federal Emergency Management Agency: Information on the disaster declaration process, disaster types, how FEMA gets involved, and more. IRS disaster relief: Recent tax relief provisions for taxpayers affected by disaster situations. IRS disaster relief by state and U.S. territory: IRS news specific to local areas, primarily disaster relief or tax provisions that affect certain states. Disaster assistance and emergency relief for individuals and businesses: Tax-related information and resources for individuals and businesses affected by federally declared disasters. DisasterAssistance.gov: Assistance programs, guidance and how to apply for aid, and updates on disaster recovery efforts. Reconstructing records after a natural disaster or casualty loss: Guidance on how to recover and recreate financial tax records that have been lost or destroyed.