WASHINGTON — The Internal Revenue Service Advisory Council (IRSAC) today issued its annual public report, including recommendations to the IRS on new and continuing issues in tax administration. 

The 2024 IRSAC Public Report includes recommendations on 37 issues covering a broad range of topics. 

“IRSAC members have spent numerous hours analyzing issues in tax administration and the transformation work underway across the IRS,” said IRS Commissioner Danny Werfel. “The IRS is grateful for their hard work and valuable insights they spent on this year’s report, and we look forward to reviewing their recommendations.” 

The top 13 general report issues are: 

• IRS funding.
• Strategic Operating Plan assessment and analysis.
• Reporting level of service data.
• Hiring.
• Online Accounts promotion.
• Online Accounts technical support.
• Capabilities for business online tax accounts.
• Authorization techniques to enable businesses to utilize online accounts.
• Identity theft prevention and resolution.
• PTIN database and renewal system.
• Oversight of return preparers.
• Broadening continuing education for Enrolled Agents to include practice management topics.
• Process for issuing new and revised forms and obtaining comments. 

The full 2024 IRSAC Public Report was posted today to IRS.gov. 

The IRSAC serves as a federal advisory committee to the IRS commissioner and executive leadership. It provides an organized public forum for discussion of relevant issues in tax administration. IRSAC members offer observations and advice regarding current or proposed IRS policies, programs and procedures. 

In addition to receiving the public report today, Werfel thanked 12 members of the council whose terms end this year: 

• Amanda Aguillard – Aguillard served on the Small Business/Self-Employed Subgroup.
• Samuel Cohen – Cohen served on the Tax Exempt/Government Entities Subgroup.
• Alison Flores – Flores served as Chair of the Taxpayer Services Subgroup.
• Jodi Kessler – Kessler served on the Tax Exempt/Government Entities Subgroup.
• Mason Klinck – Klinck served on the Taxpayer Services Subgroup.
• Jeffrey Porter – Porter served as Chair of the Small Business/Self-Employed Subgroup.
• Dawn Rhea – Rhea served on the Large Business & International Subgroup.
• Jon Schausten – Schausten served on the Information Reporting Subgroup.
• Tara Sciscoe – Sciscoe served on the Tax Exempt/Government Entities Subgroup.
• Wendy Walker – Walker served as Chair of the Information Reporting Subgroup.
• Sean Wang – Wang served on the Information Reporting Subgroup.
• Katrina Welch – Welch served as Chair of the Large Business & International Subgroup. 

The IRSAC is administered under the Federal Advisory Committee Act by the IRS Communications & Liaison Division, Office of National Public Liaison. 

Members represent the taxpaying public, the tax professional community, small and large businesses, tax-exempt and government entities, the payroll industry and academia. The IRSAC is organized into five subgroups: Information Reporting, Large Business & International, Small Business/Self-Employed, Tax Exempt/Government Entities and Taxpayer Services. 

For more information, visit www.IRS.gov/IRSAC.

WASHINGTON — The Internal Revenue Service today announced that interest rates will decrease for the calendar quarter beginning Jan. 1, 2025.

For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily.

Here is a complete list of the new rates:

• 7% for overpayments (payments made in excess of the amount owed), 6% for corporations.
• 4.5% for the portion of a corporate overpayment exceeding $10,000.
• 7% for underpayments (taxes owed but not fully paid).
• 9% 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 3 percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 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 October 2024. See the revenue ruling for details.

Revenue Ruling 2024-25 announcing the rates of interest will appear in Internal Revenue Bulletin 2024-49, dated Dec. 2, 2024.

WASHINGTON – As part of International Fraud Awareness Week, the Internal Revenue Service reminds taxpayers how to report tax-related fraud in their community to protect personal and financial information from scam artists and tax schemes.

During International Fraud Awareness Week, Nov. 17-23, the IRS Office of Fraud Enforcement and IRS Criminal Investigation aim to raise awareness of fraud, scams and schemes affecting taxpayers across the country.

The IRS also encourages individuals, businesses and tax professionals to take time now to learn to recognize red flags and to ensure defenses are in place to stop scammers and those who promote unscrupulous tax schemes.

The Security Summit, a public-private partnership between the IRS, state tax agencies and the nation’s tax industry, also works to protect taxpayers, businesses and the tax system from identity thieves and warn people to watch out for common scams and schemes.

Reporting tax fraud

Tax fraud can come in many forms, including scams targeting individuals, tax-related schemes pitched by unscrupulous promoters and fraud committed by taxpayers who knowingly file incomplete or inaccurate information with the IRS.

The public can assist the IRS in identifying and investigating possible fraud of individuals and businesses by filing Form 3949-A, Information Report Referral. Form 3949-A is a tax-related public use form submitted voluntarily by individuals to report alleged violations of tax law by individuals and businesses. A Form 3949-A submission remains confidential.

Individuals can report suspected tax law violations such as:

• False exemptions and deductions.
• Multiple tax filings.
• Organized crime, public/political corruption and kickbacks.
• Unsubstantiated and unreported income.
• Narcotics income.
• Wagering/gambling income.
• Failures to pay tax, withhold tax and file returns.

These are only some of the suspected violations individuals can report. The IRS will review submissions and determine the appropriate action to take based on the information provided. These actions may include a referral for audit or a referral for criminal prosecution.

The IRS Office of Fraud Enforcement promotes compliance with tax laws by strengthening the IRS response to fraud and mitigating emerging threats. This includes improving fraud detection, identifying areas of high risk, enhancing enforcement and helping develop and submit fraud referrals to IRS Criminal Investigation where appropriate.

Tax-exempt organizations

If an individual suspects a tax-exempt organization is not complying with tax laws, they can submit Form 13909, Tax-Exempt Organization Complaint. These organizations may include exempt organizations, employee plans, Indian tribal governments and other governmental units.

The details and information provided can help hold tax-exempt entities and organizations accountable for following tax law.

Possible monetary award

Information submitted by individuals regarding fraudulent tax-related activity can sometimes lead to a possible monetary award. Individuals requesting consideration for an award should submit Form 211, Application for Award of Original Information.

The Form 211 and any attachments must include specific and credible information concerning the person that the whistleblower believes will lead to the collection of proceeds. The IRS Whistleblower Office evaluates Form 211 submissions.

Fraudulent schemes, promoters or preparers

Each year, the IRS compiles a Dirty Dozen list that brings public awareness to a variety of common scams that taxpayers may encounter. This year’s list included phishing and smishing scams, questionable Employee Retention Credits, Fuel Tax Credit claims, Offer in Compromise mills and fake charities exploiting taxpayer generosity.

Anyone experiencing these scams, or taxpayers encountering promoters or tax preparers peddling these schemes, are encouraged to submit Form 14242, Report Suspected Abusive Tax Promotions or Preparers.

People should mail or fax a completed Form 14242 and any supporting materials to the IRS Lead Development Center:

Internal Revenue Service
Lead Development Center MS7900
1973 N. Rulon White Blvd
Ogden, UT 84404

Fax: 877-477-9135

The Lead Development Center within the Office of Promoter Investigations follows up on each referral and ensures cases involving abusive tax schemes and improper tax return preparation are appropriately sent for further action to the IRS. Referrals may lead to injunctions against preparers or promoters, monetary penalties or referrals to criminal enforcement action.

Interest rates decrease for the first quarter of 2025

WASHINGTON — The Internal Revenue Service today announced that interest rates will decrease for the calendar quarter beginning Jan. 1, 2025.

For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily.

Here is a complete list of the new rates:

• 7% for overpayments (payments made in excess of the amount owed), 6% for corporations.
• 5% for the portion of a corporate overpayment exceeding $10,000.
• 7% for underpayments (taxes owed but not fully paid).
• 9% 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 3 percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 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 October 2024. See the revenue ruling for details.

Revenue Ruling 2024-25 announcing the rates of interest will appear in Internal Revenue Bulletin 2024-49, dated Dec. 2, 2024.

Inside This Issue

1. Businesses must report Beneficial Ownership Information to Treasury by Jan. 1; free webinar can help
2. Offer in Compromise instructional videos now on IRS YouTube channel
3. IRA reminder: Qualified owners may contribute up to $105,000 to charity in 2025
4. Technical Guidance

1.  Businesses must report Beneficial Ownership Information to Treasury by Jan. 1; free webinar can help

Businesses that were established or registered prior to Jan. 1, 2024, are required to submit their initial Beneficial Ownership Information (BOI) by Jan. 1, 2025.

To assist companies that are required to submit their Beneficial Ownership Information to the Treasury Department’s Financial Crimes Enforcement Network, the IRS will sponsor a free one-hour webinar on Tuesday, Nov. 19, at 2:00 p.m. ET.

In this complimentary webinar, FinCEN will:

• Explain the Corporate Transparency Act.
• Provide Beneficial Ownership reporting resources.
• Analyze the BOI reporting requirement using the Small Entity Compliance Guide.
• Describe what happens if a company does not timely report BOI to FinCEN.
• Feature live question-and-answer session.

No continuing education credit is being offered. Click here to register. 

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2.  Offer in Compromise instructional videos now on IRS YouTube channel

The IRS has added an Offer in Compromise Overview playlist to its YouTube channel. The series of videos walks viewers step-by-step through how to complete the forms needed to submit an offer in compromise, or OIC. An OIC allows taxpayers to settle their tax debt for less than the full amount they owe. And by working directly with the IRS instead of through a third-party company, taxpayers can save themselves both time and money. Visit the OIC webpage for more information, including FAQs and the Pre-Qualifier tool.

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3.  IRA reminder: Qualified owners may contribute up to $105,000 to charity in 2025

The Internal Revenue Service reminds owners of Individual Retirement Arrangement (IRA) who are 70½ years of age or older that they can make qualified charitable distributions in 2024 that allow them to donate up to $105,000 tax-free. Compared to previous years, that is an increase of $5,000.

Qualified charitable distributions (QCDs) also count toward the year's required minimum distribution (RMD) for individuals over age 73. IRA distributions are typically taxable, but QCDs remain tax-free if sent directly to a qualified charity by the trustee. To make a QCD for 2024, IRA owners should contact their IRA trustee soon to ensure the transaction completes by year-end.

For additional information, refer to Publication 526, Charitable Contributions and Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs).

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4.  Technical Guidance

Notice 2024-81 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for October 2024 used under section 417(e)(3)(D), the 24-month average segment rates applicable for November 2024, and the 30-year Treasury rates, as reflected by the application of section 430(h)(2)(C)(iv). 

WASHINGTON — The Internal Revenue Service reminds individual retirement arrangement (IRA) owners age 70½ and older that they can make up to $105,000 in tax-free charitable donations during 2024 through qualified charitable distributions. That’s up from $100,000 in past years.

For those age 73 or older, qualified charitable distributions (QCDs) also count toward the year's required minimum distribution (RMD).

Generally, IRA distributions are taxable, but QCDs remain tax-free if sent directly to a qualified charity by the trustee. To make a QCD for 2024, IRA owners should contact their IRA trustee soon to ensure the transaction completes by year-end.

Each eligible IRA owner can exclude up to $105,000 in QCDs from taxable income. Married couples, if both meet qualifications and have separate IRAs, can donate up to $210,000 combined. QCDs don’t require itemizing deductions.

For those planning ahead, starting this year, the QCD limit is subject to annual adjustment, based on inflation. For that reason, the annual QCD limit will rise to $108,000 in 2025.

Reporting and documenting QCDs

For 2024, QCDs should be reported on the 2024 tax return. IRA trustees will issue Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., in early 2025 documenting IRA distributions.

The full amount of any IRA distribution goes on Line 4a of Form 1040, U.S. Individual Income Tax Return, or Form 1040-SR, U.S. Tax Return for Seniors. Enter “0” on Line 4b if the full amount is a QCD, marking it as such.

Donors must obtain a written acknowledgement from the charity showing the contribution date, amount and confirmation that no goods or services were received.

For more details, see Publication 526, Charitable Contributions, and Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs)

Notice 2024-81 forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for October 2024 used under § 417(e)(3)(D), the 24-month average segment rates applicable for November 2024, and the 30-year Treasury rates, as reflected by the application of § 430(h)(2)(C)(iv).  

Notice 2024-81 will be in IRB:  2024-49, dated December 2, 2024.

WASHINGTON — The Internal Revenue Service will sponsor a free one-hour webinar designed to help the many businesses that must report their beneficial ownership information to the Treasury Department’s Financial Crimes Enforcement Network.

Because this is not an IRS or tax-related requirement, FinCEN representatives will conduct the webinar on this new anti-money laundering provision. The webinar will take place on Tuesday, Nov. 19, 2025, beginning at 2 p.m. ET.

Many companies created or registered to do business before Jan. 1, 2024, must e-file their initial beneficial ownership information (BOI) to FinCEN by Jan. 1, 2025. In general, this means reporting the names and other information about the people who own or control the company. Exceptions and special rules apply.

During this free webinar, FinCEN will:

• Explain the Corporate Transparency Act.
• Provide Beneficial Ownership reporting resources.
• Analyze the BOI reporting requirement using the Small Entity Compliance Guide.
• Describe what happens if a company does not timely report BOI to FinCEN.

The webinar will also feature a live question-and-answer session. Though primarily aimed at tax professionals, anyone is welcome to attend.

Certificates of completion will be offered, but no continuing education credits are available for this webinar. Closed captioning will also be offered.

Time: 2 p.m. (Eastern); 1 p.m. (Central); 12 p.m. (Arizona and Mountain); 11 a.m. (Pacific); 10 a.m. (Alaska); 9 a.m. (Hawaii and Aleutian) time zones.

Registration: Visit the Internal Revenue Service webinar website. Questions about the webinar can be emailed to cl.sl.web.conference.team@irs.gov.

For more information about the BOI reporting requirement, including FAQs and a five-minute video illustrating how to file, visit FinCEN’s BOI page.

1. Notice of renewal for enrolled agents
2. Tax pros: New continuing education seminars now available on IRS Nationwide Tax Forum Online
3. Tax Talk Today highlights IRS Nationwide Tax Forum: Interview with Tax Exempt Commissioner
4. IRS releases 2024 Financial Report
5. IRS shares healthcare FSA reminder: Employees may contribute up to $3,300 in 2025
6. Upcoming webinars for tax professionals

1.  Notice of renewal for enrolled agents

Enrolled agents: If your Social Security number (SSN) ends in 0,1, 2 or 3, you have until Jan. 31, to renew your status. Enrolled agents must renew their status every three years to remain eligible to practice before the IRS. Failure to renew by the deadline will result in your enrolled agent status becoming “inactive.” To renew:

• Complete Form 8554, Application for Renewal of Enrollment to Practice Before the IRS, online at Pay.gov.
• Pay the $140 renewal fee.

All enrolled agents must also have an active Preparer Tax Identification Number (PTIN) that must be entered on Form 8554.

Visit IRS.gov/ea for more information.

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2.  Tax pros: New continuing education seminars now available on IRS Nationwide Tax Forum Online

The IRS encourages tax professionals to register for the IRS Nationwide Tax Forum Online to get access to 18 seminars recorded at the 2024 IRS Nationwide Tax Forum. The Nationwide Tax Forum Online offers tax professionals a convenient way to stay informed about current legislation, IRS procedures and key topics for the upcoming tax season.

Each seminar features a 50-minute interactive video presentation with synchronized slides, downloadable materials and complete transcripts. Courses can be taken for continuing education (CE) credit for a fee of $29, or they can be reviewed for free (no CE credit).

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3.  Tax Talk Today highlights IRS Nationwide Tax Forum: Interview with Tax Exempt Commissioner

Want to learn more about the annual IRS Nationwide Tax Forum? Tax Talk Today’s Alan Pinck conducted several on-site interviews at the 2024 San Diego Tax Forum touching on an array of topics.

View his interview with Edward Killen, IRS Commissioner, Tax Exempt/Government Entities Division.

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4.  IRS releases 2024 Financial Report

The Internal Revenue Service this week released financial information and highlighted selected accomplishments and challenges in its fiscal year 2024 Financial Report.

During fiscal year 2024, the IRS collected more than $5.1 trillion in tax revenue, collected more than $98 billion in enforcement revenue and distributed $553 billion in federal tax refunds and other outlays. This year’s report presents the IRS’s current financial position and discusses key financial topics. It highlights the programs, accomplishments, challenges and management's accountability for the resources entrusted to the IRS.

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5.  IRS shares healthcare FSA reminder: Employees may contribute up to $3,300 in 2025

The Internal Revenue Service reminds taxpayers that during open enrollment season for flexible spending arrangements (FSAs) they may be eligible to use tax-free dollars to pay medical expenses not covered by other health plans. An employee who chooses to participate in an FSA can contribute up to $3,300 through payroll deductions during the 2025 plan year. Amounts contributed are not subject to federal income tax, Social Security tax or Medicare tax. If the plan allows, the employer may also contribute to an employee's FSA. If the employee's spouse has a plan through their employer, the spouse can also contribute up to $3,300 to that plan. In this situation, the couple could jointly contribute up to $6,600 for their household.

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6.  Upcoming webinars for tax professionals

The IRS offers the upcoming live webinars to the tax professional community:

• Energy Efficient Home Improvements Credit & Residential Clean Energy Property Credit: How the Inflation Reduction Act revised these credits on Nov. 14, at 2 p.m. ET. Earn up to one continuing education credit (Federal Tax). Certificates of completion are being offered. Click here to register.
• Beneficial Ownership Information presented by Financial Crimes Enforcement Network (FinCEN) on Nov. 19, at 2 p.m. ET. No continuing education credit is being offered. Click here to register.

WASHINGTON — The Internal Revenue Service reminds taxpayers that during open enrollment season for Flexible Spending Arrangements (FSAs) they may be eligible to use tax-free dollars to pay medical expenses not covered by other health plans. 

An employee who chooses to participate in an FSA can contribute up to $3,300 through payroll deductions during the 2025 plan year. Amounts contributed are not subject to federal income tax, Social Security tax or Medicare tax. 

If the plan allows, the employer may also contribute to an employee's FSA. If the employee's spouse has a plan through their employer, the spouse can also contribute up to $3,300 to that plan. In this situation, the couple could jointly contribute up to $6,600 for their household. 

For FSAs that permit the carryover of unused amounts, the maximum carryover amount to 2025 is $660, increasing from $640 in tax year 2024. The carryover doesn’t affect the maximum amount of salary reduction contributions that can be made. 

It's important for taxpayers to annually review their health care selections during health care open enrollment season and maximize their savings. 

Eligible employees of companies that offer a health flexible spending arrangement (FSA) need to act before their medical plan year begins to take advantage of an FSA during 2025. Self-employed individuals are not eligible. 

Expenses to consider

Throughout the year, taxpayers can use FSA funds for qualified medical expenses not covered by their health plan. These can include co-pays, deductibles and a variety of medical products. Also covered are services ranging from dental and vision care to eyeglasses and hearing aids. Interested employees should check with their employer for details on eligible expenses and claim procedures. 

Before enrollment (if an employer offers an FSA), review any expected health care expenses projected for the year. Participating employees should plan for healthcare activities when they calculate their contribution amounts. Consider: 

• Updating medicine cabinet with necessary supplies.
• Big ticket expenses.
• Seasonal needs such as allergy products, sunscreen or warm steam vaporizers.
• Routine checkups or visits with specialists that regular insurance plans do not cover.
• Many over-the-counter items that are FSA eligible.
• Eye exams or dental visits: Out-of-pocket costs for dental and vision care are also covered by an FSA. 

Employers are not required to offer FSAs. Interested taxpayers should check with their employer to see if they offer an FSA. Also, all FSAs are subject to plan terms which may be more restrictive than the maximums allowed under the law, including both the maximum dollar amounts and the expenses covered. More information about FSAs can be found at IRS.gov in Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.