Scam awareness, SECURE 2.0, ERC, Interest rates, updates to forms, instructions, pages, and publications

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e-News for Payroll ProfessionalsMay 31, 2024

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Issue Number:  2024-06

Inside This Issue

  1. Help warn clients about scams offering big refunds
  2. New fact sheet: Disaster relief impacts to retirement plans and IRAs
  3. Check business tax returns for signs of incorrect ERC claims
  4. Third quarter 2024 interest rates
  5. Updates to forms, instructions, pages and publications

 1.  Help warn clients about scams offering big refunds


The IRS urges payroll professionals to share IRS warnings with clients about potential scams centered around the Fuel Tax Credit, the Sick and Family Leave Credit, and household employment taxes.

The IRS has seen thousands of claims filed by ineligible taxpayers. When a taxpayer is not eligible this slows refunds and requires a taxpayer to send documentation to support their claim. They may also need to file amended returns. Taxpayers should work with a trusted tax professional to resolve issues from these scams.

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 2.  New fact sheet: Disaster relief impacts to retirement plans and IRAs


The IRS released a new Fact Sheet on the impact of SECURE 2.0 provision that provides ongoing disaster relief for certain loans and distributions in federally declared major disasters. Before SECURE 2.0, there was no disaster relief that allowed these loans and distributions for all major disasters.

The FAQs help individuals, employers, retirement plan and Individual Retirement Arrangement service providers with general tax information and details about:

  • Taxation and reporting of qualified disaster recovery distributions
  • Repayment of qualified distributions taken for the purpose of purchasing or constructing a principal residence in a qualified disaster area
  • Loans from certain qualified plans

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 3.  Check business tax returns for signs of incorrect ERC claims


The IRS issued Tax Tip 2024-49 covering some signs of an incorrect Employee Retention Credit claim and how to resolve issues. The tip highlights some common ways ERC claims are incorrect:

  • Too many quarters claimed
  • Government orders that don’t qualify
  • Too many employees and wrong calculations
  • Supply chain issues
  • Claims for too much of a tax period
  • Didn’t pay wages or didn’t exist during eligibility period
  • Promoter says there’s nothing to lose

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 4.  Third quarter 2024 interest rates


The IRS advises that interest rates will remain the same for the third quarter of 2024.

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 5.  Updates to forms, instructions, pages and publications


Forms

Instructions

IRS.gov pages

Publications

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