High income enforcement efforts: filing season start date; disaster relief; reporting cryptocurrency

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e-News for Small Business01/31/2024

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Issue Number:  Issue 2024-02

Inside This Issue

  1. IRS to offer Employee Retention Credit webinar on Feb. 8; provides updates on Voluntary Disclosure Program, moratorium
  2. 2024 tax filing season starts as IRS begins accepting tax returns Jan. 29
  3. New initiatives using IRA funding to ensure complex partnerships, large corporations pay taxes owed
  4. Connecticut taxpayers impacted by storms qualify for tax relief; various deadlines postponed to June 17
  5. Taxpayers should continue to report all cryptocurrency, digital asset income
  6. Businesses do not have to report certain large cash transactions involving digital assets until regulations are issued
  7. Initial guidance for employers setting up emergency savings accounts for their employees
  8. Small number of organizations will be unable to e-file due to updates for Form 990-T and Form 1120-POL until March 17, 2024
  9. Treasury, IRS issue guidance on the Qualified Alternative Fuel Vehicle Refueling Property Credit
  10. 2023 Form 1099-K: Free online video helps those who get payments through payment apps and online marketplaces
  11. Commissioner Werfel briefs Senate Finance Committee on ERC
  12. IRS launches Simple Notice Initiative redesign effort
  13. Other tax news

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


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 (VDP) webinar on Thursday, Feb. 8 at 2 p.m. ET.

The 75-minute webinar will focus on:

Who can participate and how to apply for the ERC VDP.
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.

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2.  2024 tax filing season starts as IRS begins accepting tax returns Jan. 29


A news release was issued this week that lays out more details for expanded customer service focus by the IRS this filing season.

“We’ve taken important steps to add more improvements to help taxpayers, ranging from expanded in-person hours, better online options and improved phone service,” IRS Commissioner Danny Werfel said.

In brief, the 2024 filing season will continue to focus on improving services to taxpayers with the passage of the Inflation Reduction Act such as:

  • Taxpayer Assistance Centers (TACs) around country will provide extended hours to help taxpayers
  • Special Saturday hours available at many TACs across country starting February through May
  • “Where’s My Refund?” on IRS.gov will provide more expanded service online

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3.  New initiatives using IRA funding to ensure complex partnerships, large corporations pay taxes owed


The IRS announced continued progress to expand enforcement efforts related to high-income individuals, large corporations and complex partnerships as part of wider efforts.

The IRS focused IRA resources on strengthening enforcement to pursue complex partnerships, large corporations and high-income, high-wealth individuals who do not pay overdue tax bills. The IRS shared progress in its focus on people using partnerships to avoid paying self-employment taxes as well as new details on current enforcement priorities, including the Partnership Self-Employment Tax Initiative. The IRS is also continuing to pursue millionaires that have not paid hundreds of millions of dollars in tax debt.

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4.  Connecticut taxpayers impacted by storms qualify for tax relief; various deadlines postponed to June 17


The IRS announced tax relief for individuals and businesses in parts of Connecticut affected by severe storms, flooding and a potential dam breach that began on Jan. 10, 2024. These taxpayers now have until June 17, 2024, to file various federal individual and business tax returns and make tax payments.

Taxpayers affected by disasters can find information on the most recent tax relief provisions on the IRS tax relief in disaster situations page. The IRS will update the disaster relief page as new localities are added to affected areas.

In addition, penalties for failing to make payroll and excise tax deposits due on or after Jan. 10, 2024, and before Jan. 25, 2024, will be abated if the deposits are made by Jan. 25, 2024.

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5.  Taxpayers should continue to report all cryptocurrency, digital asset income


The IRS reminds taxpayers they must again answer a digital asset question and report all digital asset related income when they file their 2023 federal income tax return, as they did for their 2022 federal tax returns.

The cryptocurrency, digital asset income news release also covers what a digital asset is and when to check “Yes.”

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6.  Businesses do not have to report certain large cash transactions involving digital assets until regulations are issued


The Treasury Department and IRS issued an announcement informing businesses that they do not have to report the receipt of digital assets the same way as they must report the receipt of cash until Treasury and IRS issue regulations.

The Infrastructure Investment and Jobs Act revised the rules that require taxpayers engaged in a trade or business to report receiving cash of more than $10,000 by considering digital assets to be cash, but Treasury and the IRS must issue regulations before this goes into effect.

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7.  Initial guidance for employers setting up emergency savings accounts for their employees


The IRS issued initial guidance to help employers with implementation of pension-linked emergency savings accounts (PLESAs).

These individual accounts are designed to permit and encourage employees to save for financial emergencies. Employers can offer PLESAs in plan years beginning after Dec. 31, 2023.

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8.  Small number of organizations will be unable to e-file due to updates for Form 990-T and Form 1120-POL until March 17, 2024


The IRS alerted a limited group of tax-exempt organizations that they won’t be able to electronically file Form 990-T, Exempt Organization Business Income Tax Return, or Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations, until March 17, 2024.

Organizations can file an extension for both forms electronically or paper file Form 1120-POL. They should pay any tax due with the extension to avoid penalties and interest.

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9.  Treasury, IRS issue guidance on the Qualified Alternative Fuel Vehicle Refueling Property Credit


The IRS the Department of the Treasury issued Notice 2024-20 to provide guidance on eligible census tracts for the qualified alternative fuel vehicle refueling property credit and the intent to propose regulations for the credit.

The Inflation Reduction Act amended the credit for qualified alternative fuel vehicle refueling property placed in service after Dec. 31, 2022, and before Jan. 1, 2033.

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10.  2023 Form 1099-K: Free online video helps those who get payments through payment apps and online marketplaces


The IRS posted a free webinar of 2023 Form 1099-K at irsvideos.gov. The webinar focuses on taxpayers who receive income reported on Form 1099-K, including those who often use popular payment apps and online marketplaces.

The webinar covers topics, including:

  • Friends and family transactions
  • How to report 1099-K amounts on a 2023 return
  • Items that remained the same during 2023 and what the IRS plans to change for 2024

The webinar also includes a question-and-answer session, closed-captioning, and a full transcript.

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11.  Commissioner Werfel briefs Senate Finance Committee on ERC


IRS Commissioner Danny Werfel updated the Senate Finance Committee on the agency’s efforts to protect taxpayers and combat fraud in the Employee Retention Credit (ERC) program.

Werfel described to the committee how ongoing work to modernize technology using Inflation Reduction Act funds is critical to eliminating the time-consuming manual transcription process the agency has had to undertake to extract data from ERC and other tax returns.

These fraud protection measures are necessary before the IRS anticipates resuming processing of claims submitted after the Sept. 14, 2023, moratorium. A specific resumption date has not been determined.

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12.  IRS launches Simple Notice Initiative redesign effort


The IRS announced work is underway on the Simple Notice Initiative, a sweeping effort to simplify and clarify about 170 million letters sent annually to taxpayers.

The initiative will review and redesign hundreds of notices with an immediate focus on the most common notices that individual taxpayers receive. The redesign work will accelerate during the 2025 and 2026 filing seasons, improving common IRS letters going out to individual taxpayers and then expanding into notices going to businesses.

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13.  Other tax news


The following information may be of interest to individuals and groups in or related to small businesses:

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