ERC voluntary disclosure; penalty relief; Business Tax Account expansion; RMD deadlines; and more

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e-News for Tax ProfessionalsDecember 22, 2023

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Issue Number: 2023-51

Inside This Issue

  1. Employers who received questionable ERCs can repay at discounted rate through new voluntary program
  2. IRS provides penalty relief on nearly 5 million 2020, 2021 tax returns; restart of collection notices in 2024 marks end of pandemic-related pause
  3. Business Tax Account expands to S corporations, partnerships
  4. Taxpayers 73 years old and older must make required withdrawals from retirement plans by Dec. 31
  5. Complete year-end continuing education requirements on IRS Nationwide Tax Forum Online
  6. Tennessee taxpayers affected by storms, tornadoes qualify for tax relief
  7. A Closer Look at the Direct File pilot
  8. Office of Professional Responsibility alerts
  9. Small Business Tax Workshop is now available in Spanish
  10. IRS releases Clean Energy Tax Incentives e-posters for individuals, businesses
  11. Upcoming webinars for tax practitioners
  12. News from the Justice Department’s Tax Division
  13. Technical Guidance

1.  Employers who received questionable ERCs can repay at discounted rate through new voluntary program


As part of an ongoing initiative aimed at combating dubious Employee Retention Credit (ERC) claims, the IRS launched a new voluntary disclosure program to help businesses who want to pay back the money they received after filing ERC claims in error. The new disclosure program is part of a larger effort at the IRS to stop aggressive marketing around ERC that misled some employers into filing claims. The special disclosure program runs through March 22, 2024, and the IRS added provisions allowing repayment of 80% of the claim received. Additional details can also be found in the related fact sheet.

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2.  IRS provides penalty relief on nearly 5 million 2020, 2021 tax returns; restart of collection notices in 2024 marks end of pandemic-related pause


In a major step to help people who owe back taxes, the IRS is providing new penalty relief for approximately 4.7 million individuals, businesses and tax-exempt organizations that were not sent automated collection reminder notices during the pandemic. Due to the unprecedented effects of the COVID-19 pandemic, the IRS temporarily suspended the mailing of automated reminders to pay overdue tax bills starting in February 2022. Although these reminder notices were suspended, the failure-to-pay penalty continues to accrue for taxpayers who did not fully pay their bills in response to the initial balance due notice.

Given this unusual situation, the IRS is taking several steps in advance of resuming normal collection notices for tax years 2020 and 2021 to help taxpayers with unpaid tax bills. The IRS has also released Notice 2024-07, which explains how the agency is providing failure-to-pay penalty relief to eligible taxpayers affected by the COVID-19 pandemic to help them meet their federal tax obligations. Read more about this in the Technical Guidance section.

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3.  Business Tax Account expands to S corporations, partnerships


As part of continuing transformation work, the IRS recently launched the second phase of a new online self-service tool for businesses that expands the business tax account capabilities and eligible entity types. As a result, individual partners of partnerships and individual shareholders of S corporation businesses are now eligible for a business tax account in addition to sole proprietors. Available at IRS.gov/businessaccount, the new business tax account is a key part of the agency’s continuing service improvement initiative.

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4.  Taxpayers 73 years old and older must make required withdrawals from retirement plans by Dec. 31


Tax pros: If you have clients who were born before 1951, remind them of the year-end deadlines to take required minimum distributions from funds held in individual retirement arrangements (IRAs) and other retirement plans, and the noted new requirements under the law beginning in 2023.

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5.  Complete year-end continuing education requirements on IRS Nationwide Tax Forum Online


Tax pros: If you’re in need of continuing education (CE) credits before the end of the year, visit the IRS Nationwide Tax Forum Online website to receive tax law information and updates directly from the IRS. Tax Forum Online features 18 self-study seminars recorded last summer at the 2023 Nationwide Tax Forum, offering options for Ethics, Federal Tax Law and Federal Tax Law Update CE credits. The Nationwide Tax Forum Online is approved as a continuing education provider by the IRS and NASBA, the National Association of State Boards of Accountancy. To explore the available course options and register, visit irstaxforumonline.com.

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6.  Tennessee taxpayers affected by storms, tornadoes qualify for tax relief


The IRS provided tax relief for individuals and businesses in parts of Tennessee affected by severe storms and tornadoes that began on Dec. 9. These taxpayers now have until June 17, 2024, to file various federal individual and business tax returns and make tax payments. The IRS is offering relief to any area designated by the Federal Emergency Management Agency, which currently includes Davidson, Dickson, Montgomery and Sumner counties. The same relief will be available to any other Tennessee localities added later to the disaster area. The current list of eligible localities is available on the disaster relief page on IRS.gov.

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7.  A Closer Look at the Direct File pilot


In the recent issue of the executive column, “A Closer Look,” the IRS Direct File team highlighted the Direct File pilot, featuring a new tax filing service that will allow eligible taxpayers to file their taxes online, for free, directly with the IRS.

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8.  Office of Professional Responsibility alerts


Tax pros: The Office of Professional Responsibility provided recent alerts on practitioners’ obligations to have a Written Information Security Plan and practitioner diligence obligations and the report of Foreign Bank and Financial Accounts (FBAR).

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9.  Small Business Tax Workshop is now available in Spanish


Check out the Small Business Tax Workshop video, which is now available in Spanish, for a series of eight interactive lessons designed to help new small business owners learn their tax rights and responsibilities.

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10.  IRS releases Clean Energy Tax Incentives e-posters for individuals, businesses


The Inflation Reduction Act of 2022 makes several clean energy tax credits available to individuals and businesses. To determine if your clients may be eligible to claim these available credits, check out these e-posters, one that outlines the clean energy tax incentives for businesses and the other that outlines clean energy tax incentives for individuals.

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11.  Upcoming webinars for tax practitioners


The IRS offers the upcoming live webinars to the tax practitioner community. For more information or to register for the webinars, visit the Webinars for Tax Practitioners webpage:

  • Answering your Frequently Asked Questions about Due Diligence on Jan. 10, 2024, at 2 p.m. Category: Federal Tax; earn up to 1 CE credit.
  • Sailing Through the Rules of Refundable Tax Credits on Jan. 12, 2024, at 2 p.m. Certificates of completion are being offered. Category: Federal Tax; earn up to 1 CE credit.
  • 2024 IRS/California Society of Enrolled Agents (CSEA) Practitioner Seminars on Jan. 17-18, 2024, from noon – 5 p.m. ET. Earn up to 9 hours of IRS qualified CE credits, including 2 hours of Federal Ethics.

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12.  News from the Justice Department’s Tax Division


Return preparer Samir Patel of Georgia sentenced to two years in prison for evading his personal federal income taxes, causing a tax loss to the IRS of approximately $550,000. In addition to his prison sentence, Patel is ordered to serve three years of supervised release and to pay a $95,000 fine and $551,450 in restitution to the United States.

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13.  Technical Guidance


Announcement 2024-03 announces a Voluntary Disclosure Program for taxpayers to resolve refunds or credits for erroneous Employee Retention Credit (ERC) claims.

Notice 2024-01 provides the indexing factors to be used by group health plans and health insurance issuers to calculate the qualifying payment amount (QPA) for items or services provided on or after Jan. 1, 2024, and before Jan. 1, 2025.

Notice 2024-02 provides guidance in the form of questions and answers with respect to certain provisions of the SECURE 2.0 Act of 2022.

Notice 2024-03 sets forth the 2023 Cumulative List of Changes in Plan Qualification Requirements for Defined Contribution Qualified Pre-approved Plans (2023 Cumulative List).

Notice 2024-05 provides a safe harbor regarding the incremental cost of certain qualified commercial clean vehicles placed in service in calendar year 2024 for purposes of the credit for qualified commercial clean vehicles under section 45W of the Internal Revenue Code.

Notice 2024-07 provides automatic relief to eligible taxpayers from the additions to tax for the failure to pay with respect to certain income tax returns for 2020 and 2021.

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