Tax deadline approaches, First quarter estimated tax payment deadline, TDS authorization change, and more …

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e-News for Tax ProfessionalsApril 5, 2024

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Issue Number:  Issue Number2024-14

Inside This Issue

 

  1. Deadline approaches to file 2023 tax returns, make payment or request extension
  2. IRS reminder: 2024 first quarter estimated tax payment deadline is April 15
  3. TDS Authorization Change
  4. Treasury, IRS issue guidance on the tax treatment of amounts paid as rebates for energy efficient property and improvements
  5. Dirty Dozen: Beware of evolving scams
  6. Dirty Dozen: IRS urges taxpayers to not fall prey to untrustworthy tax preparers; ‘ghost preparers’ can disappear with taxpayer cash, information
  7. Reminder to U.S. taxpayers impacted by Israel attacks have until Oct. 7; more relief available
  8. Tax relief available for Maine, Rhode Island disaster victims
  9. See what’s new at the IRS Nationwide Tax Forum
  10. Upcoming Webinars for tax practitioners
  11. Report digital asset income, including cryptocurrency on tax return
  12. News from the Justice Department’s Tax Division

1.  Deadline approaches to file 2023 tax returns, make payment or request extension


The IRS reminds taxpayers of the April 15 deadline to electronically file their federal income tax return and request direct deposit.

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2.  IRS reminder: 2024 first quarter estimated tax payment deadline is April 15


The Internal Revenue Service advised taxpayers, including self-employed individuals, retirees, investors, businesses and corporations about the April 15 deadline for first quarter estimated tax payments for tax year 2024.

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3.  TDS Authorization Change


As part of the IRS’ effort to continue combatting identity theft and protecting taxpayers’ personal information, we’re making changes that will impact how tax professionals receive transcripts.

Beginning April 8, 2024, tax professionals must call the Practitioner Priority Service (PPS) to request transcripts to be deposited into their Secure Object Repository (SOR). While PPS has been the primary avenue for these requests, other IRS toll-free lines will no longer offer the SOR as a delivery method.

Additionally, tax professionals need to pass the current required authentication and also verify their Short Identification (ID). The Short ID is a unique 8-10 alphanumeric code that is systemically assigned when an IRS account is established. This Short ID is visible when the tax professional logs in to their e-Services SOR. If the identity can’t be verified, transcripts will only be mailed to the address of record. PPS assistors cannot resolve issues with ID.Me identity proofing or the status of an ID.Me account.

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4.  Treasury, IRS issue guidance on the tax treatment of amounts paid as rebates for energy efficient property and improvements


The Department of Treasury and the Internal Revenue Service issued Announcement 2024-19 that addresses the federal income tax treatment of amounts paid for the purchase of energy efficient property and improvements. Generally, taxpayers who receive rebates for the purchase of energy efficient homes will not include the value of those rebates as income o their tax returns, however they will need to reduce the basis of the property when they sell it by the amount of the rebate.

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5.  Dirty Dozen: Beware of evolving scams


The Internal Revenue Service continues to share its Dirty Dozen list of tax scams reminding taxpayers and tax professionals to be wary of evolving phishing and smishing scams designed to steal sensitive taxpayer information.

Taxpayers are advised by the IRS to be cautious of the following scenarios:

The IRS urges individuals to report unscrupulous promoters and tax preparers. To report an abusive tax scheme or a tax return preparer, people should use the online Form 14242, Report Suspected Abusive Tax Promotions or Preparers, or mail or fax a completed paper Form 14242, Report Suspected Abusive Tax Promotions or Preparers and any supporting material to the IRS Lead Development Center in the Office of Promoter Investigations.

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6.  Dirty Dozen: IRS urges taxpayers to not fall prey to untrustworthy tax preparers; ‘ghost preparers’ can disappear with taxpayer cash, information


The Internal Revenue Service and Security Summit partners alerted taxpayers to be on the lookout for unscrupulous tax preparers who could encourage people to file false tax returns and steal valuable personal information.

A common problem seen annually during tax season, “ghost preparers” pop up to encourage taxpayers to take advantage of tax credits and benefits for which they don’t qualify. These preparers can charge a large percentage fee of the refund or even steal the entire tax refund. After the tax return is prepared, these “ghost preparers” can simply disappear, leaving well-meaning taxpayers to deal with the consequences.

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7.  Reminder to U.S. taxpayers impacted by Israel attacks have until Oct. 7; more relief available


The IRS reminds U.S. taxpayers who live or have a business in Israel, Gaza or the West Bank, and certain other taxpayers affected by the terrorist attacks in the State of Israel, have until Oct. 7, 2024, to both file and pay most taxes due.

Other tax-related deadlines are postponed as well. Among other things, this includes individuals, corporations and tax-exempt organizations that had valid extensions to file their 2022 federal income tax returns, though payments for these returns do not get the extra time because they were due before the attacks occurred. See Notice 2023-71 and Rev. Proc. 2018-58 for details. For additional information, affected taxpayers may call the IRS disaster hotline at 866-562-5227. Alternatively, international callers may call 267-941-1000.

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8.  Tax relief available for Maine, Rhode Island disaster victims


The IRS is providing tax relief to the following individuals and businesses who have recently been affected by storms and flooding:

  • Disaster-area taxpayers in parts of Maine affected by severe storms and flooding that began on Jan. 9 have until July 15 to file various federal individual and business tax returns and make tax payments. The IRS is offering relief to areas designated by the Federal Emergency Management Agency (FEMA). Currently, this includes individuals and households that reside or have a business in Cumberland, Hancock, Knox, Lincoln, Sagadahoc, Waldo, Washington and York counties qualify for tax relief. The same relief will be available to any other Maine localities added later to the disaster area.
  • Individuals and businesses in parts of Rhode Island that were affected by severe storms and flooding that began on Dec. 17 and Jan. 9, now have until July 15, 2024, to file various federal individual and business tax returns and make tax payments. Currently, this includes Kent, Providence and Washington counties. The same relief will be available to any counties added later to the disaster areas.

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9.  See what’s new at the IRS Nationwide Tax Forum


Tax professionals can attend the upcoming IRS Nationwide Tax Forum, where they will have access to the latest insights and expertise straight from the IRS. Each of the five forums is a three-day event with seminars, workshops, networking opportunities, and much more. Attendees can maximize their time by participating in additional events as early as the Monday before the forums officially begin, from the annual filing season refresher course to the practice management session for tips to running their businesses.

In addition to learning about the latest developments in tax law and other issues affecting the tax community, attendees will also have a chance to meet in-person with IRS hiring experts. The IRS looks to hire talented people in the tax community and other industries as the agency continues the historic transformation work under the Inflation Reduction Act.

Register now to take advantage of the Early Bird rate available until June 17. Visit 2024 IRS Nationwide Tax Forum for information on the program, accommodations and registration.

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10.  Upcoming Webinars for tax practitioners


The IRS is presenting the webinar “Impacts of Gaming on Tax Exempt Organizations” on April 18 at 2 p.m. ET. Tax professionals can earn up to one continuing education credit.

For more information or to register for the webinar, visit the Webinars for Tax Practitioners webpage.

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11.  Report digital asset income, including cryptocurrency on tax return


Any income earned from digital asset transactions must be reported on your federal tax return.

Detailed reporting requirements are available in the Instructions for Form 1040 and Form 1040-SR and on the Digital Assets page on IRS.gov.

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12.  News from the Justice Department’s Tax Division


The United States filed a civil complaint in the U.S. District Court for the Eastern District of Washington to bar Donald J. Taylor, a former IRS revenue agent and registered enrolled agent, who left the IRS in 2008 to work as a paid tax return preparer in Kennewick, Washington. By repeatedly understating his customers’ tax liabilities, the complaint alleges that the United States has been harmed by Taylor’s conduct resulting in the loss in federal tax revenue, estimated to be over $42 million for tax years 2017 and 2020.

The Justice Department filed a civil injunction suit against a group of Texas tax return preparers seeking to bar them from owning or operating a tax preparation business and preparing tax returns. The complaint also requests that the court require the defendants to disgorge the return preparation fees they obtained by preparing allegedly false or fraudulent tax returns. The IRS estimates the harm to the United States in the form of underreported income and unpaid taxes from the defendants’ misconduct could exceed $10 million.

New Jersey tax return preparer Leon Haynes, of Teaneck, New Jersey, was charged with 55 counts of aiding and assisting in the preparation of false tax returns, five counts of mail fraud, one count of aggravated identity theft and two counts of tax evasion. Haynes filed hundreds of false returns and caused a tax loss to the IRS of $1,428,592 based on false claims he submitted relating to his businesses. Haynes faces a maximum penalty of 20 years in prison for mail fraud charges, a maximum penalty of five years in prison for each tax evasion charge, three years in prison for aiding and assisting in the preparation of false return charge and two years in prison for the aggravated identity theft charge.

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