Tax Alerts
Tax Briefing(s)

Internal Revenue Service Commissioner Daniel Werfel is looking to build on the successes the agency has experienced with the first year of supplemental funding provided to the agency by the Inflation Reduction Act.

The Financial Crimes Enforcement Network is seeing a "concerning" increase in state and federal payroll tax evasion and workers’ compensation fraud in the U.S. residential and commercial real estate construction industries.

NATIONAL HARBOR, Md.—National Taxpayer Advocate Erin Collins is hoping that collections notices from the Internal Revenue Service will resume in the coming months.

Taxpayers, by the 2024 filing season, will be able to digitally submit all correspondence, non-tax forms, and notice responses electronically to the Internal Revenue Service, the agency announced.

Additionally,"by Filing Season 2025, the IRS is committing to digitally process 100 percent of tax and information returns that are submitted by paper, as well as half of all paper correspondence, non-tax forms, and notice responses,"Department of the Treasury Secretary Janet Yellen said August 2, 2023. "It will also digitalize historical documents that are currently in storage at the IRS."

An IRS Notice provides a transition rule that generally allows taxpayers to claim the Code Sec. 25C energy efficient home improvement credit for home energy audits conducted in 2023 even if the auditor is not certified. The Notice also describes regulations the IRS intends to propose for qualified home energy audits.

The Internal Revenue Service will end, except in very limited circumstances, the practice of making unannounced visits to taxpayers’ homes and businesses."This change is effective immediately,"IRS Commissioner Daniel Werfel said during a July 24, 2023, teleconference with reporters. Werfel said the change is being made in reaction to an increase in scam activity as well as for IRS employee safety."With a growth in scam artists, taxpayers are increasingly uncertain who was knocking on their doors," Werfel said. "For IRS employees, there were fears about their own personal safety on these visits. I also learned that these concerns were shared by our partners as the National Treasury Employees Union."

The IRS has released a revenue ruling providing additional guidance concerning receipt of cryptocurrency. If a cash-method taxpayer stakes cryptocurrency native to a proof-of-stake blockchain and receives additional units of cryptocurrency as rewards when validation occurs, the fair market value of the validation rewards received is included in the taxpayer's gross income in the tax year in which the taxpayer gains dominion and control over the validation rewards. The same is true if a taxpayer stakes cryptocurrency native to a proof-of-stake blockchain through a cryptocurrency exchange and receives additional units of cryptocurrency as rewards as a result of the validation

Problems with the Internal Revenue Service’s handling of the Employee Retention Tax Credit took center stage before a House committee hearing, with tax professionals airing issues they have experienced and ongoing concerns they have.

The IRS announced substantial progress in the ongoing effort related to the dubious Employee Retention Credit (ERCclaims. The IRS successfully cleared the backlog of valid ERCs. The period of eligibility for the credit for affected businesses is very limited, covering only between March 13, 2020, and December. 31, 2021. Under the current law, businesses can typically continue to file claims for the credit until April 15, 2025.

The Internal Revenue Service is looking for ways get its post-filing alternative dispute resolution programs greater exposure and use.

The agency recently issued a public call for comment on a variety of topics related to the use of ADR, including learning why taxpayers choose not to use ADR; issues that keep taxpayers from using ADR that should be changed to allow for inclusion; how best to improve ADR; how best to education about ADR; feedback on when ADR proved particularly useful; and ideas on how to achieve tax certainty or resolution sooner beyond existing ADR programs, including ideas for new programs.

National Taxpayer Advocate Erin Collins is reiterating her call for the Internal Revenue Service to stop automatically assessing penalties related to international information returns.

The additional funding provided to the Internal Revenue Service under the Inflation Reduction Act is already paying dividends when it comes to increased enforcement, agency Commissioner Daniel Werfel said.

Action is needed at the legislative level to address issues the Internal Revenue Service has with disaster relief, National Taxpayer Advocate Erin Collins said.

The American Institute of CPAs has offered the Internal Revenue Service a series of recommendations on how the agency could handle non-fungible tokens.

The IRS Electronic Tax Administration Advisory Committee(ETAAC) in a series of recommendations to the agency and Congress is looking for improvements in agency accountability as well as stressing the agency needs to remain impartial. The committee, in its annual report released June 28, 2023, made 26 recommendations through which it “advises Congress to provide timely tax legislation and consistent multi-year funding while it urges the IRS to prioritize IRS website modernization and search engine optimization,” ETAAC noted in a statement. The full report can be found at the IRS website.

The American Bar Association offered the Internal Revenue Service a series of suggestions in response to a proposed regulation regarding supervisory approval of certain penalties.

The IRS announced transition relief for plan administrators, payors, plan participants, IRA owners, and beneficiaries in connection with the change to the required beginning date for required minimum distributions (RMDs) under Code Sec. 401(a)(9) and pursuant to the SECURE 2.0 Act of 2022 (P.L. 117-328). The transition relief extends the deadline to roll over certain distributions that were mischaracterized as RMDs and allows beneficiaries under the 10-year rule to avoid taking an RMD in 2023. In addition, the IRS announced that final regulations related to RMDs will apply for calendar years beginning no earlier than 2024.

The IRS has announced that taxpayers will not be required to report the new Code Sec. 4501 excise tax on stock repurchases during a covered corporation’s tax year on any returns filed with the IRS, or to make such tax payments, before the time specified in the forthcoming regulations previously announced in Notice 2023-2, I.R.B. 2023-3, 374.