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Weekly IRS Roundup August 5 – August 9, 2024

by , and | Aug 16, 2024 | ,

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of August 5, 2024 – August 9, 2024.

August 5, 2024: The IRS released Internal Revenue Bulletin 2024-32, which includes final regulations on the excise tax for certain sales by manufacturers, producers and importers of designated drugs under Internal Revenue Code § 5000D. Effective August 5, 2024, these regulations offer comprehensive guidance on the quarterly reporting and payment of the excise tax.

August 5, 2024: The IRS reminded educators working at least 900 hours in a school year that they may qualify for the Educator Expense Deduction, which allows them to deduct unreimbursed expenses for classroom supplies, technology and training from their taxes.

August 6, 2024: The IRS alerted taxpayers about the American opportunity tax credit and the lifetime learning credit, which help offset education costs for post-high school coursework. To claim these credits, taxpayers must complete IRS Form 8863 and meet specific eligibility requirements.

August 6, 2024: The IRS reminded tax professionals that they must use multifactor authentication to safeguard clients’ sensitive information in accordance with the Federal Trade Commission’s safeguards rule. This measure, effective as of June 2023, aims to enhance account security and reduce the risk of data breaches.

August 7, 2024: The IRS released statistics on the Inflation Reduction Act of 2022’s clean energy tax credits for tax year 2023, which show that taxpayers claimed significant amounts in residential clean energy and energy-efficient home improvement credits. These credits cover investments in solar electricity, solar water heating, battery storage, heat pumps, efficient air conditioners, insulation, windows and doors.

August 7, 2024: The IRS notified taxpayers that employer-offered educational assistance programs can help employees pay for college expenses, including tuition, books, supplies and student loan payments.

August 8, 2024: The IRS announced it will accelerate the processing of Employee Retention Credit claims while intensifying audits and investigations to prevent improper payments.

August 9, 2024: The IRS released an early draft of the updated IRS Form 1099-DA for brokers to use in 2025 to report digital asset transactions. This draft reflects the final regulations and related guidance for custodial broker reporting and includes transitional relief measures.

August 9, 2024: The IRS extended the deadline to file federal individual and business tax returns and make tax payments for certain individuals and businesses in South Carolina, North Carolina, Florida and Georgia that were affected by Hurricane Debby. The new deadline is February 3, 2025. The extended deadline is available to taxpayers in any area designated by the Federal Emergency Management Agency, including individuals and households that reside or have a business in all counties in South Carolina and select counties in Georgia, Florida and North Carolina.

August 9, 2024: The IRS released its weekly list of written determinations (e.g., Private [...]

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Weekly IRS Roundup July 29 – August 2, 2024

by , and | Aug 8, 2024 | ,

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of July 29, 2024 – August 2, 2024.

July 29, 2024: The IRS released Internal Revenue Bulletin 2024-31, which includes the following:

  • Revenue Procedure 2024-27, which provides new reproduction requirements for substitute forms, including Forms W-2 and W-3, for wages paid during the 2024 calendar year. These guidelines specify how substitute forms must be prepared and used to ensure they meet IRS and Social Security Administration standards.
  • Proposed Regulations, which provide that interest on overpayments under § 6611 of the Internal Revenue Code (Code) that is applied to erroneous employment tax credit refunds will be treated as an underpayment of tax. The regulations are expected to impact businesses, tax-exempt organizations and certain governmental entities that claimed refundable credits under the Families First Coronavirus Response Act; the Coronavirus Aid, Relief, and Economic Security Act; and the American Rescue Plan Act of 2021.
  • Proposed Regulations, which allow the IRS to directly accept tax payments by credit or debit card, eliminating the need for third-party payment processors.

July 29, 2024: The IRS celebrated National Whistleblower Day by recognizing the contributions of whistleblowers in support of tax compliance efforts.

July 29, 2024: The IRS warned taxpayers to stay alert for scammers impersonating the IRS through fraudulent calls, emails, texts, and social media messages and reminded taxpayers that it will never initiate contact via these methods to request personal or financial information.

July 30, 2024: The IRS encouraged the use of Identity Protection PINs and IRS online accounts to safeguard against tax-related identity theft and provide an extra layer of security for taxpayers and tax professionals.

July 30, 2024: The IRS encouraged taxpayers to follow IRS-verified social media accounts and subscribe to e-news services for accurate tax information and updates and to avoid misinformation and scams.

July 31, 2024: The IRS released Revenue Procedure 2024-32, which outlines the procedures for defined benefit plans sponsors subject to funding requirements under Code § 430 to request approval for using plan-specific substitute mortality tables for plan years beginning on or after January 1, 2025.

August 1, 2024: The IRS reminded taxpayers that their privacy is a fundamental right safeguarded by the Taxpayer Bill of Rights and that all IRS actions will adhere to legal standards.

August 2, 2024: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).



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Weekly IRS Roundup July 22 – July 26, 2024

by , and | Jul 31, 2024 | , ,

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of July 22, 2024 – July 26, 2024.

July 22, 2024: The IRS released Internal Revenue Bulletin 2024-30, which includes the following:

  • Treasury Decision 9999, which sets forth final regulations under § 170 and § 706 of the Internal Revenue Code (Code) that disallow deductions for qualified conservation contributions that exceed 2.5 times a partner’s relevant basis in a partnership. The final regulations include similar rules for S corporations and add additional reporting requirements.
  • Notice 2024-59, which provides the applicable percentage under Code § 613A to be used in determining percentage depletion for marginal properties for the 2024 calendar year.
  • Revenue Procedure 2024-29, which sets the 2024 requirements for using IRS forms and preparing acceptable substitutes of the IRS forms to file information returns with the IRS and to furnish information to recipients.

July 22, 2024: The IRS encouraged taxpayers who requested an extension to file their taxes by October 15, 2024, to use IRS Free File and other online resources to help them file early and avoid last-minute rushes.

July 22, 2024: The IRS updated frequently asked questions relating to the credits available for new and previously owned clean vehicles for individuals and businesses to incorporate eligibility rules, income limitations, transfer rules and dealer registration.

July 22, 2024: The IRS extended the deadline to file federal individual and business tax returns and make tax payments for certain individuals and businesses in Texas that were affected by Hurricane Beryl since July 5, 2024. The new deadline is February 3, 2025. The extended deadline is available to taxpayers in any area designated by the Federal Emergency Management Agency, including individuals and households that reside or have a business in Harris County and 66 other Texas counties.

July 23, 2024: The IRS encouraged tax professionals to identify data theft indicators to safeguard their clients and businesses, stressing the need for quick action in response to identity theft incidents and offering guidelines on detecting warning signs.

July 24, 2024: The IRS released Notice 2024-60, outlining the contents and submission procedures for lifecycle analysis reports on carbon capture property placed in service on or after February 18, 2018. These reports must be approved by the IRS and the US Department of Energy before taxpayers could claim the Carbon Oxide Sequestration Credit under Code § 45Q.

July 24, 2024: The IRS encouraged tax professionals to register for the Nationwide Tax Forum in Baltimore and Dallas this August, noting that several locations have already sold out.

July 25, 2024: The IRS reported substantial advancements in taxpayer services and online tools funded by the Inflation Reduction Act, including new features for Individual Online Accounts and a Spanish version of the Business Tax Account tool.

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Weekly IRS Roundup July 8 – July 12, 2024

by , and | Jul 17, 2024 | ,

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of July 8, 2024 – July 12, 2024.

July 8, 2024: The IRS released Internal Revenue Bulletin 2024-28, which includes, among other things:

  • Announcement 2024-28, which revokes the Internal Revenue Code (Code) 501(c)(3) determination for specified organizations and stipulates that contributions made to said organizations by individual donors are no longer deductible under Code § 170(b)(1)(A).

July 9, 2024: The IRS warned tax professionals about new and evolving scams targeting business and taxpayer information where identity thieves pose as new clients, use phishing emails and employ elaborate schemes involving calls and texts.

July 10, 2024: The IRS issued general guidelines for the registration process for the Code § 45Z Clean Fuel Production Credit, as outlined in Notice 2024-29. These guidelines cover the application process and how claim procedures will operate when the clean fuel producer is a disregarded entity.

July 11, 2024: The IRS announced it has collected more than $1 billion in past-due taxes from high-net-worth individuals and will continue to monitor activities involving large corporations and partnerships and aircraft use.

July 11, 2024: The IRS warned car dealers and sellers about evolving phishing and smishing scams involving fraudulent attempts to trick recipients into clicking suspicious links, providing personal information or downloading malware. Dealerships are advised to remain vigilant and avoid unsolicited messages or links in emails and texts.

July 12, 2024: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).



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Weekly IRS Roundup July 1 – July 5, 2024

by , and | Jul 11, 2024 | , ,

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of July 1, 2024 – July 5, 2024.

July 1, 2024: The IRS released Internal Revenue Bulletin 2024-27, which includes the following:

  • Notice 2024-52, which provides the applicable reference price and the credit amount used for determining the Marginal Well Production Credit under 45I of the Internal Revenue Code (Code) for qualified natural gas production from qualified marginal wells for tax years beginning in calendar year 2024.
  • Announcement 2024-27, which revokes the Code § 501(c)(3) determination for specified organizations and stipulates that contributions made to said organizations by individual donors are no longer deductible under Code § 170(b)(1)(A).

July 1, 2024: The IRS reminded homeowners who make energy-efficient improvements to their homes that they may qualify for home energy tax credits, such as the Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit, to offset the costs of making such improvements. Qualifying taxpayers should file Form 5695, Residential Energy Credits, with their tax return.

July 2, 2024: The IRS launched the Protect Your Clients; Protect Yourself campaign to help tax professionals guard against tax-related identity theft. This initiative aims to raise awareness about security threats and provide guidance for maintaining strong security in a series of eight news releases coinciding with the IRS Nationwide Tax Forum, which features webinars to educate tax professionals on security-related topics.

July 2, 2024: The IRS released Revenue Procedure 2024-30, which modifies Revenue Procedure 2024-23 to provide procedures under Code § 446 for obtaining automatic consent to change accounting methods to the Allowance Charge-off Method described in proposed Treasury Regulation § 1.166-2. This method determines when a debt instrument held by a regulated financial company is conclusively presumed to be worthless for purposes of the bad debt rules under Code § 166.

July 3, 2024: The IRS reminded individuals and businesses in parts of Alaska, Maine and Rhode Island affected by disaster declarations that their 2023 federal income tax returns and tax payments are due on July 15, 2024.

July 3, 2024: The IRS warned about a new scam involving tax return preparers misrepresenting the rules for claiming clean energy credits that taxpayers cannot ultimately benefit from and leading to potential compliance actions and repayment obligations.

July 5, 2024: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).



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Weekly IRS Roundup June 17 – June 21, 2024

by , and | Jun 27, 2024 | ,

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of June 17, 2024 – June 21, 2024.

June 17, 2024: The IRS released Internal Revenue Bulletin 2024-25, which includes the following:

  • Revenue Ruling 2024-12, which provides the June 2024 applicable federal rates.
  • Treasury Decision 9993, which provides final regulations on the election under Internal Revenue Code (Code) 6418 to transfer eligible energy credits, effective July 1, 2024.
  • Treasury Decision 9997, which reduces the cost of applying for or renewing a preparer tax identification number from $21 to $11.
  • Proposed Regulations, which would remove the “associated property rule” and related rules from the regulations on interest capitalization requirements for improvements to “designated property” under Code 263A(f) and clarify the definition of “improvement” in the existing regulations.

June 17, 2024: The IRS announced the establishment of a new dedicated group within the Office of Chief Counsel that will focus on developing guidance for partnerships, specifically with respect to the use of “basis shifting” transactions by related-party partnerships.

June 17, 2024: The IRS released guidance intended to target certain transactions that use the basis adjustment provisions in Code §§ 734, 743, 754 and 755 to shift basis to depreciable property through partnership transactions. This guidance includes:

  • Revenue Ruling 2024-14, which identifies three types of basis shifting transactions involving related parties that, according to the IRS, should be disallowed for lack of economic substance.
  • Notice 2024-54, which announces the IRS’s intent to propose regulations under Code §§ 732, 734, 743 and 755 that, if finalized, are intended to take effect on or after June 17, 2024. The regulations would identify several types of “covered transactions” in which basis step-ups resulting from partnership transactions would be disallowed. Unlike Revenue Ruling 2024-14, these regulations would not depend on a covered transaction lacking economic substance.
  • Proposed Regulation § 1.6011-18, which would identify certain partnership basis shifting transactions as “transactions of interest,” which generally must be disclosed to the IRS.

June 17, 2024: The IRS provided general tips for taxpayers benefiting from educational assistance programs under Code § 127 with respect to the treatment of certain educational expenses, qualified education loans and working condition fringe benefits.

June 17, 2024: The IRS released Notice 2024-53, which provides the 24-month average corporate bond segment rates for June 2024, yield curve and segment rates for single-employer plans and 30-year Treasury securities interest rates.

June 18, 2024: The IRS announced the release of final regulations for taxpayers who satisfy certain prevailing wage and apprenticeship (PWA) requirements regarding the construction, alteration or repair of certain clean energy facilities or properties, projects or equipment. Taxpayers who satisfy these PWA requirements are eligible for increased credit or deduction amounts for certain clean energy [...]

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Weekly IRS Roundup June 10 – June 14, 2024

by , and | Jun 25, 2024 | , ,

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of June 10, 2024 – June 14, 2024.

June 10, 2024: The IRS released Internal Revenue Bulletin 2024-24, which includes the following:

  • Revenue Ruling 2024-11, which provides the interest rates under 6621 of the Internal Revenue Code (Code) for tax underpayments and overpayments for the calendar quarter beginning July 1, 2024. The underpayment and overpayment interest rates will remain the same for the third calendar quarter of 2024.
  • Notice 2024-36, which provides the timeline for the second 2024 allocation round of the Qualifying Advanced Energy Project Credit program under Code 48C(e) and supersedes Appendices A, B and C of Notice 2023-44.
  • Notice 2024-39, which provides the inflation adjustment factor for the carbon oxide sequestration credit under Code § 45Q for taxpayers who make an election under § 45Q(b)(3) for calendar year 2024.
  • Notice 2024-40, which updates the corporate bond weighted average interest rate for plan years beginning May 2024, the 24-month average segment rates, the funding transitional segment rates applicable for May 2024 and the minimum present value transitional rates for April 2024.
  • Notice 2024-41, which provides a new elective safe harbor for taxpayers seeking to qualify their energy projects for the 10% Domestic Content Bonus Credit. The notice also modifies Notice 2023-38 by expanding the list of Applicable Projects to include hydropower and pumped hydropower storage facilities, among other changes.
  • Proposed Regulations, which provide guidance on information reporting requirements for transactions with foreign trusts and the receipt of large foreign gifts under Code § 643(i), 679, 6039F, 6048 and 6677 (the foreign trust and gift provisions). The proposed regulations would also provide that certain loans from a foreign trust and the use of trust property are reportable events.
  • Announcement 2024-22 and Announcement 2024-23, which revoke the Code § 501(c)(3) determination for specified organizations and stipulate that contributions made to said organizations by individual donors are no longer deductible under Code § 170(b)(1)(A).
  • Announcement 2024-24, which notifies taxpayers of the applicable Reference Standard 90.1 required under Code § 179D(c)(2) as part of the definition of energy efficient commercial building property, effective May 17, 2024.

June 10, 2024: The IRS highlighted options for taxpayers who missed the April filing deadline to file their 2023 federal income tax returns and reminded those taxpayers to pay the amounts owed as soon as possible to limit penalties and interest charges.

June 10, 2024: The IRS reminded taxpayers that the second quarter estimated tax payment deadline is June 17, 2024.

June 10, 2024: The IRS advised that most individual and business taxpayers can use the Online Payment Agreement service to set up a payment plan, including an installment agreement, to pay off an [...]

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Supreme Court Rules Against Taxpayers in IRC Section 965 Case

by , and | Jun 21, 2024 | ,

On June 20, 2024, the Supreme Court of the United States issued a 7-2 opinion in Moore v. United States, 602 U.S. __ (2024), ruling in favor of the Internal Revenue Service (IRS).

Moore concerned whether US Congress and the IRS could tax US shareholders of controlled foreign corporations (CFCs) on those corporations’ earnings even though the earnings were not distributed to the shareholders. The case specifically focused on the so-called “mandatory repatriation tax” under Internal Revenue Code (IRC) Section 965, a one-time tax on certain undistributed income of a CFC that is payable not by the CFC but by its US shareholders. Some viewed the case as hinging upon whether Congress has the power to tax economic gains that have not been “realized.” (i.e., In the case of a house whose value has appreciated from $500,000 to $600,000, the increased value is “realized” only when the house is sold and the additional $100,000 reaches the taxpayer’s coffers.)

However, Justice Brett Kavanaugh, joined by Chief Justice John Roberts and Justices Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson, rejected that position on the ground that the mandatory repatriation tax “does tax realized income,” albeit income realized by a CFC. On this basis, they reasoned that the question at issue was whether Congress has the power to attribute realized income of a CFC to (and tax) US shareholders on their respective shares of the undistributed income. This group of justices ultimately decided Congress does have the power.

The majority went out of its way to avoid expressing any opinion as to whether Congress can tax unrealized appreciation, with Justice Amy Coney Barrett’s concurrence and Justice Clarence Thomas’s dissent asserting that it cannot. Perhaps the Court was signaling a distaste for the Billionaire Minimum Income Tax proposed by US President Joe Biden, which would impose a minimum 20% tax on the total income of the wealthiest American households, including both realized and unrealized amounts, among other Democratic proposals.

Practice Point: We previously noted that certain taxpayers should consider filing protective refund claims contingent on the possibility that Moore would be decided in favor of the taxpayers. In light of the case’s outcome, however, those protective claims are now moot.



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Weekly IRS Roundup June 3 – June 7, 2024

by , and | Jun 13, 2024 | , ,

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of June 3, 2024 – June 7, 2024.

June 3, 2024: The IRS released Internal Revenue Bulletin 2024-23, which includes Revenue Procedure 2024-23. The revenue procedure provides an updated list of tax accounting method changes for which IRS consent will be automatically granted pursuant to Form 3115, Application for Change in Accounting Method.

June 5, 2024: The IRS announced it has accepted more than one million taxpayer submissions via the Document Upload Tool since it launched in 2021. The Document Upload Tool enables taxpayers and tax professionals to securely upload required tax documents online at IRS.gov.

June 5, 2024: The IRS outlined factors to help taxpayers distinguish hobbies from true business activities and reminded them that payments received for goods and services through payment apps, such as Cash App and Venmo, are taxable income.

June 5, 2024: The IRS issued Notice 2024-46, which provides that payments made by Norfolk Southern to individuals affected by the 2023 train derailment incident in East Palestine, Ohio, are considered “qualified disaster relief payments,” which should be excluded from gross income if they are not otherwise covered by insurance.

June 6, 2024: The IRS announced that eligible contractors who build new energy efficient homes or substantially reconstruct existing homes into qualified energy efficient homes may be eligible for a tax credit of up to $5,000 per home. The credit amount depends on the type of home, the home’s energy efficiency and the date the home was purchased or leased.

June 7, 2024: The IRS issued Notice 2024-48, which provides the requirements for qualifying under the Statistical Area Category or the Coal Closure Category in Notice 2023-29 to determine taxpayers’ eligibility for the Energy Community Bonus Credit amounts or rates under Internal Revenue Code (Code) §§ 45, 45Y, 48 and 48E.

June 7, 2024: The IRS issued Revenue Procedure 2024-26, which provides additional procedures for qualified manufacturers of new clean vehicles to submit records demonstrating their compliance with certain requirements under Code §§ 30D(d) and (e) to be eligible for the clean vehicle tax credit.

June 7, 2024: The IRS extended the deadline to file federal individual and business tax returns and make tax payments for certain individuals and businesses in Kentucky that were affected by severe weather that started April 2, 2024. The new deadline is November 1, 2024. The extended deadline is available to taxpayers in any area designated by the Federal Emergency Management Agency (FEMA), including individuals and households that reside or have a business in the following counties: Boyd, Carter, Fayette, Greenup, Henry, Jefferson, Jessamine, Mason, Oldham, Union and Whitley.

June 7, 2024: The IRS extended the deadline to file federal individual and business tax returns and make [...]

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