Welcome to News Explorer Today! In this article, we will provide you with critical updates from the IRS that may affect your tax filing. Stay informed about the latest news and changes in tax regulations to ensure a smooth tax season.
Latest Updates
IRS Announces New Voluntary Disclosure Program for Paying Back Erroneous ERC Claims
The IRS has launched a new Voluntary Disclosure Program to assist businesses that want to repay the money they received after filing Employee Retention Credit (ERC) claims in error. This program aims to stop aggressive marketing practices surrounding ERC that misled employers into filing inaccurate claims. Interested employers must apply to the ERC Voluntary Disclosure Program by March 22, 2024. If accepted, they will only need to repay 80% of the credit they received. The IRS also encourages employers with pending ERC claims to consider a separate withdrawal program that allows them to remove a pending claim with no interest or penalty.
IRS Sends Letters Disallowing Improper ERC Claims
As part of its efforts to combat dubious ERC claims, the IRS is sending more than 20,000 letters to taxpayers, notifying them of disallowed ERC claims. These letters target entities that either didn’t exist or didn’t have paid employees during the period of eligibility. The IRS has also introduced a special withdrawal program for those with pending claims who realize they may have filed inaccurate tax returns.
IRS Provides Penalty Relief on Unpaid Tax Balances
To assist individuals, businesses, and tax-exempt organizations with unpaid tax balances, the IRS has announced penalty relief for approximately 4.7 million taxpayers who did not receive automated collection reminder notices during the pandemic. This relief amounts to approximately $1 billion, and it primarily benefits those with an annual income under $400,000. Eligible taxpayers do not need to take any action to receive this automatic penalty relief.
IRS Announces Delay in Form 1099-K Reporting Threshold for Third-Party Platform Payments
After considering feedback from taxpayers, tax professionals, and payment processors, the IRS has announced a delay in implementing the new $600 Form 1099-K reporting threshold for third-party settlement organizations in the calendar year 2023. Reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023. This delay aims to reduce taxpayer confusion and ensure a smoother implementation process.
IRS Ends Unannounced Revenue Officer Visits to Taxpayers
As a major policy change, the IRS has decided to end unannounced visits to taxpayers by agency revenue officers. This change aims to reduce public confusion and increase overall safety. The decades-long practice of unscheduled visits by IRS revenue officers will now only occur in a few unique circumstances.
Clean Vehicle and Energy Credits
The IRS has made several changes to clean vehicle and energy credits. The Inflation Reduction Act of 2022 (IRA) added an expanded clean vehicle credit for qualified plug-in electric drive motor vehicles, including fuel cell vehicles. It also introduced a credit for previously owned and commercial clean vehicles. For more information on these credits and frequently asked questions, please visit our Clean Vehicle and Energy Credits page.
2022 and 2023 Tax Filing
Missed the Filing Deadline?
If you missed the April 18 filing deadline, the IRS urges you to file your 2022 tax return as soon as possible. Filing quickly will help you limit penalties and interest. If you’re struggling to pay your tax bill, the IRS offers various options to assist taxpayers in need.
Disaster Tax Relief
Taxpayers affected by various disasters have been granted extended filing deadlines. The IRS provides relief to individuals and businesses impacted by events such as terrorist attacks, severe storms, flooding, water supply issues, wildfires, and hurricanes. For specific details on eligible localities and other information, please refer to the IRS’s Tax Relief in Disaster Situations page.
State Payments
The IRS has clarified the federal tax status for special payments made by 21 states in 2022. After reviewing the situation, the IRS determined that taxpayers in many states will not need to report these payments on their 2022 tax returns.
Key Tax Credits for Families
Families and individuals who qualify can still claim the 2021 Recovery Rebate Credit, Child Tax Credit, Earned Income Tax Credit, and other tax credits even if they don’t owe any taxes. The IRS has sent letters to 9 million individuals and families who appear to qualify for these key 2021 tax benefits but haven’t claimed them yet.
Tax Credits for Puerto Rico Families
Families in Puerto Rico who don’t owe taxes to the IRS can file their 2021 tax returns until April 15, 2025, and claim the Child Tax Credit of $3,600 per child without penalty.
Changes to Tax Credits for 2022
For the 2022 tax year, the Child Tax Credit, Earned Income Tax Credit, and Child and Dependent Care Credit amounts have reverted to pre-COVID levels. This may result in smaller refunds compared to previous years.
Expansion of Premium Tax Credit
Under the temporarily expanded eligibility for the Premium Tax Credit, you may qualify for tax year 2022. To determine eligibility, you must meet both income requirements and other criteria.
Stimulus Payments and Charitable Deductions
Unlike 2020 and 2021, no new stimulus payments were issued in 2022. Additionally, taxpayers who don’t itemize and take the standard deduction cannot deduct their charitable contributions on their 2022 tax returns.
Taxation of Improperly Forgiven PPP Loans
If you received forgiveness of a Paycheck Protection Program (PPP) loan based on misrepresentations or omissions, you must include the forgiven loan proceeds as income on your tax return. The IRS has issued guidance confirming that forgiveness cannot be excluded from income if it was obtained through misrepresentations or omissions.
FAQs
Q: How can I participate in the Voluntary Disclosure Program for paying back erroneous ERC claims?
A: To apply for the Voluntary Disclosure Program, interested employers must submit their application by March 22, 2024. Visit the IRS website for detailed instructions and eligibility requirements.
Q: Where can I find information on clean vehicle and energy credits?
A: For more information on clean vehicle and energy credits, including frequently asked questions, visit our Clean Vehicle and Energy Credits page.
Q: Are there any options available for taxpayers who missed the tax filing deadline?
A: Yes, if you missed the tax filing deadline, it’s important to file your tax return as soon as possible to limit penalties and interest. Additionally, the IRS offers various options to assist struggling taxpayers.
Conclusion
Stay updated with the latest tax news and updates from the IRS. These updates provide valuable information that may affect your tax filing process. Remember to check back regularly for more news and changes in tax regulations. For more articles like this, visit News Explorer Today.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial or legal advice. Always consult with a professional tax advisor regarding your specific situation.