Employee Retention Credit, report who owns your business, unannounced revenue officer visits
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| Issue Number: 2023-10Inside This Issue
1. New phase of Employee Retention Credit work to deal with growing fraud; watch out for aggressive marketingWith the IRS making substantial progress in the ongoing effort related to Employee Retention Credit claims, Commissioner Danny Werfel said the agency has entered a new phase of increasing scrutiny on suspicious submissions while renewing consumer warnings against aggressive marketing. Many businesses legitimately apply for the credit, but aggressive marketing has overshadowed the program. The period of eligibility for the credit for affected businesses is very limited, covering only between March 13, 2020, and December 31, 2021. The IRS recently updated the ERC frequently asked questions (FAQs) to provide general information about eligibility, claiming the credit, scams and more. Also, the IRS reminds anyone who improperly claims the ERC that they must pay it back, possibly with penalties and interest. A business or tax-exempt group could find itself in a much worse cash position if they have to pay back the credit than if they had not claimed the credit in the first place. 2. New requirement for most businesses beginning January 1, 2024Beginning on January 1, 2024, many corporations, limited liability companies, and other entities created or registered to do business in the United States must report information about their beneficial owners—the persons who ultimately own or control the company—to the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN).
Contact FinCEN for more information and answers to any questions. 3. Info to help gig workers stay on top of their taxesThe gig economy - also called sharing economy or access economy - is a popular way for people to earn money by providing on-demand work, goods or services. Some people take up a side hustle on a part-time basis, and for others do it full-time. Check out the IRS's gig economy tax tip for information on:
4. Major IRS policy change ending unannounced RO visitsThe IRS announced a major policy change that ends most unannounced visits to taxpayers by agency revenue officers (ROs) to reduce public confusion and enhance overall safety measures for taxpayers and employees. This change is part of a larger effort to transform IRS operations following passage of the Inflation Reduction Act last year and the creation of the new IRS Strategic Operating Plan in April. Instead of making an unannounced or unscheduled field visit, ROs will send an appointment letter to schedule an initial or follow-up meeting with the taxpayer. Revenue officer unannounced visits will only be done in a few unique circumstances. The rest of the IRS collection process will remain the same and will depend on the facts and circumstances of the case. Information on the IRS collection process is available on Topic No. 201, The Collection Process. 5. IRS launches paperless processing initiativePaper-based processes have long hampered the IRS and frustrated taxpayers. Using resources from the Inflation Reduction Act, the IRS has made significant progress in adopting new technology that automates the scanning of millions of paper returns, and taxpayers are now able to respond to more notices online. In the next phase of its modernization, the IRS is accelerating paperless processing efforts. Plans are to ensure that by filing season 2024, taxpayers will be able to go paperless if they choose to do so, and by filing season 2025, the IRS will achieve paperless by processing digitizing all paper-filed returns when received. The IRS paperless processing initiative will eliminate up to 200 million pieces of paper annually, cut processing times in half and expedite refunds by several weeks. 6. ID thieves bombard taxpayers with fraudulent emails and texts this summerIdentity thieves continue to inundate taxpayers with emails and text messages promising tax refunds or offers to help 'fix' tax problems. The latest email schemes touch on a variety of topics, but many center around promises about a third round of Economic Impact Payments. Like many scams, these emails urge people to click on a link so they can complete their "application." Instead, it takes the taxpayer to a website where identity thieves will try to harvest valuable personal information. IRS news release 2023-131 details other current schemes and scams including the:
Remember, the IRS never initiates contact with taxpayers by email, text or social media regarding a bill or tax refund. 7. Video tax tip for those making extra cash selling goods or providing servicesPeople who sell items or provide a service and get paid by a payment card or through a payment app may get a Form 1099-K reporting these transactions. IRS video tax tip: "Are you making extra cash selling stuff or providing a service?" provides taxpayers tips on how to report this type of income or correct erroneous 1099-Ks. 8. IRS invites public suggestions on ways to improve dispute resolution programsThe IRS invites public input on improvements to certain post-filing alternative dispute resolution (ADR) programs currently offered to taxpayers. The IRS is committed to resolving disputes with taxpayers without a costly legal process whenever possible. Public comments can be sent through August 25, 2023. 9. IRS encourages those with extensions to file soonThe IRS reminds taxpayers with an extension to file as soon as possible to take advantage of special tools available on IRS.gov. Every year millions of taxpayers postpone filing their tax returns by requesting an extension. While taxes may not be the first thing to come to mind in the summertime, it is an ideal time to start tax planning. IRS.gov is the fastest and most convenient way to get tax-related information and help. The online tools are available any time, so taxpayers can use them at their convenience. 10. Vermont flooding victims now eligible for tax reliefFlooding victims anywhere in Vermont now have until November 15, 2023, to file various individual and business tax returns and make tax payments. The tax relief postpones various tax filing and payment deadlines that occurred starting on or after July 7, 2023. As a result, affected individuals and businesses will have until November 15, to file returns and pay any taxes that were originally due between July 7 and November 15. 11. Subscribe to IRS social media and e-news and stay current on tax newsIt's easy to stay up to date on tax information year-round with IRS verified social media accounts and e-news services. Taxpayers can get tips, guidance and the latest tax law news delivered to their social feed or inbox. 12. Other tax newsThe following information may be of interest to individuals and groups in or related to small businesses:
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