On Jan. 1, new rules targeting the origin of electric vehicle battery materials from countries considered hostile to the U.S. went into effect and limited the number of EVs eligible to receive U.S. tax credits. As part of the Inflation Reduction Act, the guidelines issued by the Treasury in December detail new battery sourcing that bars EVs from qualifying for the full tax break if critical minerals or other battery components were made by a “Foreign Entity of Concern.” The law defines an FEOC as any company owned by, controlled by, or subject to the jurisdiction of North Korea, China, Russia ..read more

On Wednesday, the Internal Revenue Service announced it will increase the amount individuals can contribute to their 401(k) plans in 2024. In the upcoming year, the individual contribution level will rise to $23,000, from $22,500 in 2023. Furthermore, the IRS released technical guidance regarding all of the cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2024. Increase in contribution limits The contribution limit for employees in 2024 who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift ..read more

DOJ to pursue fraud from aggressive marketing while IRS will add safeguards to prevent future abuse and protect businesses from predatory tactics On Sept. 14, the Internal Revenue Service announced an immediate moratorium through at least the end of the year on processing new Employee Retention Credit claims, following reports of a flood of improper claims for the pandemic-era relief program. According to their website, IRS Commissioner Danny Werfel ordered the immediate moratorium, which will run through at least Dec. 31, following growing concerns inside the agency, tax professionals an ..read more

A new year ushers in many changes for the Internal Revenue Service, but one massive problem will not go away – backlogs. While the IRS still must deal with a backlog of mail and a backed-up phone system that leaves taxpayers and practitioners on hold and frequently drops the call, changes are in the works. Among them are a potential new commissioner (Danny Werfel was nominated for the role in November 2022) and an increased budget that will give the IRS billions of dollars to spend, although it has less than two months left to develop a spending plan. New IRS Commissioner On Nov. 22, President ..read more

On Dec. 29, the Internal Revenue Service issued the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Since Jan. 1, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: $0.655 cents per mile driven for business use, up $0.03 from the midyear increase that set the rate for the second half of 2022 The portion of the business standard mileage rate treated as depreciation for the purpose of calculating reductions to the basis will be $0.28 cents per m ..read more

 $1.2 billion in penalties will be refunded to 1.6 million taxpayers In late August, the Internal Revenue Service announced on its website that it had issued Notice 2022-36, which will provide penalty relief to most taxpayers who filed certain 2019 or 2020 tax returns late. The IRS stated it will also help the estimated 1.6 million taxpayers who already paid these penalties. These taxpayers will automatically receive more than $1.2 billion in refunds or credits, which will be completed by the end of September. The relief applies to the failure to file penalty, which is typically assessed ..read more

In late May, the Internal Revenue Service enhanced the Where's My Refund? tool on their website. This new feature allows taxpayers to check the status of their refunds for current tax year and two previous years. In order to check their refund status, taxpayers will need to provide their Social Security number or ITIN, filing status and expected refund amount from the original filed tax return for the tax year they are checking. Previously, Where's My Refund? only displayed the status of the most recently filed tax return within the past two tax years. Information available to those calling ..read more

Issue highlights another reason to file and make remittance payments electronically The Internal Revenue Service admitted it destroyed roughly 30 million unprocessed informational returns from the 2020 tax year. An audit by the Treasury Inspector General for Tax Administration (TIGTA) found the IRS intentionally destroyed these documents, most related to the 1099 series, in March 2021. The documents were part of a backlog of tax returns, which the IRS has struggled to process since the onset of the COVID-19 pandemic. “The continued inability to process backlogs of paper-filed tax returns contr ..read more

The IRS announced on its website that it has suspended the mailing of automated collection notices, including balance due notices and unfiled tax return notices normally issued when a taxpayer owes additional tax, and the IRS has no record of a taxpayer filing a tax return. With several million original and amended 2020 returns filed by individuals and businesses that have not been processed due to pandemic-related challenges, the IRS hopes to avoid confusion for taxpayers and tax professionals this tax season. The American Institute of Certified Public Accountants, along with a large and dive ..read more

CPAs and taxpayers urged to contact elected officials and push for passage of H.R. 5155 Based on multiple media reports, the U.S. Treasury and IRS are preparing for the worst this filing season. According to a Jan. 10 Washington Post article, the Treasury warned of enormous challenges this tax filing season that will likely delay refunds. Treasury Department officials told reporters they predict a “frustrating season” for taxpayers and tax preparers due to delays caused by the pandemic, years of budget cuts to the IRS, and federal stimulus measures that have added to the tax agency’s workload ..read more