In this Issue:

• Voluntary Disclosure Program Reopens to Help Businesses with Incorrect ERC Claims
• New IRS, Treasury Guidance Focuses on “Basis Shifting” Transactions Used by Partnerships
• Mediation Can Help Taxpayers Settle Tax Issues
• Retirement Plan Distributions: IRS Provides Guidance on Certain Exceptions from 10% Additional Tax for Emergency Personal or Family Expenses and for Survivors of Domestic Abuse 
• National Taxpayer Advocate Issues Mid-Year Report to Congress; Highlights Filing Season Challenges and Focuses on Strategic Priorities 
• Electronic Tax Administration Advisory Committee 2024 Annual Report Includes Recommendations to Congress and IRS 
• IRS Apologizes for Personal Information Leak
• Treasury, IRS Issue Final Regulations Requiring Broker Reporting of Sales and Exchanges of Digital Assets that are Subject to Tax under Current Law, Additional Guidance to Provide Penalty Relief, Address Information Reporting and Other Technical Issues     
• Treasury and IRS Announce Final Regulations on How to Report and Pay the Corporate Stock Repurchase Excise Tax 
• New Sign-in Options for FATCA Registration System Users are Coming Soon
• Misleading Social Media Advice Leads to False Claims for Fuel Tax Credit, Sick and Family Leave Credit, Household Employment Taxes; FAQs Help Address Common Questions, Next Steps for Those receiving IRS Letters
• Changes to the SECURE 2.0 Act Affect How Businesses Complete Forms W-2, Provides IRA Information
• IRS Reminds Car Dealers and Sellers to be Aware of Phishing Scams 
• Social Security Announces Upcoming Changes to Accessing Online Services Agency Transitioning Authentication Services to Login.gov
• IRS Continues to Expand Taxpayer Services and Online Tools, Key Milestones Reached with Inflation Reduction Act Funding
• Applicable Federal Rates for August 2024, Rev. Rul. 2024-15 and September 2024, Rev. Rul 2024-

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We have some very interesting webinars coming up, check out what’s coming soon.

Ethics: Part 1	1	10/8/2024	1:00pm – 2:00pm	Ethics	Kristy Maitre
Ethics: Part 2	1	10/8/2024	2:30 – 3:30pm	Ethics	Kristy Maitre
Gift Tax Reporting on Form 709	1	10/9/2024	2:00 – 3:00pm	Fed Tax Law	Randy Adams
The Fifth Amendment & Offshore Audits	2	10/16/24	12:00pm – 2:00pm	Fed Tax Law	Mike DeBlis
Employee vs Independent Contractor	1	10/17/24	2:00 – 3:00pm	Fed Tax Law	Larry Johnson
Tax Implications of the Gig Economy	1	10/23/24	2:00 – 3:00pm	Fed Tax Law	Dr. Laura Dolley
Hobby Loss	1	10/24/24	2:00 – 3:00pm	Fed Tax Law	Larry Johnson
Overview of Form 1040	2	10/30/24	2:00 – 4:00pm	Fed Tax Law	Dr. Laura Dolley
Trusts and Estates – Part 1	2	10/31/2024	1:00pm – 3:00pm	Fed Tax Law	Michael Miranda
Trusts and Estates – Part 2	2	11/6/24	1:00pm – 3:00pm	Fed Tax Law	Michael Miranda
Understanding Financial Statements for Schedule C’s, S Corps & Partnerships	2	11/7/2024	1:00pm – 3:00pm	Fed Tax Law	Deltrease Hart-Anderson
Ethics: Part 3	1	11/12/2024	1:00pm – 2:00pm	Ethics	Kristy Maitre
Ethics: Part 4	1	11/12/2024	2:30 – 3:30pm	Ethics	Kristy Maitre
Various Form 1099s	1	11/13/2024	2:00 – 3:00pm	Fed Tax Law	Dr. Laura Dolley
Quarterly Tax Update 2024: Part 3	1	11/14/24	2:00 – 3:00pm	Fed Tax Update	Kristy Maitre
S Corp Basis (Form 7203) and Partnership Basis	1	11/19/24	2:00 – 3:00pm	Fed Tax Law	AJ Reynolds
Demystifying the FBAR	2	11/20/24	12:00pm – 2:00pm	Fed Tax Law	Mike DeBlis
SECURE 1.0 and 2.0 Acts	2	11/21/24	1:00pm – 3:00pm	Fed Tax Update	Michael Miranda
Penalty Abatement	1	12/17/2024	1:00pm – 2:00pm	Fed Tax Law	AJ Reynolds
Ethics: Part 1	1	12/18/2024	1:00pm – 2:00pm	Ethics	Kristy Maitre
Ethics: Part 2	1	12/18/2024	2:30 – 3:30pm	Ethics	Kristy Maitre

Pricing Info:

$35/hour or Register for the Unlimited Package $249
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Issue 1:  Voluntary Disclosure Program Reopens to Help Businesses with Incorrect ERC Claims

The IRS reopened the Voluntary Disclosure Program for the Employee Retention Credit through November 22 to help businesses correct improper payments at a 15% discount and avoid future audits, penalties and interest. The IRS urges businesses that received Employee Retention Credit payments to recheck eligibility requirements and consider the reopened program.

The IRS also announced plans to mail up to 30,000 letters to reverse or recapture potentially more than $1 billion in improper ERC claims.

Businesses with pending, unpaid ERC claims should consider the ERC Claim Withdrawal Program that allows them to remove a pending ERC claim – one that the IRS has not processed yet.

Issue 2: New IRS, Treasury Guidance Focuses on “Basis Shifting” Transactions Used by Partnerships

Treasury and the Internal Revenue Service issued guidance on the inappropriate use of partnership rules to inflate the basis of the underlying assets without causing any meaningful change to the economics of their business.

Generally, these transactions may employ several steps over a period of years and use sophisticated tax technology to ensure that little or no tax is paid while large amounts of tax basis is “stripped” from certain assets and shifted to other assets to generate tax benefits. In essence, these deals allow increased depreciation deductions or reduced gain on the sale of an asset with little or no substantive economic consequence.

These basis shifting transactions targeted in the new guidance generally fall into three groups:

Transfer of partnership interest to related party: In this transaction, a partner with a low share of the partnership’s “inside” tax basis and a high “outside” tax basis transfers the interest in a tax-free transaction to a related person or to a person who is related to other partners in the partnership. This related-party transfer generates a tax-free basis increase to the transferee partner’s share of “inside” basis.

Distribution of property to a related party: In this transaction, a partnership with related partners distributes a high-basis asset to one of the related partners that has a low outside basis. After this, the distributee partner reduces the basis of the distributed asset, and the partnership increases the basis of its remaining assets. The related partners can arrange this transaction so that the reduced tax basis of the distributed asset will not adversely impact the related partners, while the basis increase to the partnership’s retained assets can produce tax savings for the related parties.

Liquidation of related partnership or partner: In this transaction, a partnership with related partners liquidates and distributes (1) a low-basis asset that is subject to accelerated cost recovery or for which the parties intend to sell to a partner with a high outside basis and (2) a high-basis property that is subject to longer cost recovery (or no cost recovery at all) or for which the parties intend to hold to a partner with a low outside basis. Under the partnership liquidation rules, the first related partner increases the basis of the property with a shorter life, or which is held for sale while the second related partner decreases the basis of the long-lived or non-depreciable property, with the result that the related parties generate or accelerate tax benefits.

To help address these areas, Notice 2024-54 announces two sets of upcoming regulations:

• The first set of regulations would require partnerships to treat basis adjustments arising from covered transactions in a way that would restrict them from deriving inappropriate tax benefits from the basis adjustments.
• The second set of regulations would provide rules to ensure clear reflection of the taxable income and tax liability of a consolidated group of corporations when members of the group own interests in partnerships. The notice further announces that that the covered transactions governed by these regulations would involve basis adjustments under §§ 732, 734(b) and/or 743(b).

Issue 3: Mediation Can Help Taxpayers Settle Tax Issues

Mediation – also known as Alternative Dispute Resolution – can help taxpayers resolve tax issues early and efficiently.

The process provides taxpayers with a faster, more collaborative and cost-effective approach to case resolution. The traditional appeal process is still available for taxpayers who choose it.

Mediation might be right for a taxpayer if:

• The taxpayer wants to resolve the dispute at the earliest possible stage of their audit.
  • The taxpayer does not have many disputed issues.
  • The taxpayer gave the IRS information to support their position.
  • The IRS is still considering the taxpayer’s case and issues remain unresolved.

Mediation is:

• Voluntary for both parties.
  • Nonbinding, meaning each party retains 100% control over whether to settle the case. No one can force either party to do something they do not agree to do.
  • Effective when both parties have a desire to resolve the disputed issue.
  • Appropriate when all issues are fully resolved except the issue for which mediation is requested.
  • A chance to avoid a lengthy appeal process or costly litigation.

Mediation is not:

• Required by either party.
  • A replacement for the audit or collection process.
  • A process in which the parties in the dispute offer arguments directly to the mediator hoping to “win.”
  • Effective if either party believes the only way the dispute will get resolved is if the other party concedes or gives up on its position.
  • A time to present new information or raise new issues.
  • An opportunity to try and get a more favorable outcome or delay the examination or collection process.

Issue 4: Retirement Plan Distributions: IRS Provides Guidance on Certain Exceptions from 10% Additional Tax for Emergency Personal or Family Expenses and for Survivors of Domestic Abuse 

The IRS has issued Notice 2024-55, which provides guidance on exceptions to the additional tax when taking early permissible retirement plan distributions for emergency personal expenses and for victims of domestic abuse.

This was added by the SECURE 2.0 Act of 2022, and the provisions became effective on January 1, 2024.

Emergency personal expense distributions

The notice provides that a taxpayer is permitted to receive a distribution from an applicable eligible retirement plan to meet unforeseeable or immediate financial needs relating to necessary personal or family emergency expenses. The notice:

• defines emergency personal expense distributions, including what is an unforeseeable or immediate financial need;
• provides that qualified defined contribution plans (including § 401(k) plans), § 403(a) annuity plans, § 403(b) plans, governmental § 457(b) plans or IRAs are eligible to permit emergency personal expense distributions;
• describes the limitations (both dollar amount and frequency) on receiving emergency personal expense distributions; and
• provides that individuals receiving emergency personal expense distributions are permitted to repay these distributions to certain plans. 

Distributions to victims of domestic abuse

The notice also provides that a taxpayer is permitted to receive a distribution from an applicable eligible retirement plan if made during the one-year period beginning on the date on which the individual is a victim of domestic abuse by a spouse or domestic partner. The notice:

• defines domestic abuse victim distributions, including the definition of domestic abuse;
• provides that IRAs and certain retirement plans that are not subject to the spousal consent requirements under §§ 401(a)(11) and 417 are eligible to permit domestic abuse victim distributions;
• describes the dollar limitation (indexed for inflation) on receiving domestic abuse victim distributions; and
• provides that domestic abuse individuals are permitted to repay domestic abuse victim distributions to certain plans.

The notice also provides guidance to applicable eligible retirement plans on the plan requirements relating to emergency personal expense distributions and domestic abuse victim distributions, including that it is optional for a plan to permit these types of distributions.

Taxpayers should know that these distributions are includible in gross income but are not subject to the 10% additional tax. Individuals report early distributions that are not subject to the 10% additional tax on line 2 of Form  5329, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts.

Issue 5: National Taxpayer Advocate Issues Mid-Year Report to Congress; Highlights Filing Season Challenges and Focuses on Strategic Priorities

National Taxpayer Advocate Erin M. Collins released her statutorily mandated mid-year report to Congress. The report says the tax-return filing season generally ran smoothly this year, but it identifies delays in issuing refunds to identity theft victims, misleading telephone measures that lead to poor resource allocation decisions, and delays in processing Employee Retention Credit claims as key taxpayer challenges. The report also emphasizes the importance of technology upgrades as the IRS seeks to modernize its operations in the coming years.

Misleading Telephone Measures Lead to Poor Resource Allocation Decisions

Treasury and the IRS have established the “Accounts Management (AM) Customer Service Representative Level of Service (LOS)” as the agency’s principal and most widely cited measure of taxpayer service. For the past two filing seasons, they set a goal of achieving an LOS of at least 85%, and they succeeded. This year, the IRS achieved an LOS of 88%.

The report praised the IRS for improved telephone service but criticized its reliance on the LOS measure. Among the weaknesses of the LOS measure:

The 88% LOS leaves many observers with the impression that IRS employees answered 88% of taxpayer calls. In fact, IRS employees answered only 31% of taxpayer calls.

During the 2024 filing season, the IRS routed about 10.3 million calls to AM employees, and they answered about 9.0 million, producing an LOS of 88%.  But for context, the IRS received about 39.9 million calls.  Therefore, the 10.3 million calls included in the AM LOS calculation represented just over 25% of the calls the IRS received.  The other 75 % consisted of calls routed to non-AM telephone lines, calls in which the taxpayer disconnected before being placed in a calling queue, and calls routed for automated responses.

The IRS classifies many of its telephone lines as “Accounts Management” (AM) lines, but it excludes many of its telephone lines from the AM calculation. In contrast to the LOS of 88% on the AM lines, the LOS on non-AM lines was 36% during the filing season.

Figure 1, IRS Telephone Results for the 2024 Filing Season

Telephone lines	Calls received	Number of calls answered by an IRS e	Percentage of calls answered by an IRS employee	Level of service	Time on hold
All calls	40 mil	12.4 mil	31%	63%	8 min
Accounts Management	28 mil	9.0 mil	32%	88%	3 min
Non-Accounts Management	12 mil	3.4 mil	29%	36%	21 min

Callers to non-AM telephone lines who received substantially lower levels of service include:

• 3.7 million taxpayers who called the Installment Agreement/Balance Due line to make payment arrangements or otherwise resolve their tax debts (42% of calls were answered with a 23-minute wait time);

• 3.0 million taxpayers who called the Taxpayer Protection Program telephone line because IRS filters had suspended the processing of their returns on suspicion of identity theft, and they needed to authenticate their identities to receive their refunds (16% of calls were answered with a 20-minute wait time); and

• 2.1 million taxpayers who called the IRS’s Automated Collection System telephone line after receiving a collection notice and who may have needed urgent help getting a levy released to alleviate an economic hardship (19% of calls were answered with a 10-minute wait time).

Figure 2 shows key metrics for the 10 most frequently called telephone lines during the 2024 filing season:

Figure 2, Metrics for the 10 Most Frequently Called Telephone Lines for the 2024 Filing Season

Telephone line	Calls received	Number of calls answered by an IRS employee	Percentage of calls answered by an IRS employee	Level of service	Time on hold
Refund Hotline	8.3 mil	80,000	1%	77%	6 min
Individual Income Tax Services	6.9 mil	2,100,000	30%	87%	4 min
Installment Agreement / Balance Due	3.7 mil	1,600,000	42%	42%	23 min
Taxpayer Protection Program	3.0 mil	486,000	16%	17%	20 min
Taxpayer Assistance Center Appointments	2.4 mil	1,300,000	52%	86%	4 min
Automated Collection System	2.1 mil	408,000	19%	33%	10 min
Business and Specialty Tax Services	2.0 mil	1,200,000	59%	90%	4 min
Wage and Investment (W&I) Identity Theft	1.4 mil	598,000	43%	78%	4 min
Practitioner Priority Service	1.1 mil	973,000	85%	95%	2 min
W&I Individual Master File Customer Response	1.0 mil	329,000	31%	85%	4 min

In addition to answering telephone calls, AM employees process identity theft victims’ assistance cases, taxpayer correspondence, and amended tax returns. To achieve an AM LOS of 85%, the IRS overstaffs AM telephone lines, leading to unproductive employee time and neglect of other priority work.

To achieve its 85% LOS goal, the IRS must staff its telephone lines so there are enough employees to handle peak call periods. But that means that during quiet periods, AM employees are “sitting around waiting for the phone to ring,” the report says.

During the 2024 filing season, AM employees spent 1.1 million hours (29% of their time) waiting to receive calls.

The report says those hours represented “unproductive employee time that could have been spent processing taxpayer correspondence and amended returns” as well as resolving identity theft victims’ assistance cases. The report notes that the increase in the LOS from 85% during the 2023 filing season to 88% during the 2024 filing season corresponded with the increased time required to resolve identity theft victims’ assistance cases and an increase in overaged correspondence from 61% at the end of the 2023 filing season to 66% at the end of this year’s filing season.

Using Inflation Reduction Act funding to improve the taxpayer experience

The report addresses the IRS’s Strategic Operating Plan priorities to utilize the funding the agency received under the Inflation Reduction Act (IRA). Of the roughly $79 billion in IRA funding the IRS originally received (since reduced to $58 billion), only $3.2 billion was allocated for Taxpayer Services and only $4.8 billion was allocated for Business Systems Modernization (BSM).

The IRS has projected it will run out of IRA funding for the Taxpayer Services and BSM accounts in fiscal year (FY) 2026.

The report notes the improvements the IRS has made in taxpayer services and cites numerous examples of critical technology needs, including enhanced online taxpayer accounts, digital scanning of paper-filed tax returns, more detailed and up-to-date information on the Where’s My Refund? and Where’s My Amended Return? tools, replacement of the agency’s roughly 60 case management systems that do not communicate with each other with an integrated system, and replacement of core technology systems that still run on Assembly Language Code and COBOL.

Taxpayer Advocate Service objectives for FY 2025

As required by law, the report identifies TAS’s key objectives for the upcoming fiscal year. The report describes 11 systemic advocacy objectives, five case advocacy and other business objectives, and four research objectives. Among the objectives the report identifies are the following:

• Modernize IRS processing to increase efficiency and improve the taxpayer experience. In August 2023, the IRS announced the launch of a Paperless Processing Initiative. The report praises the initiative and points out key areas where progress can be made.
  • Currently, most paper-filed Forms 1040 are still manually transcribed. Some taxpayers who want to e-file their returns cannot do so because they are required to submit forms or schedules that the IRS’s e-file platform still does not support.
  • In addition, the IRS has created a “Document Upload Tool” that allows taxpayers to submit responses to IRS notices through a portal, but once received, the IRS still processes the responses as if they were submitted on paper.
  • TAS plans to monitor implementation of the Paperless Processing Initiative to ensure it meets taxpayer needs, and Collins also recommends the IRS change its policy of rejecting e-filed returns with certain defects, because affected taxpayers must then paper-file their returns, creating additional burden for taxpayers and the IRS alike.

• Improve IRS employee hiring, recruitment, retention, and training processes. The report notes that an estimated 37% of the IRS workforce is already eligible to retire or will become eligible to retire within the next five years. A high rate of retirements, particularly at the management level, will lead to a “brain drain” that the IRS must be prepared to address. The IRS is also hiring additional employees with its IRA funding, and these new hires must receive proper training to perform their jobs effectively. TAS plans to analyze the IRS’s hiring and recruitment strategies to help the IRS improve its hiring, recruitment, and training processes and make recommendations to improve employee retention strategies to reduce employee turnover.

• Enhance IRS transparency by improving applicable technology, sufficiently explaining modernization progress, and providing straightforward guidance on tax law. According to the report, the IRS should do a better job of “providing taxpayers, tax professionals, industry, and other stakeholders with all the information to which they’re entitled, when they need it, in an accessible, clear, and sufficiently detailed way.” The report favorably cites IRS technology modernization goals of providing taxpayers with “instant account updates, faster refund processing and payment posting, and near real-time status updates” and giving IRS telephone assistors streamlined access to the taxpayer data they need to respond to taxpayer questions with specificity and detail. Through its membership on cross-functional IRS teams, TAS will continue to advocate for the IRS to provide specific details on its progress toward achieving its goals and produce clear and timely guidance and information to taxpayers, tax professionals, industry, and other stakeholders.

IRS responses to National Taxpayer Advocate administrative recommendations

The National Taxpayer Advocate is required by statute to submit a year-end report to Congress that, among other things, makes administrative recommendations to resolve taxpayer problems. § 7803(c)(3) authorizes the National Taxpayer Advocate to submit the administrative recommendations to the Commissioner and requires the IRS to respond within three months.

The National Taxpayer Advocate made 78 administrative recommendations in her 2023 year-end report and then submitted them to the Commissioner for response. The IRS has agreed to implement 62 (or 79%) of the recommendations in full or in part.

Issue 6: Electronic Tax Administration Advisory Committee 2024 Annual Report Includes Recommendations to Congress and IRS 

The Internal Revenue Service Electronic Tax Administration Advisory Committee (ETAAC) released its 2024 annual report today with a total of 12 recommendations – three to Congress and nine to the IRS.

Among the recommendations to the IRS, the committee recommended enabling application programming interface access to taxpayer information, removing barriers to electronic filing by developing an alternative to the current self-select PIN as well as promoting greater information sharing between the IRS, states and industry partners.

The recommendations to Congress included a request for authority for IRS to regulate non-credentialed tax return preparers, support for effective tax administration through consistent, reliable funding of the IRS and greater funding for the National Taxpayer Advocate. 

ETAAC members represent various segments of the tax community, including individual and business taxpayers, tax professionals and preparers, tax software developers, payroll service providers, the financial industry and state and local governments.

The ETAAC operates under the rules of the Federal Advisory Committee Act. It works closely with the Security Summit, a joint effort of the IRS, state tax administrators and the nation’s tax industry, established in 2015 to fight tax-related identity theft and cybercrime.

Issue 7: IRS Apologizes for Personal Information Leak

The IRS issued an apology to Citidel founder and CEO Kenneth Griffin and the thousands of other Americans’ whose personal information was leaked to the press. The apology was part of the resolution of a lawsuit Griffin brought against the IRS after a government contractor made illegal disclosures of tax information.

The agency said the contractor, Charles Littlejohn, violated the terms of his contract and betrayed the trust that Americans place in the IRS to safeguard their sensitive information. Littlejohn was convicted of giving the tax information of Former President Donald Trump, Jeff Bezos, Elon Musk and others to media outlets. He has been sentenced to five years in prison.

“The IRS takes its responsibilities seriously and acknowledges that it failed to prevent Mr. Littlejohn’s criminal conduct and unlawful disclosure of Mr. Griffin’s confidential data,” the IRS’s statement said. “Accordingly, the IRS assures Mr. Griffin and the other victims of Mr. Littlejohn’s actions that it has made substantial investments in its data security to strengthen its safeguarding of taxpayer information.”

Issue 8: Treasury, IRS Issue Final Regulations Requiring Broker Reporting of Sales and Exchanges of Digital Assets that are Subject to Tax under Current Law, Additional Guidance to Provide Penalty Relief, Address Information Reporting and Other Technical Issues

Treasury and the Internal Revenue Service issued final regulations requiring custodial brokers to report sales and exchanges of digital assets, including cryptocurrency. These reporting requirements will help taxpayers to file accurate tax returns with respect to digital asset transactions, which are already subject to tax under current law.

These final regulations reflect consideration of more than 44,000 public comments received last fall on the proposed regulations. They require brokers to report certain sale and exchange transactions that take place beginning in calendar year 2025 and will be reported on the soon-to-be released Form 1099-DA. The regulations implement reporting requirements by the Infrastructure Investment and Jobs Act, enacted in 2021.

The final regulations require reporting by brokers who take possession of the digital assets being sold by their customers. These brokers include operators of custodial digital asset trading platforms, certain digital asset hosted wallet providers, digital asset kiosks, and certain processors of digital asset payments (PDAPs).

The majority of digital asset transactions today occur using these brokers. By focusing first on this group, the IRS intends these regulations to cover the greatest number of taxpayers while allowing the IRS and U.S. Treasury Department more time to consider the nuances of transactions involving non-custodial and decentralized brokers.

The final regulations do not include reporting requirements for brokers that do not take possession of the digital assets being sold or exchanged. These brokers are commonly called decentralized or non-custodial brokers. The U.S. Treasury Department and the IRS intend to provide rules for these brokers in a different set of final regulations.

In addition to the broker reporting rules, the regulations provide rules for taxpayers to determine their basis, gain, and loss from digital asset transactions. The regulations also provide backup withholding rules.

The IRS is aware of the challenges that implementing new reporting requirements can pose, which is why the agency is also providing transitional and penalty relief from reporting and backup withholding rules on certain transactions to help phase-in implementation.

Real estate professionals are also required to report the fair market value of digital assets paid by buyers and received by sellers in real estate transactions with closing dates on or after January 1, 2026.

The final regulations provide for an optional, aggregate reporting method for certain sales of stablecoins and certain non-fungible tokens (NFTs) applicable only after sales of these stablecoins and NFTs exceed de minimis thresholds. For PDAP transactions, the regulations require reporting on a transactional basis only if the customer’s sales are above a de minimis threshold.

Finally, basis reporting will be required by certain brokers, for transactions occurring on or after January 1, 2026.

Additional guidance to provide transitional relief regarding digital asset transactions includes:

Transitional relief Notice 2024-56 provides general transitional relief from reporting penalties and backup withholding for any broker who does not timely and accurately file information returns and furnish payee statements for sales and exchanges of digital assets during calendar year 2025, provided that the broker makes a good faith effort to comply with the reporting obligations. Additionally, the Notice provides more limited relief from backup withholding for certain sales of digital assets during 2026 for brokers using the IRS’s TIN-matching system in place of certified TINs. Finally, the Notice also provides backup withholding relief for exchanges of digital assets in return for specified NFTs and real property and for certain sales effected by PDAPs.

Delay on information reporting for certain transactions until future guidance is issued Notice 2024-57 informs brokers that until the U.S. Treasury Department and the IRS issue further guidance, brokers will not have to file information returns or furnish payee statements on digital asset sales and exchanges for the following six types of transactions:

1. Wrapping and unwrapping transactions,
2. Liquidity provider transactions,
3. Staking transactions,
4. Transactions described by digital asset market participants as lending of digital assets,
5. Transactions described by digital asset market participants as short sales of digital assets, and
6. Notional principal contract transactions.

Transition from universal or multi-wallet approach to allocating basis in digital assets to wallet by wallet or account by account approach. Revenue Procedure 2024-28 generally permits taxpayers to rely on any reasonable allocation of units of unused basis to wallets or accounts that hold the same number of remaining digital asset units based on the taxpayers’ records of unused bases and remaining units in those wallets or accounts.

Issue 9: Treasury and IRS Announce Final Regulations on How to Report and Pay the Corporate Stock Repurchase Excise Tax 

Treasury and the Internal Revenue Service issued final regulations that provide taxpayers and tax professionals with guidance on how to report and pay the 1 % excise tax owed on corporate stock repurchases.

The Inflation Reduction Act imposed a new excise tax on stock repurchases equal to 1 percent of the aggregate fair market value of stock repurchased by certain corporations during the taxable year, subject to adjustments. The stock repurchase excise tax applies to repurchases after Dec. 31, 2022.

These final regulations require that the stock repurchase excise tax be reported on Form 720, Quarterly Federal Excise Tax Return, due for the first full calendar quarter after the end of the corporation’s taxable year, with the Form 7208, Excise Tax on Repurchase of Corporate Stock, attached. Form 7208 is used to figure the amount of stock repurchase excise tax owed.

Forms 720 and 7208 due for taxable years ending after Dec. 31, 2022, and on or before June 30, 2024, must be filed by the third quarter due date for Form 720, which is Oct. 31, 2024.

If a corporation has more than one taxable year ending after Dec. 31, 2022, and on or before June 30, 2024, the corporation should file a single Form 720 with two separate Forms 7208 (one for each taxable year) attached by Oct. 31, 2024.

The final regulations affect publicly traded domestic corporations that repurchase their stock or whose stock is acquired by certain affiliates after Dec. 31, 2022. The regulations also affect certain publicly traded foreign corporations that repurchase their stock or whose stock is acquired by certain affiliates after Dec. 31, 2022.

Issue 10: New Sign-in Options for FATCA Registration System Users are Coming Soon

The IRS is updating the FATCA Registration System to utilize a more secure sign-in utilizing Login.gov or ID.me, the IRS’s current credential service providers. The new sign-in process will add Identify Assurance Level 1 (1AL1) security for the FATCA Registration System.

Later this month, the IRS will no longer support the use of the existing FATCA account sign-in authentication methods to access the FATCA Registration System. The FATCA Registration System provides more secure sign-in options with Login.gov and ID.me, the IRS’s credential service providers.

To access the FATCA Registration System, users will be required to sign in or register with Login.gov or ID.me. New users of Login.gov and/or ID.me will be required to create a Login.gov or ID.me account to access the FATCA Registration System. Existing users of either Login.gov and/or ID.me can simply sign in to the FATCA Registration System without creating a new account if the email matches that of the Responsible Officer or Point of Contact on the FATCA registration.

The account creation process will include verifying an email address, creating a password, and setting up multi-factor authentication to secure their FATCA account. Login.gov and ID.me will provide several ways in which an applicant can obtain a multi-factor authentication code, including obtaining a code by receiving a phone call, text message or authentication application. Users will then consent to Login.gov or ID.me to share their email address with the IRS before accessing the FATCA Registration System.

The IRS will update FATCA Registration System users when the new sign-in requirements are implemented. Users should begin to review and update their Responsible Officer and Point of Contact information to ensure all FATCA account information is current and applicable prior to the system changes. Users should continue to register and sign-in to the FATCA Registration System using the current authentication methods.

Issue 11: Misleading Social Media Advice Leads to False Claims for Fuel Tax Credit, Sick and Family Leave Credit, Household Employment Taxes; FAQs Help Address Common Questions, Next Steps for Those receiving IRS Letters

The Internal Revenue Service issued alert IR-2024-139 about a series of scams and inaccurate social media advice. Social media schemes led to thousands of inflated refund claims during the past tax season. The IRS has increased its compliance efforts related to false and/or questionable credits.

These FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible. Accordingly, these FAQs may not address any particular taxpayer’s specific facts and circumstances, and they may be updated or modified upon further review.

Background

The IRS warns taxpayers not to fall for these scams centered around the Fuel Tax Credit, the Sick and Family Leave Credit, household employment taxes and overstated withholding. The IRS has seen thousands of dubious claims come in where it appears taxpayers are claiming credits for which they are not eligible, leading to refunds being delayed and the need for taxpayers to show they have legitimate documentation to support these claims.

The IRS continues to urge taxpayers to avoid these scams as myths continue to persist that these are ways to obtain a huge refund. Many of these scams were highlighted during this spring’s annual Dirty Dozen series, including the Fuel Tax Credit scam, bad social media advice and “ghost preparers.”

The IRS reminds taxpayers to keep these important points in mind:

• Social media can connect people and information from all over the globe. Unfortunately, sometimes people provide bad tax advice that can lure good taxpayers into trouble.
• The IRS warns taxpayers to be wary of trusting internet advice, whether it’s a fraudulent tactic promoted by scammers or a deliberately false tax-related scheme trending across popular social media platforms.
• The IRS is aware of various filing season hashtags and social media topics related to this fraudulent information. These generally involve people trying to use legitimate tax forms for the wrong reason.

General information 

Q1. What happens when the IRS identifies suspicious refund claims?

A1. Some taxpayers may receive a letter 5747C and/or 4883C/5071C with instructions to verify their identity and tax return information so we can continue processing their tax return. Even after this verification, questionable refunds will continue to be held until credit eligibility is verified. Examples of frequently abused claims include:

• Fuel Tax Credit (Form 4136).
• Sick and Family Leave Credit for Self Employed Individuals (Form 7202).
• Overstated withholding.
• Schedule H, Household Employment Taxes including Qualified Sick Leave Wages.

Q2. What should you do if you receive one of these letters from the IRS, identifying your tax return as requiring authentication and/or being potentially frivolous?

• 3176C Frivolous Correspondence Response.
• 5747C Potential Identity Theft during Original Processing – TAC.
• 5071C Potential Identity Theft during Original Processing with Online Option.
• 4883C Potential Identity Theft During Original Processing. 

A2. Taxpayers in receipt of a 3176C letter should follow the directions in the correspondence. Taxpayers receiving these letters may have previously received a 5747C letter, 5071C letter or 4883C letter. In this instance, disregard the 5747C, 5071C or 4883C. Do not visit a Taxpayer Assistance Center (TAC) or try to authenticate online or over the phone. Instead, follow the directions in the 3176C letter.

Q3. What actions are needed to avoid legal consequences?

A3. File a complete and accurate return within 30 days of receiving the IRS letter or notice. This may include submitting an amended tax return for each taxable period where an inappropriate claim was filed.

If applicable, attach the IRS letter received (such as, 3176C) to your corrected return and mail it to the address listed on the correspondence.

Q4. What are the legal consequences for filing a frivolous return?

A4. Penalties

Claims and filings that are based upon a position identified as frivolous by the IRS -or- reflect a desire to delay or impede tax administration are subject to the § 6702(a) penalty. This penalty is $5,000 for each return (or copy of return) claiming an improper credit as defined above. The penalty is assessed against each spouse on a married filing joint return. (Notice 2010-33)

• Compliance audit
  • Uncorrected frivolous claims may be subject to a compliance audit. Taxpayers may be contacted by an Examination Function and asked to provide documentation related to the claim. The taxpayer will be required to verify eligibility for the credit under the law.
• Criminal prosecution
  • Individuals or preparers who knowingly file false income tax returns may face fines and be subject to criminal prosecution and imprisonment.

Q5. What is the Fuel Tax Credit?

A5. The Fuel Tax Credit is a tax credit claimed for various non-taxable use of fuel. It is meant for off-highway business, farming, aviation and commercial fishing use. As such, it is not available to most taxpayers. Taxpayers may be asked to provide specific documentation on their occupation and fuel receipts to verify eligibility. 

Q6. What happens if you fall victim to a Fuel Tax Credit scam?

A6. If you claim an amount of Fuel Tax Credit that is disproportionate to the income reported on the return or file a claim reflecting an impossible quantity of fuel for the occupation reported, you are subject to a § 6702(a) penalty of $5,000 for each return claiming an improper credit. For additional information, refer to Instructions for Form 4136.

Q7. What is the Sick and Family Leave Credit for self-employed individuals?

A7. The Sick and Family Leave Credit was enacted in March 2020, the Families First Coronavirus Response Act (FFRCA) intended to help the United States combat COVID-19 by providing small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19. The FFCRA also created equivalent refundable sick and family leave credits for self-employed individuals based on the individual’s average daily self-employment income and a specified number of days during the tax year that an individual was unable to perform services as a self-employed individual due to reasons related to COVID-19.

To be eligible, taxpayers must:

• Have a trade or business as defined in § 1402. Generally, self-employment income is a result of the performance of personal services that cannot be classified as wages because an employer-employee relationship does not exist between the payer and the payee.
• Claim only the eligible number of days or wages, but no more than the amount allowed by law.
• Claim the credit based on qualifying self-employed income, but no more than allowable by law.

Q8. What are the two primary variations of the Sick and Family Leave Credit scheme?

A8. Fraudulent Form 7202: Taxpayers use the Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, to claim a credit based on income earned as an employee and not as a self-employed individual. These credits were available for self-employed individuals to claim on 2020 and 2021 tax year returns during the pandemic. They are not available to claim on the 2022 or 2023 tax year return.

Fraudulent Schedule H: Taxpayers “invent” fictional household employees and then file Schedule H (Form 1040), Household Employment Taxes, to claim a refund based on false sick and family medical leave wages they never paid. 

Q9. What is the Overstated Withholding scam?

A9. The Overstated Withholding scam is a recent scheme circulating on social media encouraging people to use tax software to manually fill out a Form W-2, Wage and Tax Statement, or other information returns, for example Form 1099-NEC or other Form 1099s listed below, to include false income and withholding information. In this Overstated Withholding scheme, scam artists suggest people make up large income and withholding amounts as well as the fictional employer supplying those amounts. Scam artists then instruct people to file the bogus tax return electronically, in hopes of getting a substantial refund due to the large amount of fraudulent withholding.

The IRS verifies the withholding claimed on tax returns. If the IRS cannot verify the wages, income or withholding credits entered on the tax return, the tax refund will be held pending further review. Taxpayers should always file a complete and accurate tax return. Utilize legitimate information returns, such as Form W-2 issued from an employer to complete returns correctly.

There are multiple variations of the overstated withholding credit scheme, including but not limited to the following forms or schedules:

Form W-2	Form 1099-R	Alaskan Dividend Fund
Form W-2G	Form-1099-NEC	Schedule K-1 with Withholding Reported
	Form-1099-DIV Form-1099-OID	Unspecified Source of Withholding Credit Claimed
	Form 1099-B

Additional details on these Frequently Asked Questions

Because these FAQs have not been published in the Internal Revenue Bulletin, they will not be relied on or used by the IRS to resolve a case. Similarly, if an FAQ turns out to be an inaccurate statement of the law as applied to a particular taxpayer’s case, the law will control the taxpayer’s tax liability.

Nonetheless, a taxpayer who reasonably and in good faith relies on these FAQs will not be subject to a penalty that provides a reasonable cause standard for relief, including a negligence penalty or other accuracy-related penalty, to the extent that reliance results in an underpayment of tax. Any later updates or modifications to these FAQs will be dated to enable taxpayers to confirm the date on which any changes to the FAQs were made. Additionally, prior versions of these FAQs will be maintained on IRS.gov to ensure that taxpayers, who may have relied on a prior version, can locate that version if they later need to do so.

Issue 12: Changes to the SECURE 2.0 Act Affect How Businesses Complete Forms W-2, Provides IRA Information

The IRS issued a fact sheet to remind businesses that starting in tax year 2023 changes under the SECURE 2.0 Act may affect the amounts they need to report on their Forms W-2. The fact sheet also provides information on de minimis financial incentives, Roth SIMPLE and Roth SEP IRAs, designated Roth non elective contributions and designated Roth matching contributions.

The IRS recently announced this milestone achievement and provided estimates that up to 94% of individual taxpayers will have the option of using the Document Upload Tool (DUT) instead of sending mail to the IRS. That could potentially replace up to 125 million paper documents per year. The IRS launched the DUT in 2021 and expanded it in 2023 with Inflation Reduction Act funding. This tool is part of the IRS’s transformation work which helps both taxpayers and the IRS reduce the burden of processing paperwork.

Issue 13: IRS Reminds Car Dealers and Sellers to be Aware of Phishing Scams 

The Internal Revenue Service would like to remind car dealers and sellers to be aware of evolving phishing and smishing scams that could impact day-to-day operations of the business.

In light of the recent ransomware attack aimed at car dealers, the IRS is warning individuals and businesses to remain vigilant against these attacks. Fraudsters and identity thieves attempt to trick the recipient into clicking a suspicious link, filling out personal and financial information or downloading a malware file onto their computer.

Scammers are relentless in their attempts to obtain sensitive financial and personal information, and impersonating the IRS remains a favorite tactic. The IRS urges car dealerships to be extra cautious about unsolicited messages and avoid clicking any links in an unsolicited email or text if they are uncertain.

Phish or smish: Don’t take the bait

The IRS continues to see a barrage of email and text scams targeting businesses and individual taxpayers. The IRS and the Security Summit partners continue to remind taxpayers, businesses and tax professionals to be alert for a wide variety of these scams and schemes. Businesses such as car dealerships should remain alert for targeted email and text scams aimed to disrupt their computer systems.

These businesses should be alert to fake communications posing as legitimate organizations. These messages arrive in the form of unsolicited texts or emails to lure unsuspecting victims to provide valuable information that can lead to identity theft or malicious malware installed on computer systems. There are two main types:

• Phishing: An email sent by fraudsters claiming to come from a legitimate source. The email lures the victims into the scam with a variety of ruses such as enticing victims to provide sensitive information.

• Smishing: A text or smartphone SMS message where scammers often use alarming language such as, “Your account has now been put on hold,” or “Unusual Activity Report,” with a bogus “Solutions” link to restore the recipient’s account.

Never click on any unsolicited communication as it may surreptitiously load malware. It may also be a way for malicious hackers to load ransomware that keeps the legitimate user from accessing their system and files.

In some cases, phishing emails appear to come from a legitimate sender or organization that has had their email account credentials stolen. Setting up two-factor or multi-factor authentication with their email provider will reduce the risk of individuals having their email account compromised.

Posing as a trusted organization, friend or family member remains a common way to target individuals and businesses for various scams. Individuals and businesses should verify the identity of the sender by using another communication method, for instance, calling a number they independently know to be accurate, not the number provided in the email or text.

What to do

• Never respond to phishing or smishing or click on the URL link.
• Don’t open any attachments. They can contain malicious code that may infect the computer or mobile phone.
• Don’t click on any links. If a taxpayer inadvertently clicked on links in a suspicious email or website and entered confidential information, visit the IRS’ identity protection page.
• Send the full email headers or forward the email as-is to [email protected]. Don’t forward screenshots or scanned images of emails because this removes valuable information.
• Delete the original email.

Issue 14: Social Security Announces Upcoming Changes to Accessing Online Services Agency Transitioning Authentication Services to Login.gov

The Social Security Administration announced that customers who created an online account (e.g., my Social Security account) before September 18, 2021, will soon be required to transition to a Login.gov account to continue access to their online services. Over five million of these account holders have already transitioned to Login.gov.

• The agency is making the changes to simplify the sign-in experience and align with federal authentication standards while providing safe and secure access to online services.
• “mySocial Security is a safe and secure way for people to do business with us,” said Social Security Commissioner Martin O’Malley. “We’re excited to transition to Login.gov to access our online services, streamlining the process and ease of use for the public across agencies.”
• Account holders are encouraged to sign-in now. When the user logs in, they will be presented with an option to easily transition to Login.gov. Once their account is successfully linked, a confirmation screen will appear, and they will have immediate access to their personal mySocial Security services or other service that they were attempting to access.
• Existing Login.gov or ID.me account holders do NOT need to create a new account or take any action.
• mySocial Security accounts are free, secure, and provide personalized tools for everyone, whether receiving benefits or not. People can use their account to request a replacement Social Security card, check the status of an application, estimate future benefits, or manage the benefits they already receive.

Issue 15: IRS Continues to Expand Taxpayer Services and Online Tools, Key Milestones Reached with Inflation Reduction Act Funding

Quarterly update highlights expansion on Individual, Business Online Accounts; Document Upload Tool hits 1 million submissions and more amended returns can be filed electronically  

As part of ongoing transformation efforts, the Internal Revenue Service announced continued progress on a variety of taxpayer service and technology projects using Inflation Reduction Act (IRA) funding that expand online tools and digital services.

The IRS highlighted improvements, including six new features to help taxpayers using the Individual Online Account, a new Spanish version of the Business Tax Account tool and the availability of amended business forms that can be filed electronically. In addition, the IRS announced hitting the milestone of 1 million submissions through the Document Upload Tool and more special Community Assistance Visits to help taxpayers in underserved parts of the country.

New features, key milestones reached on online, digital products

Taxpayers deserve the same functionality in their online accounts that they experience with their bank or other financial institutions. As detailed in the Strategic Operating Plan, the IRS is working to transform its operations to enable a future in which all taxpayers can meet their responsibilities, including interactions with the IRS, in a digital manner if they prefer. As part of this vision, taxpayers will be able to securely file all documents and respond to all notices online as well as securely access and download their data and account history. The IRS has hit or is progressing toward several milestones toward these goals, including:

The IRS continues to expand the functionality of its online platforms, including several new features in Individual Online Account that give taxpayers the ability to:

• Retrieve all their tax related information from one source, including Wage & Income, Account, Record of Account, and Return transcripts;
• Request an update to their Identity Protection (IP) PIN using their smartphones or tablets;
• View information about the status of their audit at their convenience, instead of having to call the IRS to obtain audit information;
• Use a Lien Payoff Calculator to access lien information, calculate their lien payoff amount and generate a letter for download/print;
• Complete the Pending Installment Agreement process within Online Account without having to be re-routed to a separate application and
• View a comprehensive overview of their account information, including the status of their tax refund as it’s being processed.

With the latest expansion, Business Tax Account is now available in Spanish. In addition, eligible business taxpayers can see their balance due and make the payment all in one place. Previously, the balance due had to be viewed in a separate place from where the payment was made, adding another complicating step for businesses making payments. Sole proprietors can now download business entity transcripts from their Business Tax Account. This transcript shows entity information like business name, address, location address and more for the Employer Identification Number on file.

File new amended returns electronically: Additional business Forms 940, 941, 943 and 945, including the Spanish version of Forms 941 and 943, can now be filed electronically. Through this improved process, IRS employees can now access taxpayer return information electronically, allowing them to provide more complete and accurate answers to taxpayer questions. In addition, the IRS can now accept related electronic payments while minimizing errors normally associated with processing paper returns. Taxpayers can still choose to submit a paper version.

Respond to notices online hits 1 million uploads: IRS digitalization efforts reached another key milestone in the agency’s transformation work with the Document Upload Tool accepting its one millionth taxpayer submission. Initially launched in 2021 in a limited format and greatly expanded in 2023 with funding from IRA, the tool offers taxpayers and tax professionals the option to respond digitally to eligible IRS notices by securely uploading required documents online through IRS.gov. For anyone with a smart phone or computer, this means that replying to IRS notices is now often as easy as scanning required documents and uploading them to the tax agency.

Use mobile-adaptive forms: IRS now has a total of 30 forms available for mobile use, allowing taxpayers to fill out common non-tax forms on cell phones and tablet devices and then submit them to the IRS digitally. Taxpayers have submitted more than 72,000 mobile-friendly forms since the September 2023 launch. Providing taxpayers with common forms in this new format offers them a safe and fast way to electronically engage with the IRS. This can also help reduce mail and paper when they send forms to the IRS, a part of the Paperless Processing Initiative. Forms adapt to any screen size and ensure information is entered into all required data fields. This can help reduce errors, which can delay processing. In addition, taxpayers can access five of these forms that require signatures in their Online Account, including:

• Form 13533 – VITA/TCE Partner Sponsor Agreement
• Form 13533-A – FSA Remote Sponsor Agreement
• Form 14039-B – Business Identity Theft Affidavit
• Form 12508 – Questionnaire for Non-Requesting Spouse
• Form 14157-A – Tax Return Preparer Fraud or Misconduct Affidavit

Redesigning notices: The IRS has redesigned 100 of the most common notices that individual taxpayers receive, part of the ongoing work to prepare for the 2025 filing season as part of the Simple Notice Initiative. These notices make up about 90% of total notice volume sent to individual taxpayers, representing about 150 million notices sent to individual taxpayers in 2022.

More in-person help offered; special programs offered in underserved areas

The IRS continues to focus on helping taxpayers get it right the first time, helping them to interact with the agency in the ways that work best for them on the phone, in-person and online. The IRS is expanding in-person service, particularly those in underserved and rural communities.

During the filing season, IRS Taxpayer Assistance Centers had a 37% increase in face-to-face contacts, with the IRS working with nearly 1.3 million taxpayers for this calendar year through July 13. The IRS also received 2.7 million volunteer prepared returns to date compared to 2.5 million last year, an increase of 9.1%.

Modernizing foundational technology

In addition to improvements to customer-facing technology, the IRS is modernizing decades-old systems and equipment:

• Digitalization: The IRS continues to make significant progress scanning and electronically filing paper returns. The IRS has replaced scanning equipment that is older than five years and installed automated mail-sorter machines in the six highest-volume IRS locations, streamlining the process of mail sorting, opening and scanning. As of the end of June, the IRS had scanned more than 2 million pieces of paper. Digitization has far-reaching implications for how the IRS can improve service and will enable the IRS to create completely digital workflows.

• Online Account payment plans. The IRS recently delivered a data service that improves the taxpayer experience through Individual Online Account, allowing tax professionals to access and create payment plans on behalf of individual taxpayers.

Beyond the improvements made in direct support of taxpayers, foundational technology has continued the incremental improvements needed to increase operational effectiveness and efficiency for IRS employees, which ultimately helps taxpayers:

• Updating outdated Human Resource IT systems. Due to more than a decade of funding cuts to the agency, the IRS has hundreds of disparate, legacy human resources (HR) information technology (IT) systems with thousands of workflows. The transformation and streamlining of the HR IT applications using IRA funding is key to cultivating a robust organization, with a healthy HR function at its core. This multi-year project is a partnership with Treasury’s CIO and leverages cutting-edge technology to modernize IRS’s legacy HR applications, automate manual processes and make use of Treasury’s existing shared service offerings. These HR technology improvements in talent acquisition, workforce planning, labor and employee relations and other key HR processes will enhance the employee experience, improve productivity and help retain a strong and high-quality workforce needed to deliver customer service improvements for taxpayers.
• Increasing network bandwidth to help employees and taxpayers. IRS has doubled the network bandwidth at many of our worksites to meet increased workforce demand and improve taxpayer service. The IRS is on track to complete this phase of network expansion at all sites ahead of filing season 2025.

Ensuring complex partnerships, large corporations and high-income, high-wealth individual taxpayers pay taxes owed

The IRS is also continuing work to ensure large corporate, large partnership and high-income individual filers pay the taxes they owe. Prior to the Inflation Reduction Act, more than a decade of budget cuts prevented the IRS from keeping pace with the increasingly complicated set of tools that the wealthiest taxpayers use to hide their income and evade paying their share. The IRS is now taking a variety of steps to close this gap.

The IRS has ramped up efforts to pursue high-income, high-wealth individuals who have either not filed their taxes or failed to pay recognized tax debt, with dozens of revenue officers focused on these high-end collection cases. These efforts are concentrated among taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt.  Earlier this month, the IRS announced that it has collected more than $1 billion from high-wealth taxpayers as part of an effort to ensure these individuals pay what they owe. The $1 billion collected represents collections as of April 2024, with work continuing in this area.

More improvements planned for 2025 as filing season work intensifies

In addition to these areas mentioned above, the IRS has a number of initiatives where changes related to the Inflation Reduction Act will accelerate later this year and into the 2025 filing season. Here are some examples:

• Continuing to focus on enhancing live assistance through improved efficiency in call centers, reducing paper and continued expanded staffing levels at Taxpayer Assistance Centers, while working to ensure taxpayers are aware of all available credits and benefits.
• Expanding online services by expanding the features available in Online Account, including digital copies of notices, status updates, secure two-way messaging and expanded payment options.
• Accelerating digitalization by providing new non-tax forms in digital mobile-friendly formats, in addition to the 20 delivered in fiscal year 2024, as well as scanning at the point of entry virtually all paper-filed tax and information returns.
• Increased taxpayer information by expanding information available on important issues ranging from the availability of important tax credits and benefits, as well as more consumer-focused information raising awareness about emerging tax scams and schemes.

Issue 15: Applicable Federal Rates for August 2024, Rev. Rul. 2024-15

Rev. Rul. 2024-15 Table 2

Issue 16: Applicable Federal Rates for September 2024, Rev. Rul. 2024- 17

REV. RUL. 2024-17 TABLE 2

REV. RUL. 2024-17 TABLE 5

Rate Under Section 7520 for September 2024 4 Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years, or a remainder or reversionary interest 4.8%