e-News for Payroll Professionals Issue 2024-04

The IRS Nationwide Tax Forum offers continuing education and networking opportunities to enrolled agents, certified public accountants, attorneys, payroll professionals and other tax professionals. Each forum offers more than 40 seminars and workshops on a variety of federal and state tax issues presented by experts from the IRS and its partner associations.

Visit 2024 IRS Nationwide Tax Forum for information on the program, accommodations and registration.

2. Taxpayers in California and Washington may qualify for disaster relief

The IRS announced disaster relief for individuals and businesses affected by disasters in parts of California and Washington. This tax relief applies to areas of California affected by severe storms and flooding that began Jan. 21, 2024, and for parts of Washington state affected by wildfires that began Aug. 18, 2023. These taxpayers now have until June 17, 2024, to file various federal individual and business tax returns and make tax payments.

The current list of eligible areas is always on the disaster relief page on IRS.gov.

3. Tax Time Guide Part 3: Taxpayers should report all earned income

Each year, the IRS develops a Tax Time Guide designed to help taxpayers understand how tax changes may affect them and how to file an accurate tax return. In the third edition for 2024, the IRS reminds taxpayers that they are generally required to report all earned income on their tax return, including digital asset transactions, gig economy income, service industry income, and income from foreign sources.

The guide also includes:

• Examples of common digital assets
• Examples of gig economy work
• The reporting threshold for tips received by service industry employees

4. Digital asset updates

The IRS improved its Digital Assets page on IRS.gov, which is available in eight languages. The redesigned webpage features:

• Current information on digital assets with examples and definitions
• How to answer the digital asset question on a tax return and when to check yes or no
• How to report digital asset income

Everyone who files Forms 1040, 1040-SR, 1040-NR, 1041, 1065, 1120, 1120 or 1120-S must check one box answering "Yes" or "No" to the digital asset question. All taxpayers need to answer, not just those who engaged in a transaction involving digital assets in 2023. Taxpayers must report all income related to digital asset transactions.

Additional information:

• Frequently asked questions on virtual currency transactions
• How to answer the digital asset question on your tax return

5. Final rules on elective payments of clean energy credits

The IRS issued final regulations for applicable entities that earn certain clean energy credits and make an elective payment election. This election means the IRS will treat certain clean energy credits as a payment against a taxpayer’s federal income tax rather than as a nonrefundable credit.

Applicable entities generally include tax-exempt organizations, state and local governments, Indian tribal governments, Alaska Native Corporations, the Tennessee Valley Authority and rural electric cooperatives. The IRS updated the elective payment frequently asked questions based on the final regulations.

6. Dirty Dozen: Beware aggressive promoters of questionable Employee Retention Credit claims

As part of this year’s Dirty Dozen annual list of tax scams, the IRS continues to warn businesses and others to stay clear of unscrupulous and aggressive promoters of questionable claims for the Employee Retention Credit (ERC). These questionable ERC claims often put unsuspecting businesses and other entities in jeopardy of penalties, interest and potentially even criminal prosecution for claiming the ERC when they don’t qualify and aren’t entitled to it.

This latest warning comes as the IRS continues to take special steps to counter aggressive marketing around the ERC. Since the IRS announced a moratorium on processing new claims filed after Sept. 14, 2023, the agency’s compliance efforts on ERC claims have topped more than $1 billion so far since last fall as work continues on a number of efforts to counter questionable claims.

With compliance work on ERC claims continuing to expand through both audits and criminal investigations, the IRS reminds businesses they still have an option to pull back on any unprocessed claims. Businesses should quickly pursue the claim withdrawal process if they need to ask the IRS not to process an ERC claim for any tax period that hasn’t been paid yet.

7. Information to share with clients, employees and partners

What taxpayers should do if they received a Form 1099-K in 2024

Misinformation continues to circulate about why taxpayers may or may not have received a Form 1099-K in 2024.The IRS is asking payroll professionals to help inform employees, clients and partners about what they should do if they received a Form 1099-K.

The IRS has also debunked common myths surrounding the Form 1099-K.

Last fall, the IRS announced that previous reporting thresholds would remain for payments that businesses or individuals received through certain payment applications or online marketplaces. If a taxpayer sold goods or services and received payment through one of those platforms in 2023, they could have received a third-party reporting document Form 1099-K, Payment Card and Third Party Network Transactions. Even if their transactions fell below the 2023 threshold, taxpayers may still have received the form.

IRS Direct File pilot program officially open in 12 pilot states

The IRS announced the full launch of the Direct File pilot program, following several weeks of testing. It’s now available to taxpayers in Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming. All eligible taxpayers in these states – representing 19 million taxpayers – may now use the system at any time. It is easy to use, mobile-friendly and offers live online support during IRS business hours. See the recent news release and IRS Tax Tip.

8. Updates to IRS form instructions, publications

This information may be of interest to payroll professionals and their clients:

Form instructions:

• Instructions for Form 1099-K, Payment Card and Third Party Network Transactions
• Instructions for Form 943-X (Sp), Adjusted Employer’s Annual Federal Tax Return for Agricultural Employees or Claim for Refund (Spanish)
• Instructions for Form 944-X (Sp), Adjusted Employer’s ANNUAL Federal Tax Return or Claim for Refund (Spanish)

Publications:

• Publication 5904, IRS Business Tax Account

Update your subscriptions, modify your password or email address, or stop subscriptions at any time on your . You will need your email address to log in. If you have questions or problems with the subscription service, visit .

This service is provided to you at no charge by the Internal Revenue Service (IRS).

This email was sent to [email protected] by: Internal Revenue Service (IRS) · Internal Revenue Service · 1111 Constitution Ave. N.W. · Washington, D.C. 20535

Text-only version of this email

Nationwide Tax Forum, disaster relief, 1099-K, digital assets, clean energy IRS.gov Banner e-News for Payroll Professionals April 2, 2024 USEFUL LINKS: IRS.gov Payroll Professionals Tax Center Employment Taxes Reporting Agents File Employment Tax Forms Employment Tax Publications Online Ordering SSA/IRS Reporter SSA - Employer Web Page Taxpayer Advocate Service - Back to top ISSUE NUMBER: 2024-04 INSIDE THIS ISSUE 1. 2024 IRS Nationwide Tax Forum open for registration 2. Taxpayers in California and Washington may qualify for disaster relief 3. Tax Time Guide Part 3: Taxpayers should report all earned income 4. Digital asset updates 5. Final rules on elective payments of clean energy credits 6. Dirty Dozen: Beware aggressive promoters of questionable Employee Retention Credit claims 7. Information to share with clients, employees and partners 8. Updates to IRS form instructions, publications - 1. 2024 IRS NATIONWIDE TAX FORUM OPEN FOR REGISTRATION - Payroll professionals: Registration is now open for the 2024 IRS Nationwide Tax Forum. Register today to ensure a spot this summer: * Chicago: July 9 – 11 * Orlando: July 30 – Aug. 1 * Baltimore: Aug. 13 – 15 * Dallas: Aug. 20 – 22 * San Diego: Sep. 10 – 12 The IRS Nationwide Tax Forum offers continuing education and networking opportunities to enrolled agents, certified public accountants, attorneys, payroll professionals and other tax professionals. Each forum offers more than 40 seminars and workshops on a variety of federal and state tax issues presented by experts from the IRS and its partner associations. Visit 2024 IRS Nationwide Tax Forum for information on the program, accommodations and registration. Back to Top - 2. TAXPAYERS IN CALIFORNIA AND WASHINGTON MAY QUALIFY FOR DISASTER RELIEF - The IRS announced disaster relief for individuals and businesses affected by disasters in parts of California and Washington. This tax relief applies to areas of California affected by severe storms and flooding that began Jan. 21, 2024, and for parts of Washington state affected by wildfires that began Aug. 18, 2023. These taxpayers now have until June 17, 2024, to file various federal individual and business tax returns and make tax payments. The current list of eligible areas is always on the disaster relief page on IRS.gov. Back to Top - 3. TAX TIME GUIDE PART 3: TAXPAYERS SHOULD REPORT ALL EARNED INCOME - Each year, the IRS develops a Tax Time Guide designed to help taxpayers understand how tax changes may affect them and how to file an accurate tax return. In the third edition for 2024, the IRS reminds taxpayers that they are generally required to report all earned income on their tax return, including digital asset transactions, gig economy income, service industry income, and income from foreign sources. The guide also includes: • Examples of common digital assets • Examples of gig economy work • The reporting threshold for tips received by service industry employees Back to Top - 4. DIGITAL ASSET UPDATES - The IRS improved its Digital Assets page on IRS.gov, which is available in eight languages. The redesigned webpage features: • Current information on digital assets with examples and definitions • How to answer the digital asset question on a tax return and when to check yes or no • How to report digital asset income Everyone who files Forms 1040, 1040-SR, 1040-NR, 1041, 1065, 1120, 1120 or 1120-S must check one box answering "Yes" or "No" to the digital asset question. All taxpayers need to answer, not just those who engaged in a transaction involving digital assets in 2023. Taxpayers must report all income related to digital asset transactions. Additional information: • Frequently asked questions on virtual currency transactions • How to answer the digital asset question on your tax return Back to Top - 5. FINAL RULES ON ELECTIVE PAYMENTS OF CLEAN ENERGY CREDITS - The IRS issued final regulations for applicable entities that earn certain clean energy credits and make an elective payment election. This election means the IRS will treat certain clean energy credits as a payment against a taxpayer’s federal income tax rather than as a nonrefundable credit. Applicable entities generally include tax-exempt organizations, state and local governments, Indian tribal governments, Alaska Native Corporations, the Tennessee Valley Authority and rural electric cooperatives. The IRS updated the elective payment frequently asked questions based on the final regulations. Back to Top - 6. DIRTY DOZEN: BEWARE AGGRESSIVE PROMOTERS OF QUESTIONABLE EMPLOYEE RETENTION CREDIT CLAIMS - As part of this year’s Dirty Dozen annual list of tax scams, the IRS continues to warn businesses and others to stay clear of unscrupulous and aggressive promoters of questionable claims for the Employee Retention Credit (ERC). These questionable ERC claims often put unsuspecting businesses and other entities in jeopardy of penalties, interest and potentially even criminal prosecution for claiming the ERC when they don’t qualify and aren’t entitled to it. This latest warning comes as the IRS continues to take special steps to counter aggressive marketing around the ERC. Since the IRS announced a moratorium on processing new claims filed after Sept. 14, 2023, the agency’s compliance efforts on ERC claims have topped more than $1 billion so far since last fall as work continues on a number of efforts to counter questionable claims. With compliance work on ERC claims continuing to expand through both audits and criminal investigations, the IRS reminds businesses they still have an option to pull back on any unprocessed claims. Businesses should quickly pursue the claim withdrawal process if they need to ask the IRS not to process an ERC claim for any tax period that hasn’t been paid yet. Back to Top - 7. INFORMATION TO SHARE WITH CLIENTS, EMPLOYEES AND PARTNERS - What taxpayers should do if they received a Form 1099-K in 2024 Misinformation continues to circulate about why taxpayers may or may not have received a Form 1099-K in 2024.The IRS is asking payroll professionals to help inform employees, clients and partners about what they should do if they received a Form 1099-K. The IRS has also debunked common myths surrounding the Form 1099-K. Last fall, the IRS announced that previous reporting thresholds would remain for payments that businesses or individuals received through certain payment applications or online marketplaces. If a taxpayer sold goods or services and received payment through one of those platforms in 2023, they could have received a third-party reporting document Form 1099-K, Payment Card and Third Party Network Transactions. Even if their transactions fell below the 2023 threshold, taxpayers may still have received the form. IRS Direct File pilot program officially open in 12 pilot states The IRS announced the full launch of the Direct File pilot program, following several weeks of testing. It’s now available to taxpayers in Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming. All eligible taxpayers in these states – representing 19 million taxpayers – may now use the system at any time. It is easy to use, mobile-friendly and offers live online support during IRS business hours. See the recent news release and IRS Tax Tip. Back to Top - 8. UPDATES TO IRS FORM INSTRUCTIONS, PUBLICATIONS - This information may be of interest to payroll professionals and their clients: Form instructions: • Instructions for Form 1099-K, Payment Card and Third Party Network Transactions • Instructions for Form 943-X (Sp), Adjusted Employer’s Annual Federal Tax Return for Agricultural Employees or Claim for Refund (Spanish) • Instructions for Form 944-X (Sp), Adjusted Employer’s ANNUAL Federal Tax Return or Claim for Refund (Spanish) Publications: • Publication 5904, IRS Business Tax Account Back to Top - - Update your subscriptions, modify your password or email address, or stop subscriptions at any time on your . You will need your email address to log in. If you have questions or problems with the subscription service, visit . This service is provided to you at no charge by the Internal Revenue Service (IRS). - This email was sent to [email protected] by: Internal Revenue Service (IRS) · Internal Revenue Service · 1111 Constitution Ave. N.W. · Washington, D.C. 20535 GovDelivery logo

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