IRS in new stage of ERC work; Businesses should fix incorrect claims now

June 25, 2024

After a detailed review to protect businesses, the IRS plans to deny thousands of improper high-risk Employee Retention Credit claims while starting a new round of processing lower-risk claims to help eligible taxpayers.

The IRS urges businesses to review IRS resources and consult their trusted tax professional for help with resolving incorrect claims.

ERC Eligibility Checklist (interactive version and a printable guide) includes cautions about common areas of misinformation and links to facts and examples.
7 warning signs ERC claims may be incorrect outlines tactics that unscrupulous promoters have used and why their points are wrong.
Frequently asked questions about the Employee Retention Credit includes eligibility rules, definitions, examples and

Guidance issued on using retirement plan distributions for emergencies

The IRS issued new guidance on exceptions to the 10% additional tax when taking early permissible retirement plan distributions for emergency personal expenses and for victims of domestic abuse. These provisions became effective Jan. 1, 2024.

New FAQs for employers offering education assistance programs

The IRS issued frequently asked questions in FS-2024-22 related to educational assistance programs. Taxpayers may exclude certain educational assistance benefits from their gross income if they are provided under an educational assistance program.

Businesses: Childcare Tax Credit is worth up to $150,000

The Employer-Provided Childcare Tax Credit is an incentive for businesses to provide childcare services to employees. To be eligible, an employer must have paid or incurred qualified childcare costs during the tax year to provide childcare services to employees.

Find out more at IRS Employer-Provided Childcare Tax Credit including rules on expenses and facilities, and how to claim the credit on Form 8882.

IRS focusing on abusive use of partnerships

The IRS announced new steps to combat abusive partnership transactions that help wealthy taxpayers avoid paying what they owe. A new group in the Office of Chief Counsel will focus on developing guidance on partnerships, including closing loopholes. The office will work closely with a pass-through group in the Large Business and International division that will be established this fall.

Treasury and the IRS issued a fact sheet on the inappropriate use of partnership rules following discoveries by IRS audit teams.

IRS warns seniors about scammers posing as government agencies

The IRS issued a warning about the rising threat of impersonation scams.

The warning was part of a wider effort before World Elder Abuse Awareness Day on June 15. These efforts aim to foster a better understanding of the neglect and abuse faced by millions of older adults, focusing attention on the contributing cultural, social, economic and demographic factors.

Still haven’t filed a 2023 tax return? Review these options

The IRS has options to help taxpayers who missed the April 15 deadline to file their 2023 federal income tax return. Get information on:

Adjusting withholding
Payment options
Qualifying for automatic extensions
Qualifying for penalty relief

Disaster tax relief for Kentucky and West Virginia

Tax relief was announced for individuals and businesses in parts of Kentucky and West Virginia affected by severe storms, straight-line winds, tornadoes, landslides and mudslides that began on April 2, 2024.

These taxpayers have until Nov. 1, 2024, to file various federal individual and business tax returns and make payments.

Energy credits

The IRS and Treasury recently issued guidance on energy incentives.

Final regulations on the prevailing wage and apprenticeship requirements related to increased credit or deduction amounts for certain clean energy incentives.
Revenue Procedure 2024-26 for the submission of information by qualified manufacturers of new clean vehicles and dealers and sellers of new clean vehicles and previously owned clean vehicles. The guidance provides procedures for qualified manufacturers to submit attestations, certifications and documentation demonstrating their compliance with rules regarding new clean vehicles placed in service after Dec. 31, 2024.
Notice 2024-48, which includes information taxpayers may use to determine whether they meet certain requirements under the Statistical Area Category or the Coal Closure Category in Notice 2023-29 for purposes of qualifying for the Energy Community Bonus Credit. The IRS also updated the frequently asked questions for energy communities.

Find more information on the Inflation Reduction Act of 2022 page on IRS.gov.

IRS Careers website revamped for job seekers

The IRS Careers website is designed to connect job seekers with IRS opportunities. Part of the ongoing hiring campaign enabled by Inflation Reduction Act funding, the IRS modernized its primary vehicle to publicize job opportunities and hire new talent.

Revised draft Form 6765 released

Form 6765, Credit for Increasing Research Activities, also known as the Research Credit, was revised to ease taxpayer burden and improve the information received for tax administration.

2024 IRS Nationwide Tax Forum: seminars, special events for tax professionals

The continuing education agenda is available for the 2024 IRS Nationwide Tax forum featuring 45 seminars on topics that will help tax professionals serve clients.

Attendees can also attend special events.