The Internal Revenue Service (IRS) and the Coalition Against Scam and Scheme Threats (CASST) have announced several changes for the 2025 tax filing season. These changes are designed to protect taxpayers from becoming victims of scams and schemes and to prevent tax professionals from having their credentials compromised. Below are a few changes that are important for taxpayers before filing.

 

  1. New Fuel Tax Credit Statement

To protect taxpayers, the IRS has introduced a new form, the “Statement Supporting Fuel Tax Credit (FTC) Computation – 1,” to educate taxpayers on the eligibility requirements for claiming the Fuel Tax Credit. This credit is designed for off-highway business and farming use.

 

Key Details:

  • Who Should File the New Statement? Individuals filing Form 1040, U.S. Individual Income Tax Return, for the tax year 2024 who claim non-taxable use of gasoline, aviation gasoline, undyed diesel fuel, or undyed kerosene on Form 4136, Credit For Federal Tax Paid On Fuels.
  • Location of the New Statement: The “Statement Supporting Fuel Tax Credit (FTC) Computation – 1” is in the instructions for Form 4136 for the tax year 2024. The statement should be completed and attached to Form 1040 along with Form 4136.
  • Information Required: The statement asks for business information, including the business name and Employer Identification Number (EIN), and details about the machinery or vehicle for which the fuel was purchased. Taxpayers will also need to complete a table showing the relationship between the estimated purchase price of the fuel and the actual cost and gallons reported on Form 4136.
  • Documentation: Taxpayers should maintain receipts and explanations with their records but should not include them with the tax return. The IRS may request proof, such as receipts, later. No proper documentation can even lead to the IRS issuing notice of tax audits. In such a case, a professional tax audit representation firm must be engaged to represent you with the IRS officials.
  • Erroneous Claims: Claims based on frivolous positions or intended to delay tax administration are subject to a penalty under the Internal Revenue Code (IRC) 6702(a). This penalty is $5,000 for each improper credit claimed and is assessed against each spouse on a married filing jointly return.

 

  1. Increased Review of “Other Withholding” Claims

The IRS is stepping up its review of “other withholding” claims on Line 25C of Form 1040. Taxpayers are encouraged to attach supporting documentation to their returns to reduce potential delays in verification.

 

Key Forms Covered by Line 25C:

  • Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding.
  • Form 8805, Foreign Partner’s Information Statement of Section 1446 Withholding Tax.
  • Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests.
  • Form W2G, Certain Gambling Winnings.
  • Form 8959, Additional Medicare Tax.
  • Schedule K-1, Partner’s Share of Income, Deductions, Credits, etc.

 

  1. Addressing “Ghost Preparers”

During the tax season 2025, the IRS will send letters to taxpayers whose returns appear to have been completed by a paid preparer who did not sign or include their PTIN. These letters are intended to educate taxpayers about the dangers of “ghost preparers” and to help the IRS identify those who are preparing returns without proper identification.

 

Issues with Ghost Preparers:

  • Ghost preparers can leave taxpayers exposed to inaccurate claims.
  • They often vanish after filing the return, leaving the taxpayer to deal with any issues that arise.

 

  1. CASST Task Force and Public-Private Partnership

Convened by IRS Commissioner Danny Werfel, the CASST task force includes federal and state tax agencies, software and financial companies, and key national tax professional associations. This group has formed a new public-private partnership focused on combating scams and schemes.

 

Commissioner Werfel’s Statement: “Since its creation, this special group across the tax community has been working to take extra steps to protect taxpayers and the tax professional community. This effort includes expanding outreach and education on emerging scams, developing innovative approaches to identify potentially fraudulent returns at the point of filing, and creating infrastructure improvements to protect taxpayers as well as federal, state, and industry tax systems.”

 

Stay Vigilant

The IRS and CASST members anticipate an increase in misinformation spread by influencers and scammers around the 2025 tax season. Instead of relying on ill-informed information from social media or shady tax return preparers, taxpayers should consult trusted tax professionals.

 

Trusted Sources for Tax Information:

  • Follow IRS social media.
  • Visit an IRS walk-in center.
  • Talk to a certified tax professional.

 

Reporting

The IRS encourages the public to report improper and abusive tax schemes, as well as tax return preparers who knowingly prepare improper returns, including “ghost preparers.” Reports can be made by mailing or faxing a completed Form 14242, Report Suspected Abusive Tax Promotions or Preparers, along with supporting material, to the IRS Lead Development Center.

  • Mail: Internal Revenue Service Lead Development Center MS7900 1973 N. Rulon White Blvd Ogden, UT 84404
  • Fax: 877-477-9135

 

 

IRS AUDIT GROUP

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices nationwide.  Please get in touch with us for more information.

 

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