As the Tax Season 2024 is here, so are potential scams and fraudulent activities, prompting the IRS to issue warnings about common schemes. Here’s a compilation of important facts about various scams and advice by the IRS for Tax Season 2024.

False Fuel Tax Credit Claims

Taxpayers should be highly cautious of false Fuel Tax Credit claims, as warned by the IRS in its Dirty Dozen list for Tax Season 2024. Scammers often target individuals with promises of significant refunds through illegitimate claims for this credit, exploiting unawareness of its eligibility criteria. Vigilance, verification of information, and reliance on official IRS resources are crucial to avoid falling prey to these scams, emphasizing the importance of a thorough review process to ensure accurate and lawful tax filings.

Untrustworthy Tax Preparers (Ghost Preparers)

Taxpayers must remain vigilant against untrustworthy tax preparers, a prominent warning from the IRS’s Dirty Dozen list for Tax Season 2024. The term “ghost preparers” refers to individuals who may not sign tax returns they prepare, leaving taxpayers vulnerable to potential fraud and identity theft. These preparers often promise inflated refunds or charge exorbitant fees, exploiting unsuspecting individuals. Taxpayers must verify the credentials of their tax preparers, ensuring they are qualified, registered, and reputable. Relying on certified tax professionals and maintaining awareness of red flags can help protect against financial losses and legal complications during tax filing.

Fake Charities Exploiting Taxpayer Generosity

The IRS’s inclusion of fake charities in its “Dirty Dozen” list underscores the risks taxpayers face during tax season. These scams prey on people’s goodwill, using deceptive tactics to extract money without benefiting genuine charitable causes. IRS advises to beware of scammers who might use email communications or manipulate caller IDs to deceive people into donating funds to charities. These fraudsters often target groups such as seniors and those with limited English proficiency. Taxpayers must remain vigilant, verifying the legitimacy of charities before donating.

Offer in Compromise Mills

Another scam for Tax Season 2024 is pricey offer-in-compromise (OIC) “mills” that falsely claim their services are necessary to resolve IRS debt. The OIC program offered by the IRS is a beneficial avenue for taxpayers struggling to settle their federal tax debts, and reputable companies are providing legitimate assistance. However, the IRS advises individuals to invest a few moments in reviewing the resources provided on IRS.gov to ascertain if they qualify for the OIC program. This step helps individuals avoid costly promoters and ensures they understand the eligibility criteria thoroughly before seeking assistance.

Helpful Scammers Offering to Set Up Online Accounts

The IRS warns against scammers offering to set up online accounts. The IRS Online Account serves as a convenient tool for individuals to access their tax information. However, it has also become a target for identity thieves who exploit it to file fraudulent tax returns and claim hefty refunds in the victim’s name. Taxpayers should avoid sharing sensitive personal data over the phone, email, or social media to protect themselves and avoid getting caught up in these scams.

Aggressive Promoters Making Questionable ERC Claims

The IRS’s “Dirty Dozen” for tax season 2024 list includes a warning about aggressive promoters who entice taxpayers into making questionable claims for the Employee Retention Credit (ERC). This scam targets small businesses, urging them to engage in activities that could lead to tax non-compliance and penalties. Taxpayers are advised to exercise caution and seek reliable tax professionals’ advice to avoid falling victim to these deceptive practices. As the IRS is continuing tax audits and investigations for false claims of ERC, it emphasizes the availability of a special withdrawal program for businesses to rectify erroneous claims and ensure compliance with tax regulations.

Phishing And Smishing Scams

The IRS has launched its annual “Dirty Dozen” campaign with a strong warning about phishing and smishing scams. These deceptive tactics involve fraudulent emails (phishing) and text messages (smishing) that appear to be from legitimate sources, such as the IRS or financial institutions, but are designed to steal sensitive information like Social Security numbers or financial details. The IRS doesn’t initiate contact with taxpayers by email, text messages, or social media channels to request personal or financial information.

High-Income Filers: Targeted by Illegal Tax Schemes

The improper art donation deductions, charitable remainder annuity trusts (CRATs), and monetized installment sales are all illegal tax schemes targeting high-income filers. These schemes exploit loopholes or misinterpretations of tax laws, posing significant risks of tax evasion and penalties for those involved.

Beware of Spear phishing and “New Client” Scams

In the ongoing spear phishing attacks targeting tax professionals and businesses, these attacks typically involve fraudulent emails or messages designed to deceive recipients into disclosing confidential information, such as login credentials or financial data, under the guise of legitimate communication. Moreover, the surge in “new client” scams adds another layer of vulnerability, as fraudsters exploit the trust between tax professionals and their clients to gain access to sensitive information or perpetrate financial fraud. Tax professionals and businesses must exercise caution, implement robust cybersecurity measures, and educate employees about the signs of phishing attempts to mitigate the risk of falling victim to these malicious schemes.

Social Media Tax Advice: Risks and Pitfalls for Taxpayers

Taxpayers should be wary of relying on social media platforms like TikTok for tax advice, as these channels can be rife with inaccurate or misleading information. Scammers frequently exploit these platforms to propagate fraudulent schemes, encompassing both common tax documents like Form W-2 and more obscure ones like Form 8944. One prevalent scam circulating on social media advises individuals to manipulate income details on Form W-2 and file electronically, falsely promising substantial refunds. Similarly, misinformation surrounding Form 8944 misleads taxpayers into believing they can use it to secure refunds from the IRS, irrespective of their actual tax liabilities. However, Form 8944 is exclusively designated for tax professionals seeking waivers to file paper returns and is inapplicable to individual taxpayers. Falling prey to such scams can lead to severe penalties and legal consequences for filing fraudulent tax returns. Therefore, taxpayers must exercise vigilance, seek guidance from reputable sources, and avoid succumbing to scams on social media platforms to safeguard their financial interests.

Bogus Tax Avoidance Strategies and International Schemes

As the annual taxpayer awareness campaign ends, it’s crucial to highlight the threat posed by bogus tax avoidance strategies and schemes with international elements. These schemes often promise unrealistic or exaggerated tax savings through intricate structures or offshore accounts, luring taxpayers into non-compliance with tax laws and risking severe penalties or legal consequences. With globalization and advancements in technology, scammers exploit cross-border transactions and offshore entities to conceal income, evade taxes, and exploit loopholes in tax regulations. Taxpayers must remain vigilant, seek advice from tax professionals, and ensure compliance with tax laws to avoid falling victim to these deceptive schemes and safeguard their financial well-being.

IRS is highlighting various scams through its “Dirty Dozen” campaign for Tax Season 2024. This list will be updated to include all dozen scams as and when the IRS publishes about these scams. By remaining vigilant, reporting suspicious activities, and engaging certified tax professionals, taxpayers can protect themselves from financial losses, identity theft, and legal complications during tax filing season.

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 across the country.  Please contact us for more information.  https://irsauditgroup.com/contact/

Telephone Number: (310) 498-7508

info@irs-audit-group.com

In this tax season 2024, the IRS sets deadlines for taxpayers to pay their taxes, including estimated tax payments not subject to withholding. The first quarter estimated tax payment deadline for 2024 is April 15. This blog delves into the details of this deadline, its significance, who it affects, why it exists, penalties for non-compliance, exemptions, tools for estimation, required forms, and IRS support.

When is the Deadline?

April 15 is the deadline for tax season 2024 to submit first quarter estimated tax payments to the IRS. This deadline is crucial for individuals and businesses with income sources that do not have taxes withheld, such as self-employment income, interest, dividends, and rental income.

Who Needs to File?

This deadline primarily affects self-employed individuals, freelancers, independent contractors, sole proprietors, partners in partnerships, and shareholders in S corporations. It also includes individuals who receive income from sources where taxes are not automatically withheld.

Reason for Quarterly Payments

Taxpayers are required to make estimated tax payments quarterly because of the pay-as-you-go system in the U.S. tax system. This system ensures that taxes on income earned during the year are paid throughout the year, rather than waiting until the following year. This helps in avoiding large tax bills at the end of the year and ensures a steady flow of revenue for the government.

Types of Income

When estimating quarterly tax payments, taxpayers need to ensure they include all forms of earned income, encompassing regular employment income, part-time work or side jobs, earnings from selling goods or services (typically reported on Form 1099-K), and various other sources like interest, dividends, capital gains, alimony, and rental income. It’s crucial to incorporate all income, including those not subject to withholding, to accurately calculate and fulfill tax obligations, thereby avoiding penalties or underpayment issues.

Penalties for Late Filing

Failure to file estimated tax payments by April 15 can result in penalties. The penalty amount varies depending on factors like the amount of tax owed and the duration of the delay. Taxpayers can use IRS penalty calculators or consult IRS publications to understand the potential penalties they might face.

Estimation and Required Documentation

To report and pay estimated taxes, individuals and businesses to file Form 1040-ES. This form includes worksheets for calculating the estimated tax amount and payment vouchers for submitting payments to the IRS. Additionally, there are online calculators and tax preparation software that can assist in accurately estimating tax liabilities based on income and deductions. It is also advisable to engage certified tax professionals to avoid any tax disputes, penalties, or IRS audits in the future.

Exemptions and Due Date Extensions

Certain groups of taxpayers, including farmers and fishers, recent retirees, individuals with disabilities, those receiving irregular income and victims of disasters are eligible for exceptions to penalties and special regulations.

Following recent disasters, eligible taxpayers in Tennessee, Connecticut, West Virginia, Michigan, California, and Washington have an extended deadline for tax season 2024 for estimated tax payments until June 17, 2024. Similarly, eligible taxpayers in Alaska, Maine and Rhode Island have until July 15, 2024, and eligible taxpayers in Hawaii have until Aug. 7, 2024. For more information, visit Tax Relief in disaster situations.

In addition, taxpayers who live or have a business in Israel, Gaza, or the West Bank, and certain other taxpayers affected by the terrorist attacks in the State of Israel, have until Oct. 7, 2024, to make estimated tax payments.

IRS Support and Assistance

The IRS provides various resources and support for taxpayers regarding estimated tax payments. This includes to include the Interactive Tax Assistant, tax topics and frequently asked questions, and assistance through phone or in-person support at IRS offices or tax assistance centers.

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 across the country.  Please contact us for more information.  https://irsauditgroup.com/contact/

Telephone Number: (310) 498-7508

info@irs-audit-group.com

A solid grasp of tax laws and regulations is essential for businesses to effectively handle their financial matters. Nevertheless, even with meticulous attention, errors can occur, which may result in complications when it comes to complying with tax laws and regulations.  In a few circumstances, these errors might prompt a tax audit by the Internal Revenue Service (IRS). Failing an IRS audit can result in severe outcomes, such as monetary fines and harm to the organization’s image.  In this article, we’ll explore what could happen if a business fails an IRS audit, highlighting the importance of taking proactive steps to comply with tax rules and seeking help from knowledgeable tax professionals to protect businesses from these challenges.

Financial Consequences

1. Penalties and Fines: Failing an IRS audit can result in hefty penalties and fines. These penalties can be imposed for underreporting income, overstating deductions, or other inaccuracies in tax filings. The financial impact of these penalties can be substantial and may strain the resources of the business.
2. Additional Taxes: Besides penalties, businesses need to pay additional taxes if an audit reveals unreported income or disallowed deductions. These additional tax liabilities and accrued interest can further exacerbate the financial burden on the business.
3. Legal Costs: In cases of serious non-compliance or suspected tax evasion, businesses incur legal costs defending themselves against IRS scrutiny. Legal representation can be expensive, adding to the overall financial strain caused by the audit process.

Reputational Consequences

1. Loss of Trust: Failing an IRS audit can damage a business’s reputation and erode trust among stakeholders, including customers, suppliers, and investors. Public knowledge of non-compliance issues can tarnish the business’s image and undermine its credibility in the marketplace.
2. Negative Publicity: News of an IRS audit or allegations of tax evasion can attract negative publicity, further harming the business’s reputation. Negative media coverage can have lasting effects on consumer perception and may drive away customers and business partners.
3. Regulatory Scrutiny: Failing an IRS audit triggers increased scrutiny from other regulatory bodies, including state tax authorities and industry regulators. This additional scrutiny can disrupt business operations and add further strain to the business’s reputation and resources.

Importance of Proactive Compliance Measures and Professional Representation

1. Maintaining Accurate Records: Businesses need to maintain accurate financial records and documentation to support their tax filings. Proactive record-keeping can help businesses identify and address potential compliance issues before they escalate into audit triggers.
2. Seeking Professional Guidance: Engaging qualified tax professionals from a reputed tax audit representation firm can provide businesses with expert guidance on navigating complex tax laws and regulations. Professional representation during an IRS audit can help businesses present their case effectively and minimize the risk of adverse outcomes.
3. Co-operating with Authorities: Businesses should cooperate fully with IRS auditors and provide requested information promptly. Transparency and cooperation demonstrate a commitment to compliance and may help mitigate penalties and fines.

If you have received notification from the IRS which is usually via. mail for IRS Audit, don’t panic but don’t delay. It is important to read the mail completely and understand the reason stated for the audit, the next step to be taken, or the documents requested by the IRS. To navigate these challenges, it is recommended to engage a tax audit representation firm like the IRS Audit Group.

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 across the country.  Please contact us for more information.  https://irsauditgroup.com/contact/

Telephone Number: (310) 498-7508

info@irs-audit-group.com

The Internal Revenue Service (IRS) has instructed taxpayers to avoid errors on their federal tax returns and expedite their refunds for the Tax Season. These guidelines aim to assist in submitting returns that are thorough, precise, and free of mistakes.  To help you navigate through Tax Season 2024 smoothly, here are some tips to avoid tax return mistakes and optimize your refund.

GATHER ALL TAX DOCUMENTS

Start gathering all necessary documents well before the 2024 tax filing deadline. This includes W-2 forms, 1099s, receipts for deductions, investment statements, and any other relevant financial documents. Having everything organized will make the tax preparation process much smoother and reduce the chances of overlooking important information.

USE ELECTRONIC FILING

The IRS recommends that taxpayers and their tax professionals leverage electronic filing channels, including IRS Free File or other certified e-file service providers. Furthermore, certain taxpayers in 12 States have the option to participate in the Direct File pilot program. Electronic filing offers the advantage of reducing mathematical inaccuracies and pinpointing potential tax credits or deductions for which the taxpayer may be eligible. It is imperative for taxpayers to conduct a thorough review of their tax returns to guarantee precision and compliance. Electing electronic filing and opting for direct deposit represent the most expeditious and secure methods to receive refunds.

USE THE CORRECT FILING STATUS

Tax software platforms are designed to mitigate errors by guiding users through the selection process of their tax return filing status. For this tax season 2024, individuals who are uncertain about their appropriate filing status can utilize the Interactive Tax Assistant available on IRS.gov. This tool aids individuals in determining the correct filing status, especially in situations where multiple statuses may be applicable.

DOUBLE-CHECK PERSONAL DETAILS

Taxpayers are required to provide precise information including the name, date of birth, and Social Security number (SSN) for each dependent listed on their individual income tax return. It is imperative that the SSN and individual’s name are entered accurately, reflecting the information as it appears on the Social Security card. In instances where a dependent or spouse does not possess an SSN and is ineligible to acquire one, an assigned Individual Taxpayer Identification Number (ITIN) should be furnished in place of the SSN.

FILE YOUR DIGITAL ASSETS TRANSACTIONS

All filers of Forms 1040, 1040-SR, 1040-NR, 1041, 1065, 1120, and 1120S must indicate their response to the digital asset question by selecting “Yes” or “No”. This question must be addressed by all taxpayers, irrespective of whether they participated in digital asset transactions during the tax year 2023. Furthermore, taxpayers are obligated to report all income derived from digital asset transactions.

For comprehensive guidelines regarding when to affirm “yes” and instructions on reporting digital asset-related income, individuals are advised to refer to the IRS.gov Digital Assets section.

REPORT ALL TAXABLE INCOME

Failure to report income may result in penalties and interest. Income tax information can help prevent errors that slow down the process and help find missed deductions or credits. Taxpayers should have all their income information ready before they begin filing their taxes. IRS can even conduct tax audits on such filings and may ask for further documents or even visit the premises for field audits.

DOUBLE CHECK ROUTING AND ACCOUNT NUMBERS

Taxpayers have the flexibility to choose to have their federal income taxes deposited into one, two, or three accounts of their choice. Bank documentation containing correct numbers and account numbers is important, especially when a refund is required, to reduce the risk of delays or the refund being sent to an undesirable location. Taxpayers also have the opportunity to use their refunds to purchase US Savings Bonds, thus making the most of their tax refunds.

SIGN AND DATE THE TAX FILINGS

If filing a joint tax return, both spouses must sign and date the document. For those independently preparing and electronically submitting their taxes, authentication involves entering the adjusted gross income (AGI) from the previous year. Taxpayers seeking guidance can consult resources like “Validating Your Electronically Filed Tax Return” for assistance with any questions they may have.

ACCURATE MAILING ADDRESS

Taxpayers and tax professionals are urged to opt for electronic filing whenever possible. However, if a paper tax return must be submitted, it’s vital to confirm the accurate mailing address. This verification can be carried out on the official IRS website, IRS.gov, or by referring to the instructions provided with Form 1040. This precautionary step is essential for minimizing processing delays caused by incorrect mailing addresses.

KEEP A COPY

After completing their tax filing, individuals should proactively produce duplicates of their signed returns and any accompanying schedules for their records. Maintaining these copies simplifies future tax preparations and assists in revising calculations, especially when filing amended returns. Moreover, it is recommended that taxpayers hold onto records supporting their reported income, deductions, or credits until the statutory period for that specific tax return expires. This proactive approach ensures adherence to regulatory standards and streamlines potential inquiries or audits by tax authorities.

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 across the country.  Please contact us for more information.  https://irsauditgroup.com/contact/

Telephone Number: (310) 498-7508

info@irs-audit-group.com

The Internal Revenue Service (IRS) administers the Advanced Manufacturing Investment Credit (AMIC) in Tax Season 2024.  The objective is to motivate businesses to upgrade their manufacturing processes, and thereby boost competitiveness and stimulate economic growth.   In the fast-paced industrial environment, staying ahead often necessitates significant investments in advanced manufacturing technologies.

What is Advanced Manufacturing Investment Credit?

The AMIC (section 48D) is a targeted initiative under the Inflation Reduction Act (IRA) to boost the manufacturing sector, particularly in critical areas such as semiconductors and renewable energy. Offering a direct dollar-for-dollar tax reduction, it provides a significant financial incentive over deductions, spurring investments in advanced manufacturing technologies. This credit underlines the government’s focus on domestic manufacturing resurgence and supply chain security, with unique provisions for credit sale or transfer, enhancing its appeal and offering businesses strategic flexibility for growth and innovation in vital industries.

How much is the Credit for Tax Season 2024?

Eligible businesses may claim a tax credit equal to 25% of the qualified investment costs incurred for the purchase of advanced manufacturing equipment and related expenses. Qualified investments include expenditures on tangible property used in domestic manufacturing processes, such as machinery, equipment, and software specifically designed for advanced manufacturing activities.

Eligible Businesses for Tax Season 2024

To be eligible for the AMIC, a business must be engaged in manufacturing activities within the United States and must invest in qualified advanced manufacturing technology. Additionally, eligible taxpayers must obtain certification from the Department of Energy (DOE) or the National Institute of Standards and Technology (NIST) confirming that the equipment or process meets the criteria for advanced manufacturing.

For this overview, an advanced manufacturing facility is defined under proposed regulation section 1.48D-3(f) as a site primarily engaged in producing semiconductors or semiconductor manufacturing equipment. The facility’s assets must be central to semiconductor production or the creation of equipment to manufacture semiconductors.

Special Rules for Partnerships and S Corporations

Partnerships and S corporations may allocate the AMIC to their partners or shareholders according to their ownership interests in the business entity. This allows for greater flexibility in distributing tax benefits among multiple stakeholders and can enhance the attractiveness of the credit for businesses structured as pass-through entities.

How to Claim and What’s the Deadline?

To claim the AMIC, eligible businesses must file Form 8942, “Application for Certification of Qualified Investments Eligible for Credits and Grants Under the Qualifying Advanced Energy Project Credit,” with the IRS. Additionally, they must adhere to specific deadlines outlined by the IRS to ensure timely processing of their applications and claims.

The deadline for claiming the AMIC filing for tax year 2023 corresponds to the due date of Tax Season 2024 which is April 15, 2024. Taxpayers can include AMIC for the automatic extension that is due date on Oct. 15, 2024. It’s essential for businesses to adhere to filing deadlines to maximize their tax benefits and avoid potential penalties or interest charges.

In conclusion, the Advanced Manufacturing Investment Credit represents a valuable opportunity for businesses to invest in advanced manufacturing technologies while reducing their tax liabilities. By leveraging this incentive, companies can accelerate their growth, drive innovation, and strengthen their competitive position in the global marketplace. However, it’s crucial for businesses to carefully assess their eligibility, comply with applicable rules and deadlines, and seek guidance from tax professionals or the IRS when necessary.

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 across the country.  Please get in touch with us for more information.  https://irsauditgroup.com/contact/

Telephone Number: (310) 498-7508

info@irs-audit-group.com

Every year, based on the Federal Emergency Management Agency’s (FEMA) federally declared disaster areas, the IRS will implement administrative disaster tax relief measures. For the Tax Season 2024, the IRS made special tax law provisions to provide affected individuals and businesses with additional time to file returns, pay taxes, and complete other time-sensitive tasks. This assistance is specifically tailored for taxpayers who are affected by a disaster declared at the federal level, guaranteeing that they receive essential assistance during difficult circumstances. It is important to note that certain conditions may need to be met in order to qualify for the tax relief and provisions offered by the IRS. By following the established procedures and guidelines, disaster victims can benefit from the assistance provided by the government to alleviate the financial burden caused by the disaster.

The relief for the tax season 2024 extends the deadlines for filing and paying taxes that fell between Sept. 10, 2023, and June 17, 2024. This means that individuals and businesses affected in the disaster regions will now have until June 17, 2024, to submit their returns and settle any outstanding taxes from this period.

Who Qualifies for the Extension in Tax Season 2024?

In order to be eligible for an extension on filing your taxes, it is required that you are a resident or business situated in a region identified by the Federal Emergency Management Agency (FEMA) as a federally declared disaster area. This encompasses not only the main area impacted by the disaster but also the surrounding areas that have been affected.

Furthermore, the IRS is prepared to collaborate with any taxpayer residing outside the disaster zone but whose essential records are required to comply with a deadline falling within the extension period are situated in the impacted region. Taxpayers eligible for assistance and residing beyond the disaster zone must reach out to the IRS at 866-562-5227 for further guidance and support. This provision also encompasses individuals who participated in relief efforts and are associated with a reputable governmental or charitable institution.

What is included in the Extension?

Extension generally encompasses a range of tax deadlines, which can include filing income tax returns, making quarterly estimated income tax payments, and submitting different business tax returns. Additionally, extension can be utilized for other tax-related tasks, like requesting an extension for an individual tax return or making contributions to an IRA. The June 17, 2024, deadline will now apply to the following activities.

• Individual income tax returns and payments normally due on April 15, 2024.
• 2023 contributions to IRAs and health savings accounts for eligible taxpayers.
• 2023 quarterly estimated income tax payments normally due on Sept. 15, 2023, and Jan. 16, 2024.
• Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31 and April 30, 2024.
• Calendar-year partnership and S corporation returns normally due on March 15, 2024.
• Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2024.
• Calendar-year tax-exempt organization returns normally due on May 15, 2024.

How to Claim the Extension?

Taxpayers residing in a federally declared disaster area who qualify for the extension do not have to take any action to receive it. The IRS will recognize individuals located in the designated disaster zone and grant them an extension on their tax deadlines without requiring any additional steps. In the event that you receive a penalty notification from the IRS due to late filing or payment of taxes, you have the option to contact the phone number provided on the notice to request a waiver of the penalty.

The tax relief measures have been implemented as a component of a well-coordinated federal initiative aimed at addressing the extensive harm inflicted by these calamities. These measures have been devised after careful evaluation of the local damage assessments conducted by FEMA, ensuring that the relief efforts are targeted toward the areas most affected by the disasters.

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 across the country.  Please contact us for more information.  https://irsauditgroup.com/contact/

Telephone Number: (310) 498-7508

info@irs-audit-group.com

What is the Credit?

Alternative Fuel Vehicle (AFV) Refueling Property credit is the credit given to taxpayers under section 30C credit. The taxpayers must have installed and utilized a certified vehicle refueling and recharging station at their residential or commercial properties in the tax year 2023 per the detailed eligibility criteria.

Eligibility Criteria

The criteria to qualify for the AFV Refueling Property credit is to have a property that must either store or dispense clean-burning fuel or recharge electric motor vehicles. Along with that:

• The property must be placed in service during the tax year 2023.
• The property should have an original use that began with the taxpayer.
• The property must be used primarily in the U.S. and U.S. territories.
• The installation must be either on business property or a main home.

To be eligible, all qualified fueling equipment also must be installed in a population census tract that is a low-income community or not an urban area.

How Much is the Credit for the Tax Season 2024?

The credit for qualified refueling property as of January 1, 2023, is as follows:

• 6% credit with a maximum credit of $100,000 for each single item of property, for properties that are subject to depreciation.
• 30% credit with $100,000 limit, for businesses that meet the prevailing wage and apprenticeship requirements.
• 30% of the cost with a maximum credit of $1,000 per item, for the qualifying properties that are not subject to depreciation.
• 30% of the cost of qualified property with a maximum total credit allowed of $30,000 per location for depreciable property and $1,000 per location for all the qualifying properties (including personal property) that is being placed in service before January 1, 2023.

What are the Key Changes in Tax Season 2024?

According to Notice 2024-20, the property placed in service as of Jan 1, 2022, to Dec 31, 2032, must follow the below qualifications, credits, and transfer options:

1. Modification of Section 30C Credit Limitation:
   • The IRS adjusted the limitation on the 30C credit, changing it from being based on the location of the property to being based on every single item of qualified AFV refueling property.
   • For depreciable property, the credit is limited to $100,000 per item. For non-depreciable property, the limit is $1,000 per item.
2. Requirement for Eligible Census Tract:
   • The IRS introduced a requirement that qualified alternative fuel vehicle refueling property must be placed in service in an “eligible census tract”.
   • Eligible census tracts are defined as low-income communities or areas that are not urban.
   • To know if the property is eligible the taxpayers must determine the GEOID (an 11-digit ID) of the property and crosscheck with the GEOID in appendix A and B of the notice. If the property’s GEOID is listed in the notice, then the property is eligible for credit.
   • To help determine if an installation location is in a qualified census tract, please see Argonne National Laboratory’s 30C Tax Credit Eligibility Locator tool and list of frequently asked questions.
3. Clarification on Property Eligibility:
   • The IRS clarified that the property will still be considered qualified AFV refueling property even if it can charge and discharge electricity from a vehicle battery to an external load.
4. Modification of Qualified Property Definition:
   • The definition of qualified AFV refueling property was amended to include depreciable property designed specifically to charge two- and three-wheeled electric vehicles primarily used on public streets, roads, or highways.
5. Adjustment of Credit Amount:
   • The IRS reduced the credit amount for depreciable qualified alternative fuel vehicle refueling property from 30% to 6%.
   • An enhanced credit amount is provided for such property that is part of a qualified alternative fuel vehicle refueling project meeting certain criteria.
6. Option for Applicable Entity Election:
   • Applicable entities, defined in section 6417(d)(1)(A), can choose to make an election under section 6417 to treat the credit amount as a payment against the tax imposed by the Code.
   • The amount of the section 30C credit, if treated as a general business credit under section 38, is considered an applicable credit.
7. Transfer Option for Eligible Taxpayers:
   • Eligible taxpayers can opt to transfer all or a portion of their section 30C credit determined for any taxable year to an unrelated taxpayer by making an election under section 6418.

How to Claim the Credit?

Partners and S corporations having AFV Refueling Property placed in service during the tax year 2023, can be reported and claimed by filling the Form 8911 (PDF), for more instructions visit https://www.irs.gov/pub/irs-pdf/i8911.pdf. Other taxpayers can report the credit directly online 1s of part III of Form 3800(PDF) which is general business credit, for more instructions visit https://www.irs.gov/instructions/i3800.

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 contact us for more information.  https://irsauditgroup.com/contact/

Telephone Number: (310) 498-7508

info@irs-audit-group.com

The Internal Revenue Service (IRS) will begin accepting tax filings on January 23, 2023. This time IRS has hired more employees to help the taxpayers for a seamless experience. Taxpayers can contact IRS customer representatives through telephone and online tools as given in this link. People can also visit the IRS official website to check on the basic question under the FAQ section before contacting the customer representative team.

IRS Free Service Programs

IRS has various free services to help taxpayers with tax filing.

• The IRS’s Volunteer Income Tax Assistance and Tax Counselling for the Elderly programs are few that offer free basic tax return preparation to qualified individuals. Eligibility for the same can be checked on the above links.
• IRS Free File Program also opened on Jan 13, 2023. The service providers in this program will accept completed returns and file them electronically once it is open on Jan 23. This free file program is available only for taxpayers with AGI (Adjusted Gross Income) of $73,000 or less in 2022.
• For people in the service like the military community, the department of defense provides a free tax resource called MilTax. It includes software for tax preparation and electronic filing. It offers individualized assistance from tax advisers and up-to-date tax filing information. With MilTax, qualified taxpayers can file a federal tax return and up to three state taxes electronically for free.

Many software providers and tax professionals are already preparing taxpayers’ returns and will file them once the window is open. Therefore, IRS advises taxpayers to choose their tax professionals wisely. There are various types of tax return preparers, including enrolled agents, certified public accountants, tax attorneys, and others who don’t have professional credentials. It has even provided guidelines on selecting tax preparers through this link.

Importance of IRS Tax Credits

The IRS recommends individuals and tax professionals review their tax situations, so they don’t miss out on important tax credits like Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC). IRS even set an awareness day on Jan 27, 2023, to make them understand the benefits of the EITC program. EITC helps low- and moderate-income workers and families.

Information on IRS Refunds

Taxpayers are advised to collect and submit accurate information for error-free returns filing. This will avoid delays in processing refunds if any. If taxpayers choose direct deposit and there are no issues with their tax return, then IRS expects that most taxpayers will get their refund within 21 days of filing electronically. But taxpayers with EITC and ACTC will receive their refunds in mid-February due to processing time in identifying fraudulent refunds under the 2015 PATH Act. Taxpayers can check their refund status through Where’s My Refund? Link. This link will show an updated status by February 18, 2023, for early EITC/ACTC filers. Further, individuals can securely log in to their IRS Online Account to access personal tax account information, such as the balance, payments made, and tax records, including adjusted gross income.

National Due Date to File a 2022 Tax Return

This year the due date for tax season 2023 will be April 18, instead of April 15, unlike last year. Weekends and the District of Columbia’s Emancipation Day holiday affect the deadline, and thus the extension is given for the individuals. The taxpayers also need to file for an extension before Apr 18, if they need time to file the tax returns. Taxpayers requesting an extension will have until Monday, October 16, 2023, to file.

Key Deadlines to Remember

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. But our certified professionals cooperate and work with all IRS offices across the country. Please contact us for more information. https://irsauditgroup.com/contact/

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The Work Opportunity Tax Credit (WOTC) is a federal tax credit that businesses can use to offset the cost of hiring people from specific target groups who have consistently encountered significant barriers to employment. WOTC initiatives help to improve workplace diversity and make it easier for all citizens to acquire decent jobs.

The Consolidated Appropriation Act, 2021 authorized the extension of the Work Opportunity Tax Credit until December 31, 2025. This means taxpayers can claim the credit on or before Dec 31, 2025, for such eligible hiring. Needless to say, WOTC is only for one time per employee and cannot be claimed for re-hired.

Eligible Businesses for WOTC

There is no specific limit on business size to be eligible under this scheme. Any size of business is eligible for the work opportunity tax credit if it hires candidates from qualified groups. This credit is available to both taxpayers and certain tax-exempt employers operating in the United States and some U.S. territories. Basically, the employers must fall under the below criteria as

• Taxpayers that can claim the credit against income taxes
• Tax-exempt employers can claim the credit only against payroll taxes and only for wages paid to members of the qualified veteran targeted group.

Target Groups Qualified under WOTC

Any employers can claim WOTC for the below-targeted groups under section 51 of the Code. The employee must be a certified member of any one of the following groups to proceed with the claim.

• Veterans
• Recipients state assistance under part A of title IV of the Social Security Act (SSA)
• Individuals who have previously served time in prison or who have been convicted of a felony
• People who live in empowerment zones or rural renewal counties
• Individuals who have been referred to an employer after completing a rehabilitation plan or program
• People whose families receive supplemental nutrition assistance under the Food and Nutrition Act of 2000
• Recipients of supplemental security income benefits under title XVI of the SSA
• Individuals experiencing long-term unemployment

How much can be claimed?

The amount of tax credit under the WOTC program varies based on the employee’s target group, total hours worked, and total qualified wages earned. For instance,

• If the qualified employee has worked for at least 400 hours and is still in the first year of employment, WOTC is equal to 40% of up to $6,000 wages paid or incurred with a maximum credit of $2,400 for an employee
• If the eligible employee has 120 to 399 hours of service, then a 25% rate applies to wages
• Up to $24,000 in wages may be considered in determining the WOTC for certain qualified veteran targeted group

 Procedure to Claim WOTC

Taxpayers and Tax-exempt organizations can apply through different IRS Forms to claim WOTC. But all need to complete Form 8850 which is a Pre-Screening Notice and Certification Request to certify that the employee is qualified under the target group. These documents must be submitted to the State Workforce Agency not the IRS within 28 days of the new employee’s start date. Once the State Workforce Agency certifies the employee, Taxpayers can file Form 5884 (Work Opportunity Credit) and tax-exempt employers file Form 5884-C (Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans) to claim the WOTC.

IRS Audit Group is a Tax Audit Representation Firm in Los Angeles, California. Our Tax professionals act on the behalf of the taxpayer during an IRS audit. The IRS audit process can terrify some taxpayers but the Taxpayer Bill of Rights states that individuals can seek help from an IRS tax representative like us to represent them during the IRS audit. Don’t Panic, if you have received a mail for IRS Audit but act fast by contacting us immediately for the next step.

https://irsauditgroup.com/contact/

Telephone Number: (310) 498-7508

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The IRS tax filing deadline has ended for most individual taxpayers for the season 2022. In case, if you have not done the tax filing by the end of the deadline which was on April 18, 2022, it is important to know the consequences as well as other options. People who qualify for tax exempt or who don’t owe taxes will not receive any penalties and interests. But it is different for those who have the liability to pay tax. They need to file tax return as soon as they can do it in order to reduce penalties and interest.

For the tax season 2022, IRS advised that individuals who owe taxes need to file returns and pay as much as possible on/before Jun 14, 2022, to avoid hefty fines. It also recommended to use the electronic filing options for faster processing. Similarly, the fastest and easiest way to pay the taxed is with IRS Direct Pay.

IRS Late Filing Penalty Structure

Missing the deadline of June 14 will typically result in a failure-to-file penalty, which is also known as a minimum late filing penalty. The minimum fine is $435 or 100% of the unpaid tax, whichever is smaller, if the return is more than 60 days late. If the taxpayer owes $435 or less in taxes, the penalty will be equivalent to that amount. The minimum fine will be at least $435 if they owe more than that.

Under the normal calculation, this penalty is 5% of the unpaid tax for each month or part of a month that the return is late, up to a maximum of 25%. Once the taxpayer files return, the late filing penalty will no longer be charged. In addition, once the tax is paid, the separate late-payment penalty and interest will also stop growing. None of these costs need not be calculated by the taxpayer. The IRS will instead send them a bill for any overdue sum.

Late Filing Options for Tax Season 2022

Even if the taxpayers have not filed the returns before the April deadline, they can do so electronically through Free-File service. Those who qualify can avail this free-file service until October 17, 2022. If you are not eligible for IRS Free File, then you can e-file using Free File Fillable Forms. The IRS paper forms used in this option are electronic counterparts. It helps individuals who are comfortable filing their own taxes where the e-filing does the part of the math.

Sometimes, taxpayers may miss the deadline because they were not able to pay the taxes, which in case they can opt for payment plan with the IRS. The best way to apply is to use the IRS Online Payment Agreement tool. Once the online process is complete, you’ll receive immediate notification of whether the agreement is approved. IRS provides two types of online payment plans as follows

• Short-term payment plan: If the entire amount owed, including taxes, penalties, and interest, is less than $100,000 and the payment period is 120 days or less.
• Long-term payment plan: If the total amount payable for the tax, penalties, and interest is less than $50,000 and the payment period is greater than 120 days. If IRS approves long-term payment plan, a setup fee can be charged depending on the taxpayers’ income.

If you are not eligible for an online payment plan, you may also request an installment agreement by submitting Form 9465, “Installment Agreement Request”, with the IRS. If the IRS approves your IA, a setup fee may apply depending on your income.

Can You Avoid the Penalties?

The penalties for late filing, late payment, and interest on unpaid taxes pile up quickly, so it’s crucial to file as soon as possible. A taxpayer who files after the deadline can, however, under some circumstances, be eligible for penalty relief. Those who received a penalty may call the IRS at the number listed on their notification and explain why they were unable to file and pay on time.

Administrative penalty reduction is frequently available to taxpayers who have a history of timely filing and payment. Generally, a taxpayer is eligible if they have been timely filing and paying taxes for the last three years and meet additional criteria.

IRS Audit Group is a Tax Audit Representation company in Los Angeles, California with a team of Tax Professionals, CPAs, Enrolled Agents, and Tax Attorneys. They are primarily specialized in IRS Audit Representation. We provide free consultation to understand your tax problems. Contact us: https://irsauditgroup.com/contact/

Telephone Number: (310) 498-7508

Email Address: info@irs-audit-group.com