e-News for Tax Professionals 2023-14

The IRS unveiled its Strategic Operating Plan, an ambitious effort to transform the tax agency and dramatically improve service to taxpayers and the nation during the next decade. The 150-page report outlines the agency's historic plans to make fundamental changes following funding from last year's Inflation Reduction Act. The plan makes clear that the resources to be deployed over the short and long term will be used to:

Rebuild and strengthen IRS customer service activities.
Add capacity to unpack the complex filings of high-income taxpayers, large corporations and complex partnerships.
Update various outdated systems in IRS core operations.

2.??Taxpayer assistance centers across the nation open on Saturday, April 8, offering face-to-face help

The IRS will host special Saturday hours this weekend at taxpayer assistance centers (TACs) across the country. The special Saturday hours will be 9 a.m. to 4 p.m., on April 8 and May 13 in dozens of states, the District of Columbia and Puerto Rico. Visit IRS.gov for the TAC locations hosting these special Saturday hours. This news release is also available in Spanish and Simplified Chinese.

3.??IRS wraps up 2023 Dirty Dozen campaign

The IRS concludes its annual Dirty Dozen list of tax scams for 2023, reminding taxpayers, businesses and tax professionals to watch out for these schemes throughout the year, not just during tax season. This year?s campaign ended with warnings against:

Promoters peddling bogus tax schemes aimed at reducing taxes or avoiding them altogether.
Schemes with international elements.

4.??Avoid penalty, interest charges: Pay taxes by April 18 deadline

Tax pros: Ensure your clients avoid interest and penalty charges by filing their returns and paying any amount due by the April 18 deadline. If taxpayers can?t pay their tax bill by the deadline, the IRS offers several options to help them meet their tax obligations. For more information, watch the video Avoiding Interest and Penalty Charges. The video is also available in Spanish, Chinese and Korean.

5.??Tax relief for Arkansas storm victims

Arkansas storm victims now have until July 31, 2023, to file various federal individual and business tax returns and make tax payments. The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA) due to tornadoes and severe storms that occurred on March 31. The current list of eligible localities is available on the Tax Relief in Disaster Situations page.

6.??Taxpayer Protection Program redesigned 5071C letter pilot

Beginning this month, the IRS is phasing in a redesigned 5071C letter, which is sent to taxpayers who require identity and tax return verification. The letter will include an embedded QR code and updated format. The QR code will link to IRS.gov/VerifyReturn. No changes were made to the IRS Taxpayer Protection Program Hotline number provided on the letter. Please encourage taxpayers to complete the online identity and tax return verification to minimize processing delays no matter which version of the 5071C letter they receive.

7.??IRS revises Form 8940 to improve service, allow e-filing

As part of ongoing efforts to improve service for the tax-exempt community, the IRS issued the revised Form 8940, Request for Miscellaneous Determination, and its instructions to allow electronic filing. Beginning April 3, 2023, the IRS will make available the electronic version of the Form 8940 that exempt organizations use to make miscellaneous determination requests online at Pay.gov. The IRS will provide a 90-day grace period during which it will continue to accept paper versions of Form 8940 (Rev. 6-2011); however, after this grace period, the Form 8940 must be submitted electronically.

8.??Home energy credits: Good for the environment, your wallet

If your client makes energy improvements to their home, tax credits are available for a portion of their qualifying expenses. Visit IRS.gov/homeenergy for full details, including a comparison chart. This chart can help determine if the credits apply to expenses your client already paid or will apply to planned improvements.

9.??Guidance for energy community bonus credit program

The IRS issued technical guidance that describes certain rules that the agency intends to include in forthcoming proposed regulations for determining what constitutes an energy community for the production and investment tax credits. For more information, review Notice 2023-29 below in the Technical Guidance section.

10.? News from the Justice Department?s Tax Division

Former treasurer for the City of Houston, Jess George Adams, was arrested after a federal grand jury returned an indictment charging him with wire fraud, money laundering and tax evasion. If convicted, he faces a maximum penalty of 20 years in prison for each wire fraud count, 10 years in prison for each money laundering count and five years in prison for each tax evasion count.

Awett Tedla of Indiana pleaded guilty in federal court in the District of Columbia to conspiring to file false tax returns and related charges. She faces a maximum sentence of 20 years in prison for wire fraud, 10 years in prison for conspiring to file false claims, five years in prison for tax evasion and a mandatory sentence of two years in prison for aggravated identity theft. Tedla also faces a period of supervised release, restitution and monetary penalties.

11.??Technical Guidance

Announcement 2023-07 provides guidance on relief payments made to certain civilians affected by the release of petroleum from the Red Hill Bulk Fuel Storage Facility in O?ahu, Hawaii.

Announcement 2023-12 informs taxpayers and practitioners that the IRS has revised Form 3115, Application for Change in Accounting Method, and its instructions. The Form 3115 (Rev. December 2022) is the current Form 3115 (December 2022 Form 3115) and replaces the December 2018 version of the Form 3115. Announcement 2023-12 also provides guidance to allow for a reasonable period for taxpayers to transition to the December 2022 Form 3115.

Notice 2023-29 describes certain rules that the IRS intends to include in forthcoming proposed regulations for determining what constitutes an energy community for the production and investment tax credits.

Notice 2023-31 announces that when proposed regulations under section 903 (REG-112096-22) are finalized, the Treasury Department and the IRS intend to extend the transition period for the single-country exception?s documentation requirement from May 17, 2023, to 180 days after the date final regulations adopting the single-country exception are filed with the Federal Register.

Revenue Procedure 2023-12 has been drafted to modify specific language in Rev. Proc. 2023-5 to allow for the new electronic submission process of the Form 8940, Request for Miscellaneous Determination. This revenue procedure also provides a 90-day transition relief period, during which paper Form 8940 and letter applications will be accepted and processed by EO Determinations.

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