e-News for Small Business Issue 2023-11

One year into its modernization efforts under the Inflation Reduction Act and the IRS continues to make significant progress toward its goals of delivering world-class service, upgrading its technology and ensuring high-income taxpayers, large corporations, and complex partnerships pay taxes owed.

First year progress includes:

Delivering dramatically improved service during the 2023 filing season
Providing improved customer callback option, which is available for around 95% of callers seeking live help
Offering voice and chatbots to help taxpayers with securing account transcripts, getting answers to questions about balances due and more.
Reaching new milestones in its paperless initiative by scanning hundreds of times more forms and providing taxpayers more online response options

2.??IRS asks for feedback to help improve its notices and letters

The IRS Strategic Operating Plan outlines how it will use the funds received under the Inflation Reduction Act of 2022. The plan includes ways for updating IRS notices and letters, making it easier for taxpayers to read, understand and respond.

The IRS is asking for stakeholder feedback on letters or notices they have received to help accomplish this goal.

Anyone wanting to submit feedback or ideas on improving IRS letters and notices can do so though the [email protected] mailbox. Feedback should include the name or number of the notice or letter, the submitter?s experience with the notice or letter, and a clear explanation of how to improve the written communications.

The IRS will consider feedback received by Aug. 23, 2023, in its next round of updates ? but welcomes feedback after that date since the agency will be updating its notices and letters on a continuing basis.

The agency will not be able to respond to each individual email, but it will share how it used taxpayer and stakeholder feedback to improve its notices and letters as the projects proceeds.

3.??Truckers: E-file by Aug. 31 tax payment deadline

The IRS encourages those who have registered, or are required to register, large trucks and buses with a taxable gross weight of 55,000 pounds or more to e-file Form 2290, Heavy Highway Vehicle Use Tax Return, by the Aug. 31, 2023, payment deadline for vehicles first used in July 2023.

Get more information on who must file, what information to gather and filing options, and more.

4.??Plan sponsors: Be aware of ESOP-related compliance issues

As part of an expanded focus on ensuring high-income taxpayers pay what they owe, the IRS warns businesses and tax professionals to be aware of compliance issues associated with Employee Stock Ownership Plans (ESOPs).

Prior to the Inflation Reduction Act, more than a decade of budget cuts prevented the IRS from keeping pace with the increasingly complicated set of tools that the wealthiest taxpayers use to hide their income and evade paying their share.

"The IRS is now taking swift and aggressive action to close this gap," IRS Commissioner Werfel said. "Part of that includes alerting higher-income taxpayers and businesses to compliance issues and aggressive schemes involving complex or questionable transactions, including those involving ESOPs."

The IRS provides avenues to report individuals who promote improper and abusive tax schemes, as well as those who deliberately prepare improper returns.

5.??Energy credits

Energy Efficient Home Improvement Credit
The IRS issued Notice 2023-59 regarding the requirements for home energy audits for taxpayers that want to claim the Energy Efficient Home Improvement Credit.

Expanded credit for homebuilders under Section 45L
The IRS reminds eligible contractors who build or substantially reconstruct qualified new energy efficient homes that they might qualify for a tax credit up to $5,000 per home.

Solar and wind powered energy facilities in low-income communities
The Department of the Treasury and the IRS issued guidance for owners of solar and wind powered energy facilities in low-income communities for increased energy credit under the Inflation Reduction Act.?

6.??Other tax news

The following information may be of interest to individuals and groups in or related to small businesses:

The IRS selects new Chief Transformation and Strategy Officer to lead change efforts under the Inflation Reduction Act; David Padrino to oversee Strategic Operating Plan work to help taxpayers, drive agency improvements
Taxpayers not under examination now have easier way to electronically request relief for late-filed international documents and forms

Guidance and regulations

Treasury and the IRS issue guidance relating to section 5000D of the Internal Revenue Code
Treasury and the IRS issue proposed regulations identifying certain monetized installment sales as listed transactions

Security Summit

Special summer series concludes with important security reminders
Tax professionals can help protect clients by knowing the signs of data theft
Remain vigilant against phishing emails and cloud-based attacks

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