e-News for Tax Professionals 2023-48

On Cyber Monday, the IRS, state tax agencies and the nation's tax industry ? working together as the Security Summit ? kicked-off the eighth annual National Tax Security Awareness Week with tips for taxpayers and tax professionals to avoid scams and protect sensitive personal information. News releases issued during the week include:

Beware of scams during holidays, upcoming tax season. The Security Summit reminds everyone to stay safe during both the holiday and tax season, sharing tips that can help protect you and your sensitive information while online and in other settings.
Understand the importance of written security plans and data breach response. Under updated standards set by the Federal Trade Commission, tax professionals now not only need to have a Written Information Security Plan (WISP), but they also need to use multi-factor authentication to protect taxpayer accounts and client information.
Help avoid fraud and tax-related identity theft with the IRS Identity Protection PIN. Remind your clients that they can get extra protection against identity theft during the 2024 tax season by joining the IP PIN program. The IP PIN helps prevent criminals from filling fraudulent federal income tax returns or stealing refunds using taxpayer's personal information. IP PINs are unique because they are known only to the taxpayer and the IRS.
Businesses: Take steps to prevent data loss, fraud. The IRS continues to see instances where small businesses and others face a variety of identity theft related schemes that try to obtain information that can be used to file fake business tax returns. The Summit partners strongly urge businesses to employ robust information technology tools and services to rigorously safeguard their business and trade information as well as protect data directly connected to their customers, employees and business partners.
Watch out for emerging scams by email, text, postal mail and phone. With identity thieves constantly changing tactics to try to steal information from taxpayers and businesses, watch out for a variety of aggressive schemes that can surface on email, by text, over the phone or through the mail. These threats are present year-round, but the approach of tax season means that identity thieves will intensify efforts trying to impersonate the IRS and others involved in tax and financial work to get sensitive information.

2.??Guidance for manufacturers of new clean vehicles

The Department of the Treasury and the IRS issued two items of guidance on the excluded entity restriction of the section 30D clean vehicle credit, as amended by the Inflation Reduction Act. Under the excluded entity restriction, vehicles are not eligible for the clean vehicle credit if the battery contains battery components manufactured or assembled or applicable critical minerals extracted, processed or recycled by a foreign entity of concern (FEOC). For additional information, see the Technical Guidance section below.

3.??Reminder: File 2021 income tax returns to claim remaining Child Tax Credit

The IRS mailed Letter 6591, Advance Child Tax Credit Outreach Letter for TY 21 Filers Yet to File, to taxpayers who may qualify for the Child Tax Credit expanded by the American Rescue Plan Act. Some taxpayers received up to half the amount through monthly payments in 2021, but they must file their 2021 income tax return to receive the rest. Visit the Understanding Your Letter 6591 webpage on IRS.gov for more information about the 2021 Child Tax Credit.

4.??Webinars for tax practitioners

Tax pros: Here are some upcoming webinars for the tax practitioner community. For more information or to register, visit the Webinars for Tax Practitioners page on IRS.gov.

ECI through partnerships and reporting items from Schedule K-3 on Form 1040-NR on Dec. 7 at 2 p.m. ET. Certificate of Completion are being offered. Tax Professionals: Earn up to 1 CE credit. Category: Federal Tax.
2024 IRS/CSEA Practitioner seminars on Jan. 17-18, 2024, from noon ? 5 p.m. ET.

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

Jessica Avras of Nevada pleaded guilty to assisting in the preparation of false income tax returns. Avras is scheduled to be sentenced on Jan. 4, 2024. She faces a maximum penalty of three years in prison and a period of supervised release and monetary penalties.

Lance K. Bradford, a certified public accountant of Henderson, Nev., pleaded guilty to aiding and assisting the filing of false tax returns for his role in a purported investment scheme to sell false tax deductions. Bradford is scheduled to be sentenced on Jan. 16, 2024, and faces a maximum penalty of three years in prison, a period of supervised release, restitution and monetary penalties. IRS-Criminal Investigation are investigating the case with the help of the FBI.

A federal jury in Jackson, Miss., convicted Adam Earnest, Christopher Randell and James Klish of conspiracy to defraud the United States. Earnest and Randell were separately convicted of individual counts of preparing false tax returns. Each defendant faces a maximum penalty of five years in prison for conspiracy to defraud the United States, and Earnest and Randell face a maximum penalty of three years in prison for each false return count on which they were found guilty. They also each face a period of supervised release, restitution and monetary penalties.

A federal grand jury in Denver returned an indictment charging Timothy McPhee of Colorado and Larry Conner of Texas with conspiring to defraud the United States and with assisting in the preparation of false income tax returns. The indictment also charges the McPhee and his spouse with evading their personal federal income taxes. IRS-Criminal Investigation is investigating the case.

Tax return preparer Adis Smith of Chula Vista, Calif., and formerly of Baltimore, pleaded guilty to preparing false tax returns. In total, Smith prepared more than 1,000 false tax returns and caused a tax loss to the IRS of approximately $4.7 million. Smith faces a maximum penalty of three years in prison as well as a period of supervised release, restitution and monetary penalties.

6.??Technical Guidance

Notice 2023-74 provides that calendar year 2023 will be regarded as a further transition period for purposes of IRS enforcement and administration of the minimum reporting threshold for Form 1099-K, Payment Card and Third Party Network Transactions.

Revenue Procedure 2023-38 updates the procedures under section 30D(d)(3) of the Internal Revenue Code (Code) for qualified manufacturers to enter into a written agreement with the IRS under which such manufacturer agrees to make periodic written reports to the Secretary providing vehicle identification numbers (VINs) and other information regarding vehicles eligible for a clean vehicle credit.

Revenue Ruling 2023-22 provides the interest rates: underpayments and overpayments, determined under section 6621 of the code for the calendar quarter beginning Jan. 1, 2024.

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