ERC payment updates; bad social media advice; Whistleblower Day; clean vehicle credits; ID theft

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e-News for Small Business August 13, 2024

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Issue Number:  2024-16

Inside This Issue

* Employee Retention Credit: more payments move to processing; IRS continues vigilance on potentially improper claims [ #First ]
* New warning signs of incorrect ERC claims; resolve erroneous claims soon [ #Second ]
* Misleading social media advice leads to false claims for tax credits  [ #Third ]
* Whistleblower Office celebrates National Whistleblower Day [ #Fourth ]
* Updated frequently asked questions on New, Previously Owned and Qualified Commercial Clean Vehicle Credits [ #Fifth ]
* Security Summit Summer Series highlights identity theft protection [ #Sixth ]
* IRS releases draft of updated Form 1099-DA, Digital Asset Proceeds From Broker Transactions [ #Seventh ]
* Other tax news [ #Eighth ]
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*1.  Employee Retention Credit: more payments move to processing; IRS continues vigilance on potentially improper claims*
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The IRS announced additional actions to help small businesses and prevent improper payments in the Employee Retention Credit (ERC) program [ [link removed] ].

The IRS identified 50,000 valid ERC claims and is quickly moving them into the pipeline for payment processing in coming weeks. These payments are part of a low-risk group of claims. The IRS also sent out 28,000 disallowance letters to businesses whose claims showed a high risk of being incorrect. The IRS estimates that these disallowances will prevent up to $5 billion in improper payments. If a business disagrees with the disallowance they can file an appeal.

“The Employee Retention Credit is one of the most complex tax provisions ever administered by the IRS, and the agency continues working hard to balance our work to protect taxpayers from improper claims while also making payments to qualifying businesses,” said IRS Commissioner Danny Werfel. “It has been a time-consuming process to separate valid claims from invalid ones. During the past year, we maintained a steady cadence of both ERC approvals and disapprovals.”

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*2.  New warning signs of incorrect ERC claims; resolve erroneous claims soon*
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As the IRS intensifies work on the Employee Retention Credit, it shared five new warning signs the IRS has seen on incorrect ERC claims by businesses [ [link removed] ].

Businesses with pending claims should carefully review their filings to confirm eligibility and ensure credits claimed don’t include any of the warning signs or other mistakes. Businesses with these indicators should talk to a trusted tax professional [ [link removed] ] and explore the ERC Withdrawal Program [ [link removed] ] to resolve their incorrect claim.

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*3.  Misleading social media advice leads to false claims for tax credits *
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Businesses: Beware of a series of scams and inaccurate social media advice. Social media schemes led to thousands of inflated refund claims during the past tax season including claims for the Fuel Tax Credit, Sick and Family Leave Credit and household employment taxes. The IRS increased its compliance efforts related to false and questionable credits and shared FAQs to address common questions and provide next steps for those receiving IRS letters [ [link removed] ].

Myths continue to persist that these schemes are ways to obtain a huge refund. Avoid them! Many of these scams were highlighted during this spring’s annual Dirty Dozen [ [link removed] ] series, including the Fuel Tax Credit scam [ [link removed] ], bad social media advice [ [link removed] ] and “ghost preparers [ [link removed] ].”

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*4.  Whistleblower Office celebrates National Whistleblower Day*
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On *July 30*, National Whistleblower Appreciation Day [ [link removed] ], the IRS Whistleblower Office recognized the important role whistleblowers play in supporting the nation’s tax administration.

Since issuing its first award in 2007 through *June 2024*, the IRS has paid over $1.2 billion in awards based on the successful collection of $7 billion from non-compliant taxpayers.

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*5.  Updated frequently asked questions on New, Previously Owned and Qualified Commercial Clean Vehicle Credits*
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The IRS updated frequently asked questions in Fact Sheet 2024-26 to provide guidance related to eligibility rules, income limitations, transfer rules and dealer registration for the New, Previously Owned and Qualified Commercial Clean Vehicle Credits [ [link removed] ].

These FAQs supersede earlier FAQs that were posted in FS-2024-14 on *April 16, 2024*.

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*6.  Security Summit Summer Series highlights identity theft protection*
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Learn about ways the IRS and Security Summit partners help protect business and individual taxpayers from tax-related identity theft:


* IRS Identity Protection PIN program and the IRS online accounts [ [link removed] ]
* Multi-factor authentication [ [link removed] ], which is now a federal requirement for tax professionals

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*7.  IRS releases draft of updated Form 1099-DA, Digital Asset Proceeds From Broker Transactions*
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The IRS announced the release of the updated draft of Form 1099-DA, Digital Asset Proceeds From Broker Transactions [ [link removed] ]. This form is for brokers to report certain sale and exchange transactions of digital assets that take place beginning in calendar year 2025.

The IRS posted the new draft to IRS.gov along with the instructions for the *recipients* of the form.

The IRS expects to post the draft instructions for *filers (brokers)* soon. Once the draft filer instructions have been posted, a notice will be published in the Federal Register to allow for a 30-day comment period.

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*8.  Other tax news*
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The following information may be of interest to individuals and groups in or related to small businesses:


* Employer-offered educational assistance programs [ [link removed] ] can help pay for college
* Treasury and IRS release Inflation Reduction Act clean energy statistics [ [link removed] ]

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