e-News for Tax Professionals 2024-38

1. Directions for responding to Employee Retention Credit disallowance letter

Businesses that claimed the Employee Retention Credit may have received IRS Letter 105-C, a disallowance letter, if the IRS identified their claim as ineligible.
A new page on IRS.gov, Understanding Letter 105-C, Disallowance of the Employee Retention Credit, can help tax professionals and business clients learn about next steps if they disagree with the disallowance. This page has information on:
• Rechecking eligibility for the credit before disagreeing
• Responding to the letter, including what documentation to send the IRS
• Requesting an appeal or filing suit and the timelines to do so

2. IRS warns of "mills" taking advantage of taxpayers with Offer in Compromise program

The Internal Revenue Service reminds taxpayers to beware of promoters claiming their services are necessary to resolve unpaid taxes owed to the IRS while charging excessive fees, often with no results. These unscrupulous “mills” use aggressive marketing to make false claims of guaranteed settlements for “pennies-on-the-dollar,” or will say there’s a limited window of time to resolve tax debts through the IRS Offer in Compromise (OIC) program. "Taxpayers should be cautious of aggressive marketing that can mislead them,” said IRS Commissioner Danny Werfel. “Many OIC mills charge steep fees, give false assurances and can take advantage of taxpayers with empty promises that their tax debt will disappear. The result is often good money paid for bad results.”

3. Tax relief now available to Debby victims in parts of Pennsylvania; various deadlines postponed to Feb. 3

The Internal Revenue Service today announced disaster tax relief for individuals and businesses in parts of Pennsylvania affected by Tropical Storm Debby. Affected taxpayers now have until Feb. 3, 2025, to file various federal individual and business tax returns and make tax payments. This relief is comparable to that provided in other states impacted by Debby. The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). Currently, this includes Lycoming, Potter, Tioga and Union counties in Pennsylvania.

4. IRS Electronic Tax Administration Advisory Committee selects 10 new members

The Internal Revenue Service has appointed 10 new members to the Electronic Tax Administration Advisory Committee or ETAAC. Founded by statute in 1998, the ETAAC serves as a public forum for discussing electronic tax administration issues. Initially, the committee's main objective was to encourage paperless filing of tax and information returns. However, its focus has broadened in recent years. ETAAC members closely collaborate with the Security Summit, a partnership involving the IRS, state tax administrators and the national tax industry to combat identity theft and refund fraud. The committee is made up of state tax officials, cybersecurity and information security experts, tax professionals, tax software developers and representatives from the payroll and financial sectors, along with consumer groups.

5. Treasury, IRS issue guidance on the Alternative Fuel Vehicle Refueling Property Credit

The Inflation Reduction Act amended the credit for qualified alternative fuel vehicle refueling property. The changes apply to qualified alternative fuel vehicle refueling property placed in service after Dec. 31, 2022, and before Jan. 1, 2033.

The credit amount for property not subject to depreciation is 30% of the cost of the qualified property placed in service during the tax year. The credit amount for depreciable property is 6% of the cost of the qualified property placed in service during the tax year but may be increased to 30% of the cost of the qualified property if the prevailing wage and apprenticeship requirements are met. The credit is limited to $1,000 per item of non-depreciable property and $100,000 per item of depreciable property.

6. IRS provides an update to frequently asked questions for the Premium Tax Credit

The Internal Revenue Service today updated its frequently asked questions in Fact Sheet 2024-30 PDF for the Premium Tax Credit. This revision is under the Affordability of Employer Coverage for Employees and for Family Members of Employees section, specifically Q11, to provide the required contribution percentage for determining whether employer coverage is considered affordable for plan years beginning in 2025. The revision is based on Revenue Procedure 2024-35.

The Internal Revenue Service announced today that it will offer a free webinar Sep. 26 on dealing with disasters from an individual tax perspective. The webinar will begin at 2 p.m. ET. During this free webinar, the IRS will provide an overview of awareness of tax-related disaster relief, types of relief, casualty losses, federally declared disaster areas, and other permanent relief. Register here.

Tax professionals may be randomly selected to take part in a voluntary survey to help the IRS improve services to the tax professional community and taxpayers. Survey invitations will arrive by mail with phone follow ups. This is not a scam. Please don’t hang up. The survey will be conducted through Dec. 6 by ICF, an independent research firm. Tax professionals can complete the survey online or by mail in about 20 minutes. It covers topics like e-filing, due diligence requirements, data security and electronic document submission. All responses are anonymous and confidential. The survey won’t ask for personal info about tax pros or their clients.

Calls will be on weekdays from 8:30 a.m. to 6:30 p.m. local time from a Kansas City area code (816).

Revenue Procedure 2024-37 provides guidance to issuers of tax-exempt and other tax-advantaged bonds regarding the procedures for filing claims for recovery of overpayments of rebate, penalty in lieu of rebate, and yield reduction payments under section 148 of the Internal Revenue Code. Revenue Procedure 2024-37 will be in IRB: 2024-41, dated October 7, 2024.

Notice 2024-67 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for August 2024 used under § 417(e)(3)(D), the 24-month average segment rates applicable for September 2024, and the 30-year Treasury rates, as reflected by the application of § 430(h)(2)(C)(iv). Notice 2024-67 will be in IRB: 2024-41, dated October 7, 2024.

Revenue Ruling 2024-21 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, and the adjusted federal long-term tax-exempt rate, for October 2024.

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Issue Number: 2024-38

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