e-News for Tax Professionals 2024-51

1. IRS announces special payments going this month to 1 million taxpayers who did not claim 2021 Recovery Rebate Credit

The Internal Revenue Service will issue automatic payments later this month to eligible people who did not claim the Recovery Rebate Credit on their 2021 tax returns. The IRS announced the special step Friday after reviewing internal data showing many eligible taxpayers who filed a return but did not claim the credit. The Recovery Rebate Credit is a refundable credit for individuals who did not receive one or more Economic Impact Payments (EIP), also known as stimulus payments.

No action is needed for eligible taxpayers to receive these payments, which will go out automatically in December and should arrive in most cases by late January 2025. The payments will be automatically direct deposited or sent by paper check; eligible taxpayers will also receive a separate letter notifying them of the payment.

Tax pros: Remind your clients to get ready now to file their taxes in 2025. Visit the Get Ready page to view key information such as steps to make tax filing easier, gathering and organizing tax records, life changes that can affect a refund, what to do with a Form 1099-K, home and energy related credits, avoiding refund delays, understanding refund timing and more.

Effective Dec. 8, taxpayers can submit IRS Form 8898, Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Territory using the IRS Digital Mobile Application Format (DMAF). Many of these submissions originate from outside the 50 states and mailing these forms to ensure timely receipt may require extra effort. Using this format will provide taxpayers with:

There is no need to submit a paper copy to the IRS, and the filer can download or print a copy of what was submitted.

The IRS reminds taxpayers of the filing requirements for information returns that must be filed on or before Jan. 1. Electronic submission is required for those who are filing 10 or more information returns. This includes Forms W-2, e-filed with the Social Security Administration. In addition, taxpayers may prepare to file information returns electronically by applying for a Transmitter Control Code (TCC) from the IRS as soon as possible, as it may take up to 45 days for processing. (Note: A TCC is not required to electronically file Form W-2, although registration with Business Services Online at SSA.gov is required. Form 8809, Application for Extension of Time to File Information Returns can be used to request an extension if a taxpayer needs more time to file information returns. E-Filing options can be found at IRS.gov/inforeturn.

5. Treasury and IRS propose regulations to update rules for tax professionals who can practice before the IRS

The Department of the Treasury and the Internal Revenue Service today issued proposed regulations to update the rules for certain tax professionals who can practice before the IRS; these rules are contained in Treasury Department Circular 230.

The IRS Office of Professional Responsibility generally has responsibility for matters related to practitioner conduct, and exclusive responsibility for discipline, including disciplinary proceedings and sanctions. The proposed regulations, if finalized, would amend Circular 230 in various ways to account for changes in the law and the evolving nature of tax practice. Among other changes, the proposed regulations would remove or update the parts of Circular 230 related to registered tax return preparers and tax return preparation, as well as contingent fees to reflect changes in the law since the prior amendments to Circular 230 in 2011 and 2014. The proposed regulations would also revise or eliminate other provisions that are out of date.

The IRS is seeking qualified applicants for nomination to the Electronic Tax Administration Advisory Committee (ETAAC), an organized public forum for discussion of issues in electronic tax administration, such as prevention of identity theft and refund fraud. New members will serve three-year terms beginning in September 2025. Applications will be accepted through Jan. 31. For more information about ETAAC, the application process and qualification criteria, email [email protected].

Draft instructions for Form 6765, Credit for Increasing Research Activities, commonly referred to as the research credit, were released by the IRS today. The IRS is looking for feedback on the draft instructions, particularly on the Section G reporting for controlled groups, ASC 730 Directive, Section G business component detail and statistical sampling.

Feedback regarding the tax year 2024 draft or final instructions can be submitted to [email protected] through June 30, 2025, using the subject line: “Instructions for Form 6765.” All responses will be considered to ensure the tax year 2025 (processing year 2026) instructions provide clear and updated guidance on completing the form. The IRS remains committed to engaging with stakeholders in preparation for tax year 2025 (processing year 2026).

8. Tax pros: New continuing education seminars available on IRS Nationwide Tax Forum Online

The IRS encourages tax professionals to register for the IRS Nationwide Tax Forum Online to get access to 18 seminars recorded at the 2024 IRS Nationwide Tax Forum. The Nationwide Tax Forum Online offers tax professionals a convenient way to stay informed about current legislation, IRS procedures and key topics for the upcoming tax season.

Each seminar features a 50-minute interactive video presentation with synchronized slides, downloadable materials and complete transcripts. Courses can be taken for continuing education (CE) credit for a fee of $29, or they can be reviewed for free (no CE credit).

Monica McGinley was charged with tax fraud and theft of government funds in an indictment delivered by a federal grand jury in Greenbelt, Md. According to the indictment, McGinley assisted with the preparation and filing false tax returns, so that she may receive large refunds from the IRS to which she was not entitled from 2014 to 2024. McGinley allegedly claimed nonexistent payments or withholdings and requested nearly $12 million in refunds. The IRS issued refunds to McGinley totaling over $1.5 million. In one example, she allegedly received a U.S. Treasury check for over $1 million. McGinley faces a maximum penalty of 10 years in prison for the theft of government funds charge and a maximum penalty of three years in prison for each of the six counts of aiding and assisting in the preparation and presentation of false tax returns. IRS Criminal Investigation is investigating the case.

Announcement 2025-02 provides that the Treasury Department and the IRS anticipate that certain portions of future regulations finalizing the proposed regulations will apply beginning in the 2026 distribution calendar year.

Notice 2025-01 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for November 2024 used under section 417(e)(3)(D), the 24-month average segment rates applicable for December 2024, and the 30-year Treasury rates, as reflected by the application of section 430(h)(2)(C)(iv).

Notice 2025-04 announces that the Department of the Treasury and the Internal Revenue Service intend to issue proposed regulations that, for purposes of applying section 482, provide a new simplified and streamlined approach ("SSA") for pricing certain controlled transactions involving baseline marketing and distribution activities.

Notice 2025-05 provides the optional 2025 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.

Revenue Procedure 2025-08 modifies section 7 of Revenue Procedure 2024-23, 2024-23 I.R.B. 1334, to modify the procedures under section 446 of the Internal Revenue Code and section1.446-1(e) of the Income Tax Regulations for obtaining automatic consent of the Commissioner of Internal Revenue to change methods of accounting for research or experimental expenditures paid or incurred in taxable years beginning after Dec. 31, 2021.

Revenue Ruling 2025-01 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. These rates are determined as prescribed by section 1274.

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Issue Number: 2024-51

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