e-News for Small Business Issue 2022-17

The IRS recently hired 4,000 new customer service representatives to help answer phones and provide other services. In addition to the thousands of employees already hired, the IRS is also seeking over 700 new employees to help taxpayers at Taxpayer Assistance Centers across the country.

This marks significant progress as the agency prepares for the 2023 filing season. This increase in staffing is part of much wider IRS improvements enabled by the Inflation Reduction Act funding approved in August 2022.

2.??Know the difference between a hobby and a business

Sometimes knowing the distinction between a hobby and business isn?t always clear cut. The IRS has provided resources to help people make the determination.

The following information is available on IRS.gov to help a taxpayer determine if their hobby qualifies as a business:

3.??Program expanded for certain retirement plans

The Treasury Department and the IRS recently announced an expansion of the 403(b) retirement plan. Taxpayers can find details of the expansion in Revenue Procedure 2022-40, which includes other changes and contains notable additions for:

Expansion for initial plan determination
Terminations

4.??Taxpayer Bill of Rights: Taxpayers right to finality

The IRS reminds taxpayers interacting with the IRS on one of their ten basic rights - the right to finality. These ten basic rights, known as the Taxpayer Bill of Rights, are a set of fundamental rights that taxpayers should be aware of. The right to finality comes into play for taxpayers going through an audit and explains that taxpayers have the right to know when the IRS has completed their audit.

5.??2023 PTIN renewal period underway

The IRS urges active tax return preparers to start the upcoming 2023 filing season smoothly by renewing their Preparer Tax Identification Numbers (PTINs) now. All current PTINs will expire December 31, 2022.

Visit IRS.gov for more information about how to renew a PTIN online, how to apply for a PTIN and PTIN system enhancements.

6.??Doug O?Donnell to serve as acting IRS Commissioner

Outgoing IRS Commissioner Chuck Rettig recently announced that Doug O?Donnell, IRS Deputy Commissioner for Services and Enforcement, has been selected to serve as acting IRS Commissioner. Commissioner Rettig?s term ended on November 12,2022.

7.??New Tax Gap data underscores importance of compliance efforts

The IRS released a new set of tax gap estimates on tax years 2014 through 2016 showing the estimated gross tax gap increased to $496 billion, a rise of more than $58 billion from the prior estimate.

8.??Other tax news

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

Seniors can reduce their tax burden by donating to charity through their retirement account
Tax resources and information available for U.S. service members and veterans as they navigate their unique and sometimes complex tax situation
IRS seeks comments on upcoming energy guidance
IRS Independent Office of Appeals? priorities for 2023 focus on taxpayer service

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