e-News for Tax Professionals 2022-51

The IRS has announced a delay in reporting thresholds for third-party settlement organizations set to take effect for the upcoming tax filing season. As a result of this delay, third-party settlement organizations will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount enacted as part of the American Rescue Plan of 2021. The IRS also has released guidance outlining that calendar year 2022 will be a transition period for implementation of the lowered threshold reporting for third-party settlement organizations (TPSOs) that would have generated Form 1099-Ks for taxpayers. This news release is also available in Spanish and Simplified Chinese.

2.??Treasury, IRS provide transitional guidance for broker reporting on digital assets

Brokers are not required to report additional information with respect to dispositions of digital assets until final regulations are issued under sections 6045 and 6045A. The Infrastructure Investment and Jobs Act (Infrastructure Act), enacted in 2021, amended provisions in sections 6045 and 6045A to clarify and expand the rules regarding the reporting of information on digital assets by brokers. Brokers are still required to comply with existing laws and regulations. See additional details in Announcement 2023-02 in the Technical Guidance section.

3.??FAQs about energy efficient home improvements, residential clean energy property credits

The IRS released frequently asked questions (FAQs) about energy efficient home improvements and residential clean energy property credits. The inflation Reduction Act of 2022 (IRA) amended the credits for energy efficient home improvements and residential energy property. These FAQs provide details on the IRA's changes to these tax credits, information on eligible expenditures and provides examples of how the credit limitations work.

4.??Treasury, IRS issue guidance on new Sustainable Aviation Fuel Credit

The Treasury Department and the IRS issued a notice regarding the Sustainable Aviation Fuel (SAF) credit. This is a new credit created by the Inflation Reduction Act of 2022. It applies to a qualified fuel mixture containing sustainable aviation fuel for certain sales or uses in calendar years 2023 and 2024.

5.??Nationwide Tax Forums Online now available with latest continuing education seminars

Tax pros: Visit the Nationwide Tax Forums Online (NTFO) webpage for 18 self-study seminars featuring topics about tax law changes, professional responsibility, cybersecurity and more. The seminars, four of which are available in both English and Spanish, were recorded during the 2022 IRS Nationwide Tax Forum. Earn continuing education (CE) credits for a fee or you may audit the courses free of charge (no CE credits are offered when you audit a seminar). For a full list of the seminars and more information on how to register, visit the NTFO webpage. The Nationwide Tax Forums Online are certified by the IRS Return Preparer Office and the National Association of State Boards of Accountancy.

6.??Saver?s Credit higher limits can help low- and moderate-income workers save more in 2023

The IRS reminds low- and moderate-income workers that they can save for retirement now and possibly earn a special tax credit in 2022 and years ahead. The Retirement Savings Contributions Credit, also known as the Saver's Credit, helps offset part of the first $2,000 workers voluntarily contribute to Individual Retirement Arrangements, 401(k) plans and similar workplace retirement programs. The credit also helps any eligible person with a disability who is the designated beneficiary of an Achieving a Better Life Experience (ABLE) account, contribute to that account. This news release is also available in Spanish and Simplified Chinese.

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

Chicago tax preparer Eunice Salley was sentenced to seven years in prison after her trial conviction for embezzling her deceased grandmother?s pension checks and preparing false tax returns for clients. In addition to the term of imprisonment, Salley was also ordered to serve three years of supervised release and to pay approximately $558,369 in restitution to the United States.

A Texas accountant pleaded guilty to embezzling funds from his employer and filing a false tax return. According to court documents and statements made in court, Steven Marquez embezzled more than $700,000 from his employer, an Austin-based company, where he worked as an accountant and cash manager. Marquez also filed a false tax return for 2017 that did not report the embezzled funds. Marquez is scheduled to be sentenced on March 9, 2023. He faces a maximum penalty of 20 years in prison for wire fraud and three years in prison for filing a false tax return. He also faces a period of supervised release, restitution and monetary penalties.

8.??Technical Guidance

Announcement 2023-01 affirms the applicable Reference Standard 90.1 for purposes of the deduction for energy efficient commercial building property expenditures under section 179D of the Internal Revenue Code. Specifically, this announcement is effective on Jan. 1, 2023, and affirms that Reference Standard 90.1-2019 is the applicable Reference Standard 90.1 for energy efficient commercial building property placed in service after 2026.

Announcement 2023-02 provides transitional guidance under sections 6045 and 6045A with respect to the reporting of information on digital assets by brokers.

Notice 2023-04 provides the indexing factors to be used by group health plans and health insurance issuers to calculate the qualifying payment amount (QPA) for items or services provided on or after Jan. 1, 2023, and before Jan. 1, 2024.

Notice 2023-06 explains the requirements for the fuel to be eligible for the SAF credit, the various methods in which a claimant may claim the credit, and which parties must be registered for the different activities in the process. The notice also asks for public comments on various aspects of the statute, which will help Treasury and IRS in developing additional guidance.

Notice 2023-08 provides additional guidance for brokers to comply with the provisions of the final regulations under section 1446(f) that relate to withholding on the transfer of an interest in a publicly traded partnership. The Treasury Department and the Internal Revenue Service intend to issue proposed regulations that would amend the final regulations to implement this additional guidance.

Notice 2023-10 delays the reporting of transactions in excess of $600 to transactions that occur after calendar year 2022. The transition period is intended to facilitate an orderly transition for third-party settlement organizations (TPSO) tax compliance, as well as individual payee compliance with income tax reporting.

Revenue Procedure 2023-10 prescribes the loss payment patterns for the 2022 determination year and the discount factors for the 2022 accident year for use by insurance companies in computing discounted unpaid losses under section 846 of the Internal Revenue Code and discounted estimated salvage recoverable under section 832.

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