e-News for Tax Professionals 2022-52

The IRS updated frequently asked questions (FAQs) for Form 1099-K, Payment Card and Third Party Network Transactions. Updates include definitions, general information and individuals.

2.??IRS issues standard mileage rates for 2023

The IRS issued the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning Jan. 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022.
22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022.
14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022.

These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.

3.??Treasury, IRS issue guidance on their intent to publish regulations regarding clean vehicles

The Treasury Department and the IRS issued Notice 2023-01 of its intent to publish regulations related to the new clean vehicle credit. The guidance issued informs taxpayers that the Department of the Treasury and the IRS intend to propose regulations addressing the definitions of certain terms in respect of the credit and lays out the expected content of those regulations.

4.??Guidance on the incremental cost for the Commercial Clean Vehicle Credit

The Treasury Department and the IRS issued Notice 2023-9 regarding the commercial clean vehicle credit for commercial vehicles purchased and placed in service during the taxable year. The analysis shows that the incremental cost of all street vehicles (other than in the case of compact car PHEVs) that have a gross vehicle weight rating of less than 14,000 pounds will be greater than $7,500 in calendar year 2023. Accordingly, the incremental cost will not limit the available credit amount for street vehicles that have a gross vehicle weight rating of less than 14,000 pounds and are placed in service in calendar year 2023.

5.??IRS releases FAQs about clean vehicles credits for new, previously owned, commercial clean vehicles

The IRS released frequently asked questions (FAQs) about clean vehicle credits for new, previously owned and commercial clean vehicles. The Inflation Reduction Act of 2022 (IRA) makes several changes to the new clean vehicle credit for qualified plug-in electric drive motor vehicles, including adding fuel cell vehicles. The IRA also added a new credit for previously owned and commercial clean vehicles.

6.??Treasury, IRS issue guidance on corporate stock repurchase excise tax in advance of forthcoming regulations

The Treasury Department and the IRS issued Notice 2023-2, which provides interim guidance regarding the application of the corporate stock repurchase excise tax until the issuance of proposed regulations. The new code section added by the Inflation Reduction Act imposes a 1% excise tax on the aggregate fair market value of stock repurchased by certain corporations during the taxable year, subject to adjustments. The Treasury Department and the IRS have issued Notice 2023-2 to provide certainty to taxpayers in advance of Jan. 1, 2023, the date on which the new excise tax will apply to stock repurchases.

7.??Interim guidance on new corporate alternative minimum tax

The Treasury Department and the IRS issued Notice 2023-07, which provides interim guidance regarding the application of the new corporate alternative minimum tax (CAMT) until the issuance of proposed regulations. The Inflation Reduction Act created the CAMT, which imposes a 15% minimum tax on the adjusted financial statement income of large corporations for taxable years beginning after Dec. 31, 2022.

8.??Get the latest tax education from Nationwide Tax Forums Online

Tax pros: Earn continuing education credits through the IRS Nationwide Tax Forums Online (NTFO), a virtual platform that provides self-study seminars on important tax topics. These courses, which were recorded during the 2022 IRS Nationwide Tax Forum, are available 24/7 and cover topics about tax law changes, professional responsibility, cybersecurity and more. The seminars include:

Options for Ethics, Federal Tax Law and Federal Tax Law Update continuing education (CE) credits (for a fee).
A 50-minute interactive video of each seminar, synchronized with the PowerPoint presentation.
Downloadable slides and complete transcripts for each seminar.

For a complete list of seminars, registration information and more, visit the NTFO website.

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

A federal court in the Eastern District of Michigan has permanently enjoined Latavia Garrett, Latrina Hall and their tax return preparation company, Detroit Tax Solution LLC from preparing returns for others and from owning or operating any tax return preparation business in the future. As alleged in the complaint, the IRS has conservatively estimated that defendants? fraudulent return preparation activities have caused a combined loss to the United States for tax years 2019 and 2020 exceeding $1.2 million.

10. Technical Guidance

Notice 2023-1 informs taxpayers that the Department of the Treasury and the IRS intend to propose regulations addressing the definitions of certain terms in respect of the credit available under section 30D of the Code and lays out the expected content of those regulations.

Notice 2023-2 (1) announces the intent of the Treasury Department and the IRS to issue proposed regulations (forthcoming proposed regulations) addressing the application of the corporate stock repurchase excise tax added to section 4501 of the Internal Revenue Code by the enactment of Public Law 117-169, 136 Stat. 1818 (Aug. 16, 2022), commonly referred to as the Inflation Reduction Act of 2022; (2) describes certain rules and procedures that the Treasury Department and the IRS intend to include in the forthcoming proposed regulations; (3) provides interim guidance that taxpayers may rely upon until the issuance of the forthcoming coming proposed regulations; and (4) solicits comments on the rules contained in the notice and certain other issues prior to the publication of the forthcoming proposed regulations.

Notice 2023-3 references longstanding regulations under section 61 that provide special valuation rules for employer-provided automobiles.

Notice 2023-7 announces the intention of the Department of the Treasury and the IRS to issue proposed regulations addressing the application of the corporate alternate minimum tax (CAMT), as added to the Code by the Inflation Reduction Act of 2022.

Notice 2023-9 informs taxpayers that based on analysis by the Department of Energy of representative qualified commercial clean vehicles and comparable internal combustion engine vehicles, the Department of the Treasury and the IRS have reviewed the incremental cost for all street vehicles in calendar year 2023.

Notice 2023-11 is intended to provide Foreign Account Tax Compliance Act (FATCA) reporting relief to Model 1 foreign financial institutions (FFIs) who have been unable to obtain U.S. taxpayer identification numbers (TINs) for their pre-existing accounts that are U.S. reportable accounts; as part of the relief, the FFIs will also provide information that the IRS can analyze to determine why these TINs are missing.

Revenue Procedure 2023-11 modifies and supersedes Rev. Proc. 2023-8, which modified Rev. Proc. 2022-14, 2022-7 I.R.B. 502. This revenue procedure contains guidance similar to Rev. Proc. 2023-8 but modifies the audit protection with respect to section 174 expenditures to encourage timely compliance with the changes made by the Tax Cuts and Jobs Act, effective for tax years beginning after Dec. 31. 2021.

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