e-News for Small Business Issue 2023-03

Taxpayers who receive certain notices requiring them to send information to the IRS now have the option of securely submitting their documentation online through IRS.gov.

"This capability is another step forward by the IRS to help taxpayers and improve service," said IRS Acting Commissioner Doug O'Donnell. "This provides immediate benefits to taxpayers, who have nearly instant confirmation that documents were received by the IRS. In turn, this will dramatically speed up the resolution of issues by removing a time-consuming step in the process. This means people can have their issues resolved much faster, including getting refunds to affected taxpayers faster. We will continue to look at improvements like this as we work to transform the IRS following passage of the Inflation Reduction Act last year."

For the most part, the IRS sends these notices to individual tax filers claiming tax benefits, such as the Earned Income Tax Credit for low- and moderate-income workers, the Child Tax Credit for families with dependents, the Premium Tax Credit for those who obtain health coverage through the Health Insurance Marketplace and members of the military claiming combat zone tax benefits.

2.?Energy credits: Low-income areas, advanced projects, residential and vehicle

Solar and wind power for low-income areas
The Department of Treasury and the IRS established the Low-Income Communities Bonus Credit Program to provide solar and wind power to certain low-income areas under the Inflation Reduction Act. Taxpayers can find initial guidance on eligibility requirements, details on the program and the proposed timeline in Notice 2023-17.

Qualifying Advanced Energy Project Credit
The Department of Treasury and the IRS allocates $10 billion in credits for qualified investments in eligible qualifying advanced energy projects under the Inflation Reduction Act. An allocation of $4 billion is anticipated in the first round, with $1.6 billion of these credits allocated to projects in certain energy communities. Interested parties can find details in Notice 2023-18 with additional guidance to be issued May 31, 2023.

Home improvements
Taxpayers may be able to take the residential clean energy and efficient home improvement credits if energy saving improvements were made to their home in the United States in 2022. See Instructions for Form 5695, Residential Energy Credits and frequently asked questions for more information.

New, previously owned and qualified commercial clean vehicles
The IRS issued Notice 2023-16 that modifies the definitions of certain vehicle classifications for the new, previously owned and qualified commercial clean vehicle credits. This guidance changes the vehicle classification standard by which vans, sport utility vehicles, pickup trucks and other vehicles are defined. It also updated the related frequently asked questions.

3.??EITC benefits millions of low- and moderate-income workers

The IRS, along with partners nationwide, promote awareness of the Earned Income Tax Credit. This outreach campaign helps millions of Americans who earned $59,187 or less last year take advantage of the Earned Income Tax Credit. The IRS encourages people who don?t normally file to check and see if they qualify for EITC or other valuable credits.

4.??Direct deposit now available for electronically filed amended returns

Anyone filing electronic amended returns Form 1040-X now has the option to select direct deposit for quicker delivery of refunds. As part of the funding for the Inflation Reduction Act, this is the latest step the IRS is taking to improve service this filing season.

"This is a big win for taxpayers and another achievement as we transform the IRS to improve taxpayer experiences," said IRS Acting Commissioner Doug O'Donnell. "This important update will cut refund time and reduce inconvenience for people who file amended returns. We always encourage direct deposit whenever possible. Getting tax refunds into taxpayers' hands quickly without worry of a lost or stolen paper check just makes sense."

5.??Important tax season information

Avoid the rush: Use online tools in February to avoid delays
With the nation entering a peak period for filing taxes, the IRS urges taxpayers to use online tools to get answers quickly and avoid phone delays during a traditional peak period for IRS phone lines.

Key points when filing
To help taxpayers navigate the beginning of the tax filing season, the IRS offers a checklist of reminders for people as they prepare to file their 2022 tax returns.

From gathering information to filing a tax return, the six easy steps on the checklist will make tax preparation smoother.

Finding the right tax professional
Taxpayers should choose a tax return preparer with care. Even though most tax return preparers provide honest, quality service, some may cause harm through fraud, identity theft and other scams.

Tax filers need to understand who they're choosing and what important questions to ask. Taxpayers are ultimately responsible for all the information on their income tax return, regardless of who prepares the return. The IRS urges taxpayers to visit IRS.gov, including: the Choosing a Tax Professional page and the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.

The right to be informed
The Taxpayer Bill of Rights is a cornerstone of the IRS mission that highlights the 10 fundamental rights taxpayers have when working with the IRS. Taxpayers should familiarize themselves with these rights.

The right to be informed means taxpayers have the right to:

Know and understand what they need to do to comply with the tax laws
Have clear explanations of the laws and IRS procedures in all forms, instructions, publications, notices and correspondence
Be informed of IRS decisions about their tax accounts
Receive clear explanations of the outcomes of IRS decisions

6.??Free tax assistance available

Face-to-face help
As part of a continuing effort to improve service this tax season, the IRS announced special Saturday hours for four months at dozens of Taxpayer Assistance Centers (TACs) across the country. The special Saturday availability takes place from 9 a.m. to 4 p.m., on March 11, April 8 and May 13.

Taxpayers should check ahead for what services are available at their location, including service in many languages, come prepared, be aware of tax preparation options and know where to go for more information.

Military members and their families
Military personnel have several options for free federal tax return filing, including the Department of Defense?s MilTax and the IRS Free File program, which offers online tax preparation, electronic filing and direct deposit of refunds at no cost.

Some members have extra time to file, but those with spouses and families may choose to file as soon as they can to claim any tax benefits.

Seniors
Besides the in-person assistance mentioned above, seniors and retirees who want to file their taxes for free or find free in-person tax help have options.

These options include:

Tax Counseling for the Elderly ? prioritizes taxpayers aged 60 and older, specializes in questions about pensions and retirement-related issues unique to seniors
Volunteer Income Tax Assistance ? generally for people who make $60,000 or less, people with disabilities and limited English-speaking taxpayers

7.??A Closer Look: 2023 tax season and tips to accurately file your return

The latest executive column in ?A Closer Look? features Ken Corbin, Commissioner, Wage and Investment Division, discussing the 2023 tax season and tips to accurately file a tax return. ?I?ve seen first-hand some easy, important steps that people can take to help get their refunds as quickly as possible and avoid potential delays as well as follow-up questions,? said Corbin. Read more here.

?A Closer Look? is a column from IRS executives that covers a variety of key issues affecting everything from IRS operations and employees to issues involving taxpayers and tax professionals.

8.??Other tax news

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

IRS Chief Counsel is hiring attorneys; multiple job openings posted to help enhance the taxpayer experience and address high-end noncompliance
Interest rates remain the same for calendar quarter beginning April 1, 2023
IRS announces new pilot phase for Compliance Assurance Process program
Guidance on state tax payments to help taxpayers

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