IRS Seeks Membership Nominations For The 2025 Internal Revenue Service Advisory Council

On Thursday, April 18th the Internal Revenue Service announced that it is now accepting applications for the 2025 Internal Revenue Service Advisory Council (hereinafter “IRSAC”) through May 31, 2024, including nominees for a newly created subcommittee focused on fairness issues.

The IRSAC serves as an advisory body to the IRS commissioner and the Service’s leadership. The IRSAC is organized under the Federal Advisory Committee Act and includes volunteer members with deep subject matter expertise amongst highly diverse tax matters. IRSAC provides an organized forum for discussion of relevant tax administration issues between IRS officials and representatives primarily from accounting firms, law firms and the tax departments of select Fortune 500 / Russell Index 2000 size companies. The IRSAC’s goals and objectives include but are not limited to:

  • Proposes enhancements to IRS operations;
  • Recommends administrative and policy changes to improve taxpayer services, fairness in tax administration and compliance;
  • Discusses issues and recommends solutions relevant to information reporting;
  • Addresses matters concerning tax exempt and government entities; and
  • Conveys the public’s perception of professional standards and best practices for tax professionals.

In addition, the IRSAC will launch its first-ever Subcommittee on Fairness in Tax Administration that will join the existing five subcommittees. This new subcommittee will review, and issue specific recommendations related to the overall fairness in tax administration. The subcommittee will focus on how the Service can identify and address any tax administration disparities that may limit some communities from fully benefiting from and contributing to the nation’s economic growth and prosperity. Potential focus areas will include disparities in audit selection, tax credit and deduction awareness, fraud prevention, data analytics as well as community outreach and education opportunities. The IRSAC’s other subcommittees focus on information reporting, large business & international, small business/self-employed, tax-exempt/government entities, and taxpayer services.

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IRS Releases Guidance On Elective Payments And Transfers Of Certain Credits Under The Inflation Reduction Act

The Internal Revenue Service issued proposed regulations and frequently asked questions describing rules for applicable entities that earn certain clean energy credits and choose to make an elective payment election and rules for eligible taxpayers that elect to transfer certain credits to unrelated parties.

For tax years beginning after Dec. 31, 2022, applicable entities can choose to make an elective payment election, which will treat certain credits as a payment against their federal income tax liabilities rather than as a nonrefundable credit. This payment will first offset any tax liability of the entity and any excess will be refundable.

Applicable entities generally include tax-exempt organizations, state and local governments, Indian tribal governments, Alaska Native Corporations, the Tennessee Valley Authority and rural electric cooperatives. All other taxpayers may elect to be treated as an applicable entity for a limited number of credits.

Also, for tax years beginning after Dec. 31, 2022, certain eligible taxpayers (generally taxpayers that are not applicable entities) can make an election to transfer all or a portion of an eligible credit to unrelated taxpayers for cash payments.
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When To Use A Durable Power Of Attorney To Authorize Representation Before The IRS

As the U.S. population ages, taxpayers and their representatives are increasingly confronted with the question of how to appoint a power of attorney (POA) to act on behalf of taxpayers in the event of incompetence or incapacity. When taxpayers are competent, they use a Form 2848, Power of Attorney and Declaration of Representative, for this purpose. However, an incompetent or incapacitated taxpayer is in no position to execute a Form 2848. Likewise, even a preexisting Form 2848 is usually voided if taxpayers become incompetent or incapacitated. In other contexts, individuals typically rely on various types of POA instruments to enable representation, but the IRS often will not recognize these for tax purposes. Thus, in the event of unforeseen circumstances, taxpayers can find themselves without a voice in their own tax matters beyond that of a court-appointed fiduciary.

One way of avoiding this potential pitfall is through creative and well-informed use of a durable power of attorney (DPOA). DPOAs are a common tool in the realm of estate planning and financial and medical decision-making. The key feature of a DPOA is that it remains operative or becomes effective when the principal (the individual who granted the authority) becomes incompetent or unable to act on his or her own behalf.

Tax practitioners rarely rely on DPOAs because, in their usual format, they do not authorize representation before the IRS. For this reason, individuals who have been acting on behalf of someone via a DPOA (often known as “attorneys-in-fact”) may have an unwelcome surprise when it comes to IRS representation.

Based on regulatory requirements, the Form 2848 includes information beyond a typical DPOA, such as:
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Plan Now To Take Advantage Of New And Existing Tax Benefits, Prepare For Reporting Changes

WASHINGTON — The Internal Revenue Service urged business taxpayers to begin planning now to take advantage of tax-saving opportunities and get ready for reporting changes that take effect in 2023.

During National Small Business Week, April 30 to May 6, the IRS is joining the Small Business Administration and others in both the public and private sector to celebrate the hard work, ingenuity and dedication of America’s small businesses and their contributions to the economy.

With next year’s filing deadline nearly a year away, entrepreneurs still have time to identify possible tax benefits, take action to qualify for them and then claim them when they file in 2024. They also have time to plan for reporting changes and even claim overlooked tax benefits from the recent past.

Cutting Energy Costs For Small Businesses
The Inflation Reduction Act (IRA), enacted last summer, includes provisions that can save small business owners money on energy costs. For example:
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Lookback Rule: The IRS Fixes The Refund Trap For The Unwary

For tax year (TY) 2019, there were nearly 34 million returns filed between the postponed period of April 16, 2020, and July 15, 2020, and for TY 2020, there were nearly 29 million returns filed between the postponed period of April 16, 2021, and May 17, 2021. Without IRS intervention, any claims for credit or refund filed during the postponed period three years later that included withholding or estimated taxes would have been denied because the withheld amount(s) would have been credited to the taxpayer’s account as of April 15, outside the three-year lookback period.

Good news: Earlier today the IRS issued Notice 2023-21 addressing the mismatch between the time for filing a claim for credit or refund and the three-year lookback period caused by postponing certain filing deadlines for filing seasons 2020 and 2021, which would result in the denial of timely claims for credit or refund for those taxpayers who took advantage of the postponed deadlines and who had withholding or estimated payments. Taxpayers will never know this was a potential problem as the IRS did the right thing and proactively fixed the lookback period to eliminate challenges and refund denials for taxpayers.

I first raised this issue internally after the IRS postponed the filing date for the 2020 filing season (TY 2019 returns). On May 11, 2021, I posted a blog, in which I publicly suggested the IRS publish guidance to remedy this problem and submitted a recommendation to include in the U.S. Department of the Treasury/Internal Revenue Service Priority Guidance Plan. I also provided a legislative recommendation as to how Congress could remedy this issue for these tax years and for all future instances when the filing deadline is postponed. This notice resolves the issue for the 2020 and 2021 COVID-19 disaster relief, yet it does not provide relief for other disaster filing postponements.
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U.S. Government Concedes In Case Of Large Foreign Gifts

An American citizen got a big cash gift from his mom back in Poland. The U.S. government went after him for failure to report foreign gifts – but now has changed its tune regarding “reasonable cause” and “willful” failure to file.

The U.S. Department of Justice has conceded in Wrzesinski v US that an American citizen and a native of Poland does not owe penalties for failing to file IRS Form 3520, “Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts,” after receiving $830,000 from his mother in Poland.

Krzysztof Wrzesinski immigrated to America in 2005 at age 19 and for the past nine years he has been a Philadelphia police officer. In 2010, his mother, Barbara Wrzesinska, a citizen and resident of Poland, made a gift to her son of $830,000 after winning the Polish lottery.

Wrzesinski visited his mother in mid-November 2010 and while there phoned his tax advisor in the United States to ask if he needed to document the gift in the U.S. The advisor, a tax accountant and an Enrolled Agent, told Wrzesinski there was no need to include the gift on his U.S. tax returns and that there was no other U.S. legal requirement in connection with the gift. Wrzesinski received the money in four payments from December 2010 to March 2011.

A Problem Unearthed
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Church Inquiries And Examinations By The IRS | A Look At Section 7611 And Its Exceptions

IRS Inquiries and Examinations, Generally – Sections 6201 and 7602. Generally, the IRS is authorized and required by 26 U.S.C. § 6201(a) “to make the inquiries, determinations, and assessments of all taxes” imposed by the Internal Revenue Code.

To execute on that requirement, Congress, via section 7602, granted the IRS broad latitude to issue summonses “‘[f]or the purpose of ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any internal revenue tax …, or collecting any such liability.’” United States v. Clarke, 573 U.S. 248, 250 (2014) (quoting 26 U.S.C. § 7602(a)). The IRS has the authority to issue summonses to the subject taxpayer and to third parties who may have relevant information. See 26 U.S.C. § 7602(a)(2); Standing Akimbo, LLC v. United States, 955 F.3d 1146, 1154 (10th Cir. 2020). If a person or entity fails to comply with a summons, the IRS can bring an enforcement proceeding in a district court. 26 U.S.C. § 7604.

The IRS must have a good faith basis for issuing a summons under section 7602. To determine if a good faith basis exists, the courts evaluate these four factors: (1) whether the investigation will be conducted pursuant to a legitimate purpose, (2) whether the inquiry may be relevant to the purpose, (3) whether the information sought is not already within the IRS’s possession, and (4) whether the administrative steps required by the Internal Revenue Code have been followed. See United States v. Powell, 379 U.S. 48, 57-58 (1964).

Church Inquiries and Examinations, Section 7611. Section 7611 of the Code provides a different and unique statutory regime for inquiries and examinations of churches. Section 7611 restricts those inquiries and examinations, including the IRS’s ability to examine “church records,” and provides a detailed process for when and how those examinations may occur. See 26 U.S.C. § 7611(a), (h) (defining “church records” as “all corporate and financial records regularly kept by a church, including corporate minute books and lists of members and contributors.”). Under section 7611, the IRS may begin a church tax inquiry only if: (A) reasonable belief requirements and (B) specific notice requirements have been met.

Reasonable Belief Requirements. The “reasonable belief” requirements are met “if an appropriate high-level Treasury official reasonably believes (on the basis of facts and circumstances recorded in writing) that the church—(A) may not be exempt, by reason of its status as a church, from tax under section 501(a), or (B) may be carrying on an unrelated trade or business (within the meaning of section 513) or otherwise engaged in activities subject to taxation under this title.” Id. at § 7611(a)(2)-(a)(2)(B).
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IRS Quickly Moves Forward With Taxpayer Service Improvements; 4,000 Hired Plus 1000 More By End Of Year

The Internal Revenue Service announced significant progress to prepare for the 2023 tax filing season as the agency passed a milestone of hiring 4,000 new customer service representatives to help answer phones and provide other services.

These assistors have been hired over the last several months and are being trained to provide help to taxpayers, including answering phone questions. This is part of a much wider IRS improvement effort tied to the Inflation Reduction Act funding approved in August. The IRS continues working hard on implementing the landmark 10-year legislation, and updates on other improvement areas will be provided in the near future.

“The IRS is fully committed to providing the best service possible, and we are moving quickly to use new funding to help taxpayers during the busy tax season,” said IRS Commissioner Chuck Rettig. “Our phone lines have been simply overwhelmed during the pandemic, and we have been unable to provide the help that IRS employees want to give and that the nation’s taxpayers deserve. But help is on the way for taxpayers. As the newly hired employees are trained and move online in 2023, we will have more assistors on the phone than any time in recent history.”

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Plug-In Electric Drive Vehicle Credit (IRC 30D)

The Treasury Department and the IRS issued Notice 2022-46 PDF requesting comments on any questions arising from the IRA amendments to the Clean Vehicle Credit. Comments should be submitted by November 4, 2022.

Updated information for consumers as of August 16, 2022

New Final Assembly Requirement

If you are interested in claiming the tax credit available under section 30D (EV credit) for purchasing a new electric vehicle after August 16, 2022 (which is the date that the Inflation Reduction Act of 2022 was enacted), a tax credit is generally available only for qualifying electric vehicles for which final assembly occurred in North America (final assembly requirement).

The Department of Energy has provided a list of Model Year 2022 and early Model Year 2023 electric vehicles that may meet the final assembly requirement. Because some models are built in multiple locations, there may be vehicles on the Department of Energy list that do not meet the final assembly requirement in all circumstances.

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IRS Provides Tax Inflation Adjustments For Tax Year 2023

The Internal Revenue Service announced the tax year 2023 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2022-38PDF provides details about these annual adjustments.

New For 2023

The Inflation Reduction Act extended certain energy related tax breaks and indexed for inflation the energy efficient commercial buildings deduction beginning with tax year 2023. For tax year 2023, the applicable dollar value used to determine the maximum allowance of the deduction is $0.54 increased (but not above $1.07) by $0.02 for each percentage point by which the total annual energy and power costs for the building are certified to be reduced by a percentage greater than 25 percent. The applicable dollar value used to determine the increased deduction amount for certain property is $2.68 increased (but not above $5.36) by $0.11 for each percentage point by which the total annual energy and power costs for the building are certified to be reduced by a percentage greater than 25 percent.
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Tax Scams

WASHINGTON – J. Russell George, the Treasury Inspector General for Tax Administration, announced the release of new public service announcements (PSAs) to educate taxpayers about the continuing threat of Internal Revenue Service (IRS) impersonation scams.

The English and Spanish-language PSAs are available on TIGTA’s YouTube Channel.

“IRS impersonation scams continue to plague Americans and have claimed victims in every State,” George said. “TIGTA’s new public service announcements share advice on how to recognize these scams. If you receive a suspicious phone call from someone claiming to be from the IRS, just hang up.”

Scammers undermine Federal tax administration by impersonating IRS employees in an effort to obtain personally identifiable information (PII) from unsuspecting taxpayers or to steal their money. Such impersonators may claim to be IRS employees on the telephone or may misuse IRS logos, seals, or symbols to create official-looking letters and e-mails.

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IRS On Identity Theft

The Internal Revenue Service today reminded all taxpayers – particularly those who are identity theft victims – of an important step they should take to protect themselves from tax fraud.

Some identity thieves use taxpayers’ information to file fraudulent tax returns. By requesting Identity Protection PINs from the Get an IP PIN tool on, taxpayers can prevent thieves from claiming tax refunds in their names.

Identity Protection PINs And How To Get One

An IP PIN is a six-digit number the IRS assigns to an individual to help prevent the misuse of their Social Security number or Individual Taxpayer Identification Number (ITIN) on federal income tax returns. The IP PIN protects the taxpayer’s account, even if they’re no longer required to file a tax return, by rejecting any e-filed return without the taxpayer’s IP PIN

Taxpayers should request an IP PIN:

  • If they want to protect their SSN or ITIN with the IRS,
  • If they want to protect their dependent’s SSN or ITIN with the IRS,
  • If they think their SSN, ITIN or personal information was exposed by theft or fraudulent acts or
  • If they suspect or confirm they’re a victim of identity theft.

Taxpayers can go to to complete a thorough authentication check. Once authentication is complete, an IP PIN will be provided online immediately. A new IP PIN is generated every year for added security. Once an individual is enrolled in the IP PIN program, there’s no way to opt-out.

The IRS may automatically assign an IP PIN if the IRS determines the taxpayer’s a victim of tax-related identity theft. The taxpayer will receive a notification confirming the tax-related ID theft incident along with an assigned IP PIN for future tax-return filings.

Taxpayers will either receive a notice with their new IP PIN every year in early January for the next filing season or they must retrieve their IP PIN by going to

Tax-related Identity Theft And How To Handle It

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