IRS Announcement | TaxConnections

02 May 2023

Internal Revenue Service Highlights Information And Free Resources In Recognition Of National Small Business Week

As part of National Small Business Week, April 30 to May 6, the Internal Revenue Service is highlighting tax benefits and resources to help those looking to start a business.

National Small Business Week is an annual effort led by the Small Business Administration to recognize the hard work, ingenuity and dedication of America’s small businesses and to celebrate their contributions to the economy. To support the special week, the IRS has a variety of resources available for small business owners to help them understand and meet their tax responsibilities. Next week, the IRS will be highlighting some of these resources, and @IRSnews also plans a special Twitter chat on Thursday.

When choosing to start a business, it’s important to consider the following:

Employer Identification Number
Most business owners will need an Employer Identification Number (EIN). It’s a permanent number and can be used for most business needs, from opening bank accounts to filing a tax return by mail. Business owners can get their EIN immediately by applying online at IRS.gov at no cost.

Business Structure
Taxpayers must decide what form of business entity to establish when starting a business. This helps determine which income tax return form must be filed. The most common business structures are:
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Written by TaxConnections Admin | Posted in IRS Announcement

02 Dec 2022

Treasury Guidance On Wage And Apprenticeship Requirements For Enhanced Credits/Deductions

Treasury And IRS Announce Guidance On Wage And Apprenticeship Requirements For Enhanced Credits/Deductions

WASHINGTON — The Treasury Department and Internal Revenue Service announced guidance providing taxpayers information on how to satisfy the prevailing wage and apprenticeship requirements for enhanced tax benefits under the Inflation Reduction Act. The guidance will be published in the Federal Register tomorrow.

Notice 2022-61 explains how taxpayers – generally builders, developers, and owners of clean energy facilities – receive the increased tax credits or deduction amounts by satisfying the wage and apprenticeship requirements as provided for in this notice. For instance, the notice provides guidance on what constitutes a prevailing wage and the determination of qualified apprenticeships with accompanying examples.

Written by TaxConnections Admin | Posted in IRS Updates

09 Nov 2022

IRS-CI Releases FY2022 Annual Report Highlighting More Than 2,550 Investigations

In fiscal year 2022, IRS Criminal Investigation initiated more than 2,550 criminal investigations, identified over $31 billion from tax and financial crimes, and obtained a 90.6% conviction rate on cases accepted for prosecution. The IRS-CI FY22 Annual Report PDF, released Thursday, details these statistics, as well as important partnerships and significant criminal enforcement actions from the past fiscal year, which began October 1, 2021, and ended September 30, 2022.

“The cases the IRS-CI team investigated over the past fiscal year touch multiple continents and require cooperation with partners around the globe. This is why IRS-CI continues to cement itself as the preeminent law enforcement agency investigating financial crimes on a global scale,” said IRS Commissioner Chuck Rettig.

Written by TaxConnections Admin | Posted in IRS Notice

07 Oct 2021

IRS Launches New Webpage To Assist Taxpayers With Refunds Subject To Joint Committee On Taxation Review

The IRS announced a new webpage that provides information to taxpayers whose large refunds are subject to further review by the Joint Committee on Taxation (JCT or Joint Committee).

By law, when taxpayers claim a federal tax refund or credit of more than $2 million ($5 million for a C corporation), the IRS must review the refund or credit and provide a report to the JCT, a non-partisan committee of the U.S. Congress. Refunds subject to this review are known as “Joint Committee Refund Cases.”

Taxpayers can now find answers to most questions about Joint Committee case reviews and links to additional resources at Large Tax Refunds and Credits Subject to Review by the Joint Committee on Taxation – What to Expect.

The new webpage covers the following topics:

Written by TaxConnections Admin | Posted in IRS Notice • Joint Committee Refund Case

28 Oct 2020

IRS Provides Tax Inflation Adjustments For Tax Year 2021

The Internal Revenue Service today announced the tax year 2021 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2020-45 PDF provides details about these annual adjustments.

Highlights Of Changes In Revenue Procedure 2020-45

The Consolidated Appropriation Act for 2020 increased the amount of the minimum addition tax for failure to file a tax return within 60 days of the due date. Beginning with returns due after Dec. 31, 2019, the new additional tax is $435 or 100 percent of the amount of tax due, whichever is less, an increase from $330. The $435 additional tax will be adjusted for inflation.

Written by IRS | Posted in IRS Announcement • IRS Provides Tax Inflation Adjustments For Tax Year 2021

30 Oct 2019

Farmers And Ranchers Affected By Drought Have Extra Time To Sell Livestock

Drought can be devastating to farmers and ranchers. Those who were forced to sell livestock due to drought may get extra time to replace the livestock. They may also have more time to defer tax on any gains from the forced sales.

Here are some facts to help farmers understand how the deferral works and if they are eligible.

The one-year extension gives eligible farmers and ranchers until the end of the tax year after the first drought-free year to replace the sold livestock.
The farmer or rancher must be in an applicable region. An applicable region is a county designated as eligible for federal assistance, as well as counties contiguous to that county.
The farmer’s county, parish, city or district included in the applicable region must be listed as suffering exceptional, extreme or severe drought conditions by the National Drought Mitigation Center. All or part of 32 states, plus Guam, the U.S. Virgin Islands and the Commonwealths of Puerto Rico and the Northern Mariana Islands, are listed. The list of applicable regions is in Notice 2019-54 on IRS.gov.
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Written by IRS | Posted in IRS Announcement

14 May 2019

Tax Cuts And Jobs Act: Comparison For Large Businesses And International Taxpayers

The Tax Cuts and Jobs Act (“TCJA”) made significant changes that affect international and domestic businesses, such as deductions, depreciation, expensing, tax credits and other tax items. This side-by-side comparison can help taxpayers understand the changes and plan accordingly.

Some provisions of the TCJA that affect individual taxpayers can also affect business taxes. Businesses and self-employed individuals should review tax reform changes for individuals and determine how these provisions work with their business situation.

Written by IRS | Posted in Tax Cuts and Jobs Act

22 Mar 2019

Changes To Depreciation And Expensing For Businesses

The Tax Cuts and Jobs Act changed some laws on depreciation and expensing. These changes can affect a business’s tax situation. Here are the highlights:

Businesses can immediately expense more under the new law.
Temporary 100 percent expensing for certain business assets (first year bonus depreciation).
Changes to depreciation limitations on luxury automobiles and personal use property.
The treatment of certain farm property changed.
Applicable recovery period for real property.
Use of alternative depreciation system for farming businesses.

Taxpayers can use a safe harbor method to figure depreciation deductions for passenger automobiles qualifying for the 100-percent additional first year depreciation deduction and subject to depreciation limitations. The safe harbor allows depreciation deductions for the excess amount during the recovery period subject to depreciation limitations applicable to passenger automobiles. To apply the safe-harbor method, the taxpayers must use the applicable depreciation table in Appendix A of Publication 946, How to Depreciate Property. The safe harbor method doesn’t apply to a passenger automobile for which the taxpayer elected out of the 100-percent additional first year depreciation deduction or elected to expense all or a portion of the cost of the passenger automobile.

Find more details in FS-2018-9, New rules and limitations for depreciation and expensing under the Tax Cuts and Jobs Act, and Additional First Year Depreciation Deduction (Bonus) – FAQ.

Written by IRS | Posted in IRS Notice

06 Mar 2019

IRS Issues Proposed Regulations: Deduction For Foreign-Derived Intangible Income

The Internal Revenue Service issued proposed regulations under section 250 of the Internal Revenue Code, which offers domestic corporations deductions for foreign-derived intangible income (FDII) and global intangible low-taxed income. Section 250, as well as section 951A dealing with global intangible low-taxed income, was added by the 2017 Tax Cuts and Jobs Act (TCJA).

These proposed regulations provide guidance on both the computation of the deductions available under section 250 and determination of FDII. In addition, the proposed regulations provide rules for the computation of FDII in the consolidated return context. Proposed guidance on the computation of global intangible low-taxed income was published in the Federal Register on Oct. 10, 2018.

New reporting rules requiring the filing of Form 8993, Section 250 Deduction for Foreign-Derived Intangible Income and Global Intangible Low-Taxed Income, are also described in the proposed regulations.

Written by IRS | Posted in IRS Announcement

06 Sep 2017

Don’t Count On A Hurricane For Tax Extension

The IRS has granted an extension of time to file 2016 income tax returns for individuals and businesses impacted by Hurricane Harvey. The new deadline is January 31, 2018. Eighteen Texas counties are included in this extension – Aransas, Bee, Brazoria, Calhoun, Chambers, Fort Bend, Galveston, Goliad, Harris, Jackson, Kleberg, Liberty, Matagorda, Nueces, Refugio, San Patricio, Victoria, and Wharton. Other counties could be added. In addition, if a taxpayer outside the designated area can demonstrate that records necessary to complete the return are located in the affected area, an extension may be granted.

Written by John Stancil | Posted in TaxConnections