IRS practice & procedure

The draft form, which when finalized will be used by brokers to report digital asset transactions, reflects the language of the proposed regulations, including a broad definition of “broker.”

The IRS had mixed success in its first efforts to find employers who evade taxes, doing better in its criminal pursuit than on the civil side, the Treasury Inspector General for Tax Administration said in a recent report.

The IRS winds up its annual list of 12 scams and schemes by covering two broad categories: bogus tax-avoidance strategies and schemes with an international element.

The IRS opened its annual Dirty Dozen list with scams that trick recipients into clicking a suspicious link, filling out personal and financial information, or downloading malware onto their computer.

The appropriations act enacted over the weekend that kept the federal government from shutting down included $12.3 billion for the IRS, but also codified an agreed-upon $20 billion cut in money allocated by the Inflation Reduction Act.

The IRS would reduce the notice of third-party contact with respect to the determination or collection of the taxpayer’s tax liability to 10 days from 45 days in several circumstances involving statutory periods for assessments and collections that expire in one year or less.

Allowing taxpayers to communicate with the IRS almost entirely online will free the agency’s workers to handle other tasks, Commissioner Danny Werfel said in a speech Monday.

IRS Commissioner Danny Werfel said Thursday that the effort will begin with compliance letters going out to high-income taxpayers in 125,000 cases where third-party information indicated federal tax returns have not been filed since 2017.

The Service said that U.S. withholding agents are administratively exempt from the requirement to e-file Forms 1042 during calendar year 2024, while foreign agents are exempt in calendar years 2024 and 2025.

IRS Commissioner Danny Werfel said Wednesday that the audits will focus on business vs. personal use of aircraft by large corporations, large partnerships, and high-income taxpayers.

The IRS warns that the scammers want to gain access to data and identities so they can file fraudulent tax returns.

Almost 50 new or updated frequently asked questions for the IRS’s Form 1099-K, Payment Card and Third Party Network Transactions, published Tuesday, include guidance on common situations, along with more clarity for the payment card industry about which organizations should send Forms 1099-K.