e-News for Small Business Issue 2024-06

7 ERC warning signs; filing season info; digital assets

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e-News for Small Business March 29, 2024

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Issue Number: 2024-06

Inside This Issue

  1. Seven warning signs of incorrect Employee Retention Credit claims; aggressive ERC promotion makes 2024 IRS Dirty Dozen list
  2. Important tax filing season information
  3. Businesses should report digital asset transactions and other income
  4. Treasury, IRS finalize rules on elective payments of certain clean energy credits
  5. IRS has many resources in multiple languages
  6. Registration open for 2024 IRS Nationwide Tax Forum
  7. Other tax news

1.  Seven warning signs of incorrect Employee Retention Credit claims; aggressive ERC promotion makes 2024 IRS Dirty Dozen list

The IRS encourages businesses to review Employee Retention Credit claims and see if the agency’s special programs can help them avoid future compliance issues.

The deadline of March 22 for employers to correct improper ERC claims has passed, but the IRS reminds businesses of a special claim withdrawal process for businesses whose claim is still pending.

The IRS included warnings about aggressive ERC marketing and making improper claims as part of the agency’s annual Dirty Dozen list of tax scams.

Taking steps now to resolve these issues can help businesses get right and avoid future IRS action, and the agency urged businesses to immediately seek the help of a trusted tax professional to get help.

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2.  Important tax filing season information

Avoid tax return mistakes, delays and refund adjustments with these tips

As the April 15 filing deadline approaches, the IRS reminds taxpayers about ways to prevent typical errors on federal tax returns to help speed potential refunds.

  • Collect tax-related paperwork
  • Use e-filing options, including Free File and Direct File
  • Ensure correct filing status
  • Report all taxable income
  • Verify bank information
  • Request an extension, if needed

Prevent penalties and interest with electronic filing and payment options

Taxpayers, regardless of income, who need more time to file a return can use IRS Free File to electronically file for a six-month extension before April 15, 2024.

An extension will help to avoid penalties and interest for failing to file on time, and gives taxpayers until Oct. 15, 2024, to file. However, they still must pay what they owe by the April 15 deadline and are encouraged to use electronic payment options to further avoid late filing and interest penalties.

Tell employees about IRS Direct File, now open in 12 pilot states

The IRS has fully launched its Direct File pilot and is asking businesses to encouraged eligible employees in 12 states to try the new service to file their tax returns online for free directly with the IRS. Pilot states include: Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington State and Wyoming.

The early results from Direct File have shown taxpayers like the ease and convenience of the tool, and moving into the full-scale launch of the pilot will give more taxpayers the chance to use this free option,” said IRS Commissioner Danny Werfel.

Tips for success using Direct File is available on IRS.gov. 

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3.  Businesses should report digital asset transactions and other income

The IRS reminds businesses that they’re generally required to report all earned income on their tax return, including income earned from digital asset transactions, the gig economy, service industry and foreign sources.

The redesigned Digital Assets page on IRS.gov features:

  • General information and examples of digital assets
  • How to answer the digital asset question on a tax return – when to check yes or no
  • How to report digital asset income

More information: Frequently Asked Questions on Virtual Currency Transactions

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4.  Treasury, IRS finalize rules on elective payments of certain clean energy credits

The Department of the Treasury and IRS issued final regulations for applicable entities that earn certain clean energy credits and choose to make an elective payment election.

For tax years beginning after Dec. 31, 2022, applicable entities can choose to make an elective payment election, which will treat certain clean energy credits as a payment against their federal income tax liabilities rather than as a nonrefundable credit.

This payment will first offset any income tax liability of the applicable entity and any excess is refunded to the applicable entity.

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5.  IRS has many resources in multiple languages

The IRS reminds businesses and individuals that the agency continues to increase the amount of information available in multiple languages.

On IRS.gov, much of the information has been translated into seven languages other than English. Taxpayers can choose their preferred language from the dropdown menu at the top of the page, including Spanish, Vietnamese, Russian, Korean, Haitian Creole, Traditional Chinese and Simplified Chinese.

The Languages page also gives taxpayers key topics related to federal taxes in 21 languages.

Topics include:

  • Taxpayer rights
  • Who needs to file
  • Filing for a business
  • Help options for preparing a tax return
  • Refunds

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6.  Registration open for 2024 IRS Nationwide Tax Forum

Registration for the IRS’s 2024 Nationwide Tax Forum is now open. The forum provides tax professionals the opportunity to attend continuing education sessions this summer in five U.S. cities.

This event offers continuing education and networking opportunities to enrolled agents, certified public accountants, attorneys and other tax professionals who serve businesses, individuals and other entities. Attendees may earn up to 18 continuing education credits.

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7.  Other tax news

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

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