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☆ IRS delays tax reporting rule change for business payments on apps such as Venmo and PayPal
▼ + stars: | 2023-11-21 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

If you received business payments via apps such as PayPal or Venmo or e-commerce companies such as eBay , Etsy or Poshmark in 2023, your tax return may now be a little less complicated. The IRS announced Tuesday that 2023 would be a "transition year" for a new tax reporting requirement affecting such payments. Once in place, it will trigger Form 1099-K for just $600 in payments, even if that income stemmed from a single business transaction. For 2023, the old limit of more than 200 transactions worth an aggregate above $20,000 will remain in place. The agency said it also plans on updates for Form 1040, which is used by taxpayers to file individual income tax returns, and related schedules, to "make the reporting process easier."

Persons: aren't, Danny Werfel Organizations: PayPal, eBay, IRS, Finance

WASHINGTON (AP) — House Republicans went after the IRS — long a GOP whipping child — when they decided that emergency aid for Israel should be coupled with cuts elsewhere in the budget. The aid bill that passed the House on Thursday — unlikely to be approved by the Democratic-controlled Senate — would cut $14 billion from the nation's tax collector in exchange for providing assistance to Israel. President Joe Biden has said he would veto the bill if it reaches his desk. The IRS cutback would cost taxpayers billions of dollars, not save money, according to independent budget analysts. In June, legislation to raise the statutory debt limit also rescinded $1.4 billion given to the federal tax collector through the IRA.

Persons: —, Joe Biden, ”, Danny Werfel, Werfel, MacGuineas Organizations: WASHINGTON, —, Republicans, IRS, Democratic, Congressional, Treasury, Federal Budget Locations: Israel

The Employee Retention Credit was intended to be a financial lifeline to small businesses struggling to make ends meet during the pandemic. Innovation Refunds — a consulting firm that focuses on the ERC — was one of the most visible advertisers during the tax credit's heyday. How Innovation Refunds worksOn its website, Innovation Refunds makes it clear it is not a tax professional. Innovation Refunds markets to clients, determines if they are viable candidates for the credit and then collects businesses' documentation. Some former employees said this could insulate Innovation Refunds from potential liability if ineligible businesses claimed the credit.

Persons: Danny Werfel, Andrew Kelly, Howard Makler, Ty Burrell, Burrell, Rob Domenico, Werfel, Tom Williams, Makler, Kate Rogers, Domenico, Slack, Jenn McCabe, Armanino Organizations: Companies, ERC, Internal Revenue Service, IRS, ERC —, CNBC, Reuters, CPA, Senate, Washington , D.C, CQ, Inc, Getty, LinkedIn, Justice Locations: New York, Washington ,, Des Moines

☆ IRS unveils 'special withdrawal process' for small businesses that claimed pandemic-era tax credit
▼ + stars: | 2023-10-19 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

The IRS on Thursday announced a "special withdrawal process" for small businesses that may have wrongly claimed the so-called employee retention tax credit, or ERC. Enacted to support small businesses during the pandemic, the ERC, worth thousands per eligible employee, has been a magnet for fraudulent or "questionable claims," according to the IRS. Many small businesses were misled by ERC promoters, prompting the agency to temporarily stop processing for new claims in September. Small businesses can use the ERC claim withdrawal process if they meet the following criteria:They claimed the ERC on an adjusted employment return (Forms 941-X, 943-X, 944-X, CT-1X). Small businesses can learn more about the ERC withdrawal process by visiting IRS.gov/withdrawmyERC.

Persons: Daniel Werfel, Danny Werfel, Here's, Werfel, haven't, IRS.gov Organizations: Revenue, Senate, IRS, ERC, Finance

☆ The IRS is rolling out a free tax filing pilot in 13 states. Here's where and who's eligible.
▼ + stars: | 2023-10-18 | by ( Juliana Kaplan | ) www.businessinsider.com time to read: +4 min

The IRS is rolling out its pilot of a free direct tax filing program. It's part of the IRS's continued efforts to make tax filing simpler and more cost-effective. AdvertisementAdvertisementThe IRS is rolling out its own free direct tax filing pilot program — and some taxpayers will be able to use it as soon as the 2024 tax filing season. The IRS's ambitious plans for using the billions it got from the Inflation Reduction Act funding include developing a free, direct filing tool for taxpayers . Now, a pilot program is about to become a reality for some across 13 states.

Persons: —, Danny Werfel, filers, Rick Heineman, Werfel Organizations: IRS, Taxpayers, Service, Treasury Department, Child Tax, Social Security, CTC, Intuit TurboTax, Treasury Locations: Arizona California Massachusetts New York Alaska Florida New Hampshire Nevada South Dakota Tennessee Texas Washington Wyoming Arizona , California , Massachusetts, New York, Washington

☆ IRS to offer free 'Direct File' pilot to some taxpayers in 13 states for 2024 tax season. Here's who qualifies
▼ + stars: | 2023-10-17 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

The IRS on Tuesday unveiled more details about its direct filing pilot program launching for the 2024 tax season. Known as Direct File, the pilot will allow certain taxpayers to electronically file federal tax returns for free directly through the IRS, the agency told reporters on a press call. Starting in 2024, Arizona, California, Massachusetts and New York will integrate state tax filings into the pilot program. "This will help us gather important information about the future direction of the Direct File program." After filing federal returns through Direct File, the software will direct taxpayers to state-sponsored tools to complete separate state filings.

Persons: Gen Z, Danny Werfel Organizations: IRS, Taxpayers, Finance Locations: Arizona , California , Massachusetts, New York, Alaska , Florida , New Hampshire , Nevada , South Dakota , Tennessee , Texas, Washington, Wyoming

☆ Some of America's richest people are just not paying their taxes — and millionaires alone could owe up to $34 billion
▼ + stars: | 2023-10-04 | by ( Juliana Kaplan | ) www.businessinsider.com time to read: +4 min

New IRS data shows that some of America's highest earners are just not paying taxes. Sen. Ron Wyden of Oregon requested data from the IRS on taxpayers who are not filing returns. Nearly 1,000 taxpayers making over $1 million aren't paying up and could owe billions. AdvertisementAdvertisementThe average American taxpayer pays $16,615 in income taxes annually — but for some of the wealthiest Americans, that number is zero. Nearly 1,000 taxpayers who make over $1 million annually didn't file taxes multiple times from 2015 to 2020, according to an IRS memo viewed by Insider.

Persons: Sen, Ron Wyden, —, they're, they've, Wyden, Danny Werfel, you'll Organizations: IRS, Service, Finance, Congressional Republicans, Treasury Department, Department of, Treasury, Harvard University, University of Sydney, Biden, Republican Locations: Oregon

☆ Here's what tax pros recommend after the IRS halts processing for small business tax credit
▼ + stars: | 2023-09-18 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +3 min

Kevin Lamarque | ReutersAs the IRS pauses on processing new claims for a pandemic-era small business tax break, some filers are in limbo as the agency works on further guidance. The IRS on Thursday temporarily halted processing for amended payroll tax returns claiming the so-called employee retention tax credit, or ERC, which was enacted during the Covid-19 pandemic. More from Personal Finance:IRS halts processing of a small business tax breakDoes your business qualify for the employee retention credit? If you claimed the credit and are worried about eligibility, it's an excellent time to review your filing with a qualified tax professional, she said. My blanket advice is always to talk to a qualified tax professional who has filed [ERC claims] before.

Persons: Daniel Werfel, Kevin Lamarque, Danny Werfel, Jennifer Rohen, Craig Hausz, Hausz, There's Organizations: Reuters, IRS, ERC, Finance, CMH, CMH Advisors Locations: Worth, Dallas

The Internal Revenue Service is pausing accepting claims for a pandemic-era tax credit until 2024 due to rising concerns that an influx of applications are fraudulent. The tax credit, called the Employee Retention Credit, was designed help small businesses keep paying their employees during the height of the pandemic if they were fully or partly suspended from operating. The credit ended on Oct. 1, 2021, but businesses could still apply retroactively by filing an amended payroll tax return. A growing number of questionable claims are coming from small businesses who may or may not be aware that they aren't eligible. The government's programs to help small businesses during the pandemic have long been a target for fraudsters.

Persons: isn't, Danny Werfel, “, It's, they're Organizations: Internal Revenue, ERC, IRS

☆ IRS halts processing of a small business tax break amid 'surge of questionable claims'
▼ + stars: | 2023-09-14 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

IRS Commissioner Danny Werfel on Thursday ordered the agency to immediately stop processing new claims for a pandemic-era small business tax break to protect filers from a "surge of questionable claims." The employee retention credit, or ERC, was created to support small businesses during the Covid-19 pandemic. "This great program to help small businesses has been overtaken by aggressive promoters," Werfel told reporters on a press call. More from Personal Finance:IRS weighs guidance for employee retention tax creditHow to know if your business qualifies for employee retention creditHouse lawmakers scrutinize pandemic-era small business tax breakThe processing pause on new ERC claims will be in effect through at least the end of 2023. Normal processing times for existing claims could stretch from the standard goal of 90 days to 180 days or longer.

Persons: Danny Werfel, Werfel Organizations: ERC, Finance

☆ Little used tax-free benefit can help employees pay their student loans
▼ + stars: | 2023-08-29 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +3 min

That $5,250 is the federal cap on the amount of tax-free money that employers may offer to help defray employees’ qualified costs for their own education, including tuition and fees. In response to the Society of Human Resource Management’s 2023 employer benefits survey, only 8% of organizations said they offer student loan benefits to employees, a percentage that hasn’t changed for five years. But lawmakers who advocated for tax-advantaged employer benefits to help with student loan payments are concerned there hasn’t been enough public awareness of it. That may be of particular interest now that the yearslong pause in payments on federal student loans is expiring. But for anyone who also has to pay off private student loans, the amount they shell out every month is likely much higher.

Persons: it’s, “, hasn’t, Danny Werfel, —, Katie Lobosco Organizations: New, New York CNN, Society of Human, IRS, Federal Locations: New York

☆ Treasury Secretary Yellen says surprising Fitch downgrade is 'entirely unwarranted'
▼ + stars: | 2023-08-02 | by ( Chelsey Cox | ) www.cnbc.com time to read: +1 min

Treasury Secretary Janet Yellen testifies before the House Financial Services Committee on the state of the international financial system, in the Rayburn House Office Building on Capitol Hill in Washington, DC on June 13, 2023. WASHINGTON — Treasury Secretary Janet Yellen on Wednesday denounced Fitch's decision to downgrade the United States' longstanding credit rating that caused stocks to tumble. Yellen, who spoke during a visit with Danny Werfel, commissioner of the IRS, called the move "surprising" considering the nation's strong economic recovery from the Covid pandemic. Fitch cited "expected fiscal deterioration over the next three years," and "repeated debt-limit political standoffs" when it downgraded the nation's rating to AA+ from AAA. "I strongly disagree with Fitch's decision, and I believe it is entirely unwarranted," Yellen said.

Persons: Janet Yellen, Fitch's, Danny Werfel, Fitch, Yellen, we've Organizations: Financial, WASHINGTON —, AAA, CNBC Locations: Rayburn, Washington , DC, States

☆ IRS halts most unannounced visits to taxpayers, citing safety concerns
▼ + stars: | 2023-07-24 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

The IRS on Monday ended its controversial practice of unannounced visits to homes or businesses from agency revenue officers for most taxpayers. Part of a broader IRS overhaul, the policy change aims to lessen public confusion and improve safety. "The change reverses a long-standing practice by IRS revenue officers that goes back decades." "We have the tools we need to successfully collect revenue without adding stress with unannounced visits," Werfel said. Some Republicans have cited concerns about "new IRS agents" in a push to strip IRS funding.

Persons: Danny Werfel, —, Lesser, Werfel, Tony Reardon, Reardon Organizations: Finance, National Treasury Employees Union, IRS

☆ Taxpayers don’t have to worry about unannounced visits from the IRS anymore
▼ + stars: | 2023-07-24 | by ( Tami Luhby | ) edition.cnn.com time to read: +3 min

These visits will only continue in a few special circumstances, the agency said Monday. “Changing this long-standing procedure will increase confidence in our tax administration work and improve overall safety for taxpayers and IRS employees,” Danny Werfel, IRS commissioner, said in a statement. “These visits created extra anxiety for taxpayers already wary of potential scam artists,” Werfel said. “At the same time, the uncertainty around what IRS employees faced when visiting these homes created stress for them as well.”Typically, tens of thousands of unannounced visits take place each year. It will continue to focus on high-income taxpayers with tax issues, the agency said.

Persons: ” Tony Reardon, Biden, ” Danny Werfel, ” Werfel, “, ” Organizations: CNN, IRS, National Treasury Employees Union

WASHINGTON, July 24 (Reuters) - The U.S. Internal Revenue Service (IRS) said on Monday it was ending its policy of unannounced visits to taxpayers by agency revenue officers, reversing a decades-long practise to "reduce public confusion and enhance overall safety measures for taxpayers and employees." "Effective immediately, unannounced visits will end except in a few unique circumstances and will be replaced with mailed letters to schedule meetings," the IRS said in a statement. Werfel also noted the security concerns around these unannounced visits and said they created "extra anxiety" for taxpayers. In place of the unannounced visits, revenue officers will instead make contact with taxpayers through an appointment letter, and schedule a follow-up meeting, according to the new policy. Such situations number less than a few hundred each year – a small fraction compared to the tens of thousands of unannounced visits that typically occurred annually under the old policy, the IRS said.

Persons: Danny Werfel, Werfel, Kanishka Singh, Mark Potter Organizations: Internal Revenue Service, National Treasury Employees Union, IRS, Thomson Locations: summonses, Washington

☆ The IRS is cracking down on a popular small business tax break that could lead to a costly audit
▼ + stars: | 2023-06-09 | by ( Cheryl Winokur Munk | ) www.cnbc.com time to read: +6 min

A cottage industry of specialist firms has sprung up to help business owners claim the Employee Retention Credit (ERC), a governmental tax incentive intended for companies stressed by the pandemic. To be sure, the IRS warned business owners last October to be on the lookout for third parties promoting improper ERC claims. The IRS went so far as to add fraudulent claims involving the ERC to its annual "Dirty Dozen" list of tax scams. Start by understanding the basic ERC claim requirementsStart by knowing the basics so you can understand whether your business may qualify for a credit. Another red flag is when a third party doesn't ask for documentation to ensure a business owner qualifies, Perrone said.

Persons: Donald N, Hoffman, Danny Werfel, Gina Perrone, Sax, Jenn McCabe, Perrone Organizations: ERC —, Eisner Advisory, IRS, ERC, CPA, Small Business Administration, Armanino

☆ US IRS to launch free tax e-file pilot program in 2024
▼ + stars: | 2023-05-16 | by ( David Lawder | ) www.reuters.com time to read: +3 min

WASHINGTON, May 16 (Reuters) - The Internal Revenue Service on Tuesday said it would launch a free, government-provided direct tax filing option next year, which could lead to the full-scale launch of an IRS filing system that would compete with private tax preparers. The IRS said in an exploratory report to Congress that 72% of American taxpayers surveyed said they were "very interested in" or "somewhat interested in" using a government tool to electronically file their tax returns. The size, scope and complexity of the pilot program, to be available in the 2024 tax filing season, has yet to be determined, IRS Commissioner Danny Werfel told reporters, adding that Treasury Secretary Janet Yellen directed the IRS to launch the pilot after reviewing the report. "Americans will be powerless when the IRS completely controls the tax filing process from start to finish," Smith said in a statement. Werfel noted that all filing options would continue, including free e-file options from private firms and non-profit tax advocacy services, paid filing by tax preparers, and free paper filing to the IRS.

☆ IRS to launch free US direct tax filing pilot program in 2024
▼ + stars: | 2023-05-16 | by ( ) www.reuters.com time to read: +1 min

WASHINGTON, May 16 (Reuters) - The Internal Revenue Service on Tuesday said it would launch a free, government-provided direct tax filing option next year, which could lead to the full-scale launch of an IRS filing system that would compete with private tax preparers. The IRS said in an exploratory report to Congress on the issue that a majority of American taxpayers have indicated in surveys and in other research that they are interested in using a free government-provided tool to electronically file their tax returns. The agency estimated that a new direct filing system would cost between $64.3 million and $248.9 million a year to operate, depending on the complexity of returns accepted and the number of taxpayers using the system. The size, scope and complexity of the IRS pilot program, to be available in the 2024 tax filing season, has yet to be determined, IRS Commissioner Danny Werfel told reporters. Reporting by David Lawder; Editing by Paul SimaoOur Standards: The Thomson Reuters Trust Principles.

☆ No, the IRS still isn't hiring an 'army' of armed auditors—here's how the agency is actually spending $80 billion
▼ + stars: | 2023-05-02 | by ( Ryan Ermey | ) www.cnbc.com time to read: +3 min

Last month, the IRS released a plan for how the agency plans to spend nearly $80 billion in funding granted through the Inflation Reduction Act passed in August. The IRS is already spendingThe IRS has already started using a portion of the appropriation to beef up customer services. More audits for wealthy filersThe biggest sticking point in the funding plan is IRS efforts to close the $600 billion "tax gap," the difference between what Americans owe and what they actually pay. To that end, the agency plans to higher more staff in order to ramp up auditing efforts on wealthy families, large corporations and business partnerships. What is clear, Smith says, is that corporations are likely to receive the "majority" of the uptick in IRS scrutiny.

☆ There's still time to claim your share of $1.5 billion in unclaimed tax refunds from 2019, IRS says
▼ + stars: | 2023-05-01 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

The 2022 federal tax deadline has passed for most Americans, but another key date is approaching for past-due filers. If you're one of the nearly 1.5 million people with an unclaimed tax refund from 2019, the last chance to file your return is July 17, according to the IRS. There's a state-by-state breakdown of median potential refunds for 2019 here. "The 2019 tax returns came due during the pandemic, and many people may have overlooked or forgotten about these refunds," IRS Commissioner Danny Werfel said in a statement. With the 2019 tax deadline extended until July, Werfel said, many Americans, particularly lower earners such as students and part-time workers, may have accidentally skipped the filing.

☆ Lawmakers scrutinize free IRS filing options. “The whole process needs to be improved,” commissioner says
▼ + stars: | 2023-04-20 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

IRS Commissioner Danny Werfel on Wednesday fielded questions from the Senate Finance Committee about the agency's spending priorities, including research on the IRS direct e-file program. However, he admitted there are issues with the current IRS Free File program. A public-private partnership between the IRS and the Free File Alliance, IRS Free File offers free online guided tax prep software to taxpayers with an adjusted gross income of $73,000 or less for 2022. Warren said private companies "sabotaged the program" by making it harder for users to find free filing options to "keep raking in money." IRS free filing raises 'conflicts of interest'Throughout Inflation Reduction Act negotiations, many Republicans have been skeptical about the IRS creating its own free filing program, as well as the $15 million allocated for the study.

☆ IRS chief urges 2024 budget hike as Republicans criticize $80 bln spending plan
▼ + stars: | 2023-04-19 | by ( ) www.reuters.com time to read: +2 min

Werfel told a Senate Finance Committee hearing that the Biden administration's $14.1 billion fiscal 2024 IRS budget request would allow for further improvements in taxpayer services after the agency improved its call center response times with 5,000 new employees funded by last year's Inflation Reduction Act. "It's not enough resources to fund a tax system in an economy that grows in size and complexity every year," Werfel said of the fiscal 2023 IRS budget of $12.3 billion. The Strategic OperatingPlan calls for spending nearly 60% of the Inflation Reduction Act funds, or $79 billion on expanded enforcement, but only $4.3 billion for taxpayer services. Senator John Thune, a Republican from South Dakota, said he was "deeply concerned" that the "funds committed to promoting the administration's radical energy agenda" were similar in size to the taxpayer services spending plan. Some Republicans in the House of Representatives have targeted repeal of the $80 billion in IRS funding as a key spending cut demand for raising the $31.4 trillion federal debt limit this year.

☆ U.S. IRS clears massive backlog of unprocessed paper tax returns
▼ + stars: | 2023-04-18 | by ( David Lawder | ) www.reuters.com time to read: +2 min

WASHINGTON, April 18 (Reuters) - The U.S. Internal Revenue Service declared on Tuesday that it is completing its first "normal" tax filing season since the COVID-19 pandemic struck in 2020, with a backlog of millions of unprocessed returns from previous years fully cleared. New IRS Commissioner Danny Werfel told reporters that the initial spending of $80 billion in new IRS funding helped purchase new scanning technology that has allowed paper returns to be digitized and quickly processed. The delays collided with staffing shortages to pile up a massive backlog of some 23.5 million individual and business tax returns by February 2022 that needed some form of manual processing, according to the National Taxpayer Advocate's office. A U.S. Treasury spokesperson said the IRS ended 2022 with a backlog of 1.4 million unprocessed individual and business returns and those were cleared by mid-March. Republicans in the U.S. House of Representatives have targeted the $80 billion in new IRS funding as part of their spending cut demands in exchange for raising the $31.4 trillion U.S. debt ceiling.

☆ Tax Day: Here's what you need to know if you haven't filed your return yet — and even if you have
▼ + stars: | 2023-04-18 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +10 min

New York CNN —It’s April 18, the official deadline to file your federal and state income tax returns for 2022. Whether you have already filed your tax return or still need to, the good news is this tax filing season has gone much more smoothly than the past three, which were hurt by the pandemic. But you may want to anyway if you think you are eligible for a refund thanks to, for instance, refundable tax credits such as the Earned Income Tax Credit. If you’ve already filed your return, you’re probably glad to have it in the rear view mirror. But one thing is common for the vast majority of US tax filers: Audit rates are exceedingly low.

☆ This free tax tool may find 'overlooked' credits or refunds for those who don't need to file, IRS says
▼ + stars: | 2023-04-14 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

Most taxpayers, including this group, qualify for IRS Free File, which offers free online guided tax prep for federal returns and some state filings, to possibly claim "overlooked tax credits or refunds," according to the IRS. You can use IRS Free File if your 2022 adjusted gross income was $73,000 or less, and taxpayers at any income level can use it to file an extension. Roughly 70% of taxpayers qualify for Free File, but only 2% used it during the 2022 filing season, according to the National Taxpayer Advocate. However, they may still qualify for "refundable" tax credits, which can be claimed without a balance, such as the earned income tax credit for low- to moderate-income workers. How to use IRS Free FileTo get started with Free File, you'll need personal information like your Social Security number, dependent and spouse details, last year's adjusted gross income for verification and the necessary tax forms.

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