Tag: IRS

IRS Warns Taxpayers to Choose Tax Preparers Carefully to Avoid Fraud and Identity Theft | Small Biz Trends

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The Internal Revenue Service (IRS) is urging taxpayers to exercise caution when selecting tax professionals, warning that while most preparers are reputable, some engage in fraud, identity theft, and other scams. The agency emphasizes that taxpayers remain legally responsible for their tax returns, even if prepared by someone else.

IRS Resources for Selecting a Tax Professional

To help taxpayers make informed choices, the IRS offers several tools, including:

  • The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications, which lists preparers who meet high professional standards.
  • A dedicated page on IRS.gov with guidance on choosing a reputable preparer, avoiding unethical ones, and understanding different preparer qualifications

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IRS Announces Unchanged Interest Rates for Fourth Quarter of 2024 | Small Business Trends

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The Internal Revenue Service (IRS) announced today that interest rates will remain unchanged for the fourth quarter of 2024, continuing the rates that have been in place. These rates apply to overpayments and underpayments for the calendar quarter beginning October 1, 2024. For individual taxpayers, the interest rate for both overpayments and underpayments will be set at 8% per year, compounded daily. Corporations will see a slight variation in the rates applicable to them.

Interest Rates for the Fourth Quarter of 2024

  • 8% for overpayments (payments made in excess of the amount owed), with a reduced rate of 7% for corporations.
  • 5.5% for the portion of a corporate overpayment exceeding $10,000.
  • 8% for underpayments (taxes owed but not fully paid).
  • 10% for large corporate underpayments.

Under the Internal Revenue Code, interest rates are determined on a quarterly basis. For individual taxpayers, the rate applied to both overpayments and underpayments is calculated by adding three percentage points to the federal short-term rate. This same formula applies to corporations for underpayments, while the overpayment rate for corporations is the federal short-term rate plus two percentage points.

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IRS Warns Car Dealers About Phishing and Smishing Scams | Small Biz Trends

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The IRS is warning car dealers and sellers about rising phishing and smishing scams. These scams can severely impact business operations by tricking recipients into clicking suspicious links or providing sensitive information.

A recent ransomware attack targeted car dealers, prompting the IRS to stress vigilance. Fraudsters use various tactics to steal personal and financial information, often impersonating the IRS. The agency advises car dealerships to be wary of unsolicited messages and avoid clicking links in emails or texts if they seem suspicious.

Types of Scams:

Phishing: Fraudulent emails appear to be from legitimate sources, using various tricks to obtain sensitive information.

Smishing: Fraudulent text messages use alarming language to prompt recipients to click bogus links, leading to identity theft or malware installation. These scams aim to disrupt computer systems and steal valuable data. They often appear as unsolicited texts or emails from supposed trusted sources. The IRS advises not to click on unsolicited communications, as they might load malware or ransomware.

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IRS Cautions Tax Professionals About Spearphishing Scams | Small Biz Trends

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The IRS recently issued a warning to tax professionals and businesses about a rise in spearphishing attacks aimed at stealing sensitive information. This alert is part of the IRS’s annual “Dirty Dozen” campaign, which highlights the top twelve scams targeting taxpayers and tax advisors each year.

Spearphishing is a type of email scam where criminals pretend to be potential clients to trick tax professionals into giving away personal and financial information. These attackers send emails that look real but are actually fake, trying to get access to computer systems and sensitive data.

IRS Commissioner Danny Werfel stressed the importance of staying alert. “Cyberattacks pose a threat to not just the livelihood of the businesses, but the sensitive tax and personnel information that identity thieves can use to try filing fake tax returns,” he said. “The Security Summit partners continue to urge tax pros and businesses to be on guard and educate their employees. Taking simple steps by using extra caution when opening emails, clicking on links or sharing private client information can prevent tax professionals from being taken advantage of by cybercriminals.”

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Steps to Take if You’re Behind on Your Taxes | Business

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Tax season is a nearly universal source of stress for business owners. It’s especially fraught with anxiety if you have unpaid taxes. The longer your tax delinquency goes on, the more daunting the prospect of catching up becomes, especially as interest and penalties accumulate. You may feel your only option is hiding from the IRS since any form of contact would constitute an admission of guilt or remind the IRS to audit your business.

However, it’s in your best interest to remedy the situation as soon as possible, and you may be surprised to learn the process isn’t as difficult as you’d guess. You may not even be in that much trouble (and if you are, it’s crucial to address that). Learn the steps to take if you’re past due ― and the potential impact on your business.

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IRS Targets High-Income Tax Non-Filers in New Compliance Push | Small Biz Trends

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The Internal Revenue Service (IRS) has launched an initiative to address tax non-compliance among high-income individuals. This latest effort targets over 125,000 instances where individuals with substantial earnings have failed to file federal income tax returns since 2017. Notably, this includes more than 25,000 cases involving individuals with incomes exceeding $1 million and over 100,000 cases of individuals with incomes ranging between $400,000 to $1 million for the tax years 2017 to 2021.

Funded by the Inflation Reduction Act, this campaign aims to bolster tax compliance and ensure fairness across the board. IRS Commissioner Danny Werfel emphasized the importance of this initiative, especially during tax season, stating, “At this time of year when millions of hard-working people are doing the right thing by paying their taxes, we cannot tolerate those with higher incomes failing to do a basic civic duty of filing a tax return.”

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IRS Holds Interest Rates Steady for Q2 2024 | Small Biz Trends

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The Internal Revenue Service (IRS) announced as of April 1, 2024, interest rates for overpayments and underpayments will remain unchanged for the second quarter of the year. This decision reflects the IRS’s ongoing assessment of the economic landscape and its implications for individual and corporate taxpayers.

For individuals, the sustained rate is set at 8% per annum, compounded daily, for both overpayments and underpayments. This means that taxpayers who have paid more than what was owed will earn interest at this rate, while those who have underpaid their taxes will incur interest at the same rate on the outstanding amount.

Corporate taxpayers will see a differentiated structure. The general rate for corporate overpayments stands at 7%, but for the portion of a corporate overpayment exceeding $10,000, the rate is reduced to 5.5%. Conversely, the underpayment rate for corporations mirrors that of individuals at 8%, with a heightened rate of 10% applying to large corporate underpayments.

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IRS Issues Guidance on Emergency Savings Accounts for Employees |Small Biz Trends

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The Internal Revenue Service (IRS) has released initial guidance to assist employers in implementing pension-linked emergency savings accounts (PLESAs). This development follows the authorization of PLESAs under the SECURE 2.0 Act of 2022, aimed at encouraging employees to save for financial emergencies.

Key Features of PLESAs

  • Eligibility and Contributions: Employees eligible to participate in an employer’s defined contribution plan can contribute to a PLESA, even if they do not participate in the main plan. Employers may start offering PLESAs in plan years beginning after December 31, 2023.
  • Contribution Match: Employers can match PLESA contributions at the same rate as those made to the linked defined contribution plan, subject to certain restrictions.
  • Maximum Balance: The maximum balance in a PLESA is generally capped at $2,500, although employers have the discretion to set a lower limit

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Treasury and IRS Delay Reporting Requirements for Digital Asset Transactions | Small Biz Trends

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The Treasury Department and Internal Revenue Service (IRS) have announced a transitional phase in the implementation of new reporting rules for small businesses dealing with digital assets. This move grants temporary relief to businesses from the stringent reporting requirements for certain transactions involving digital assets.

The Treasury and IRS have issued Announcement 2024-4PDF, which specifies that businesses are not required to report the receipt of digital assets in the same manner as cash transactions exceeding $10,000. This guidance comes as part of the transitional measures while the Treasury and IRS work on implementing new provisions established by the Infrastructure Investment and Jobs Act.

The Infrastructure Investment and Jobs Act revised existing rules, equating digital assets with cash for reporting purposes. However, this particular provision requires the Treasury and the IRS to issue specific regulations before it becomes effective.

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IRS Reminds Small Business Owners Q3 Tax Payments Due by September 15, 2023 | Small Biz Trends

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In a timely reminder from the Internal Revenue Service (IRS), taxpayers, especially small business owners such as gig workers, sole proprietors, retirees, partners, and S corporation shareholders, are urged to ensure they meet the third quarter tax payment deadline of September 15, 2023.

Who Needs to Make Quarterly Payments?

Primarily, those not undergoing standard withholding need to be vigilant about these quarterly estimated tax payments. The IRS has specified two conditions to determine if you must make these payments:

  1. If you anticipate owing a minimum of $1,000 in taxes for 2023, post all tax credits and withholding deductions.
  2. Your withholdings and tax credits for 2023 are less than either 90% of your expected tax for 2023 or 100% of the tax reported on your complete 2022 return spanning 12 months.

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