As the new year unfolds, the anticipation of tax season builds. In 2024, taxpayers face a unique set of changes and challenges, with the IRS preparing to accept and process returns starting January 29, 2024. Whether you’re organizing your business taxes or those of your clients, this month brings forth several noteworthy developments, including tax filings, court decisions, and news. We aim to keep you well-informed about the ever-evolving tax landscape, so let’s dive into some of the latest updates and insights.
Tax Filing for 2023: Key Updates
As we all gear up for tax season, it’s crucial to be aware of the changes and important dates. Starting January 29, 2024, the IRS will commence accepting and processing 2023 returns. While the tax filing deadline remains April 15, 2024, it’s essential to note that taxpayers in Maine and Massachusetts have a slight extension until April 17, thanks to Patriots’ Day and Emancipation Day. Additionally, individuals in federally declared disaster areas may also have extra time to file.
Now, let’s dive into some other significant tax-related updates:
- Form 8300 E-filing Started on 1/1/24: Many businesses are now mandated to e-file Form 8300, known as the Report of Cash Payments Over $10,000, instead of filing a traditional paper return. This form plays a pivotal role in the IRS and the Financial Crimes Enforcement Network (FinCEN)’s efforts to combat money laundering, which conceals illicit activities, including crimes such as drug trafficking, tax evasion, and terrorist financing.
- For Charities & Nonprofits: The IRS, through Revenue Procedure 2024-5, has introduced a new process. It allows organizations currently recognized under Section 501(c)(3) to apply for recognition under a different paragraph of Section 501(c). To qualify, the organization must demonstrate that, at the time of application submission, it has distributed its assets to another Section 501(c)(3) organization or government entity and meets the requirements for the requested Section 501(c) status.
- Invest in Virtual Currencies? Last month (December 2023), the Treasury Inspector General for Tax Administration (TIGTA) released a report assessing the IRS’ efforts to develop a digital asset monitoring and compliance strategy. The report highlights the IRS’s actions to centralize its approach and emphasizes the “significant impact” that digital assets (Report No. 2024-IE-R005)
News & Court Rulings
Navigating IRS Notice Discrepancies
When you receive an IRS notice of deficiency, you typically have a 90-day window to petition the Tax Court. But what if the IRS initially sends an incorrect notice and later issues a corrected one? In the case of Douglas Dodson and Rebecca Dodson (162 T.C. No. 1), the IRS sent a notice of deficiency (the first notice) to the taxpayers with a filing deadline over a year away. Just a day later, they sent a second notice (the second notice) to correct the deadline. The taxpayers filed their petition in response to the first notice but after the second notice’s deadline and beyond the initial 90-day period specified by Sec. 6213(a). The Tax Court ruled that the taxpayers filed their petition on time, following the last sentence of Sec. 6213(a), and maintained jurisdiction over the case.
2022: A Record-Setting Year
In a remarkable achievement, the IRS set a record in federal tax collection for FY 2022, totaling an astounding $4.9 trillion. This milestone was reached despite a significant estimated tax gap of $688 billion in tax years 2020 and 2021. You can find more details about the 2022 Fiscal Year HERE.
Maryland Man Sentenced for False Return Filings
Ronald Eugene Watson, also known as Sabir Muhammad, received a 27-month prison sentence for preparing and filing false tax returns on behalf of his clients. Operating as a self-employed tax return preparer in Largo, Maryland, Watson willfully prepared and electronically filed tax returns that contained false income and deduction information, including fictitious or exaggerated business expenses and unreimbursed employee costs.
Attorney Guilty for Failing to File Employment Tax Returns
Kassius Orlando Benson, an attorney from Kassius Benson Law P.A. in Minnesota, pleaded guilty to the failure to file quarterly employment tax returns and the failure to remit taxes withheld from his employees’ wages to the IRS. This resulted in a tax loss of approximately $213,000 for the IRS.
Concerned About a Major Tax Liability or Criminal Tax Allegations?
In the past month, various tax changes and events have unfolded—and this article represents just a sampling of the highlights. If any of these updates raise concerns about your tax filings, it is advisable to consult with your accountant or conduct further investigation. However, if you have a significant tax liability, are having trouble with the IRS, or are facing criminal tax allegations, reach out to us.
With offices in Maryland, Washington D.C., and Mumbai, the legal team at Kundra & Associates delivers strong representation and guidance to those facing significant tax liability, offshore tax concerns, or payroll tax issues. We represent clients locally, as well as internationally. Call 301-597-4975 or reach out to us today online.