2024-2025 IRS Priority Guidance—Want to Opine?
Per Notice 2024-28, 2024-13 IRB, the IRS invites the public to submit recommendations for items to be included on the 2024-2025 Priority Guidance Plan. This document is used by the IRS to identify and prioritize tax issues to be addressed through IRS administrative guidance.
Improvements Suggested for IRS Tax Transcripts
ABA Tax Section asks the IRS to include on individual and business return transcripts issuances of taxpayer notices, taxpayer actions (CDP, Tax Ct petition), referral of matter to Taxpayer Advocate (TAS), etc. See, Tax Notes, 3/5/34.
Tax Agenda and POTUS
Part of the President’s tax policy agenda addressed in the 2024 State of the Union highlighted restoring low- and middle-income tax breaks, higher tax floors and stricter limitations for high-earners and corporations.
Ramping up of Audit Review Issues
In reminding taxpayers to report all income earned (IR 2024-63, 3/6/2024) the IRS specified income from digital asset transactions, the gig economy, and foreign sources. By doing so, it is setting stage what IRS will be looking to in its audits and reconciliation with third party tax documents.
Virginia & Pass Throughs
From our next-door neighbor, through Virginia Public Document Ruling No. 24-12, 02/19/2024, VDOT provides guidelines on making the pass-through entity tax (PTET) election for taxable year 2021 and claiming a retroactive PTET credit. The Department previously released guidelines applicable to taxable years 2022 through 2025.
DC & Property Taxes now Law
Our neighbor on the other side, though L. 2024, Act 25-363 (Law 25-133), effective 03/01/2024, enacted “Golden Triangle Business Improvement District Amendment Act of 2023.” Starting with tax year 2024, tax rates in the Golden Triangle BID are set as (1) 19¢ for each net rentable square foot of improved Class 2 and Class 3 Property, excluding hotels, for any property for which the owner must report net rentable area; (2) 19¢ for each equivalent net rentable square foot of improvements of improved Class 2 and Class 3 Property, excluding hotels, for any property for which the owner is not required to report net rentable area; (3) 16¢ for each equivalent net rentable square foot of improvements of hotels; and (4) $163 per unit annually for nonexempt residential properties.
Voluntary Disclosure & ERC ends 3/22/24
All employers are urged to review their eligibility for the ERC and to voluntarily correct any mistakes to avoid penalties and interest per the IRS. (IR 2024-39, 2/13/2024)
Government Accounting Office & IRS Audit Suggestions
Per GAO-24-106112, in addressing a decline in audit rates for the highest-income taxpayers in 2020, Treasury directed the IRS to audit at least 8% of tax returns filed by individuals with income of $10 million or more. While IRS increased the number of said audits, according to the GAO, the IRS must still assess its “research efforts to understand the complexity of high-income returns, audit selection models to ensure IRS is not burdening compliant taxpayers, auditor hiring and training needs to address any staffing and skill gaps” and the “IRS should also centralize its management of high-income/high-wealth audit programs.”