Taxes 2023: 5 Important Updates From the IRS as Tax Day Nears
With only a few weeks to go until Tax Day on April 18, this year’s tax filing season has been going smoothly. According to CNN, recent IRS filing statistics indicate more returns are being processed and more refunds are being issued than at the same time last year.
This being said however, the IRS does continue to issue tax updates and news. These may be of interest to taxpayers, especially those who have yet to file their tax returns. As Tax Day nears, here are five important updates from the IRS.
Steer Clear of Shady Tax Preparers
On March 27, 2023, the IRS put out a news release as part of its Dirty Dozen series. This release cautioned taxpayers to avoid shady tax professionals and offered tips on how to find the right tax professional.
Some of the items outlined in the release include common warning signs of a shady tax professional, including instances where unscrupulous tax preparers will “ghost” taxpayers or invent a false income to boost the size of the refund. Taxpayers are advised to choose their tax preparer carefully. Any taxpayer who experiences preparer misconduct may report this to the IRS using Form 14157, Complaint: Tax Return Preparer.
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Tax Relief for New York Storm Victims
Individuals and households which reside or have a business in Erie, Genesee, Niagara, St. Lawrence and Suffolk counties in New York qualify for tax relief as New York winter storm and snowstorm victims, according to the IRS. These individuals and households now have until May 15, 2023, to file federal individual and business tax returns and make tax payments.
Any area designated by FEMA as a result of storms that occurred between Dec. 23 and Dec. 28, 2022, is being offered relief by the IRS. For the full list of eligible localities, you may visit Tax Relief in Disaster Situations to learn more.
Watch Out for Charity Scams and Online Account Scams
As part of the Dirty Dozen campaign, the IRS continues to urge taxpayers to be on alert for scammers. These include scammers using fake charities to steal money and personal information as well as scammers who try to sell or offer assistance setting up an online account on IRS.gov.
Both instances put personal and financial information at risk for identity theft. The IRS provides taxpayers with tips on how to protect against these scams and urges people not to use any third-party assistance to create their own IRS online account other than the approved IRS authentication process.
False Fuel Tax Credit Claims
If you see promoters pushing fuel tax credit claims, watch out. According to the IRS, the fuel tax credit is for off-highway business and farming use. It is not available to most taxpayers, but promoters and scammers will try to convince them to fraudulently claim this credit.
Taxpayers who have heard about the fuel tax credit claims or have any questions about these credits are advised to speak to a legitimate source if they are contemplating participating in it. The IRS said those who knowingly claim a credit they are not entitled to may face fines and be subject to federal criminal prosecution and imprisonment.
Revisions Have Been Made To Form 1099-K’s Frequently Asked Questions
Form 1099-K is used to report income from buyers whose clients used an online payment service or a payment card. It is issued for individuals with $20,000 or more in income and more than $600 in transactions for 2022 and for income greater than $600 in 2023.
There have been many questions about Form 1099-K and the IRS said on March 22, 2023, it revised its frequently asked questions (FAQs). Sections that received updates include the general section (Question 3), individuals sections (Questions 6 and 7 added), filing Form 1099-K section (Question 5) and more available information about reliance.
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