Goehner Accountancy

The IRS has reminded taxpayers of their tax responsibilities, including if they're required to file a tax return Generally, most U S citizens and permanent residents who work in the United States need to file a tax return if they make more than a certain amount for the year Taxpayers may have to pay a penalty if they're required to file a return but fail to do so If they willfully failed to file a return, they may also be subject to additional fines and possible criminal prosecution The following factors affect the filing requirement: (1) gross income; (2) required filing threshold; (3) self-employment status; and (4) status as a dependent Taxpayers must read Publication 501, Dependents, Standard Deduction, and Filing Information, for all the details related to return filing

IRS Offers Checklist of Reminders as Taxpayers Prepare to File 2022 Tax Returns (IR-2023-17)

The IRS has offered a checklist of reminders for taxpayers as they prepare to file their 2022 tax returns Following are some steps that will make tax preparation smoother for taxpayers in 2023:

• Gather tax paperwork and records for accuracy to avoid missing a deduction or credit
• Remember to report all types of income on the tax return
• File electronically with direct deposit to avoid delays in receiving a refund
• Free resources are available to help eligible taxpayers file online
• Free help may also be available to qualified taxpayers
• Choose a tax professional carefully
• Avoid phone delays; use online resources before calling the IRS

In addition, the IRS has suggested that taxpayers stay up to date on important tax information online by:

• Following the IRS' official social media accounts and email subscription lists to stay current on the latest tax topics and alerts; and
• Downloading the IRS2Go mobile app, watching IRS YouTube videos, or following the IRS on Twitter, Facebook, LinkedIn and Instagram for the latest updates on tax changes, scam alerts, initiatives, products and services

IRS Reminds Taxpayers to Report Digital Asset-Related Income (IR-2023-12)

The IRS has reminded taxpayers that they must report all digital asset-related income when they file their 2022 federal income tax return, as they did for fiscal year 2021 The term "digital assets" has replaced "virtual currencies," a term used in previous years The question, which appears at the top of Forms 1040, Individual Income Tax Return; 1040-SR, U S Tax Return for Seniors; and 1040-NR, U S Nonresident Alien Income Tax Return, was revised this year to update terminology All taxpayers must answer the question regardless of whether they engaged in any transactions involving digital assets A digital asset is a digital representation of value which is recorded on a cryptographically secured, distributed ledger Common digital assets include convertible virtual currency and cryptocurrency, stablecoins and Non-fungible tokens (NFTs)

Taxpayer must check the "Yes" box if they:

• Received digital assets as payment for property or services provided;
• Transferred digital assets for free (without receiving any consideration) as a bona fide gift;
• Received digital assets resulting from a reward or award;
• Received new digital assets resulting from mining, staking and similar activities;
• Received digital assets resulting from a hard fork (a branching of a cryptocurrency's blockchain that splits a single cryptocurrency into two);
• Disposed of digital assets in exchange for property or services;
• Disposed of a digital asset in exchange or trade for another digital asset;
• Sold a digital asset; or
• Otherwise disposed of any other financial interest in a digital asset

For more information, taxpayers must visit the Tax Year 2022 1040 (and 1040-SR) Instructions and for frequently asked questions (FAQs) and other details, they must visit the Digital Assets page

IRS Proposes New Service Industry Tip Compliance Agreement (SITCA) Program (Notice 2023-13)

The IRS has issued a guidance which sets forth a proposed revenue procedure that establishes the Service Industry Tip Compliance Agreement (SITCA) program, a voluntary tip reporting program offered to employers in the service industry (excluding gaming industry employers) SITCA is intended to replace the Tip Reporting Alternative Commitment (TRAC) program and the Tip Rate Determination Agreement (TRDA) program, as set forth in Announcement 2001-1, 2001-2 I R B 277, as well as the Employer-Designed Tip Reporting Program (EmTRAC), as set forth in Notice 2001-1, 2001-2 I R B 261

The proposed revenue procedure provides that upon termination of the TRAC, TRDA, and EmTRAC programs, employers with existing tip reporting agreements in those programs will have a transition period during which their existing agreements will remain effective The transition period will end upon the earliest of (1) the employer's acceptance into the SITCA program, (2) an IRS determination that the employer is noncompliant with the terms of the TRAC, TRDA, or EmTRAC agreement, or (3) the end of the first calendar year beginning after the date on which the final revenue procedure is published in the Internal Revenue Bulletin

The SITCA program will be available to employers in all service industries (excluding gaming industry employers) with at least one business location, called a "Covered Establishment," operating under the Employer Identification Number (EIN) of the employer Some of the highlights of SITCA include the following: