Larry Saunders & Associates, Cpa's

The Internal Revenue Service said it delivered "significantly improvedcustomerservice" during the 2023 tax filing season and cited funds made available to it from the Inflation Reduction Act as the key reason for it

According to statistics released April 17, 2023, by the agency, the IRS achieved 87 percent level of service, two percentage points above the 85 percent target set by Department of the Treasury Secretary Janet Yellen and well above the 15 percent recorded in 2022

Compared to 2022, the agency answered 2 million more calls and cut average wait times from 27 minutes to four minutes It also served 100,000 more taxpayers in person and digitized 80 times more tax returns through the adoption of new scanning technology The IRS also reports that 92 percent of taxpayer assistance centers (335) were open by early April this year

The IRS also made it possible to respond to nine notices online and plan to allow for 72 more notices to come with an online response form

By Gregory Twachtman, Washington News Editor The IRS, Department of Labor (DOL) and Department of Health and Human Services (HHS) jointly issued frequently asked questions (FAQs), Part 58 and Part 59 to clarify how the COVID-19 coverage and payment requirements under the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief and Economic Security Act (CARES Act) will change when the Public Health Emergency (PHE) ends The HHS is planning for the federal PHE for COVID-19 to end on May 11, 2023 Once the PHE ends, the coverage and payment requirements will change

Further, under the FFCRA and the CARES Act, plans and issuers are not required to provide coverage for items and services related to diagnostic testing for COVID-19 that are furnished after the end of the PHE If they provide such coverage, they may impose cost-sharing requirements, prior authorization or other medical management requirements for the items and services

The IRS has released a new Audit Technique Guide (ATG) designed to provide assistance in auditing individuals in various roles in the entertainment industry The auditor must develop issues in relation to the taxpayer's trade or business To that end, it may be necessary to look beyond the job title and determine the actual duties and responsibilities of the taxpayer

The ATG provides an overview and examination of the music industry, looks at videos, songwriters, publishers and live performers and considers the interests and characteristics of producers and managers The ATG covers general background, income, capitalization and cost recovery, passive activity losses, travel and transportation, recordkeeping and personal expenses It also examines other issues, such as home office use, nonprofit activities, job searches, agents, and moving expenses The scope of this guide also includes employment tax, unions and guilds, reimbursements and copyright law

The IRS has released the applicable terminal charge and the Standard Industry Fare Level (SIFL) mileage rate for determining the value of noncommercial flights on employer-provided aircraft in effect for the second half of 2022 for purposes of the taxation of fringe benefits Further, in March 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P L 116-136) was enacted, directing the Treasury Department to allot up to $25 billion for domestic carriers to cover payroll expenses via grants and promissory notes, known as the Payroll Support Program (PSP) Therefore, the IRS has provided the SIFL Mileage Rate The value of a flight is determined under the base aircraft valuation formula by multiplying the SIFL cents-per-mile rates applicable for the period during which the flight was taken by the appropriate aircraft multiple provided in Reg §1 61-21(g)(7) and then adding the applicable terminal charge

The IRS today informed taxpayers and practitioners that it has revised Form 3115, Application for Change in Accounting Method, and its instructions

Announcement 2023-12 [PDF 78 KB] states that the Form 3115 (Rev December 2022) is the current Form 3115 (December 2022 Form 3115) and replaces the December 2018 version of the Form 3115 (December 2018 Form 3115)

Announcement 2023-12 also provides guidance to allow for a reasonable period for taxpayers to transition to the December 2022 Form 3115

• The IRS will accept either the December 2022 Form 3115 or the December 2018 Form 3115 if filed by a taxpayer on or before April 18, 2023, unless the use of the December 2022 Form 3115 is specifically required by guidance published in the Internal Revenue Bulletin
• Taxpayers filing Forms 3115 after April 18, 2023, must use the December 2022 Form 3115

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The IRS has issued frequently asked questions (FAQs) to provide guidance for victims who have received state compensation payments for forced, involuntary, or coerced sterilization Some states have enacted legislation to compensate victims of forced sterilization under state programs These states have made payments to those victims pursuant to the legislation The FAQs address the Federal income tax consequences of these payments

As businesses begin to comply with Initiative 82, which phases out the District of Columbia tipped minimum wage for servers, bartenders, and other tipped workers beginning May 1, 2023, the Office of Tax and Revenue reminds businesses and consumers that, under District law, if tangible personal property or taxable service being sold is subject to District sales tax, the business must collect and remit sales tax on the total sales price Therefore, if a business adds a mandatory service charge, fee, or other similar item, such as a "fair wage service charge" or "packaging fee," to the total sales price, District sales tax would be due on the total sales price including the mandatory service charge or fee OTR Tax Notice 2023-03, District of Columbia Office of Tax and Revenue, March 27, 2023 North Carolina issued important guidance on 2022 tax return filing changes resulting from legislation that: expands eligibility for the elective pass-through entity (PTE) income tax to partnerships with partners that are partnerships or S corporations; and allows residents who are partners or shareholders in a partnership or S corporation that paid a PTE income tax to another state or the District of Columbia to claim a credit for the tax paid

Important Notice: Session Law 2023-12, North Carolina Department of Revenue, April 4, 2023 Effective July 1, 2023, Pittsylvania County imposes a new 1% additional retail sales and use tax (the "additional local tax") As a result, the total sales and use tax rate in Pittsylvania County will be 6 3%, which is comprised of the 4 3% state tax, the 1% local option tax, and the 1% additional local tax

Transitional ProvisionsSales made on or after July 1, 2023, will be subject to the new tax rate Items delivered to a purchaser and paid for on or after July 1, 2023, will be taxed at the 6 3% rate, regardless of when the property was ordered The increased rate will not apply to property delivered prior to July 1, 2023, but paid for on or after July 1, 2023 Also, the increased rate will not apply when a taxable sale or lease payment is paid for in full prior to July 1, 2023, even though delivery may occur on or after July 1, 2023, or the paid-in-full lease payment covers a lease period beginning on or after July 1, 2023

Food Purchased For Home ConsumptionFood purchased for home consumption is not subject to the additional 1% local tax in Pittsylvania County

Essential Personal Hygiene ProductsEssential personal hygiene products are not subject to the additional one percent local tax in Pittsylvania County

Sourcing RulesThe additional local tax in Pittsylvania County is sourced in the same manner as the local option sales and use tax, the Northern Virginia, Hampton Roads, and Central Virginia regional taxes, the Historic Triangle additional tax, and the additional local tax in the Counties of Charlotte, Gloucester, Halifax, Henry, Northampton, and Patrick and the City of Danville

Transient AccommodationsThe additional local tax in Pittsylvania County applies to rentals of accommodations to transients on and after July 1, 2023 Accommodations (i) furnished to transients on or after July 1, 2023, and (ii) paid for on or after July 1, 2023, are taxed at the 6 3% rate in Pittsylvania County, regardless of when the rental was reserved The increased tax rate will not apply to accommodations furnished to transients prior to July 1, 2023, but paid for on or after July 1, 2023; nor will it apply when the accommodations are paid for in full prior to July 1, 2023, even if the accommodations are not furnished to the transient until on or after July 1, 2023 Tax Bulletin 23-4, Virginia Department of Taxation, April 21, 2023