Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 18, 2023 – December 22, 2023.

December 18, 2023: The IRS released Internal Revenue Bulletin 2023-51, which includes the following:

• Notice 2023-74, which delays the new $600 Form 1099-K reporting threshold requirement for third-party settlement organizations for calendar year 2023 and plans to phase in the reporting requirement in 2024, starting with a threshold of $5,000.
• Revenue Procedure 2023-40, which provides guidance in specific circumstances on the adequacy of disclosure on a federal tax return for purposes of reducing the understatement of income tax accuracy-related penalty pursuant to § 6662(d) of the Internal Revenue Code (Code) and avoiding the Code § 6694(a) tax return preparer penalty.
• Proposed regulations that would amend the rules applicable to plans that include cash or deferred arrangements pursuant to § 401(k) to provide guidance with respect to long-term, part-time employees. Comments must be received by January 26, 2024. A public hearing is scheduled for March 15, 2024, at 10 am EDT.
• Revenue Procedure 2023-37, which sets forth rules for Qualified Pre-approved Plans and § 403(b) Pre-approved Plans. The rules consolidate and conform prior revenue procedures with respect to the pre-approved plans.
• Revenue Procedure 2023-38, which provides procedural rules for qualified manufacturers of new clean vehicles to comply with the reporting, certification and attestation requirements regarding the excluded entity restriction.
• Revenue Ruling 2023-23, which publishes the base period T-bill rate for the period ending September 30, 2023, under § 995(f).
• Revenue Procedure 2023-36, which updates the list of jurisdictions with which the United States has in effect a relevant information exchange agreement or an automatic exchange relationship under Treasury Regulation § 1.6049-4(b)(5) and Treasury Regulation § 1.6049-8(a).

December 18, 2023: The IRS announced the launch of the second phase of a new online self-service tool for businesses that expands the business tax account capabilities and eligible entity types. Individual partners of partnerships and individual shareholders of S Corporation businesses are also now eligible for a business tax account.

December 18, 2023: The IRS issued Revenue Ruling 2024-1, which provides tables of covered compensation under § 401(l)(5)(E) for the 2024 plan year.

December 19, 2023: The IRS announced new penalty relief for certain individuals, businesses and tax-exempt organizations that were not sent automated collection reminder notices during the pandemic. Notice 2024-7 and Fact Sheet 2023-28 provide additional details.

December 19, 2023: The IRS issued Notice 2024-1, which provides the percentage increase for calculating the qualifying payment amounts for items and services furnished during 2024 for purposes of § 9816 and § 9817 of the Code, section 716 and section 717 of the Employee Retirement Income Security Act of 1974, and section 2799A-1 and section 2799A-2 of the Public Health Service Act.

December 20, 2023: The IRS issued Notice 2024-5, which provides a safe harbor regarding the incremental cost of certain qualified commercial clean vehicles placed in service in calendar year 2024 for purposes of the credit pursuant to § 45W. The notice also requests comments regarding additional types or classes of vehicles that should be included in the safe harbor in the future.

December 20, 2023: The IRS reminded individuals born before 1951 of the year-end deadlines to take the required minimum distributions from funds held in individual retirement arrangements and other retirement plans, and noted new requirements beginning in 2023. Notice 2023-54 provides additional details.    

December 20, 2023: The IRS issued Notice 2024-2, which provides guidance with respect to certain provisions of the SECURE 2.0 Act of 2022.

December 20, 2023: The IRS issued Notice 2024-3, which sets forth the “2023 Cumulative List of Changes in Plan Qualification Requirements for Defined Contribution Qualified Pre-approved Plans.”

December 21, 2023: The IRS launched a new Voluntary Disclosure Program to help businesses who want to pay back the credit the businesses received after filing Employee Retention Credit claims in error. Announcement 2024-3 provides additional details.

December 21, 2023: The IRS issued final regulations regarding the fees established by the No Surprises Act for the federal independent dispute resolution process. The final regulations will be effective on January 22, 2024.

December 22, 2023: The IRS issued Revenue Procedure 2024-9, which provides procedures pursuant to § 446 and Treasury Regulation § 1.446-1(e) to change methods of accounting for expenditures paid or incurred in taxable years beginning after December 31, 2021. The revenue procedure modifies or clarifies certain sections of previous revenue procedures.

December 22, 2023: The IRS issued proposed regulations for the tax credit for the production of clean hydrogen. The proposed regulations would provide certain definitions and procedures for administering and claiming the credit, including guidance on determining the life cycle greenhouse gas emissions rate resulting from the hydrogen production process. Comments must be received by February 26, 2024. A public hearing is scheduled for March 25, 2024, at 10 am EDT.

December 22, 2023: The IRS announced that certain qualifying businesses, tax-exempt organizations and other entities can register using the free IRA/CHIPS Pre-filing Registration Tool to take advantage of the elective payment or transfer of certain credits.

December 22, 2023: The IRS provided tax relief for individuals and businesses in parts of Tennessee affected by severe storms and tornadoes that began on December 9, 2023. Generally, affected taxpayers now have until June 17, 2024, to file various federal individual and business tax returns and to make tax payments.

December 22, 2023: The IRS issued Notice 2024-12, which clarifies and modifies Notice 2023-63 such that:

• The costs paid or incurred by a research provider to perform specified research or experimental (SRE) activities under contract are not SRE expenditures if the research provider does not bear financial risk and any rights acquired to the SRE product are separately bargained for;
• Until proposed regulations are issued, the rules set forth in sections 3–9 of Notice 2023-63 are optional at the election of the taxpayer, rather than mandatory, except section 7, which may not be relied upon for SRE expenditures paid or incurred with respect to property that is contributed to, distributed from, or transferred from a partnership; and
• Section 5 of Revenue Procedure 2000-50 is obsolete for expenditures paid or incurred in taxable years beginning after December 31, 2021.

December 22, 2023: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).

Special thanks to John Zhang in our New York office for this week’s roundup.

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