Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of October 17, 2022 – October 21, 2022.

October 17, 2022: The IRS released Internal Revenue Bulletin 2022-42, which highlights the following:

• Notice 2022-45: This notice extends the deadline for amending an eligible retirement plan to reflect the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act). Both allow for special tax treatment with respect to a coronavirus-related distribution or a qualified disaster distribution.

• Notice 2022-43: This notice provides guidance regarding the extension of the four-year replacement period for livestock sold because of the drought. The relief extends to 44 states, two US territories and two independent nations. It generally applies to capital gains realized on sales of livestock held for draft, dairy or breeding purposes.

October 17, 2022: The IRS announced its continued support to fight fraud targeting charities, businesses and individuals during Charity Fraud Awareness Week, which was October 17 to October 21. The IRS estimates that charities lose 5% of their revenue each year to fraud.

October 17, 2022: The IRS released Tax Tip 2022-158, reminding taxpayers to review their withholdings and estimated tax payments.

October 17, 2022: The IRS released Revenue Ruling 2022-20, providing various prescribed rates for federal income tax purposes for November 2022.

October 17, 2022: The IRS released Notice 2022-54, which provides guidance on the corporate bond monthly yield curve and corresponding spot segment rates and the 24-month average segment rates for October 2022. The notice also provides guidance as to interest rates on 30-year Treasury securities and 30-year Treasury weighted average rates.

October 17, 2022: The IRS reminded families that they may be eligible for the Child Tax Credit if they claim at least one child as their dependent. The IRS specifically urges grandparents, foster parents or people caring for siblings or other relatives to check whether they are eligible to receive the 2021 Child Tax Credit.

October 18, 2022: The IRS released Tax Tip 2022-159, suggesting that taxpayers with an outstanding tax bill consider making an Offer in Compromise. An Offer in Compromise is an option for taxpayers who cannot pay their full tax liabilities or in situations where paying the balance would create financial hardship.

October 18, 2022: The IRS announced the 2023 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. The Inflation Reduction Act of 2022 is extending certain tax breaks related to energy for the first time in 2023. The standard deduction for a married couple filing jointly and single and married taxpayers filing separately is also increasing. All of the 2023 adjustments can be found in Revenue Procedure 2022-38. You can also access a summary of the highlights here.

October 19, 2022: The IRS warned employers to be cautious of third parties advising them to claim the Employee Retention Credit when they may not qualify. The third parties either charge large upfront fees or a fee contingent on the amount of the refund. However, they fail to inform taxpayers that wage deductions claimed on the business’s federal tax return must be reduced by the amount of the credit.

October 19, 2022: The IRS reminded employers to file the next quarterly payroll tax by October 31, 2022. While paper filing is available, the IRS strongly encourages employers to file electronically.

October 19, 2022: The IRS reminded taxpayers in certain disaster areas that they may have additional time to file their returns to qualify for penalty relief under Notice 2022-36. Under the notice, penalties for late filing certain tax returns and for failing to report certain required information on Form 1065 or Form 1120-S are waived or abated if the relevant return was filed on or before September 30, 2022. Individuals and households that reside in or have a business in recently declared Federal Emergency Management Agency disaster areas have postponed deadlines.

October 19, 2022: The IRS released Tax Tip 2022-160, providing steps to help people reconstruct important records after a natural disaster.

October 20, 2022: The IRS urged taxpayers to review their tax withholdings before the end of 2022 in order to benefit from any necessary changes. The IRS says a review now could help avoid a balance due or a big refund at tax time in 2023.

October 20, 2022: The IRS released Tax Tip 2022-161, encouraging people to volunteer by helping people file their tax returns. There are two IRS volunteer programs, the Volunteer Income Tax Assistance program and the Tax Counseling for the Elderly program.

October 21, 2022: The IRS, along with the Security Summit partners, provided tips to families to help them remain careful about protecting their personal information. October is Cyber Security Month, which is a collaboration between the government and private industry to raise awareness about digital security and encourage people to protect themselves from cybercrime.

October 21, 2022: The IRS announced that the 401(k) limit is increasing to $22,500 for 2023, up from $20,500. In addition, the individual retirement amount limit is increasing to $6,500. A complete list of all the cost-of-living adjustments is available in Notice 2022-55.

October 21, 2022: The IRS withdrew its proposed regulations related to Section 959 of the Internal Revenue Code originally issued August 29, 2006. The notice related to the exclusion from gross income of previously taxed earnings and profits and to basis adjustments under Section 961. The IRS previously announced its intent to withdraw the 2006 proposed regulations on December 14, 2018.

October 21, 2022: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).

Upcoming Events:

• The 28th Annual Tax Practitioner and IRS Fall Seminar is scheduled for October 26, 2022, at 10:00 am (CDT). Topics include IRS Operations, Federal Ethics, Tax Pro Account, Offer In Compromise and Estate and Gift Tax.

• The IRS’s Taxpayer Advocacy Panel will hold the following committee meetings in November:

  • November 8, 2022: Notices and Correspondence Project Committee

  • November 8, 2022: Tax Forms and Publications Project Committee

  • November 8, 2022: Toll-Free Phone Lines Project Committee

  • November 9, 2022: Special Projects Committee

  • November 9, 2022: Taxpayer Communications Project Committee

  • November 10, 2022: Assistance Center Improvements Project Committee

  • November 17, 2022: Taxpayer Advocacy Panel Joint Committee

Special thanks to Sarah Raben in our Chicago office for this week’s roundup.