JoAnn's Business & Tax Service

01/08/2026

Issue Number: IR-2026-02
Inside This Issue
IRS announces first day of 2026 filing season; online tools and resources help with tax filing

IR-2026-02, Jan. 8, 2026

WASHINGTON — The Internal Revenue Service announced Monday, January 26, 2026, as the opening of the nation’s 2026 filing season. This year, several new tax law provisions of the One, Big, Beautiful Bill become effective, which could impact federal taxes, credits and deductions.

Taxpayers have until Wednesday, April 15, 2026, to file their 2025 tax returns and pay any tax due. The IRS expects to receive about 164 million individual income tax returns this year, with most taxpayers filing electronically.

IRS.gov has online tools and resources taxpayers can use before, during and after filing their federal tax return. One, Big, Beautiful Provisions provides information that could help lower tax bills and potentially increase refund amounts.

“President Trump is committed to the taxpayers of this country and improving upon the successful tax filing season in 2025,” said Acting IRS Commissioner Scott Bessent. “Prior to the passage of the One, Big, Beautiful Bill, which delivered working families tax cuts, Treasury and IRS were diligently preparing to update forms and processes for the benefit of hardworking Americans, and I am confident in our ability to deliver results and drive growth for businesses and consumers alike.”

“The Internal Revenue Service is ready to help taxpayers meet their tax filing and payment obligations during the 2026 filing season,” said IRS Chief Executive Officer Frank Bisignano. “As always, the IRS workforce remains vigilant and dedicated to their mission to serve the American taxpaying public. At the same time, IRS information systems have been updated to incorporate the new tax laws and are ready to efficiently and effectively process taxpayer returns during the filing season.”

IRS Individual Online Account. Taxpayers can access their individual online account information, including balance due, payments made or scheduled, tax records and more.

New Schedule 1-A. Taxpayers will use the new Schedule 1-A to claim recently enacted tax deductions, such as no tax on tips, no tax on overtime, no tax on car loan interest and/or the enhanced deduction for seniors.

Enroll in a Trump Account. Parents, guardians and other authorized individuals can establish a new type of individual retirement account for their children. To learn more, visit trumpaccounts.gov.

Open a bank account. The IRS strongly encourages taxpayers to establish a bank account to receive their tax refunds via direct deposit, because the IRS is phasing out paper tax refund checks due to the executive order, Modernizing Payments To and From America’s Bank Account.

Forms 1099-K and 1099-DA. Taxpayers should visit IRS.gov and learn what to do if they receive either of these forms. Form 1099-K, Payment Card and Third Party Network Transactions, is used to report payments received from credit cards, payments apps and online marketplaces. Form 1099-DA, Digital Assets, is used to report digital asset proceeds from broker transactions. Taxpayers must report all taxable income on their federal tax returns, even if they don’t receive either form.

Where’s My Refund? Refund status information is generally available around 24 hours after e-filing a current-year return, or four weeks after filing a paper return.

Be aware of tax scams and fraud. Taxpayers can learn how to prevent, report and recover from tax scams and tax-related identity theft on IRS.gov.

Choose a tax preparer. Taxpayers should review IRS guidance for Choosing a Tax Professional, including tips on choosing a reputable preparer and how to avoid unethical preparers.

Taxpayer Assistance Centers. Taxpayers should make IRS.gov their first stop to get help. If taxpayers cannot resolve their issue online, they can get help by making an appointment to visit a Taxpayer Assistance Center.

IRS Free File and Fillable Forms. The IRS Free File program will begin accepting individual tax returns starting Friday, Jan. 9 for qualified taxpayers. Taxpayers comfortable preparing their own taxes can use IRS Free File Fillable Forms starting Jan. 26, regardless of income.

MilTax. Military members and some veterans can use the Department of Defense program, MilTax, for free return preparation and e-filing software.

IRS-certified volunteers. The Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs offer no-cost, basic tax preparation to qualified individuals.

08/16/2024

Issue Number: IR-2024-215

Inside This Issue

IRS, states, tax industry announce new joint effort to combat growing scams and schemes; ongoing coordination to follow in footsteps of Security Summit’s identity theft efforts to help taxpayers and protect revenue

WASHINGTON — A coalition representing the Internal Revenue Service, state tax agencies and the spectrum of the nation’s tax industry today announced a new joint effort to combat the growth of scams and schemes threatening taxpayers and tax systems.

The new combined effort follows a variety of increased scams and schemes that intensified during the past filing season that aimed to exploit vulnerable taxpayers while enriching fraudsters and promoters.

Convened at the request of IRS Commissioner Danny Werfel, the coalition of federal and state tax agencies along with software and financial companies as well as key national tax professional associations agreed to a three-pronged approach. They will work to expand outreach and education about emerging scams, develop new approaches to identify potentially fraudulent returns at the point of filing and create infrastructure improvements to protect taxpayers as well as federal, state and industry tax systems.

The new task force will be called the Coalition Against Scam and Scheme Threats (CASST).

“Across the spectrum of the tax system, we’ve seen a rising tide of scams and schemes that try to exploit taxpayers and find gaps in government and industry defenses,” Werfel said. “This new collaborative approach will allow the private and public sectors to throw our combined weight against this threat. We will do more to work closely together, share information faster, respond quickly to threats and quickly alert the public to new and emerging threats. Our goal is to have a mass effect on this expanding problem that’s spread on social media and through bad actors.”

The new CASST project has wide support across the nation’s tax community. In addition to the IRS, other participants include state tax agencies represented by the Federation of Tax Administrators as well as the leading software and financial industries working in the tax space and key national tax professional organizations. The Council for Electronic Revenue Communication Advancement, the National Association of Computerized Tax Processors and the American Coalition for Taxpayer Rights are among those that have signed on to support the initiative. In all, more than 60 different groups from the private sector have signed on to the initiative, either individually or as part of a group.

“The FTA membership is dedicated to protecting taxpayers from fraudulent attacks on the country’s tax ecosystem,” said Federation of Tax Administrators Executive Director Sharonne Bonardi. “We are committed to continuing our collaborative efforts by working with the IRS, industry and other stakeholders to implement strategies that allow for proactive detection, prevention and mitigation of scams and schemes deployed by bad actors intending to defraud tax agencies.”

The new coalition is an outgrowth of the Security Summit effort, and while the new collaborative effort will not replace the Summit, the scams coalition will be closely modeled on the Summit. The Security Summit was launched in 2015 by the same groups to stem the growth in tax-related identity theft. The combined effort improved information sharing between the groups, identified common approaches to combat tax-related identity theft, improved internal tax system defenses and conducted extensive public awareness campaigns for taxpayers and tax professionals. While tax-related identity theft remains a concern, the improved protections have protected millions of taxpayers and prevented billions of dollars of fraudulent payments.

For this new project targeting scams, the CASST task force has agreed to high-level principles. The purpose of the group will be to better protect taxpayers from falling prey to unscrupulous actors by leveraging multilateral relationships across the tax ecosystem to minimize the filing of fraudulent tax returns.

"CERCA is pleased to work with the IRS and the states to combat the proliferation of ‘scams and schemes’ that are victimizing millions of Americans,” said Shannon Bond, chair of the Council for Electronic Revenue Communication Advancement. CERCA represents companies in the tax software and preparation industries as well as financial service groups and others in the tax community. “Continuing our long partnership with the IRS, CERCA stands shoulder to shoulder with both the federal government and the states to reduce first-party fraud, which threatens the viability of tax systems and imperils vulnerable taxpayers."

During the past tax season, there has been increased activity involving a variety of scams and schemes harming taxpayers, including the Fuel Tax Credit, household employment taxes and the Sick and Family Leave Credit. The IRS has seen hundreds of thousands of dubious claims come in where it appears taxpayers are claiming credits for which they are not eligible, leading to refunds being delayed and the need for taxpayers to show they have legitimate documentation to support these claims.

Numerous other scams and schemes continue to be seen circulating on social media and are highlighted through efforts including the annual IRS Dirty Dozen list and alerts from the Security Summit partners. The new approach will increase collaborative efforts to raise awareness and education about schemes, not just during tax season but throughout the year.

With the new scam and scheme initiatives, the IRS, states and the private sector will work to put in place new protections by filing season 2025. The combined effort is particularly important because the group has seen instances where scammers look for weak points in government systems and the private sector to exploit. The combined effort will improve defenses across both the private and public sector with a goal of making it more difficult for scammers to slip improper or false tax returns through the system.

The group will also work to make long-term structural changes to fundamentally improve the ability to identify and stop scams. This includes working to improve EFIN and PTIN validation and new steps to combat “ghost preparers,” who prepare tax returns for a fee and do not in any way sign a tax return or disclose their role on the tax return as the preparer. In many cases, these are inflated tax refunds that lead to millions in revenue loss and add risk for taxpayers who file potentially improper claims with only the individual’s name associated with the tax return.

12/25/2023

09/14/2023

Issue Number: IR-2023-169

Inside This Issue

To protect taxpayers from scams, IRS orders immediate stop to new Employee Retention Credit processing amid surge of questionable claims; concerns from tax pros, aggressive marketing to ineligible applicants highlights unacceptable risk to businesses and the tax system

Moratorium on processing of new claims through year’s end will allow IRS to add more safeguards to prevent future abuse, protect businesses from predatory tactics; IRS working with Justice Department to pursue fraud fueled by aggressive marketing

WASHINGTON – Amid rising concerns about a flood of improper Employee Retention Credit claims, the Internal Revenue Service today announced an immediate moratorium through at least the end of the year on processing new claims for the pandemic-era relief program to protect honest small business owners from scams.

IRS Commissioner Danny Werfel ordered the immediate moratorium, beginning today, to run through at least Dec. 31 following growing concerns inside the tax agency, from tax professionals as well as media reports that a substantial share of new claims from the aging program are ineligible and increasingly putting businesses at financial risk by being pressured and scammed by aggressive promoters and marketing.

The IRS continues to work previously filed Employee Retention Credit (ERC) claims received prior to the moratorium but renewed a reminder that increased fraud concerns means processing times will be longer. On July 26, the agency announced it was increasingly shifting its focus to review these claims for compliance concerns, including intensifying audit work and criminal investigations on promoters and businesses filing dubious claims. The IRS announced today that hundreds of criminal cases are being worked, and thousands of ERC claims have been referred for audit.

The IRS emphasizes that payouts for these claims will continue during the moratorium period but at a slower pace due to the detailed compliance reviews. With the stricter compliance reviews in place during this period, existing ERC claims will go from a standard processing goal of 90 days to 180 days – and much longer if the claim faces further review or audit. The IRS may also seek additional documentation from the taxpayer to ensure it is a legitimate claim.

This enhanced compliance review of existing claims submitted before the moratorium is critical to protect against fraud but also to protect the businesses from facing penalties or interest payments stemming from bad claims pushed by promoters, Werfel said.

“The IRS is increasingly alarmed about honest small business owners being scammed by unscrupulous actors, and we could no longer tolerate growing evidence of questionable claims pouring in,” Werfel said. “The further we get from the pandemic, the further we see the good intentions of this important program abused. The continued aggressive marketing of these schemes is harming well-meaning businesses and delaying the payment of legitimate claims, which makes it harder to run the rest of the tax system. This harms all taxpayers, not just ERC applicants.”

“For those people being pressured by promoters to apply for the Employee Retention Credit, I urge them to immediately pause and review their situation while we look to add new protections and safeguards to stop bad claims from ever coming in,” Werfel said. “In the meantime, businesses should seek out a trusted tax professional who actually understands the complex ERC rules, not a promoter or marketer hustling to get a hefty contingency fee. Businesses that receive ERC payments improperly face the daunting prospect of paying those back, so we urge the utmost caution. The moratorium will help protect taxpayers by adding a new safety net onto this program to focus on fraudulent claims and scammers taking advantage of honest taxpayers.”

Taxpayers are encouraged to review IRS guidance and tools for helping determine ERC eligibility, including frequently asked questions and a new question and answer guide released today to help businesses understand if they are actually eligible for the credit.

The IRS is developing new initiatives to help businesses who found themselves victims of aggressive promoters. This includes a settlement program for repayments for those who received an improper ERC payment; more details will be available this fall.

In addition, the IRS is finalizing details that will be available soon for a special withdrawal option for those who have filed an ERC claim but the claim has not been processed. This option – which can be used by taxpayers whose claim hasn’t yet been paid– will allow the taxpayers, many of them small businesses who were misled by promoters, to avoid possible repayment issues and paying promoters contingency fees. Filers of these more than 600,000 claims awaiting processing will have this option available. Those who have willfully filed fraudulent claims or conspired to do so should be aware, however, that withdrawing a fraudulent claim will not exempt them from potential criminal investigation and prosecution.

As part of the wider compliance effort, the IRS is working with the Justice Department to address fraud in the ERC program as well as promoters who have been ignoring the rules and pushing businesses to apply.

The IRS has trained auditors examining ERC claims posing the greatest risk, and the IRS Criminal Investigation division is actively working to identify fraud and promoters of fraudulent claims for potential referral for prosecution to the Justice Department.

IRS Criminal Investigation (IRS-CI) investigates a variety of COVID fraud allegations ranging from fraudulently obtained employee refund tax credits to falsified Paycheck Protection Program loans. To date, IRS-CI has uncovered suspected pandemic fraud totaling more than $8 billion. As of July 31, 2023, IRS-CI has initiated 252 investigations involving over $2.8 billion of potentially fraudulent Employee Retention Credit claims. Of those, fifteen of the 252 investigations have resulted in federal charges. Of the 15 federally charged cases, so far six matters have resulted in convictions, four of those cases have reached the sentencing phase with the average sentence being 21 months.

Criminal Investigation’s work is in addition to ERC audits that have started. The IRS has already referred thousands of ERC cases for audit.

ERC: A complex credit designed to help during the pandemic; taxpayer risk growing amid aggressive marketing and potential to have to repay improper claims

When properly claimed, the ERC – also referred to as the Employee Retention Tax Credit or ERTC -- is a refundable tax credit designed for businesses that continued paying employees during the COVID-19 pandemic while their business operations were fully or partially suspended due to a government order or they had a significant decline in gross receipts during the eligibility periods. The credit is not available to individuals.

The ERC is a complex claim with precise requirements to help businesses during the pandemic, and the IRS has received approximately 3.6 million of these claims over the course of the program.

“As we move nearly two years beyond the 2021 eligibility date for the program and beyond the end of the pandemic, the reality that we’re seeing and hearing from tax professionals and others is that many of the affected businesses have already come in,” Werfel said. “This means we must increase our safeguards to protect against fraud and revenue loss.”

Although promoters advertise that ERC submissions are “risk free,” there are significant risks facing businesses as the IRS increases its audit and criminal investigation work.

The IRS reminds anyone who improperly claims the ERC that they must pay it back, possibly with penalties and interest. A business or tax-exempt group could find itself in a much worse financial position if it has to pay back the credit than if the credit was never claimed in the first place. This underscores the importance of taxpayers taking precautionary steps to independently verify their eligibility to receive the credit before applying through a promoter. Taxpayers should take particular precautions because a promoter can collect a contingency fee of up to 25% of the ERC refund.

Advice for taxpayers: What to do as IRS works to help businesses facing questionable ERC claims

As the IRS continues working additional details on ERC, there are several steps that the agency recommends for businesses, depending on where they are in the process:

• For those currently awaiting an ERC claim. For those who currently have an ERC claim on file, the IRS will continue processing these claims during the moratorium period but at a greatly reduced speed due to the complex nature of these filings and the need to protect businesses from being improperly paid. Normal processing times could easily stretch to 180 days or longer. The IRS cautions that many applications will be facing additional compliance scrutiny, which means the payments could take even longer to be processed. While the IRS works on compliance measures during this period, the agency cautions businesses to expect extended wait times due to the large volume of claims and the complexity of the applications.

Due to the large volumes and the need for compliance checks to protect against fraud, the IRS is unable to expedite individual claims. The IRS believes many of the applications currently filed are likely ineligible, and tax professionals note anecdotally that they are seeing instances where 95 percent or more of claims coming in recent months are ineligible as promoters continue to aggressively push people to apply regardless of the rules.

For those currently with a pending application at the IRS, they should review the options below to see if any of those could help with their current situation.

• For those who haven’t filed a claim yet, consider reviewing the guidelines and waiting to file: For those considering filing a claim, the IRS urges businesses to carefully review the ERC guidelines during the processing moratorium period. The IRS urges businesses to talk to a trusted tax professional – not a tax promoter or marketing firm looking to make money generating applications that takes a big chunk out of the ERC claim. The new question and answer guide can also help. A careful review of the rules will show that many of these businesses do not qualify for the ERC, and avoiding a bad claim will avoid complications with the IRS.

• Withdraw an existing claim for businesses that have already filed: For those who have filed and have a pending claim, they should carefully review the program guidelines with a trusted tax professional and check the new question and answer guide. For example, the IRS is seeing repeated instances of people improperly citing supply chain issues as a basis for an ERC claim when a business with those issues will very rarely meet the eligibility criteria. Under any scenario, if a business claimed the ERC earlier and the claim has not been processed or paid by the IRS, they can withdraw the claim if they now believe it was submitted improperly – even if their case is already under audit or awaiting audit. More details will be available shortly.

• Wait for the IRS ERC settlement program to be finalized: If a business has already received an ERC that they now believe is in error, the IRS will be providing additional details on the settlement program in the fall that will allow businesses to repay ERC claims. The settlement program will allow the businesses to avoid penalties and future compliance action. The IRS is continuing to assess options on how to deal with businesses that had a promoter contingency fee paid for out of the ERC payment.

Warning flags to watch out for; help for properly claiming the ERC

The IRS has a list of red flags to watch out for aggressive marketing and questionable ERC claims.

The ERC is an incredibly complex credit, and there are very specific eligibility requirements for claiming the ERC. Employers can claim the ERC on an original or amended employment tax return for qualified wages paid between March 13, 2020, and Dec. 31, 2021. However, to be eligible, employers must have:

Sustained a full or partial suspension of operations due to orders from an appropriate governmental authority limiting commerce, travel or group meetings because of COVID-19 during 2020 or the first three quarters of 2021,
Experienced a significant decline in gross receipts during 2020 or a decline in gross receipts during the first three quarters of 2021, or
Qualified as a recovery startup business for the third or fourth quarters of 2021.

09/14/2023

IRS Unveils Timetable for Completely Paperless Filing by 2025

Bob Williams Saturday, August 05, 2023

IRS Unveils Timetable for Completely Paperless Filing by 2025
The Internal Revenue Service says it has constructed a blueprint for its future called the Paperless Processing Initiative. The plans are aimed at eliminating up to 200 million pieces of paper every year, while cutting processing times in half and speeding up refunds by weeks. The agency says it will realize these benefits by fully embracing digital filing and processing - the sooner, the better. The plan is a two-step process with work starting now and extending past filing season 2026. It’s funded by the Inflation Reduction Act.

When it comes to speeding up the taxpaying process, paper is the enemy.

Every year, the IRS gets about 76 million paper tax returns and forms, and another 125 million pieces of correspondence. Each one of those pieces of paper requires a human being to enter its information into the IRS computer systems.

This process can lead to a filing logjam as outside of the annual 1040 tax return and a relatively few other forms, taxpayers are currently limited to sending in forms and correspondence to the IRS on paper. Meanwhile, the agency can’t digitally process the mountain of paper it gets. In fact, just storing the paper returns and correspondence the agency receives costs a tidy $40 million every year. The plan is to push all tax filing into the digital world, and to devise a system to automatically scan any paper documents on arrival.

Step One: Taxpayers Can Go Paperless in Filing Season 2024

The first step is a big one in itself: taxpayers will be able to send all their correspondence, non-tax forms, and notice responses to the IRS in digital form. This may appear to be a small action, but it will take millions of paper documents out of the processing backlog every year. The IRS estimates that this initial step alone will mean some 94% of individual taxpayers will no longer ever need to send a piece of mail to the agency.

Some 20 additional tax forms, meanwhile, will be added to the digital availability list. This will include amendments to Forms 940, 941, and 941SSPR. The most popular non-tax forms - at least 20 of them - will also be moved over into the digital world and optimized for mobile devices. This includes the Request for Taxpayer Advocate Service Assistance.

Note, however, that in this first phase taxpayers who have a need to file a paper form or send paper correspondence may still do so.

Step Two: IRS Starts Paperless Processing for Tax Returns in Filing Season 2025.

In this phase, the IRS takes aim at the avalanche of paper it receives, whether tax forms or correspondence.

The agency timeline calls for all paper-filed tax and information returns to be digitally processed on arrival. Half of all non-tax forms, notice responses and other correspondence should start being digitally processed by this period, with full digital processing in place in a year’s time. Once in place, digital processing will also enable up to a billion historical documents - filed tax returns and other files - to be digitized, freeing up millions of dollars in storage costs.

Also, in this step, an additional 150 of the most-used non-tax forms will be available in digital form and optimized for mobile devices. This reflects the move by the IRS to make more of the most popular forms available for smartphones as they estimate that some 15% of Americans rely on their phones for main internet access, and do not have broadband at home.

IRS: Digital Processing Key to Agency’s Future.

The benefits of paperless processing are huge. First, it stands to speed up customer service by making filed returns and other information available digitally, reducing the possibility of human error in data entry as well as granting customer service representatives improved access to information for addressing taxpayer questions. Taxpayers could expect to see their refunds sooner, since all the data and tax forms will be processed faster. Finally, successful implementation could also have financial rewards from lower paper storage costs, which can be leveraged into other technical improvements within the IRS.

11/17/2021

Teachers can deduct out-of-pocket classroom expenses including COVID-19 protective items

Fall is here and another school year is in full swing. Many teachers are already dipping into their own pockets to buy classroom supplies that will help set their students up for success. Doing this all year long can add up fast. Fortunately, eligible educators may be able to offset qualified expenses they paid in 2021 when they file their tax return in 2022.

Educators who work in schools may qualify to deduct up to $250 of unreimbursed expenses. That amount goes up to $500 if two qualified educators are married and file a joint return. However, neither spouse can deduct more than $250 of their qualified expenses when they file their federal tax return.

Taxpayers qualify for this deduction if they:

Teach any grade from kindergarten through twelfth grade.
Are a teacher, instructor, counselor, principal or aide.
Work at least 900 hours during the school year.
Work in a school that provides elementary or secondary education.
Qualified expenses include:

Professional development courses.
Books.
Supplies.
Computer equipment including related software and services.
Supplementary materials.
Athletic supplies only for health and physical education
Personal protective equipment, disinfectant, and other supplies used for the prevention of the spread of coronavirus.
Expenses for COVID-19 protective items. These items include, but are not limited to:

Face masks.
Disinfectant for use against COVID-19.
Hand soap.
Hand sanitizer.
Disposable gloves.
Tape, paint or chalk to guide social distancing.
Physical barriers, such as clear plexiglass.
Air purifiers.
Other items recommended by the Centers for Disease Control and Prevention to be used for the prevention of the spread of COVID-19.
This deduction is for unreimbursed expenses paid or incurred during the tax year. Taxpayers should keep records, such as receipts, and other documents that support the deduction with other tax documents. Eligible taxpayers will claim the deduction on Form 1040, Form 1040-SR, or Form 1040-NR.