IRS Announces New Tax Programs and Updates

The Internal Revenue Service (IRS) has launched a second voluntary disclosure program for businesses that need to return funds received from Employee Retention Credit (ERC) claims filed in error. Unlike the first program, which offered more lenient terms, this initiative requires businesses to repay 85% of the credit. The program will be available until November 22, 2024, providing a limited window for businesses to rectify their claims. In addition to the ERC updates, the IRS is expected to release further guidance on tax matters, particularly concerning digital assets. As the year progresses, stakeholders anticipate clarity on various tax regulations, although significant legislative changes are not expected before year-end. The IRS also highlighted the benefits of like-kind exchanges under section 1031 of the Tax Code, which allows taxpayers to defer recognizing gains or losses when exchanging similar types of property. To qualify, the exchanged property must be held for productive use or investment, and specific timelines must be adhered to—properties must be identified within 45 days and the exchange completed within 180 days. Lastly, the newsletter invites readers to submit tax-related questions for future coverage, emphasizing the IRS's commitment to addressing taxpayer concerns. The communication also notes a diverse range of countries, including India, Nigeria, and France, suggesting a global perspective on tax issues.