Tax Tips: The New Fuel Tax Credit statement
• New Fuel Tax Credit Statement - The IRS developed the “Statement Supporting Fuel Tax Credit (FTC) Computation - 1”, to educate taxpayers on eligibility requirements for claiming the credit.
Here are key details:
o Who should file the new statement? Individuals filing Form 1040, U.S. Individual Income Tax Return, for tax year 2024 who claim nontaxable use of gasoline, aviation gasoline, undyed diesel fuel or undyed kerosene on Form 4136, Credit For Federal Tax Paid On Fuels.
o Where is the new statement located? “Statement Supporting Fuel Tax Credit (FTC) Computation – 1” is located in the instructions for Form 4136 for tax year 2024. The statement should be completed and attached to Form 1040 with Form 4136.
o What information is the statement asking for? The statement asks for the business information, including name and Employer Identification Number or EIN (if applicable), and make, model and type of machinery or vehicle for which the fuel was purchased. The taxpayer will also be required to complete a table to show the relationship between the estimated purchase price of the fuel compared to the actual cost and gallons reported as being purchased on Form 4136. The IRS used Gasoline and Diesel Fuel Update - U.S. Energy Information Administration (EIA), when determining the average price of fuel for the year.
o Should documentation to support the claim be included with the statement? No. Taxpayers should not include any receipts or explanation with their tax return but maintain them with their books and records for their tax return. Taxpayers may be asked at a later time to submit proof, such as receipts, of the actual costs paid for each fuel type.
o What happens if the Fuel Tax Credit is claimed erroneously? Claims and filings that are based upon a position identified as frivolous by the IRS or reflect a desire to delay or impede tax administration are subject to the Internal Revenue Code (IRC) 6702(a) penalty. This penalty is $5,000 for each return (or copy of return) claiming an improper credit as defined above. The penalty is assessed against each spouse on a married filing joint return. (Notice 2010-33)
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Tax Tips: IRS, Coalition Against Scam and Scheme Threats announce 2025 filing season changes aimed at preventing spread of scams, schemes;
The Internal Revenue Service and partners in the Coalition of Scam and Scheme Threats (CASST) today released changes for the 2025 filing season designed to help protect taxpayers from becoming victims of a scam or scheme and preventing tax professionals from having their credentials compromised.
The changes to protect taxpayers include a new form involving the Fuel Tax Credit that’s designed to make it harder for well-meaning taxpayers to be misled into claiming the credit by promoters. This specialized credit that’s been promoted on social media is designed for off-highway business and farming use. Taxpayers need a business purpose and a qualifying business activity such as running a farm or purchasing aviation gasoline to be eligible for the credit. Most taxpayers don’t qualify for this credit.
The IRS is also stepping up review on a variety of “other withholding” claims on Form 1040 that have been targets of scammers and schemers. And the IRS is reaching out to taxpayers who have potentially been using “ghost preparers” to prepare tax returns. These preparers don’t identify themselves on the tax return, which is a red flag for taxpayers to be misled into a scam or scheme.
Convened at the request of IRS Commissioner Danny Werfel, the CASST task force of federal and state tax agencies, software and financial companies, as well as key national tax professional associations, agreed to a new public private partnership in August focused on scams and schemes.
“Since its creation, this special group across the tax community has been working to take extra steps to protect taxpayers and the tax professional community,” Werfel said. “This effort includes expanding outreach and education on emerging scams, developing innovative approaches to identify potentially fraudulent returns at the point of filing and creating infrastructure improvements to protect taxpayers as well as federal, state and industry tax systems. CASST partners have already worked together on important changes to protect taxpayers and tax professionals in the 2025 filing season, but this needs to be an ongoing effort given the continued expansion and threats from scams.”
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Tax Tips: : California wildfire victims qualify for tax relief; various deadlines postponed to Oct. 15
WASHINGTON — The Internal Revenue Service announced today tax relief for individuals and businesses in southern California affected by wildfires and straight-line winds that began on Jan. 7, 2025.
These taxpayers now have until Oct. 15, 2025, to file various federal individual and business tax returns and make tax payments.
The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). Currently, individuals and households that reside or have a business in Los Angeles County qualify for tax relief.
The same relief will be available to any other counties added later to the disaster area. The current list of eligible localities is always available on the Tax relief in disaster situations page on IRS.gov.
Filing and payment relief
The tax relief postpones various tax filing and payment deadlines that occurred from Jan. 7, 2025, through Oct. 15, 2025 (postponement period). As a result, affected individuals and businesses will have until Oct. 15, 2025, to file returns and pay any taxes that were originally due during this period.
This means, for example, that the Oct. 15, 2025, deadline will now apply to:
• Individual income tax returns and payments normally due on April 15, 2025.
• 2024 contributions to IRAs and health savings accounts for eligible taxpayers.
• 2024 quarterly estimated income tax payments normally due on Jan. 15, 2025, and estimated tax payments normally due on April 15, June 16 and Sept. 15, 2025.
• Quarterly payroll and excise tax returns normally due on Jan. 31, April 30 and July 31, 2025.
• Calendar-year partnership and S corporation returns normally due on March 17, 2025.
• Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2025.
• Calendar-year tax-exempt organization returns normally due on May 15, 2025.
In addition, penalties for failing to make payroll and excise tax deposits due on or after Jan. 7, 2025, and before Jan. 22, 2025, will be abated as long as the deposits are made by Jan. 22, 2025.
The Disaster assistance and emergency relief for individuals and businesses page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.
It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated.
In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization. Disaster area tax preparers with clients located outside the disaster area can choose to use the Bulk Requests from Practitioners for Disaster Relief option, described on IRS.gov.
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