Other Tax Matters

PENALTIES : Failing to timely file correct information returns can lead to stiff fines. The basic penalty for returns due in 2024 is $310 per Form 1099, W-2, etc. A lesser penalty is imposed when the information returns are corrected by Aug. 1. The fine skyrockets to $630 or more if IRS can prove intentional disregard of the rules. Small-dollar-amount errors won’t be penalized in many circumstances. If the mistake is $100 or less…$25 or less in the case of tax withheld… then the issuer will escape penalties, and needn’t file a corrected form unless the payee elects otherwise within 30 days or by Oct. 15, the Revenue Service says in finalregulations.

ENFORCEMENT : IRS’s Criminal Investigation division is pursuing more cases. 2,676 probes were initiated in 2023, compared with 2,558 cases in 2022. Each year, IRS’s CID prosecutes about 70% of its cases and has a nearly 90% conviction rate. Among CID’s priorities for 2024: Cybercrimes and digital assets. Abusive overseas tax schemes. Payroll tax fraud. Corrupt preparers. COVID scams.

ELECTRIC VEHICLES : Only eight 2024 EV models qualify for the full clean vehicle credit in 2024 because of strict critical minerals and battery component rules. The credit is $7,500 for new electric vehicles that meet both rules…$3,750 if only one is met. Final assembly of the vehicle must occur in North America. And some high-cost EVs don’t qualify. The manufacturer’s suggested retail price for the EV or plug-in vehicle can’t exceed $55,000 for sedans and $8,000 for vans, sUVs and pickup trucks. There is also an income cap to take the credit: Modified AGI can’t exceed $300,000 for joint filers, $225,000 for heads of household and $150,000 for single filers