The End Of The Year Will Be Here Before You Know It Edition

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Chances are that you, like me, are still recovering from Thanksgiving week–I love the chaos, but it can be tiring.

That’s why this edition of the newsletter is a bit lean–it’s our mini-edition for the holiday. There was too much good stuff to skip completely, but I know there is still football to watch and leftover pie to eat. So here’s, literally, the skinny.

First up, Christmas came early for some companies and taxpayers this year. The IRS has announced that it will (again) delay the new $600 Form 1099-K reporting threshold (☆) for third-party settlement organizations. Under the most recent guidance, third-party settlement organization reporting will only be required if the taxpayer receives over $5,000, regardless of the number of transactions in 2024. The dollar value will scale to $2,500 for transactions in 2025 before hitting the $600 threshold in 2026 and after.

That should mean that you will not receive Form 1099-K unless you hit the existing transaction threshold for 2024—an exception exists for taxpayers subject to backup withholding. It’s worth noting, however, that it’s not unlikely that some Form 1099-K reporting threshold companies could still send the form for totals above $600 when year-end forms are sent out in January 2025—there’s no need to panic if you receive a form, as that doesn’t change the tax treatment.

And a little heads up: The IRS shuts down online applications for new Employer Identification Numbers (EINs) each year for “Annual Maintenance.” Typically, this starts around December 20 and lasts through the first business day of January. Here’s how to get an EIN and what to do if you need one before year-end during the online black-out period (hint: you go old school).

Speaking of year-end, don’t forget about those beneficial ownership information (BOI) filings. A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial report (☆). This is true even if the company was created years before 2024. Failure to file on time can result in penalties.

Year-end is also a good time for reconsidering opportunities for tax planning, charitable giving, and retirement contributions–as well as checking in on your Social Security benefits and preparing for anticipated changes to student loan forgiveness and repayment.

But don’t rush into anything without considering the big picture–for example, prepaying income tax on a retirement account by funding a Roth might be a good idea. Or it could be a really bad idea. Think before you pull the trigger (☆).

There’s still so much that can happen in the next few weeks—and 2025 will be here before you know it.

Enjoy your weekend,

Kelly Phillips Erb (Senior Writer, Tax)

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Statistics, Charts, and Maps (Oh My!)

Tuesday is Giving Tuesday. And charities are hoping that, once again, Americans will dig deep. Traditionally, we do–according to the most recent Giving USA report, in 2023, Americans gave $557.16 billion to charity (that works out to more than $1.52 billion per day). Most dollars went to religious charities, with human services and education rounding out the top three.

Most of those donors were individual donors.

A Deeper Dive

The Supreme Court has agreed to hear (☆) consolidated cases to resolve a circuit split focused on whether Congress unlawfully delegated the power to tax to the Federal Communications Commission (FCC), which then delegated its power to a private company.

The legal challenge focuses on the FCC’s Universal Service Fund, updated as part of the Telecommunications Act of 1996. The USF was intended to subsidize telephone service to low-income households and high-cost areas, including service to hospitals, schools, and libraries. In 2011, the fund was expanded to include broadband—high-speed internet—services. The fund does not rely on money collected from income taxes or appropriated by Congress but by a specific fee on U.S. telephone providers.

A group filed a lawsuit contending that Congress had unconstitutionally delegated legislative power to the FCC and that the Commission had unconstitutionally redelegated power to the Universal Service Administrative Company (USAC) in violation of the nondelegation doctrine.

The Fifth Circuit held that “the combination of Congress’s sweeping delegation to FCC and FCC’s unauthorized subdelegation to [the Company]” was unconstitutional. That included a finding that the FCC “may have impermissibly delegated the taxing power” to USAC. But the Sixth and Eleventh Circuits reached a split, which landed the matter at the Supreme Court.

Tax Filings And Deadlines

📅 January 1, 2025. Due date for reporting companies created or registered to do business in the United States before January 1, 2024, to file Beneficial Ownership Information (BOI) reports with FinCEN.

📅 February 3, 2025. Due date for individuals and businesses affected by Hurricanes Beryl and Debby (more info here (☆) and here (☆)), those in South Dakota affected by severe storms, straight-line winds and flooding that began on June 16, 2024, taxpayers in Puerto Rico affected by Tropical Storm Ernesto, and those individuals and businesses in Connecticut and New York affected by severe storms and flooding from torrential rainfalls that began on August 18, 2024.

📅 May 1, 2025. Due date for individuals and businesses in the entire states of Alabama, Georgia, North Carolina and South Carolina and parts of Florida, Tennessee and Virginia affected by severe storms and flooding from Hurricane Helene (☆) and Hurricane Milton.

📅 September 30, 2025. Due date for individuals and businesses impacted by recent terrorist attacks in Israel.

Tax Conferences And Events

📅 December 12-14, 2024. ABA Section of Tax, 2024 Criminal Tax Fraud and Tax Controversy Conference, Las Vegas, NV. CLE available. Registration required.

📅 December 16-17, 2024. NYU 43rd Institute on State and Local Taxation, Westin New York at Times Square, New York, NY. CLE and CPE available. Registration required, virtual option available.

📅 February 19-25, 2025. ABA Tax Section 2025 Midyear Tax Meeting. JW Marriott Los Angeles L.A. Registration required.

📅 July 21-23, 2025. National Association of Tax Professionals Taxposium 2025, Caesars Palace, Las Vegas. Registration required.

Trivia

According to the National Retail Federation, for the last several years, how many out of every 5 holiday shoppers have started browsing and buying before November?

(A) One

(B) Two

(C) Three

(D) Four

Find the answer at the bottom of this newsletter.

Positions And Guidance

The IRS has published Internal Revenue Bulletin 2024-48.

The IRS has published its Management Quarterly Update, a supplemental document to the IRS Agency Financial Report to provide transparency on the IRS’s management and operational challenges. The Fiscal Year 2024 quarter 4 update includes a table describing the IRS’s Inflation Reduction Act of 2022 spending.

The Public Company Accounting Oversight Board (PCAOB) posted additional resources for implementing QC 1000, A Firm’s System of Quality Control. All firms registered with the PCAOB, including those that do not audit issuers or SEC-registered brokers and dealers, are affected by QC 1000, but not all requirements of QC 1000 apply to every firm. Staff Guidance provides an overview of the requirements of QC 1000 and staff guidance for firms about how to comply with the standard, while AS 2901 Staff Guidance addresses responding to engagement deficiencies in an auditor’s report.

Noteworthy

White and Case announced that Narissa Lyngen has been named counsel in the firm’s tax practice. Based in New York, her practice focuses on advising clients in various sectors on cross-border and domestic taxation related to mergers and acquisitions, securities offerings, securitizations and financing transactions, as well as matters involving intellectual property, tax-deferred reorganizations, restructurings, corporate inversions and tax treaties.

Vinson & Elkins announced that Lauren Meyers, Brent Schoradt, and Curt Wimberly have been promoted to counsel at the firm. Meyers advises partnerships, corporations, and individuals on federal tax planning matters. Schoradt represents financial institutions, project sponsors, and developers in the financing, development, and sale of large-scale wind and solar projects, with a focus on tax-equity financings. Wimberly’s practice focuses on the U.S. federal income tax aspects of domestic and international transactions.

­President-elect Donald Trump has named hedge fund executive Scott Bessent for the role of Treasury secretary.

The ABA Tax Section announced the launch of a new pro bono project, the Alaska VITA Project, from February 21 to March 2, 2025. After a successful pilot with the Alaska Business Development Corporation (ABDC) during the winter of 2024, the Tax Section will host six volunteers to travel to Alaska and prepare tax returns for taxpayers living in remote parts of the state. This is a unique pro bono opportunity that offers tax return preparation and experiential learning in communities far off the usual Alaska travel path.

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In Case You Missed It

Here’s what readers clicked through most often last week:

You can find the entire newsletter here.

Trivia Answer

The answer is (B) two.

For the last several years, approximately two out of every five holiday shoppers have started browsing and buying before November. The top reasons consumers begin their shopping ahead of time are to spread out their budget, avoid the stress of last-minute shopping and avoid crowds.

Feedback

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