Comply Connect – September 2023 – Issue 4

IRS Draft Forms and Instructions  

During September, the IRS published the following DRAFT forms and instructions: 

• DRAFT Instructions for Form W-8EXP (Rev. October 2023) Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding and Reporting

• DRAFT 2023 Instructions for Form 945 Annual Return of Withheld Federal Income Tax

• DRAFT 2024 Form 1096 Annual Summary and Transmittal of U.S. Information Returns

• DRAFT Form 1099-DIV (Rev. January 2024) Dividends and Distributions

• DRAFT 2023 Form 1042 Annual Withholding Tax Return for U.S. Source Income of Foreign Persons

• DRAFT 2023 Instructions for Form 8966 FATCA Report

• DRAFT 2024 Instructions for Forms 1099-SA and 5498-SA Distributions From an HSA, Archer MSA, or Medicare Advantage MSA, and HSA, Archer MSA, or Medicare Advantage MSA Information

• DRAFT 2024 Instructions for Forms 1099-QA and 5498-QA Distributions from ABLE Accounts and ABLE Account Contribution Information

• DRAFT Form 1099-G (Rev. March 2024) Certain Government Payments 

Issue Number 2023-165 

On September 6, the IRS issued IR-2023-165 reminding taxpayers of the following: 

• For taxpayers who pay estimated taxes, the deadline to submit their third quarter payment was Sept. 15, 2023.
• The IRS provided the below general rule of thumb for whether a taxpayer should make estimated tax payments, noting they should if they expect: 
• • To owe at least $1,000 in taxes for 2023 after subtracting their withholding and tax credits. 
  • Their withholding and tax credits to be less than the smaller of: 

• • • 90% of the tax to be shown on their 2023 tax return or 
    • 100% of the tax shown on their complete 12-month 2022 tax return.
• For payments received in January 2023, taxpayers who were paid over $600 by payment apps and online marketplaces or received any amount by payment cards could receive a Form 1099-K, Payment Card and Third Party Network Transactions, starting January 2024.
   

Issue Number 2023-13 

The IRS released Issue Number 2023-13 alerting Qualified Intermediaries (QI) (including Qualified Derivatives Dealers), Withholding Foreign Partnerships (WP) and Withholding Foreign Trusts (WT) of the application deadline for the 2023 year. All applicants wishing to have an agreement in effect for 2023 must submit their applications through the Qualified Intermediary, Withholding Foreign Partnership, Withholding Foreign Trust Application & Account Management System (QAAMS) no later than October 27, 2023. If required for Chapter 4 purposes, a GIIN must have been obtained prior to application submission. 

Applications submitted after October 27, 2023, will not be processed. If an applicant is unable to submit an application before the October deadline, then they will need to wait until January 1, 2024, to submit for the 2024 year. 

Publication 1167 

On September 13, the IRS released a draft version of Publication 1167, General Rules and Specifications for Substitute Forms and Schedules. Changes include: 

• Forms 5300 and 5307 can no longer be submitted as substitute forms – Forms 5300 and 5307 must be submitted electronically through Pay.gov.
• Form 8905 is discontinued – Form 8905 is discontinued and can no longer be filed with Forms 5300 and 5307. 

Publication 1220 

On September 18, the IRS released a new version of Publication 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G. Changes include: 

• Information on IRIS, Information Returns Intake System, Taxpayer Portal, which is a free online system that allows users to electronically file information returns and automatic extensions of time to file. IRIS requires its own TCC (Transmitter Control Code).
• Information on the threshold for filing returns and other documents electronically. The regulations will require filers of 10 or more information returns in a calendar year beginning in 2024, tax year 2023, to file those information returns electronically.
• Additional resources for IRIS and Publication 5717, IRIS Taxpayer Portal User Guide added to table.
• Changes to the participating states and codes in the CF/SF program.
• Added: District of Columbia (42) and Pennsylvania (11)
• Clarifying response provided for Part B. Sec. 1 Information Returns (IR) Application for Transmitter Control Code (TCC), .05 Do I Need More than One TCC?
• Added: “A TCC used to file Forms 1097, 1098, 1099, 3921, 3922, 5498, and W2G can be used to submit 1,000 files per year. If the TCC exceeds 1,000 files, an additional TCC can be requested via the IR Application for TCC.”