WASHINGTON — Many taxpayers make quarterly estimated tax payments during the year to stay current on their taxes, but many who should overlook this step. The Internal Revenue Service today urged those who paid too little tax in 2022 to make a fourth quarter payment on or before January 17 to avoid an unexpected potential tax bill or penalty when they file in 2023.

Taxes are normally paid throughout the year by withholding tax from paychecks or by making quarterly estimated tax payments to the IRS or by a combination of both. Individuals do this because income taxes are pay-as-you-go, meaning taxpayers need to pay most of their tax during the year as income is earned or received.

Who needs to make a payment?

Taxpayers who earn or receive income that is not subject to tax withholding such as self-employed people or independent contractors should pay their taxes quarterly to the IRS.

In addition, people who owed tax when they filed their current year tax return often find themselves in the same situation again when they file the next year. Taxpayers in this situation normally include:

• Those who itemized in the past but are now taking the standard deduction,
• Two wage-earner households,
• Employees with non-wage sources of income such as dividends,
• Those with complex tax situations and/or
• Those who failed to increase their tax withholding.

What’s taxable?

The IRS reminds people that most income is taxable. This includes unemployment income, refund interest and income from the gig economy and digital assets. When estimating quarterly tax payments, taxpayers should include all forms of earned income, including from part-time work, side jobs or the sale of goods.

Also, various financial transactions, especially late in the year, can often have an unexpected tax impact. Examples include year-end and holiday bonuses, stock dividends, capital gain distributions from mutual funds, and stocks, bonds, virtual currency, real estate or other property sold at a profit.

Delay in requirement for Forms 1099-K

On December 23, 2022, the IRS announced that calendar year 2022 will be treated as a transition year for the reduced reporting threshold of $600. For calendar year 2022, third-party settlement organizations who issue Forms 1099-K are only required to report transactions where gross payments exceed $20,000 and there are more than 200 transactions. Last week, the IRS also issued Frequently Asked Questions to help people who may receive Forms 1099-K.

Reporting does not impact a taxpayer’s responsibility to accurately report all income, whether or not they receive a Form 1099-K or other information return (such as Form 1099-MISC, Miscellaneous Information; Form 1099-NEC, Nonemployee Compensation; etc.).

How to make an estimated tax payment

The fastest and easiest way to make an estimated tax payment is to do so electronically using IRS Direct Pay. Taxpayers can schedule a payment in advance of the January deadline.

Taxpayers can now also make a payment through their IRS Online Account. There they can see their payment history, any pending or recent payments and other useful tax information. The Electronic Filing Tax Payment System, or EFTPS, is an excellent choice as well.

The IRS does not charge a fee for these services. Plus, using these or other electronic payment options ensures that a payment gets credited promptly. More information on other payment options is available at Pay Online.

Act now to avoid a penalty

Either payment method—withholding or estimated tax payments—or a combination of the two, can help avoid a surprise tax bill at tax time and the accompanying penalty that often applies.

If a taxpayer failed to make required quarterly estimated tax payments earlier in the year, making a payment soon to cover these missed payments will usually lessen and may even eliminate any possible penalty.

Stay current using the Withholding Estimator

The Tax Withholding Estimator, available on IRS.gov, can often help people determine if they need to make an estimated tax payment. It also helps people calculate the correct amount of tax to withhold throughout the year based on their complete set of tax facts and circumstances.

Alternatively, taxpayers can use the worksheet included with estimated tax Form 1040-ES, or read through Publication 505, Tax Withholding and Estimated Tax, available on IRS.gov. Both are excellent resources.

Planning ahead

It’s never too early to get ready for the tax-filing season. For more tips and resources, check out the Get Ready page on IRS.gov.

Source: IRS

An Identity Protection PIN (IP PIN) is a six-digit number that prevents someone else from filing a tax return using your Social Security number or Individual Taxpayer Identification Number. The IP PIN is known only to you and the IRS. It helps us verify your identity when you file your electronic or paper tax return. Even though you may not have a filing requirement, an IP PIN still protects your account.

Service Outage: November 19, 2022 to January 9, 2023

This service will be unavailable until January 2023, for planned maintenance. Thank you for your patience.

If you are a confirmed victim of tax-related identity theft and we have resolved your tax account issues, we’ll mail you a CP01A Notice with your new IP PIN each year.

If you don’t already have an IP PIN, you may get an IP PIN as a proactive step to protect yourself from tax-related identity theft.

If you want to request an IP PIN, please note:

• You must pass an identity verification process.
• Spouses and dependents are eligible for an IP PIN if they can pass the identity verification process.

How to get an IP PIN

The fastest way to receive an IP PIN is by using the online Get an IP PIN tool. If you wish to get an IP PIN and you don’t already have an account on IRS.gov, you must register to validate your identity. The IP PIN tool is generally available starting in mid-January through mid-November. Select the button to get started

Get an IP PIN 

Alternatives to the online tool

If you want an IP PIN but can’t successfully validate your identity through the Get an IP PIN tool, there are alternatives. Please note using an alternative method to the online tool takes longer for an IP PIN to be assigned to you.

Important Information about IP PINs

• An IP PIN is valid for one calendar year.
• A new IP PIN is generated each year for your account.
• Logging back into the Get an IP PIN tool, will display your current IP PIN.
• An IP PIN must be used when filing any federal tax returns during the year including prior year returns.
• FAQs about the Identity Protection Personal Identification Number (IP PIN)

Using an IP PIN to File

Enter the six-digit IP PIN when prompted by your tax software product or provide it to your trusted tax professional preparing your tax return. The IP PIN is used only on Forms 1040, 1040-NR, 1040-PR, 1040-SR, and 1040-SS.

Correct IP PINs must be entered on electronic and paper tax returns to avoid rejections and delays. An incorrect or missing IP PIN will result in the rejection of your e-filed return or a delay of your paper return until it can be verified.

Don’t reveal your IP PIN to anyone. It should be known only to your tax professional and only when you are ready to sign and submit your return. The IRS will never ask for your IP PIN. Phone calls, emails or texts asking for your IP PIN are scams.

Lost IP PINs

Review Retrieve Your IP PIN for details. Do not file a Form 15227 to apply for a new IP PIN.

Source: IRS

Most people can’t recall the strategy of the organization they work for. Even the executives and managers responsible for strategy struggle, with one study reporting that only 28% of them could list three strategic priorities.

It’s not surprising. Many organizations don’t have a strategy. The few that do find it hard to communicate effectively, as it requires engaging with a wide range of stakeholders in different situations. They find it easier and less risky to issue lofty purpose statements, describe big goals, launch initiatives, or publish fixed plans instead.

Communicating strategy clearly increases the chances of an organization “winning” by helping people decide where to focus their attention, energy, resources, and capabilities. Unclear communication results in wasted effort from lack of alignment and confusion, which leads to inertia.

If you’re embarking on communicating your organization’s strategy, here are five ways to do it clearly.

Communicate comprehensively

Communications sometimes focus on one aspect of strategy to the detriment of others. For example, they lay out how to beat the competition but forget to address how best to serve customers. Or they describe an exciting vision but leave out important details of how the organization will deliver on it. They outline the trends, dynamics, and disruptions but fail to clearly articulate the choices they’ve made to address them.

The same goes for the audience. Executives prioritize communicating with employees and investors and then forget to engage with wider stakeholders, such as regulators or community groups, until they raise questions or objections.

To combat this narrow focus, a chief of staff I worked with developed a central repository of answers to frequently asked questions about her company’s strategy and highlighted the most important ones for each stakeholder group. This better prepared her to customize the message for the audience, which increased the efficacy of the communications. She also invited colleagues to contribute. That improved not just the quality of the answers, but also the consistency of messages across the organization, as those contributors felt a greater sense of ownership.

To communicate strategy comprehensively, you’ll need to:

• Visualize your ambition. To create intrigue, spark imagination, and build excitement in a better future, focus attention on the opportunities and possibilities ahead. ( “At our best we will become…”)
• Describe the contribution you want to make. Articulate the impactof the strategy on customers, wider stakeholders (e.g., citizens), and systems (e.g., the environment). (“We will make a significant contribution to our shareholders and the society we operate in by…”)
• Challenge the status quo. Encourage people to see the merits in trying a new path, overcoming personal and organizational inertia. (“We’re not serving our customers as best we can because…”)
• Instill belief in the organization. Signal confidence in the organization’s ability to get there while acknowledging there will be some changes. (“We’ve shown what we’re capable of before when we’ve applied the right mindset…”)
• Focus attention on what matters. Give people the opportunity to make the decisions they’re most capable of making about where to focus their time in line with the strategy — a process author Roger Martin calls “strategic choice chartering.” (“In my business area, we’ve chosen to focus on serving [x] customers in [these geographies] because [y] and we’ll win by being the best at [z]. The next choice is how and where to…”)
• Outline what will change. Encourage people to start making changes to the way they work. (“To deliver on the strategy, we’ll need to invest in these capabilities, deploy resources in new areas, and change the way we work.”)
• Set out the metrics. Clarify the behaviors, activities, and outcomes that are central to the strategy and assign metrics to them. (“We will measure our success in delivering on this strategy by the following metrics at the organizational and individual levels.”)
• Explain the thinking, logic, and evidence that supports the choices. Build credibility and confidence in the ambition, choices, and investments. (“This strategy is based on a number of important data points and assumptions.”)
• Describe the process. Instill confidence in the way you’ve developed the strategy. (“We developed this strategy in open dialogue throughout the process, inviting ideas and suggestions.”)

In most cases it’s not necessary to do this in one go. The trick is to combine the right message with the audience using the most effective medium, listening attentively to the responses and contributions and refining the communication (if not aspects of the strategy) as required; it’s certainly not a fixed construct.

Make it personal

Communications often paint a corporate picture of the world that doesn’t actually convey what’s expected of the audience — or how it benefits them.

Steve, a CEO I came to work with, walked off stage feeling great after presenting the new strategy to his team. The rehearsals he did had paid off. He landed all the important points and effectively included personal anecdotes and humor. Or so he thought.

As they shared their reactions with me, I could see that the audience members were less convinced: “That was some performance,” “It’s clear what the future looks like. But I have no idea what it means for me. What should I change? How will I change?,” “How will this strategy help my career?,” “The other executive committee members were nodding, but are they truly on board?”

Take four actions to avoid this scenario:

• Show that you’re implementing the strategy yourself through the choices you make. Prioritize spending your time, attention, and energy on the activities that best enable the strategy. Talk through areas of confusion or disagreement in your team in order to build alignment and commitment. Reflect on how your decisions and words are consistent with the strategy.
• Describe the new activities, capabilities, and behaviors that enable the strategy, and establish pilots to start rolling them out.
• Tackle nostalgia, fears, or frictions that might hold people back, such as, “We’ve tried this before and it didn’t work, so what’s different this time?” or “How can we improve our speed to market when we have to wade through so much bureaucracy?”
• Help people upskill — for example, through training programs (which should include teaching people about strategy, not just their functional skillsets), coaching, or mentoring.

Match the message to the moment

Communicating strategy often involves long, bombastic slide presentations or brief, bland statements online. By themselves, these rarely create the excitement, engagement, advocacy, or recall required to effect change.

Instead, design your communication as a series of engaging and dynamic exercises — with an emphasis on brevity and clarity. This requires three steps:

• Map out the critical or “imprintable” moments — including the people involved — where you want to communicate strategy. This could be an interview with a recruit, a pitch to investors, a board meeting, a townhall presentation, a team huddle, or a performance appraisal.
• Decide what messages you want to emphasize. If you’re with a potential partner organization, you might want to focus on the ambition and opportunity ahead, whereas with a group of managers, you’ll want to articulate the choices and changes you’ve made and encourage them to make their own.
• Select the tool or asset that best works for the people, moment, and message. For a one-on-conversation, you might use a two-minute (or even shorter) elevator pitch, or an anecdote about the organization’s advantage. In a larger group setting, a visualization that describes elements of the strategy, or a story that illustrates how the organization will overcome the challenges it faces, works well. In an email, you might use a one-paragraph summary of the strategy, along with some answers to frequently-asked questions, and a personal reflection on what it means to the you.

As an example of online communication, telecommunications company BT uses a single visual on its website to connect purpose, ambition, values, and strategy. BP (British Petroleum) set out its strategic narrativein a well-written press release, while carmaker Renault presented its “Renaulation” plan in a highly visual, content-rich presentation.

Empower people through transparency

The responsibility for communicating strategy is often restricted to a select few, based on two mistaken beliefs: Only the top team has responsibility for strategy and strategy is too complex for others to communicate. Information is also restricted based on two other mistaken beliefs: Too much detail will distract people and competitors will gain an advantage from knowing more about the strategy.

This approach limits the opportunity for employees, partners, suppliers, and other stakeholders to contribute to, advocate for, and deliver on the strategy. They want to hear from people they work closely with — not just the top team — and to understand the full picture.

One CFO I worked with made a point to explain on calls and in meetings how what she and her team were doing contributed to the strategy. She also encouraged people involved in the development of strategy to play a prominent role in the program of communications and to act as advocates in their daily activities. This ranged from people who contributed ideas and perspectives in crowdsourcing events to those who played a central role in designing the strategy (including representatives from corporate development, sales, customer service, operations, and HR).

Help people understand the strategy and make their own choices by:

• Sharing as much of the strategy as possible, explaining the critical decisions, assumptions made, and uncertainties. Provide the assets and information in one place so people can select what they’re interested in.
• Describing how important decisions enable the strategy, such as a new investment, closure, restructure, or partnership.
• Communicating progress honestly. Share updates on what’s working and what’s challenging and invite people to contribute ideas.
• Holding back detail wisely. Only restrict information if it has the potential to overwhelm or confuse people or undermine commercial activity (e.g., a potential acquisition or new venture).
• Creating open channels. Make it easy for people to share ideas, raise challenges, and ask questions.

Repeat, listen, and refresh

After the launch of a strategy, life often goes back to “normal” as people revert to old habits, practices, and routines — especially in many large, traditional companies. Communications fade away. Apart from the wasted effort, it leaves the organization less resilient and more susceptible to disruption.

Strategy needs to evolve in a world that is more volatile and uncertain than before. Its communication, therefore, needs to be both systematic and flexible. This requires you to:

• Map out clear sequences of communications with different stakeholder groups in different moments to ensure clarity and consistency of messages. Research suggests it takes about two months to embed a new habit, even with the best communications and incentives — so this needs to be a sustained effort and include some repetition. You’ll know it’s resonating when stakeholders start to use the same language, and, most importantly, start making their own choices about where to focus and how to work differently.
• Ask questions to encourage participation and overcome obstacles. Think, “What can we do to accelerate the changes?” or “What can we remove to make our lives easier?” Listen carefully to the answers.
• Monitor weak signals of change within and outside the organization that should change the content and nature of communication (let alone the strategy). For example, if there’s a change in consumer sentiment or aggressive competitor activity, communications should call out the resilience of the strategy (or the reasons for changes).
• Surface and highlight success stories to reinforce the messages, maintain interest, and build commitment.

Source: HBR

WASHINGTON — The Treasury Department and Internal Revenue Service today issued a Revenue Procedure setting out key processes for manufacturers and sellers of clean vehicles. These processes are required for vehicles to be eligible for one or more clean vehicle tax incentives, including tax credits for new and previously owned clean vehicles, as well as for commercial clean vehicles.

For vehicle manufacturers, Revenue Procedure 2022-42PDF provides guidance on new rules in the tax law added by the Inflation Reduction Act on how to enter into a written agreement with the IRS and how to provide periodic written reports containing specified information related to each clean vehicle manufactured.

This revenue procedure also provides the procedures for persons selling vehicles to report specified information to the IRS for a vehicle to be eligible for the credit for new or previously owned clean vehicles.

Source: IRS-2022-218, December 12, 2022

The Internal Revenue Service encouraged taxpayers to take important actions this month to help them file their 2022 federal tax returns. This is the second in a series of reminders to help taxpayers get ready for the upcoming tax filing season. A “Get Ready” pageoutlines steps taxpayers can take now to make tax filing easier in 2023. Here’s what’s new and some key items for taxpayers to consider before they file next year.

Reporting rules changed for Form 1099-K. Taxpayers should receive Form 1099-K, Payment Card and Third Party Network Transactions, by January 31, 2023, if they received third party payments in tax year 2022 for goods and services that exceeded $600.

There’s no change to the taxability of income. All income, including from part-time work, side jobs or the sale of goods is still taxable. Taxpayers must report all income on their tax return unless it’s excluded by law, whether they receive a Form 1099-K, a Form 1099-NEC, Nonemployee Compensation, or any other information return.

Prior to 2022, Form 1099-K was issued for third party networks transactions only if the total number of transactions exceeded 200 for the year and the aggregate amount of these transactions exceeded $20,000. The American Rescue Plan Act of 2021 lowered the reporting threshold for third party networks that process payments for those doing business.

Now a single transaction exceeding $600 can require the third party platform to issue a 1099-K. Money received through third party payment networks from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable.

The IRS cautions people in this category who may be receiving a Form 1099 for the first time – especially “early filers” who typically file a tax return during the month of January or early February – to be careful and make sure they have all of their key income documents before submitting a tax return. A little extra caution could save people additional time and effort related to filing an amended tax return. And if they have untaxed income on a Form 1099 that isn’t reflected on the tax return they initially file, that could mean they need to submit a tax payment with an amended tax return.

If the information is incorrect on the 1099-K, taxpayers should contact the payer immediately, whose name appears in the upper left corner on the form. The IRS cannot correct it.

Some tax credits return to 2019 levels. This means that affected taxpayers will likely receive a significantly smaller refund compared with the previous tax year. Changes include amounts for the Child Tax Credit (CTC), Earned Income Tax Credit (EITC) and Child and Dependent Care Credit.

• Those who got $3,600 per dependent in 2021 for the CTC will, if eligible, get $2,000 for the 2022 tax year.
• For the EITC, eligible taxpayers with no children who received roughly $1,500 in 2021 will now get $500 in 2022.
• The Child and Dependent Care Credit returns to a maximum of $2,100 in 2022 instead of $8,000 in 2021.

Visit Credits and Deductions for more details.

No above-the-line charitable deductions. During COVID, taxpayers could take up to a $600 charitable donation tax deduction on their tax returns. However, in 2022, those who take a standard deduction may not take an above-the-line deduction for charitable donations.

More people may be eligible for the Premium Tax Credit. For tax year 2022, taxpayers may still qualify for temporarily expanded eligibility for the premium tax credit.

Eligibility rules changed to claim a tax credit for clean vehicles. Review the changes under the Inflation Reduction Act of 2022 to qualify for a Clean Vehicle Credit.

Avoid refund delays and understand refund timing

Many different factors can affect the timing of a refund after the IRS receives a return. Although the IRS issues most refunds in less than 21 days, the IRS cautions taxpayers not to rely on receiving a 2022 federal tax refund by a certain date, especially when making major purchases or paying bills. Some returns may require additional review and may take longer to process if IRS systems detect a possible error, the return is missing information or there is suspected identity theft or fraud.

Also, the IRS cannot issue refunds for people claiming the EITC or Additional Child Tax Credit (ACTC) before mid-February. The law requires the IRS to hold the entire refund – not just the portion associated with EITC or ACTC.

Last quarterly payment for 2022 is due on January 17, 2023

Taxpayers may need to consider estimated or additional tax payments due to non-wage income from unemployment, self-employment, annuity income or even digital assets. The Tax Withholding Estimator on IRS.gov can help wage earners determine if there is a need to consider an additional tax payment to avoid an unexpected tax bill when they file.

Gather 2022 tax documents

Taxpayers should develop a recordkeeping system − electronic or paper − that keeps important information in one place. This includes year-end income documents like Forms W-2 from employers, Forms 1099 from banks or other payers, Form 1099-K from third party payment networks, Form 1099-NEC for nonemployee compensation, Form 1099-MISC for miscellaneous income, or Form 1099-INT if you were paid interest, as well as records documenting all digital asset transactions.

Ensuring their tax records are complete before filing helps taxpayers avoid errors that lead to processing delays. When they have all their documentation, taxpayers are in the best position to file an accurate return and avoid processing or refund delays or IRS letters.

Sign in to Online Account

An IRS Online Account lets taxpayers securely access their personal tax information, including tax return transcripts, payment history, certain notices, prior year adjusted gross income and power of attorney information. Filers can log in to verify if their name and address are correct. They should notify IRS if their address has changed. They must notify the Social Security Administration of a legal name change to avoid a delay in processing their tax return.

Get banked to speed refunds with direct deposit

The fastest way to get a tax refund is by filing electronically and choosing direct deposit. Direct deposit is faster than waiting for a paper check in the mail. It also avoids the possibility that a refund check could be lost, stolen or returned to the IRS as undeliverable.

Don’t have a bank account? Learn how to open an account at an FDIC-Insured bank or through the National Credit Union Locator Tool. Veterans should see the Veterans Benefits Banking Program (VBBP) for access to financial services at participating banks.

Prepaid debit cards or mobile apps may allow direct deposit of tax refunds. They must have routing and account numbers associated with them that can be entered on a tax return. Taxpayers can check with the mobile app provider or financial institution to confirm which numbers to use.

Bookmark resources

Taxpayers can download Publication 5348, Get Ready to FilePDF, or Publication 5349, Year-Round Tax Planning is for EveryonePDF, for more information to help them get ready to file.

Source: IRS-2022-213, December 6, 2022

The theory of disruptive innovation, introduced in these pages in 1995, has proved to be a powerful way of thinking about innovation-driven growth. Many leaders of small, entrepreneurial companies praise it as their guiding star; so do many executives at large, well-established organizations, including Intel, Southern New Hampshire University, and Salesforce.com.

Unfortunately, disruption theory is in danger of becoming a victim of its own success. Despite broad dissemination, the theory’s core concepts have been widely misunderstood and its basic tenets frequently misapplied. Furthermore, essential refinements in the theory over the past 20 years appear to have been overshadowed by the popularity of the initial formulation. As a result, the theory is sometimes criticized for shortcomings that have already been addressed.

There’s another troubling concern: In our experience, too many people who speak of “disruption” have not read a serious book or article on the subject. Too frequently, they use the term loosely to invoke the concept of innovation in support of whatever it is they wish to do. Many researchers, writers, and consultants use “disruptive innovation” to describe any situation in which an industry is shaken up and previously successful incumbents stumble. But that’s much too broad a usage.

The problem with conflating a disruptive innovation with any breakthrough that changes an industry’s competitive patterns is that different types of innovation require different strategic approaches. To put it another way, the lessons we’ve learned about succeeding as a disruptive innovator (or defending against a disruptive challenger) will not apply to every company in a shifting market. If we get sloppy with our labels or fail to integrate insights from subsequent research and experience into the original theory, then managers may end up using the wrong tools for their context, reducing their chances of success. Over time, the theory’s usefulness will be undermined.

This article is part of an effort to capture the state of the art. We begin by exploring the basic tenets of disruptive innovation and examining whether they apply to Uber. Then we point out some common pitfalls in the theory’s application, how these arise, and why correctly using the theory matters. We go on to trace major turning points in the evolution of our thinking and make the case that what we have learned allows us to more accurately predict which businesses will grow.

Read more: HBR

WASHINGTON —The Internal Revenue Service today reminded IRA owners age 70½ or over of their option to transfer up to $100,000 to charity tax-free each year.

These transfers, known as qualified charitable distributions or QCDs, offer eligible older Americans a great way to easily give to charity before the end of the year. Moreover, for those who are at least 72, QCDs count toward the IRA owner’s required minimum distribution (RMD) for the year.

How to set up a QCD

Any IRA owner who wishes to make a QCD for 2022 should contact their IRA trustee soon so the trustee will have time to complete the transaction before the end of the year.

Normally, distributions from a traditional individual retirement arrangement (IRA) are taxable when received. With a QCD, however, these distributions become tax-free as long as they’re paid directly from the IRA to an eligible charitable organization.

QCDs can be made electronically, directly to the charity, or by check payable to the charity.

An IRA distribution, such as an electronic payment made directly to the IRA owner, does not count as a QCD. Likewise, a check made payable to the IRA owner is not a QCD.

Each year, an IRA owner age 70½ or over can exclude from gross income up to $100,000 of these QCDs. For a married couple, if both spouses are age 70½ or over and both have IRAs, each spouse can exclude up to $100,000 for a total of up to $200,000 per year.

The QCD option is available regardless of whether an eligible IRA owner itemizes deductions on Schedule A. Transferred amounts are not taxable, and no deduction is available for the transfer.

Report correctly

A 2022 QCD must be reported on the 2022 federal income tax return, normally filed during the 2023 tax filing season.

In early 2023, the IRA owner will receive Form 1099-R from their IRA trustee that shows any IRA distributions made during calendar year 2022, including both regular distributions and QCDs. The total distribution is in Box 1 on that form. There is no special code for a QCD.

Like other IRA distributions, QCDs are shown on Line 4 of Form 1040 or Form 1040-SR. If part or all of an IRA distribution is a QCD, enter the total amount of the IRA distribution on Line 4a. This is the amount shown in Box 1 on Form 1099-R.

Then, if the full amount of the distribution is a QCD, enter 0 on Line 4b. If only part of it is a QCD, the remaining taxable portion is normally entered on Line 4b.

Either way, be sure to enter “QCD” next to Line 4b. Further details will be in the final instructions to the 2022 Form 1040.

Get a receipt

QCDs are not deductible as charitable contributions on Schedule A. But, as with deductible contributions, the donor must get a written acknowledgement of their contribution from the charitable organization, before filing their return.

In general, the acknowledgement must state the date and amount of the contribution and indicate whether the donor received anything of value in return. For details, see the Acknowledgement section in Publication 526, available on IRS.gov.

For more information about IRA distributions and QCDs, see Publication 590-B, also available on IRS.gov.

Source: IRS-2022-201, November 17, 2022

WASHINGTON — Today, the IRS Independent Office of Appeals released its focus guidePDF for fiscal year 2023. Appeals is taking important steps to expand communications with external stakeholders and to improve taxpayer access to Appeals. Promoting transparency and taxpayer access helps Appeals fulfill its mission to resolve tax disputes in a fair and impartial manner without the need for litigation.

The focus guide outlines the taxpayer service initiatives you can expect over the coming year, including:

Increasing stakeholder outreach – including to historically marginalized and limited English proficient communities—about the appeals process.
Improving access to in-person and video conferences and revising letters and notices to ensure taxpayers understand that it is generally their choice how to meet with Appeals.
Leveraging technology to improve how Appeals works and manages its cases.
Continuing the Practitioner Perspectives series in which tax practitioners share insights and feedback with Appeals employees. Recordings of prior panel discussions on Collection Appeals and Examination Appeals are available.
Developing training for Appeals employees on enhancing customer engagement.
“We are excited to share Appeals’ 2023 priorities,” said Andy Keyso, Chief of Appeals. “We will keep doing all we can to promote a positive experience for taxpayers and practitioners, while building upon our past accomplishments and applying lessons we learned from the challenges posed by COVID-19.”

A key success in 2022 is how Appeals addressed a significant increase in cases referred for settlement after the taxpayer filed a petition in the United States Tax Court. Many of these cases involved taxpayers without legal representation and resulted from communications challenges and difficulties in obtaining and sharing documents during the pandemic.

To avoid further delays, Appeals prioritized these docketed cases and dedicated additional resources to promptly resolve them. Appeals shared guidelinesPDF for how employees would streamline their approach to these cases with the public in April 2022. Under these guidelines, Appeals attempted to reach affected taxpayers by telephone shortly after receiving the cases. In addition, Appeals considered specific-dollar settlements, expedited tax computation, and streamlined internal documentation of proposed settlements. As always, Appeals Officers applied their professional judgment, including to accept oral testimony where appropriate, to settle the cases efficiently.

Using this approach, Appeals resolved all 7,500 docketed cases pending when the initiative began. To achieve permanent improvements to the taxpayer experience, the IRS is working to increase the number of cases resolved at the earliest stage possible—before a dispute arises.

“Ensuring that taxpayers and practitioners are satisfied with the appeals process is an ongoing goal for us,” said Shahid Babar, Acting Deputy Chief of Appeals. “The 2023 focus guide is a way to share with the public and with employees our ideas for continually improving how Appeals resolves tax disputes.”

Source: IRS