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IR-2012-97, Nov. 21, 2012
WASHINGTON — The Internal Revenue Service today announced that the fall 2012 issue of the Statistics of Income Bulletin is available. This issue features individual income tax return data for Tax Year 2010. 
Nearly 143 million individual income tax returns were filed for Tax Year 2010, an increase of 1.7 percent from 140.5 million returns filed for 2009.  The adjusted gross income (AGI) reported on these returns totaled $8.1 trillion, a 6.1-percent increase from the previous year.
The Statistics of Income (SOI) Division produces the SOI Bulletin on a quarterly basis.  Articles included in the publication provide the most recent data available from various tax and information returns filed by U.S. taxpayers. This issue of the SOI Bulletin also includes articles on the following topics:
Partnership Returns, 2010. For 2010, the number of partnerships increased 2.5 percent, from the previous year.  The number of partners increased by 6.1 percent, from the previous year, and this number has grown 9 out of the last 10 years.  Nearly half of all partnerships and more than a third of all partners were classified in the real estate and rental and leasing sector.
Nonprofit Charitable Organizations, 2009.  For 2009, nonprofit charitable organizations (excluding private foundations) tax exempt under Internal Revenue Code (IRC) section 501(c)(3) reported $2.7 trillion in total assets and $1.5 trillion in revenue.
Transactions Between Large Foreign-Owned Domestic Corporations and Related Foreign Persons, 2008.  The total value of nonloan transactions between large foreign-owned domestic corporations and related foreign parties totaled $1.187 trillion, a 36-percent decrease from the record high of $1.86 trillion in 2006.
The Statistics of Income Bulletin is available for download at IRS.gov/taxstats. Printed copies of the Statistics of Income Bulletin are available from the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954. The annual subscription rate is $67 ($93.80 foreign), single issues cost $44 ($61.60 foreign).
For more information about these data, write to the Director, Statistics of Income (SOI) Division, RAS:S, Internal Revenue Service, P.O. Box 2608, Washington, DC 20013-2608.
Related Items:          
SOI Bulletin: Fall 2012
Historical Tables and Appendix
Tax Statistics
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IR-2012-96, Nov. 21, 2012
WASHINGTON — As part of the administration’s efforts to bring all available resources to bear to support state and local partners impacted by Hurricane Sandy, the IRS is postponing the filing date until Feb. 1, 2013, for some small tax-exempt organizations affected by Hurricane Sandy to take advantage of transitional relief when applying for reinstatement of their exempt status.
Organizations that did not file a required information return or electronic notice for their taxable years beginning in 2007, 2008 and 2009 automatically lost their tax-exempt status, and must apply if they want to be reinstated. In Notice 2011-43PDF, the IRS provided transitional relief for certain small organizations that were not required to file annual information returns for taxable years beginning before 2007, were eligible in each of their taxable years beginning in 2007, 2008 and 2009 to file a Form 990-N e-Postcard, and applied for reinstatement of tax-exempt status on or before Dec. 31, 2012. These organizations may file an application for tax exemption and, if it is approved, will have their tax-exempt status reinstated retroactively to the date the status was revoked. In addition, these organizations pay a reduced application fee of $100.
To be eligible for the Feb. 1 deadline, described in Notice 2012-71PDF, the organization’s principal place of business must be located in the covered disaster area, or records necessary to meet the application deadline must be maintained in the covered disaster area. If an eligible organization files its application for exemption on or before Feb. 1, 2013, it will be treated as if it had been timely filed on Dec. 31, 2012.  Organizations located outside the affected areas must apply for transitional relief by Dec. 31, 2012. Organizations located outside of the affected area that think they may qualify for the relief described in Notice 2012-71 need to contact the IRS at 866-562-5227.
To take advantage of the extended transitional relief, an organization must apply for reinstatement by filing a Form 1023 or Form 1024, Application for Recognition of Exemption. In addition to the instructions in Notice 2011-43, the organization should write “Notice 2011-43” and “Sandy Relief” on the top of the application form and on the envelope. Organizations with questions about this relief should call the TE/GE Customer Account Services toll free number at (877) 829-5500.
For information on areas designated as covered disaster areas and tax relief for victims of Hurricane Sandy, visit Tax Relief in Disaster Situations.
To check for future announcements, visit Disaster Relief Resources for Charities and Contributors or Help for Victims of Hurricane Sandy.
Related Items:
Form 1023 FormPDF and InstructionsPDF
Form 1024 Form and InstructionsPDF    
IRS Charities and Nonprofits information
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R-2012-95, Nov. 21, 2012
WASHINGTON — The Internal Revenue Service today issued the 2013 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2013, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
56.5 cents per mile for business miles driven.
24 cents per mile driven for medical or moving purposes.
14 cents per mile driven in service of charitable organizations.
The rate for business miles driven during 2013 increases 1 cent from the 2012 rate. The medical and moving rate is also up 1 cent per mile from the 2012 rate.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.
These and other requirements for a taxpayer to use a standard mileage rate to calculate the amount of a deductible business, moving, medical, or charitable expense are in Rev. Proc. 2010-51. Notice 2012-72PDF contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.
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IR-2012-94, Nov. 20, 2012
WASHINGTON — As part of the administration’s efforts to bring all available resources to bear to support state and local partners impacted by Hurricane Sandy, the Internal Revenue Service today extended until Dec. 7 the diesel fuel penalty waiver, due to expire today, for New Jersey and parts of New York.
The extension is based on an extended fuel waiver granted to these areas by the Environmental Protection Agency (EPA). The original waiver was put in place in response to shortages of clear diesel fuel caused by the hurricane.
As a result, the IRS will not impose a tax penalty when dyed diesel fuel is sold for use or used on the highway. This relief applies beginning Oct. 30, 2012, to the entire state of New Jersey and to the five boroughs of New York City and Nassau, Suffolk, Rockland and Westchester counties in New York State, and will remain in effect through Dec. 7, 2012.
This relief is available to any person that sells or uses dyed fuel for highway use. In the case of the operator of the vehicle in which the dyed fuel is used, the relief is available only if the operator or the person selling the fuel pays the 24.4-cent-per-gallon tax that normally applies to diesel fuel for on-road use. The IRS will not impose penalties for failure to make semimonthly deposits of this tax. IRS Publication 510PDF, Excise Taxes, has information on the proper method for reporting and paying the tax.
Ordinarily, dyed diesel fuel is not taxed, because it is sold for uses exempt from excise tax, such as to farmers for farming purposes, for home heating use and to local governments for buses.
Finally, the IRS will not impose the tax penalty on a failure to meet the requirements of EPA highway diesel fuel sulfur content regulations if EPA has waived those requirements.
The IRS is closely monitoring the situation and will provide additional relief as needed.
Related Items: 
Help for Victims of Hurricane Sandy
Tax Relief in Disaster Situations
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IR-2012-93, Nov. 16, 2012
WASHINGTON — As part of the administration’s efforts to bring all available resources to bear to support state and local partners impacted by Hurricane Sandy, the Internal Revenue Service today announced that 401(k)s and similar employer-sponsored retirement plans can make loans and hardship distributions to victims of Hurricane Sandy and members of their families.
401(k) plan participants, employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, and state and local government employees with 457(b) deferred-compensation plans may be eligible to take advantage of these streamlined loan procedures and liberalized hardship distribution rules. Though IRA participants are barred from taking out loans, they may be eligible to receive distributions under liberalized procedures.
Retirement plans can provide this relief to employees and certain members of their families who live or work in the disaster area. To qualify for this relief, hardship withdrawals must be made by Feb. 1, 2013.
The IRS is also relaxing procedural and administrative rules that normally apply to retirement plan loans and hardship distributions. As a result, eligible retirement plan participants will be able to access their money more quickly with a minimum of red tape. In addition, the six-month ban on 401(k) and 403(b) contributions that normally affects employees who take hardship distributions will not apply.
This broad-based relief means that a retirement plan can allow a Sandy victim to take a hardship distribution or borrow up to the specified statutory limits from the victim’s retirement plan. It also means that a person who lives outside the disaster area can take out a retirement plan loan or hardship distribution and use it to assist a son, daughter, parent, grandparent or other dependent who lived or worked in the disaster area.
Plans will be allowed to make loans or hardship distributions before the plan is formally amended to provide for such features. In addition, the plan can ignore the limits that normally apply to hardship distributions, thus allowing them, for example, to be used for food and shelter. If a plan requires certain documentation before a distribution is made, the plan can relax this requirement as described in the announcement.
Ordinarily, retirement plan loan proceeds are tax-free if they are repaid over a period of five years or less. Under current law, hardship distributions are generally taxable. Also,  a 10 percent early-withdrawal tax usually applies.
Further details are in Announcement 2012-44PDF.
Related Items:
Help for Victims of Hurricane Sandy
Tax Relief in Disaster Situations
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IR-2012-92, Nov. 15, 2012 
WASHINGTON — One of the Internal Revenue Service’s main advisory panels for tax administration today issued its 2012 annual report, covering a range of key issues affecting taxpayers. 
The Internal Revenue Service Advisory Council (IRSAC) issued its report at a public meeting. IRSAC’s primary purpose is to provide an organized public forum for senior IRS executives and representatives of the public to discuss relevant tax administration issues. 
“IRSAC members provide valuable feedback on products, programs and services of the IRS,” said Acting IRS Commissioner Steven T. Miller. "We welcome their perspectives as we address future challenges." 
Based on its findings, IRSAC made several recommendations in its 2012 report on a broad array of issues and concerns including, among other things, the following:
Streamlining the Audit Process 
Managing Knowledge in the Issue Practice Groups and International Practice Networks 
Improving Lien Withdrawal Processing 
Enhancing the availability of electronic completion and filing for Form 1099-Miscellaneous 
Increasing BMF Electronic Filing 
Enhancing the reporting of dispositions of capital assets on various forms 
Tax Practitioner obligations and competency IRSAC draws its members from the tax professional community and members of academia. 
The Commissioner’s Advisory Group was established in 1953 and renamed IRSAC in 1998 to focus as an advisory body to the entire IRS.
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IR-2012-91, Nov. 9, 2012
WASHINGTON — The Internal Revenue Service today issued a consumer alert about possible scams taking place in the wake of Hurricane Sandy.
Following major disasters, it’s common for scam artists to impersonate charities to get money or private information from well-intentioned taxpayers. Such fraudulent schemes may involve contact by telephone, social media, email or in-person solicitations.
The IRS cautions both hurricane victims and people wishing to make disaster-related charitable donations to avoid scam artists by following these tips:
To help disaster victims, donate to recognized charities. 
	 
Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of respected, legitimate organizations. The IRS website at IRS.gov has a search feature, Exempt Organizations Select Check, which allows people to find legitimate, qualified charities to which donations may be tax-deductible. Legitimate charities may also be found on the Federal Emergency Management Agency (FEMA) Web site at fema.gov.
	 
Don’t give out personal financial information — such as Social Security numbers or credit card and bank account numbers and passwords — to anyone who solicits a contribution from you. Scam artists may use this information to steal your identity and money.
	 
Don’t give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the gift.
	 
Call the IRS toll-free disaster assistance telephone number, 1-866-562-5227, if you are a hurricane victim with specific questions about tax relief or disaster related tax issues.
Scam artists can use a variety of tactics. Some scammers operating bogus charities may contact people by telephone to solicit money or financial information. They may even directly contact disaster victims and claim to be working for or on behalf of the IRS to help the victims file casualty loss claims and get tax refunds. They may attempt to get personal financial information or Social Security numbers that can be used to steal the victims’ identities or financial resources.
Bogus websites may solicit funds for disaster victims. Such fraudulent sites frequently mimic the sites of, or use names similar to, legitimate charities, or claim to be affiliated with legitimate charities, in order to persuade members of the public to send money or provide personal financial information that can be used to steal identities or financial resources.   Additionally, scammers often send e-mail that steers the recipient to bogus websites that sound as though they are affiliated with legitimate charitable causes.
Taxpayers suspecting disaster-related frauds should visit IRS.gov and search for the keywords “Report Phishing.”
More information about tax scams and schemes may be found at IRS.gov using the keywords “scams and schemes.” 
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IR-2012-90, Nov. 8, 2012
WASHINGTON –– The Internal Revenue Service announced today that its Applications Development group has achieved Capability Maturity Model Integration (CMMI) Level 3. The IRS is the only large civilian U.S. government agency to have achieved this level of process maturity.
The announcement comes after an independent appraisal of IRS’s application development practices conducted by Software Engineering Services Corporation.
CMMI, which is maintained by the Software Engineering Institute (SEI) at Carnegie Mellon University, is used across the public and private sector. According to SEI, CMMI is a process improvement approach that provides organizations with the essential elements of effective processes, which will improve their performance. CMMI-based process improvement includes identifying organizational process strengths and weaknesses and making process changes to turn weaknesses into strengths.
“Today’s announcement is further evidence of the commitment of the IRS to driving efficiencies, and ensuring that we are good stewards of taxpayer dollars,” said IRS Commissioner Doug Shulman. “I am proud of the information technology team for their commitment to continuous improvement.”
“By substantially improving our processes and management disciplines, the IRS IT organization is able to do more with less,” said IRS Chief Technology Officer Terry Milholland. “In a challenging budget environment, proactive steps like these will allow the IRS to continue to innovate and deliver services to taxpayers.”
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IR-2012-88, Nov. 6, 2012
WASHINGTON — As part of the administration’s efforts to bring all available resources to bear to support state and local partners impacted by Hurricane Sandy, the Treasury Department and the Internal Revenue Service today announced special relief intended to support leave-based donation programs to aid victims who have suffered from the extraordinary destruction caused by Hurricane Sandy.
Under these programs, employees may donate their vacation, sick or personal leave in exchange for employer cash payments made to qualified tax-exempt organizations providing relief for the victims of Hurricane Sandy.
Employees can forgo leave in exchange for employer cash payments made before Jan. 1, 2014. Under this special relief, the donated leave will not be included in the income or wages of the employees. Employers will be permitted to deduct the amount of the cash payment. Details on this relief are in Notice 2012-69PDF.
The IRS continues to monitor the situation and will provide additional relief related to Hurricane Sandy as needed.
Related Item: 
Help for Victims of Hurricane Sandy
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IR-2012-87, Nov. 6, 2012                                                                
WASHINGTON — As part of the administration’s efforts to bring all available resources to bear to support state and local partners impacted by Hurricane Sandy, the Treasury Department and the Internal Revenue Service today announced an expedited review and approval process will be offered for organizations seeking tax-exempt status in order to provide relief for victims of Hurricane Sandy.  The IRS also continues to encourage people to use existing organizations currently working on immediate aid efforts.
Organizations should apply for tax-exempt status by filing IRS Form 1023.
and write at the top of the form “Disaster Relief, Hurricane Sandy.” The IRS will give such applications expedited attention and ensure they meet the legal requirements for tax exemption.  Organizations seeking to provide relief for victims of Hurricane Sandy that have already submitted an application can fax a request labeled "Disaster Relief, Hurricane Sandy" that includes the organization's name, Employer Identification Number, contact name and phone number to 513-263-4554 in order to be given the same expedited handling.
The IRS reminds people that existing charitable organizations, including churches and other places of worship, are frequently able to administer relief programs more efficiently than newly formed organizations, since they tend to already have fund-raising and distribution infrastructures in place.
The web site of the Federal Emergency Management Agency (FEMA)
and the U.S. Government’s main Web portal at FirstGov.gov both offer lists of organizations that provide support to victims of Hurricane Sandy.
The IRS anticipates new charities will form to address specific needs of disaster victims. The IRS will continually update its on-line search feature, Select Check, that allows taxpayers to determine if a charity has IRS-approved tax-exempt status.
In addition to Form 1023 for applying for recognition for tax exemption, the IRS also offers Publication 3833PDF, Disaster Relief: Providing Assistance Through Charitable Organizations, which provides information about establishing a new charitable organization.
Related Items:
Help for Victims of Hurricane Sandy
Form 1023 InstructionsPDF
IRS Charities and Nonprofits information
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IR-2012-86, Nov. 4, 2012
WASHINGTON — As part of the administration’s continued support for states and local partners impacted by Hurricane Sandy, the Treasury Department and the Internal Revenue Service today announced that they will waive low-income housing tax credit rules that prohibit owners of low-income housing from providing housing to victims of Hurricane Sandy who do not qualify as low-income. The action will expand the availability of housing for disaster victims and their families.
Because of the widespread devastation to housing caused by Hurricane Sandy, the Treasury Department and the IRS will temporarily suspend income limitation requirements and non-transient requirements for qualified low-income housing projects that provide housing to victims of Hurricane Sandy.
The President has declared that major disasters exist in Connecticut, New York and New Jersey, making federal funding available to affected individuals in designated counties through the Federal Emergency Management Agency (FEMA). Assistance can include grants for temporary housing and home repairs, low-cost loans to cover uninsured property losses, and other programs to help individuals and business owners recover from the effects of the disaster. FEMA has also approved Transitional Sheltering Assistance (TSA) in New York and New Jersey for eligible disaster survivors who have a continuing need for shelter because they are unable to return to their homes for an extended period of time. Individuals and business owners who sustained losses can apply for assistance from FEMA by calling 1-800-621-FEMA (3362) via mobile device at m.fema.gov, or online at www.disasterassistance.gov.
Related Items: 
Notice 2012-68PDF
Help for Victims of Hurricane Sandy
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IR-2012-85, Nov. 3, 2012
WASHINGTON — The Internal Revenue Service, in response to shortages of clear diesel fuel caused by Hurricane Sandy, will not impose a tax penalty when dyed diesel fuel is sold for use or used on the highway.
This relief applies beginning Oct. 30, 2012 in New Jersey, New York, and Pennsylvania and will remain in effect through Nov. 20, 2012.
This penalty relief is available to any person that sells or uses dyed fuel for highway use. In the case of the operator of the vehicle in which the dyed fuel is used, the relief is available only if the operator or the person selling the fuel pays the tax of 24.4 cents per gallon that is normally applied to diesel fuel for on-road use. The IRS will not impose penalties for failure to make semimonthly deposits of this tax. IRS Publication 510PDF, Excise Taxes, has information on the proper method for reporting and paying the tax.
Ordinarily, dyed diesel fuel is not taxed, because it is sold for uses exempt from excise tax, such as to farmers for farming purposes, for home heating use and to local governments for buses.
Finally, the Internal Revenue Service will not impose the tax penalty on a failure to meet the requirements of EPA highway diesel fuel sulfur content regulations if EPA has waived those requirements.
The IRS is closely monitoring the situation and will provide additional relief as needed.
Related Item:
Help for Victims of Hurricane Sandy
	 
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Update 2/4/13 to show counties in NJ and NY which received an additional extension of time to file and pay tax. See news release link at bottom.
IR-2012-84, Nov. 2, 2012
Washington ― The Internal Revenue Service today alerted employers and other taxpayers that because Hurricane Sandy is designated as a qualified disaster for federal tax purposes, qualified disaster relief payments made to individuals by their employer or any person can be excluded from those individuals’ taxable income.
Qualified disaster relief payments include amounts to cover necessary personal, family, living or funeral expenses that were not covered by insurance. They also include expenses to repair or rehabilitate personal residences or repair or replace the contents to the extent that they were not covered by insurance. Again, these payments would not be included in the individual recipient’s gross income.
The IRS also announced that the designation of Hurricane Sandy as a qualified disaster means that employer-sponsored private foundations may provide disaster relief to employee-victims in areas affected by the hurricane without affecting their tax-exempt status. Like all charitable organizations, employer-sponsored private foundations should follow the guidance in Publication 3833, Disaster Relief: Providing Assistance Through Charitable Organizations, in providing assistance to employees or their family members affected by Hurricane Sandy.
Related Items:
IR-2013-16, IRS Extends Tax Relief to Some New Jersey and New York Victims of Hurricane Sandy; Return Filing and Tax Payment Deadline Extended to April 1, 2013
Help for Victims of Hurricane Sandy
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This news release has been superseded by IR-2013-1.
IR-2012-105, Dec. 31, 2012
WASHINGTON — The Internal Revenue Service today released new income-tax withholding tables for 2013 and issued special instructions on implementing new income tax and Social Security tax rates. 
In issuing this guidance, the IRS takes note of the fact that Congress is currently considering legislation that could affect these rates. If this legislation is enacted, IRS will issue new, corresponding tables at that time.
The updated tables issued today show the new rates for 2013, which reflect the expiration of the 2001 and 2003 tax cuts. In addition, employers should also begin withholding Social Security tax at the rate of 6.2 percent of wages paid following the expiration of the temporary two-percentage-point payroll tax cut in effect for 2011 and 2012.
Notice 1036PDF, released today, contains the percentage method income-tax withholding tables and related information that employers need to implement these changes.
Employers should start using the new withholding tables and correct the amount of Social Security tax withheld as soon as possible in 2013, but not later than Feb. 15, 2013. For any Social Security tax under-withheld before that date, employers should make the appropriate adjustment in workers’ pay as soon as possible, but not later than March 31, 2013.
Employers and payroll companies will handle the withholding changes, so workers typically won’t need to take any additional action, such as filling out a new W-4 withholding form.
As always, however, the IRS urges workers to review their withholding every year and, if necessary, fill out a new W-4 and give it to their employer. For example, individuals and couples with multiple jobs, people who are having children, getting married, getting divorced or buying a home, and those who typically wind up with a balance due or large refund at the end of the year may want to consider submitting revised W-4 forms.
More information can be found on this website.
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IR-2012-104, Dec. 31, 2012
WASHINGTON — The Internal Revenue Service today announced that its Office of Professional Responsibility (OPR) has disbarred a return preparer accused of routinely preparing and filing fraudulent federal tax returns.
Working in tandem with the Department of Justice Tax Division, OPR accepted Benaym Tewolde’s consent to be sanctioned under Circular 230 (Regulations Governing Practice before the IRS) in lieu of pursuing a separate disciplinary proceeding. The discipline agreement prohibits Tewolde from any practice (including tax return preparation) before the IRS for a minimum of five years. His provisional Preparer Tax Identification Number (PTIN) was immediately revoked.
“OPR is pleased with this outcome and is committed to maintaining the integrity of the U.S. tax system at all levels, and in coordination with the Justice Department," said Karen L. Hawkins, Director of the IRS Office of Professional Responsibility. "This settlement agreement is the direct result of OPR's expanded oversight of return preparers under Circular 230, which is part of the IRS' return preparer initiative."
Earlier this year, the Department of Justice Tax Division filed a complaint seeking to permanently prohibit Tewolde from any further federal tax return preparation. The complaint accused him and others of preparing and filing fraudulent returns for inflated refunds. 
The settlement agreement includes a disclosure authorization that allows the IRS to issue this release.
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IR-2011-11, Jan. 24, 2011
WASHINGTON — The Internal Revenue Service’s next IRS Live webinar, “Getting Ready for Filing Season 2011 - Individuals and Businesses,” is Wednesday, Jan. 26, at 2 p.m. This special, 100-minute program will give tax preparers a head start on the 2011 filing season.
The extended program will include updates to tax forms, the latest tax law changes and information about e-File, e-Pay and Direct Deposit.
Panelists include: Virginia Tarris, Tax Law Specialist, Tax Forms and Publications, IRS; Bill Woolf, Reviewer, Business Forms and Publications Branch, IRS; Donna Rodriguez, CPA JD; and Tanya Davis, President of the National Association of Black Accountants, Metropolitan Washington D.C. chapter. The moderator is Mike Quinn, a retired IRS Communications Manager.
Viewers must register online at Internal Revenue Service Webinar Registration. Enrolled agents can receive two CPE credits. Other tax professionals may receive credit if the broadcast meets their organization's or state's CPE requirements.
More information about CPE credit is available on IRS.gov.
Tax professionals are encouraged to watch the free webinar and submit questions by e-mail to IRS.Live@irs.gov during the broadcast.
The event will be archived for later viewing, approximately three weeks after the date of the event on the IRS Video Portal.
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IR-2011-7, Jan. 20, 2011
WASHINGTON — The Internal Revenue Service plans a Feb. 14 start date for processing tax returns delayed by last month’s tax law changes. The IRS reminded taxpayers affected by the delay they can begin preparing their tax returns immediately because many software providers are ready now to accept these returns.
Beginning Feb. 14, the IRS will start processing both paper and e-filed returns claiming itemized deductions on Schedule A, the higher education tuition and fees deduction on Form 8917 and the educator expenses deduction. Based on filings last year, about nine million tax returns claimed any of these deductions on returns received by the IRS before Feb. 14.
People using e-file for these delayed forms can get a head start because many major software providers have announced they will accept these impacted returns immediately. The software providers will hold onto the returns and then electronically submit them after the IRS systems open on Feb. 14 for the delayed forms.
Taxpayers using commercial software can check with their providers for specific instructions. Those who use a paid tax preparer should check with their preparer, who also may be holding returns until the updates are complete.
Most other returns, including those claiming the Earned Income Tax Credit (EITC), education tax credits, child tax credit and other popular tax breaks, can be filed as normal, immediately.
The IRS needed the extra time to update its systems to accommodate the tax law changes without disrupting other operations tied to the filing season. The delay followed the Dec. 17 enactment of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which extended a number of expiring provisions including the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction.
Related Items:
IR-2011-1, IRS Kicks Off 2011 Tax Season with Deadline Extended to April 18; Taxpayers Impacted by Recent Tax Breaks Can File Starting in Mid- to Late February
IR-2011-4, IRS e-file Launches Today; Most Taxpayers Can File Immediately
 

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IR-2011-6, Jan. 14, 2011
WASHINGTON — The Internal Revenue Service is joining national TV network Telemundo in a special one-hour tax program for Spanish-speaking taxpayers on Sunday, Jan. 30.
The program “Los Impuestos y Usted” (“Taxes and You”) will air at:
noon Eastern time
1:00 p.m. Central time 
1:30 p.m. Mountain time 
1:00 p.m. Pacific time
Check your local listings for exact times.
“Los Impuestos y Usted” will help viewers determine whether they qualify for many tax benefits, including the Earned Income Tax Credit or EITC. Workers who earned $48,362 or less from wages, self-employment or farming last year could receive larger refunds if they qualify to receive EITC.
IRS estimates four of five eligible taxpayers claimed their EITC last year, obtaining an average $2,200 from the credit. To qualify, taxpayers must meet certain criteria and file a tax return, even if they do not have a filing requirement. 
Among other topics, the program features Free File, a program that allows individuals to file their taxes online at no cost, how to get free tax help at local community centers and other services available at /espanol.
Mónica Noguera, host for many of Telemundo’s specials, will present the IRS program, which features in-studio interviews with IRS tax experts. IRS tax experts will also be available during the airing of the program to answer questions submitted online via Telemundo’s website.
Information about the EITC, Free File and other IRS programs and services is available in Spanish at /espanol or toll-free at 800-829-1040, extension 8.
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IR-2011-3, Jan. 13, 2011
WASHINGTON — The Internal Revenue Service today announced that small tax-exempt organizations may be able to shift to the simpler Form 990-N (e-Postcard) for their 2010 annual information reporting.
The IRS today issued guidance ( Revenue Procedure 2011-15PDF) that will allow more tax-exempt organizations to file the e-Postcard rather than the Form 990-EZ or the standard Form 990.
For tax years beginning on or after Jan. 1, 2010, most tax-exempt organizations whose gross annual receipts are normally $50,000 or less can file the e-Postcard. The threshold was previously set at $25,000 or less. (However, supporting organizations of any size must file the standard Form 990 or, if eligible, Form 990-EZ).
A tax-exempt organization’s annual gross receipts or total assets are used to determine which of the three versions of Form 990 it is required to file. IRS.gov contains information about which form to file.
The Pension Protection Act of 2006 made important changes to rules regarding tax-exempt organizations’ annual filing requirements, which took effect as of the beginning of 2007.
First, it mandated that small tax-exempt organizations, other than churches and church-related organizations, file an annual notice with the IRS if they were too small to file Form 990 or Form 990-EZ. (The Form 990-N was created for small tax-exempt organizations that had not previously had a filing requirement.) Second, it required all supporting organizations, regardless of their size, to file the standard Form 990 or Form 990-EZ. Finally, the law specifies that any tax-exempt organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.
Any tax-exempt organization that has not yet complied with these new requirements should do so immediately. If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status. Any income received between the revocation date and renewed exemption may be taxable.
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IR-2011-19, Feb. 23, 2011
WASHINGTON — The Internal Revenue Service announced today that nearly 100 IRS offices will be open on Saturday, Feb. 26, and Saturday, March 26, to help taxpayers. The location of participating offices is listed on IRS.gov.
"We are opening our doors on these Saturdays to help taxpayers who may not have a chance to seek assistance during the work week," said IRS Commissioner Doug Shulman. "If taxpayers need help preparing their tax returns or have an account question, we encourage them to visit one of our open houses." 
On Saturday, Feb. 26, and Saturday, March 26, the IRS offices will be open from 9 a.m. to 2 p.m. local time. IRS staff will be on site to help taxpayers work through issues. More than 35,000 taxpayers attended similar events last year resolving over 95 percent of their issues.
During the open-house hours, IRS personnel will be available to provide services such as tax return preparation, assist with account questions and help with a variety of other issues. IRS offices in 10 locations will also offer free seminars designed to provide information on new tax laws affecting federal tax returns and detail other services provided by the IRS.
In addition to IRS help, community organizations partner with the IRS. Volunteer Income Tax Assistance (VITA) programs assist people who earned $49,000 or less, and Tax Counseling for the Elderly (TCE) programs assist individuals age 60 and over with their 2010 income tax return preparation and electronic filing. Many of these sites have Saturday hours while others offer assistance at various times during the week. Taxpayers can call 800-906-9887 to locate partner sites in their area.
In addition to the open houses on Saturday, Feb. 26, and Saturday, March 26, the IRS expects to open many of its offices on two additional Saturdays later this year.
 
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IR-2011-17, Feb. 17, 2011
WASHINGTON — The Internal Revenue Service today announced that interest rates for the calendar quarter beginning April 1, 2011, will increase by one percentage point.  The rates will be: 
four (4) percent for overpayments (three (3) percent in the case of a corporation);
four (4) percent for underpayments;
six (6) percent for large corporate underpayments; and
one and one-half (1.5) percent for the portion of a corporate overpayment exceeding $10,000.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.  For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. 
Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points.  The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. 
The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.  Additionally, the rate for determining the addition to tax for failure to pay estimated tax for the first 15 days in April 2011 is the 4 percent rate that applied to underpayments of tax during the first calendar quarter in 2011.
The interest rates announced today are computed from the federal short-term rate during January 2011 to take effect February 1, 2011, based on daily compounding.
Revenue Ruling 2011-5PDF, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin No. 2011-13, dated March 28, 2011.
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IR-2011-15, Feb. 11, 2011
WASHINGTON — The Internal Revenue Service is requesting membership nominations for the Electronic Tax Administration Advisory Committee (ETAAC). The deadline for submitting applications is March 28, 2011.
ETAAC was established as required by the Internal Revenue Service Restructuring and Reform Act of 1998.The purpose of the ETAAC is to provide continued input into the development and implementation of the agency’s strategy for electronic tax administration as well as to provide an organized public forum for the discussion of issues in electronic tax administration.
This year’s vacancies require skills and qualifications related to e-file security and the accuracy of commercial tax software. See the ETAAC application for more details.
Nominations of qualified individuals may be made by letter and received from individuals or associations. A complete application package includes the nomination, application, a short statement of interest and resume. The application should describe and document the proposed member’s qualifications, past and current affiliations and/or dealings with tax software companies. A notice published in the Federal Register dated Feb. 3, 2011, contains more details about the ETAAC and the application process.
Members are approved by the Treasury Secretary and would serve three-year terms, beginning in the fall of 2011. Members must pass an IRS tax compliance check and Federal Bureau of Investigation (FBI) background investigation and may not be federally registered lobbyists.
Complete application packages must be sent to etaac@irs.gov or faxed to 202-283-2845 (not a toll-free number). You may email your questions to etaac@irs.gov or call Cassandra Daniels at 202-283-2178.
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IR-2011-33, March 31, 2011
WASHINGTON — The Treasury Department and the Internal Revenue Service (IRS) today announced that Form 8939PDF is not due on April 18, 2011, and should not be filed with the final Form 1040 of persons who died in 2010.
New guidance that announces the form due date will be issued at a later date and Form 8939 will be released soon after guidance is issued.
Form 8939, Allocation of Increase in Basis for Property Acquired from a Decedent, is an informational return used to establish basis for income tax purposes of property acquired from a person who died in 2010.
Under the Economic Growth and Tax Relief Reconciliation Act of 2001, the estate tax was repealed for persons who died in 2010. The executors of the estates of certain decedents who died in 2010 were previously required to file an information return (Form 8939) relating to large transfers at death, which was due on the date of the decedent’s final Form 1040 or a later date specified in regulations issued by the Treasury Department.
Enacted in December of last year, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 reinstated the estate tax for persons who died in 2010.
The law allows executors of the estates of decedents who died in 2010 to elect to have the rules of the estate tax not apply to the property of a decedent’s estate. This election is to be made at the time and in the manner prescribed by the Treasury Department.
Treasury and the IRS plan to issue future guidance that will provide a deadline for filing Form 8939 and for electing to have the estate tax rules not apply to the estates of persons who died in 2010. 
The prior deadline was April 18, which remains the deadline for filing a decedent’s final Form 1040 this filing season.  The forthcoming guidance will also explain the manner in which an executor of an estate may elect to have the estate tax not apply.
A reasonable period of time for preparation and filing will be given between issuance of the guidance and the deadline for filing Form 8939 and for electing to have the estate tax rules not apply.
The Form 8939 is not currently available, but will be made available soon after the guidance is issued. Both will be made available on IRS.gov.
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IR-2011-32, March 31, 2011
WASHINGTON — Internal Revenue Service officials announced today that the six-year-old Compliance Assurance Process (CAP) pilot program for large corporate taxpayers is being expanded and made permanent.
“This marks another important step in our evolving relationship with corporate taxpayers,” said IRS Commissioner Doug Shulman. “Through greater cooperation and transparency, CAP taxpayers and the IRS both benefit.”
Under CAP, participating taxpayers work collaboratively with an IRS team to identify and resolve potential tax issues before the tax return is filed each year. With the major potential tax issues largely settled before filing, taxpayers are generally subject to shorter and narrower post-filing examinations.
With the CAP program growing in popularity, it is being expanded to include two additional components. A new pre-CAP program will provide interested taxpayers with a clear roadmap of the steps required for gaining entry into CAP.
A new CAP maintenance program is intended for taxpayers who have been in CAP, have fewer complex issues, and have established a track record of working cooperatively and transparently with the IRS.
“CAP is a program where the tax system is at its best -- when the taxpayer and the IRS are transparent and issues are resolved before a return is filed,” Shulman said.
Details of the permanent program, including the new pre-CAP program and CAP maintenance program, are included in a revision to the Internal Revenue Manual, a revised application and memorandums of understanding (MOU)  that corporations are required to submit to participate in pre-CAP and CAP.
The CAP pilot began in 2005 with 17 taxpayers and in FY 2011 there are 140 taxpayers participating.  Only taxpayers with assets of $10 million or more are eligible to participate.
For more information on the Compliance Assurance Process (CAP), visit Compliance Assurance Process on IRS.gov.
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