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IR-2020-14, January 16, 2020
WASHINGTON — As the 2020 tax season approaches, the Internal Revenue Service today encouraged taxpayers, businesses, tax professionals and others to take advantage of a variety of improved e-mail subscription services.
The e-News Subscription Service has been redesigned and updated in recent months to make it easier to subscribe to specific areas that people and organizations are interested in. Among others, the IRS offers subscription services tailored to tax exempt and government entities, small and large businesses and individuals.
The IRS currently has 20 registration-based e-News options, including:
IRS Tax Tips – These brief, concise tips in plain language that cover a wide-range of topics of general interest to taxpayers. They include the latest on tax scams and schemes, tax reform, tax deductions, filing extensions and amending a return. IRS Tax Tips are distributed daily during tax season and periodically throughout the year.
IRS Newswire − Subscribers to IRS Newswire receive news releases the day they are issued. These cover a wide range of tax administration issues ranging from breaking news to details related to legal guidance.
IRS News in Spanish (Noticias del IRS en Español) − Readers get IRS news releases, tax tips and updates in Spanish as they are released. Subscribe at Noticias del IRS en Español.
e-News for Tax Professionals − Includes a weekly roundup of news releases and legal guidance specifically designed for the tax professional community. Subscribing to e-News for Tax Professionals gets tax pros a weekly summary, typically delivered on Friday afternoons.
IRS Outreach Connection − This newest IRS subscription offering delivers up-to-date materials for tax professionals and partner groups inside and outside the tax community. The material for Outreach Connection is specifically designed so subscribers can share the material with their clients or members through email, social media, internal newsletters, e-mails or external websites. Subscribe by visiting IRS.gov/outreachconnect.
For more information and other IRS subscriptions designed for specific groups, visit IRS e-News Subscriptions. The resources will help taxpayers and organizations keep up with the latest information during and after filing season.
IR-2020-13, January 16, 2020
WASHINGTON – Most taxpayers can do both their federal and state tax returns for free online through Free File offered either by the IRS or by states that have a similar public-private partnership.
For 2020, taxpayers whose prior-year adjusted gross income was $69,000 or less, and that's most people, can use IRS Free File. Generally, taxpayers must complete their federal tax return before they can begin their state taxes.
More than 20 states also have a state Free File program patterned after federal partnership which means many taxpayers are eligible for free federal and free state online tax preparation. Those states are: Arkansas, Arizona, Georgia, Idaho, Indiana, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, Mississippi, Montana, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, Vermont, Virginia and West Virginia, plus the District of Columbia.
In addition, IRS Free File partners – featuring 10 brand-name online products - offer most or some state tax returns for free as well. Some may also charge so it is important for taxpayers to explore their free options.
Here's how Free File works:
Go to IRS.gov/freefile to see all Free File options.
	 
Browse each of the 10 offers or use a "look up" tool to help you find the right product. Each Free File partner sets its own eligibility standards generally based on income, age and state residency. But if your adjusted gross income was $69,000 or less, you will find at least one free product to use. Two products are in Spanish.
	 
Select a provider and follow the links to their web page to begin your tax return.
	 
Complete and e-file your tax return only if you have all the income and deduction records you need. The fastest way to get a refund is by filing electronically and selecting direct deposit. If you owe, use direct pay or electronic options.
	 
Free File partners will charge a fee for state tax return preparation unless their offer outlines upfront that you can file both federal and state returns for free. If you want to use one of the state Free File program products, go to your state tax agency's Free File page.
For residents of Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming, IRS Free File may be the only tax product you need. Those states do not have an income tax.
IR-2020-12, January 16, 2020
WASHINGTON – The Internal Revenue Service today announced it will return sequestered funds to businesses that were affected by a recent Office of Management and Budget (OMB) determination regarding the Balanced Budget and Emergency Deficit Control Act of 1985, as amended.
The IRS will restore any amounts sequestered since 2013 under section 168(k)(4). OMB determined that the refundable corporate minimum tax credit claimed under sections 53 and 168(k)(4) of title 26, U.S. Code as in effect for taxable years beginning before Jan. 1, 2018, is not subject to sequestration.
The IRS has a complete list of all taxpayers affected so taxpayers do not need to take any action. Funds and applicable interest will be sent out during fiscal year 2020. Less than 1,000 businesses were affected by the OMB determination. Funds due a company will be used to offset current tax liabilities first.
Formerly, refund payments issued to, and credit elect and refund offset transactions for, corporations claiming refundable minimum tax credits for prior year alternative minimum tax liability were subject to sequestration. The OMB determination corrects and reverses the previous determination.
Additional information will be shared regarding the timing and process for these reimbursements when it is available.
IR-2020-11, January 15, 2020
WASHINGTON — The Internal Revenue Service and Department of the Treasury issued Revenue Procedure 2020-11 PDF that establishes a safe harbor extending relief to additional taxpayers who took out federal or private student loans to finance attendance at a nonprofit or for-profit school.
Relief is also extended to any creditor that would otherwise be required to file information returns and furnish payee statements for the discharge of any indebtedness within the scope of this revenue procedure.
The Treasury Department and the IRS have determined that it is appropriate to extend the relief provided in Rev. Proc. 2015-57, Rev. Proc. 2017-24 and Rev. Proc. 2018-39 to taxpayers who took out federal and private student loans to finance attendance at nonprofit or other for-profit schools not owned by Corinthian College, Inc. or American Career Institutes, Inc.
The Revenue Procedure provides relief when the federal loans are discharged by the Department of Education under the Closed School or Defense to Repayment discharge process, or where the private loans are discharged based on settlements of certain types of legal causes of action against nonprofit or other for-profit schools and certain private lenders.
Taxpayers within the scope of this revenue procedure will not recognize gross income as a result of the discharge, and the taxpayer should not report the amount of the discharged loan in gross income on his or her federal income tax return.
Additionally, the IRS will not assert that a creditor must file information returns and furnish payee statements for the discharge of any indebtedness within the scope of this revenue procedure. To avoid confusion, the IRS strongly recommends that these creditors not furnish students nor the IRS with a Form 1099-C.
IR-2020-10, January 15, 2020
WASHINGTON — Seniors and retirees whose income is under $69,000 a year should explore IRS Free File for free online tax preparation.
Seniors are one of the key constituents for Free File which has served 57 million taxpayers and saved them $1.7 billion since the online filing service debuted in 2003.
Free File – which features 10 brand-name tax software providers – also offers the new Form 1040-SR option for seniors over the age of 65.
"When you're on a fixed income, every penny saved matters. With Free File, you can save lots of pennies. Free File also does all the hard work for you. It finds the right forms, benefits and does all the math," said Ken Corbin, commissioner of IRS' Wage and Investment division.
Free File supports all the major forms that can be filed electronically so even if your return is a bit more complex, you can still use a free service.
Here's how Free File works:
Go to IRS.gov/freefile to see all Free File options.
	 
Browse each of the 10 offers or use a "look up" tool to help you find the right product. Each Free File partner sets its own eligibility standards generally based on income, age and state residency. But if your adjusted gross income was $69,000 or less, you will find at least one free product to use. Two products are in Spanish.
	 
Select a provider and follow the links to their web page to begin your tax return.
	 
Complete and e-file your tax return only if you have all the income and deduction records you need. The fastest way to get a refund is by filing electronically and selecting direct deposit. If you owe, use direct pay or electronic options.
Free File providers also offer state tax return preparation, some for free and some for a fee. Again, use the "look up" tool to find the right product. Here's another plus for Free File: you can use your smart phone or tablet to do your taxes. Just go to IRS.gov/freefile on your device. All Free File products are enabled for mobile devices.
Seniors who are not comfortable preparing their own tax return still have other free options. The IRS helps support the Volunteer Income Tax Assistance program and AARP supports the Tax Counseling for the Elderly program. Volunteers will prepare your tax return for you for free. Use the VITA locator tool to find a VITA/TCE location near you.
Free File is available now through October to accommodate extension filers.
IRS YouTube Videos:
IRS Tax Withholding Estimator – English | Spanish (obsolete)
IR-2020-09, January 14, 2020
WASHINGTON — The Internal Revenue Service has launched a new and improved Tax Withholding Estimator, designed to help workers target the refund they want by having the right amount of federal income tax taken out of their pay.
The Tax Withholding Estimator, now available on IRS.gov, incorporates the changes from the redesigned Form W-4, Employee's Withholding Certificate, that employees can fill out and give to their employers this year.
The IRS urges everyone to see if they need to adjust their withholding by using the Tax Withholding Estimator to perform a Paycheck Checkup. If an adjustment is needed, the Tax Withholding Estimator gives specific recommendations on how to fill out their employer's online Form W-4 or provides the PDF form with key parts filled out.
To help workers more effectively adjust their withholding, the improved Tax Withholding Estimator features a customized refund slider that allows users to choose the refund amount they prefer from a range of different refund amounts. The exact refund range shown is customized based on the tax information entered by that user.
Based on the refund amount selected, the Tax Withholding Estimator will give the worker specific recommendations on how to fill out their W-4. This new feature allows users who seek either larger refunds at the end of the year or more money on their paychecks throughout the year to have just the right amount withheld to meet their preference.
The new Tax Withholding Estimator also features several other enhancements, including one allowing anyone who expects to receive a bonus to indicate whether tax will be withheld. In addition, improvements added last summer continue to be available, including mobile-friendly design, handling of pension income, Social Security benefits and self-employment tax.
Starting in 2020, income tax withholding is no longer based on an employee's marital status and withholding allowances, tied to the value of the personal exemption. Instead, income tax withholding is generally based on the worker's expected filing status and standard deduction for the year. In addition, workers can choose to have itemized deductions, the Child Tax Credit and other tax benefits reflected in their withholding for the year.
It is important for people with more than one job at a time (including families in which both spouses work) to adjust their withholding to avoid having too little withheld. Using the Tax Withholding Estimator is the most accurate way to do this. As in the past, employees can also choose to have an employer withhold an additional flat-dollar amount each pay period to cover, for example, income they receive from the gig economy, self-employment, or other sources that is not subject to withholding.
 For more information about the updated Tax Withholding Estimator and the redesigned 2020 Form W-4, visit Tax Withholding Estimator FAQs and the FAQs on the 2020 Form W-4.
IR-2020-08, January 14, 2020
WASHINGTON — Filing taxes for the first time or working part-time? IRS Free File may be the perfect match for people looking to save money on federal tax preparation.
Most Free File users are under the age of 30 with modest incomes. The Free File adjusted gross income limit for 2020 is $69,000. For those who want to do their own taxes, Free File means free tax preparation, free electronic filing and free direct deposit, which is the fastest way to get a refund.
"Doing your taxes may seem a bit overwhelming, but it's not. Free File does the hard work for you. The software finds the right forms, finds any tax benefits and does all the math," said Ken Corbin, commissioner of the IRS' Wage and Investment division. "Here's a key tip: have all your income records like your Form W-2 ready before you start."
Another plus: Free File is mobile enabled. Taxpayers can use their smart phones or tablets to do their taxes.
Free File features 10 brand-name tax software providers who are in a partnership with the IRS to offer their online products for free. Each provider sets additional eligibility requirements, generally based on age, state residency and income.
Here's how Free File works:
Go to IRS.gov/freefile to see all Free File options.
	 
Browse each of the 10 offers or use a "look up" tool to help you find the right product. Each Free File partner sets its own eligibility standards generally based on income, age and state residency. But if your adjusted gross income was $69,000 or less, you will find at least one free product to use. Two products are in Spanish.
	 
Select a provider and follow the links to their webpage to begin your tax return.
	 
Complete and e-file your tax return only if you have all the income and deduction records you need. The fastest way to get a refund is by filing electronically and selecting direct deposit. If you owe, use direct pay or electronic options.
If this is the first time that you've filed a federal tax return and you are single, here's what you need before you start:
Social Security number.
	 
Wage and income information i.e. Form W-2 or Form 1099. Remember: parts of college scholarships or grants may be taxable income.
	 
Check with your parents to make sure they are not claiming you as a dependent. You may still file a separate tax return but if you are being claimed as a dependent by others, you cannot claim yourself as a dependent.
	 
Documentation for all tax credits and deductions. Remember: the standard deduction has been greatly increased so that itemizing your deductions may not be necessary.
	 
For all electronic tax returns, you must use your prior-year adjusted gross income as part of your electronic signature. If you are a first-time filer over the age of 16, simply enter 0 (zero) as your prior-year income for signature purposes. If you filed before, your prior-year tax return will show your adjusted gross income.
	 
Bank account and routing number. If you are receiving a refund, and most people do, the fastest way to get a refund is through direct deposit to a financial account.
Free File is available now through October to accommodate extension filers.
IR-2020-07, January 13, 2020
WASHINGTON – The Internal Revenue Service today reminded active duty military personnel that IRS Free File offers them multiple options for free federal tax preparation.
Free File is for individuals or families whose adjusted gross income was $69,000 or less last year. Free File is a private-public partnership between the IRS and the Free File Inc.
"The IRS takes special steps to help military members and their families with their taxes, and the Free File program is part of that effort," said IRS Commissioner Chuck Rettig. "Almost 10% of the IRS workforce are veterans. We greatly appreciate the service to the nation of every veteran and their supportive families, and we will do all we can to assist them."
For active duty military and their spouses, Free File has a special offer. Individuals and their families who meet the income limitation may choose from any of nine companies without regard to additional eligibility requirements.
The nine special offers are from 1040Now, Inc., FileYourTaxes.com, Free tax Returns.com, H&R Block, On-Line Taxes, Inc., Tax ACT, TaxHawk, Inc., TaxSlayer (English and Spanish) and TurboTax.
Active duty military stationed in combat zones also have more time to file their tax returns. However, those with spouses and families may opt to file as soon as they are able to claim various tax benefits for which they may be eligible. If only one spouse is present to file a joint return, they must have proper authorization to file a joint tax return on behalf of their spouse.
The IRS will begin processing tax returns on January 27. With Free File, you can use any digital device, personal computer, tablet or smart phone. Free File products are mobile enabled so you can do your taxes on your smart phone or tablet and e-file with your hand-held device.
Here's how Free File works:
Go to IRS.gov/freefile to see all Free File options.
Military personnel who meet the income requirement can select from any of the nine providers that have "Free for Active Military for Adjusted Gross Income of $69,000 or less" in their offer. Nine of the 10 partners are making the offer. One product is in Spanish.
Select a provider and follow the links to their web page to begin your tax return.
Complete and e-file your tax return only if you have all the income and deduction records you need. The fastest way to get a refund is by filing electronically and selecting direct deposit. If you owe, use direct pay or electronic options.
Generally, each Free File partner sets additional eligibility requirements that civilian taxpayers must meet. Non-military personnel should use the "look up" tool at IRS.gov/freefile to find the best match.
Military members can get more information on their special tax benefits at IRS.gov/military.
Free File is available now through October to accommodate extension filers.
IR-2020-04, January 9, 2020
WASHINGTON — The Internal Revenue Service this week launched a new Gig Economy Tax Center on IRS.gov to help people in this growing area meet their tax obligations through more streamlined information.
"The IRS developed this online center to help taxpayers in this emerging segment of the economy," said IRS Commissioner Chuck Rettig. "Whether renting out a spare bedroom or providing car rides, we want people to understand the rules so they can stay compliant with their taxes and avoid surprises down the line."
The gig economy is also known as the sharing, on-demand or access economy. It usually includes businesses that operate an app or website to connect people to provide services to customers. While there are many types of gig economy businesses, ride-sharing and home rentals are two of the most popular.
Educating gig economy workers about their tax obligations is vital because many don't receive form W-2s, 1099s or other information returns for their work in the gig economy. However, income from these sources is generally taxable, regardless of whether workers receive information returns. This is true even if the work is fulltime, part-time or if the person is paid in cash. Workers may also be required to make quarterly estimated income tax payments, pay their share of Federal Insurance Contribution (FICA), Medicare and Additional Medicare taxes if they are employees and pay self-employment taxes if they are not considered to be employees.
The Gig Economy Tax Center streamlines various resources, making it easier for taxpayers to find information about the tax implications for the companies that provide the services and the individuals who perform them.
It offers tips and resources on a variety of topics including:
filing requirements
making quarterly estimated income tax payments
paying self-employment taxes
paying FICA, Medicare and Additional Medicare
deductible business expenses
special rules for reporting vacation home rentals
For more information, check out the new Gig Economy Tax Center on IRS.gov.
More resources:
Gig Economy and your taxes: things to knowPDF
IR-2020-02, January 6, 2020
WASHINGTON ― The Internal Revenue Service confirmed that the nation's tax season will start for individual tax return filers on Monday, January 27, 2020, when the tax agency will begin accepting and processing 2019 tax year returns.
The deadline to file 2019 tax returns and pay any tax owed is Wednesday, April 15, 2020. More than 150 million individual tax returns for the 2019 tax year are expected to be filed, with the vast majority of those coming before the traditional April tax deadline.
"As we enter the filing season, taxpayers should know that the dedicated workforce of the IRS stands ready to help," said IRS Commissioner Chuck Rettig. "We encourage taxpayers to plan ahead and use the tools and information available on IRS.gov. The IRS and the nation's tax community are committed to making this another smooth filing season."
The IRS set the January 27 opening date to ensure the security and readiness of key tax processing systems and to address the potential impact of recent tax legislation on 2019 tax returns.
While taxpayers may prepare returns through the IRS' Free File program as well as many tax software companies and tax professionals before the start date, processing of those returns will begin after IRS systems open later this month.
"The IRS encourages everyone to consider filing electronically and choosing direct deposit," Rettig said. "It's fast, accurate and the best way to get your refund as quickly as possible."
Filing electronically flags common errors and prompts taxpayers for missing information. Taxpayers can get free help preparing and filing taxes through IRS Free File online or free tax help from trained volunteers at community sites around the country. The IRS also reminds taxpayers that they don't have to wait until January 27 to start their tax return or contact a reputable tax preparer.
In addition, IRS tax help is available 24 hours a day on IRS.gov, the official IRS website, where people can find answers to tax questions and resolve tax issues online. The Let Us Help You page helps answer most tax questions, and the IRS Services GuidePDF links to these and other IRS services.
IR-2020-01, January 6, 2020
WASHINGTON — The Internal Revenue Service today released a new annual report highlighting accomplishments across the nation's tax agency during Fiscal Year 2019.
"Internal Revenue Service Progress Update/Fiscal Year 2019 – Putting Taxpayers First" PDF provides an overview of a variety of operations across taxpayer service, compliance and support areas. The 41-page document is built around the agency's six strategic goals.
"This report is about more than what happened during the past year," IRS Commissioner Chuck Rettig wrote in the report's opening message to taxpayers. "It's also designed to provide insight into the people serving this country on behalf of the IRS and provide a glimpse into the future."
The report highlights the work of IRS employees supporting the nation's tax system during the past year. This covers a variety of taxpayer service efforts, including development of a new Taxpayer Withholding Estimator, as well as operations support efforts on areas involving Information Technology modernization, Human Capital Office initiatives and others.
The report also focuses on Criminal Investigation results and efforts involving civil enforcement. Ongoing compliance areas, among them micro-captives, syndicated conservation easements and virtual currency, are also included in the publication.
The report also covers IRS implementation of new tax laws, ranging from steps to put in place provisions of the Tax Cuts and Jobs Act to ongoing work underway on the new Taxpayer First Act of 2019.
The resource document is designed to complement other documents, including the annual IRS Data Book.
"We continually strive to put taxpayers first," Rettig said. "The IRS leadership team and our entire workforce are excited about the direction of our agency as outlined in this report."
IR-2020-46, February 28, 2020
WASHINGTON – The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning April 1, 2020. The rates will be:
five (5) percent for overpayments (four (4) percent in the case of a corporation);
two and one-half (2.5) percent for the portion of a corporate overpayment exceeding $10,000;
five (5) percent for underpayments; and
seven (7) percent for large corporate underpayments. 
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.
The interest rates announced today are computed from the federal short-term rate determined during January 2020 to take effect February 1, 2020, based on daily compounding.
Revenue Ruling 2020-7PDF, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2020-12, dated March 16, 2020.
IR-2020-41, February 24, 2020
WASHINGTON — The Internal Revenue Service announced today that Brendan O'Dell will serve as the agency's new promoter investigations coordinator.
O'Dell, currently a senior advisor in the IRS Large Business & International (LB&I) Division, will coordinate promoter activity across the agency and will serve as the point person for Commissioner Chuck Rettig and IRS leadership on promoter investigations. He will serve in a temporary detail assignment as coordinator, and the IRS anticipates it will begin a national search in the near future for a person to permanently fill the position.
He will work with the IRS business units, the Office of Professional Responsibility, Criminal Investigation, Chief Counsel and other IRS offices to ensure coordination of ongoing investigations and develop new approaches to identify promoters of aggressive tax arrangements. O'Dell will also assist IRS business units in developing and resolving cases both individually and with a view toward strategic promoter enforcement.
"Brendan brings a strong set of skills and experience from inside and outside the IRS, which will be an asset in this important new position," said Sunita Lough, IRS Deputy Commissioner for Services and Enforcement. "He will play a leading role coordinating promoter investigations, an emerging priority concern for the IRS to help improve compliance and ensure fairness in the tax system."
O'Dell will report directly to Lough's office, beginning the assignment in early April.
In his current position, O'Dell advises the LB&I Commissioner on strategic issues impacting LB&I and supports the Director of LB&I's Pass‐Through Entities Practice Area.
Prior to joining LB&I, O'Dell was an attorney‐advisor to the Tax Legislative Counsel in the Office of Tax Policy at the Department of the Treasury from 2016‐2019. In the Office of Tax Policy, O'Dell was responsible for IRS procedure and administration issues and was the lead Treasury attorney responsible for the development of the regulations and other guidance implementing the Centralized Partnership Audit Regime enacted in 2015.
Prior to joining the Treasury Department, he spent a number of years in private practice, focusing on tax controversy and tax litigation. O'Dell received his J.D. from Georgetown University Law Center and his B.S. from St. Lawrence University.
IR-2020-40, February 24, 2020
WASHINGTON — The Internal Revenue Service has released its newly-revised tax guide, designed to help members of the military understand the many special tax benefits available to them under the law.
Publication 3, Armed Forces' Tax Guide, now posted on IRS.gov, is packed with useful filing tips for any member of the military, including reservists and the National Guard, regardless of whether they are stationed in the U.S. or abroad.
Among other things, this free publication describes the provision allowing armed forces reservists to deduct their reservist-related travel expenses, regardless of whether they itemize their deductions. It also describes the moving expense deduction still available to active-duty members of the military in connection with a change of station.
The publication covers the special benefits available to those serving in a combat zone, including the full or partial exclusion of combat pay and special rules for determining the IRA contribution limit. Also included in this publication are special rules for figuring the Earned Income Tax Credit for low- and moderate-income workers and families and the extended deadlines available for filing returns, paying taxes and claiming refunds.
To view or download this free publication, visit IRS.gov/pub3.
More resources:
FS-2020-03, Tax filing tips for military service members and veterans
IR-2020-39, February 24, 2020
WASHINGTON — The Internal Revenue Service issued proposed regulations on the business expense deduction for meals and entertainment following changes made by the Tax Cuts and Jobs Act (TCJA).
The 2017 TCJA eliminated the deduction for any expenses related to activities generally considered entertainment, amusement or recreation. It also limited the deduction for expenses related to food and beverages provided by employers to their employees.
These proposed regulations address the elimination of the deduction for expenditures related to entertainment, amusement or recreation activities and provide guidance to determine whether an activity is considered to be entertainment. The proposed regulations also address the limitation on the deduction of food and beverage expenses.
The proposed regulations affect taxpayers who pay or incur expenses for meals or entertainment. These proposed regulations generally follow Notice 2018-76PDF, issued on October 15, 2018, which provided transitional guidance on the deductibility of expenses for certain business meals.
Taxpayers affected by this change and other interested parties may submit comments on the proposed regulations. The IRS will hold a public hearing on these proposed regulations on April 7, 2020.
IR-2020-38, February 21, 2020
WASHINGTON – The Treasury Department and Internal Revenue Service today issued Revenue Procedure 2020-13PDF providing procedures for farmers who have elected out of certain capitalization rules and want to apply the small business taxpayer exemption in the same taxable year.
The Tax Cuts and Jobs Act (TCJA) added a provision exempting small business taxpayers from the capitalization rules under section 263A. A taxpayer, other than a tax shelter, qualifies as a small business taxpayer by satisfying the gross receipts test for the taxable year. To satisfy the gross receipts test, a farming business must have gross receipts of $25 million or less for taxable years beginning in 2018, and $26 million or less for taxable years beginning in 2019. 
Unlike the section 263A(d)(3) election, the small business taxpayer exemption does not require the special rules for the use of the Alternative Depreciation System (ADS) or characterization of certain property as section 1245 property.
Today's guidance provides procedures for farmers to revoke their election under section 263A(d)(3) and apply the small business taxpayer exemption under section 263A(i) in the same taxable year. It also provides procedures for eligible farmers that want to make an election under section 263A(d)(3) in the same taxable year that they no longer qualify as small business taxpayers.
Updates on the implementation of the TCJA can be found on the Tax Reform page of IRS.gov.
IR-2020-37, February 20, 2020
WASHINGTON — The Internal Revenue Service reminds farmers and fishermen who chose to forgo making quarterly estimated tax payments that they must file their 2019 Form 1040 along with a payment for all taxes owed by Monday, March 2, 2020.
This special rule normally applies to taxpayers whose farming or fishing income was at least two-thirds of their total gross income in either the current or the preceding tax year. Farmers and fishermen can avoid the estimated tax penalty by both filing and paying all taxes due by March 2. Those who chose to make an estimated tax payment, on or before Jan. 15, 2020, can instead wait and file by the regular April 15 deadline.
IRS Direct Pay is safe, free
The IRS urges farmers and fishermen to take advantage of the speed, convenience and security of IRS Direct Pay to pay their taxes. Anyone can use this free online service to quickly make federal individual income tax payments or quarterly estimated tax payments directly from their checking or savings account. There are no IRS fees and no pre-registration.
IRS Direct Pay is available seven days a week and payments can be scheduled up to 30 days in advance. Users receive instant confirmation after they submit a payment or they can opt in to receive email notifications.
IRS Direct Pay cannot be used to pay the federal highway use tax, payroll taxes or other business taxes. Anyone wishing to pay these business taxes electronically can enroll in the Electronic Federal Tax Payment System (EFTPS). Like IRS Direct Pay, EFTPS is also a free service.
For more information about these and other payment options, visit IRS.gov/payments.
Related items
Tax Topic 416, Farming and Fishing Income
Publication 5034, Need to Make a Tax Payment? (English and Spanish)PDF
IR-2020-35, February 19, 2020                                                      
WASHINGTON — The Internal Revenue Service today issued guidance to help businesses understand how legislation passed in 2018 may benefit those claiming carbon capture credits. Today's guidance addresses the definition of "beginning of construction" and provides a safe harbor for partnership allocations of the credit.
After the enactment of the Bipartisan Budget Agreement in February 2018, the IRS issued Notice 2019-32PDF requesting comments from taxpayers regarding the changes to the carbon capture credit in the new law. After carefully considering the comments, the IRS is issuing guidance to provide clarity, especially regarding the definition of "beginning of construction."
In Notice 2020-12PDF, the IRS provides guidance to help businesses determine when construction has begun on a qualified facility or on carbon capture equipment that may be eligible for the carbon capture credit. This notice provides broad guidance in lieu of taxpayers requesting private letter rulings in this area.
In Revenue Procedure 2020-12PDF, the IRS creates a safe harbor for the allocation rules for carbon capture partnerships similar to the safe harbors developed for partnerships receiving the wind energy production tax credit and the rehabilitation credit. The safe harbor simplifies the application of carbon capture credit rules to partnerships able to claim the credit.
The IRS anticipates issuing further guidance in the near future on issues ranging from secure geological storage to utilization to recapture of the credit for those claiming credits for carbon capture.
IR-2020-32, February 14, 2020
WASHINGTON — The IRS and its Security Summit partners today called on tax professionals and taxpayers to use the free, multi-factor authentication feature being offered on tax preparation software products.
Already, nearly two dozen tax practitioner firms have reported data thefts to the IRS this year. Use of the multi-factor authentication feature is a free and easy way to protect clients and practitioners' offices from data thefts. Tax software providers also offer free multi-factor authentication protections on their Do-It-Yourself products for taxpayers.
"The IRS, state tax agencies and the private-sector tax industry have worked together as the Security Summit to make sure the multi-factor authentication feature is available to practitioners and taxpayers alike," said Kenneth Corbin, Commissioner of the IRS Wage and Investment division. "The multi-factor authentication feature is simple to set up and easy to use. Using it may just save you from the financial pain and frustration of identity theft."
Multi-factor authentication means returning users must enter their username/password credentials plus another data point that only they know, such as a security code sent to their mobile phone. For example, thieves may steal passwords but will be unable to access the software accounts without the mobile phones to receive the security codes.
Multi-factor authentication protections are now commonly offered by financial institutions, email providers and social media platforms to protect online accounts. Users should always opt for multi-factor authentication when it is offered but especially with tax software products because of the sensitive data held in the software or online accounts.
The IRS reminded tax professionals to beware of phishing scams that are commonly used by thieves to gain control of their computers. Thieves may claim to be a potential client, a cloud storage provider, a tax software provider or even the IRS in their effort to trick tax professionals to download attachments or open links. These scams often have an urgent message, implying there are issues with the tax professionals' accounts that need immediate attention.
The IRS also reminds tax professionals that they can track the number of returns filed with their Electronic Filing Identification Number (EFIN) on a weekly basis. This helps ensure EFINS are not being misused. Simply go to e-Services, access the EFIN application and select EFIN status to see a weekly total of returns filed using the EFIN. If there are excessive returns, contact the IRS immediately.
Taxpayers can learn more about identity theft and how to protect themselves at Identity Theft Central on IRS.gov.
Tax professionals can learn more about protecting data, signs of theft or reporting data thefts Identity Theft Information for Tax Professionals. Also, Publication 4557, Safeguarding Taxpayer DataPDF, provides a comprehensive overview of steps to protect computer systems and client data.
IR-2020-29, February 12, 2020
WASHINGTON — The Internal Revenue Service is holding a free webinar designed to help gig workers, employers, contractors and other businesses understand their tax reporting responsibilities.
This free 60-minute webinar will take place on Thursday, February 20 at 2 p.m. Eastern Time. It is open to gig workers, businesses, tax professionals and anyone else interested in the tax rules that affect the gig economy. Tax pros can earn one continuing education credit.
Topics to be covered include:
What is the gig economy?
How does a gig worker know whether they are an employee or self-employed?
Business expenses and recordkeeping.
Rules for home rentals.
Tax payment options.
The webinar will feature a live question and answer session and will be closed captioned for viewers who are deaf or hearing impaired. Anyone interested in attending can register online.
For more information on the gig economy, visit Understanding the Gig Economy and the Gig Economy Tax Center on IRS.gov.
Archived versions of past IRS webinars are available at www.irsvideos.gov
Focuses on needs of taxpayers, tax professionals and businesses
IR-2020-27, February 3, 2020
WASHINGTON — The Internal Revenue Service today launched Identity Theft Central, designed to improve online access to information on identity theft and data security protection for taxpayers, tax professionals and businesses.
Located on IRS.gov, Identity Theft Central is available 24/7 at IRS.gov/identitytheft. It is a resource on how to report identity theft, how taxpayers can protect themselves against phishing, online scams and more.
Improving awareness and outreach are hallmarks of initiatives to combat identity theft coordinated by the IRS, state tax agencies and the nation's tax industry, all working in partnership under the Security Summit banner.
Since 2015, the Security Summit partners have made substantial progress in the fight against tax-related identity theft. But thieves are still constantly looking for ways to steal the identities of individuals, tax professionals and businesses in order to file fraudulent tax returns for refunds.
The partnership has taken a number of steps to help educate and improve protections for taxpayers, tax professionals and businesses. As part of this effort, the IRS has redesigned the information into a new, streamlined page − Identity Theft Central − to help people get information they need on ID theft, scams and schemes.
From this special page, people can get specific information including:
Taxpayer Guide to Identity Theft, including what to do if someone becomes a victim of identity theft
Identity Theft Information for Tax Professionals, including knowing responsibilities under the law
Identity Theft Information for Businesses, including how to recognize the signs of identity theft
The page also features videos on key topics that can be used by taxpayers or partner groups. The new page includes a video message from IRS Commissioner Chuck Rettig, warning signs for phishing email scams – a common tactic used for identity theft – and steps for people to protect their computer and phone.
Tax professionals and others may want to bookmark Identity Theft Central and check their specific guidance periodically for updates.
This is part of an ongoing effort by the IRS to share identity theft-related information with the public. The IRS continues to look for ways to raise awareness and improve education and products related to identity theft for taxpayers and the tax professional community.
IR-2020-62, March 31, 2020
WASHINGTON — The Treasury Department and the Internal Revenue Service today launched the Employee Retention Credit, designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.
Does my business qualify to receive the Employee Retention Credit?
The credit is available to all employers regardless of size, including tax-exempt organizations. There are only two exceptions: State and local governments and their instrumentalities and small businesses who take small business loans.
Qualifying employers must fall into one of two categories:
The employer's business is fully or partially suspended by government order due to COVID-19 during the calendar quarter.
The employer's gross receipts are below 50% of the comparable quarter in 2019. Once the employer's gross receipts go above 80% of a comparable quarter in 2019, they no longer qualify after the end of that quarter.
These measures are calculated each calendar quarter.
How is the credit calculated?
The amount of the credit is 50% of qualifying wages paid up to $10,000 in total. Wages paid after March 12, 2020, and before Jan. 1, 2021, are eligible for the credit. Wages taken into account are not limited to cash payments, but also include a portion of the cost of employer provided health care.
How do I know which wages qualify?
Qualifying wages are based on the average number of a business's employees in 2019.
Employers with less than 100 employees: If the employer had 100 or fewer employees on average in 2019, the credit is based on wages paid to all employees, regardless if they worked or not. If the employees worked full time and were paid for full time work, the employer still receives the credit.
Employers with more than 100 employees: If the employer had more than 100 employees on average in 2019, then the credit is allowed only for wages paid to employees who did not work during the calendar quarter.
I am an eligible employer. How do I receive my credit?
Employers can be immediately reimbursed for the credit by reducing their required deposits of payroll taxes that have been withheld from employees' wages by the amount of the credit.
Eligible employers will report their total qualified wages and the related health insurance costs for each quarter on their quarterly employment tax returns or Form 941 beginning with the second quarter. If the employer's employment tax deposits are not sufficient to cover the credit, the employer may receive an advance payment from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19.
Eligible employers can also request an advance of the Employee Retention Credit by submitting Form 7200.
Where can I find more information on the Employer Retention Credit and other COVID-19 economic relief efforts? 
Updates on the implementation of this Employee Retention Credit, Frequently Asked Questions on Tax Credits for Required Paid Leave  and other information can be found on the Coronavirus page of IRS.gov.