etrent17/irs-articles huggingface dataset:
IR-2019-166, October 8, 2019
WASHINGTON – The Internal Revenue Service is participating in National Work and Family Month by issuing a series of informative tips on work-life balance throughout the month of October. The agency plans a series of news releases, fact sheets and tax tips. Topics covered include family-owned businesses, family tax credits, military tax benefits and scams and security issues.
National Work and Family Month was established in 2003 by a Senate resolution. The month of October was chosen to help communicate and celebrate progress towards creating more flexible work environments and helping individuals better balance their work-life commitments.
Employer Credit for Paid Family and Medical Leave
This tax benefit helps highlight the spirit of National Work and Family Month. Under tax reform, eligible employers who provide paid family and medical leave to their employees in 2019 may qualify for a business credit.
To qualify, an employer must have a written policy that provides:
At least two weeks of paid family and medical leave annually to full-time employees, prorated for part-time employees.
Family and medical leave pay that is at least 50% of employee's wages.
Other facts:
For tax year 2018 and 2019, the employee must earn $72,000 or less to qualify.
The credit ranges from 12.5% to 25% of wages paid for qualifying employees.
Some employers are eligible to claim the credit retroactively.
The credit is available for qualified wages paid in tax years beginning after Dec. 31, 2017, and before Jan. 1, 2020. Generally, tax year 2019 is the last year most employers are eligible to claim the credit.
Family and Medical Leave Act
The Family and Medical Leave Act of 1993 required covered employers to provide employees with job-protected and unpaid leave for qualified medical and family reasons. The law allows certain employees with up to 12 weeks of unpaid, job-protected leave per year. It also protects the employee's group health benefits during the leave period.
FMLA is designed to help employees balance their work and family responsibilities by allowing them to take reasonable unpaid leave for specific family and medical reasons.
More information on the Employer Credit for Paid Family and Medical Leave is available at IRS.gov.
More information:
Highlights of tax reform for businesses
Employers may claim tax credit for providing paid family and medical leave to employees
IR-2019-162, October 1, 2019
WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued Revenue Procedure 2019-40PDF and proposed regulations that provides relief to certain U.S. persons that own stock in certain foreign corporations.
The Revenue Procedure limits the inquiries required by U.S. persons to determine whether certain foreign corporations are controlled foreign corporations ("CFCs"). The Revenue Procedure also allows certain unrelated minority U.S. shareholders to rely on specified financial statement information to calculate their subpart F and GILTI inclusions and satisfy reporting requirements with respect to certain CFCs if more detailed tax information is not available. It also provides penalty relief to taxpayers in the specified circumstances.
Finally, the Revenue Procedure announces that the IRS intends to amend the instructions for Form 5471 to reduce the amount of information that certain unrelated minority U.S. shareholders of the CFC are required to provide. It will also limit the filing requirements of U.S. shareholders who only constructively own stock of the CFC solely due to downward attribution from another person.
The proposed regulations provide additional relief to taxpayers affected by the repeal of section 958(b)(4). These regulations also propose modifications to existing regulations that are intended to ensure, in certain appropriate circumstances, that the operation of certain rules is consistent with their application before the repeal of section 958(b)(4).
The repeal of section 958(b)(4) was part of the Tax Cuts and Jobs Act. For more information about this and other TCJA provisions, visit IRS.gov/taxreform.
IR-2019-190, November 26, 2019
WASHINGTON — The Internal Revenue Service today issued guidance for business travelers, updated to include changes resulting from the Tax Cuts and Jobs Act (TCJA).
Revenue Procedure 2019-48 PDF, posted today on IRS.gov, updates the rules for using per diem rates to substantiate the amount of ordinary and necessary business expenses paid or incurred while traveling away from home. Taxpayers are not required to use a method described in this revenue procedure and may instead substantiate actual allowable expenses provided they maintain adequate records.
Although TCJA suspended the miscellaneous itemized deduction that employees could take for non-reimbursed business expenses, self-employed individuals and certain employees, such as Armed Forces reservists, fee-basis state or local government officials, eligible educators, and qualified performing artists, that deduct unreimbursed expenses for travel away from home may still use per diem rates for meals and incidental expenses, or incidental expenses only.
The revenue procedure makes clear that TCJA amended prior rules to disallow a deduction for expenses for entertainment, amusement, or recreation paid or incurred after December 31, 2017. Otherwise allowable meal expenses remain deductible if the food and beverages are purchased separately from the entertainment, or if the cost of the food and beverages is stated separately from the cost of the entertainment.
The IRS annually issues guidance providing updated per diem rates; Notice 2019-55 PDF provides the rates that have been in effect since October 1, 2019.
Related items:
Publication 535, Business ExpensesPDF
Publication 463, Travel, Gift, and Car Expenses PDF
IR-2019-193, December 2, 2019
WASHINGTON — The Internal Revenue Service issued final regulationsPDF today on the Foreign Tax Credit, a long-standing tax benefit that generally allows individuals and businesses to claim a credit for income taxes paid or accrued to foreign governments.
The Tax Cuts and Jobs Act (TCJA) made major changes to the tax law, including revamping the U.S. international tax system. Specifically, several Foreign Tax Credit provisions were changed, including repeal of section 902, which allowed deemed-paid credits in connection with dividend distributions based on foreign subsidiaries' cumulative pools of earnings and foreign taxes. TCJA also added two separate limitation categories for foreign branch income and amounts includible under the Global Intangible Low-Taxed Income (GILTI) provisions.
Additionally, the TCJA changed how taxable income is calculated for purposes of the Foreign Tax Credit limitation by disregarding certain expenses and repealing the use of the fair market value method for allocating interest expense.
Finally, the TCJA made systemic changes to U.S. taxation of international income that impact the Foreign Tax Credit calculation. These systemic changes include the introduction of a participation exemption through a dividends received deduction for certain dividends in section 245A and the introduction of GILTI, which subjects to current U.S. taxation foreign earnings that would have been deferred under previous law, albeit at a lower tax rate and subject to extra Foreign Tax Credit restrictions.
The IRS also issued proposed regulationsPDF today relating to the allocation and apportionment of deductions and creditable foreign taxes, foreign tax redeterminations, availability of Foreign Tax Credits under the Transition Tax, and the application of the Foreign Tax Credit limitation to consolidated groups.
Updates on the implementation of the TCJA can be found on the Tax Reform page of IRS.gov.
IR-2019-189, November 22, 2019
WASHINGTON — The Treasury Department and the Internal Revenue Service today issued final regulations confirming that individuals taking advantage of the increased gift and estate tax exclusion amounts in effect from 2018 to 2025 will not be adversely impacted after 2025 when the exclusion amount is scheduled to drop to pre-2018 levels.
Treasury Decision 9884, available today in the Federal Register, implements changes made by the Tax Cuts and Jobs Act (TCJA), the tax reform legislation enacted in December 2017. Though the final regulations largely adopt the proposed regulations published last November, they also include clarifying technical language addressing concerns raised in several public comments as well as four examples which, among other things, illustrate the impact of inflation adjustments. As a result, individuals planning to make large gifts between 2018 and 2025 can do so without concern that they will lose the tax benefit of the higher exclusion level once it decreases after 2025.
In general, gift and estate taxes are calculated, using a unified rate schedule, on taxable transfers of money, property and other assets. Any tax due is determined after applying a credit – formerly known as the unified credit – based on an applicable exclusion amount.
The applicable exclusion amount is the sum of the basic exclusion amount (BEA) established in the statute, and other elements, if applicable, described in the final regulations. The credit is first used during life to offset gift tax and any remaining credit is available to reduce or eliminate estate tax.
The TCJA temporarily increased the BEA from $5 million to $10 million for tax years 2018 through 2025, with both dollar amounts adjusted for inflation. For 2019, the inflation-adjusted BEA is $11.4 million. In 2026, the BEA will revert to the 2017 level of $5 million as adjusted for inflation.
To address concerns that an estate tax could apply to gifts exempt from gift tax by the increased BEA, the final regulations provide a special rule that allows the estate to compute its estate tax credit using the higher of the BEA applicable to gifts made during life or the BEA applicable on the date of death.
More information about this and other TCJA provisions can be found on the Tax Reform page on IRS.gov.
IR-2019-188, November 22, 2019
WASHINGTON — The Internal Revenue Service recently awarded more than $9.8 million in Tax Counseling for the Elderly (TCE) grants to organizations that provide free federal tax return preparation.
This year, the IRS awarded grants to 27 TCE applicants from across the nationPDF. The TCE grants cover one year. The IRS received 37 applications requesting $11.7 million.
The TCE program, established in 1978, provides tax counseling and return preparation nationwide to people who are 60 or older. Volunteers receive training and technical assistance.
The IRS forms partnerships with a wide variety of organizations across the country to develop TCE programs. Community partners include non-profit agencies, faith-based organizations and community centers. The IRS provides tax law training, certification and oversight to equip these organizations to prepare accurate returns.
For information on applying for the TCE program, visit the TCE webpage. For details on becoming a TCE volunteer, visit IRS Tax Volunteers.
IR-2019-187, November 20, 2019
WASHINGTON — The Internal Revenue Service Advisory Council (IRSAC) today issued its annual report for 2019, including recommendations to the IRS on new and continuing issues in tax administration.
The IRSAC is a federal advisory committee that provides an organized public forum for discussion of relevant tax administration issues between IRS officials and representatives of the public. IRSAC members offer constructive observations regarding current or proposed IRS policies, programs and procedures.
The 2019 Public Report includes recommendations on over 20 issues, which cover a broad range of topics and concerns including:
Accelerating the use of e-Signatures in Federal Tax Administration
Guidance Relating to the Tax Cuts and Jobs Act
Establishing Safe Harbors by Relying on Certain Conclusions of Independent Parties
Broadening and Improving a Self-Correction Program for Tax-Exempt Bonds
Improving Customer Experience and Service Delivery
Form W-4 2020 Version
Commissioner Chuck Rettig and IRS executives also thanked members of the council whose terms end this year:
Lisa Allen – Allen served on the IRSAC Tax Exempt & Government Entities Subgroup
Tenesha Carter – Carter served on the IRSAC Wage & Investment Subgroup
Randall Cathell – Cathell served on the IRSAC Large Business and International Subgroup
Alan Ellenby – Ellenby served on the IRSAC Small Business/Self-Employed Subgroup
Sharyn Fisk – Fisk served on the IRSAC Wage & Investment Subgroup
Dana Flynn – Flynn served on the IRSAC Large Business and International Subgroup
Kathy Hettick – Hettick served as the 2019 IRSAC Co-Chair
Sheldon Kay – Kay served on the IRSAC Large Business and International Subgroup
Joel Levenson – Levenson served as the 2019 IRSAC Co-Chair and on the Tax Exempt & Government Entities Subgroup
Ryan Lovin – Lovin served on the IRSAC Large Business and International Subgroup
James Paille – Paille served on the IRSAC Small Business/Self-Employed Subgroup
Clark Sells – Sells served on the IRSAC Small Business/Self-Employed Subgroup
The 2019 report is the first published by the reconstituted IRSAC, which now also addresses topics previously worked by the former Advisory Council on Tax Exempt and Government Entities (ACT) and the Information Reporting Program Advisory Committee (IRPAC). The IRSAC is administered under the Federal Advisory Committee Act by the Office of National Public Liaison, part of IRS Communications and Liaison, and draws its members from the taxpaying public, the tax professional community, small and large businesses, tax-exempt and government entities and the payroll industry.
The full 2019 IRSAC Public Report is available on the IRS website.
IR-2019-184, November 15, 2019
WASHINGTON — With health care open season now under way at many workplaces, the Internal Revenue Service today reminded workers they may be eligible to use tax-free dollars to pay medical expenses not covered by other health plans.
Eligible employees of companies that offer a health flexible spending arrangement (FSA) need to act before their medical plan year begins to take advantage of an FSA during 2020. Self-employed individuals are not eligible.
An employee who chooses to participate can contribute up to $2,750 through payroll deductions during the 2020 plan year. Amounts contributed are not subject to federal income tax, Social Security tax or Medicare tax. If the plan allows, the employer may also contribute to an employee's FSA.
Throughout the year, employees can use FSA funds for qualified medical expenses not covered by their health plan. These can include co-pays, deductibles and a variety of medical products. Also covered are services ranging from dental and vision care to eyeglasses and hearing aids. Interested employees should check with their employer for details on eligible expenses and claim procedures.
Under the FSA use-or-lose provision, participating employees normally must incur eligible expenses by the end of the plan year or forfeit any unspent amounts. However, employers can, if they choose to, offer an option for participating employees to have more time to use FSA money.
Under the carryover option, an employee can carry over up to $500 of unused funds to the following plan year. For example, an employee with unspent funds at the end of 2019 would still have those funds available to use in 2020.
Under the grace period option, an employee has until two and a half months after the end of the plan year to incur eligible expenses. For example, March 15, 2020, for a plan year ending on December 31, 2019.
Employers can offer either option (not both) or no option.
Employers are not required to offer FSAs. Interested employees should check with their employer to see if they offer an FSA. More information about FSAs can be found at IRS.gov in Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.
IR-2019-183, November 14, 2019
WASHINGTON — The Internal Revenue Service today issued guidance for taxpayers with certain deductible expenses to reflect changes resulting from the Tax Cuts and Jobs Act (TCJA).
Revenue Procedure 2019-46 PDF, posted today on IRS.gov, updates the rules for using the optional standard mileage rates in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes.
The guidance also provides rules to substantiate the amount of an employee's ordinary and necessary travel expenses reimbursed by an employer using the optional standard mileage rates. Taxpayers are not required to use a method described in this revenue procedure and may instead substantiate actual allowable expenses provided they maintain adequate records.
The TCJA suspended the miscellaneous itemized deduction for most employees with unreimbursed business expenses, including the costs of operating an automobile for business purposes. However, self-employed individuals and certain employees, such as Armed Forces reservists, qualifying state or local government officials, educators and performing artists, may continue to deduct unreimbursed business expenses during the suspension.
The TCJA also suspended the deduction for moving expenses. However, this suspension does not apply to a member of the Armed Forces on active duty who moves pursuant to a military order and incident to a permanent change of station.
IR-2019-215, December 31, 2019
WASHINGTON — The Internal Revenue Service today issued the 2020 optional standard mileage ratesPDF used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on January 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
57.5 cents per mile driven for business use, down one half of a cent from the rate for 2019,
17 cents per mile driven for medical or moving purposes, down three cents from the rate for 2019, and
14 cents per mile driven in service of charitable organizations.
The business mileage rate decreased one half of a cent for business travel driven and three cents for medical and certain moving expense from the rates for 2019. The charitable rate is set by statute and remains unchanged.
It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, except members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details, see Rev. Proc. 2019-46PDF.
The standard mileage rate for business use 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 five vehicles used simultaneously. These and other limitations are described in section 4.05 of Rev. Proc. 2019-46PDF.
Notice 2020-05PDF, posted today on IRS.gov, 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. In addition, for employer-provided vehicles, the Notice provides the maximum fair market value of automobiles first made available to employees for personal use in calendar year 2020 for which employers may use the fleet-average valuation rule in § 1.61-21(d)(5)(v) or the vehicle cents-per-mile valuation rule in § 1.61-21(e).
IR-2019-214, December 30, 2019
WASHINGTON — The Internal Revenue Service announced today an agreement PDF with Free File, Inc. (FFI) designed to bring more clarity for taxpayers choosing to use free online software during the 2020 filing season. The agreement reached will help make the Free File program more taxpayer-friendly while strengthening consumer protections in several key areas.
"This updated agreement is part of a larger effort by the IRS to help taxpayers meet their tax obligations," said IRS Commissioner Chuck Rettig. "It continues to show the partnership we enjoy with the Free File partners and the commitment we both share in helping taxpayers since the program's creation 18 years ago. The improved process will make Free File stronger and give taxpayers another reason to consider this valuable software option."
"The IRS and FFI will also continue to work together to identify and explore ways to better help low- to moderate-income taxpayers and to pursue meaningful opportunities to enhance taxpayer awareness and use of the Free File Program beyond the 2020 filing season," Rettig added.
Each year, Free File partners, acting through FFI, offer their software free to eligible taxpayers. Any taxpayer earning $69,000 or less can find one or more free commercial software products available by visiting IRS.gov/freefile. Some providers offer both free federal and free state tax preparation. Active duty military personnel with incomes of $69,000 or less may use a Free File software product of their choice without regard to other criteria.
The program also offers Free File Fillable Forms, a fillable version of IRS' printed forms best suited for taxpayers experienced in preparing returns by hand and who need limited assistance. The Fillable Forms program, which is available to anyone regardless of income, will be available again in the 2020 tax season for people completing their tax year 2019 returns.
Highlights of the new agreement reached on the Free File program include several features designed to make the program more taxpayer friendly. Among the features in the new agreement, FFI members:
Will not exclude their Free File Landing page from an organic internet search.
Will ensure a link on their sites is available to return taxpayers to the IRS Free File website at the earliest feasible point in the preparation process if they do not qualify for the Member's Free File offer, and
Will regularly survey taxpayers who successfully e-filed a tax return through the Free File program, reporting their results quarterly to the IRS.
"These steps will help further protect taxpayers and make important improvements to the program," Rettig said. "The IRS is committed to improving the Free File program and providing a great option for taxpayers to consider when preparing their taxes."
IR-2019-213, December 20, 2019
WASHINGTON — The Internal Revenue Service today urged taxpayers involved in designated syndicated conservation easement arrangements to consult with their tax advisors following a recent U.S. Tax Court decision and agency plans to continue enforcement efforts in this area.
In late 2016, the Internal Revenue Service designated certain syndicated conservation easement arrangements as "listed transactions" in Notice 2017-10PDF.
On Dec. 13, 2019, the U.S. Tax Court entered its first decision on a syndicated conservation easement transaction. In TOT Property Holdings, LLC v. Commissioner, Docket No. 005600-17, the Tax Court sustained in its entirety the IRS's determination that all tax benefits from a syndicated conservation easement transaction should be denied and that the 40% gross valuation misstatement and negligence penalties applied. The Tax Court found that the transaction failed the legal requirements applicable to donations of land easements and, in imposing the gross valuation misstatement penalty, found that the actual value of the easement donation was less than 10 percent of what was originally reported on the tax return.
"In denying the deductions and upholding the 40% gross valuation misstatement penalty, the Tax Court confirmed that aggressive syndicated easement transactions simply will not survive scrutiny," said IRS Commissioner Chuck Rettig. "We will not stop in our coordinated pursuit of these abusive transactions while seeking the imposition of all available civil penalties and, when appropriate, various criminal options for those involved."
"If you engaged in any questionable syndicated conservation easement transaction, you should immediately consult an independent, competent tax advisor to consider your best available options," Rettig added.
Tax Court trials in four other syndicated easement cases were conducted earlier this year and more than 50 cases are pending. In other recent cases, the Tax Court has rejected arguments that various regulations taxpayers failed to comply with are invalid, essentially negating one of these taxpayers' main defenses.
"We are prepared to take each of these and all other cases being developed by the IRS to trial, although the substance of most cases can be resolved without trial because the transactions do not meet the basic requirements to claim the charitable contribution deduction," said IRS Chief Counsel Mike Desmond. "We encourage taxpayers and their advisors to see the writing on the wall and take immediate steps to resolve these matters."
IR-2019-212, December 19, 2019
WASHINGTON — The Internal Revenue Service today issued final regulationsPDF providing details about investment in qualified opportunity zones (QOZ).
The final regulations modified and finalized the proposed regulationsPDF that were issued on October 28, 2018 and May 1, 2019.
The final regulations provide additional guidance for taxpayers eligible to make an election to temporarily defer the inclusion in gross income of certain eligible gain. The final regulations also address, the ability of such taxpayers' eligibility to increase the basis in their qualifying investment equal to the fair market value of the investment on the date that it is sold, after holding the equity interest for at least 10 years.
The statute permits the deferral of all or part of a gain that would otherwise be included in income, if corresponding amounts are invested into a qualified opportunity fund (QOF). The gain is deferred until an inclusion event or Dec. 31, 2026, whichever is earlier. The final regulations provide a list of inclusion events. Further, the final regulations provide guidance to determine the amount of income that must be included at the time of the inclusion event or December 31, 2026.
The final regulations also address the various requirements that must be met to qualify as a QOF, as well as the requirements an entity must meet to qualify as a QOZ business. In order to provide clarity, the final regulations have modified the proposed regulations for QOFs and QOZ businesses. Specifically, the final regulations provide additional guidance on how an entity becomes a QOF or QOZ business, and the requirement that a QOF or QOZ business engage in a trade or business. The final regulations retain the general approach of the proposed regulations but provide additional guidance and clarity to the rules regarding QOZ business property.
Related forms, instructions and other information taxpayers need to take advantage of this update will be made available in January 2020.
For more information about this and other TCJA provisions, visit IRS.gov/taxreform.
IR-2019-211, December 18, 2019
WASHINGTON —Taxpayers who paid too little tax during 2019 can still avoid a tax-time surprise by making a quarterly estimated tax payment now, directly to the Internal Revenue Service. The deadline for making a payment for the fourth quarter of 2019 is Wednesday, January 15, 2020.
Income taxes are pay-as-you-go. This means that by law, taxpayers are required to pay most of their tax during the year as income is received. There are two ways to do this:
Withholding from paychecks, pension payments, Social Security benefits or certain other government payments. This is how most people pay most of their tax.
Making quarterly estimated tax payments throughout the year. Self-employed people and investors, among others, often pay tax this way.
Either method can help avoid a surprise tax bill at tax time and the accompanying penalty that often applies. If a taxpayer failed to make required quarterly estimated tax payments earlier in the year, making a payment to cover these missed payments, as soon as possible, will usually lessen and may even eliminate any possible penalty.
The IRS recommends that everyone check their possible tax liability by using the IRS Tax Withholding Estimator. This online tool allows taxpayers to see if they are withholding the right amount and find out if they need to make an estimated tax payment. Form 1040-ES, available on IRS.gov, includes a worksheet for figuring the right amount to pay as well.
This is especially important for anyone who owed taxes when they filed their 2018 return. Taxpayers in this situation may include those who itemized in the past but will now claim the increased standard deduction, as well as two wage-earner households, employees with non-wage sources of income and those with complex tax situations.
Taxpayers who owed taxes when they last filed and who did not adjust their 2019 withholding may find that they owe taxes again, and even a penalty, when they file their 2019 return next year. Making a quarterly estimated tax payment now can help.
In addition, various financial transactions, especially late in the year, can often have an unexpected tax impact. Examples include year-end and holiday bonuses, stock dividends, capital gain distributions from mutual funds and stocks, bonds, virtual currency, real estate or other property sold at a profit.
Publication 505, Tax Withholding and Estimated Tax, has additional details, including worksheets and examples, that can be especially helpful to those who have dividend or capital gain income, owe alternative minimum tax or self-employment tax, or have other special situations.
The fastest and easiest way to make an estimated tax payment is to do so electronically using IRS Direct Pay or the Treasury Department's Electronic Federal Tax Payment System (EFTPS). For information on other payment options, visit IRS.gov/payments. If paying by check, be sure to make the check payable to the "United States Treasury."
Though it's too early to file a 2019 return, it's never too early to get ready for the tax-filing season ahead. For more tips and resources, check out the Get Ready page on IRS.gov.
IR-2019-210, December 18, 2019
WASHINGTON — The Internal Revenue Service is seeking qualified applicants for nomination to the Electronic Tax Administration Advisory Committee (ETAAC).
The ETAAC is an organized public forum for discussion of electronic tax administration issues, such as prevention of identity theft and refund fraud in support of the overriding goal that paperless filing should be the preferred and most convenient method of filing tax and information returns. ETAAC members work closely with the Security Summit, a joint effort of the IRS, state tax administrators and the nation's tax industry, to fight identity theft and refund fraud.
The IRS is looking for approximately 10 qualified individuals who will serve three-year terms beginning in September 2020. Applicants should have experience in such areas as state tax administration, cybersecurity and information security, tax software development, tax preparation, payroll and tax financial product processing, systems management and improvement and implementation of customer service initiatives.
The IRS also strongly encourages representatives from consumer groups with an interest in tax issues to apply.
Applications will be accepted through February 14, 2020. Nominations of qualified individuals may be made by letter and received from organizations or the individuals themselves. Applicants should complete the ETAAC applicationPDF and include a short statement of interest and a resume. Applicants should describe and document their qualifications, past and current affiliations, and dealings with cybersecurity and electronic tax administration. More information is available on Apply for membership on the ETAAC.
Applicants must complete and submit a tax check waiver form and pass both an IRS practitioner background check and FBI criminal background check.
ETAAC is a Federal Advisory Committee established by the Internal Revenue Service Restructuring and Reform Act of 1998.
Questions about the ETAAC and the application process can be emailed to publicliaison@irs.gov.
IR-2019-209, December 17, 2019
WASHINGTON — The Internal Revenue Service has launched a new online assistant designed to help employers, especially small businesses, easily determine the right amount of federal income tax to withhold from their workers' pay.
Known as the Income Tax Withholding Assistant for Employers (obsolete), this new spreadsheet-based tool is designed to help employers easily transition to the redesigned withholding system (no longer based on withholding allowances), which goes into effect on Jan. 1. It does this by helping them easily implement new income-tax withholding requests from employees who fill out the completely redesigned 2020 Form W-4, Employee's Withholding Certificate.
At the same time, the tool can also help employers continue to properly withhold from employees who still have a withholding request on file using a past version of the W-4, which was based on withholding allowances.
"We've been working closely with the payroll community and other partners to make improvements in the withholding process," said IRS Commissioner Chuck Rettig. "As part of this effort and based on feedback from partners, the IRS has created a new spreadsheet-based tool that's designed to help small businesses navigate a variety of situations involving their employees to help ensure the right amount of withholding."
Now available for download, without charge, on IRS.gov, the Income Tax Withholding Assistant for Employers is designed to help any employer who would otherwise figure withholding, manually, using a worksheet and either the percentage method or wage bracket tables found in Publication 15-T, Federal Income Tax Withholding Methods. Employers who already use an automated payroll system won't need this new assistant because their system already does the math.
The Income Tax Withholding Assistant for Employers is available in Microsoft Excel. The employer can use the tool to create a profile for each employee that then automatically calculates their correct federal income tax withholding.
To use the Income Tax Withholding Assistant for Employers, the employer starts by indicating their pay period frequency (for example, weekly, bi-weekly, monthly, etc.), and then enters key information from an employee's Form W-4. For the tool to work properly, the employer must indicate whether the employee submitted a 2020 Form W-4, which does not base withholding on the number of withholding allowances claimed, or a prior version of the W-4, which does.
The employer can then save a separate customized copy of the file for each employee containing that employee's Form W-4 information. Then, each pay period, the employer simply opens the employee's file and enters their gross wage or salary amount for that pay period. The tool will then automatically display the correct amount of federal income tax to withhold from that employee's pay.
More information about the Income Tax Withholding Assistant for Employers, the redesigned 2020 Form W-4, and other tax topics of interest to employers and small businesses can be found on IRS.gov.
IR-2019-208, December 17, 2019
WASHINGTON — The Treasury Department and Internal Revenue Service issued proposed regulations to reflect changes from the Tax Cuts and Jobs Act (TCJA) on the tax deductibility of officers' compensation by publicly held corporations.
On Aug. 21, 2018, the Treasury Department and IRS released Notice 2018-68PDF. This notice provided initial guidance on this deduction limitation.
Section 162(m) disallows the deduction by any publicly held corporation for compensation paid in any  taxable year to a covered employee that exceeds $1 million. The proposed regulations update the definitions of covered employee, publicly held corporation and applicable employee compensation.
The TCJA also provided a transition, or "grandfather" rule, for certain outstanding compensatory arrangements. Specifically, the TCJA changes do not apply to compensation that is provided to a covered employee under a written binding contract that was in effect on Nov. 2, 2017 and was not modified on or after that date. The proposed regulations further explain the grandfather rule, including when a contract will be considered materially modified so that it is no longer considered "grandfathered." The TCJA changes apply to tax years beginning after Dec. 31, 2017, except to the extent the grandfather rule applies.
Taxpayers may rely on these proposed regulations for tax years before the final regulations are effective.
IRS and Treasury welcome public comments. For details, see the proposed regulations now available in the Federal Register.
Updates on the implementation of the TCJA can be found on the Tax Reform page of IRS.gov.
IR-2019-204, December 11, 2019
WASHINGTON — The Internal Revenue Service today announced a process has been formalized with the Alcohol and Tobacco Tax and Trade Bureau (TTB) that puts in place procedures between the IRS and TTB to process claims for whistleblower awards under internal revenue laws that are administered and enforced by TTB.
The IRS and TTB signed a Memorandum of Understanding on December 3, 2019, making these new procedures possible.
"This is another important step in our efforts to make the Whistleblower Program as effective as possible," said Lee D. Martin, Director of the IRS Whistleblower Office. "The IRS Whistleblower Office is always looking to do more for whistleblowers."
The new procedures enable a partnership with TTB to provide a consistent approach for claims for a whistleblower award administered under Internal Revenue laws.
TTB is a bureau of the Treasury Department and administers provisions of the Internal Revenue laws that impose a federal excise tax on distilled spirits, wine, beer, tobacco products, cigarette papers and tubes, as well as firearms and ammunition.
"The whistleblower program gives us another tool to fight for the level playing field that our law-abiding industry members expect and deserve," said Nicholas Colucci, TTB's Assistant Administrator, Field Operations. "We appreciate this opportunity to partner with our colleagues at the IRS."
Since 2007, the IRS Whistleblower Office made awards totaling more than $811 million based on the collection of more than $5 billion in back taxes, interest and penalties.
For more on the Whistleblower Office go to IRS.gov.
IR-2019-203, December 10, 2019
WASHINGTON — The Internal Revenue Service reminds retirees born before July 1, 1949, that they usually must take distributions from their retirement plans by December 31.
The payments, called required minimum distributions (RMDs), are normally made by the end of the year. Those who turned 70½ in 2019 are allowed to wait until April 1, 2020, to take their first RMDs.
The special April 1 deadline only applies to the RMD for the first year. For all subsequent years, the RMD must be made by December 31. For example, a taxpayer who is 70½ in 2018 and receives the first RMD on April 1, 2019, must receive a second RMD by December 31, 2019.
The required distribution rules apply to:
Owners of traditional Individual Retirement Arrangements (IRAs)
Owners of traditional Simplified Employee Pension (SEP) IRAs
Owners of Savings Incentive Match Plans for Employees (SIMPLE) IRAs
Participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans
Roth IRAs don't require distributions while the original owner is alive.
An IRA trustee, or plan administrator, must report the amount of the RMD to the IRA owner. Alternatively, an IRA trustee may offer to calculate the amount of the RMD for the owner.
An IRA owner, or trustee, must calculate the RMD separately for each IRA owned. However, they can choose to withdraw the total amount from one or more of the IRAs. In contrast, RMDs required from workplace retirement plans must be taken separately from each account.
The RMD is based on the taxpayer's life expectancy and their account balance.
For most taxpayers, life expectancy used to calculate the RMD is based on Table III (Uniform Lifetime Table) in Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs). For example, it shows that for a taxpayer who turned 72 in 2019, the required distribution is based on a life expectancy of 25.6 years. Table II applies to a taxpayer whose spouse is more than 10 years younger and is the taxpayer's only beneficiary.
The trustee reports the year-end account value to the IRA owner on Form 5498, IRA Contribution Information (Info Copy Only), in Box 5.
Individuals can use online worksheets on IRS.gov to figure the RMD. The worksheets can also be found in the Appendices to Publication 590-B.
Often, a trustee will use Form 5498, box 12b, to report the RMD to the recipicient. In that case, a recipient can find their 2019 RMD on the 2018 Form 5498. The 2018 Form 5498 is normally issued to the owner during January 2019.
RMD rules are mandatory for all owners of traditional, SEP and SIMPLE IRAs and participants in workplace retirement plans. However, some people in workplace plans can wait longer to receive their RMDs. If their plan allows, current employees can wait until April 1 of the year following retirement to start taking RMDs, regardless of their age. However, there may be tax consequences to doing so. See Tax on Excess Accumulations in Publication 575, Pension and Annuity Income.
Find more information on RMDs, including answers to frequently asked questions, on IRS.gov.
IR-2019-201, December 6, 2019
WASHINGTON —The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning January 1, 2020. The rates will be: 
5% for overpayments (4% in the case of a corporation);
2.5% for the portion of a corporate overpayment exceeding $10,000;
5% for underpayments; and
7% 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 October 2019, to take effect November 1, 2019, based on daily compounding.
Revenue Ruling 2019-28 PDF, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2019-52, dated December 23, 2019.
IR-2019-199, December 5, 2019
WASHINGTON — The Internal Revenue Service today released the Criminal Investigation Division's (CI) annual reportPDF, highlighting significant successes and criminal enforcement actions taken in fiscal year 2019. The report also commemorates CI's 100th year anniversary as a law enforcement agency.
"CI is critical to the overall enforcement efforts of the IRS in pursuing its Mission in a fair, impartial, diligent and, where appropriate, tenacious manner." said IRS Commissioner Chuck Rettig. "The Fiscal Year 2019 Annual Report summarizes various CI activities throughout the year but vastly understates the importance of CI to the overall IRS mission. CI supports the efforts of compliant taxpayers by visibly demonstrating the risks of noncompliance thereby helping otherwise honest taxpayers stay honest and compliant."
Key focuses of CI in fiscal year 2019 included cybercrimes, with an emphasis on virtual and crypto currencies, traditional tax investigations, international tax enforcement, employment tax, refund fraud and tax-related identity theft. Other areas of emphasis included public corruption, corporate fraud and money laundering.
"We are working smarter using data analytics to augment good old-fashioned police work and find those cases that have the biggest impact on tax administration," said Don Fort, Chief of CI. "We are leading the world in our ability to trace virtual currency in financial investigations while still working our bread and butter tax enforcement mission areas."
CI initiated 2,485 cases in fiscal year 2019, applying approximately 75 percent of its time to tax related investigations. The number of CI special agents dropped to 2,009 by the end of fiscal year 2019, which is the lowest level since the early 1970's. Consequently, CI has increased its usage of data analytics and strengthened its international partnerships to assist in finding the most-impactful cases.
CI is the only federal law enforcement agency with jurisdiction over federal tax crimes. CI achieved a conviction rate of 91.2 percent in fiscal year 2019, which is among the highest of all federal law enforcement agencies. The high conviction rate reflects the thoroughness of CI investigations and the high caliber of CI agents. CI is routinely called upon by prosecutors across the country to lead financial investigations on a wide variety of financial crimes.
"While we have published an annual report since 1920 to highlight our successes during the past year, this particular year had special meaning as we celebrated our 100th anniversary as a law enforcement agency," Fort said. "Honor the Badge, Preserve the Legacy, Master Your Craft, Inspire the Future. These are the guiding principles that IRS Criminal Investigation lives by and that 2019 was defined by."
The 2019 report is interactive, summarizes a wide variety of CI activity during the year and features examples of cases from each field office on a wide range of financial crimes. The federal fiscal year begins October 1 and ends on September 30.
IR-2019-197, December 4, 2019
WASHINGTON — The Internal Revenue Service today reminded employers and other businesses that wage statements and independent contractor forms still have a January 31 filing deadline.
Before the Protecting Americans from Tax Hikes (PATH) Act, employers generally had a longer period of time to file these forms. But the 2015 law made a permanent requirement for employers to file their copies of Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by January 31.
Certain Forms 1099-MISC, Miscellaneous Income, filed with the IRS to report non-employee compensation to independent contractors are also due at this time. Such payments are reported in box 7 of this form.
The early filing date means that the IRS can more easily detect refund fraud by verifying income that individuals report on their tax returns. Employers can avoid penalties by filing the forms on time and without errors. The IRS recommends e-file as the quickest, most accurate and convenient way to file these forms.
Get a jump on the due date
Employers should verify employees' information. This includes names, addresses, and Social Security or individual taxpayer identification numbers. They should also ensure their company's account information is current and active with the Social Security Administration before January. If paper Forms W-2 are needed, they should be ordered early.
Automatic extensions of time to file Forms W-2 are not available. The IRS will only grant extensions for very specific reasons. Details can be found on the instructions for Form 8809, Application for Time to File Information Returns.
For more information, read the instructions for Forms W-2 & W-3 and the Information Return Penalties page at IRS.gov.