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https://www.irs.gov/newsroom/tax-time-guide-use-the-wheres-my-refund-tool-or-irs2go-app-to-check-tax-refund-status

IR-2021-60, March 18, 2021 WASHINGTON — The Internal Revenue Service today reminds taxpayers that the most convenient way to check on a tax refund is by using the Where's My Refund? tool at IRS.gov or through the IRS2Go Mobile App. Taxpayers can start checking their refund status within 24 hours after an e-filed return is received. In addition, Where's My Refund provides a personalized date after the return is processed and a refund is approved. Go paperless Now more than ever, the safest and best way to file a complete and accurate tax return and get a refund is to file electronically and use direct deposit. Taxpayers can visit IRS.gov/filing for more details about IRS Free File, Free File Fillable Forms and free tax preparation sites. E-filing is also available through a trusted tax professional. Refund timing While most tax refunds are issued within 21 days, some may take longer because the return requires additional review. There are several reasons a tax refund may take long: The return may include errors or be incomplete. The return could be affected by identity theft or fraud. The return includes a claim for the Earned Income Tax Credit or Additional Child Tax Credit. The time between the IRS issuing the refund and the bank posting it to an account since many banks do not process payments on weekends or holidays. The IRS will contact taxpayers by mail if more information is needed to process a return. Taxpayers claiming the Recovery Rebate Credit on their tax return will not cause a delay in the processing of that tax return. However, it is important that taxpayers claim the correct amount. If a correction is needed, there may be a slight delay in processing the return and the IRS will send a notice explaining any change made. Refunds may be delayed while the IRS makes any necessary corrections. Fast and easy refund updates Taxpayers can use Where's My Refund? to start checking on the status of their return within 24 hours after the IRS acknowledges receipt of an electronically filed return or four weeks after the taxpayer mails a paper return. The tool's tracker displays progress through three phases: Return Received; Refund Approved; and Refund Sent. To use it a taxpayer must enter their Social Security number or ITIN (Individual Taxpayer Identification Number) , their filing status and the exact whole dollar amount of their refund. The IRS updates "Where's My Refund? once a day, usually overnight, so there's no need to check more frequently. Calling IRS doesn't speed up refund timing Calling the IRS won't expedite a tax refund. The information available on Where's My Refund? is the same information available to IRS telephone assistors. Most taxpayers who want to prepare their own returns can file electronically for free with IRS Free File. Alternatively, taxpayers who qualify can get free tax help from trained volunteers at community sites around the country. Ignore refund myths Some people mistakenly believe they can expedite their refund by ordering a tax transcript, calling the IRS or calling their tax preparer. Ordering a tax transcript will not help a taxpayer get their refund faster or find out when they'll get their refund. Filing options Taxpayers can use several options to help find a paid tax preparer. One resource is Choosing a Tax Professional, which includes a list of consumer tips for selecting a tax professional. The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications is a free searchable and sortable database. It includes the name, city, state and zip code of credentialed return preparers who are CPAs, enrolled agents or attorneys, as well as those who have completed the requirements for the IRS Annual Filing Season Program. A search of the database can help taxpayers verify credentials and qualifications of tax professionals. Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov anytime. No appointment required and no waiting on hold. This news release is part of a group of IRS tips called the Tax Time Guide. The guide is designed to help taxpayers as they near the May 17, 2021, tax filing deadline.

https://www.irs.gov/newsroom/tax-day-for-individuals-extended-to-may-17-treasury-irs-extend-filing-and-payment-deadline

IR-2021-59, March 17, 2021 WASHINGTON — The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days. "This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities," said IRS Commissioner Chuck Rettig. "Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds. Filing electronically with direct deposit is the quickest way to get refunds, and it can help some taxpayers more quickly receive any remaining stimulus payments they may be entitled to." Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17. Individual taxpayers do not need to file any forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the May 17 deadline can request a filing extension until Oct. 15 by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Filing Form 4868 gives taxpayers until October 15 to file their 2020 tax return but does not grant an extension of time to pay taxes due. Taxpayers should pay their federal income tax due by May 17, 2021, to avoid interest and penalties. The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds associated with e-filed returns are issued within 21 days. This relief does not apply to estimated tax payments that are due on April 15, 2021. These payments are still due on April 15. Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments. In general, estimated tax payments are made quarterly to the IRS by people whose income isn't subject to income tax withholding, including self-employment income, interest, dividends, alimony or rental income. Most taxpayers automatically have their taxes withheld from their paychecks and submitted to the IRS by their employer. State tax returns The federal tax filing deadline postponement to May 17, 2021, only applies to individual federal income returns and tax (including tax on self-employment income) payments otherwise due April 15, 2021, not state tax payments or deposits or payments of any other type of federal tax. Taxpayers also will need to file income tax returns in 42 states plus the District of Columbia. State filing and payment deadlines vary and are not always the same as the federal filing deadline. The IRS urges taxpayers to check with their state tax agencies for those details. Winter storm disaster relief for Louisiana, Oklahoma and Texas Earlier this year, following the disaster declarations issued by the Federal Emergency Management Agency (FEMA), the IRS announced relief for victims of the February winter storms in Texas, Oklahoma and Louisiana. These states have until June 15, 2021, to file various individual and business tax returns and make tax payments. This extension to May 17 does not affect the June deadline. For more information about this disaster relief, visit the disaster relief page on IRS.gov.

https://www.irs.gov/newsroom/irs-treasury-disbursed-90-million-economic-impact-payments-from-the-american-rescue-plan

IR-2021-58, March 17, 2021 WASHINGTON — Today, the Internal Revenue Service, the U.S. Department of the Treasury and the Bureau of the Fiscal Service announced they disbursed approximately 90 million Economic Impact Payments from the American Rescue Plan. As announced last week, Economic Impact Payments are rolling out in tranches to millions of Americans in the coming weeks. The first batch of payments were mostly sent by direct deposit, which some recipients started receiving this past weekend. As of today, all recipients of this first batch of direct deposit payments will have access to their funds. Here is additional information on this first batch of payments: These payments began processing on Friday, March 12. Some Americans saw the direct deposit payments as pending or as provisional payments in their accounts before today's official payment date.   The first batch of payments primarily went to eligible taxpayers who provided direct deposit information on their 2019 or 2020 returns, including people who don't typically file a return but who successfully used the Non-Filers tool on IRS.gov last year.   In total, this first batch included approximately 90 million payments, which are valued at more than $242 billion.   The use of direct deposit to issue these payments means that they are being delivered remarkably faster than would otherwise be possible.   While the majority of payments were delivered by direct deposit, which reach individual taxpayers more quickly than paper checks, Treasury mailed roughly 150,000 checks worth approximately $442 million.   Finally, since this past weekend, more than 35 million people have received their stimulus payment status through the "Get My Payment" tool on IRS.gov, which is updated on a regular basis as updated information is available. Additional batches and payments will be sent in the coming weeks by direct deposit and through the mail as a check or debit card. The vast majority of all Economic Impact Payments will be issued by direct deposit. No action is needed by most taxpayers; the payments are automatic and, in many cases, similar to how people received their first and second round of Economic Impact Payments in 2020. Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on these Economic Impact Payments, along with a fact sheet of frequently asked questions, is available on IRS.gov.

https://www.irs.gov/newsroom/tax-time-guide-irs-reminds-taxpayers-of-recent-changes-to-retirement-plans

IR-2021-57, March 16, 2021 WASHINGTON — The Internal Revenue Service today reminded taxpayers about the rules for required minimum distributions (RMDs) from retirement accounts. A retirement plan account owner must normally begin taking an RMD annually starting the year he or she reaches 70 ½ or 72, depending on their birthdate and maybe the year they retire. Retirement plans requiring RMDs include traditional, Simplified Employee Pension Plan (SEP) and Savings Incentive Match Plan for Employees (SIMPLE) Individual Retirement Accounts; 401(k), 403(b), 457(b), profit sharing and other defined contribution plans. The Setting Every Community Up for Retirement Enhancement (SECURE) Act changed the age when individuals must begin taking withdrawals from their retirement accounts. Someone born on or before June 30, 1949, was required to start getting RMDs for the year they reached the age of 70½. However, under the SECURE Act, if a person's 70th birthday is July 1, 2019, or later, they do not have to take their first RMD until the year they reach age 72. The Coronavirus, Aid, Relief and Economic Security (CARES) Act waived RMDs during 2020 so seniors and retirees, including beneficiaries with inherited accounts, were not required to take money out of IRAs and workplace retirement plans. The waiver included RMDs for individuals who turned age 70½ in 2019 and took their first RMD in 2020. Individuals who reached age 70 ½ before 2020 and were still employed, but terminated employment in 2020, would normally have a 2020 RMD due by April 1, 2021, from their workplace retirement plan. This RMD is also waived as part of the CARES Act relief. Roth IRAs do not require withdrawals until after the death of the owner. 2021 RMDs Individuals who reached 70 ½ in 2019 or earlier, did not have an RMD due for 2020. For 2021, they will have an RMD due by Dec. 31, 2021. Individuals who did not reach age 70 ½ in 2019 will reach age 72 in 2021 will have their first RMD due by April 1, 2022, and their second RMD due by Dec. 31, 2022. To avoid having both amounts included in their income for the same year, the taxpayer can make the first withdrawal by Dec. 31, 2021, instead of waiting until April 1, 2022. After the first year, all RMDs must be made by Dec. 31. An IRA trustee must either report the amount of the RMD to the IRA owner or offer to calculate it for the owner. Calculating the amount of the RMD depends on the type of IRA or if they are from multiple accounts. Not taking a required distribution, or not withdrawing enough, could mean a 50% excise tax on the amount not distributed. Some can delay RMDs Though the April 1 deadline for taking the first RMD is mandatory for all owners of traditional IRAs, participants in workplace retirement plans who are still working usually can, if their plan allows, wait until April 1 of the year after they retire to start receiving distributions from these plans. Individuals who reached age 70 ½ before 2020 and were still employed, but terminated employment in 2020, would normally have a 2020 RMD due by April 1, 2021 from their workplace retirement plan. This RMD is also waived as part of the CARES Act relief. Employees of public schools and certain tax-exempt organizations should check with their employer, plan administrator or provider to see how to treat these accruals. Coronavirus-related distributions and loans The CARES Act made it easier to access savings in IRAs and workplace retirement plans for those affected by the coronavirus. This relief provided favorable tax treatment for certain withdrawals from retirement plans and IRAs, including expanded loan options. Distributions: Certain distributions made from Jan. 1, 2020, through Dec. 30, 2020, from IRAs or workplace retirement plans to qualified individuals may be treated as coronavirus-related distributions. These distributions are not subject to the 10% additional tax on early distributions (including the 25% additional tax on certain SIMPLE IRA distributions). Taxes on coronavirus-related distributions are includible in taxable income: Over a three-year period, one-third each year, or If elected, in the year you take the distribution. Coronavirus-related distributions may be repaid to an IRA or workplace retirement plan within three years. If you had an outstanding loan balance in when you left employment, the plan sponsor will usually offset the loan balance against your benefit. For loan offsets in 2020, you have until the due date of your tax return (plus extensions) to repay that amount to another retirement plan or IRA. If you're a qualified individual, you can treat the loan offset as a coronavirus-related distribution and have three years to repay to an IRA or include in income tax ratably over three years. RMDs: An IRA owner or beneficiary who received an RMD in 2020 had the option of returning it to their account or other qualified plan to avoid paying taxes on that distribution. RMDs in 2020 that were not rolled over or repaid may be eligible to be treated as coronavirus-related distributions if the individual is a qualified individual. A 2020 RMD that otherwise qualifies as a coronavirus-related distribution may be repaid over a 3-year period or have the taxes due on the distribution spread over three years. A withdrawal from an inherited IRA to a qualified individual may also be a coronavirus-related distribution. Income from the withdrawal may be spread over three years for income inclusion; however, the withdrawal may not be repaid to the inherited IRA. IRS Notice 2020-51PDF provided that the one rollover per 12-month period limitation and the restriction on rollovers to inherited IRAs did not apply to repayments made by Aug. 31, 2020. The RMD suspension did not apply to qualified defined benefit plans. The CARES Act included special rules for plan loans made to qualified individuals. Plans could suspend loan repayments for up to one year, although, typically, repayments resumed in January 2021. This effectively gives up to six years (instead of five) to repay a typical plan loan. IRS online tools and publications can help Taxpayers can find answers, forms and instructions and easy-to-use tools at IRS.gov. FAQs regarding Required Minimum Distributions Individual Retirement Arrangements (IRAs) Publication 590-B, Distribution from Individual Retirement Arrangements (IRAs) Coronavirus Relief for Retirement Plans and IRAs This news release is part of a series called the Tax Time Guide, a resource to help taxpayers file an accurate tax return. Additional help is available in Publication 17, Your Federal Income TaxPDF.

https://www.irs.gov/newsroom/irs-expands-help-to-taxpayers-in-multiple-languages-with-new-forms-communication-preferences

IR-2021-56, March 16, 2021 WASHINGTON — The Internal Revenue Service today said that it continues its efforts to expand ways to communicate to taxpayers who prefer to get information in other languages. For the first time ever, the agency has posted to IRS.gov a Spanish language version of Form 1040PDF and the related instructionsPDF. "Being able to talk to and receive information from the nation's tax agency in their preferred language is something we hope to eventually provide to all taxpayers," said IRS Commissioner Chuck Rettig. "We want everyone to be on the same playing field, so to speak, and each day that we can move forward with that goal is a good one." The new Form 1040 Schedule LEP, in EnglishPDF and SpanishPDF, with instructionsPDF available in English and 20 other languages, can be filed with a tax return by those taxpayers who prefer to communicate with the IRS in another language. They can indicate their language of preference for IRS-issued written communications or change their language of preference. While communications may not be immediately sent in the selected language, the IRS will use this information to allocate resources and develop communication alternatives based on the reported language preferences. "When it comes to filing taxes, being able to ask questions and read forms and instructions is crucial," said Ken Corbin, IRS Taxpayer Experience Officer. "We take that very seriously and continue to work toward ensuring all taxpayers have what they need without obstacles." IRS Publication 17, Your Federal Income Tax, has been streamlined for tax year 2020, and is now available in SpanishPDF, Chinese (Simplified)PDF; Chinese (TraditionalPDF); VietnamesePDF; KoreanPDF; and RussianPDF. Many pages on IRS.gov are now available in seven other languages: Spanish, Vietnamese, Russian, Korean, Haitian Creole and Chinese − Simplified and Traditional. Here are some additional materials and services that are now available in multiple languages: Publication 1, Your Rights as a Taxpayer, and other basic tax information are now available in 20 languages on IRS.gov. Taxpayers who interact with an IRS representative have access to over the phone interpreter services in more than 350 languages. The Earned Income Tax Assistant tool is newly available in Spanish. The agency continues to incorporate multilingual information into its social media platforms, including Twitter and Instagram. IRS highlights key messages in six languages, including Spanish, Vietnamese, Russian, Korean, Haitian Creole and Chinese, using both Twitter Moments and Instagram Highlights. Introduced for tax year 2019, the Form 1040-SR, in EnglishPDF and SpanishPDF, features larger print and a standard deduction chart making it easier to use for older Americans. Form W-4 enables taxpayers to correctly adjust their withholding during 2021. The English languagePDF version as well as the Spanish languagePDF version are available. The agency is also inserting information about translation services and other multilingual options into the top notices sent to taxpayers. For more information, see the We Speak Your Language page on IRS.gov.

https://www.irs.gov/newsroom/low-income-taxpayer-clinic-2021-supplemental-application-period-now-open

IR-2021-55, March 15, 2021 WASHINGTON — The Internal Revenue Service today announced it will accept applications for an 18-month Low Income Taxpayer Clinic (LITC) matching grant from all qualified organizations. The application period will run from March 15, 2021-April 16, 2021. The budget and the period of performance for the supplemental grant will be July 1, 2021-December 31, 2022. Organizations currently receiving a grant for 2021 are not eligible to apply. Qualified organizations that are awarded grants will ensure the fairness and integrity of the tax system for taxpayers who are low-income or speak English as a second language (ESL taxpayers) by: providing pro bono representation on their behalf in tax disputes with the IRS, educating them about their rights and responsibilities as taxpayers, and identifying and advocating for issues that impact these taxpayers. Applications will be accepted from all areas, but priority consideration will be given to organizations that can provide services in the identified geographic areas, listed below. Geographic underserved areas in need of LITC services: Arizona - Gila County Florida - Brevard, Citrus, Flagler, Hernando, Lake, Orange, Putnam, Seminole and Sumter Counties Idaho - Ada, Adams, Bannock, Bear Lake, Bingham, Boise, Bonneville, Butte, Canyon, Caribou, Clark, Clearwater, Custer, Franklin, Freemont, Gem, Idaho, Jefferson, Latah, Lemhi, Lewis, Madison, Nez Perce, Oneida, Owyhee, Payette, Power, Teton, Washington and Valley Counties Nevada - Entire state North Dakota - Entire state Pennsylvania - Bradford, Clinton, Lycoming, Monroe, Northumberland, Pike, Snyder, Sullivan, Susquehanna, Tioga and Wyoming Counties Puerto Rico - Entire territory West Virginia - Entire state Wyoming - Entire state The LITC Program is a federal grant program administered by the Office of the Taxpayer Advocate at the IRS, led by National Taxpayer Advocate Erin M. Collins. The LITC Program awards matching grants of up to $100,000 per year to qualifying organizations to develop, expand or continue low income taxpayer clinics. The LITC Program funds organizations to represent low-income taxpayers who have a tax controversy with the IRS and to educate ESL taxpayers about their rights and responsibilities as U.S. taxpayers. An LITC must provide services for free or for no more than a nominal fee. Although LITCs receive partial funding from the IRS, LITCs, their employees and their volunteers operate independently from the IRS. Examples of qualifying organizations include but are not limited to: Clinical programs at accredited law, business or accounting schools whose students represent low-income taxpayers in tax disputes with the IRS. Organizations exempt from income tax under Internal Revenue Code Section 501(a) whose employees and volunteers represent low income taxpayers in tax disputes with the IRS or refer those taxpayers to qualified representatives. Applications must be submitted electronically at www.grants.gov by 11:59 p.m. (Eastern Time) on April 16, 2021. The funding number is TREAS-GRANTS-052021-002. Copies of IRS Publication 3319, 2021 Grant Application Package and GuidelinesPDF, can be downloaded from IRS.gov, ordered online from IRS.gov or ordered by phone by calling 800-TAX-FORM (800-829-3676). Questions about the LITC Program or grant application process can be addressed to the LITC Program Office at 202-317-4700 (not a toll-free call) or by email at litcprogramoffice@irs.gov. In addition, individuals may also contact Bill Beard at 949-575-6200 (not a toll-free number) or by email at beard.william@irs.gov. More information about LITCs and the work they do to represent, educate and advocate on behalf of low-income and ESL taxpayers is available in IRS Publication 5066, LITC Program ReportPDF. A short video about the LITC program is available on the IRS website. Anyone can join the LITC staff for a Zoom webinar where they will provide information about the LITC program and the application process. For details on the date and time of the webinar, please check the LITC page on IRS.gov.

https://www.irs.gov/newsroom/irs-begins-delivering-third-round-of-economic-impact-payments-to-americans

IR-2021-54, March 12, 2021 WASHINGTON — The Internal Revenue Service announced today that the third round of Economic Impact Payments will begin reaching Americans over the next week. Following approval of the American Rescue Plan Act, the first batch of payments will be sent by direct deposit, which some recipients will start receiving as early as this weekend, and with more receiving this coming week. Additional batches of payments will be sent in the coming weeks by direct deposit and through the mail as a check or debit card. The vast majority of these payments will be by direct deposit. No action is needed by most taxpayers; the payments will be automatic and, in many cases, similar to how people received the first and second round of Economic Impact Payments in 2020. People can check the  Get My Payment tool on IRS.gov on Monday to see the payment status of the third stimulus payment. "Even though the tax season is in full swing, IRS employees again worked around the clock to quickly deliver help to millions of Americans struggling to cope with this historic pandemic," said IRS Commissioner Chuck Rettig. "The payments will be delivered automatically to taxpayers even as the IRS continues delivering regular tax refunds. We urge people to visit IRS.gov for the latest details on the stimulus payments, other new tax law provisions and tax season updates." Highlights of the third round of Economic Impact Payments; IRS will automatically calculate amounts In general, most people will get $1,400 for themselves and $1,400 for each of their qualifying dependents claimed on their tax return. As with the first two Economic Impact Payments in 2020, most Americans will receive their money without having to take any action. Some Americans may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of March 17. Because these payments are automatic for most eligible people, contacting either financial institutions or the IRS on payment timing will not speed up their arrival. Social Security and other federal beneficiaries will generally receive this third payment the same way as their regular benefits. A payment date for this group will be announced shortly. The third round of Economic Impact Payments (EIP3) will be based on the taxpayer's latest processed tax return from either 2020 or 2019. This includes anyone who successfully registered online at IRS.gov using the agency's Non-Filers tool last year, or alternatively, submitted a special simplified tax return to the IRS. If the IRS has received and processed a taxpayer's 2020 return, the agency will instead make the calculation based on that return. In addition, the IRS will automatically send EIP3 to people who didn't file a return but receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) or Veterans Affairs benefits. This is similar to the first and second rounds of Economic Impact Payments, often referred to as EIP1 and EIP2. For those who received EIP1 or EIP2 but don't receive a payment via direct deposit, they will generally receive a check or, in some instances, a prepaid debit card (referred to as an "EIP Card). A payment will not be added to an existing EIP card mailed for the first or second round of stimulus payments. Under the new law, an EIP3 cannot be offset to pay various past-due federal debts or back taxes. The IRS reminds taxpayers that the income levels in this new round of stimulus payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly.) The reduced payments end at $80,000 for individuals ($160,000); people above these levels are ineligible for a payment. More information is available on IRS.gov. New payments differ from earlier Economic Impact Payments The third round of stimulus payments, those authorized by the 2021 American Rescue Plan Act, differs from the earlier payments in several respects: The third stimulus payment will be larger for most people. Most families will get $1,400 per person, including all dependents claimed on their tax return. Typically, this means a single person with no dependents will get $1,400, while a family of four (married couple with two dependents) will get $5,600. Unlike the first two payments, the third stimulus payment is not restricted to children under 17. Eligible families will get a payment based on all of their qualifying dependents claimed on their return, including older relatives like college students, adults with disabilities, parents and grandparents. For additional information, see More details about the third round of Economic Impact Payments.

https://www.irs.gov/newsroom/tax-time-guide-get-credit-for-ira-contributions-made-by-april-15-on-2020-tax-returns

IR-2021-53, March 11, 2021 WASHINGTON — The Internal Revenue Service notes that taxpayers of all ages may be able to claim a deduction on their 2020 tax return for contributions to their Individual Retirement Arrangement (IRA) made through April 15, 2021. There is no longer a maximum age for making IRA contributions. An IRA is designed to enable employees and the self-employed to save for retirement. Most taxpayers who work are eligible to start a traditional or Roth IRA or add money to an existing account. Contributions to a traditional IRA are usually tax deductible, and distributions are generally taxable. There is still time to make contributions that count for a 2020 tax return, if they are made by April 15, 2021. Taxpayers can file their return claiming a traditional IRA contribution before the contribution is actually made. The contribution must then be made by the April due date of the return. While contributions to a Roth IRA are not tax deductible, qualified distributions are tax-free. In addition, low- and moderate-income taxpayers making these contributions may also qualify for the Saver's Credit. Generally, eligible taxpayers can contribute up to $6,000 to an IRA for 2020. For someone who was 50 years of age or older at the end of 2020, the limit is increased to $7,000. The restrictions on taxpayers age 70 1/2 or older to make contributions to their IRA were removed in 2020. Qualified contributions to one or more traditional IRAs are deductible up to the contribution limit or 100% of the taxpayer's compensation, whichever is less. For 2020, if a taxpayer is covered by a workplace retirement plan, the deduction for contributions to a traditional IRA is generally reduced depending on the taxpayer's modified adjusted gross income: Single or head of household filers with income of $65,000 or less can take a full deduction up to the amount of their contribution limit. For incomes more than $65,000 but less than $75,000, there is a partial deduction and if $75,000 or more there is no deduction. Filers that are married filing jointly or a qualifying widow(er) with $104,000 or less of income, a full deduction up to the amount of the contribution limit is permitted. Filers with more than $104,000 but less than $124,000 can claim a partial deduction and if their income is at least $124,000, no deduction is available. For joint filers, where the spouse making the IRA contribution is not covered by a workplace plan, but their spouse is covered, a full deduction is available if their modified AGI is $196,000 or less. There's a partial deduction if their income is between $196,000 and $206,000 and no deduction if their income is $206,000 or more. Filers who are married filing separately and have an income of less than $10,000 can claim a partial deduction. If their income is at least $10,000, there is no deduction. Worksheets are available in the Form 1040 InstructionsPDF or in Publication 590-A, Contributions to Individual Retirement ArrangementsPDF. The deduction is claimed on Form 1040, Schedule 1PDF. Nondeductible contributions to a traditional IRA are reported on Form 8606, Nondeductible IRAsPDF. Even though contributions to Roth IRAs are not tax deductible, the maximum permitted amount of these contributions begins to phase out for taxpayers whose modified adjusted gross income is above a certain level: For filers who are married filing jointly or qualifying widow(er), that level is $196,000. For those who file as single, head of household, or married filing separately and did not live with their spouse at any time during the year, that level is $124,000. For filers who are married filing separately and lived with their spouse at any time during the year, any amount of modified AGI reduces their contribution limit. The Saver's Credit, also known as the Retirement Savings Contributions Credit, is often available to IRA contributors whose adjusted gross income falls below certain levels. In addition, beginning in 2018, designated beneficiaries may be eligible for a credit for contributions to their Achieving a Better Life Experience (ABLE) account. For more information on annual contributions to an ABLE account, see Publication 907, Tax Highlights for Persons With DisabilitiesPDF. Taxpayers should use Form 8880, Credit for Qualified Retirement Savings ContributionsPDF, to claim the Saver's Credit, and its instructions for details on figuring the credit correctly. Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov. They can use these resources to get help when it's needed, at home, at work or on the go. This news release is part of a series called the Tax Time Guide, a resource to help taxpayers file an accurate tax return. Additional help is available in Publication 17, Your Federal Income Tax For IndividualsPDF. More resources Do I Qualify for the Retirement Savings Contributions Credit?

https://www.irs.gov/newsroom/tax-time-guide-make-protecting-tax-and-financial-information-a-habit

IR-2021-52, March 9, 2021 WASHINGTON – The Internal Revenue Service today urged people to continue practicing proper cybersecurity habits by securing computers, phones and other devices. Scams and schemes using the IRS as a lure can take on many variations, so practicing personal information security is vital. This news release is part of a series called the Tax Time Guide, a resource to help taxpayers file an accurate tax return. Additional help is available in Publication 17, Your Federal Income Tax. The IRS works with the Security Summit, a partnership with state tax agencies and the private-sector tax industry, to help protect taxpayer information and defend against identity theft. Taxpayers and tax professionals can take steps to help in this effort by doing things like minimizing cybersecurity footprints, staying vigilant in protecting personal tax and financial information and being aware of common scams and schemes. As a reminder, the IRS doesn't initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. Generally, the IRS first mails a paper bill to a person who owes taxes. In some special situations, the IRS will call or come to a home or business. People should be alert to scammers posing as the IRS to steal personal information. There are ways to know if it's really the IRS calling or knocking on someone's door. Below are a few tips to help minimize exposure to fraud and identity theft: Protect personal information. Treat personal information like cash – don't hand it out to just anyone. Social Security numbers, credit card numbers, bank and even utility account numbers can be used to help steal a person's money or open new accounts.   Safeguard personal data. Provide a Social Security number, for example, only when necessary. Only offer personal information or conduct financial transactions on sites that have been verified as reputable, encrypted websites.   Use strong passwords. Use a password phrase or series of words that will be easy for you to remember. Use at least 10 characters; 12 is ideal for most home users. Mix letters, numbers and special characters. Try to be unpredictable – don't use names, birthdates or common words. Don't use the same password for many accounts and avoid sharing them. Keep passwords in a secure place or use password management tools.   Set password and encryption protections for wireless networks. If a home or business Wi-Fi is unsecured, it allows any computer within range to access the wireless network and potentially steal information from connected devices. Whenever it is an option for a password-protected account, users should also opt for a multi-factor authentication process. Multi-factor authentication is critical to protecting your password.   Avoid phishing scams. The easiest way for criminals to steal sensitive data is simply to ask for it. IRS urges people to learn to recognize phishing emails, calls or texts that pose as familiar organizations such as banks, credit card companies or even the IRS. Keep sensitive data safe and:   Be aware that an unsolicited email with a request to download an attachment or click on a URL could appear to come from someone that you know like a friend, work colleague or tax professional if their email has been spoofed or compromised.    Don't assume internet advertisements, pop-up ads or emails are from reputable companies. If an ad or offer looks too good to be true, take a moment to check out the company behind it.   Never download "security" software from a pop-up ad. A pervasive ploy is a pop-up ad that indicates it has detected a virus on the computer. The download most likely will install some type of malware. Reputable security software companies do not advertise in this manner.   Use security software. An anti-virus program should provide protection from viruses, Trojans, spyware and adware. The IRS urges people, especially tax professionals, to use an anti-virus program and always keep it up to date. Set security software to update automatically so it can be updated as threats emerge. Educate children and those with less online experience about the threats of opening suspicious web pages, emails or documents.   Back up files. No system is completely secure. Copy important files, including federal and state tax returns, onto removable discs or back-up drives and cloud storage. Store discs, drives and any paper copies in secure, locked locations.   ID Theft Central. Designed to improve online access to information on identity theft, it serves taxpayers, tax professionals and businesses. Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov. They can use these resources to get help when it's needed at home, at work or on the go.

https://www.irs.gov/newsroom/tax-time-guide-make-irsgov-first-stop-for-tax-help

IR-2021-51, March 4, 2021 WASHINGTON — The Internal Revenue Service reminds taxpayers that its website, IRS.gov, continues to be the first and best place for people seeking information and assistance on their federal taxes. It is available 24 hours a day from the comfort of home, on a desktop, or from just about anywhere with a mobile device. The array of online tools and resources available at IRS.gov range from tax preparation and refund tracking to research tools like the Interactive Tax Assistant and answers for Frequently Asked Questions on many subjects. View tax account online Taxpayers can use their online account to securely see important information when preparing to file their tax return or following up on balances or notices. This includes: Adjusted Gross Income: This can be useful if using a different tax software or tax preparer this year. Economic Impact Payment amounts: Eligible individuals who did not receive the full amounts of both Economic Impact Payments may claim the Recovery Rebate Credit on their 2020 federal tax return. To claim the full amount, taxpayers will need to know the amounts of the Economic Impact Payments received. These amounts can be found on the Tax Records tab in online account. Estimated tax payment amounts: The total of any estimated tax payments made during the year or refunds applied as a credit can be found on the Account Balance tab in online account, and a record of each payment appears under Payment Activity. Additionally, taxpayers can view: The amount owed for any past years, updated for the current calendar day Payment history and any scheduled or pending payments Payment plan details Digital copies of select notices from the IRS Get a tax return transcript The Get Transcript tool is free and also accessible through an online account. It allows taxpayers to view, print or download their tax transcripts after the IRS has processed the return. A tax return transcript shows most line items from an original tax return, along with any forms and schedules, but not changes made after it was filed. Get an Identity Protection PIN An Identity Protection PIN (IP PIN) is a six-digit number that prevents someone from filing a tax return using another taxpayer's Social Security number. The IP PIN is known only to the real taxpayer and the IRS and helps the IRS verify the taxpayer's identity when they file their electronic or paper tax return. Starting in 2021, any taxpayer who can verify his or her identity can voluntarily opt into the IP PIN program. See Get an IP PIN for details and to access the online tool. There are options for those who cannot verify their identities online. Locate local free tax preparation The IRS's Volunteer Income Tax Assistance (VITA) program has operated for over 50 years. It offers free basic tax return preparation to qualified individuals: People who generally make $57,000 or less People with disabilities Limited English-speaking taxpayers The Tax Counseling for the Elderly (TCE) program also offers free tax help for taxpayers, particularly those age 60 and older. The VITA/TCE Site Locator can help eligible taxpayers find the nearest community-based site staffed by IRS-trained and certified volunteers. Please note that some VITA/TCE sites are not operating at full capacity this year and others are not opening. Demand is high for this service so taxpayers may experience longer wait times for appointments. Taxpayers can use the locator tool to find an available site near them. It is updated throughout the tax season, so individuals should check back if they don't see a nearby site listed. DIY tax preparation for free The IRS Free File program offers 70% of all taxpayers the choice of nine brand-name tax preparation software packages to use at no cost. Those who earned less than $72,000 in 2020 can choose which package is best for them. Some even offer free state tax return preparation. Those who earned more than $72,000 in 2020 and are comfortable preparing their own taxes can use Free File Fillable Forms. This electronic version of paper IRS tax forms can also be used to file tax returns online. Free File is available only through IRS.gov. Read more about the Free File program in this week's A Closer Look. Find a local tax professional The searchable directory on IRS.gov can help taxpayers find a tax professional in their area. The list can be sorted by credentials and qualifications. Tax return preparers have differing levels of skills, education and expertise. Most tax return preparers provide outstanding and professional service. However, each year, some taxpayers are hurt financially because they choose the wrong tax return preparer. Be sure to check our tips for choosing a tax preparer and how to avoid unethical "ghost" return preparers. Track refunds with 'Where's My Refund?' Taxpayers can easily find the most up-to-date information about their tax refund using the "Where's My Refund?" tool on IRS.gov and on the official IRS mobile app, IRS2Go. Within 24 hours after the IRS acknowledges receipt of an e-filed return, or four weeks after a paper return is mailed, taxpayers can start checking on the status of their refund. Make a tax payment Taxpayers can visit the "Pay" tab on IRS.gov to see their payment options. Most tax software products give taxpayers various payment options, including the option to schedule a payment from a bank account when filing their return. IRS Direct Pay offers taxpayers a free, fast, secure and easy way to make an electronic payment from their bank account to the U.S. Treasury. Other ways to pay include: Electronic Funds Withdrawal (during e-filing) Credit or debit card Check or money order Cash at a participating retail store Make a plan to pay Taxpayers can meet their tax obligation in monthly installments by applying for a payment plan. Most can be setup on IRS.gov/paymentplan or through an online account in a matter of minutes. Setup fees may apply for some types of plans. Options include a full-pay agreement, a short-term plan of up to 120 days or a long-term monthly payment plan (installment agreement). The amount a taxpayer owes and their tax- filing compliance determines which payment plan options may be available. Other options available may include an  offer in compromise  -- a way for a taxpayer to settle their tax debt for less than the full amount -- or requesting the IRS to temporarily delay collection until the taxpayer's financial situation improves. The IRS2Go app offers great features Refund Status: Check the status of an income tax refund within 24 hours after the IRS receives the e-filed return, or about four weeks after mailing a paper return. Make a Payment: Get easy access to mobile-friendly payment options like IRS Direct Pay, offering a free, secure way to pay directly from a bank account. Free Tax Help: Directly access Free File tax software from a mobile device to quickly prepare and file taxes or find a VITA or TCE site nearby. Stay Connected: Follow IRS on Twitter, LinkedIn and Instagram, watch helpful videos on YouTube, subscribe to receive IRS Tax Tips and more. Security Code: IRS2Go can generate login security codes for certain IRS online services, allowing the retrieval of codes through IRS2Go instead of using text messages. For more information, visit the Secure Access page. The Tax Time Guide is series of news releases designed to help taxpayers get the information they need to file an accurate tax return. Additional help is available in Publication 17, Your Federal Income Tax, on IRS.gov.

https://www.irs.gov/newsroom/interest-rates-remain-the-same-for-the-second-quarter-of-2021

IR-2021-50, March 2, 2021 WASHINGTON — The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning April 1, 2021. The rates will be: 3% for overpayments (2% in the case of a corporation); 0.5% for the portion of a corporate overpayment exceeding $10,000; 3% for underpayments; and 5% 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 2021 to take effect February 1, 2021, based on daily compounding. Revenue Ruling 2021-6PDF, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2021-12, dated March 22, 2021.

https://www.irs.gov/newsroom/tax-time-guide-didnt-get-economic-impact-payments-check-eligibility-for-recovery-rebate-credit

IR-2021-49, March, 2, 2021 WASHINGTON – The Internal Revenue Service reminds first-time filers and those who usually don't have a federal filing requirement to consider filing a 2020 tax return. They may be eligible to claim the Recovery Rebate Credit, a new refundable credit, authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the COVID-related Tax Relief Act. Most individuals eligible for the Recovery Rebate Credit have already received the full amount in two rounds of payments, known as Economic Impact Payments. All legally permitted first and second Economic Impact Payments have been issued. Individuals who were eligible but did not receive the first or second Economic Impact Payment or received less than the full amounts may be eligible to claim the Recovery Rebate Credit and must file a 2020 federal tax return, even if they do not usually file a tax return. The IRS offers free options to prepare and file a return. Taxpayers who received the full amounts of both Economic Impact Payments won't claim the Recovery Rebate Credit or include any information about the payments on their 2020 tax return because the IRS already issued their Recovery Rebate Credit in advance as Economic Impact Payments. Didn't get an Economic Impact Payment or got less than the full amount? People who didn't get an Economic Impact Payment or got less than the full amounts may be eligible to claim the Recovery Rebate Credit and must file a 2020 tax return, even if they don't usually file. The first Economic Impact Payment was based on an individual's 2019 tax year information or 2018 if the 2019 tax return information was not available. The second Economic Impact Payment was based on an individual's 2019 tax year information. The Recovery Rebate Credit is similar except that the eligibility and the amount are based on 2020 information on the tax return. The Recovery Rebate Credit is reduced by any Economic Impact Payments issued. People who were not eligible for either or both of the Economic Impact Payments may still be eligible for the Recovery Rebate Credit since it's based on their 2020 tax return information. Those with lower income in 2020 or who were claimed as a dependent on someone else's tax return in 2018 or 2019, but who cannot be claimed as a dependent on someone else's return in 2020, may now be eligible for the Recovery Rebate Credit. People eligible to claim the Recovery Rebate Credit based on their 2020 tax information must file a 2020 federal tax return. For more information about the Recovery Rebate Credit, see Frequently Asked Questions at IRS.gov. Filing a 2020 tax return To avoid refund delays, file a complete and accurate tax return. The best way to file a complete and accurate 2020 tax return is to file electronically. The tax software will ask questions about income, credits and deductions and help taxpayers figure their Recovery Rebate Credit. The Form 1040 and Form 1040-SR instructions includes a worksheet that can also help. Individuals will need to know the amount of their Economic Impact Payments to claim the Recovery Rebate Credit. Those who don't have their Economic Impact Payment notices can view the amounts of their first and second Economic Impact Payments through their individual online account. For married filing joint individuals, each spouse will need to log into his or her own account. The Recovery Rebate Credit will be included in any tax refund. It will not be issued separately. For those due a refund (which would include the Recovery Rebate Credit), combining electronic filing with direct deposit is the safest and fastest way to get their refund. IRS Free File Taxpayers with incomes of $72,000 or less, an use brand-name software to prepare and file their federal tax returns electronically for free with IRS Free File. IRS Free File is a great option for people who are only filing a tax return to claim the Recovery Rebate Credit. Free File Fillable Forms is the only IRS Free File option available for most taxpayers whose adjusted gross income is greater than $72,000. Taxpayers who have no taxable income but are filing a return to receive the Recovery Rebate Credit should look for several of the Free File products that have no minimum income for eligibility. Simply go to IRS.gov/Free File, select "Choose an IRS Free File Offer" and then select "Browse All Offers" to find a Free File product with no minimum income as part of its offer. Free online tax help for military service members, families and some veterans MilTax, Military OneSource's tax service, provides online software for eligible individuals to electronically file a federal return and up to three state returns for free. Free tax preparation in local communities First-time filers and those who usually don't have a filing requirement may also qualify for free assistance from IRS Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs in their community. These programs offer free basic tax return preparation to qualified individuals. The VITA program has operated for over 50 years, offering free tax help to: People who generally make $57,000 or less Persons with disabilities; and Limited English-speaking taxpayers who need assistance in preparing their tax return. In addition to VITA, the TCE program offers free tax help, particularly for those who are 60 years of age and older, specializing in questions about pensions and retirement-related issues unique to seniors. This year, some VITA/TCE sites are not operating at full capacity and others are not opening. Check the VITA/TCE locator tool to search for nearby available sites. Help at IRS.gov IRS.gov has online resources to answer tax questions immediately. The Interactive Tax Assistant is a tool that provides answers to several tax-law questions specific to a taxpayer's individual circumstances. Visit IRS.gov/filing for details about IRS Free File, Free File Fillable Forms, free VITA or TCE tax preparation sites in the local community or finding a trusted tax professional.

https://www.irs.gov/newsroom/irs-provides-guidance-for-employers-claiming-the-employee-retention-credit-for-2020-including-eligibility-rules-for-ppp-borrowers

IR-2021-48, March 1, 2021 WASHINGTON — The Internal Revenue Service today issued guidance for employers claiming the employee retention credit under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), as modified by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act), for calendar quarters in 2020. The guidance in Notice 2021-20PDF is similar to the information in the employee retention credit FAQs, but includes clarifications and describes retroactive changes under the new law applicable to 2020, primarily relating to expanded eligibility for the credit. For 2020, the employee retention credit can be claimed by employers who paid qualified wages after March 12, 2020, and before January 1, 2021, and who experienced a full or partial suspension of their operations or a significant decline in gross receipts. The credit is equal to 50 percent of qualified wages paid, including qualified health plan expenses, for up to $10,000 per employee in 2020. The maximum credit available for each employee is $5,000 in 2020. A significant change for 2020 made by the Relief Act permits eligible employers that received a Paycheck Protection Program (PPP) loan to claim the employee retention credit, although the same wages cannot be counted both for seeking forgiveness of the PPP loan and calculating the employee retention credit. Notice 2021-20 explains when and how employers that received a PPP loan can claim the employee retention credit for 2020. Notice 2021-20PDF also provides answers to questions such as: who are eligible employers; what constitutes full or partial suspension of trade or business operations; what is a significant decline in gross receipts; how much is the maximum amount of an eligible employer's employee retention credit; what are qualified wages; how does an eligible employer claim the employee retention credit; and how does an eligible employer substantiate the claim for the credit. While the Relief Act also extended and modified the employee retention credit for the first two calendar quarters in 2021, Notice 2021-20PDF addresses only the rules applicable to 2020. The IRS plans to release additional guidance soon addressing the changes for 2021. A page on IRS.gov is devoted to providing information to businesses on all aspects of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

https://www.irs.gov/newsroom/irs-now-accepting-tce-and-vita-grant-applications

IR-2021-99, April 30, 2021 WASHINGTON — Eligible organizations can now submit applications for the Internal Revenue Service's Tax Counseling for the Elderly and Volunteer Income Tax Assistance grant programs, allowing some organizations to apply for up to three years of annual funding. Organizations can apply on Grants.gov through June 4, 2021, and can find application packages and guidelines on IRS.gov. In 2021, the IRS awarded 31 TCE grantees $11 million and 297 VITA grantees $25 million. The two programs prepare millions of tax returns each year. The IRS established the TCE program in 1978 to provide tax counseling and return preparation to persons age 60 or older and to give training and technical assistance to the volunteers who provide free federal income tax assistance within elderly communities across the nation. For more information visit the TCE webpage on IRS.gov. The IRS created the VITA program in 1969. In 2007, the IRS established the VITA Grant program to supplement VITA partners' efforts. VITA provides free tax filing assistance to underserved communities. The grant program enables VITA to extend services to underserved populations in the hardest-to-reach urban and non-urban areas, to increase the capacity of targeted taxpayers to file returns electronically, to enhance training of volunteers and to improve the accuracy rate of returns prepared at VITA sites. For more information visit the VITA webpage on IRS.gov. More Information: Applying for a TCE grant Publication 1101, Application Package and Guidelines for Managing a TCE Program PDF Applying for a VITA grant Publication 4671, VITA Grant Program Overview and Application Instructions PDF

https://www.irs.gov/newsroom/draft-schedules-k-2-and-k-3-released-to-enhance-reporting-of-international-tax-matters-by-pass-through-entities

IR-2021-98, April 30, 2021 WASHINGTON — The Treasury and the IRS released today updated early drafts of new Schedules K-2 and K-3 for Forms 1065, 1120-S, and 8865 for tax year 2021 (filing season 2022). The schedules are designed to provide greater clarity for partners and shareholders on how to compute their U.S. income tax liability with respect to items of international tax relevance, including claiming deductions and credits. The early release drafts of the schedules are intended to give a preview of the changes before final versions are released. The release of an early draft of the instructions for the schedules is planned for this summer. The redesigned forms and instructions will also give useful guidance to partnerships, S corporations and U.S persons who are required to file Form 8865 with respect to controlled foreign partnerships on how to provide international tax information. The updated forms will apply to any persons required to file Form 1065, 1120-S or 8865, but only if the entity for which the form is being filed has items of international tax relevance (generally foreign activities or foreign partners). The changes do not affect partnerships and S corporations with no items of international tax relevance. The Treasury Department and the IRS released prior drafts of Schedules K-2 and K-3 for the Form 1065 in July 2020 and engaged with stakeholders to solicit input on the changes. Helpful comments were received, and changes have been made to the schedules and instructions as appropriate. To promote compliance with adoption of Schedules K-2 and K-3 by affected pass-through entities and their partners and shareholders, the Treasury Department and the IRS intend to provide certain penalty relief for the 2021 tax year in future guidance.

https://www.irs.gov/newsroom/irs-has-options-for-gig-economy-workers-and-those-with-unemployment-benefits

IR-2021-97, April 29, 2021 WASHINGTON — The Internal Revenue Service reminds workers in the gig economy and those who claimed unemployment compensation in 2020 of their options and where to find information on meeting their tax obligations. Gig economy The gig economy refers to income earned providing on-demand work performing services or selling goods, including driving a car for booked rides or deliveries, renting out property, selling goods online or freelance work. Often, customers and service providers or sellers are brought together through a digital platform on an app or website. Visit the Gig Economy Tax Center on IRS.gov to learn more about withholding and estimated tax requirements for these types of earned income and paid services. Taxpayers should collect and keep records and receipts during the year. Recordkeeping can help track income, deduct expenses and complete tax returns. Unemployment benefits A record number of Americans applied for unemployment compensation in 2020 due to the pandemic. Anyone who received unemployment benefits will need to report it on their tax returns. However, the American Rescue Plan, enacted on March 11, 2021, excludes from income up to $10,200 ($20,400 if married filing jointly) of unemployment compensation paid in 2020 for those with modified adjusted gross income under $150,000. Any amount over $10,200 is still taxable for each person. To determine if payments received for being unemployed are taxable, check out the Interactive Tax Assistant on IRS.gov. For those who have already filed their 2020 tax return and paid taxes on the full amount of unemployment compensation before the law was passed, they should not file an amended return. The IRS will automatically refund money to people who already filed their tax return reporting unemployment compensation. The IRS will recompute any credits and deductions claimed on the original return. However, if the reduction of income now qualifies a taxpayer for a new credit not claimed on the original return, like the Earned Income Tax Credit (EITC), those taxpayers will need to file an amended tax return, Form 1040x, to claim the new credit. Taxpayers can see if they qualify for the EITC at IRS.gov. Unemployment benefit recipients should have received a Form 1099-G, Certain Government Payments, from the agency paying the benefits. The form will show the amount of unemployment compensation they received in 2020 in Box 1, and any federal income tax withheld in Box 4. Some states do not mail Form 1099-Gs. Taxpayers may need to get the electronic version from their state's website. Taxpayers who received an incorrect Form 1099-G for unemployment benefits they did not receive should contact the issuing state agency to request a revised Form 1099-G showing they did not receive these benefits. Taxpayers who are unable to obtain a timely, corrected form from their state should still file an accurate tax return, reporting only the income they received. A corrected Form 1099-G showing zero unemployment benefits in cases of identity theft will help taxpayers avoid an unexpected federal tax bill for unreported income. Additionally, if taxpayers are concerned that their personal information has been stolen and they want to protect their identity when filing their federal tax return, they can request an Identity Protection Pin (IP PIN) from the IRS. Generally, by law, unemployment compensation must be included as income. Taxable benefits include any of the special unemployment compensation authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in 2020. If a taxpayer didn't report income from gig work or unemployment compensation on a return, a corrected return can be filed using Form 1040-X, Amended U.S. Individual Income Tax Return. Form 1040-X can be filed electronically. Taxpayers who owe but can't pay in full always have options to seek help through payment plans and other tools from IRS.gov/payments. Tax information is also available in: Spanish (Español)  Chinese (中文)  Korean (한국어) Russian (Pусский) Vietnamese (Tiếng Việt) Resources IRS Webinar – Understanding the Gig Economy Gig Economy and Your Taxes: Things to KnowPDF  Pay As You Go, So You Won't Owe: A Guide to Withholding & Estimated Taxes  ID Theft regarding unemployment  Tax Treatment of unemployment

https://www.irs.gov/newsroom/irs-some-people-get-more-time-to-file-without-asking-anyone-else-can-request-an-automatic-extension

IR-2021-96, April 29, 2021 WASHINGTON — Anyone can request an automatic tax-filing extension, but some people get extra time without asking, according to the Internal Revenue Service. Due to the ongoing pandemic, this year the IRS postponed the usual April 15 deadline for filing individual income tax returns until May 17, 2021. Even so, as is the case every year, many Americans will still need more time to meet their tax-filing obligation. The IRS estimates that more than 16 million taxpayers will get an automatic extension this filing season, either by filing a form or making an electronic tax payment. But some taxpayers, including disaster victims, those serving in a combat zone and Americans living abroad get more time, even if they don't ask for it. Here are details on each of these special tax-relief provisions. Disaster victims Victims of the February winter storms in Texas, Oklahoma and Louisiana have until June 15, 2021, to file their 2020 returns and pay any tax due. The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in a federally declared disaster area when at least one area qualifies for FEMA's Individual Assistance program. Ordinarily, this means that taxpayers need not contact the IRS to get disaster tax relief. This relief also includes more time for making 2020 contributions to IRAs and other plans and making 2021 estimated tax payments. In some cases, relief is also available to people living outside the disaster area if, for example, they have a business located in the disaster area, have tax records located in the disaster area or are assisting in disaster relief. For details on all available relief, visit the Around the Nation page on IRS.gov. Combat zone taxpayers Military service members and eligible support personnel serving in a combat zone have at least 180 days after they leave the combat zone to file their tax returns and pay any tax due. This includes those serving in Iraq, Afghanistan and other combat zones. A complete list of designated combat zone localities can be found in Publication 3, Armed Forces' Tax Guide, available on IRS.gov. Combat zone extensions also give affected taxpayers more time for a variety of other tax-related actions, including contributing to an IRA. Various circumstances affect the exact length of the extension available to taxpayers. Details, including examples illustrating how these extensions are calculated, are in the Extensions of Deadlines section in Publication 3. Taxpayers outside the United States U.S. citizens and resident aliens who live and work outside the U.S. and Puerto Rico have until June 15, 2021 to file their 2020 tax returns and pay any tax due. The special June 15 deadline also applies to members of the military on duty outside the U.S. and Puerto Rico who do not qualify for the longer combat zone extension. Affected taxpayers should attach a statement to their return explaining which of these situations apply. Though taxpayers abroad get more time to pay, interest -- currently at the rate of 3% per year, compounded daily -- applies to any payment received after this year's May 17 deadline. For more information about the special tax rules for U.S. taxpayers abroad, see Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, on IRS.gov. Everyone else Taxpayers who don't qualify for any of these three special situations can still get more time to file by submitting a request for an automatic extension. This will extend their filing deadline until October 15, 2021. But because this is only a tax-filing extension, their 2020 tax payments are still due by May 17. An easy way to get the extra time is through Free File on IRS.gov. In a matter of minutes, anyone, regardless of income, can use this free service to electronically request an extension on Form 4868. To get the extension, taxpayers must estimate their tax liability on this form. Another option is to pay electronically and get a tax-filing extension. The IRS will automatically process an extension when a taxpayer selects Form 4868 and makes a full or partial federal tax payment by the May 17 due date using Direct Pay, the Electronic Federal Tax Payment System (EFTPS) or a debit or credit card. Under this option, there is no need to file a separate Form 4868. Please note, you must register for EFTPS before using. Electronic payment options are available at IRS.gov/payments.

https://www.irs.gov/newsroom/nearly-2-million-more-economic-impact-payments-disbursed-under-the-american-rescue-plan-continuing-payments-reach-approximately-163-million

IR-2021-95, April 28, 2021 WASHINGTON — Today, the Internal Revenue Service, the U.S. Department of the Treasury, and the Bureau of the Fiscal Service announced they are disbursing nearly 2 million payments in the seventh batch of Economic Impact Payments from the American Rescue Plan. Today's announcement brings the total disbursed so far to approximately 163 million payments, with a total value of approximately $384 billion, since these payments began rolling out to Americans in batches as announced on March 12. The seventh batch of payments began processing on Friday, April 23, with an official payment date of April 28, with some people receiving direct payments in their accounts earlier as provisional or pending deposits. Here is additional information on this batch of payments: In total, this batch includes nearly 2 million payments with a value of more than $4.3 billion. More than 1.2 million payments, with a value of over $3 billion, went to eligible individuals for whom the IRS previously did not have information to issue an Economic Impact Payment but who recently filed a tax return.  This batch also includes additional ongoing supplemental payments for people who earlier this year received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns. This batch included more than 730,000 of these "plus-up" payments, with a value of over $1.3 billion. Overall, this seventh batch of payments contains about 1.1 million direct deposit payments (with a total value of $2.5 billion) and about 850,000 paper check payments (with a total value of more than $1.8 billion). Additional information is available on the first six batches of Economic Impact Payments from the American Rescue Plan, which processed weekly on April 16, April 9, April 2, March 26, March 19 and March 12. The IRS will continue to make Economic Impact Payments on a weekly basis. Ongoing payments will be sent to eligible individuals for whom the IRS previously did not have information to issue a payment but who recently filed a tax return, as well to people who qualify for "plus-up" payments. Special reminder for those who don't normally file a tax return Although payments are automatic for most people, the IRS continues to urge people who don't normally file a tax return and haven't received Economic Impact Payments to file a 2020 tax return to get all the benefits they're entitled to under the law, including tax credits such as the 2020 Recovery Rebate Credit, the Child Tax Credit, and the Earned Income Tax Credit. Filing a 2020 tax return will also assist the IRS in determining whether someone is eligible for an advance payment of the 2021 Child Tax Credit, which will begin to be disbursed this summer. For example, some federal benefits recipients may need to file a 2020 tax return – even if they don't usually file – to provide information the IRS needs to send payments for a qualifying dependent. Eligible individuals in this group should file a 2020 tax return as quickly as possible to be considered for an additional payment for their qualifying dependents. People who don't normally file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness, the rural poor, and others. Individuals who didn't get a first or second round Economic Impact Payment or got less than the full amounts may be eligible for the 2020 Recovery Rebate Credit, but they'll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. Free tax return preparation is available for qualifying people. The IRS reminds taxpayers that the income levels in this third round of Economic Impact Payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly). The payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment. Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.

https://www.irs.gov/newsroom/electronic-options-on-irsgov-are-available-24-7-save-time-online-for-filing-information-and-help

IR-2021-94, April 27, 2021 WASHINGTON — The Internal Revenue Service today urged taxpayers and tax professionals to continue using electronic options to speed the processing of tax returns, refunds and payments. IRS.gov showcases many task-based tools and features to help people navigate their taxes. All are available 24/7/365. Timely processing of tax returns and refund issuance is especially important during the pandemic. To speed refunds and avoid delays in processing, the IRS strongly advises taxpayers to file electronically with direct deposit as soon as they have the information they need. Simple options to make filing easier Check IRS.gov for the latest tax information, including the latest on Economic Impact Payments and tax refund status. There is no need to call.   Consider IRS Free File. Taxpayers who want to prepare and file their tax returns electronically for free can use IRS Free File. This program offers brand-name tax software for taxpayers with an income of $72,000 or less in 2020. Those who earned more can use Free File Fillable Forms, the electronic version of IRS paper forms. Some people will need to file a return to get a third Economic Impact Payment and Free File gives people the ability to do that for free.   Check payment options on IRS.gov. Several electronic payment options are available to taxpayers. View an account and learn about other ways to pay such as an online installment agreement.   Find answers to many tax questions using the Interactive Tax Assistant. The ITA is a tool that provides answers to several tax law questions specific to an individual's circumstances.   Online tools for tax professionals. e-Services is a suite of web-based tools that allow tax professionals, reporting agents, mortgage industry, payers and others to complete transactions online with the IRS. Other useful tools and features Get My Payment. People can find out when their third Economic Impact Payment is scheduled to be sent, or when and how IRS sent it with the Get My Payment application. Get My Payment updates once a day, usually overnight.   Filing options. Find complete tax filing information for individuals, business and self-employed taxpayers, charities and non-profits, International taxpayers and government entities.   Get an Identity Protection PIN. IP PINs are available to all taxpayers. An IP PIN is a six-digit number that prevents someone else from filing a tax return using another taxpayers' Social Security number. The IP PIN is known only to the taxpayer and the IRS and helps the IRS verify the identity of a taxpayer when filing an electronic or paper tax return.   View an account. Online account is an online system that allows people to securely access their individual account information. Taxpayers can view taxes owed, balance details, information on a most recent tax return, payment plan details and more.   Get a tax record. Request a copy of a tax return online. The Get Transcript Service is for individual taxpayers to retrieve their own transcripts for their own purposes.   Download tax forms and instructions. Current and prior years' forms are available. Other online options include IRS e-Books and accessible versions for people with disabilities.   Tax Withholding Estimator. Use of this tool can help people bring their taxes paid closer to what is owed. The IRS encourages everyone to perform a "paycheck checkup" to be sure the right amount of tax is withheld based on their personal situation. Free options for the military and some veterans MilTax, Military OneSource's tax service, provides online software for eligible individuals to electronically file a federal return and up to three state returns for free. Military OneSource is a program funded by the Department of Defense that provides a range of free resources for military members, veterans and their families. More information about OneSource is available at MilitaryOneSource.mil. Tax deadline is May 17 Although the tax filing deadline has been extended to May 17, 2021, from April 15, the IRS continues to process electronic tax returns, issue direct deposit refunds and accept electronic payments. As of April 16, the IRS received over 110 million tax returns and issued over $210 billion in refunds. Overall, the IRS anticipates nine out of 10 taxpayers will receive their refund within 21 days of when they file electronically with direct deposit if there are no issues with their tax return.

https://www.irs.gov/newsroom/irs-office-of-chief-counsels-first-national-virtual-settlement-month-successful-in-resolving-almost-150-tax-court-cases

IR-2021-93, April 26, 2021 WASHINGTON — Building on the success of Settlement Days and Virtual Settlement Days, the Internal Revenue Service Office of Chief Counsel hosted its first National Virtual Settlement Month in March 2021. The results are impressive. Settlement Days events are coordinated efforts to resolve cases in the United States Tax Court by providing taxpayers who are not represented by counsel the opportunity to receive free tax advice from Low Income Taxpayer Clinics (LITCs), American Bar Association (ABA) volunteer attorneys and other pro bono organizations. "The March Settlement Days campaign yielded great results with well over half of participating taxpayers settling their cases on a basis agreeable to them without having to represent themselves in Tax Court," said IRS Commissioner Chuck Rettig. "These strong results could not be achieved without the dedication and support of our partner groups--the LITCs, ABA and other pro bono organizations." During the Office of Chief Counsel's National Virtual Settlement Month, Virtual Settlement Days events were held in all 50 states and the District of Columbia. Many were held in cities that had not recently hosted a Settlement Days event. Nearly 240 taxpayers met with Chief Counsel employees and pro bono organizations, leading to settlements in 148 Tax Court cases. Those taxpayers whose cases were not resolved had the opportunity to obtain free legal advice and better understand their cases and the process of litigating in the Tax Court. LITC representatives and ABA volunteer attorneys provided free legal advice, assisting taxpayers outside their regular service areas as needed. At many events, taxpayers were also able to discuss payment options with IRS Collection employees. Taxpayers were also able to consult Taxpayer Advocate Service employees about unrelated tax matters not before the Tax Court. "Unrepresented taxpayers with cases in Tax Court should strongly consider seeking assistance at a settlement day event when given the chance. It provides taxpayers a fair way to resolve their cases on a basis they agree with rather than taking their chances in court," Rettig noted. Virtual Settlement Days events were first announced in May 2020 to continue the benefits of Settlement Days during the pandemic. Before March 2021, more than 260 taxpayers resolved their Tax Court cases during a Virtual Settlement Days event, avoiding the need for over 260 trials. The Office of Chief Counsel plans to continue Virtual Settlement Days events together with face-to-face options when circumstances permit. In the meantime, taxpayers with cases before the Tax Court are encouraged to contact the assigned Chief Counsel attorney or paralegal to inquire about participating in a Virtual Settlement Days event. It is possible they can achieve same-day resolution of their case on a basis they agree with.

https://www.irs.gov/newsroom/two-million-more-economic-impact-payments-disbursed-under-the-american-rescue-plan-total-reaches-approximately-161-million-as-payments-continue

IR-2021-92, April 22, 2021 WASHINGTON — Today, the Internal Revenue Service, the U.S. Department of the Treasury, and the Bureau of the Fiscal Service announced they are disbursing nearly two million payments in the sixth batch of Economic Impact Payments from the American Rescue Plan. Today's announcement brings the total disbursed so far to approximately 161 million payments, with a total value of more than $379 billion, since these payments began rolling out to Americans in batches as announced on March 12. The sixth batch of payments began processing on Friday, April 16, with an official payment date of April 21, with some people receiving direct payments in their accounts earlier as provisional or pending deposits. Here is additional information on this batch of payments: In total, this batch includes nearly 2 million payments with a value of nearly $3.4 billion. Nearly 700,000 payments, with a value of more than $1.3 billion, went to eligible individuals for whom the IRS previously did not have information to issue an Economic Impact Payment but who recently filed a tax return.  This batch also includes additional ongoing supplemental payments for people who earlier this year received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns. This batch included nearly 700,000 of these "plus-up" payments, with a value of nearly $1.2 billion. Another 600,000 payments went to Social Security beneficiaries and Supplemental Security Income recipients, including those with foreign addresses. Overall, this sixth batch of payments contains about 900,000 direct deposit payments (with a total value of $1.5 billion) and nearly 1.1 million paper check payments (with a total value of nearly $1.8 billion). Additional information is available on the first five batches of Economic Impact Payments from the American Rescue Plan, which began processing on  April 9 , April 2, March 26, March 19 and March 12. The IRS will continue to make Economic Impact Payments on a weekly basis. Ongoing payments will be sent to eligible individuals for whom the IRS previously did not have information to issue a payment but who recently filed a tax return, as well to people who qualify for "plus-up" payments. Special reminder for those who don't normally file a tax return Although payments are automatic for most people, the IRS continues to urge people who don't normally file a tax return and haven't received Economic Impact Payments to file a 2020 tax return to get all the benefits they're entitled to under the law, including tax credits such as the 2020 Recovery Rebate Credit, the Child Tax Credit, and the Earned Income Tax Credit. Filing a 2020 tax return will also assist the IRS in determining whether someone is eligible for an advance payment of the 2021 Child Tax Credit, which will begin to be disbursed this summer. For example, some federal benefits recipients may need to file a 2020 tax return – even if they don't usually file – to provide information the IRS needs to send payments for a qualifying dependent. Eligible individuals in this group should file a 2020 tax return as quickly as possible to be considered for an additional payment for their qualifying dependents. People who don't normally file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness, the rural poor and others. Individuals who didn't get a first or second round Economic Impact Payment or got less than the full amounts may be eligible for the 2020 Recovery Rebate Credit, but they'll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. Free tax return preparation is available for qualifying people. The IRS reminds taxpayers that the income levels in this new round of Economic Impact Payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly). The payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment. Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.

https://www.irs.gov/newsroom/treasury-department-and-irs-provide-safe-harbor-for-small-businesses-to-claim-deductions-relating-to-first-round-paycheck-protection-program-loans

IR-2021-91, April 22, 2021 WASHINGTON — The Treasury Department and the Internal Revenue Service today issued Revenue Procedure 2021-20PDF for certain businesses that received first-round Paycheck Protection Program (PPP) loans but did not deduct any of the original eligible expenses because they relied on guidance issued before the enactment of tax relief legislation in December of 2020. Under prior guidance, businesses that received PPP loans to cover payroll costs, interest on covered mortgage obligations, covered rent obligation payments, and covered utility payments could not deduct corresponding expenses. With the Dec. 27, 2020, enactment of the Consolidated Appropriations Act, 2021, businesses now may claim these deductions even though they received PPP loans to cover original eligible expenses. These businesses can use the safe harbor provided by this guidance to deduct those expenses on the return for the immediately subsequent year. More information on COVID-19 related tax relief for business can be found on IRS.gov

https://www.irs.gov/newsroom/american-rescue-plan-tax-credits-available-to-small-employers-to-provide-paid-leave-to-employees-receiving-covid-19-vaccines-new-fact-sheet-outlines-details

IR-2021-90, April 21, 2021 WASHINGTON — The Internal Revenue Service and the Treasury Department announced today further details of tax credits available under the American Rescue Plan to help small businesses, including providing paid leave for employees receiving COVID-19 vaccinations. The additional details, provided in a fact sheet released today, spell out some basic facts about the employers eligible for the tax credits. It also provides information on how these employers may claim the credit for leave paid to employees related to COVID-19 vaccinations Eligible employers, such as businesses and tax-exempt organizations with fewer than 500 employees and certain governmental employers, can receive a tax credit for providing paid time off for each employee receiving the vaccine and for any time needed to recover from the vaccine. For example, if an eligible employer offers employees a paid day off in order to get vaccinated, the employer can receive a tax credit equal to the wages paid to employees for that day (up to certain limits). "This new information is a shot in the arm for struggling small employers who are working hard to keep their businesses going while also watching out for the health of their employees," said IRS Commissioner Chuck Rettig. "Our work on this issue is part of a larger effort by the IRS to assist the nation recover from the pandemic." The American Rescue Plan Act of 2021 (ARP) allows small and midsize employers, and certain governmental employers, to claim refundable tax credits that reimburse them for the cost of providing paid sick and family leave to their employees due to COVID-19, including leave taken by employees to receive or recover from COVID-19 vaccinations. Self-employed individuals are eligible for similar tax credits. The ARP tax credits are available to eligible employers that pay sick and family leave for leave from April 1, 2021, through Sept. 30, 2021. The paid leave credits under the ARP are tax credits against the employer's share of the Medicare tax. The tax credits are refundable, which means that the employer is entitled to payment of the full amount of the credits if it exceeds the employer's share of the Medicare tax. In anticipation of claiming the credits on the Form 941, Employer's Quarterly Federal Tax ReturnPDF, eligible employers can keep the federal employment taxes that they otherwise would have deposited, including federal income tax withheld from employees, the employees' share of social security and Medicare taxes and the eligible employer's share of social security and Medicare taxes with respect to all employees up to the amount of credit for which they are eligible. If the eligible employer does not have enough federal employment taxes on deposit to cover the amount of the anticipated credits, the eligible employer may request an advance by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19. Self-employed individuals may claim comparable credits on the Form 1040, U.S. Individual Income Tax ReturnPDF. More details are available on this fact sheet.

https://www.irs.gov/newsroom/steer-clear-of-typical-tax-return-errors-may-17-deadline-nears

IR-2021-89, April 20, 2021 WASHINGTON — The Internal Revenue Service today reminded taxpayers to check their tax returns for common errors that could delay refunds or otherwise affect normal processing. Here are some ways to avoid tax return slipups as the May 17 due date gets closer. Use electronic filing. Filing electronically, whether through IRS Free File or other e-file service providers, is a great way to cut the chances for many tax return mistakes and maximize deductions to reduce tax owed at the same time. The tax software automatically applies the latest tax laws, checks for available credits or deductions, does the calculations, and asks taxpayers for all required information. Report all taxable income. Be sure to have income documents on hand before starting the tax return. Examples are Forms W-2, 1099-MISC or 1099-NEC. Underreporting income may lead to penalties and interest. Get names and Social Security numbers right. Enter each Social Security number (SSN) and individual's name on a tax return exactly as printed on the Social Security card. Persons generally must list on their individual income tax return the SSN of any person they claim as a dependent. If a dependent or spouse does not have and is not eligible to get a SSN, list the Individual Tax Identification Number (ITIN) instead of a SSN. Learn about filing status. If taxpayers are unsure about their filing status, the Interactive Tax Assistant on IRS.gov can help them choose the correct status, especially if more than one filing status applies. Tax software, including IRS Free File, also helps prevent mistakes with filing status. Correctly answer the virtual currency question. The 2020 Form 1040 asks whether at any time during 2020, a person received, sold, sent, exchanged or otherwise acquired any financial interest in any virtual currency. If a taxpayer's only transactions involving virtual currency during 2020 were purchases of virtual currency, they are not required to answer "yes" to the question. Mail paper returns to the right address. Paper filers should check the right address for where to file on IRS.gov or on form instructions to avoid processing delays. Note that due to staffing issues related to COVID-19, processing paper tax returns could take much longer than usual. Taxpayers and tax professionals are encouraged to file electronically if possible. Use the right routing and account numbers. Requesting direct deposit of a federal refund into one, two or even three accounts is convenient and allows the taxpayer access to his or her money faster. Make sure the financial institution routing and account numbers entered on the return are accurate. Incorrect numbers can cause a refund to be delayed or deposited into the wrong account. Taxpayers can also use their refund to purchase U.S. Savings Bonds. Sign and date the return. If filing a joint return, both spouses must sign and date the return. E-filers can sign using a self-selected personal identification number (PIN). Keep a copy. When ready to file, taxpayers should make a copy of their signed return and all schedules for their records. Request an extension, if needed. Taxpayers who cannot meet the May 17 deadline can easily request an automatic filing extension to October 15 and prevent late filing penalties. Use Free File or Form 4868. But keep in mind that while an extension grants additional time to file, tax payments are still due May 17.

https://www.irs.gov/newsroom/20-year-exam-veteran-selected-as-new-office-of-promoter-investigations-acting-director

IR-2021-88, April 19, 2021 WASHINGTON — As part of the continued focus on compliance issues, the Internal Revenue Service announced today the establishment of the IRS Office of Promoter Investigations. The new office will further expand on the efforts of the Promoter Investigations Coordinator that began last summer. "By establishing the Office of Promoter Investigations, we are continuing our increased focus on promoters of abusive tax avoidance transactions, which we have demonstrated over the last year," said IRS Commissioner Chuck Rettig. "This office will coordinate efforts across multiple business divisions to address abusive syndicated conservation easements and abusive micro-captive insurance arrangements, as well as other transactions." Lois Deitrich, a 20-year veteran of the agency, will be the new office's acting director. Even though OPI will be positioned within SB/SE, Deitrich will work on agency-wide compliance issues, including coordination of promoter activities with promoter teams in other business divisions, including Large Business & International, Tax Exempt/Government Entities, the Office of Fraud Enforcement, and Criminal Investigations.. She will serve as the principal advisor and consultant to IRS division commissioners and deputy commissioners on issues involving promoters of abusive transactions and the schemes they peddle. The OPI will also develop strategic plans, programs and policy. Prior to the creation of OPI, the SB/SE division completed a realignment of field examination employees who work on promoter investigations. This realignment brought SB/SE revenue agents under a single director within the Field Exam Division, increasing the focus and attention they apply to investigations going forward. With additional training, resources and applied analytics, SB/SE will bring improved focus on identifying, investigating and taking necessary enforcement action to halt promotion of abusive transactions. De Lon Harris, commissioner, SB/SE Exam, noted that the realignment of field employees will continue to strengthen the internal compliance efforts within SB/SE. "These groups are exclusively dedicated to investigating those who peddle abusive tax schemes. Bringing these agents together, in combination with the creation of the service-wide Office of Promoter Investigations, will help strengthen our compliance work and is yet another opportunity to increase our capacity to conduct these investigations," said De Lon Harris, commissioner, SB/SE Exam. "Our promoter office will strategically focus resources to help expand detection and deterrence efforts of promoter work across the IRS." Deitrich will take over the work the agency has been pursuing for the past year under Brendan O'Dell, who was selected as the Promoter Investigation Coordinator in early 2020. Prior to this position, Deitrich served as the director of the southwest area of SB/SE's Field Examination, where she was responsible for overseeing SB/SE field operation for abusive transaction investigations. She brings extensive experience in the abusive transaction space and the Special Enforcement Program. Previously, she served as director of Exam Case Selection and Exam Quality and Technical Support. Deitrich began her IRS career as a revenue agent in 2001. She holds a master's degree in Tax from the University of Denver and is a certified public accountant and a certified fraud examiner.

https://www.irs.gov/newsroom/those-experiencing-homelessness-can-get-economic-impact-payments-and-other-tax-benefits-permanent-address-not-required

IR-2021-87, April 15, 2021 WASHINGTON — The Internal Revenue Service today continued an ongoing effort to help those experiencing homelessness during the pandemic by reminding people who don't have a permanent address or a bank account that they may still qualify for Economic Impact Payments and other tax benefits. While Economic Impact Payments continue to be made automatically to most people, the IRS can't issue a payment to eligible Americans when information about them isn't available in the tax agency's systems. To help people experiencing homelessness, the rural poor and other historically under-served groups, the IRS urges community groups, employers and others to share information about Economic Impact Payments and help more eligible people file a tax return so they can receive everything they're entitled to. IRS.gov has a variety of information and tools to help people receive the Economic Impact Payments. "The IRS has been continuing to work directly with groups inside and outside the tax community to get information directly to people experiencing homelessness and other groups to help them receive Economic Impact Payments," said IRS Commissioner Chuck Rettig. "The IRS is working hard on this effort, enabling millions of people who don't normally file a tax return to receive these payments. But we need to do more, and we appreciate all the help we've been receiving from national and local groups to assist in this effort to reach the people who desperately need this help." Economic Impact Payments, also known as stimulus payments, are different from most other tax benefits; people can get the payments even if they have little or no income and even if they don't usually file a tax return. This is true as long as they have a Social Security number and are not being supported by someone else who can claim them as a dependent. The IRS needs information from people who don't usually file a tax return – even if they did not have any income last year or their income was not large enough to require them to file. The only way for the agency to have that information is for people to file a basic 2020 tax return with the IRS. Once that return is processed, the IRS can quickly send stimulus payments to an address selected by the eligible individual. People do not need a permanent address or a bank account. They don't need to have a job. For eligible individuals, the IRS will still issue the payment even if they haven't filed a tax return in years. People in this group can still qualify for the first two Economic Impact Payments when they file their 2020 return by claiming the Recovery Rebate Credit. There's a special section on IRS.gov that can help: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. For the current third round of payments, people who are experiencing homelessness usually qualify to receive $1,400 for themselves. If they are married or have dependents, they can get an additional $1,400 for each of their family members. Filing a 2020 federal income tax return that provides very basic information about the person is something that can be done electronically using a smartphone or a computer. When the IRS receives the return, it will automatically calculate and issue the Economic Impact Payments to eligible individuals. Permanent address not required People can claim an Economic Impact Payment or other credits even if they don't have a permanent address. For example, someone experiencing homelessness may list the address of a friend, relative or trusted service provider, such as a shelter, drop-in day center or transitional housing program, on the return filed with the IRS. If they are unable to choose direct deposit, a check or debit card for the tax refund and the third Economic Impact Payment can then be mailed to this address. Individuals experiencing homelessness can receive the EITC A worker experiencing homelessness can get an Earned Income Tax Credit (EITC). To get the credit, federal law requires that a worker live in the U.S. for more than half of the year and meet other requirements. This means living in a home in any of the 50 states or the District of Columbia. Therefore, individuals experiencing homelessness, including those who reside at one or more homeless shelters, can meet that requirement. No bank account? No problem Many financial institutions will help a person lacking an account to open a low-cost or no-cost bank account. Individuals who open accounts will then have an account and routing number available when they file and claim a direct deposit of the Economic Impact Payment. Visit the Federal Deposit Insurance Corporation (FDIC) website for details, in both English and Spanish, on opening an account online. Among other things, people can also use the FDIC's BankFind tool to locate a nearby FDIC-insured bank. In addition, BankOn, American Bankers Association, Independent Community Bankers of America, and National Credit Union Administration have all compiled lists of banks and credit union that can open an account online. For veterans, see the Veterans Benefits Banking Program (VBBP) for access to financial services at participating banks. For those with a prepaid debit card, they may be able to have their refund applied to the card. Many reloadable prepaid cards or mobile payment apps have account and routing numbers that can be provided to the IRS. Individuals would need to check with the financial institution to ensure the card can be used and to obtain the routing number and account number, which may be different from the card number. File for free The fastest and easiest way to claim the 2020 Recovery Rebate Credit and Earned Income Tax Credit (EITC) or to get the third Economic Impact Payment is to file a return electronically using IRS Free File. People can use a smartphone or computer to visit IRS.gov and click the File Your Taxes for Free link. Through the Free File system, anyone who qualifies for the EITC also qualifies to use brand-name software to prepare and electronically file their return for free. The IRS urges anyone experiencing homelessness who has a smartphone or access to a computer to take advantage of this service. Get free help from IRS partners Alternatively, anyone who qualifies for the EITC or does not have a filing requirement but is filing to get an Economic Impact Payment also qualifies for free tax help from a trained community volunteer tax preparer. Through VITA (Volunteer Income Tax Assistance) and TCE (Tax Counselling for the Elderly), volunteers prepare basic tax returns at thousands of tax help sites nationwide. Please note that some VITA/TCE sites are not operating at full capacity and others are not opening this year. To find the nearest location, visit the Free Tax Return Preparation site on IRS.gov, or call 800-906-9887. VITA/TCE site availability is updated throughout the filing season, so check back if there aren't any sites listed nearby. The IRS also continues to work extensively with community groups across the country to get people to file tax returns and receive all the Economic Impact Payments and credits they're entitled to. These efforts helped lead to more than 8 million people last year to submit tax returns who normally don't file. Direct deposit speeds payments Direct deposit is the safest and fastest way to receive a refund and Economic Impact Payments. People will need to include direct deposit information on their 2020 tax return to get their payment directly deposited. Anyone with a savings, checking, or brokerage account can choose to have their refund electronically deposited in that account. Direct deposit is available even for people who file a paper tax return, but processing of paper returns takes longer. More details on the Earned Income Tax Credit For people experiencing homelessness who have a job, filing a return often carries an added bonus—getting a refund based on various tax benefits, especially the EITC for low-and moderate-income workers and working families. Like many other workers, some workers experiencing homelessness still qualify for the credit even if they earned too little income during 2020 to owe tax. For 2020, the income limit is $15,820 for singles with no children ($21,710 for couples with no children). The income limit is higher for people with children. For example, the limit is $50,594 for singles with three or more children ($56,844 for couples with three or more children). Those who make less than this amount must also meet other eligibility requirements. Because it's a refundable credit, those who qualify and claim the credit could pay less federal tax, pay no tax, or even get a tax refund. The EITC can put up to $6,660 into a worker's pocket. The amount varies depending upon the worker's income, marital status, and other factors. The IRS recognizes that eligible workers experiencing homelessness often encounter unique challenges not faced by other people. To find out if they're eligible, people can use the EITC Assistant on IRS.gov. It's available in both English and Spanish. Help spread the word Employers can help by making their employees aware of the third Economic Impact Payment, 2020 Recovery Rebate Credit and Earned Income Tax and Child Tax Credit, and by encouraging them to file for these benefits based on tax year 2020 rules. In addition, the American Rescue Plan, enacted in March 2021, expands EITC and the Child Tax Credit benefits for the 2021 tax year. Some people will be able to get advance payments of the Child Tax Credit later this year. There is nothing those who qualify need to do at this point other than file a 2020 tax return. Employers can also help by making it easy for employees to obtain or access their 2020 W-2 forms. For more information, check out the outreach material, available on IRS.gov.

https://www.irs.gov/newsroom/irs-treasury-disburse-2-million-more-economic-impact-payments-under-the-american-rescue-plan-va-beneficiaries-bring-total-to-approximately-159-million-as-payments-continue

IR-2021-86, April 14, 2021 WASHINGTON — Today, the Internal Revenue Service, the U.S. Department of the Treasury and the Bureau of the Fiscal Service announced they are disbursing nearly 2 million payments in the fifth batch of Economic Impact Payments from the American Rescue Plan. Today's announcement brings the total disbursed so far to approximately 159 million payments, with a total value of more than $376 billion, since these payments began rolling out to Americans in batches as announced on March 12. The fifth batch of payments began processing on Friday, April 9, with an official payment date of April 14, with some people receiving direct payments in their accounts earlier as provisional or pending deposits. Here is additional information on this batch of payments: In total, this batch includes nearly 2 million payments with a value of more than $3.4 billion. More than 320,000 payments, with a total value of $450 million, went to Veterans Affairs (VA) beneficiaries who receive Compensation and Pension (C&P) benefit payments but who don't normally file a tax return and didn't use the Non-Filers tool last year. Nearly 850,000 payments, with a total value of nearly $1.6 billion, went to eligible individuals for whom the IRS previously did not have information to issue an Economic Impact Payment but who recently filed a tax return.  This batch also includes additional ongoing supplemental payments for people who earlier this year received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns. This batch included more than 700,000 of these "plus-up" payments, with a total value of more than $1.2 billion. Another 72,000 payments went to Social Security beneficiaries who didn't file a 2020 or 2019 tax return and didn't use the Non-Filers tool last year. Overall, this fifth batch of payments contains nearly 1.2 million direct deposit payments (with a total value of just under $2 billion) and nearly 800,000 paper check payments (with a total value of over $1.4 billion). Additional information is available on the first four batches of Economic Impact Payments from the American Rescue Plan, which began processing on April 2, March 26, March 19 and March 12. A larger percentage of payments was made electronically during this round of payments than during previous rounds. This accelerated the delivery of payments to millions of American families whose payments would otherwise have been sent by mail. Over 95% of all Social Security beneficiaries have been paid electronically during this round of payments, compared to 70% in the first round and 72% in the second round. The IRS will continue to make Economic Impact Payments on a weekly basis. Ongoing payments will be sent to eligible individuals for whom the IRS previously did not have information to issue a payment but who recently filed a tax return, as well to people who qualify for "plus-up" payments. Special reminder for those who don't normally file a tax return Although payments are automatic for most people, the IRS continues to urge people who don't normally file a tax return and haven't received Economic Impact Payments to file a 2020 tax return to get all the benefits they're entitled to under the law, including tax credits such as the 2020 Recovery Rebate Credit, the Child Tax Credit, and the Earned Income Tax Credit. Filing a 2020 tax return will also assist the IRS in determining whether someone is eligible for an advance payment of the 2021 Child Tax Credit, which will begin to be disbursed this summer. For example, some federal benefits recipients may need to file a 2020 tax return – even if they don't usually file – to provide information the IRS needs to send payments for a qualifying dependent. Eligible individuals in this group should file a 2020 tax return as quickly as possible to be considered for an additional payment for their qualifying dependents. People who don't normally file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness, the rural poor, and others. Individuals who didn't get a first or second round Economic Impact Payment or got less than the full amounts may be eligible for the 2020 Recovery Rebate Credit, but they'll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. Free tax return preparation is available for qualifying people. The IRS reminds taxpayers that the income levels in this new round of Economic Impact Payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly). The payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment. Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.

https://www.irs.gov/newsroom/irs-free-file-can-help-people-who-have-no-filing-requirement-find-overlooked-tax-credits-and-get-a-refund

IRS YouTube Video: Do Your Taxes for Free with Free File  English | Spanish (obsolete) IR-2021-85, April 13, 2021 WASHINGTON – The Internal Revenue Service today urged low- and moderate-income individuals and families, especially those who don't normally file a tax return, to use IRS Free File to prepare their own federal tax return, e-file it and get a refund – all for free. This year's federal tax filing deadline for individuals has been postponed to May 17 from April 15. Free File offers free access to brand-name tax software to anyone who makes $72,000 or less. Already this year, more than 2.96 million individuals and couples have used this online service to file returns and get their share of these valuable benefits. Available only at IRS.gov, Free File offers people experiencing homelessness, students who are now on their own, low-and moderate-income families and others a fast and easy way to access these benefits. All anyone needs to reach Free File is access to a computer or similar device. No computer? No problem. IRS Free File products support mobile phone access too. Never has Free File been as important as it is right now. The IRS delivered two rounds of Economic Impact Payments to eligible people. The first payment was up to $1,200 per person and $500 per qualifying child. The second payment was up to $600 per eligible person and $600 per qualifying child. People who did not receive the full amount of the first or second payments can claim the additional amount they are due as the Recovery Rebate Credit when they file their 2020 tax return. And that's where Free File comes in. It's a free way to claim the full amount of tax benefits, including the Recovery Rebate Credit, and ensure that eligible people get their refund. See the special section on IRS.gov - Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return – for more information. Look for a Free File product with "no minimum income" and file electronically and choose direct deposit. Free File is also a great way to take advantage of two other tax benefits that help workers and families --the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC). Under a special COVID-related rule, people who were laid off during part or all of 2020 will often still qualify for these benefits. That's because if they worked during 2019, they can choose to use their 2019 earned income to figure these credits, as long as it was higher than it was in 2020. Through Free File, leading tax software providers make their online products available for free as part of a 19-year partnership with the IRS. There are nine products in English and one in Spanish. Visit IRS.gov/freefile for details. In addition, MilTax, available free through the Department of Defense, offers a similar online tax-preparation service to members of the military. Because Free File returns are filed electronically, the service offers everyone a great way to get their money quickly. This is especially true for anyone who chooses to have their refund deposited directly into a savings or checking account. The IRS urges everyone to consider taking advantage of the speed and convenience of Free File. This includes: People experiencing homelessness. As long as they are not someone's dependent, chances are they still qualify for the Recovery Rebate Credit even if they have little or no income. They can still use Free File even if their only access to the Internet is through a smartphone. Look for a Free File product with "no minimum income." Individuals who were claimed as a dependent on someone else's tax return in 2018 or 2019, but who cannot be claimed as a dependent on someone else's return in 2020, may now be eligible to claim a 2020 Recovery Rebate Credit and must file a 2020 tax return. One spouse with an ITIN: Under a new law enacted in December 2020, a married couple filing a joint return now may be eligible for a partial credit when only one spouse has a Social Security number valid for employment. If a couple did not receive one or both Economic Impact Payments because one of them did not have a Social Security number valid for employment, they may be eligible to claim a 2020 Recovery Rebate Credit and must file a 2020 tax return. There is an exception if one spouse is a member of the U.S. Armed Forces. Qualifying child: Families who had a baby or adopted a child during 2020 did not receive a first or second Economic Impact Payment for that qualifying child. They may be eligible to claim a 2020 Recovery Rebate Credit and must file a 2020 tax return. Low- and moderate-income workers and working families who don't normally file a return: Historically, many of these families miss out on the EITC and ACTC because they don't file.  Check out the A Closer Look column for more information on how Free File can help people get all available tax benefits. For those who are not comfortable doing their own return, IRS-trained community volunteers offer tax help at more than 11,000 tax help sites, nationwide. To find the nearest site, visit IRS.gov/volunteers, or call 800-906-9887.

https://www.irs.gov/newsroom/irs-suspends-requirement-to-repay-excess-advance-payments-of-the-2020-premium-tax-credit-those-claiming-net-premium-tax-credit-must-file-form-8962

IR-2021-84, April 9, 2021 WASHINGTON — The American Rescue Plan Act of 2021 suspends the requirement that taxpayers increase their tax liability by all or a portion of their excess advance payments of the Premium Tax Credit (excess APTC) for tax year 2020. A taxpayer's excess APTC is the amount by which the taxpayer's advance payments of the Premium Tax Credit (APTC) exceed his or her Premium Tax Credit (PTC). The Internal Revenue Service announced today that taxpayers with excess APTC for 2020 are not required to file Form 8962, Premium Tax Credit, or report an excess advance Premium Tax Credit repayment on their 2020 Form 1040 or Form 1040-SR, Schedule 2, Line 2, when they file. Eligible taxpayers may claim a PTC for health insurance coverage in a qualified health plan purchased through a Health Insurance Marketplace. Taxpayers use Form 8962, Premium Tax Credit to figure the amount of their PTC and reconcile it with their APTC. This computation lets taxpayers know whether they must increase their tax liability by all or a portion of their excess APTC, called an excess advance Premium Tax Credit repayment, or may claim a net PTC. Taxpayers can check with their tax professional or use tax software to figure the amount of allowable PTC and reconcile it with APTC received using the information from Form 1095-A, Health Insurance Marketplace Statement. The process remains unchanged for taxpayers claiming a net PTC for 2020. They must file Form 8962 when they file their 2020 tax return. See the Instructions for Form 8962 for more information. Taxpayers claiming a net PTC should respond to an IRS notice asking for more information to finish processing their tax return. Taxpayers who have already filed their 2020 tax return and who have excess APTC for 2020 do not need to file an amended tax return or contact the IRS. The IRS will reduce the excess APTC repayment amount to zero with no further action needed by the taxpayer. The IRS will reimburse people who have already repaid any excess advance Premium Tax Credit on their 2020 tax return. Taxpayers who received a letter about a missing Form 8962 should disregard the letter if they have excess APTC for 2020. The IRS will process tax returns without Form 8962 for tax year 2020 by reducing the excess advance premium tax credit repayment amount to zero. Again, IRS is taking steps to reimburse people who filed Form 8962, reported, and paid an excess advance Premium Tax Credit repayment amount with their 2020 tax return before the recent legislative changes were made. Taxpayers in this situation should not file an amended return solely to get a refund of this amount. The IRS will provide more details on IRS.gov. There is no need to file an amended tax return or contact the IRS. As a reminder, this change applies only to reconciling tax year 2020 APTC. Taxpayers who received the benefit of APTC prior to 2020 must file Form 8962 to reconcile their APTC and PTC for the pre-2020 year when they file their federal income tax return even if they otherwise are not required to file a tax return for that year. The IRS continues to process prior year tax returns and correspond for missing information. If the IRS sends a letter about a 2019 Form 8962, we need more information from the taxpayer to finish processing their tax return. Taxpayers should respond to the letter so that the IRS can finish processing the tax return and, if applicable, issue any refund the taxpayer may be due. See the  Form 8962, Premium Tax Credit and Fact Sheet 2021-08, More details about changes for taxpayers who received advance payments of the 2020 Premium Tax Credit.

https://www.irs.gov/newsroom/irs-reminds-foreign-bank-and-financial-account-holders-the-fbar-deadline-remains-april-15

IR-2021-83, April 9, 2021 WASHINGTON — The Internal Revenue Service is reminding U.S. citizens, resident aliens and any domestic legal entity that the deadline to file their annual Report of Foreign Bank and Financial Accounts (FBAR) is still April 15, 2021. The extension of the federal income tax filing due date and other tax deadlines for individuals to May 17, 2021, does not affect the FBAR requirement. However, filers missing the April 15 deadline will receive an automatic extension until October 15, 2021, to file the FBAR. They don’t need to request the extension. Who must report The Bank Secrecy Act requires U.S. persons to file a FBAR if they have: Financial interest in, signature authority or other authority over one or more accounts, such as a bank account, brokerage account, mutual fund or other financial account in a foreign country, and The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year. Because of this threshold, the IRS encourages U.S. persons or entities with foreign accounts, even relatively small ones, to check if this filing requirement applies to them. A U.S. person is a citizen or resident of the United States or any domestic legal entity such as a partnership, corporation, limited liability company, estate or trust. The 2021 FBAR must be filed electronically with the Financial Crimes Enforcement Network (FinCEN) and is only available through the BSA E-Filing System website. Taxpayers who are unable to e-file their FBAR must call FinCEN at 800-949-2732, from outside the U.S. at 703-905-3975. Penalties for failure to file an FBAR Those who don't file an FBAR when required may be subject to significant civil and criminal penalties that can result in a fine and/or prison. The IRS will not penalize those who properly reported a foreign account on a late-filed FBAR if the IRS determines there was reasonable cause for late filing. More details and help available IRS.gov has several resources available 24 hours a day: How to report foreign bank and financial accounts International Taxpayers  IRS Tax Map IRS FBAR Reference GuidePDF FAQs About International Individual Tax Matters FinCEN's website Reporting Maximum Account Value To help avoid delays with tax refunds, taxpayers living abroad should visit Helpful Tips for Effectively Receiving a Tax Refund for Taxpayers Living Abroad on IRS.gov.

https://www.irs.gov/newsroom/irs-urges-participants-of-abusive-micro-captive-insurance-arrangements-to-exit-from-arrangements

IR-2021-82, April 9, 2021 WASHINGTON — Internal Revenue Service officials today urged participants in abusive micro-captive insurance arrangements to exit these transactions as soon as possible. The IRS has stepped up examinations of these arrangements and has recently won yet another case in U.S. Tax Court that such arrangements are not eligible for the tax benefits claimed. On March 10, 2021, the U.S. Tax Court held in Caylor Land & Dev. v. Commissioner, T.C. Memo. 2021-30 (2021), that yet another micro-captive arrangement failed to qualify as insurance for federal tax purposes. This decision follows several earlier Tax Court decisions that also confirmed the IRS's determinations that certain micro-captive arrangements were not eligible for the claimed federal tax benefits. In Caylor, the Tax Court also sustained the IRS's determination of accuracy-related penalties and rejected the taxpayer's claim of reliance on tax advice. Taxpayers who engaged in abusive micro-captive transactions are once again encouraged to consult an independent tax advisor prior to filing their 2020 tax returns. Taxpayers should consider exiting the transaction and not reporting deductions associated with abusive micro-captive insurance transactions. "In multiple cases before the courts, judges have held that these 'fanciful' and 'unreasonable' arrangements don't add up to insurance in the commonly accepted sense," said IRS Commissioner Chuck Rettig. "I strongly urge participants in these arrangements to get independent legal advice separate from those who helped steer them into these abusive arrangements." In the past several years, the IRS has ratcheted up its efforts to combat abusive micro-captive insurance arrangements. In 2020, the IRS deployed 12 newly formed micro-captive examination teams to substantially increase the examinations of ongoing abusive micro-captive insurance transactions. The IRS will disallow tax benefits from transactions that are determined to be abusive and may also require domestic captives to include premium payments in income and assert a withholding liability on foreign captives. The IRS will continue to assert penalties, as appropriate, including the strict liability penalty that applies to transactions that lack economic substance. In Notice 2016-66, the IRS advised that micro-captive insurance transactions have the potential for tax avoidance or evasion. The notice designated transactions that are the same as or substantially similar to transactions that are described in the notice as "Transactions of Interest." The notice established reporting requirements for those entering into such transactions on or after Nov. 2, 2006 and created disclosure and list maintenance obligations for material advisors. In March and July 2020, IRS issued letters to taxpayers who participated in a Notice 2016-66 transaction alerting them that IRS enforcement activity in this area will be expanding significantly and providing them with the opportunity to tell the IRS if they've discontinued their participation in this transaction before the IRS initiates examinations. Early responses indicate that a significant number of taxpayers who participated in these transactions have exited the transaction.

https://www.irs.gov/newsroom/irs-reminds-us-territory-residents-about-us-income-tax-rules-relating-to-pandemic-unemployment-compensation

IR-2021-81, April 8, 2021 WASHINGTON — The Internal Revenue Service reminds eligible residents of the U.S. territories that if they receive unemployment compensation payments that are otherwise  subject to U.S. income tax, they may be eligible to exclude up to $10,200 per person of  unemployment compensation from U.S. income tax for 2020, following legislation that was passed March 11, 2021. Taxpayers with modified adjusted gross income of less than $150,000 may exclude the first $10,200 of unemployment compensation from their 2020 federal income tax return. In the case of taxpayers that are married filing jointly, the maximum exclusion would be $10,200 for each spouse for a maximum of $20,400. Taxpayers who filed before the law was passed should not file an amended return. Last year, in response to the COVID-19 pandemic, Congress passed legislation providing eligible individuals with two new types of pandemic-related unemployment compensation, which are subject to the same U.S. tax rules that apply to other unemployment compensation: Pandemic Unemployment Assistance (PUA) Federal Pandemic Unemployment Compensation (FPUC) The $10,200 exclusion applies to these new types of unemployment compensation for U.S. income tax purposes. The IRS also notes that for U.S. income tax purposes, unemployment compensation is generally considered sourced where the taxpayer performed the underlying services. For guidance on the U.S. income taxation of residents of the U.S. territories, see Publication 570, Tax Guide for Individuals with Income from U.S. Possessions. The U.S. territories are American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, the Commonwealth of Puerto Rico, and the U.S. Virgin Islands. U.S. territory residents should contact their territory tax department with questions relating to the taxation of COVID-related unemployment compensation at the territory level.

https://www.irs.gov/newsroom/irs-announces-several-key-executive-changes-as-agency-gears-up-to-implement-the-taxpayer-first-act

IR-2021-80, April 8, 2021 WASHINGTON — The Internal Revenue Service today announced several key leadership appointments as work continues implementing major provisions of the Taxpayer First Act. Douglas O'Donnell will serve as the new IRS Deputy Commissioner, Services and Enforcement. Among other leadership changes, Sunita Lough will be returning to serve as the IRS Commissioner of the Tax Exempt and Government Entities Division (TE/GE ). These leadership changes are part of a larger effort underway at the IRS to continue work on the Taxpayer First Act, which includes work to reimagine the agency's tax administration and work to improve taxpayer service and enforcement. "I am proud of the dedicated and nimble leadership of the IRS, along with all the employees," said IRS Commissioner Chuck Rettig. "As we emerge from the pandemic, our strong leadership team is making some changes to take on the important challenges ahead. Taxpayers need to see the IRS renewing the fight each day for the highest possible service and tax compliance." Sunita Lough has served as the IRS Deputy Commissioner, Services and Enforcement, since September 2019. She is returning to her prior position as Commissioner of TE/GE , a role she previously held from 2014 to 2019. "I am eternally grateful to Sunita for her experience, steady leadership and support during the pandemic, which tested every aspect of the IRS, and I am proud to say we have come through the crisis so far with high marks," Rettig said. "Most of her time as deputy commissioner was during the pandemic, and she has overcome every challenge." Lough has worked for the IRS for nearly 27 years, holding many key leadership roles. She served as the Executive Project Lead for the Tax Reform Implementation Office, effectively spearheading the successful delivery and implementation of the Tax Cuts and Jobs Act, the biggest tax reform legislation in 30 years. "Helping to lead this agency during the pandemic has been one of the most gratifying things I've done during my career, and I am very grateful to everyone at the IRS," Lough said. "I'm excited to return to TE/GE as we work to assure our commitment to strengthening the oversight and services within the TE/GE community. I also look forward to assisting and supporting the new Deputy Commissioner, Services and Enforcement." O'Donnell has been the Commissioner of the Large Business and International Division of the IRS (LB&I) since 2015, where he also served as the U.S. Competent Authority. "Having long worked closely with Sunita, I'm looking forward to taking on the broader role as Deputy Commissioner," O'Donnell said. "We have an exceptionally strong IRS leadership team, and I am hopeful we can continue our efforts to earn the trust and respect of every American. Our employees have worked hard during the unprecedented pandemic to assist the people of our country and, rest assured, we will continue to do so." O'Donnell began his career at the IRS as a revenue agent in 1986. Since then, he has held several key positions. He received the Presidential Rank Award for Meritorious Executive in 2010. Nikole Flax will take over as Commissioner of LB&I after serving as Deputy Commissioner of the division since 2017. She has held many key roles at the IRS including IRS Chief of Staff and Assistant Deputy Commissioner for Services and Enforcement, among others. "I am excited to lead the agency's monumental task of overseeing the most complicated noncompliance tax issues, both domestic and international, and continuing to work with employees and taxpayers to improve tax administration," Flax said. Holly Paz replaces Flax as Deputy Commissioner of LB&I. She is leaving her current role at LB&I as the Director of the Pass-Through Entities Practice Area, which supports all of LB&I with S Corporation and Partnership Specialty teams and the Ogden TEFRA Unit. She has held other key roles at the IRS including serving as the Director of Corporate Issues and Credits in LB&I's Enterprise Activities Practice Area, among others. Edward Killen has been serving as Acting Commissioner of TE/GE and will return to the role of Deputy Commissioner of TE/GE. Prior to joining TE/GE , Killen has held several leadership positions including the IRS Chief Privacy Officer and Senior Advisor to the IRS Deputy Commissioner of Operations Support, among others. "These are all exemplary leaders, who have a demonstrated ability to work together, communicate effectively inside and outside the IRS as well as organize cross-functional teams to take on our biggest compliance challenges," Rettig added.

https://www.irs.gov/newsroom/treasury-irs-provide-guidance-on-tax-relief-for-deductions-for-food-or-beverages-from-restaurants

Businesses can temporarily deduct 100% beginning January 1, 2021 IR-2021-79, April 8, 2021 WASHINGTON — The Treasury Department and the Internal Revenue Service today issued Notice 2021-25PDF providing guidance under the Taxpayer Certainty and Disaster Relief Act of 2020. The Act added a temporary exception to the 50% limit on the amount that businesses may deduct for food or beverages. The temporary exception allows a 100% deduction for food or beverages from restaurants. Beginning January 1, 2021, through December 31, 2022, businesses can claim 100% of their food or beverage expenses paid to restaurants as long as the business owner (or an employee of the business) is present when food or beverages are provided and the expense is not lavish or extravagant under the circumstances. Where can businesses get food and beverages and claim 100%? Under the temporary provision, restaurants include businesses that prepare and sell food or beverages to retail customers for immediate on-premises and/or off-premises consumption. However, restaurants do not include businesses that primarily sell pre-packaged goods not for immediate consumption, such as grocery stores and convenience stores. Additionally, an employer may not treat certain employer-operated eating facilities as restaurants, even if these facilities are operated by a third party under contract with the employer. More information for businesses seeking coronavirus related tax relief can be found at IRS.gov.

https://www.irs.gov/newsroom/irs-reminds-taxpayers-to-make-april-15-estimated-tax-payment

IR-2021-78, April 8, 2021 WASHINGTON — The Internal Revenue Service today reminded self-employed individuals, retirees, investors, businesses, corporations, and others who pay their taxes quarterly that the payment for the first quarter of 2021 is due Thursday, April 15, 2021. The extension to May 17, 2021 for individuals to file their 2020 federal income taxes does not apply to estimated tax payments. The 2021 Form 1040-ES, Estimated Tax for Individuals, can help taxpayers estimate their first quarterly tax payment. Income taxes are pay-as-you-go. This means, by law, taxes must be paid as income is earned or received during the year. Most people pay their taxes through withholding from paychecks, pension payments, Social Security benefits or certain other government payments including unemployment compensation. Most often, those who are self-employed or in the sharing economy need to make estimated tax payments. Similarly, investors, retirees and others often need to make these payments because a substantial portion of their income is not subject to withholding. Other income generally not subject to withholding includes interest, dividends, capital gains, alimony and rental income. Paying quarterly estimated taxes will usually lessen and may even eliminate any penalties. Exceptions to the penalty and special rules apply to some groups of taxpayers, such as farmers, fishermen, casualty and disaster victims, those who recently b ecame disabled, recent retirees and those who receive income unevenly during the year. See Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts, and its instructions for more information. How to pay estimated taxes Form 1040-ES, Estimated Tax for Individuals, includes instructions to help taxpayers figure their estimated taxes. They can also visit IRS.gov/payments to pay electronically. The fastest and easiest ways to make an estimated tax payment is by using IRS Direct Pay, the IRS2Go app 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, taxpayers should be sure to make the check payable to the "United States Treasury." 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. IRS.gov assistance 24/7 Tax help is available 24/7 on IRS.gov. The IRS website offers a variety of online tools to help taxpayers answer common tax questions. For example, taxpayers can search the Interactive Tax Assistant, Tax Topics, Frequently Asked Questions, and Tax Trails to get answers to common questions. The IRS is continuing to expand ways to communicate to taxpayers who prefer to get information in other languages. The IRS has posted translated tax resources in 20 other languages on IRS.gov. For more information, see We Speak Your Language.

https://www.irs.gov/newsroom/irs-treasury-disburse-25-million-more-economic-impact-payments-under-the-american-rescue-plan

Social Security and other beneficiaries bring total to more than 156 million payments; VA beneficiaries’ payments to be disbursed on April 14  IR-2021-77, April 7, 2021 WASHINGTON — Today, the Internal Revenue Service, the U.S. Department of the Treasury, and the Bureau of the Fiscal Service announced they are disbursing more than 25 million payments in the fourth batch of Economic Impact Payments from the American Rescue Plan. Today’s announcement brings the total disbursed so far to more than 156 million payments, with a total value of approximately $372 billion, since these payments began rolling out to Americans in batches, as announced on March 12.  The fourth batch of payments began processing on Friday, April 2, with an official payment date of April 7, with some people receiving direct payments in their accounts earlier as provisional or pending deposits. Here is additional information on this batch of payments: In total, this batch includes more than 25 million payments, with a total value of more than $36 billion. The largest block of these payments went to Social Security beneficiaries who didn’t file a 2020 or 2019 tax return and didn’t use the Non-Filers tool last year. More than 19 million payments, with a total value of more than $26 billion, went to these beneficiaries, which include Social Security retirement, survivor or disability (SSDI) beneficiaries. More than 3 million payments, with a total value of nearly $5 billion, went to Supplemental Security Income (SSI) beneficiaries. Nearly 85,000 payments, with a total value of more than $119 million, went to Railroad Retirement Board (RRB) beneficiaries. This batch includes additional ongoing supplemental payments for people who earlier in March received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns. This batch included more than 1 million of these “plus-up” payments, with a total value of more than $2 billion. More than 1 million payments, with a total value of nearly $3 billion, went to people for whom the IRS previously did not have information to issue a payment but who recently filed a tax return and qualified for an Economic Impact Payment.  Payments to this group -- and the “plus-up” payments noted above -- will continue on a weekly basis going forward as the IRS continues processing tax returns from 2020 and 2019. Overall, this fourth batch of payments contains nearly 24 million direct deposit payments (with a total value of over $33 billion) and more than 1 million paper check payments (with a total value of nearly $3 billion). Additional  information is available on the first three batches of Economic Impact Payments from the American Rescue Plan, which began processing on March 26, March 19, and March 12. No action is needed by most people to obtain this round of Economic Impact Payments. People can check the Get My Payment tool on IRS.gov on to see if the their payment has been scheduled. Payments to non-filer VA beneficiaries will be disbursed on April 14 The IRS continues to review data received from Veterans Affairs (VA), which covers veterans and their beneficiaries who receive Compensation and Pension (C&P) benefit payments who don’t normally file a tax return. If no additional issues arise, the IRS expects to begin processing these VA payment files at the end of this week. Because the majority of these payments will be disbursed electronically, they would be received on the official payment date of April 14. The IRS projects VA beneficiary payment information would be available in the Get My Payment tool this weekend, April 10-11. Payments continue to be made rapidly and effectively The IRS and Treasury are disbursing Economic Impact Payments authorized by the American Rescue Plan quickly and successfully, while improving on previous rounds of payments. Within two weeks of the American Rescue Plan becoming law, the IRS and Treasury had started disbursing 127 million payments, including 107 million completed direct deposits. At a similar point during the first round of Economic Impact Payments authorized a year ago, the first payments had yet to be completed. Payments to Social Security and other federal beneficiaries are being issued faster than they were during the first round of payments a year ago. Approximately 85% of the current round of payments have been made by direct deposit, up from 74% in the first round of payments and 77% in the second round.  This helps to expedite payments for millions of American families.  Direct deposits are also more likely to be successfully delivered than mailed payments, and the return rate of direct deposits is also lower than in previous rounds of payments. Over 3.1 million Direct Express cardholders have received payment electronically, more than a half-million more than in previous rounds.  Making most of these payments to Direct Express cards enables cardholders, many of whom are unbanked, to receive their Economic Impact Payment the same way they typically receive their federal benefits. Special reminder for those who don't normally file a tax return Some federal benefits recipients may need to file a 2020 tax return, even if they don't usually file, to provide information the IRS needs to send payments for a qualified dependent. Eligible individuals in this group should file a 2020 tax return to be considered for an additional payment for their qualified dependent as quickly as possible. People who don't normally file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness, the rural poor, and others. Individuals who didn't get a first or second round Economic Impact Payment or got less than the full amounts may be eligible for the 2020 Recovery Rebate Credit, but they’ll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. Free tax return preparation is available for qualifying people. The IRS reminds taxpayers that the income levels in this new round of Economic Impact Payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly). The payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment. Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.

https://www.irs.gov/newsroom/irs-letters-explain-why-some-2020-recovery-rebate-credits-are-different-than-expected

IR-2021-76, April 5, 2021 WASHINGTON − As people across the country file their 2020 tax returns, some are claiming the 2020 Recovery Rebate Credit (RRC). The IRS is mailing letters to some taxpayers who claimed the 2020 credit and may be getting a different amount than they expected. It's important to remember that the first and second Economic Impact Payments (EIP) were advance payments of the 2020 credit. Most eligible people already received the first and second payments and shouldn't or don't need to include this information on their 2020 tax return. People who didn't receive a first or second EIP or received less than the full amounts may be eligible for the 2020 RRC. They must file a 2020 tax return to claim the credit, even if they don't usually file a tax return. When the IRS processes a 2020 tax return claiming the credit, the IRS determines the eligibility and amount of the taxpayer's credit based on the 2020 tax return information and the amounts of any EIP previously issued. If a taxpayer is eligible, it will be reduced by the amount of any EIPs already issued to them. If there's a mistake with the credit amount on Line 30 of the 1040 or 1040-SR, the IRS will calculate the correct amount, make the correction and continue processing the return. If a correction is needed, there may be a slight delay in processing the return and the IRS will send the taxpayer a letter or notice explaining any change. Taxpayers who receive a notice saying the IRS changed the amount of their 2020 credit should read the notice. Then they should review their 2020 tax return, the requirements and the worksheet in the Form 1040 and Form 1040-SR instructions. Here are some common reasons the IRS corrected the credit: The individual was claimed as a dependent on another person's 2020 tax return. The individual did not provide a Social Security number valid for employment. The qualifying child was age 17 or older on January 1, 2020. Math errors relating to calculating adjusted gross income and any EIPs already received. IRS.gov has a special section - Correcting Recovery Rebate Credit issues after the 2020 tax return is filed – that provides additional information to explain what errors may have occurred. Taxpayers who disagree with the IRS calculation should review their letter as well as the questions and answers for what information they should have available when contacting the IRS. The Internal Revenue Service urges people who have not yet filed their 2020 tax return to properly determine their eligibility for the 2020 before they file their 2020 tax returns. To calculate any credit due, start with the amount of any EIPs received. Use the RRC Worksheet or tax preparation software. Taxpayers who didn't save or didn't receive an IRS letter or notice can securely access their individual tax information with an IRS online account. Anyone with income of $72,000 or less can file their Federal tax return electronically for free through the IRS Free File program. The fastest way to get a tax refund which will include your 2020 RRC is to file electronically and have it direct deposited into their financial account. Bank accounts, many prepaid debit cards and several mobile apps can be used for direct deposit when a routing and account number are provided. If using a prepaid debit card, check with the financial institution to ensure the card can be used and to obtain the routing number and account number, which may be different from the card number. For more information, see IRS information letters about Economic Impact Payments and the Recovery Rebate Credit or visit IRS.gov/rrc and the frequently asked questions by topic. Topic A: Claiming the Recovery Rebate Credit if you aren't required to file a tax return Topic B: Eligibility Topic C: Claiming the Credit Topic D: Calculating the Credit Topic E: Receiving the Credit Topic F: Finding the First and Second Economic Impact Payment Amounts to Calculate the 2020 Recovery Rebate Credit Topic G: Correcting issues after the 2020 tax return is filed

https://www.irs.gov/newsroom/irs-has-refunds-totaling-1-point-3-billion-for-people-who-have-not-filed-a-2017-federal-income-tax-return

IR-2021-75, April 5, 2021 WASHINGTON – Unclaimed income tax refunds worth more than $1.3 billion await an estimated 1.3 million taxpayers who did not file a 2017 Form 1040 federal income tax return, according to the Internal Revenue Service. "The IRS wants to help taxpayers who are due refunds but haven't filed their 2017 tax returns yet," said IRS Commissioner Chuck Rettig. "Time is quickly running out for these taxpayers. There's only a three-year window to claim these refunds, and the window closes on May 17. We want to help people get these refunds, but they will need to quickly file a 2017 tax return." The IRS estimates the midpoint for the potential refunds for 2017 to be $865 — that is, half of the refunds are more than $865 and half are less. In cases where a federal income tax return was not filed, the law provides most taxpayers with a three-year window of opportunity to claim a tax refund. If they do not file a tax return within three years, the money becomes the property of the U.S. Treasury. For 2017 tax returns, the window closes May 17, 2021, for most taxpayers. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by that date. The IRS reminds taxpayers seeking a 2017 tax refund that their checks may be held if they have not filed tax returns for 2018 and 2019. In addition, the refund will be applied to any amounts still owed to the IRS or a state tax agency and may be used to offset unpaid child support or past due federal debts, such as student loans. By failing to file a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2017. Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC). For 2017, the credit was worth as much as $6,318. The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2017 were: $48,340 ($53,930 if married filing jointly) for those with three or more qualifying children;   $45,007 ($50,597 if married filing jointly) for people with two qualifying children;   $39,617 ($45,207 if married filing jointly) for those with one qualifying child, and;   $15,010 ($20,600 if married filing jointly) for people without qualifying children. Current and prior year tax forms (such as the tax year 2017 Form 1040, 1040-A and 1040-EZ) and instructions are available on the IRS.gov Forms and Publications page or by calling toll-free 800-TAX-FORM (800-829-3676). Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years 2017, 2018 or 2019 should request copies from their employer, bank or other payer. Taxpayers who are unable to get missing forms from their employer or other payer can order a free wage and income transcript at IRS.gov using the Get Transcript Online tool. Alternatively, they can file Form 4506-T to request a wage and income transcript. A wage and income transcript shows data from information returns received by the IRS, such as Forms W-2, 1099, 1098, Form 5498 and IRA contribution information. Taxpayers can use the information from the transcript to file their tax return. First-time filers and EIP eligible The IRS reminds first-time filers and those who usually don't have a federal filing requirement that they must file a 2020 tax return to claim the Recovery Rebate Credit (RRC), if they were eligible but did not receive the first or second Economic Impact Payment (EIP), or received less than the full amounts. The IRS offers free options to prepare and file a return at How to File on IRS.gov. Taxpayers who received the full amounts of both EIPs cannot claim the RRC and should not include any information about the payments on their 2020 tax return. State-by-state estimates of individuals who may be due 2017 income tax refunds State or District Estimated Number of Individuals Median Potential Refund Total Potential Refunds * Alabama 21,700 $848 $21,542,300 Alaska 5,000 $960 $5,527,400 Arizona 32,900 $766 $30,655,500 Arkansas 12,600 $811 $12,150,900 California 132,800 $833 $129,793,500 Colorado 27,000 $813 $26,020,400 Connecticut 13,200 $928 $13,945,100 Delaware 5,200 $853 $5,254,600 District of Columbia 3,600 $878 $3,765,500 Florida 89,600 $870 $89,767,400 Georgia 46,300 $791 $44,234,300 Hawaii 7,600 $913 $7,827,400 Idaho 6,200 $727 $5,572,300 Illinois 49,000 $901 $50,355,300 Indiana 30,800 $894 $31,291,100 Iowa 13,500 $922 $13,851,800 Kansas 13,400 $865 $13,313,500 Kentucky 17,700 $875 $17,612,600 Louisiana 21,700 $837 $21,659,900 Maine 5,300 $853 $5,158,000 Maryland 26,700 $872 $27,241,700 Massachusetts 28,000 $978 $30,469,100 Michigan 43,100 $863 $43,189,300 Minnesota 20,400 $808 $19,400,200 Mississippi 11,800 $776 $11,087,800 Missouri 30,500 $831 $29,778,200 Montana 4,400 $808 $4,255,500 Nebraska 7,200 $853 $6,982,000 Nevada 15,500 $845 $15,310,600 New Hampshire 5,900 $968 $6,391,000 New Jersey 34,200 $924 $35,778,700 New Mexico 9,000 $837 $8,913,100 New York 66,700 $956 $71,361,600 North Carolina 43,500 $837 $42,307,200 North Dakota 3,600 $958 $3,779,100 Ohio 48,700 $852 $47,892,500 Oklahoma 19,800 $869 $19,890,300 Oregon 21,200 $765 $19,733,900 Pennsylvania 50,900 $931 $52,861,200 Rhode Island 3,600 $921 $3,792,500 South Carolina 16,800 $768 $15,740,900 South Dakota 3,600 $912 $3,665,500 Tennessee 27,100 $851 $26,534,100 Texas 133,000 $904 $138,355,200 Utah 11,100 $771 $10,251,900 Vermont 2,600 $852 $2,505,200 Virginia 36,600 $827 $36,159,900 Washington 36,900 $928 $38,924,900 West Virginia 6,400 $946 $6,769,600 Wisconsin 18,900 $798 $17,759,900 Wyoming 3,100 $944 $3,273,400 Totals 1,345,900 $865 $1,349,654,800 * Excluding credits.

https://www.irs.gov/newsroom/irs-provides-guidance-for-employers-claiming-the-employee-retention-credit-for-first-two-quarters-of-2021

IR-2021-74, April 2, 2021 WASHINGTON — The Internal Revenue Service today issued guidance for employers claiming the Employee Retention Credit under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) modified by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act). Notice 2021-23PDF explains the changes to the Employee Retention Credit for the first two calendar quarters of 2021, including: the increase in the maximum credit amount, the expansion of the category of employers that may be eligible to claim the credit, modifications to the gross receipts test, revisions to the definition of qualified wages, and new restrictions on the ability of eligible employers to request an advance payment of the credit. As a result of the changes made by the Relief Act, eligible employers can now claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees after December 31, 2020, through June 30, 2021. Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. Thus, the maximum employee retention credit available is $7,000 per employee per calendar quarter, for a total of $14,000 for the first two calendar quarters of 2021. Employers can access the Employee Retention Credit for the 1st and 2nd calendar quarters of 2021 prior to filing their employment tax returns by reducing employment tax deposits. Small employers (i.e., employers with an average of 500 or fewer full-time employees in 2019) may request advance payment of the credit (subject to certain limits) on Form 7200, Advance of Employer Credits Due to Covid-19, after reducing deposits. In 2021, advances are not available for employers larger than this. Further details on how to calculate and claim the employee retention credit for the first two calendar quarters of 2021 can be found in Notice 2021-23. Under the American Rescue Plan Act of 2021, enacted March 11, 2021, the Employee Retention Credit is available to eligible employers for wages paid during the third and fourth quarters of 2021. The Department of the Treasury and the IRS will provide further guidance on the Employee Retention Credit available under the ARPA. Additional coronavirus relief information for businesses is available on IRS.gov.

https://www.irs.gov/newsroom/join-the-taxpayer-advocacy-panel-and-help-improve-the-irs-apply-by-may-14

IR-2021-73, April 2, 2021 WASHINGTON — The Internal Revenue Service today announced it is seeking civic-minded volunteers to serve on the Taxpayer Advocacy Panel (TAP). The TAP is a federal advisory committee that listens to taxpayers, identifies major taxpayer concerns and makes recommendations for improving IRS service and customer satisfaction. Taxpayers interested in serving on the panel may apply between April 5 and May 14. National Taxpayer Advocate Erin Collins recently expressed her appreciation for the contributions of TAP volunteers to improve the experience of U.S. taxpayers. "I am grateful to these citizens for volunteering their time and talent to the Taxpayer Advocacy Panel," she said. "I am very proud of the accomplishments of the TAP last year, and I look forward to the TAP bringing its valuable taxpayer perspective in recommending changes to tax administration to achieve the quality service that taxpayers expect and deserve." The TAP reports annually to the Secretary of the Treasury, the Commissioner of the Internal Revenue Service and the National Taxpayer Advocate. The Office of the Taxpayer Advocate is an independent organization within the IRS that provides support for and oversight of the TAP. To the extent possible, the TAP includes members from all 50 states, the District of Columbia, Puerto Rico and one member representing international taxpayers. Each member is appointed to represent the interests of taxpayers in his or her geographic location as well as taxpayers overall. For the TAP, "international taxpayers" are broadly defined to include U.S. citizens working, living, or doing business abroad or in U.S. territories. The TAP is seeking members in the following locations: Arkansas, California, Connecticut, Delaware, Georgia, Idaho, International, Kentucky, Massachusetts, Michigan, Missouri, Minnesota, Montana, North Dakota, Nebraska, New Mexico, New York, Oklahoma, Ohio, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Wisconsin and West Virginia. The panel is seeking alternates in the following locations: Alabama, California, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Kentucky, Massachusetts, Michigan, Missouri, North Dakota, Nebraska, New Hampshire, New Mexico, Nevada, Ohio, Oregon, Rhode Island, Texas, Vermont, Wisconsin, West Virginia and Wyoming. Federal advisory committees are required to have a balanced membership in terms of viewpoints represented. As such, applicants from under-represented groups, such as Native Americans and non-tax professionals, are particularly encouraged to apply. All timely applications, however, will be given consideration. New TAP members will serve a three-year term starting in December 2021. Applicants chosen as alternate members will be considered to fill any vacancies that open in their areas during the next three years. To be a member of the TAP, a person must be a U.S. citizen, be current with his or her federal tax obligations, be able to commit 200 to 300 volunteer hours during the year and pass a Federal Bureau of Investigation criminal background check. Members cannot be federally registered lobbyists. Current Department of the Treasury or IRS employees cannot serve on the panel, and former Department of the Treasury or IRS employees and former TAP members must have a three-year separation from their service to be considered for appointment. Tax practitioner applicants must be in good standing with the IRS (meaning not currently under suspension or disbarment). For additional information about the TAP or the application process, visit www.improveirs.org or call 888-912-1227 (a toll-free call) and select prompt number five. Callers outside the U.S. may call 214-413-6523 (not a toll-free call) or email the TAP staff at taxpayeradvocacypanel@irs.gov. A video is available with more information about the TAP and about how to contribute to this dynamic group of volunteers.

https://www.irs.gov/newsroom/irs-treasury-disburse-more-economic-impact-payments-under-the-american-rescue-plan-total-tops-130-million-with-more-to-come

IR-2021-72, April 1, 2021 WASHINGTON — Today, the Internal Revenue Service, the U.S. Department of the Treasury and the Bureau of the Fiscal Service announced they are disbursing several million more payments in the third batch of Economic Impact Payments from the American Rescue Plan. This brings the total disbursed so far to more than 130 million payments worth approximately $335 billion. As announced on March 12, Economic Impact Payments continue to roll out in batches to millions of Americans. The third batch of payments began processing on Friday, March 26, with an official payment date of March 31, with some people receiving direct payments in their accounts earlier as provisional or pending deposits. Here is additional information on this batch of payments: This batch includes the first of ongoing supplemental payments for people who earlier in March received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns. These "plus-up" payments could include a situation where a person's income dropped in 2020 compared to 2019, or a person had a new child or dependent on their 2020 tax return, and other situations. The payments announced today also include payments for people for whom the IRS previously did not have information to issue a payment but who recently filed a tax return and qualify for an Economic Impact Payment. Payments to this group -- and the "plus-up" payments noted above -- will continue on a weekly basis going forward, as the IRS continues processing tax returns from 2020 and 2019. In total, this third batch includes more than 4 million payments, with a total value of more than $10 billion. This batch of payments contains more than 2 million direct deposit payments (with a total value of more than $5 billion) and approximately 2 million paper check payments (with a total value of nearly $5 billion). For the first two batches of payments (which began processing on March 12 and March 19), payments were primarily sent to eligible taxpayers who filed 2019 or 2020 returns. People who don't typically file a return but who successfully used the Non-Filers tool on IRS.gov last year were also sent payments in these first two batches, either as a direct deposit or by paper check or an EIP Card, a prepaid debit card. Starting Friday, a large set of payments will begin going to Social Security and other federal beneficiaries who didn't file a 2020 or 2019 tax return and didn't use the Non-Filers tool last year. These payments will go to Social Security retirement, survivor or disability (SSDI), Supplemental Security Income (SSI), and Railroad Retirement Board (RRB) beneficiaries. As announced previously, these payments will begin to be issued this weekend, with the projection that the majority of these payments will be sent electronically and received on April 7. No action is needed by most people to obtain this round of Economic Impact Payments. People can check the Get My Payment tool on IRS.gov on to see if their payment has been scheduled. The IRS notes that the Get My Payment tool on IRS.gov will not be updated until the weekend of April 3-4 with information for Social Security and other federal beneficiaries expecting payments next week. The IRS continues to review data received for Veterans Affairs (VA) benefit recipients and expects to determine a payment date and provide more details soon. Currently, the IRS estimates that Economic Impact Payments for VA beneficiaries who do not regularly file tax returns could be disbursed by mid-April. VA beneficiary payment information will be available in the Get My Payment tool at a future date Special reminder for those who don't normally file a tax return Some federal benefits recipients may need to file a 2020 tax return, even if they don't usually file, to provide information the IRS needs to send payments for any qualified dependent. Eligible individuals in this group should file a 2020 tax return to be considered for an additional payment for their qualified dependent as quickly as possible. People who don't normally file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness, the rural poor, and others. For those eligible individuals who didn't get a first or second Economic Impact Payment or got less than the full amounts, they may be eligible for the 2020 Recovery Rebate Credit, but they'll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. Free tax return preparation is available for qualifying people. The IRS reminds taxpayers that the income levels in this new round of Economic Impact Payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly). The payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment. Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.

https://www.irs.gov/newsroom/interest-rates-remain-the-same-for-the-third-quarter-of-2021

IR-2021-120, May 27, 2021 WASHINGTON — The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning July 1, 2021. The rates will be: 3% for overpayments (two (2) % in the case of a corporation), 0.5% for the portion of a corporate overpayment exceeding $10,000, 3% for underpayments and 5% 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 April 2021 to take effect May 1, 2021, based on daily compounding. Revenue Ruling 2021-10PDF, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2021-25, dated June 21, 2021.

https://www.irs.gov/newsroom/more-than-1-point-8-million-additional-economic-impact-payments-disbursed-under-the-american-rescue-plan-total-payments-reach-nearly-167-million

IR-2021-119, May 26, 2021 WASHINGTON — Today, the Internal Revenue Service, the U.S. Department of the Treasury, and the Bureau of the Fiscal Service announced they have disbursed more than 1.8 million additional Economic Impact Payments under the American Rescue Plan. Today's announcement covering the most recent two weeks of the effort brings the total disbursed so far to nearly 167 million payments. They represent a total value of approximately $391 billion since these payments began rolling out to Americans in batches on March 12. Here is additional information on the last two weeks of payments, which includes those with official payment dates through May 26: In total, this includes more than 1.8 million payments with a value of more than $3.5 billion. More than 900,000 payments, with a value of approximately $1.9 billion, went to eligible individuals for whom the IRS previously did not have information to issue an Economic Impact Payment but who recently filed a tax return.  This also includes additional ongoing supplemental payments for people who earlier this year received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns. In the last two weeks, there were more than 900,000 of these "plus-up" payments, with a value of more than $1.6 billion. In all, the IRS has made nearly 7 million of these supplemental payments this year. Overall, the last two weeks of payments contain more than 900,000 direct deposit payments (with a total value over $1.6 billion) with the remainder as paper check payments. The IRS will continue to make Economic Impact Payments on a weekly basis. Ongoing payments will be sent to eligible individuals for whom the IRS previously did not have information to issue a payment but who recently filed a tax return, as well to people who qualify for "plus-up" payments. Special reminder for those who don't normally file a tax return Although payments are automatic for most people, the IRS continues to urge people who don't normally file a tax return and haven't received Economic Impact Payments to file a 2020 tax return to get all the benefits they're entitled to under the law, including tax credits such as the 2020 Recovery Rebate Credit, the Child Tax Credit, and the Earned Income Tax Credit. Filing a 2020 tax return will also assist the IRS in determining whether someone is eligible for an advance payment of the 2021 Child Tax Credit, which will begin to be disbursed this summer. For example, some federal benefits recipients may need to file a 2020 tax return – even if they don't usually file – to provide information the IRS needs to send payments for a qualifying dependent. Eligible individuals in this group should file a 2020 tax return as quickly as possible to be considered for an additional payment for their qualifying dependents. People who don't normally file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness, the rural poor, and others. Individuals who didn't get a first or second round Economic Impact Payment or got less than the full amounts may be eligible for the 2020 Recovery Rebate Credit, but they'll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. Free tax return preparation is available for qualifying people. The IRS reminds taxpayers that the income levels in this third round of Economic Impact Payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly). The payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment. Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.

https://www.irs.gov/newsroom/2021-irs-virtual-nationwide-tax-forum-begins-in-july

Tax pros may earn continuing education credits and more IRS YouTube Video: 2021 IRS Tax Forum Will Be Virtual (obsolete) IR-2021-118, May 24, 2021 WASHINGTON — The Internal Revenue Service today announced that the 2021 Virtual IRS Nationwide Tax Forum will be held over five weeks starting July 20, with a series of live-streamed webinars every Tuesday, Wednesday and Thursday. Held each summer for 30 years, the IRS Nationwide Tax Forums are the IRS's marquee outreach event to the tax professional community. This year, the IRS decided once again to provide these events in a virtual format in an abundance of caution and for the safety of the tax professional community. The virtual format allows experts from the IRS and its association partners to educate and update the tax professional community on tax law, cybesecurity, ethics and other topics. Registering and attending these virtual seminars will allow many to fully satisfy their annual continuing education requirements. Tax professionals are encouraged to register now to take advantage of this virtual program. Seminar dates and agenda The 2021 Virtual Nationwide Tax Forum will begin on July 20 and continue through Aug. 19 with live-streamed webinars broadcast on Tuesdays, Wednesdays and Thursdays. Registration enables attendees to participate in all of the live webinars earning up to 28 continuing education credits. The Nationwide Tax Forum will feature a keynote address from Commissioner Chuck Rettig, a plenary session with tax law and publications updates, and multiple sessions on high-interest topics such as the new Advance Child Tax Credit, virtual currencies, the gig economy, tax professional ethics, advanced cybersecurity and more. Presentations are made by both IRS experts and partner associations. This year, the plenary session and an ethics webinar will be offered both in English and Spanish. Additional multilngual resources will be available for attendees in the Virtual Expo. Course details, including webinar titles, descriptions and schedule are available now. 2021 registration and fees Tax professionals who register by June 15 at 5 p.m. ET qualify for an Early Bird rate of $240 per person. The standard rate, starting June 16, will be $289. Discounts for national association members Members of the IRS's national partner associations listed below qualify for a discount of $10 off the Early Bird rate, but only if they register by June 15. Participating association members should contact their association directly for more information: American Bar Association (ABA) Section of Taxation American Institute of Certified Public Accountants (AICPA) National Association of Enrolled Agents (NAEA) National Association of Tax Professionals (NATP) National Society of Accountants (NSA) National Society of Tax Professionals (NSTP) Low Income Taxpayer Clinics (LITC) Volunteer Income Tax Assistance Program (VITA) Virtual Expo and Focus Groups Registration at the 2021 Virtual IRS Nationwide Tax Forum includes access to the Virtual Expo. The Virtual Expo provides a great opportunity to visit with exhibitors representing dozens of commercial leaders in the industry, as well as leading national associations and several key IRS offices. New this year is the IRS's multilingual engagement and services booth, which will feature the expanded resources, IRS publications, forms and webpages that are now available in various languages. They will also share some related efforts coming soon. Highlights of the Virtual Expo include: The latest tax products and software The IRS Zone and engagement with representatives from IRS program offices Bonus Q&A sessions in the Speaker's Corner Live webinars from many of our sponsors In addition, attendees are invited to share their experiences and discuss innovative ideas directly with the IRS in small, virtual focus groups. Please check the website for the list of topics and qualifying criteria.

https://www.irs.gov/newsroom/with-the-may-17-deadline-in-the-past-file-taxes-now-to-get-refund-or-cut-penalties-and-interest

IR-2021-117, May 20, 2021 WASHINGTON — The Internal Revenue Service reminds taxpayers who missed the recent tax-filing deadline who are due a refund that there is no penalty for filing late. Those who owe and missed the deadline without requesting an extension should file quickly to limit penalties and interest. Extra time to file and pay any taxes due without penalties and interest is available for some taxpayers. Included are: Members of the military who served or are currently in a combat zone. They may qualify for an additional extension of at least 180 days to file and pay taxes. Support personnel in combat zones or a contingency operation in support of the Armed Forces. They may also qualify for a filing and payment extension of at least 180 days. Some disaster victims. Those who qualify have more time to file and pay what they owe. Here are some tips for late filers: File to get a tax refund The only way to get a refund is to file a tax return. There is no penalty for filing after the deadline if a refund is due. Use electronic filing options including IRS Free File available on IRS.gov through October 15 to prepare and file returns electronically. COVID-19 continues to cause delays in some IRS services. If a taxpayer filed a paper tax return, the IRS will process it in the order it was received. Taxpayers should not file a second tax return or call the IRS. The IRS issues more than nine out of 10 refunds in less than 21 days. However, it's possible a tax return may require additional review and take longer. Taxpayers can track a refund using the Where's My Refund? tool on IRS.gov, IRS2Go and by phone at 800-829-1954. Taxpayers need the primary Social Security number on the tax return, the filing status and the expected refund amount. The tool updates once daily, usually overnight, so there's no need to check more frequently. The Where's My Refund? tool cannot be used to track Economic Impact Payments. File to reduce penalties and interest Normally, taxpayers should file their tax return, or request an extension, and pay any taxes they owe by the deadline to avoid penalties and interest. An extension to file is not an extension to pay. Penalties and interest will apply to taxes owed after May 17. Even if a taxpayer can't afford to immediately pay the taxes they owe, they should still file a tax return as soon as possible to reduce possible penalties. The IRS has more information for taxpayers who owe the IRS, but cannot afford to pay. Ordinarily, the failure to file penalty is 5% of the tax owed for each month or part of a month that a tax return is late, up to five months, reduced by the failure to pay penalty amount for any month where both penalties apply. If a return is filed more than 60 days after the due date, the minimum penalty is either $435 or 100% of the unpaid tax, whichever is less. Filing and paying as much as possible is important because the late-filing penalty and late-payment penalty add up quickly. The failure to pay penalty rate is generally 0.5% of unpaid tax owed for each month or part of a month until the tax is fully paid or until 25% is reached. The rate is subject to change. For more information see IRS.gov/penalties. Taxpayers who have a history of filing and paying on time often qualify for penalty relief. A taxpayer will usually qualify if they have filed and paid timely for the past three years and meet other requirements. For more information, see the first-time penalty abatement page on IRS.gov. Interest is charged on tax and penalties until the balance is paid in full. Pay taxes due electronically Those who owe taxes can pay with IRS Direct Pay, by debit or credit card or apply online for a payment plan (including an installment agreement). For more electronic payment options visit IRS.gov/payments. They are secure and easy to use. Taxpayers paying electronically receive immediate confirmation when they submit their payment. With Direct Pay and the Electronic Federal Tax Payment System (EFTPS), taxpayers can opt in to receive email notifications about their payments. Selecting a tax professional The IRS offers tips to help taxpayers choose a tax return preparer wisely. The Choosing a Tax Professional page has information about tax return preparer credentials and qualifications and guidance on avoiding unscrupulous tax return preparers The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help taxpayers find tax return preparers who hold a professional credential recognized by the IRS or who have completed the requirements for the IRS Annual Filing Season Program. Taxpayer Bill of Rights Taxpayers have fundamental rights under the law that protect taxpayers when they interact with the IRS. The Taxpayer Bill of Rights presents these rights in 10 categories. IRS Publication 1, Your Rights as a Taxpayer, highlights these rights and the agency's obligation to protect them.

https://www.irs.gov/newsroom/irs-urges-groups-to-share-information-to-help-those-without-permanent-addresses-get-benefits-including-economic-impact-payments-upcoming-advance-child-tax-credit

IR-2021-116, May 19, 2021 WASHINGTON — The Internal Revenue Service today continued an ongoing effort to help those experiencing homelessness by reminding people who don't have a permanent address or a bank account that they may still qualify for stimulus payments and other credits, including the advance Child Tax Credit. The agency is also asking for help from groups that assist vulnerable or underserved people who may have difficulty getting a stimulus payment automatically. Filing a 2020 tax return, even if people don't have to, could put money in their pocket. While the third round of Economic Impact Payments continue to be made automatically to most eligible people, the IRS can't issue a payment to eligible Americans when information about them isn't available in the tax agency's systems. To help people experiencing homelessness, the rural poor and other historically underserved groups, the IRS urges community groups, employers and others to share information about Economic Impact Payments, the upcoming advance Child Tax Credit and other tax details to help more eligible people file a tax return so they can receive everything to which they're eligible. Advance Child Tax Credit: Payments begin soon The IRS and the U.S. Department of the Treasury announced earlier this week that the first monthly payment of the expanded and newly-advanceable Child Tax Credit (CTC) from the American Rescue Plan will be made on July 15. Roughly 39 million households—covering 88% of children in the United States—are slated to begin receiving monthly payments without any further action required. IRS and Treasury also announced the increased CTC payments will be made on the 15th of each month unless the 15th falls on a weekend or holiday. Families who receive the credit by direct deposit can plan their budgets around receipt of the benefit. Eligible families will receive a payment of up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 and above. The American Rescue Plan increased the maximum Child Tax Credit in 2021 to $3,600 for children under the age of 6 and to $3,000 per child for children between ages 6 and 17. The American Rescue Plan is projected to lift more than five million children out of poverty this year, cutting child poverty by more than half. Households covering more than 65 million children will receive the monthly CTC payments through direct deposit, paper check, or debit cards, and IRS and Treasury are committed to maximizing the use of direct deposit to ensure fast and secure delivery. While most taxpayers will not be required to take any action to receive their payments, Treasury and the IRS will continue outreach efforts with partner organizations over the coming months to make more families aware of their eligibility. How to help The IRS urges community groups, employers and others to share information about the Child Tax Credit, Economic Impact Payments and other key programs to help more eligible people file a tax return so they can receive everything to which they're eligible. IRS.gov has a variety of information and tools to help people. Economic Impact Payments, also known as stimulus payments, are different from most other tax benefits; people are eligible for the payments even if they have little or no income and even if they don't usually file a tax return. This is true as long as they have a Social Security number and are not being supported by someone else who can claim them as a dependent. For anyone who missed out on the first two rounds of payments, it's not too late. However, filing a 2020 tax return is the only way, if they're eligible, to get the money from the first or second payment now. People will need to claim the 2020 Recovery Rebate Credit. Most people who don't usually file can use IRS Free File to provide very basic information. There's even a special section on IRS.gov that can help: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. When the individual answers the questions in Free File, they may also find that they're eligible for other tax credits which may mean a bigger refund. The IRS will process the tax return and issue a refund. The individual can expect two payments because the 2020 Recovery Rebate Credit is paid as part of the tax refund. After the refund is issued, if they're eligible, they'll get another payment shortly afterward for the third Economic Impact Payment. For the third round of payments, people who are experiencing homelessness may qualify to receive $1,400 for themselves. If they are married or have eligible dependents, they can get an additional $1,400 for each of their family members. Filing a 2020 federal income tax return that provides very basic information about the person is something that can be done electronically using a smartphone or a computer. When the IRS receives the return, it will automatically calculate and issue the Economic Impact Payments to eligible individuals. People do not need a permanent address or a bank account. They don't need to have a job. For eligible individuals, the IRS will still issue the payment even if they haven't filed a tax return in years. Permanent address not required People can claim the Recovery Rebate Credit or other credits or get a third Economic Impact Payment even if they don't have a permanent address. For example, someone experiencing homelessness may list the address of a friend, relative or trusted service provider, such as a shelter, drop-in day center or transitional housing program, on the return filed with the IRS. If they are unable to choose direct deposit, a check or debit card for the tax refund and the third Economic Impact Payment can then be mailed to this address. For those with no bank account Many financial institutions will help a person lacking an account to open a low-cost or no-cost bank account. Individuals who open accounts will then have an account and routing number available if they file and request a direct deposit of the Economic Impact Payment. Visit the Federal Deposit Insurance Corporation (FDIC) website for details, in both English and Spanish, on opening an account online. Among other things, people can use the FDIC's BankFind tool to locate a nearby FDIC-insured bank. In addition, BankOn, the American Bankers Association, Independent Community Bankers of America and the National Credit Union Administration have all compiled lists of banks and credit unions that can open an account online. For veterans, see the Veterans Benefits Banking Program (VBBP) for access to financial services at participating banks. People with a prepaid debit card may be able to have their refund applied to the card. Many reloadable prepaid cards or mobile payment apps have account and routing numbers that can be provided to the IRS. Individuals would need to check with the financial institution to ensure the card can be used and to obtain the routing number and account number, which may be different from the card number. Workers experiencing homelessness can also receive the EITC A worker experiencing homelessness might also qualify for an Earned Income Tax Credit (EITC). To get the credit, federal law requires that a worker live in the U.S. for more than half of the year and meet other requirements. This means living in a home in any of the 50 states or the District of Columbia. Therefore, individuals experiencing homelessness, including those who reside at one or more homeless shelters, can meet that requirement. More details on the Earned Income Tax Credit For people experiencing homelessness who have a job, filing a return often carries an added bonus—getting a refund based on various tax benefits, especially the EITC for low-and moderate-income workers and working families. Like many other workers, some workers experiencing homelessness still qualify for the credit even if they earned too little income during 2020 to owe tax. For 2020, the income limit is $15,820 for singles with no children ($21,710 for couples with no children). The income limit is higher for people with children. For example, the limit is $50,594 for singles with three or more children ($56,844 for couples with three or more children). Those who make less must also meet other eligibility requirements. Because it's a refundable credit, those who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund. The EITC can put up to $6,660 into a worker's pocket. The amount varies depending upon the worker's income, filing status and other factors. The IRS recognizes that eligible workers experiencing homelessness often encounter unique challenges not faced by other people. To find out if they're eligible, people can use the EITC Assistant on IRS.gov. It's available in both English and Spanish. File for free The fastest and easiest way to claim the 2020 Recovery Rebate Credit and Earned Income Tax Credit (EITC) or to get the third Economic Impact Payment is to file a return electronically using IRS Free File. People can use a smartphone or computer to visit IRS.gov. Through the Free File system, anyone who qualifies for the EITC also qualifies to use brand-name software to prepare and electronically file their return for free. The IRS urges anyone experiencing homelessness who has a smartphone or access to a computer to take advantage of this service. Direct deposit speeds payments Direct deposit is the safest and fastest way to receive a refund and the third Economic Impact Payment. People will need to include direct deposit information on their 2020 tax return to get their payment directly deposited. Anyone with a savings, checking or brokerage account can choose to have their refund electronically deposited in that account. Taxpayers can also purchase U.S. Savings Bonds with their refund. Direct deposit is available even for people who file a paper tax return, but processing of paper returns takes longer. Help spread the word Employers can help by making their employees aware of the third Economic Impact Payment, 2020 Recovery Rebate Credit and Earned Income Tax and Child Tax Credit, and by encouraging them to file for these benefits based on tax year 2020 rules. In addition, the American Rescue Plan, enacted in March 2021, expands EITC and the Child Tax Credit benefits for the 2021 tax year. Some people will be able to get advance payments of the Child Tax Credit later this year. There is nothing those who qualify need to do at this point other than file a 2020 tax return. The IRS also continues to work extensively with community groups across the country to get people to file tax returns and receive all the Economic Impact Payments and credits they're entitled to. These efforts helped lead to more than 8 million people last year to submit tax returns who normally don't file. For more information, check out the outreach material, available on IRS.gov.

https://www.irs.gov/newsroom/irs-provides-guidance-on-premium-assistance-and-tax-credit-for-continuation-health-coverage

IR-2021-115, May 18, 2021 WASHINGTON — The Internal Revenue Service today provided guidance on tax breaks under the American Rescue Plan Act of 2021 for continuation health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). Notice 2021-31PDF provides guidance for employers, plan administrators, and health insurers regarding the new credit available to them for providing continuation health coverage to certain individuals under COBRA. The American Rescue Plan provides a temporary 100% reduction in the premium that individuals would have to pay when they elect COBRA continuation health coverage following a reduction in hours or an involuntary termination of employment. The new law provides a corresponding tax credit for the entities that maintain group health plans, such as employers, multiemployer plans, and insurers. The 100% reduction in the premium and the credit are also available with respect to continuation coverage provided for those events under comparable State laws, sometimes referred to as "mini-COBRA." Notice 2021-31 provides information regarding the calculation of the credit, the eligibility of individuals, the premium assistance period, and other information vital to employers, plan administrators, and insurers to understand the credit. COBRA provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. COBRA generally covers health plans maintained by private-sector employers with 20 or more full and part-time employees. It also covers employee organizations or federal, state or local governments. State mini-COBRA laws often provide similar benefits for insured small employers not subject to Federal COBRA. The IRS will continue to update information related to health plans on IRS.gov.

https://www.irs.gov/newsroom/irs-reminds-taxpayers-of-may-17-deadline-for-individual-income-tax-returns-extensions-other-help-available

IR-2021-114, May 17, 2021 WASHINGTON — The Internal Revenue Service reminds taxpayers that the deadline for filing most individual income tax returns this year is May 17. The agency also wants taxpayers who have yet to file their tax returns to know that there are a variety of options available to help them. IRS tax help is available 24 hours a day on IRS.gov. Whether filing a tax return, requesting an extension or making a payment, the IRS website can help last-minute filers on just about everything related to taxes. The IRS encourages taxpayers to file electronically. Doing so, whether through e-file or IRS Free File, vastly reduces tax return errors as the tax software does the calculations, flags common errors and prompts taxpayers for missing information. Free File Fillable Forms means there is a free option for everyone. Request more time Anyone who needs more time to file can get it. The easiest way to do so is through the Free File link on IRS.gov. In a matter of minutes, anyone, regardless of income, can use this free service to electronically request an extension on Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. Taxpayers are reminded, however, that an extension of time to file is not an extension of time to pay. To get the extension, taxpayers must estimate their tax liability on this form and pay any amount due. Tax payments are generally due by the May 17 filing deadline, and taxpayers should pay as much as they can to avoid possible penalties and interest. Taxpayers paying all or part of their income taxes, due by the May 17 deadline, with IRS Direct Pay, the Electronic Federal Tax Payment System (EFTPS) or a credit or debit card will get an automatic extension of time to file. By selecting "extension" as the reason for the payment, there is no need to separately file a Form 4868. Taxpayers will also receive a confirmation number after they submit their payment. When paying with Direct Pay and EFTPS, taxpayers can sign up for email notifications. Any payment made with an extension request will reduce or, if the balance is paid in full, eliminate interest and late-payment penalties that apply to payments made after the May 17 tax filing deadline. Alternatively, people can complete a paper copy of Form 4868 and mail it to the IRS. The form must be mailed and postmarked by the filing deadline. Download and print it from IRS.gov/forms. While an estimated 16 million taxpayers will request an extension of time to file, others automatically qualify for more time to meet their tax obligations. Who automatically has more time to file? The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in areas covered by Federal Emergency Management Agency disaster declarations. For details on all available relief, visit the Around the Nation page on IRS.gov. Deadlines for individual and business tax returns and make tax payments are extended for taxpayers in: Louisiana, Oklahoma and Texas – until June 15, 2021. Kentucky – until June 30, 2021. Alabama – until August 2, 2021. Tennessee – until August 2, 2021. Special rules may apply for some military personnel serving in a combat zone or a qualified hazardous duty area. This also applies to individuals serving in the combat zone in support of the U.S. Armed Forces. A complete list of designated combat zone localities can be found in Publication 3, Armed Forces' Tax Guide, available on IRS.gov. U.S. citizens and resident aliens living outside the United States have until June 15, 2021, to file their 2020 tax returns and pay any tax due. Additional May 17 extended deadlines May 17 is also the deadline to make 2020 contributions to: health savings accounts (HSAs) and Archer medical savings accounts (Archer MSAs); individual retirement arrangements (IRAs and Roth IRAs); Solo 401(k)s and Simplified Employee Pension plans (SEPs) as well as Coverdell education savings accounts (Coverdell ESAs). Employment taxes are also due May 17 for household employees including housekeepers, maids, babysitters, gardeners and others who work in or around a private residence as an employee. For more information, see Publication 926, Household Employer's Tax Guide. Also, tax-exempt organizations that operate on a calendar-year basis need to file certain annual information and tax returns by May 17. Unclaimed 2017 refunds The IRS estimates 1.3 million taxpayers did not file a 2017 tax return to claim tax refunds worth more than $1.3 billion. The three-year window of opportunity to claim a 2017 tax refund closes May 17, 2021, for most taxpayers. If they do not file a tax return by May 17, the money becomes the property of the U.S. Treasury. Direct deposit for a faster refund The fastest way to receive a refund is to file electronically and use direct deposit. The best way to check on a refund is the Where's My Refund? tool available on IRS.gov and the IRS2Go mobile app.

https://www.irs.gov/newsroom/irs-treasury-announce-families-of-88-percent-of-children-in-the-us-to-automatically-receive-monthly-payment-of-refundable-child-tax-credit

IR-2021-113, May 17, 2021 WASHINGTON — The Internal Revenue Service and the U.S. Department of the Treasury announced today that the first monthly payment of the expanded and newly-advanceable Child Tax Credit (CTC) from the American Rescue Plan will be made on July 15. Roughly 39 million households — covering 88% of children in the United States — are slated to begin receiving monthly payments without any further action required. IRS and Treasury also announced the increased CTC payments will be made on the 15th of each month unless the 15th falls on a weekend or holiday. Families who receive the credit by direct deposit can plan their budgets around receipt of the benefit. Eligible families will receive a payment of up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 and above. The American Rescue Plan increased the maximum Child Tax Credit in 2021 to $3,600 for children under the age of 6 and to $3,000 per child for children between ages 6 and 17. The American Rescue Plan is projected to lift more than five million children out of poverty this year, cutting child poverty by more than half. Households covering more than 65 million children will receive the monthly CTC payments through direct deposit, paper check, or debit cards, and IRS and Treasury are committed to maximizing the use of direct deposit to ensure fast and secure delivery. While most taxpayers will not be required to take any action to receive their payments, Treasury and the IRS will continue outreach efforts with partner organizations over the coming months to make more families aware of their eligibility. Today's announcement represents the latest collaboration between the IRS and Bureau of the Fiscal Service—and between Treasury and the White House American Rescue Plan Implementation Team—to ensure help quickly reaches Americans in need as they recover from the COVID-19 pandemic. Since March 12, the IRS has also distributed approximately 165 million Economic Impact Payments with a value of approximately $388 billion as a part of the American Rescue Plan. Additional information for taxpayers on how they can access the Child Tax Credit will be available soon at  IRS.gov/childtaxcredit2021 .

https://www.irs.gov/newsroom/irs-extends-may-17-other-tax-deadlines-for-victims-of-tennessee-storms-provides-special-guidelines-for-disaster-area-individuals-needing-further-extensions

IR-2021-112, May 14, 2021 WASHINGTON — Victims of this spring's storms and tornadoes in Tennessee will have until August 2, 2021, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today. Following The recent disaster declaration issued by the  Federal Emergency Management Agency (FEMA) , the IRS is providing this relief to taxpayers affected by storms, tornadoes, and flooding that took place between March 25 and April 3, 2021, in parts of Tennessee. Currently, relief is available to affected taxpayers who live or have a business in Campbell, Cannon, Cheatham, Claiborne, Clay, Davidson, Decatur, Fentress, Grainger, Hardeman, Henderson, Hickman, Jackson, Madison, Maury, McNairy, Moore, Overton, Scott, Smith, Wayne, Williamson and Wilson counties. The current list of eligible localities is always available on the disaster relief page on IRS.gov. The tax relief postpones various tax filing and payment deadlines that occurred starting on March 25. As a result, affected individuals and businesses will have until August 2 to file returns and pay any taxes that were originally due during this period. This includes 2020 individual income tax returns due on May 17, as well as various 2020 business returns normally due on April 15. Among other things, this also means that affected taxpayers will have until August 2 to make 2020 IRA contributions. The August 2 deadline also applies to quarterly estimated income tax payments due on April 15 and June 15, and the quarterly payroll and excise tax returns normally due on April 30. It also applies to tax-exempt organizations, operating on a calendar-year basis, that have a 2020 return due on May 17. In addition, penalties on payroll and excise tax deposits due on or after March 25 and before April 9 will be abated as long as the deposits were made by April 9. The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time. The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated. In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization. Individuals and businesses in a federally-declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2021 return normally filed next year), or the return for the prior year. This means that taxpayers can, if they choose, claim these losses on the 2020 return they are filling out this tax season. Be sure to write the FEMA declaration number – 4601DR − on any return claiming a loss. See Publication 547 for details. The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov. Besides Tennessee, taxpayers in part or all of five other states also have more time to file and pay: Individuals and businesses in Texas, Oklahoma and Louisiana have until June 15 to file and pay. All taxpayers in these three states qualify for relief. Individuals and businesses in parts of Kentucky have until June 30 to file and pay. Individuals and businesses in parts of Alabama have until August 2 to file and pay. Disaster area individuals who need more time to file, beyond these postponed deadlines, can get it by submitting a request for an automatic extension. This will extend their filing deadline until October 15, 2021. The IRS emphasized that this additional extension is not an extension of time to pay. An easy way to get the extra time is through Free File on IRS.gov. In a matter of minutes, anyone, regardless of income, can use this free service to electronically request an extension on Form 4868. To get the extension, taxpayers must estimate their tax liability on this form. Another option is to pay electronically and get a tax-filing extension. The IRS will automatically process an extension when a taxpayer selects Form 4868 and makes a full or partial federal tax payment by the May 17 due date using Direct Pay, the Electronic Federal Tax Payment System (EFTPS) or a debit or credit card. Note that registration is required before using EFTPS. To learn more about each of these electronic payment options, visit IRS.gov/payments. The IRS emphasized that May 17 is the last day to request an extension using any of these electronic options. After May 17, disaster-area taxpayers who need more time to file must make that request on paper. To do that, file Form 4868, available on IRS.gov. For more information about extensions, visit IRS.gov/extension.

https://www.irs.gov/newsroom/irs-begins-correcting-tax-returns-for-unemployment-compensation-income-exclusion-periodic-payments-to-be-made-may-through-summer

IR-2021-111, May 14, 2021 WASHINGTON — The Internal Revenue Service will begin issuing refunds this week to eligible taxpayers who paid taxes on 2020 unemployment compensation that the recently-enacted American Rescue Plan later excluded from taxable income. The IRS identified over 10 million taxpayers who filed their tax returns prior to the American Rescue Plan of 2021 becoming law in March and is reviewing those tax returns to determine the correct taxable amount of unemployment compensation and tax. This could result in a refund, a reduced balance due or no change to tax (no refund due nor amount owed). These corrections are being made automatically in a phased approach, easing the burden on taxpayers. The first phase is underway and includes the simplest returns. The next phase will include the more complex tax returns which the IRS anticipates will take through the end of summer to review and correct. The first phase of adjustments is being made for single taxpayers who had the simplest tax returns, such as those filed by taxpayers who did not claim children or any refundable tax credits. The IRS will issue refunds resulting from this effort by direct deposit for taxpayers who provided bank account information on their 2020 tax return. If valid bank account information is not available, the refund will be mailed as a paper check to the address of record. The IRS will continue to send refunds until all identified tax returns have been reviewed and adjusted. These refunds are subject to normal offset rules, such as past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support or certain federal nontax debts (i.e., student loans). The IRS will send a separate notice to the taxpayer if the refund is offset to pay unpaid debts. The IRS will send taxpayers a notice explaining the corrections, which they should expect within thirty days of when the correction is made. Taxpayers should keep any notices they receive for their records. Taxpayers should review their return after receiving their IRS notice(s). Correction to any Earned Income Tax Credit (EITC) without qualifying children and the Recovery Rebate Credit are being made automatically as part of this process. However, some taxpayers may be eligible for certain income-based tax credits not claimed on their original return, such as the EITC for their qualifying children. If so, they should file an amended tax return if the revised adjusted gross income amount makes them eligible for additional benefits. More complex corrections will begin upon the completion of the first phase and involves couples filing as married filing jointly. Unemployment compensation is taxable income. The American Rescue Plan excludes $10,200 in 2020 unemployment compensation from income used to calculate the amount of taxes owed. The $10,200 per person exclusion applies to taxpayers, single or married filing jointly, with modified adjusted gross income of less than $150,000. The $10,200 is the amount of income exclusion, not the amount of the refund. Refund amounts will vary and not all adjustments will result in a refund. The legislation also suspends the requirement to repay excess advance payments of the Premium Tax Credit (excess APTC). If a taxpayer paid an excess APTC repayment amount when they filed their 2020 return, the IRS is also refunding this amount automatically. If the IRS corrects the taxpayer's account to reflect the unemployment income exclusion, the excess APTC amount that the taxpayer paid will be included in that adjustment. The IRS is also adjusting accounts for those who repaid excess APTC but did not report unemployment compensation on their 2020 tax return. Taxpayers who have not yet filed a tax return should follow the guidance for Forms 1040 and 1040-SR, which details how to exclude unemployment compensation. For additional information Tax Treatment of Unemployment Compensation Unemployment Compensation Exclusion FAQs Tax Year 2020: Requirement to repay excess advance payments of the Premium Tax Credit is suspended

https://www.irs.gov/newsroom/facing-a-surprise-tax-bill-be-sure-to-still-file-by-may-17

It's easy for most people to set up an online payment agreement with IRS IR-2021-110, May 14, 2021 WASHINGTON ― The Internal Revenue Service today reminded taxpayers who owe 2020 taxes that there are different ways to pay through IRS.gov, including payment options for many people who can't pay in full. File by May 17 The most important thing everyone with a tax bill should do is file a return by the May 17 due date, even if they can't pay in full, or request a six-month extension to avoid higher penalties for failing to file on time. Though automatic tax-filing extensions are available to anyone who wants one, these extensions don't change the payment deadline. It is not an extension to pay. Visit IRS.gov/extensions for details. Usually anyone who owes tax and waits until after that date to file will be charged a late-filing penalty of 5% per month. So, if a tax return is done, filing it by May 17 is always less costly, even if the full amount due can't be paid on time. Free File is an easy, quick way to file that is available to anyone who makes $72,000 or less and is available on IRS.gov. Pay what you can Interest, plus the much smaller late-payment penalty, will apply to any payments made after May 17. Making a payment, even a partial payment, will help limit penalty and interest charges. The fastest and easiest way to pay a personal tax bill is with Direct Pay, available only on IRS.gov. For a rundown of other payment options, visit IRS.gov/payments. The IRS urges taxpayers to first consider other options for payment, including getting a loan to pay the amount due. In many cases, loan costs may be lower than the combination of interest and penalties the IRS must charge under federal law. Normally, the late-payment penalty is one-half-of-one percent (0.5%) per month. The interest rate, adjusted quarterly, is currently 3% per year, compounded daily. If a loan isn't possible, the IRS can often help. Online payment plans Most individual taxpayers qualify to set up an online payment agreement with the IRS, and it only takes a few minutes to apply. Applicants are notified immediately if their request is approved. No need to call or write to the IRS. The IRS notes that Online payment plans are processed more quickly than requests submitted with electronically-filed tax returns. There are two main types of Online payment plans. They are: Short-term payment plan – The payment period is 120 days or less and the total amount owed is less than $100,000 in combined tax, penalties and interest. A 180-day payment plan is also possible, but it's only available by calling or writing the IRS. Either way, there's no fee for setting one up, though interest and the late-payment penalty continue to apply. Long-term payment plan – The payment period is longer than the short-term payment plan. Payments are made monthly, and the amount owed must be less than $50,000 in combined tax, penalties and interest. If the IRS approves a long-term payment plan, also known as an installment agreement, a setup fee normally applies. But low-income taxpayers may qualify to have the fee waived or reimbursed. In addition, for anyone who filed their return on time, the late-payment penalty rate is cut in half while an installment agreement is in effect. This means that the penalty accrues at the rate of one-quarter-of-one percent (0.25%) per month, instead of the usual one-half-of-one percent (0.5%) per month. Taxpayers who do not qualify for an online payment agreement may still be able to arrange to pay in installments. See Additional Information on Payment Plans for more information. For some, but not all, struggling taxpayers, three other options are available: Delayed collection If the IRS determines a taxpayer is unable to pay, it may delay collection until their financial condition improves. However, the total amount owed will still increase because penalties and interest are charged until paid in full. Taxpayers can request a delay by calling the phone number on their notice or 800-829-1040. Penalty relief Some taxpayers qualify to have their late-filing or late-payment penalties reduced or eliminated. This can be done on a case-by-case basis, based on reasonable cause. Alternatively, where a taxpayer has filed and paid on time during the past three years, the IRS can typically provide relief under the First Time Abatement program. Visit IRS.gov/penaltyrelief for details. Offer in Compromise Some taxpayers qualify to settle their tax bill for less than the full amount due, through an offer in compromise. Though there is typically a $205 non-refundable application fee, it is generally waived for low-income taxpayers, and for offers based on doubt as to liability. The Offer in Compromise Pre-Qualifier tool can help determine eligibility for anyone interested in applying. Taxpayers can securely access their federal tax account information at IRS.gov/account. Among other things, this includes viewing any amount due and payment history. The IRS reminds taxpayers that they have rights and protections throughout the collection process. For details, see Taxpayer Bill of Rights and Publication 1, Your Rights as a TaxpayerPDF. For more information about payments, see Topic No. 202, Tax Payment Options, on IRS.gov.

https://www.irs.gov/newsroom/irs-extends-deadline-to-apply-for-the-2022-2024-volunteer-taxpayer-advocacy-panel

IR-2021-109, May 13, 2021 WASHINGTON — The Internal Revenue Service has extended the deadline for civic-minded volunteers to apply for membership on the Taxpayer Advocacy Panel (TAP) for 2022. Taxpayers may submit a TAP application online at www.improveirs.org through June 1, 2021. The TAP is a federal advisory committee that listens to taxpayers, identifies major taxpayer concerns and makes recommendations for improving IRS service and customer satisfaction. Taxpayers are encouraged to take this opportunity to make a difference in how the IRS delivers products and services. A video is available with information about the TAP and how to contribute to this dynamic group of volunteers. The National Taxpayer Advocate Erin M. Collins recently expressed her appreciation for the contributions of TAP volunteers to improve the experience of U.S. taxpayers. "I am grateful to these citizens for volunteering their time and talent to the Taxpayer Advocacy Panel," she said. "I am very proud of the accomplishments of the TAP last year, and I look forward to the TAP bringing its valuable taxpayer perspective in recommending changes to tax administration to achieve the quality service that taxpayers expect and deserve." The TAP reports annually to the Secretary of the Treasury, the Commissioner of the Internal Revenue Service and the National Taxpayer Advocate. The Office of the Taxpayer Advocate is an independent organization within the IRS that provides support for and oversight of the TAP. To the extent possible, the TAP includes members from all 50 states, the District of Columbia, Puerto Rico and one member representing international taxpayers. Each member is appointed to represent the interests of taxpayers in his or her geographic location as well as taxpayers overall. For the TAP, "international taxpayers" are broadly defined to include U.S. citizens working, living or doing business abroad or in U.S. territories. The TAP is seeking members in the following locations: Arkansas, California, Connecticut, Delaware, Georgia, Idaho, International, Kentucky, Massachusetts, Michigan, Missouri, Minnesota, Montana, North Dakota, Nebraska, New Mexico, New York, Oklahoma, Ohio, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Wisconsin and West Virginia. The panel is seeking alternates in the following locations: Alabama, California, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Kentucky, Massachusetts, Michigan, Missouri, North Dakota, Nebraska, New Hampshire, New Mexico, Nevada, Ohio, Oregon, Rhode Island, Texas, Vermont, Wisconsin, West Virginia and Wyoming. Federal advisory committees are required to have a balanced membership in terms of viewpoints represented. As such, applicants from under-represented groups, such as Native Americans and non-tax professionals, are particularly encouraged to apply. All timely applications, however, will be given consideration. New TAP members will serve a three-year term starting in December 2021. Applicants chosen as alternate members will be considered to fill any vacancies that open in their areas during the next three years. To be a member of the TAP, a person must be a U.S. citizen, be current with his or her federal tax obligations, be able to commit 200 to 300 volunteer hours during the year and pass a Federal Bureau of Investigation criminal background check. Members cannot be federally registered lobbyists. Current Department of the Treasury or IRS employees cannot serve on the panel, and former Department of the Treasury or IRS employees and former TAP members must have a three-year separation from their service to be considered for appointment. Tax practitioner applicants must be in good standing with the IRS (meaning not currently under suspension or disbarment). For additional information about the TAP or the application process, visit www.improveirs.org or call 888-912-1227 (a toll-free call) and select prompt number five. Callers outside the U.S. may call 214-413-6523 (not a toll-free call) or email the TAP staff at taxpayeradvocacypanel@irs.gov.

https://www.irs.gov/newsroom/irs-grants-dyed-diesel-fuel-penalty-relief-due-to-disruptions-of-the-fuel-supply-chain

IR-2021-108, May 13, 2021 WASHINGTON — The Internal Revenue Service, in response to disruptions of the fuel supply chain, will not impose a penalty when dyed diesel fuel is sold for use or used on the highway in the states of Alabama, Delaware, Georgia, Florida, Louisiana, Maryland, Mississippi, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and the District of Columbia. This relief is retroactive to May 7, 2021, and will remain in effect through May 21, 2021. This penalty relief is available to any person that sells or uses dyed diesel fuel for highway use. In the case of the operator of the vehicle in which the dyed diesel fuel is used, the relief is available only if the operator or the person selling such fuel pays the tax of 24.4 cents per gallon that is normally applied to diesel fuel for highway use. The IRS will not impose penalties for failure to make semimonthly deposits of this tax. IRS Publication 510, Excise Taxes, has information on the proper method for reporting and paying the tax. Ordinarily, dyed diesel fuel is not taxed, because it is sold for uses exempt from excise tax, such as to farmers for farming purposes, for home heating use, and to local governments. The IRS is closely monitoring the situation and will provide additional relief as needed.

https://www.irs.gov/newsroom/nearly-1-million-additional-economic-impact-payments-disbursed-under-the-american-rescue-plan-total-payments-reach-nearly-165-million

IR-2021-107, May 12, 2021 WASHINGTON — Today, the Internal Revenue Service, the U.S. Department of the Treasury, and the Bureau of the Fiscal Service announced they are disbursing nearly 1 million payments in the ninth batch of Economic Impact Payments from the American Rescue Plan. Today's announcement brings the total disbursed so far to approximately 165 million payments, with a total value of approximately $388 billion, since these payments began rolling out to Americans in batches as announced on March 12. The ninth batch of payments began processing on Friday, May 7, with an official payment date of May 12, with some people receiving direct payments in their accounts earlier as provisional or pending deposits. Here is additional information on this batch of payments: In total, this batch includes more than 960,000 payments with a value of more than $1.8 billion. More than 500,000 payments, with a value of over $1 billion, went to eligible individuals for whom the IRS previously did not have information to issue an Economic Impact Payment but who recently filed a tax return.  This batch also includes additional ongoing supplemental payments for people who earlier this year received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns. This batch included more than 460,000 of these "plus-up" payments, with a value of more than $800 million. In all, the IRS has made more than 6 million of these supplemental payments this year. Overall, this ninth batch of payments contains nearly 500,000 direct deposit payments (with a total value of $946 million) with the remainder as paper payments. Additional information is available on the first eight batches of Economic Impact Payments from the American Rescue Plan, which processed weekly on April 30, April 23, April 16, April 9, April 2, March 26, March 19 and March 12. The IRS will continue to make Economic Impact Payments on a weekly basis. Ongoing payments will be sent to eligible individuals for whom the IRS previously did not have information to issue a payment but who recently filed a tax return, as well to people who qualify for "plus-up" payments. Special reminder for those who don't normally file a tax return Although payments are automatic for most people, the IRS continues to urge people who don't normally file a tax return and haven't received Economic Impact Payments to file a 2020 tax return to get all the benefits they're entitled to under the law, including tax credits such as the 2020 Recovery Rebate Credit, the Child Tax Credit, and the Earned Income Tax Credit. Filing a 2020 tax return will also assist the IRS in determining whether someone is eligible for an advance payment of the 2021 Child Tax Credit, which will begin to be disbursed this summer. For example, some federal benefits recipients may need to file a 2020 tax return – even if they don't usually file – to provide information the IRS needs to send payments for a qualifying dependent. Eligible individuals in this group should file a 2020 tax return as quickly as possible to be considered for an additional payment for their qualifying dependents. People who don't normally file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness, the rural poor, and others. Individuals who didn't get a first or second round Economic Impact Payment or got less than the full amounts may be eligible for the 2020 Recovery Rebate Credit, but they'll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. Free tax return preparation is available for qualifying people. The IRS reminds taxpayers that the income levels in this third round of Economic Impact Payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly). The payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment. Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.

https://www.irs.gov/newsroom/irs-offers-overview-of-tax-provisions-in-american-rescue-plan-retroactive-tax-benefits-help-many-people-now-preparing-2020-returns

Taxpayers with children should file returns soon for advance payments of Child Tax Credit  IR-2021-106, May 11, 2021 WASHINGTON — The Internal Revenue Service today provided an overview of some of the key tax provisions in the American Rescue Plan Act. Several provisions affect the 2020 tax return people are filling out this filing season, including one exempting up to $10,200 in unemployment compensation from tax and another benefiting many people who purchased subsidized health coverage through either federal or state Health Insurance Marketplaces. In addition, the law also includes a third round of Economic Impact Payments, now going out to eligible Americans, that are generally equal to $1,400 per person for most people, as well as several other key changes for tax-year 2021. The best way to keep up with tax law developments is by regularly checking IRS.gov. In the meantime, the IRS urges taxpayers who have already filed their 2020 returns to avoid filing amended returns, refund claims or contacting the IRS about obtaining newly-enacted tax benefits. Taking any of these actions now will not speed up a future refund and may even slow down an existing refund claim. Instead, as noted below, the IRS will automatically provide these benefits to eligible filers. Retroactive changes for 2020 Some unemployment compensation not taxed for many For tax year 2020 only, the first $10,200 of unemployment compensation is not taxable for most households. This tax benefit is only available to those whose modified adjusted gross income is below $150,000 during 2020. The same income cap applies to all filing statuses. This means that those eligible who haven't filed a 2020 return yet can subtract the first $10,200 from the total compensation received and only include the difference in their taxable income. For couples where both spouses received unemployment compensation, each spouse can subtract $10,200. Details, including a worksheet, are available at IRS.gov/form1040. For any eligible taxpayer who has already filed and reported their compensation as fully taxable, the IRS is automatically adjusting their return and providing them this tax benefit. Refunds, based on this adjustment, are being issued in May and continuing through the summer. Repayment of excess Advance Premium Tax Credit suspended Taxpayers who, for 2020, purchased health insurance through a federal or state Health Insurance Marketplace and have excess advance payments of the premium tax credit (excess APTC) won't report an excess APTC repayment when they file their 2020 tax return. Taxpayers use Form 8962 to figure the amount of the premium tax credit (PTC) they are allowed and reconcile it with any advance payments of the premium tax credit (APTC) made for their health insurance through the Marketplace. If the APTC is less than the PTC, they claim a net premium tax credit (net PTC). The process remains unchanged for taxpayers claiming a net PTC for 2020. They must file Form 8962 when they file their 2020 tax return. However, if a taxpayer's APTC was more than his or her allowable PTC, the taxpayer has the excess APTC. The new law suspends the requirement to repay 2020 excess APTC. This means that taxpayers with excess APTC for 2020 do not need to report the excess APTC or file Form 8962. The IRS will automatically reduce the repayment amount to zero. In addition, the agency will automatically reimburse anyone who has already repaid their 2020 excess APTC. Looking ahead to the 2021 tax season Child and dependent care credit increased for 2021 only The new law increases the amount of the credit and eligible expenses for child and dependent care, modifies the phase-out of the credit for higher earners and makes it refundable. For 2021, the top credit percentage of qualifying expenses increased from 35% to 50%. In addition, eligible families can claim qualifying child and dependent care expenses of up to: $8,000 for one qualifying individual, up from $3,000 in prior years, or $16,000 for two or more qualifying individuals, up from $6,000 before 2021. This means that the maximum credit in 2021 of 50% for one dependent's qualifying expenses is $4,000, or $8,000 for two or more dependents. When figuring the credit, employer-provided dependent care benefits, such as those provided through a flexible spending account (FSA), must be subtracted from total eligible expenses. As before, the more a taxpayer earns, the lower the credit percentage. But under the new law, more people will qualify for the new maximum 50% credit rate. That's because the adjusted gross income (AGI) level at which the credit percentage is reduced is raised substantially from $15,000 to $125,000. Above $125,000, the 50% credit percentage is reduced as income rises, plateauing at a 20% rate for taxpayers with an AGI above $183,000. The credit percentage level remains at 20% until reaching $400,000 and is then phased out above that level. It is completely unavailable for any taxpayer with AGI exceeding $438,000. In 2021, for the first time, the credit is fully refundable. This means that an eligible family can get it, even if they owe no federal income tax. Workers can set aside more in a Dependent Care FSA For 2021, the maximum amount of tax-free employer-provided dependent care benefits increased from $5,000 to $10,500. This means that an employee can set aside $10,500 in a dependent care FSA, if their employer has one, instead of the normal $5,000. Workers can only do that if their employer adopts this change. Interested employees should contact their employer for details. Childless EITC expanded for 2021 For 2021 only, more childless workers and couples can qualify for the Earned Income Tax Credit (EITC), a fully refundable tax benefit that helps many low- and moderate-income workers and working families. That's because the maximum credit is nearly tripled for these taxpayers and is, for the first time, made available to both younger workers and senior citizens. In 2021, the maximum EITC for those with no dependents is $1,502, up from $538 in 2020. Available to filers with an AGI below $27,380 in 2021, it can be claimed by eligible workers who are at least 19 years of age. Full-time students under age 24 don't qualify. In the past, the EITC for those with no dependents was only available to people ages 25 to 64. Another change is available to both childless workers and families with dependents. For 2021, it allows them to choose to figure the EITC using their 2019 income, as long as it was higher than their 2021 income. In some instances, this option will give them a larger credit. Changes expanding EITC for 2021 and future years Changes expanding the EITC for 2021 and future years include: Singles and couples who have Social Security numbers can claim the credit, even if their children don't have SSNs. In this instance, they would get the smaller credit available to childless workers. In the past, these filers didn't qualify for the credit More workers and working families who also have investment income can get the credit. Starting in 2021, the limit on investment income is increased to $10,000. After 2021, the $10,000 limit is indexed for inflation. The current limit is $3,650. Married but Separated spouses can choose to be treated as not married for EITC purposes. To qualify, the spouse claiming the credit cannot file jointly with the other spouse, cannot have the same principal residence as the other spouse for at least six months out of the year and must have a qualifying child living with them for more than half the year. Expanded Child Tax Credit for 2021 only The new law increases the amount of the Child Tax Credit, makes it available for 17-year-old dependents, makes it fully refundable and makes it possible for families to receive up to half of it, in advance, during the last half of 2021. Moreover, families can get the credit, even if they have little or no income from a job, business or other source. Prior to taxable year 2021, the credit is worth up to $2,000 per eligible child. The new law increases it to as much as $3,000 per child for dependents ages 6 through 17, and $3,600 for dependents ages 5 and under. The maximum credit is available to taxpayers with a modified AGI of: $75,000 or less for singles, $112,500 or less for heads of household and $150,000 or less for married couples filing a joint return and qualified widows and widowers. Above these income thresholds, the extra amount above the original $2,000 credit — either $1,000 or $1,600 per child — is reduced by $50 for every $1,000 in modified AGI. Also, the credit is fully refundable for 2021. Before this year, the refundable portion was limited to $1,400 per child. Advance Child Tax Credit payments From July through December 2021, up to half the credit will be advanced to eligible families by Treasury and the IRS. The advance payments will be estimated from their 2020 return, or if not available, their 2019 return. For that reason, the IRS urges families to file their 2020 return as soon as possible. This includes many low-and moderate-income families who don't normally file returns. Often, those families will qualify for an Economic Impact Payment or tax benefits, such as the EITC. This year, taxpayers have until May 17, 2021, to file a return. To speed delivery of any refund, be sure to file electronically and choose direct deposit. Doing so will also ensure quick delivery of the Advance Child Tax Credit payments to eligible taxpayers, later this year. In the next few weeks, eligible families can choose to decline receiving the advance payments. Likewise, families will also be able to notify Treasury and IRS of changes in their income, filing status or number of qualifying children. Details will be available soon. The IRS also urges community groups, non-profits, associations, education groups and anyone else with connections to people with children to share this critical information about the Child Tax Credit as well as other important benefits. The IRS will be providing additional materials and information in the near future that can be easily shared by social media, email and other methods. For the most up-to-date information on the Child Tax Credit and advance payments, visit Advance Child Tax Credit Payments in 2021.

https://www.irs.gov/newsroom/irs-issues-guidance-on-taxability-of-dependent-care-assistance-programs-for-2021-2022

IR-2021-105, May 10, 2021 WASHINGTON — The Internal Revenue Service today issued guidance on the taxability of dependent care assistance programs for 2021 and 2022, clarifying that amounts attributable to carryovers or an extended period for incurring claims generally are not taxable. The guidance also illustrates the interaction of this standard with the one-year increase in the exclusion for employer-provided dependent care benefits from $5,000 to $10,500 for the 2021 taxable year under the American Rescue Plan Act. Because of the pandemic, many people were unable to use the money they set aside in their dependent care assistance programs in 2020 and 2021. Generally, under these plans, an employer allows its employees to set aside a certain amount of pre-tax wages to pay for dependent care expenses. The employee's expenses are then reimbursed from the dependent care assistance program. Carryovers of unused dependent care assistance program amounts generally are not permitted (although a 2½ month grace period is allowed). However, recent coronavirus-related legislation (the Taxpayer Certainty and Disaster Tax Relief Act of 2020) allowed employers to amend their plans to permit the carryover of unused dependent care assistance program amounts to plan years ending in 2021 and 2022, or to extend the permissible period for incurring claims to plan years over the same period. Today's Notice 2021-26PDF clarifies for taxpayers that if these dependent care benefits would have been excluded from income if used during taxable year 2020 (or 2021, if applicable), these benefits will remain excludible from gross income and are not considered wages of the employee for 2021 and 2022. Notice 2021-15PDF, issued in February 2021, states that if an employer adopted a carryover or extended period for incurring claims, the annual limits for dependent care assistance program amounts apply to amounts contributed, not to amounts reimbursed or available for reimbursement in a particular plan or calendar year. Therefore, participants in dependent care assistance programs may continue to contribute the maximum amount to their plans for 2021 and 2022. For more on coronavirus-related tax relief, see IRS.gov.

https://www.irs.gov/newsroom/reminder-to-tax-exempt-organizations-990s-other-forms-due-on-may-17-information-and-tools-available-to-help

IR-2021-104, May 7, 2021 WASHINGTON — The Internal Revenue Service today reminds tax-exempt organizations that operate on a calendar-year (CY) basis that certain annual information and tax returns they file with the IRS are due on May 17, 2021. These returns are: Form 990-series annual information returns (Forms 990, 990-EZ, 990-PF, 990-BL) Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or Form 990-EZ Form 990-T, Exempt Organization Business Income Tax Return (other than certain trusts) Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code Mandatory Electronic Filing Organizations filing a Form 990, 990-PF or 990-N for CY2020 must file their returns electronically. Organizations filing Form 990-EZ for CY2020 received transitional relief and may file electronically or in paper. To help exempt organizations comply with their filing requirements, the IRS provides a series of pre-recorded online workshops. These workshops are designed to assist officers, board members, and volunteers with the steps they need to take to maintain their tax-exempt status, including filing annual information returns. "We want to make sure everyone in the exempt sector understands their obligations," said Robert Malone, Exempt Organizations and Government Entities Director. "The IRS offers an interactive walkthrough of the annual Form 990 filing process and other courses that board members and volunteers can take to learn about maintaining their charity's tax-exempt status." Extension of Time to File Tax-exempt organizations that need additional time to file beyond the May 17 deadline can request an automatic extension by filing Form 8868, Application for Extension of Time To File an Exempt Organization Return. An organization will be allowed a six-month extension beyond the original due date. In situations where tax is due, extending the time for filing a return does not extend the time for paying tax. The IRS encourages organizations requesting an extension to electronically file Form 8868. Auto-revocation Under section 6033(j) of the Internal Revenue Code, organizations that fail to file their Form 990 series for three consecutive years automatically lose their exempt status. This is referred to as "auto-revocation." The IRS is experiencing delays in processing paper returns in our service centers. Although organizations may file their CY2020 Form 990-EZ in paper, the IRS is encouraging them to electronically file their Form 990-EZ. To avoid auto-revocation, this is especially important for organizations that did not file their information returns for CY2018 and CY2019. Small tax-exempt organizations may be eligible to file Form 990-N to satisfy their annual information return requirement. These organizations need only eight items of basic information to complete the submission, which must be electronically filed. The Form 990-N due date cannot be extended, but there is no monetary penalty for late submissions. Although there is no monetary penalty for filing Form 990-N late, organizations that failed to file their required Form 990-N for CY2018 and CY2019, and file after May 17, 2021, are auto-revoked. What Can an Organization Do if Auto-revoked? The IRS publishes a list of, and mails notices to, organizations whose tax-exempt status has been automatically revoked. The law prohibits the IRS from undoing a proper automatic revocation, but the IRS has procedures in place to assist organizations that believe they have been erroneously listed as auto-revoked. This includes situations where an organization has documentation that it met its filing requirement for one or more years during the three-consecutive-year period. For example, if an organization receives a notice of automatic revocation or is listed as auto-revoked effective May 17, 2021, but has documentation it filed a paper Form 990‑EZ or Form 8868 for CY2020 by that date, it can fax us the relevant information (an IRS receipt for a filed return, for example) at 855-247‑6123 to resolve the issue.

https://www.irs.gov/newsroom/more-than-1-point-1-million-additional-economic-impact-payments-disbursed-under-the-american-rescue-plan-payments-total-approximately-164-million

IR-2021-103, May 5, 2021 WASHINGTON — Today, the Internal Revenue Service, the U.S. Department of the Treasury, and the Bureau of the Fiscal Service announced they are disbursing more than 1.1 million payments in the eighth batch of Economic Impact Payments from the American Rescue Plan. Today's announcement brings the total disbursed so far to approximately 164 million payments, with a total value of approximately $386 billion, since these payments began rolling out to Americans in batches as announced on March 12. The eighth batch of payments began processing on Friday, April 30, with an official payment date of May 5, with some people receiving direct payments in their accounts earlier as provisional or pending deposits. Here is additional information on this batch of payments: In total, this batch includes more than 1.1 million payments with a value of more than $2 billion. More than 585,000 payments, with a value of over $1.2 billion, went to eligible individuals for whom the IRS previously did not have information to issue an Economic Impact Payment but who recently filed a tax return.  This batch also includes additional ongoing supplemental payments for people who earlier this year received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns. This batch included more than 570,000 of these "plus-up" payments, with a value of nearly $1 billion. Overall, this eighth batch of payments contains about 600,000 direct deposit payments (with a total value of $1.1 billion) with the remainder on paper payments. Additional information is available on the first seven batches of Economic Impact Payments from the American Rescue Plan, which processed weekly on April 23, April 16, April 9, April 2, March 26, March 19 and March 12. The IRS will continue to make Economic Impact Payments on a weekly basis. Ongoing payments will be sent to eligible individuals for whom the IRS previously did not have information to issue a payment but who recently filed a tax return, as well to people who qualify for "plus-up" payments. Special reminder for those who don't normally file a tax return Although payments are automatic for most people, the IRS continues to urge people who don't normally file a tax return and haven't received Economic Impact Payments to file a 2020 tax return to get all the benefits they're entitled to under the law, including tax credits such as the 2020 Recovery Rebate Credit, the Child Tax Credit, and the Earned Income Tax Credit. Filing a 2020 tax return will also assist the IRS in determining whether someone is eligible for an advance payment of the 2021 Child Tax Credit, which will begin to be disbursed this summer. For example, some federal benefits recipients may need to file a 2020 tax return – even if they don't usually file – to provide information the IRS needs to send payments for a qualifying dependent. Eligible individuals in this group should file a 2020 tax return as quickly as possible to be considered for an additional payment for their qualifying dependents. People who don't normally file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness, the rural poor, and others. Individuals who didn't get a first or second round Economic Impact Payment or got less than the full amounts may be eligible for the 2020 Recovery Rebate Credit, but they'll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. Free tax return preparation is available for qualifying people. The IRS reminds taxpayers that the income levels in this third round of Economic Impact Payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly). The payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment. Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.

https://www.irs.gov/newsroom/irs-announces-use-of-projected-contract-award-date-web-app-that-predicts-when-contracts-will-be-signed

IR-2021-102, May 5, 2021 WASHINGTON —The Internal Revenue Service's Office of the Chief Procurement Officer today announced the successful development of a web app called Projected Contract Award Date. The interactive forecast dashboard statistically predicts when contracts will be signed. "This effort is a new trend in contract management that adjusts our business processes based on timing factors in the government contracting process, using cutting-edge data science technologies," said Shanna Webbers, IRS Chief Procurement Officer. "The web app will help us shorten the lead time in awards and save valuable time for our procurement staff as well as help contractors." The IRS has $2.5 billion in contracts a year. 'When will a contract be signed?' is a key question for the IRS and generally for the federal government. This tool gives insight about when each request is likely to turn into a contract. The tool provides a technique other federal agencies can implement, potentially effecting $600 billion in government contracts. The new web app provides information on requisitions for new contracts. Using historical data of contract awards, the intelligent web app forecasts the number of days to contract award for requisitions in the IRS's Integrated Financial System – Procurement for the Public Sector. Predictions can also be expressed as a projected contract award date. The managerial implications of the new application are far-reaching. The web app with its predictive model will enable internal customers to accurately forecast needs and when they will be fulfilled, enable the IRS to adjust standards by redefining requirements – solicitation procedure, competition, dollar value and type of goods/services with commensurate realistic award lead time goals – and evenly distribute workload to contracting personnel and others. This predictive web app is one of the results brought about by an IRS research partnership with Data and Analytic Solutions (DAS), a woman-owned, small business comprised of procurement practitioners as well as university professors and students with procurement and machine learning experience. Other research initiatives of the team include vendor risk analysis and natural language processing and clustering analysis.

https://www.irs.gov/newsroom/as-hurricane-season-nears-irs-reminds-people-to-prepare-for-natural-disasters

IR-2021-101, May 4, 2021 WASHINGTON — The Internal Revenue Service reminds everyone that May includes National Hurricane Preparedness Week and is also National Wildfire Awareness Month. Now is a good time to create or review emergency preparedness plans for surviving natural disasters. In the last year, the Federal Emergency Management Agency (FEMA) declared major disasters following hurricanes, tropical storms, tornados, severe storms, flooding, wildfires and an earthquake. Individuals, organizations and businesses should take time now to make or update their emergency plans. Secure key documents and make copies Taxpayers should place original documents such as tax returns, birth certificates, deeds, titles and insurance policies inside waterproof containers in a secure space. Duplicates of these documents should be kept with a trusted person outside the area of the taxpayer. Scanning them for backup storage on electronic media such as a flash drive is another option that provides security and portability. Document valuables and equipment Current photos or videos of a home or business's contents can help support claims for insurance or tax benefits after a disaster. All property, especially expensive and high value items, should be recorded. The IRS disaster-loss workbooks in Publication 584 can help individuals and businesses compile lists of belongings or business equipment. Employers should check fiduciary bonds Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider. The IRS reminds employers to carefully choose their payroll service providers. Rebuilding documents Reconstructing records after a disaster may be required for tax purposes, getting federal assistance or insurance reimbursement. Those who have lost some or all their records during a disaster can visit IRS's Reconstructing Records webpage as one of their first steps. IRS stands ready After FEMA issues a disaster declaration, the IRS may postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. There is no need to call the IRS to request this relief. The IRS automatically identifies taxpayers located in the covered disaster area and applies filing and payment relief. Those impacted by a disaster with tax-related questions can contact the IRS at 866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues. Taxpayers who do not reside in a covered disaster area, but suffered impact from a disaster should call 866-562-5227 to find out if they qualify for disaster tax relief and to discuss other available options. Find complete disaster assistance and emergency relief details for both individuals and businesses on our Around the Nation webpage on IRS.gov. The FEMA Prepare for Disasters web page includes information to Build a Kit of emergency supplies. Related items: Publication 2194, Disaster Resource Guide for Individuals and BusinessesPDF Publication 583, Starting a Business and Keeping Records Small Business Administration Disasterassistance.gov Ready.gov

https://www.irs.gov/newsroom/low-income-taxpayer-clinic-2022-grant-application-period-now-open

IR-2021-100, May 3, 2021 WASHINGTON — The Internal Revenue Service today announced that the application period for Low Income Taxpayer Clinic (LITC) matching grants for calendar year 2022 will run from May 3, 2021, to June 18, 2021. The LITC Program is a federal grant program administered by the Office of the Taxpayer Advocate at the IRS, which is led by National Taxpayer Advocate (NTA) Erin M. Collins. LITCs can make a tremendous impact on the lives of taxpayers, as detailed in this recent blog from the NTA: Not all Superheroes Wear Capes: Join the Low Income Taxpayer Clinic Community and Be a Hero to Taxpayers Most in Need. Under Internal Revenue Code (IRC) Section 7526, the IRS awards matching grants of up to $100,000 per year to qualifying organizations to develop, expand or maintain an LITC. An LITC must provide services for free or for no more than a nominal fee. Qualified organizations that are awarded grants ensure the fairness and integrity of the tax system for taxpayers who are low-income or speak English as a second language (ESL) by providing pro bono representation on their behalf in tax disputes with the IRS, educating them about their rights and responsibilities as taxpayers, and identifying and advocating on issues that impact these taxpayers. The IRS is committed to achieving maximum access to representation for taxpayers under the terms of the LITC Program. In awarding LITC grants for calendar year 2022, the IRS will continue to work toward providing coverage for all states and territories. Although the IRS welcomes all applicants and will give each application due consideration, the IRS is particularly interested in applicants from the following underserved areas in need of LITC services: Arizona - Gila County Florida - Brevard, Citrus, Flagler, Hernando, Lake, Orange, Putnam, Seminole, and Sumter Counties Idaho - Ada, Adams, Bannock, Bear Lake, Bingham, Boise, Bonneville, Butte, Canyon, Caribou, Clark, Clearwater, Custer, Franklin, Freemont, Gem, Idaho, Jefferson, Latah, Lemhi, Lewis, Madison, Nez Perce, Oneida, Owyhee, Payette, Power, Teton, Washington, and Valley Counties Nevada - Entire state North Dakota - Entire state Pennsylvania - Bradford, Clinton, Lycoming, Monroe, Northumberland, Pike, Snyder, Sullivan, Susquehanna, Tioga, and Wyoming Counties Puerto Rico - Entire territory West Virginia - Entire state Wyoming - Entire state LITC grants are funded by federal appropriations. The clinics, their employees and their volunteers operate independently of the IRS. Examples of qualifying organizations include: Clinical programs at accredited law, business, or accounting schools whose students represent low-income taxpayers in tax disputes with the IRS; and  Organizations exempt from tax under IRC Section 501(a) whose employees and volunteers represent or refer for representation low-income taxpayers in tax disputes with the IRS. The IRS is authorized to award multi-year grants not to exceed three years. For an organization not currently receiving a grant for 2021, an organization that received a single-year grant for 2021, or an organization whose multi-year grant ends in 2021, the organization must submit a full grant application electronically. For an organization currently receiving a grant for 2021 that is requesting funding for the second or third year of a multi-year grant, the organization must submit a request for continued funding electronically. All organizations must use the funding number of TREAS-GRANTS-052022-001. Both Full Applications and Non-Competing Continuation Requests must be submitted by 11:59 p.m. Eastern time on June 18, 2021. Questions about the LITC Program or grant application process can be addressed to the LITC Program Office at 202-317-4700 or by email at litcprogramoffice@irs.gov. In addition, individuals may contact Bill Beard at 949-575-6200 or by email at beard.william@irs.gov. More information about LITCs and the work they do to represent, educate and advocate on behalf of low-income and ESL taxpayers is available in IRS Publication 5066, LITC 2020 Program ReportPDF. A short video about the LITC program is also available. Interested individuals may join LITC Program Office staff for a Zoom webinar, where staff will provide information about the LITC Program and the application process. For details on the date and time of the webinar, please check the LITC page on IRS.gov.

https://www.irs.gov/newsroom/irs-families-receiving-monthly-child-tax-credit-payments-can-now-update-their-direct-deposit-information

IR-2021-143, June 30, 2021 WASHINGTON — The Internal Revenue Service today upgraded a key online tool to enable families to quickly and easily update their bank account information so they can receive their monthly Child Tax Credit payment. The bank account update feature was added to the Child Tax Credit Update Portal, available only on IRS.gov. Any updates made by August 2 will apply to the August 13 payment and all subsequent monthly payments for the rest of 2021. Families will receive their July 15 payment by direct deposit in the bank account currently on file with the IRS. Those who are not enrolled for direct deposit will receive a check. The IRS encourages people without current bank account information to use the tool to update their information so they can get the payments sooner. The IRS also urges people to be on the lookout for scams related to the Child Tax Credit. People who need to update their bank account information should go directly to the IRS.gov site and not click on links received by email, text or phone. How to update direct deposit information First, families should use the Child Tax Credit Update Portal to confirm their eligibility for the payments. If eligible, the tool will also indicate whether they are enrolled to receive their payments by direct deposit. If so, it will list the full bank routing number and the last four digits of their account number. This is the account that will receive their July 15 payment, and if they don't change the account, all future payments will go there as well. Next, if they choose, they can change the bank account receiving the payment starting with the August 13 payment. They can do that by updating the routing number and account number and indicating whether it is a savings or checking account. Note that only one account number is permitted for each recipient—that is, the entire payment must be direct deposited in only one account. How to switch from paper check to direct deposit If the Update Portal shows that a family is eligible to receive payments but not enrolled to receive direct deposits, they will receive a check each month. If they want to switch to receiving their payments by direct deposit, they can use the tool to add their bank account information. They do that by entering their bank routing number and account number and indicating whether it is a savings or checking account. The IRS urges any family receiving checks to consider switching to direct deposit. With direct deposit, families can access their money more quickly. Direct deposit removes the time, worry and expense of cashing a check. In addition, direct deposit eliminates the chance of a lost, stolen or undelivered check. Families can stop payments anytime Even after payments begin, families can stop all future monthly payments if they choose. They do that by using the unenroll feature in the Child Tax Credit Update Portal. Eligible families who make this choice will still receive the rest of their Child Tax Credit as a lump sum when they file their 2021 federal income tax return next year. To stop all payments starting in August and the rest of 2021, they must unenroll by August 2, 2021. For more information about the unenrollment process, including a schedule of deadlines for each monthly payment, see Topic J of the Child Tax Credit FAQs on IRS.gov. Who should unenroll? Instead of receiving these advance payments, some families may prefer to wait until the end of the year and receive the entire credit as a refund when they file their 2021 return. The Child Tax Credit Update Portal enables these families to quickly and easily do that. The unenroll feature can also be helpful to any family that no longer qualifies for the Child Tax Credit or believes they will not qualify when they file their 2021 return. This could happen if, for example: Their income in 2021 is too high to qualify them for the credit. Someone else (an ex-spouse or another family member, for example) qualifies to claim their child or children as dependents in 2021. Their main home was outside of the United States for more than half of 2021. What is the Child Tax Credit Update Portal? The Child Tax Credit Update Portal is a secure, password-protected tool, available to any eligible family with internet access and a smart phone or computer. It is designed to enable them to manage their Child Tax Credit accounts. Right now, this includes updating their bank account information with the IRS or unenrolling from monthly payments. Soon, it will allow people to check on the status of their payments. Later this year, the tool will also enable them to make other status updates and be available in Spanish. To access the Child Tax Credit Update Portal, a person must first verify their identity. If a person has an existing IRS username or an ID.me account with a verified identity, they can use those accounts to easily sign in. People without an existing account will be asked to verify their identity with a form of photo identification using ID.me, a trusted third party for the IRS. Identity verification is an important safeguard and will protect the user's account from identity theft. Anyone who lacks internet access or otherwise cannot use the online tool may unenroll by contacting the IRS at the phone number included in the outreach letter they received from the IRS. Who is getting a monthly payment? In general, monthly payments will go to eligible families who: Filed either a 2019 or 2020 federal income tax return. Used the Non-Filers tool on IRS.gov in 2020 to register for an Economic Impact Payment. Registered for the advance Child Tax Credit this year using the new Non-Filer Sign-up Tool on IRS.gov. An eligible family who took any of these steps does not need to do anything else to get their payments. Normally, the IRS will calculate the advance payment based on the 2020 income tax return. If that return is not available, either because it has not yet been filed or it has not yet been processed, the IRS is instead determining the payment using the 2019 tax return. Eligible families will receive advance payments, either by direct deposit or check. Each payment will be up to $300 per month for each child under age 6 and up to $250 per month for each child ages 6 through 17. The IRS will issue advance Child Tax Credit payments on these dates: July 15, August 13, September 15, October 15, November 15 and December 15. Tax returns processed by June 28 will be reflected in the first batch of monthly payments scheduled for July 15. Taxpayers will receive several letters Taxpayers will also receive several letters related to the Child Tax Credit. In the next few weeks, letters are going to eligible families who filed either a 2019 or 2020 federal income tax return or who used the Non-Filers tool on IRS.gov to register for an Economic Impact Payment. The letters will confirm their eligibility, the amount of payments they'll receive and that the payments begin July 15. Families who receive these letters do not need to take any further action. The personalized letters follow up on the Advance Child Tax Credit Outreach Letter, sent in early- and mid-June, to every family who appeared to qualify for the advance payments. Child Tax Credit 2021 The IRS has created a special Advance Child Tax Credit 2021 page, designed to provide the most up-to-date information about the credit and the advance payments. Among other things, it provides direct links to the Child Tax Credit Update Portal, as well as two other online tools −the Non-filer Sign-up Tool and the Child Tax Credit Eligibility Assistant, a set of frequently asked questions and other useful resources. Child Tax Credit changes The American Rescue Plan raised the maximum Child Tax Credit in 2021 to $3,600 for children under the age of 6 and to $3,000 per child for children ages 6 through 17. Before 2021, the credit was worth up to $2,000 per eligible child. The new maximum credit is available to taxpayers with a modified adjusted gross income (AGI) of: $75,000 or less for singles, $112,500 or less for heads of household and $150,000 or less for married couples filing a joint return and qualified widows and widowers. For most people, modified AGI is the amount shown on Line 11 of their 2020 Form 1040 or 1040-SR. Above these income thresholds, the extra amount above the original $2,000 credit — either $1,000 or $1,600 per child — is reduced by $50 for every $1,000 in modified AGI. In addition, the credit is fully refundable for 2021. This means that eligible families can get it, even if they owe no federal income tax. Before this year, the refundable portion was limited to $1,400 per child. For the most up-to-date information on the Child Tax Credit and advance payments, visit Advance Child Tax Credit Payments in 2021.

https://www.irs.gov/newsroom/irs-extends-tax-relief-for-employer-leave-based-donation-programs-that-aid-victims-of-the-covid-19-pandemic

IR-2021-142, June 30, 2021 WASHINGTON — The Internal Revenue Service today extended the tax relief provided in Notice 2020-46 for calendar year 2021 for employers whose employees forgo sick, vacation or personal leave because of the COVID-19 pandemic. Notice 2021-42PDF provides that cash payments employers make to charitable organizations that provide relief to victims of the COVID-19 pandemic in exchange for sick, vacation or personal leave which their employees forgo will not be treated as compensation. Similarly, the employees will not be treated as receiving the value of the leave as income and cannot claim a deduction for the leave that they donated to their employer. Employers, however, may deduct these cash payments as a business expense or as a charitable contribution deduction if the employer otherwise meets the respective requirements of either section. Notice 2020-46PDF and Notice 2021-42PDF provide further details for employers with leave-based donation programs Additional information about tax relief for those affected by the COVID-19 pandemic can be found at Coronavirus Tax Relief for Businesses and Tax-Exempt Entities. .

https://www.irs.gov/newsroom/irs-dirty-dozen-list-warns-people-to-watch-out-for-tax-related-scams-involving-fake-charities-ghost-preparers-and-other-schemes

Agency reminds seniors and immigrants to watch out for predators IR-2021-141, June 30, 2021 WASHINGTON — The Internal Revenue Service today continued its "Dirty Dozen" tax scams with a warning for people to watch out for predators using tax-related schemes ranging from fake charities to scams targeting seniors and immigrants. The IRS continues to see a group of ruses by dishonest people who trick others into doing something illegal or which ultimately causes them harm. Predators encourage otherwise honest people to do things they don't realize are illegal or prey on their good will to take something from them. Several schemes involve fraudsters targeting groups like seniors or immigrants, posing as fake charities impersonating IRS authorities, charging excessive fees for Offers in Compromise, conducting unemployment insurance fraud and unscrupulously preparing tax returns. Here are five of this year's "Dirty Dozen" scams. Fake charities The IRS advises taxpayers to be on the lookout for scammers who set up fake organizations to take advantage of the public's generosity. They especially take advantage of tragedies and disasters, such as the COVID-19 pandemic. Scams requesting donations for disaster relief efforts are especially common on the phone. Taxpayers should always check out a charity before they donate, and they should not feel pressured to give immediately. Taxpayers who give money or goods to a charity may be able to claim a deduction on their federal tax return by reducing the amount of their taxable income. But taxpayers should remember that to receive a deduction, taxpayers must donate to a qualified charity. To check the status of a charity, use the IRS Tax Exempt Organization Search tool. (It's also important for taxpayers to remember that they can't deduct gifts to individuals or to political organizations and candidates.) Here are some tips to remember about fake charity scams: Individuals should never let any caller pressure them. A legitimate charity will be happy to get a donation at any time, so there's no rush. Donors are encouraged to take time to do the research. Potential donors should ask the fundraiser for the charity's exact name, web address and mailing address, so it can be confirmed later. Some dishonest telemarketers use names that sound like large well-known charities to confuse people. Be careful how a donation is paid. Donors should not work with charities that ask them to pay by giving numbers from a gift card or by wiring money. That's how scammers ask people to pay. It's safest to pay by credit card or check — and only after having done some research on the charity. For more information about fake charities see the information on fake charity scams on the Federal Trade Commission web site. Immigrant/senior fraud IRS impersonators and other scammers are known to target groups with limited English proficiency as well as senior citizens. These scams are often threatening in nature. While it has diminished some recently, the IRS impersonation scam remains a common scam. This is where a taxpayer receives a telephone call threatening jail time, deportation or revocation of a driver's license from someone claiming to be with the IRS. Taxpayers who are recent immigrants often are the most vulnerable and should ignore these threats and not engage the scammers. The IRS reminds taxpayers that the first contact with the IRS will usually be through mail, not over the phone. Legitimate IRS employees will not threaten to revoke licenses or have a person deported. These are scare tactics. As phone scams pose a major threat to people with limited access to information, including individuals not entirely comfortable with the English language, the IRS has added new features to help those who are more comfortable in a language other than English. The Schedule LEPPDF allows a taxpayer to select in which language they wish to communicate. Once they complete and submit the schedule, they will receive future communications in that selected language preference. Additionally, the IRS is providing tax information, forms and publications in many languages other than English. IRS Publication 17, Your Federal Income Tax, is now available in Spanish, Chinese (simplified and traditional), Vietnamese, Korean and Russian. Seniors beware Senior citizens and those who care about them need to be on alert for tax scams targeting older Americans. The IRS recognizes the pervasiveness of fraud targeting older Americans, along with the Department of Justice and FBI, the Federal Trade Commission and the Consumer Financial Protection Bureau (CFPB), among others. In an effort to make filing taxes easier for seniors, the IRS reminds seniors born before Jan. 2, 1956 that the IRS has re-designed the Form 1040 and its instructions, and that they can use the Form 1040SR and related instructions. The IRS reminds seniors that the best source for information about their federal taxes is the IRS website. Offer in Compromise "mills" Offer in Compromise mills contort the IRS program into something it's not – misleading people with no chance of meeting the requirements while charging excessive fees, often thousands of dollars. "We're increasingly concerned that people having trouble paying their taxes are being duped into misleading claims about settling their tax debts for 'pennies on the dollar'," said IRS Commissioner Chuck Rettig. "The IRS urges people to take a few minutes to review information on IRS.gov to see if they might be a good candidate for the program – and avoiding costly promoters who advertise on radio and television." The IRS reminds taxpayers to beware of promoters claiming their services are needed to settle with the IRS, that their tax debts can be settled for "pennies on the dollar" or that there is a limited window of time to resolve tax debts through the Offer in Compromise (OIC) program. An "offer," or OIC, is an agreement between a taxpayer and the IRS that resolves the taxpayer's tax debt. The IRS has the authority to settle, or "compromise," federal tax liabilities by accepting less than full payment under certain circumstances. However, some promoters are inappropriately advising indebted taxpayers to file an OIC application with the IRS, even though the promoters know the person won't qualify. This costs honest taxpayers money and time. Taxpayers should be especially wary of promoters who claim they can obtain larger offer settlements than others or who make misleading promises that the IRS will accept an offer for a small percentage. Companies advertising on TV or radio frequently can't do anything for taxpayers that they can't do for themselves by contacting the IRS directly. Taxpayers can go to IRS.gov and review the Offer in Compromise Pre-Qualifier Tool to see if they qualify for an OIC. The IRS reminds taxpayers that under the First Time Penalty Abatement policy, taxpayers can go directly to the IRS for administrative relief from a penalty that would otherwise be added to their tax debt. Unscrupulous tax return preparers Although most tax preparers are ethical and trustworthy, taxpayers should be wary of preparers who won't sign the tax returns they prepare, often referred to as ghost preparers. For e-filed returns, the "ghost" will prepare the return, but refuse to digitally sign as the paid preparer. By law, anyone who is paid to prepare, or assists in preparing federal tax returns, must have a valid Preparer Tax Identification Number (PTIN). Paid preparers must sign and include their PTIN on the return. Not signing a return is a red flag that the paid preparer may be looking to make a quick profit by promising a big refund or charging fees based on the size of the refund. Unscrupulous tax return preparers may also: Require payment in cash only and will not provide a receipt. Invent income to qualify their clients for tax credits. Claim fake deductions to boost the size of the refund. Direct refunds into their bank account, not the taxpayer's account. It's important for taxpayers to choose their tax return preparer wisely. The Choosing a Tax Professional page on IRS.gov has information about tax preparer credentials and qualifications. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification. Taxpayers should also remember that they are legally responsible for what is on their tax return even if it is prepared by someone else. Consumers can help protect themselves by choosing a reputable tax preparer. Unemployment insurance fraud Unemployment fraud often involves individuals acting in coordination with or against employers and financial institutions to get state and local assistance to which they are not entitled. These scams can pose problems that can adversely affect taxpayers in the long run. States, employers and financial institutions need to be aware of the following scams related to unemployment insurance: Identity-related fraud: Filers submit applications for unemployment payments using stolen or fake identification information to perpetrate an account takeover. Employer-employee collusion fraud: The employee receives unemployment insurance payments while the employer continues to pay the employee reduced, unreported wages. Misrepresentation of income fraud: An individual returns to work and fails to report the income to continue receiving unemployment insurance payments, or in an effort to receive higher unemployment payments, applicants claim higher wages than they actually earned. Fictitious employer-employee fraud: Filers falsely claim they work for a legitimate company, or create a fictitious company, and supply fictitious employee and wage records to apply for unemployment insurance payments. Insider fraud: State employees use credentials to inappropriately access or change unemployment claims, resulting in the approval of unqualified applications, improper payment amounts, or movement of unemployment funds to accounts that are not on the application. Below is a short list of financial red flag indicators of unemployment fraud: Unemployment payments are coming from a state other than the state in which the customer reportedly resides or has previously worked. Multiple state unemployment payments are made within the same disbursement timeframe. Unemployment payments are made in the name of a person other than the account holder or in the names of multiple unemployment payment recipients. Numerous deposits or electronic funds transfers (EFTs) are made that indicate they are unemployment payments from one or more states to people other than the account holder(s). A higher amount of unemployment payments is seen in the same timeframe compared to similar customers and the amount they received.

https://www.irs.gov/newsroom/draft-instructions-for-the-schedules-k-2-and-k-3-released-to-enhance-reporting-of-international-tax-matters-by-pass-through-entities

IR-2021-140, June 30, 2021 WASHINGTON — The Treasury and the IRS released today early draft instructions for the Schedules K-2 and K-3 for Forms 1065, 1120-S, and 8865 for tax year 2021 (filing season 2022). The early release drafts of the instructions provide a preview of the instructions before final versions are released. The new Schedules K-2 and K-3 were released on June 3 and 4, 2021. The redesigned forms and instructions give useful guidance to partnerships, S corporations and U.S persons who are required to file Form 8865 with respect to controlled foreign partnerships on how to provide international tax information. The updated forms apply to any persons required to file Form 1065, 1120-S or 8865, but only if the entity for which the form is being filed has items of international tax relevance (generally foreign activities or foreign partners). The changes do not affect partnerships and S corporations with no items of international tax relevance. The Treasury Department and the IRS released prior drafts and instructions of Schedules K-2 and K-3 for the Form 1065 in July 2020 and engaged with stakeholders to solicit input on the changes. The final instructions respond to comments received with respect to the draft July 2020 instructions. For example, the final instructions: Clarify when each part of the schedule is applicable; Clarify that the preparer must only complete applicable parts of the Schedules K-2 and K-3; and Provide instructions for requested new separate schedules regarding determination of the section 250 deduction and the allocation and apportionment of expenses Recognizing the transitional challenges with the adoption of Schedules K-2 and K-3 by affected pass-through entities and their partners and shareholders, the Treasury Department and the IRS issued Notice 2021-39PDF on June 30, 2021. The Notice provides certain penalty relief for the 2021 tax year.

https://www.irs.gov/newsroom/national-taxpayer-advocate-assesses-tax-filing-season-and-identifies-areas-for-irs-improvement-in-midyear-report-to-congress

IR-2021-139, June 30, 2021 WASHINGTON — National Taxpayer Advocate Erin M. Collins today released her statutorily mandated midyear report to Congress. The report presents an assessment of the 2021 filing season, identifies key objectives the Taxpayer Advocate Service (TAS) will pursue during the upcoming fiscal year, and contains the IRS's responses to each of the 73 administrative recommendations the Advocate made in her 2020 Annual Report to Congress. The Advocate's report emphasizes that the difficulties the IRS faced in performing its traditional work due to the COVID-19 pandemic and the added responsibilities it was assigned to make three rounds of stimulus payments combined to create significant challenges for taxpayers. "This past year and the 2021 filing season conjure up every possible cliché for taxpayers, tax professionals, the IRS, and its employees," Collins wrote. "It was a perfect storm; it was the best of times and the worst of times; patience is a virtue; with experience comes wisdom and with wisdom comes experience; out of the ashes we rise; and we experienced historical highs and lows." The IRS Timely Processed Most Tax Returns and Timely Issued Most Stimulus Payments During the 2021 tax filing season, the IRS processed 136 million individual income tax returns and issued 96 million refunds totaling about $270 billion. That matches up closely to the results of the last typical filing season in 2019. In addition to its traditional work, the IRS was directed by Congress to issue three rounds of stimulus payments over the past 15 months and has made about 475 million payments worth $807 billion to mitigate the impact of the pandemic on U.S. families and businesses. "The IRS and its employees deserve tremendous credit for what they have accomplished under very difficult circumstances," Collins wrote, "but there is always room for improvement." The IRS Finished the Filing Season with Over 35 Million Tax Returns Awaiting Manual Reviews Although most taxpayers successfully filed their returns and received their refunds, a historically high number did not. At the conclusion of the filing season, the IRS faced a backlog of over 35 million individual and business income tax returns that require manual processing – meaning that employee involvement is generally needed before a return can advance to the next stage in the processing pipeline. The backlog includes about 16.8 million paper tax returns waiting to be processed; about 15.8 million returns suspended during processing that require further review; and about 2.7 million amended returns awaiting processing. The backlog resulted largely from the pandemic-related evacuation order that restricted employee access to IRS facilities. Processing backlogs matter greatly, the report says, because most taxpayers overpay their tax through wage withholding or estimated tax payments and are entitled to receive refunds when they file their returns. The government also uses the tax system to distribute financial benefits. So far for tax year 2020, in addition to refunding overpayments of tax, the IRS has issued about 20 million refunds that include Earned Income Tax Credits worth up to $6,660 and about 15 million refunds that include Additional Child Tax Credits worth up to $1,400 per qualifying child. This year, over eight million taxpayers also may be eligible to receive Recovery Rebate Credits. "For taxpayers who can afford to wait, the best advice is to be patient and give the IRS time to work through its processing backlog," Collins wrote. "But particularly for low-income taxpayers and small businesses operating on the margin, refund delays can impose significant financial hardships." The IRS Received a Record Volume of Telephone Calls, and Only 7 Percent of Callers Reached a Telephone Assistor on the Accounts Management Lines When a taxpayer needs general information or is responding to an audit or collection notice, the IRS's toll-free lines are often the taxpayer's first or second option. During the 2021 filing season, the IRS received 167 million telephone calls – over four times as many calls as during the 2019 filing season. IRS employees could not keep pace with this massive volume of calls, resulting in the poorest service ever. The IRS reported a "Level of Service" on its Accounts Management telephone lines of 15 percent, with only seven percent of taxpayer calls reaching a telephone assistor. On the "1040" line, the most frequently called IRS toll-free number, taxpayers placed about 85 million calls, and only three percent (i.e., three out of 100) reached a telephone assistor. "When so few callers can get through to a telephone assistor, problems remain unsolved and taxpayer frustration mounts," Collins wrote. The IRS Can Apply Lessons Learned from the Past Year to Improve Its Operations in the Future Over the long run, the report says the lessons learned from the pandemic can be useful in helping to identify or reprioritize needs for improved tax administration and taxpayer service. Collins wrote: "The pandemic exposed weaknesses and vulnerabilities that must be strengthened; it forced the IRS to experiment with new approaches to old problems; it led to a renewed awareness of the impact of cuts to the IRS's budget over the past decade and the IRS's need for additional funding; and it is causing the IRS and congressional overseers to collaborate on steps to improve the IRS's performance going forward to provide taxpayers with the service they deserve." The report recommends the IRS take these proactive steps to improve service and communication with taxpayers: Prioritize the development of accessible, robust online accounts. The IRS offers an online account option for individual taxpayers, but its usefulness is limited in two ways. First, most taxpayers who try to establish online accounts fail because they cannot pass the e-authentication requirements. Second, the functionality of the accounts is very limited. TAS recommends that taxpayers be given the option of interacting online with the IRS for all common transactions, just as customers routinely interact with their financial institutions through online accounts. TAS further recommends that tax practitioners be given access to online accounts on behalf of their client taxpayers and that the IRS prioritize providing this service to practitioners.    Expand customer callback technology to all IRS toll-free telephone lines. Many businesses and federal agencies with large telephone call centers offer customers the option of receiving a call back when the wait time to speak with a customer service representative is long. The IRS offers this option on some of its telephone lines, but the option is not yet offered on most lines, including the high-volume lines. Particularly in light of the telephone challenges taxpayers have experienced over the past year, TAS recommends that the IRS make customer callback an option on all high-volume telephone lines.   Reduce barriers to e-filing tax returns. One of the biggest challenges the IRS has faced over the past year has been processing paper returns. Some taxpayers prefer to file on paper, but many taxpayers file on paper because they are prevented from e-filing. There are three principal obstacles to e-filing: (i) taxpayers sometimes are required to submit statements or other substantiation with their returns, and these attachments generally cannot be e-filed; (ii) some tax forms are not accepted electronically; and (iii) taxpayers sometimes need to override default entries when preparing their returns with tax software, and some of these overrides render returns ineligible for e-filing. TAS recommends the IRS address these limitations so all taxpayers who wish to e-file their returns may do so.   Utilize scanning technology for individual income tax returns prepared electronically but submitted on paper. When taxpayers file returns on paper, IRS employees must manually transcribe the data line-by-line into IRS systems. In 2020, the IRS received about 17 million individual income tax returns and millions of business and other tax returns on paper. Manually entering data from so many paper returns is an enormous task, and transcription errors are common, particularly on longer returns. Scanning technology is available that would allow the IRS to machine read paper returns and avoid the need for manual data entry. TAS understands the IRS is exploring the implementation of scanning technology for paper 2020 tax returns and recommends it do so for future years as well.   Expand digital acceptance and transmission of documents and digital signatures. The March 2020 closure of IRS offices and mail facilities made it impossible for IRS employees to receive paper documents from taxpayers. As a workaround, the IRS issued temporary guidance that authorizes employees to accept and transmit documents related to the determination or collection of a tax liability by email using an established secured messaging system. Employees are also permitted to accept images of signatures (scanned or photographed) and digital signatures on documents related to the determination or collection of a tax liability. TAS recommends the IRS make these temporary solutions permanent and continue to explore and prioritize additional digital communication options.   Offer videoconferencing options to taxpayers. Videoconference technology allows taxpayers and their authorized representatives to be both seen and heard and to share documents without being physically present. The IRS Independent Office of Appeals offers WebEx technology for virtual face-to-face conferences among taxpayers, representatives, and Appeals Officers. The IRS Office of Chief Counsel and the U.S. Tax Court are also conducting video communications and virtual trials using ZoomGov.com. Although videoconferencing should not replace in-person or telephone conference options, it adds a vital human interaction option to enable communication with taxpayers when appropriate, and it provides options for taxpayers with difficulty traveling or the inability to take extended time off from work. TAS has recommended the IRS evaluate the feasibility of expanding the use of these technologies to as many taxpayer-facing functions as possible without removing the in-person options for taxpayers. Videoconferencing should continue to be expanded and offered as an option to taxpayers because it can help fill current or future voids in face-to-face service at Taxpayer Assistance Centers (TACs) and in working with revenue agents or revenue officers. It can also be a useful tool to supplement correspondence audits, where conversing face-to-face may facilitate a better understanding of the taxpayer's return. In addition, taxpayers who are geographically remote from a TAC and taxpayers with mobility or transportation challenges find videoconferencing technology more helpful and economical than traveling for an in-person conference. IRS Responses to National Taxpayer Advocate Administrative Recommendations The National Taxpayer Advocate is required by statute to submit a year-end report to Congress that, among other things, makes administrative recommendations to resolve taxpayer problems. Section 7803(c)(3) of the Internal Revenue Code authorizes the National Taxpayer Advocate to submit administrative recommendations to the Commissioner and requires the IRS to respond within three months. Under this authority, the National Taxpayer Advocate annually transmits to the Commissioner all administrative recommendations proposed in her year-end report for response. The National Taxpayer Advocate made 73 administrative recommendations in her 2020 year-end report and then submitted them to the Commissioner for response. The IRS has agreed to implement 48 (or 66 percent) of the recommendations in full or in part. The IRS's responses are published in an appendix to the report. The National Taxpayer Advocate is required by statute to submit two annual reports to the House Committee on Ways and Means and the Senate Committee on Finance. The statute requires these reports to be submitted directly to the Committees without any prior review or comment from the Commissioner of Internal Revenue, the Secretary of the Treasury, the IRS Oversight Board, any other officer or employee of the Department of the Treasury, or the Office of Management and Budget. The first report must identify the objectives of the Office of the Taxpayer Advocate for the fiscal year beginning in that calendar year. The second report must include a discussion of the ten most serious problems encountered by taxpayers, identify the ten tax issues most frequently litigated in the courts, and make administrative and legislative recommendations to resolve taxpayer problems. The National Taxpayer Advocate blogs about key issues in tax administration. Send an email to subscribe. Past blogs from the National Taxpayer Advocate can be found on the Taxpayer Advocate Blog. About the Taxpayer Advocate Service The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. Your local taxpayer advocate's number is in your local directory and and on the  Contact Us webpage. You can also call TAS toll-free at 877-777-4778. TAS can help if you need assistance in resolving an IRS problem, if your problem is causing financial difficulty, or if you believe an IRS system or procedure isn't working as it should. Our service is free. For more information about TAS and your rights under the Taxpayer Bill of Rights, go to Taxpayer Advocate Service. You can get updates on tax topics at facebook.com/YourVoiceAtIRS, Twitter.com/YourVoiceatIRS, and YouTube.com/TASNTA.

https://www.irs.gov/newsroom/treasury-irs-extend-safe-harbor-for-renewable-energy-projects

IR-2021-138, June 29, 2021 WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued guidance for taxpayers developing renewable energy projects to address delays related to the COVID-19 pandemic. In prior IRS notices, the Treasury Department and the IRS established the Continuity Safe Harbor that allows an eligible renewable energy project to be deemed to satisfy the continuity requirement for taking the production tax credit and the investment tax credit (Continuity Safe Harbor) if the taxpayer places the project in service within a certain period that starts in the taxable year in which construction of the project began. The Treasury Department and the IRS recognize that the COVID-19 pandemic continues to cause delays in the development of certain projects eligible for the production tax credit and the investment tax credit. As a result, many taxpayers may not place projects in service in time to meet the Continuity Safe Harbor, which may significantly impact project financing and development. Today's guidance provides relief to taxpayers impacted by project delays related to the pandemic by allowing additional time to satisfy the Continuity Safe Harbor. It also adds flexibility for taxpayers to satisfy the continuity requirement outside of the safe harbor. As provided in IRS guidance, a taxpayer has two methods to demonstrate the taxpayer has begun construction of a project, the Physical Work Test and the Five Percent Safe Harbor. After a taxpayer begins construction of a project, the taxpayer must also make continuous progress toward completion to satisfy beginning of construction requirements. Under the Physical Work Test, a taxpayer uses the Continuous Construction Test to demonstrate continuous progress whereas under the Five Percent Safe Harbor, a taxpayer uses the Continuous Efforts Test. The guidance issued today in Notice 2021-41PDF provides that the period of the Continuity Safe Harbor provided and extended by prior IRS notices is further extended for projects for which construction began in 2016 through 2020: For projects for which construction began under the Physical Work Test or the Five Percent Safe Harbor in 2016, 2017, 2018, or 2019, the Continuity Safe Harbor is satisfied if the project is placed in service by the end of a calendar year that is no more than 6 calendar years after the calendar year during which construction began; and   For projects for which construction began under the Physical Work Test or the Five Percent Safe Harbor in calendar year 2020, the Continuity Safe Harbor is satisfied if the project is placed in service by the end of the calendar year that is no more than 5 calendar years after the calendar year during which construction began. Notice 2021-41 also clarifies that if the Continuity Safe Harbor does not apply, the continuity requirement is satisfied if the taxpayer demonstrates satisfaction of either the Continuous Construction or the Continuous Efforts Tests, regardless of the method that the taxpayer used to begin construction. Additional information about tax relief for businesses affected by the COVID-19 pandemic can be found at Coronavirus Tax Relief for Businesses and Tax-Exempt Entities.

https://www.irs.gov/newsroom/irs-urges-caution-with-email-social-media-and-phones-as-part-of-dirty-dozen-series

IR-2021-137, June 29, 2021 WASHINGTON — The Internal Revenue Service today continues its "Dirty Dozen" scam series with a warning to taxpayers to watch out for unexpected schemes in the form of emails, text or social media messages and phone calls. Unscrupulous individuals seek to obtain personal information for the purpose of tax-related identity theft. Whether through a telephone call, text message or email, the con artist tries to convince the recipient that they need to provide Social Security numbers, bank account or credit card information or passwords. The scam may also include sending links that once clicked on can download malicious software that collects, or "mines" personal data. Often, criminals pose as someone the recipient knows or frequently interacts with, whether a social or family relationship or a business contact. They gather much of this information from social media. A person's contacts or 'friends' are used to bait the recipient into thinking they're dealing with someone they know. More information on the IRS's "Dirty Dozen" list can be found on a special section of IRS.gov. Tax-related phishing scams persist The IRS warns taxpayers, businesses and tax professionals to be alert for a continuing surge of fake emails, text messages, websites and social media attempts to steal personal information. These attacks tend to increase during tax season and remain a major cause of identity theft throughout the year. Phishing scams target individuals with communications appearing to come from legitimate sources to collect victims' personal and financial data and potentially infect their devices by convincing the target to download malicious programs. Cybercriminals usually send these phishing communications by email but may also use text messages or social media posts or messaging. These phishing schemes can be tricky and cleverly disguised to look like they're from the IRS or from others in the tax community. Taxpayers are reminded to continually watch out for emails and other scams posing as the IRS, like those promising a big refund, missing stimulus payment or even issuing a threat. People should not open attachments or click on links in those emails or text messages. Phishing scams targeting tax professionals As part of the Security Summit effort, the IRS warns tax professionals about phishing scams involving verification of Electronic Filing Identification Numbers (EFIN) and Centralized Authorization File (CAF) numbers. The agency has seen an increase in these kinds of scams, along with offers to buy and sell EFINs and CAFs. Tax professionals have reported receiving scam e-mails from the fictitious "IRS Tax E-Filing" and the IRS reminds tax professionals who receive those e-mails to not open any attachments or click any links. Rather, they should report the scam to the Treasury Inspector General for Tax Administration. The IRS reminds tax professionals to protect themselves against the unauthorized use of an EFIN. Tax professionals must not transfer their EFIN or ETIN by sale, merger, loan, gift or otherwise to another entity. Phishing – new client scams target tax pros The "New Client" scam continues to be a prevalent form of phishing for tax pros. Here's an example in the form of an email: "I just moved here from Michigan. I have an urgent tax issue and I was hoping you could help," the email begins. "I hope you are taking on new clients." The email says one attachment is an IRS notice and the other attachment is the prospective client's prior-year tax return. This scam has many variations so tax professionals should be wary and avoid opening attachments or clicking links when they don't know the e-mail sender. Knowing what to watch for can help. Below is an actual example of another recent new client scam e-mail: Impersonator phone calls/vishing Individuals should be wary of unexpected phone calls asking for personal financial information. The IRS has seen an increase in voice-related phishing, or 'vishing,' particularly from scams related to federal tax liens. For those receiving phone calls out of the blue, security experts recommend asking questions of the caller but not providing any personal information. If in doubt, hang up immediately. During 2020, almost 400 vishing scams were reported, a 14% increase from the prior year. Of those vishing scams, 25% were scammers who tried to use fake tax lien information. The number of tax-lien related scams increased from 58 in 2019 to 104 in 2020, an increase of 79%. The IRS urges taxpayers to refrain from engaging potential scammers on the phone or online. While both the IRS and the Federal Trade Commission have seen a decline in the number of reports of scammers claiming to be from the IRS telephoning potential victims, the agency urges taxpayers to be wary. (The IRS has seen a 43% decrease in the number of reports of calls from callers claiming to be from the IRS: 20,500 in 2020 compared to 36,000 in 2019. The FTC saw a 67% decline from 7,694 reports in 2019 to 2,571 in 2020.) While the numbers may be on the decline, the IRS urges taxpayers to remain vigilant and to remember the following things about the IRS: The IRS generally first contacts people by mail - not by phone - about unpaid taxes. The IRS may attempt to reach individuals by telephone but will not insist on payment using an iTunes card, gift card, prepaid debit card, money order or wire transfer. The IRS will never request personal or financial information by e-mail, text or social media. Recipients of these calls should hang up before giving out any information. If anyone receives an unexpected call from the IRS that they believe to be a scam, they can report it to the Treasury Inspector General for Tax Administration (TIGTA). Social media scams continue Taxpayers should be aware of social media scams, which frequently use events like COVID-19 to try to trick people. Social media enables unscrupulous individuals to lurk on accounts and extract personal information to use against the victim. These cons may send emails impersonating the victim's family, friends or co-workers. Social media scams have also led to tax-related identity theft. The basic element of social media scams is convincing a potential victim that he or she is dealing with a person close to them that they trust via email, text or social media messaging. Using personal information, a scammer may email a potential victim and include a link to something of interest to the recipient, but which contains malware intended to commit more crimes. Scammers also infiltrate their victim's emails and cell phones to go after their friends and family with fake emails that appear to be real, and text messages soliciting, for example, small donations to fake charities that are appealing to the victims. Individuals should know that any of their information that is publicly shared on social media platforms can be collected and used against them. One way to circumvent these scams is to review privacy settings and limit data that is publicly shared. Ransomware on the rise Financial institutions should be aware of trends and indicators of ransomware, which is a form of malicious software ("malware") designed to block access to a computer system or data. Access is often blocked by encrypting data or programs on information technology (IT) systems to extort ransom payments from victims in exchange for decrypting the information and restoring victims' access to their systems or data. In some cases, in addition to the attack, the perpetrators threaten to publish sensitive files belonging to the victims, which can be individuals or business entities. The U.S. Treasury Financial Crimes Enforcement Network (FINCEN), has noted that ransomware attacks continue to rise across various sectors, particularly across governmental entities as well as financial, educational and healthcare institutions. Ransomware attacks on small municipalities and healthcare organizations have increased, likely due to the victims' weaker cybersecurity controls, such as inadequate system backups and ineffective incident response capabilities. Tactics Cybercriminals using ransomware often resort to common tactics, such as wide-scale phishing and targeted spear-phishing campaigns that induce victims to download a malicious file or go to a malicious site. They may also exploit remote desktop protocol endpoints and software vulnerabilities or deploy "drive-by" malware attacks that host malicious code on legitimate websites. Proactive prevention through effective cyber hygiene, cybersecurity controls and other best practices are often the best defense against ransomware. Ransomware actors are increasingly engaging in selective targeting of larger enterprises to demand bigger payouts – commonly referred to as "big game hunting." Many cybercriminals are sharing resources to enhance the effectiveness of ransomware attacks, such as ransomware exploit-kits that come with ready-made malicious codes and tools. These kits can be purchased, although they are also offered free of charge. Some ransomware groups are also forming partnerships to share advice, code, trends, techniques and illegally obtained information over shared platforms. Ransomware criminals are also increasingly engaging in "double extortion schemes," which involve removing sensitive data from the targeted networks, encrypting the system files and demanding ransom. The consequences of a ransomware attack can be severe and far-reaching, with losses of sensitive, proprietary, and critical information and loss of business functionality. The role of financial intermediaries in facilitating ransomware payments and ransomware attacks are a growing concern for the financial sector because of the critical role financial institutions play in the collection of ransom payments. The IRS reminds taxpayers and tax professionals to keep abreast of news about fraud-related behavior. Report any instances of fraud immediately. For more information visit Tax Fraud Alerts and Tax Scams – How to Report Them.

https://www.irs.gov/newsroom/irs-treasury-release-state-by-state-data-on-third-round-of-economic-impact-payments

IR-2021-136, June 29, 2021 WASHINGTON — The Internal Revenue Service and the Treasury Department released information today detailing how many people in each state received the third round of Economic Impact Payments through early June. The new details, available at SOI Tax Stats - Coronavirus Aid, Relief, and Economic Security Act (CARES Act) Statistics, are through June 3 and provide a look at the number of payments by stateXLS, income categoryXLS, filing statusXLS and other features. The IRS continues to distribute Economic Impact Payments and the related 2020 Recovery Rebate Credit on a weekly basis as people continue to file income tax returns and as returns are processed. Ongoing payments will be sent to eligible individuals for whom the IRS previously did not have information to issue a payment but who recently filed a tax return, as well to people who qualify for "plus-up" payments. The statistics released today provide details on more than 163 million payments worth approximately $390 billion. Special reminder for those who don't normally file a tax return Although payments are automatic for most people, the IRS continues to urge people who don't normally file a tax return and haven't received Economic Impact Payments to file a 2020 tax return to get all the benefits they're entitled to under the law, including tax credits such as the 2020 Recovery Rebate Credit, the Child Tax Credit and the Earned Income Tax Credit. Filing a 2020 tax return will also assist the IRS in determining whether someone is eligible for an advance payment of the 2021 Child Tax Credit, which will begin to be disbursed this summer. For example, some federal benefits recipients may need to file a 2020 tax return – even if they don't usually file – to provide information the IRS needs to send payments for a qualifying dependent. Eligible individuals in this group should file a 2020 tax return as quickly as possible to be considered for an additional payment for their qualifying dependents. People who don't normally have an obligation to file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness and others. Individuals who didn't get a first or second round Economic Impact Payment or got less than the full amounts may be eligible for the 2020 Recovery Rebate Credit, but they'll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. Free tax return preparation is available for qualifying people. The IRS reminds taxpayers that the income levels in this third round of Economic Impact Payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly). The payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment. Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.

https://www.irs.gov/newsroom/irs-announces-dirty-dozen-tax-scams-for-2021

Americans urged to watch out for tax scams during the pandemic IR-2021-135, June 28, 2021 WASHINGTON — The Internal Revenue Service today began its "Dirty Dozen" list for 2021 with a warning for taxpayers, tax professionals and financial institutions to be on the lookout for these 12 nefarious schemes and scams. This year's "Dirty Dozen" will be separated into four separate categories: pandemic-related scams like Economic Impact Payment theft; personal information cons including phishing, ransomware and phone "vishing;" ruses focusing on unsuspecting victims like fake charities and senior/immigrant fraud; and schemes that persuade taxpayers into unscrupulous actions such as Offer In Compromise mills and syndicated conservation easements. The agency compiled the list into these categories based on who perpetuates the schemes and who they impact. In addition to today's scams the IRS will highlight the other schemes over the next three days. The IRS urges all taxpayers to be on guard, especially during the pandemic, not only for themselves, but also for other people in their lives. "We continue to see scam artists use the pandemic to steal money and information from honest taxpayers in a time of crisis," said IRS Commissioner Chuck Rettig. "We provide this list to alert taxpayers about common scams that fraudsters use against their victims. At the IRS, we are dedicated to stopping these criminals, but it's up to all of us to remain vigilant to protect ourselves and our families." Taxpayers are encouraged to review the "Dirty Dozen: list in a special section on IRS.gov and should be alert to these scams during tax filing season and throughout the year. Economic Impact Payment theft A continuing threat to individuals is from identity thieves who try to steal Economic Impact Payments (EIPs), also known as stimulus payments. Most eligible people will get their payments automatically from the IRS. Taxpayers should watch out for these tell-tale signs of a scam: Any text messages, random incoming phone calls or emails inquiring about bank account information or requesting recipients to click a link or verify data should be considered suspicious and deleted without opening. Be alert to mailbox theft. Frequently check mail and report suspected mail losses to Postal Inspectors. Don't fall for stimulus check scams. The IRS won't initiate contact by phone, email, text or social media asking for Social Security numbers or other personal or financial information related to Economic Impact Payments. Taxpayers should remember that the IRS website, IRS.gov, is the agency's official website for information on payments, refunds and other tax information. Unemployment fraud leading to inaccurate taxpayer 1099-Gs Because of the COVID-19 pandemic, many taxpayers lost their jobs and received unemployment compensation from their state. However, scammers also took advantage of the pandemic by filing fraudulent claims for unemployment compensation using stolen personal information of individuals who had not filed claims. Payments made on these fraudulent claims went to the identity thieves. The IRS reminds taxpayers to be on the lookout for receiving a Form 1099-G reporting unemployment compensation that they didn't receive. For people in this situation, the IRS urges them to contact their appropriate state agency for a corrected form. If a corrected form cannot be obtained so that a taxpayer can file a timely tax return, taxpayers should complete their return claiming only the unemployment compensation and other income they actually received. See Identity Theft and Unemployment Benefits for tax details and DOL.gov/fraud for state-by-state reporting information. Additional protection to help protect taxpayers IRS makes IP PINs available to all taxpayers – adding another layer of security To help taxpayers avoid identity theft, the IRS this year made its Identity Protection PIN (IP PIN) program available to all taxpayers. Previously it was available only to victims of ID theft or taxpayers in certain states. The IP PIN is a six-digit code known only to the taxpayer and to the IRS. It helps prevent identity thieves from filing fraudulent tax returns using a taxpayer's personally identifiable information. Using an IP PIN is, in essence, a way to lock a tax account. The IP PIN serves as the key to opening that account. Electronic returns that do not contain the correct IP PIN will be rejected and paper returns will go through additional scrutiny for fraud. Reducing fraud The IRS and its Security Summit partners in the states and the private-sector tax community have made changes to help reduce identity theft-related refund fraud that are noticeable to the average person filing a return: Tax software providers agreed to strengthen password protocols. This is the first line of defense for these companies to make sure their products are secure. State tax agencies began asking for taxpayers' driver's license numbers as another way for people to prove their identities. The IRS limited the number of tax refunds going to financial accounts or addresses. The IRS masked personal information from tax transcripts. Multi-factor authentication can help It is important for taxpayers filing in 2021 to know that online tax software products available to both taxpayers and tax professionals will contain options for multi-factor authentication. Multi-factor authentication allows users to better protect online accounts. One way this is accomplished is by requiring a security code sent to a mobile phone in addition to the username and password used to access the account. The IRS and its Security Summit partners have formed an information sharing center that allows them to quickly identify emerging scams and react to protect taxpayers. The Identity Theft Tax Refund Fraud Information Sharing and Analysis CenterPDF is now operational. Also, check out our recent A Closer Look column for more on how to be vigilant about tax scams. Visit Identity Theft Central and Tax Fraud Alerts for more information on how to protect against or report identity theft or fraud.

https://www.irs.gov/newsroom/irs-releases-data-book-for-fiscal-2020-describing-agencys-activities-during-pandemic

IR-2021-134, June 24, 2021 WASHINGTON — The Internal Revenue Service today issued the Data Book detailing the agency's activities during fiscal year 2020 (October 1, 2019 – September 30, 2020). "This year's Data Book describes the important work that IRS employees accomplish on behalf of the public," said IRS Commissioner Chuck Rettig. "The IRS accounts for approximately 96% of the funding that supports the federal government's operations, while proudly serving and interacting with more Americans than any other public or private organization." "The 2020 Data Book also details the extraordinary measures the IRS took to protect the health and safety of taxpayers and IRS employees during the COVID-19 pandemic while implementing critical economic relief legislation – the largest economic rescue packages in US history," Rettig added. The Data Book details how during the COVID-19 pandemic the IRS developed new technologies and provided the equipment necessary to allow thousands of employees to work from home, which enabled the IRS to resume processing returns and providing phone assistance to taxpayers. At the same time, the agency eased burdens on people facing tax issues by extending the deadline to file and pay federal income taxes from April 15, 2020 to July 15, 2020. The agency also launched the People First Initiative, which eased payment guidelines, postponed compliance actions and suspended most collection enforcement activities, such as new notices of lien or levy, from April 15, 2020, to July 15, 2020. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the IRS issued 161.9 million Economic Impact Payments (EIPs) in the first round: 122.5 million by direct deposit, 35.8 million by check, and nearly 3.6 million by debit card. Under the COVID-Related Tax Relief (CRTR) Act of 2020 the IRS issued 146.5 million second-round EIPs, including 112.8 million by direct deposit, 25.7 million by check, and 8 million by debit card. Combined, the IRS provided $412.9 billion in relief under these programs during the calendar year. The IRS continued its operations, processing more than 240 million tax returns, and collected nearly $3.5 trillion in federal taxes during the fiscal year – about 96% of federal revenue from all sources. "You'll find many interesting statistics within the Data Book," said Rettig. "But there's more to the IRS story than charts and tables. IRS employees care, and our agency is made up of people who give back to their communities and help one another. Our employees provide significant support for those devastated by hurricanes, wildfires, and other natural disasters, and across the nation, they did amazing work in their communities to help those impacted by COVID-19." The IRS Data Book for fiscal 2020 comprises 33 tables describing all IRS activities from returns processed and revenue collected to numbers and amounts from examinations of returns and collection methods, as well as budget and personnel information.

https://www.irs.gov/newsroom/irs-online-tool-helps-families-see-if-they-qualify-for-the-child-tax-credit-one-of-three-tools-now-available-for-the-upcoming-advance-payments

IR-2021-133, June 24, 2021 WASHINGTON — The Treasury Department and the Internal Revenue Service today urged families to take advantage of a special online tool that can help them determine whether they qualify for the Child Tax Credit and the special monthly advance payments beginning on July 15. Available exclusively on IRS.gov, the new Child Tax Credit Eligibility Assistant, launched earlier this week, is interactive and easy to use. By answering a series of questions about themselves and their family members, a parent or other family member can quickly determine whether they qualify for the credit. Though anyone can use this tool, it may be particularly useful to families who don't normally file a federal tax return and have not yet filed either a 2019 or 2020 tax return. Often, these are people who receive little or no income, including those experiencing homelessness, low income households, and other underserved groups. Using this tool can help them decide whether they should take the next step and register for the Child Tax Credit payments on another new IRS tool unveiled earlier this week. "This new tool provides an important first step to help people understand if they qualify for the Child Tax Credit, which is especially important for those who don't normally file a tax return," said IRS Commissioner Chuck Rettig. "The eligibility assistant works in concert with other features on IRS.gov to help people receive this important credit. The IRS is working hard to deliver the expanded Child Tax Credit, and we will be rolling out additional help for taxpayers in the near future. Where possible, please help us help others by distributing CTC information in your communities." To help people understand and receive this benefit, the IRS has created a special Advance Child Tax Credit 2021 page at IRS.gov/childtaxcredit2021 designed to provide the most up-to-date information about the credit and the advance payments. Among other things, the page already features a link to both the Non-filer Sign-up Tool, and the Child Tax Credit Eligibility Assistant, along with a third tool launched earlier this week—the Child Tax Credit Update Portal. The Child Tax Credit Eligibility Assistant does not request any personally-identifiable information (PII) for any family member. For that reason, its results are not an official determination by the IRS. Though the results are reliable, if the questions are answered accurately, they should be considered preliminary. Neither the answers supplied by the user, nor the results, are retained by the IRS. After checking the Eligibility Assistant, Non-filer Sign-Up Tool is available to help those who don't normally file tax returns The online Non-filer Sign-Up Tool is designed to help eligible families who don't normally file tax returns register for the monthly Advance Child Tax Credit payments. This tool, an update of last year's IRS Economic Impact Payment Non-filers tool, is also designed to help eligible individuals who don't normally file tax returns register for the $1,400 third round of Economic Impact Payments (also known as stimulus checks) and claim the Recovery Rebate Credit for any amount of the first two rounds of Economic Impact Payments they may have missed. Developed in partnership with Intuit and delivered through the Free File Alliance, this tool provides a free and easy way for eligible people who don't make enough income to have an income tax return-filing obligation to provide the IRS the basic information needed to figure and issue their Advance Child Tax Credit payments. This includes name, address, and social security numbers. This also enables them to provide information about their qualifying children age 17 and under, their other dependents, and their direct deposit bank information so the IRS can quickly and easily deposit the payments directly into their checking or savings account. It is available only on IRS.gov. The Non-filer Sign-Up tool should not be used by anyone who has already filed a 2019 or 2020 federal income tax return. No action needed by most other families Eligible families who already filed or plan to file 2019 or 2020 income tax returns should not use the Non-filer Sign-Up Tool. Once the IRS processes their 2019 or 2020 tax return, the information will be used to determine eligibility and issue advance payments. Families who want to claim other tax benefits, such as the Earned Income Tax Credit for low-and moderate-income families, should not use this tool and instead file a regular tax return. For them, the fastest and easiest way to file a return is the Free File system, available only on IRS.gov. Watch out for scams The IRS urges everyone to be on the lookout for scams related to both Advance Child Tax Credit payments and Economic Impact Payments. The IRS emphasized that the only way to get either of these benefits is by either filing a tax return with the IRS or registering online through the Non-filer Sign-up Tool, exclusively on IRS.gov. Any other option is a scam. Watch out for scams using email, phone calls or texts related to the payments. Remember, the IRS never sends unsolicited electronic communications asking anyone to open attachments or visit a non-governmental web site. Child Tax Credit Update Portal Earlier this week, Treasury and IRS launched another useful tool, the Child Tax Credit Update Portal. Initially, this tool only enables anyone who has been determined to be eligible for advance payments to see that they are eligible and unenroll from (opt out of) the advance payment program. Later, it will allow people to check on the status of their payments and make updates to their information, including their bank account information. Later this year, the tool will also be available in Spanish. Community partners can help The IRS urges community groups, non-profits, associations, education organizations and anyone else with connections to people with children to share this critical information about the Advance Child Tax Credit as well as other important benefits. Among other things, the IRS is already working closely with its community partners to ensure wide access to the Non-filer Sign-up Tool and the Child Tax Credit Update Portal. The agency is also providing additional materials and information that can be easily shared by social media, email and other methods. About the Advance Child Tax Credit The expanded and newly-advanceable Child Tax Credit was authorized by the American Rescue Plan Act, enacted in March. Normally, the IRS will calculate the payment based on a family's 2020 tax return, including those who use the Non-filer Sign-up Tool. If that return is not available because it has not yet been filed or is still being processed, the IRS will instead determine the initial payment amounts using the 2019 return or the information entered using the Non-filers tool that was available in 2020. The payment will be up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 through 17. To make sure families have easy access to their money, the IRS will issue these payments by direct deposit, as long as correct banking information has previously been provided to the IRS. Otherwise, people should watch their mail around July 15 for their mailed payment. The dates for the Advance Child Tax Credit payments are July 15, August 13, September 15, October 15, November 15, and December 15. For more information, visit  IRS.gov/childtaxcredit2021 , or read FAQs on the 2021 Child Tax Credit and Advance Child Tax Credit Payments.

https://www.irs.gov/newsroom/irs-and-community-partners-team-up-to-provide-free-tax-help-for-families-to-get-advance-child-tax-credit-payments-and-economic-impact-payments

Partners urged to use AdvCTC online information and tools to help eligible taxpayers get registered IR-2021-132, June 23, 2021 Note: More events coming soon. WASHINGTON — The Internal Revenue Service is partnering with non-profit organizations, churches, community groups and others in 12 cities to help eligible families, particularly those who normally do not file a federal tax return, file a 2020 income tax return or register for the monthly Advance Child Tax Credit (AdvCTC) payments using the new Non-filer Sign-up Tool. This tool, an update of last year's IRS Non-Filers tool, is also designed to help eligible individuals who don't normally file tax returns register for the $1,400 third round of Economic Impact Payments (also known as stimulus checks) and claim the Recovery Rebate Credit for any amount of the first two rounds of Economic Impact Payments they may have missed. Individuals do not need to have children in order to attend these events and sign up for Economic Impact Payments. The special eventsPDF by IRS and partner groups to help people quickly file income tax returns and register for the advance payments will take place over two weekends, June 25-26 and July 9-10, 2021. Events will be held in Atlanta; New York; Detroit; Houston; Los Angeles; Las Vegas; Miami; Milwaukee; Philadelphia; Phoenix; St. Louis; and Washington, DC. "This important new tax change affects millions of families across the nation, and the IRS wants to do everything it can to help people get the payments," said IRS Wage & Investment Commissioner Ken Corbin, who also serves as the agency's Chief Taxpayer Experience Officer. "Many people miss out on tax benefits simply because they don't file a tax return. Our work in these cities is designed to help people receive monthly Advance Child Tax Credit payments and Economic Impact Payments." People can check their eligibility for the AdvCTC payments by using the new Advance Child Tax Credit Eligibility Assistant. To make the sign-up process go quickly and smoothly, people are encouraged to have the following information when they come to one of these events: Social Security numbers for their children, Social Security numbers or Tax Identification Numbers for themselves and their spouse, a reliable mailing address, an email address, and their bank account information if they want to receive their payment by direct deposit. As part of a wider effort to raise awareness of the expanded Child Tax Credit, the IRS also encourages its partners to use available online tools and toolkits to help non-filers, low-income families and other underserved groups sign up to receive the AdvCTC. Some tax credits, such as the Child Tax Credit (CTC), are "refundable," meaning that even if taxpayers don't owe income tax, the IRS will issue them a refund if they're eligible; but they must file a tax return or register with the new Non-filer Sign-up Tool to receive it. Some people who haven't filed a 2020 tax return yet are also eligible for the $1,400 per person Economic Impact Payments and the Recovery Rebate Credit. The first monthly payments of the expanded and newly-advanceable CTC from the American Rescue Plan will be made in July. Most families will begin receiving monthly payments without any additional action. Eligible families will receive a payment of up to $300 per month for each child under age 6, and up to $250 per month for each child ages 6 to 17. People who need to file a 2020 federal income tax return, but are unable to attend one of these events, may be able to prepare and file their own federal income tax online using IRS Free File if their income is $72,000 or less. People who don't need to file a 2020 federal tax return can use the Non-filer Sign-up Tool to register to receive the advance CTC payments, the Third Round Economic Impact Payment, and the Recovery Rebate Credit. The IRS encourages people to request payments via direct deposit, which is faster and more secure than other payment methods. People who don't have a bank account should visit the Federal Deposit Insurance Corporation website for details on opening an account online. They can also use the FDIC's BankFind tool to locate an FDIC-insured bank. Finally, BankOn, American Bankers Association, Independent Community Bankers of America and National Credit Union Administration have lists of banks and credit unions that can open an account online. Veterans can see the Veterans Benefits Banking Program for financial services at participating banks. About the advance Child Tax Credit The expanded and newly-advanceable Child Tax Credit was authorized by the American Rescue Plan Act, enacted in March. Normally, the IRS will calculate the payment based on a family's 2020 tax return, including those who use the Non-filer Sign-up Tool. If that return is not available because it has not yet been filed or is still being processed, the IRS will instead determine the initial payment amounts using the 2019 return or the information entered using the Non-filers tool that was available in 2020. The payment will be up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 through 17. To make sure families have easy access to their money, the IRS will issue these payments by direct deposit, as long as correct banking information has previously been provided to the IRS. Otherwise, people should watch their mail around July 15 for their mailed payment. The dates for the Advance Child Tax Credit payments are July 15, August 13, September 15, October 15, November 15, and December 15. To learn more about advance CTC payments, visit IRS.gov/childtaxcredit2021 or see FAQs on the 2021 Child Tax Credit and Advance Child Tax Credit Payments.

https://www.irs.gov/newsroom/etaac-delivers-2021-annual-report-with-recommendations-to-congress-and-irs

IR-2021-131, June 23, 2021 WASHINGTON — The Electronic Tax Administration Advisory Committee (ETAAC) today released its annual report to Congress, featuring 10 recommendations with a focus on the prevention of identity theft and refund fraud. The report groups the recommendations into two sections: recommendations to Congress involving the IRS budget, information return filing and federal data-sharing; and recommendations to the IRS grouped around electronic filing and cybersecurity. The ETAAC is a public forum whose 21 members work closely with the Security Summit, a joint effort of the IRS, state tax administrators and the nation's tax industry established in 2015 to fight tax-related identity theft and cybercrime. ETAAC members represent various segments of the tax community, including individual and business taxpayers, tax professionals and preparers, tax software developers, payroll service providers, the financial industry and state and local governments. The 2021 Report to CongressPDF is available on IRS.gov. At today's annual meeting, IRS Commissioner Chuck Rettig and IRS leaders thanked six members of the committee whose terms are now ending: Luanne Brown - Director of Payroll Services for Grand Valley State University.  Jenine Hallings - Compliance Risk Manager for Paychex.  Lynnette T. Riley - President of the Georgia Student Finance Commission and former Georgia Commissioner of Revenue. Cynthia Rowley - Retired Assistant Commissioner with the Minnesota Department of Revenue.  Geno Salo - Senior Director at Thompson Reuters. For the past year he served as ETAAC Chair. Matthew Vickers - General Manager of Product for U.S.-based Xero Inc. 

https://www.irs.gov/newsroom/irs-announces-two-new-online-tools-to-help-families-manage-child-tax-credit-payments

Child Tax Credit Eligibility Assistant helps families determine whether they qualify for Child Tax Credit payments Update Portal helps families monitor and manage Child Tax Credit payments IR-2021-130, June 22, 2021 WASHINGTON — The Internal Revenue Service today launched two new online tools designed to help families manage and monitor the advance monthly payments of Child Tax Credits under the American Rescue Plan. These two new tools are in addition to the Non-filer Sign-up Tool, announced last week, which helps families not normally required to file an income tax return to quickly register for the Child Tax Credit. The new Child Tax Credit Eligibility Assistant allows families to answer a series of questions to quickly determine whether they qualify for the advance credit. The Child Tax Credit Update Portal allows families to verify their eligibility for the payments and if they choose to, unenroll, or opt out from receiving the monthly payments so they can receive a lump sum when they file their tax return next year. This secure, password-protected tool is available to any eligible family with internet access and a smart phone or computer. Future versions of the tool planned in the summer and fall will allow people to view their payment history, adjust bank account information or mailing addresses and other features. A Spanish version is also planned. Both the Child Tax Credit Eligibility Assistant and Child Tax Credit Update Portal are available now on IRS.gov. The American Rescue plan increased the maximum Child Tax Credit amount in 2021 to $3,600 per child for children under the age of 6 and to $3,000 per child for children ages 6 through 17. The advance Child Tax Credit payments, which will generally be made on the 15th of each month, create financial certainty for families to plan their budgets. Eligible families will receive a payment of up to $300 per month for each child under age 6, and up to $250 per month for each child ages 6 through 17. The first monthly payment of the expanded and newly-advanceable Child Tax Credit will be made on July 15. Most families will begin receiving monthly payments automatically next month without any further action required. "IRS employees continue to work hard to help people receive this important credit," IRS Commissioner Chuck Rettig said. "The Update Portal is a key piece among the three new tools now available on IRS.gov to help families understand, register for and monitor these payments. We will be working across the nation with partner groups to share information and help eligible people receive the advance payments." More features coming to the Update Portal soon Coming soon, families will be able to use the Child Tax Credit Update Portal to check the status of their payments. In late June, people will be able to update their bank account information for payments starting in August. In early August, a feature is planned that will allow people to update their mailing address. Then, in future updates planned for this summer and fall, they will be able to use this tool for things like updating family status and changes in income. For more information see the FAQs, which will continue to be updated. Update Portal allows people to unenroll Instead of receiving these advance payments, some families may prefer to wait until the end of the year and receive the entire credit as a refund when they file their 2021 return. In this first release of the tool, the Child Tax Credit Update Portal now enables these families to quickly and easily unenroll from receiving monthly payments. The unenroll feature can also be helpful to any family that no longer qualifies for the Child Tax Credit or believes they will not qualify when they file their 2021 return. This could happen if, for example: Their income in 2021 is too high to qualify them for the credit. Someone else (an ex-spouse or another family member, for example) qualifies to claim their child or children as dependents in 2021. Their main home was outside of the United States for more than half of 2021. Accessing the Update Portal To access the Child Tax Credit Update Portal, a person must first verify their identity. If a person has an existing IRS username or an ID.me account with a verified identity, they can use those accounts to easily sign in. People without an existing account will be asked to verify their identity with a form of photo identification using ID.me, a trusted third party for the IRS. Identity verification is an important safeguard and will protect your account from identity theft. Anyone who lacks internet access or otherwise cannot use the online tool may unenroll by contacting the IRS at the phone number included in your outreach letter. Who is getting a monthly payment In general, monthly payments will go to eligible families who: Filed either a 2019 or 2020 federal income tax return. Used the Non-Filers tool on IRS.gov in 2020 to register for an Economic Impact Payment. Registered for the advance Child Tax Credit this year using the new Non-Filer Sign-up Tool on IRS.gov. An eligible family who took any of these steps does not need to do anything else to get their payments. Normally, the IRS will calculate the advance payment based on the 2020 income tax return. If that return is not available, either because it has not yet been filed or it has not yet been processed, the IRS is instead determining the payment using the 2019 tax return. Eligible families will receive advance payments, either by direct deposit or check. Each payment will be up to $300 per month for each child under age 6 and up to $250 per month for each child ages 6 through 17. The IRS will issue advance Child Tax Credit payments on these dates: July 15, August 13, September 15, October 15, November 15 and December 15. The IRS urges any family who hasn't yet filed their 2020 return – or 2019 return – to do so as soon as possible so they can receive any advance payment they're eligible for. At the same time, the agency cautions that tax returns must be processed by June 28 to be reflected in the first batch of monthly payments scheduled for July 15, so eligible families filing now will likely receive payments in the following months. Even if monthly payments begin after July, the IRS will adjust the monthly amounts upward to ensure that people still receive half of their total eligible Child Tax Credit benefit by the end of the year. Filing soon will also ensure that the IRS has their most current bank account information, as well as key details about qualifying family members. This includes people who don't normally file a tax return, such as families experiencing homelessness and people in underserved groups. For most people, the fastest and easiest way to file a return is by using IRS Free File, available only on IRS.gov. Besides qualifying them for these advance payments, using Free File will also enable them to claim other family-oriented tax benefits, if eligible, such as the Earned Income Tax Credit and the Recovery Rebate Credit/Economic Impact Payments. New tool helps non-filers register For families who don't normally file an income tax return, another easy option is to register for these advance payments using the new Non-filer Sign-up Tool, introduced recently, and available only on IRS.gov. Among other things, the tool asks users to supply current bank information, along with key details about themselves and their qualifying children. The tool then automatically fills in a very basic 2020 federal income tax return that is electronically sent to the IRS. The new tool was developed in partnership with Intuit and the Free File Alliance. Child Tax Credit Eligibility Assistant unveiled Before filing a return or using the Non-filer Sign-up Tool, families unsure of whether they qualify for either the credit or the advance payments may want to check out another new tool — the Child Tax Credit Eligibility Assistant. By answering a series of questions, the tool helps people determine if they qualify for the credit and the payments. The IRS emphasized that because the Child Tax Credit Eligibility Assistant requests no personalized information, it is not a registration tool, but merely an eligibility tool. Nevertheless, it can still help an eligible family determine whether they should take the next step and either file an income tax return or register using the Non-filer Sign-up Tool. Personal help available IRS and its partners are helping families register for the payments using the Non-filer Sign-up Tool. During late June and early July, free events will take place in Atlanta, Brooklyn, Detroit, Houston, Las Vegas, Los Angeles, Miami, Milwaukee, Philadelphia, Phoenix, St. Louis and Washington, D.C. More details will be available soon on IRS.gov. Child Tax Credit 2021 The IRS has created a special Advance Child Tax Credit 2021 page, designed to provide the most up-to-date information about the credit and the advance payments. It's at IRS.gov/childtaxcredit2021. Among other things, it provides direct links to the Non-Filer Sign Up Tool, the Child Tax Credit Update Portal, the Child Tax Credit Eligibility Assistant, a set of frequently asked questions and other useful resources. Child Tax Credit changes The American Rescue Plan raised the maximum Child Tax Credit in 2021 to $3,600 for children under the age of 6 and to $3,000 per child for children ages 6 through 17. Before 2021, the credit was worth up to $2,000 per eligible child. The new maximum credit is available to taxpayers with a modified adjusted gross income (AGI) of: $75,000 or less for singles, $112,500 or less for heads of household and $150,000 or less for married couples filing a joint return and qualified widows and widowers. For most people, modified AGI is the amount shown on Line 11 of their 2020 Form 1040 or 1040-SR. Above these income thresholds, the extra amount above the original $2,000 credit — either $1,000 or $1,600 per child — is reduced by $50 for every $1,000 in modified AGI. In addition, the credit is fully refundable for 2021. This means that eligible families can get it, even if they owe no federal income tax. Before this year, the refundable portion was limited to $1,400 per child. Help spread the word The IRS urges community groups, non-profits, associations, education organizations and anyone else with connections to people with children to share this critical information about the Child Tax Credit as well as other important benefits. Among other things, the IRS is already working closely with its community partners to ensure wide access to the Non-filer Sign-up Tool and the Child Tax Credit Update Portal. The agency is also providing additional materials and information that can be easily shared by social media, email and other methods. For the most up-to-date information on the Child Tax Credit and advance payments, visit Advance Child Tax Credit Payments in 2021.

https://www.irs.gov/newsroom/irs-unveils-online-tool-to-help-low-income-families-register-for-monthly-child-tax-credit-payments

IR-2021-129, June 14, 2021 WASHINGTON — The Treasury Department and the Internal Revenue Service today unveiled an online Non-filer Sign-up tool designed to help eligible families who don't normally file tax returns register for the monthly Advance Child Tax Credit payments, scheduled to begin July 15. This tool, an update of last year's IRS Non-filers tool, is also designed to help eligible individuals who don't normally file income tax returns register for the $1,400 third round of Economic Impact Payments (also known as stimulus checks) and claim the Recovery Rebate Credit for any amount of the first two rounds of Economic Impact Payments they may have missed. Developed in partnership with Intuit and delivered through the Free File Alliance, this tool provides a free and easy way for eligible people who don't make enough income to have an income tax return-filing obligation to provide the IRS the basic information needed—name, address, and Social Security numbers—to figure and issue their Advance Child Tax Credit payments. Often, these are individuals and families who receive little or no income, including those experiencing homelessness and other underserved groups. This new tool is available only on IRS.gov. "We have been working hard to begin delivering the monthly Advance Child Tax Credit to millions of families with children in July," said IRS Commissioner Chuck Rettig. "This new tool will help more people easily gain access to this important credit as well as help people who don't normally file a tax return obtain an Economic Impact Payment. We encourage people to review the details about this important new effort." The Non-filer Sign-up tool is for people who did not file a tax return for 2019 or 2020 and who did not use the IRS Non-filers tool last year to register for Economic Impact Payments. The tool enables them to provide required information about themselves, their qualifying children age 17 and under, their other dependents, and their direct deposit bank information so the IRS can quickly and easily deposit the payments directly into their checking or savings account. No action needed by most families Eligible families who already filed or plan to file 2019 or 2020 income tax returns should not use this tool. Once the IRS processes their 2019 or 2020 tax return, the information will be used to determine eligibility and issue advance payments. Families who want to claim other tax benefits, such as the Earned Income Tax Credit for low- and moderate-income families, should not use this tool and instead file a regular tax return. For them, the fastest and easiest way to file a return is the Free File system, available only on IRS.gov. Public-private partnership plays vital role Intuit developed the Non-filer Sign-up tool for the IRS and delivers this tool through its participation in the Free File Alliance. Intuit has a long history of working closely with the IRS on innovative solutions, including last year's Non-filers: Enter Payment Info Here tool. In addition, for many years, Intuit has offered Free File Fillable Forms, also delivered through the Free File Alliance. This is the electronic version of IRS paper forms, which provides all taxpayers with the option to electronically file for free. There are no income restrictions for using this option to file a 2020 tax return. Watch out for scams The IRS urges everyone to be on the lookout for scams related to both Advance Child Tax Credit payments and Economic Impact Payments. The IRS emphasized that the only way to get either of these benefits is by either filing a tax return with the IRS or registering online through the Non-filer Sign-up tool, exclusively on IRS.gov. Any other option is a scam. Watch out for scams using email, phone calls or texts related to the payments. Be careful and cautious: The IRS never sends unsolicited electronic communications asking anyone to open attachments or visit a non-governmental web site. Other tools coming soon The IRS has created a special Advance Child Tax Credit 2021 page at IRS.gov/childtaxcredit2021, designed to provide the most up-to-date information about the credit and the advance payments. The page already features a link to the Non-filer Sign-up tool. In the next few weeks, it will also feature other useful new tools, including: An interactive Child Tax Credit eligibility assistant to help families determine whether they qualify for the Advance Child Tax Credit payments. Another tool, the Child Tax Credit Update Portal, will initially enable anyone who has been determined to be eligible for advance payments to see that they are eligible and unenroll/opt out of the advance payment program. Later, it will allow people to check on the status of their payments, make updates to their information and be available in Spanish. Community partners can help The IRS urges community groups, non-profits, associations, education organizations and anyone else with connections to people with children to share this critical information about the Advance Child Tax Credit as well as other important benefits. The IRS will provide additional materials and information in the near future that can be easily shared by social media, email and other methods. About the Advance Child Tax Credit The expanded and newly-advanceable Child Tax Credit was authorized by the American Rescue Plan Act, enacted in March. Normally, the IRS will calculate the payment based on a person's 2020 tax return, including those who use the Non-filer Sign-up tool. If that return is not available because it has not yet been filed or is still being processed, the IRS will instead determine the initial payment amounts using the 2019 return or the information entered using the Non-filers tool that was available in 2020. The payment will be up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 through 17. To make sure families have easy access to their money, the IRS will issue these payments by direct deposit, as long as correct banking information has previously been provided to the IRS. Otherwise, people should watch their mail around July 15 for their mailed payment. The dates for the Advance Child Tax Credit payments are July 15, Aug. 13, Sept. 15, Oct. 15, Nov. 15 and Dec. 15. For more information, visit IRS.gov/childtaxcredit2021, or read FAQs on the 2021 Child Tax Credit and Advance Child Tax Credit Payments.

https://www.irs.gov/newsroom/new-faqs-available-to-aid-families-and-small-business-under-the-american-rescue-plan

Information for enhanced 2021 child and dependent care tax credits; updated paid sick and family leave credits for Q2 and Q3 of 2021 IR-2021-128, June 11, 2021 WASHINGTON – The Internal Revenue Service today posted two new, separate sets of frequently-asked-questions (FAQs) to assist families and small and mid-sized employers in claiming credits under the American Rescue Plan (ARP). Both the child and dependent care credit as well as the paid sick and family leave credit were enhanced under the ARP, enacted in March to assist families and small businesses with the fallout of the COVID-19 pandemic and recovery underway. The two sets of FAQs provide information on eligibility, computing the credit amounts, and how to claim these important tax benefits. An overview of these tax credits follows: Child and dependent care credit For 2021, the ARP increased the maximum amount of work-related expenses for qualifying care that may be taken into account in calculating the credit, increased the maximum percentage of those expenses for which the credit may be taken, modified how the credit is reduced for higher earners, and made it refundable. For 2021, eligible taxpayers can claim qualifying work-related expenses up to: $8,000 for one qualifying person, up from $3,000 in prior years, or $16,000 for two or more qualifying persons, up from $6,000 in prior years. Taxpayers are also required to have earnings; the amount of qualifying work-related expenses claimed cannot exceed the taxpayer's earnings. Combined with the increase to 50% in the maximum credit rate, taxpayers with the maximum amount of qualifying work-related expenses would receive a credit of $4,000 for one qualifying person, or $8,000 for two or more qualifying persons. When calculating the credit, a taxpayer must subtract employer-provided dependent care benefits, such as those provided through a flexible spending account, from total work-related expenses. A qualifying person generally is a dependent under the age of 13, or a dependent of any age or spouse who is incapable of self-care and who lives with the taxpayer for more than half of the year. As in prior years, the more a taxpayer earns, the lower the percentage of work-related expenses that are taken into account in determining the credit. However, under the new law, more taxpayers will qualify for the new maximum 50% credit rate. That's because the ARP increased to $125,000 the adjusted gross income level at which the credit rate starts to be reduced. Above $125,000, the 50% credit percentage goes down as income rises. Taxpayers with adjusted gross income over $438,000 are not eligible for the credit. The credit is fully refundable for the first time in 2021. This means an eligible taxpayer can receive it, even if they owe no federal income tax. To be eligible for the refundable credit, a taxpayer (or the taxpayer's spouse if filing a joint return) must reside in the United States for more than half of the year. However, special rules apply to military personnel stationed outside of the United States. To claim the credit for 2021, taxpayers will need to complete Form 2441, Child and Dependent Care Expenses, and include the form when filing their tax returns in 2022. In completing the form to claim the 2021 credit, those claiming the credit will need to provide a valid taxpayer identification number (TIN) for each qualifying person. Generally, this is the Social Security number for the qualifying person. For more information about completing the form and claiming the credit, see the instructions to Form 2441. In addition, those claiming the credit are required to identify all persons or organizations that provided care for the qualifying person. This requires providing the care provider's name, address, and TIN. Paid sick and family leave credits The paid sick and family leave credits reimburse eligible employers for the cost of providing paid sick and family leave to their employees for reasons related to COVID-19, including leave taken by employees to receive or recover from COVID-19 vaccinations. Self-employed individuals are eligible for similar tax credits. The paid sick and family leave tax credits under the ARP are similar to those put in place by the Families First Coronavirus Response Act (FFCRA), as extended and amended by the COVID-related Tax Relief Act of 2020, under which certain employers could receive tax credits for providing paid leave to employees that met the requirements of the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act (as added by FFCRA). The ARP amends and extends these credits, and provides that leave wages paid to an employee who is seeking or awaiting the results of a test for, or diagnosis of, COVID-19, or is obtaining immunizations related to COVID-19 or recovering from immunization, are leave wages that can be eligible for the credits. Additionally, under the ARP, eligible employers may now claim the credit for paid family leave wages for all the same reasons that they can claim the credit for paid sick leave wages. The FAQs include information on how eligible employers may claim the paid sick and family leave credits, including how to file for and compute the applicable credit amounts, and how to receive advance payments for and refunds of the credits. Under the ARP, eligible employers, including businesses and tax-exempt organizations with fewer than 500 employees and certain governmental employers, may claim tax credits for qualified leave wages and certain other wage-related expenses (such as health plan expenses and certain collectively bargained benefits) paid with respect to leave taken by employees beginning on April 1, 2021, through September 30, 2021. The ARP keeps the daily wage thresholds that previously existed for these credits under the FFCRA. The aggregate cap on qualified sick leave wages remains at two weeks (up to a maximum of 80 hours), and this aggregate cap reset with respect to leave taken by employees beginning on April 1, 2021. The aggregate cap on qualified family leave wages increases to $12,000 from $10,000, and this aggregate cap reset with respect to leave taken by employees beginning on April 1, 2021. The paid leave credits under the ARP are tax credits against the employer's share of Medicare tax. The tax credits are refundable, which means that the employer is entitled to payment of the full amount of the credits to the extent it exceeds the employer's share of Medicare tax. In anticipation of the credits to be claimed on the applicable federal employment tax return, eligible employers can keep the federal employment taxes that they otherwise would have deposited, including federal income tax withheld from employees, the employees' share of social security and Medicare taxes, and the employer's share of social security and Medicare taxes with respect to all employees up to the amount of the credit for which they are eligible. If the eligible employer does not have enough federal employment taxes on deposit to cover the amount of the anticipated credits, the eligible employer may request an advance of the credit by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19. Self-employed individuals may claim comparable credits on the Form 1040, U.S. Individual Income Tax Return. See the tax provisions of the American Rescue Plan for more information. See other provisions designed to help taxpayers recovering from the impact of the COVID-19 pandemic. Also, see FAQs on these and other provisions.

https://www.irs.gov/newsroom/more-than-2-point-3-million-additional-economic-impact-payments-disbursed-under-the-american-rescue-plan-total-payments-top-169-million

IR-2021-127, June 9, 2021 WASHINGTON — The Internal Revenue Service, the U.S. Department of the Treasury, and the Bureau of the Fiscal Service announced today they have disbursed more than 2.3 million additional Economic Impact Payments under the American Rescue Plan. Today's announcement covering the most recent two weeks of the effort brings the total disbursed so far to more than 169 million payments. They represent a total value of approximately $395 billion since these payments began rolling out to Americans in batches on March 12. Here is additional information on the last two weeks of payments, which includes those with official payment dates through June 9: In total, this includes more than 2.3 million payments with a value of more than $4.2 billion. More than 900,000 payments, with a value of approximately $1.9 billion, went to eligible individuals for whom the IRS previously did not have information to issue an Economic Impact Payment but who recently filed a tax return.  This also includes additional ongoing supplemental payments for people who earlier this year received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns. In the last two weeks, there were more than 1.1 million of these "plus-up" payments, with a value of more than $2.5 billion. In all, the IRS has made more than 8 million of these supplemental payments this year. Overall, the last two weeks of payments contain more than 1.2 million direct deposit payments (with a total value over $2.2 billion) with the remainder as paper check payments. The IRS will continue to make Economic Impact Payments on a weekly basis. Ongoing payments will be sent to eligible individuals for whom the IRS previously did not have information to issue a payment but who recently filed a tax return, as well to people who qualify for "plus-up" payments. Special reminder for those who don't normally file a tax return Although payments are automatic for most people, the IRS continues to urge people who don't normally file a tax return and haven't received Economic Impact Payments to file a 2020 tax return to get all the benefits they're entitled to under the law, including tax credits such as the 2020 Recovery Rebate Credit, the Child Tax Credit, and the Earned Income Tax Credit. Filing a 2020 tax return will also assist the IRS in determining whether someone is eligible for an advance payment of the 2021 Child Tax Credit, which will begin to be disbursed this summer. For example, some federal benefits recipients may need to file a 2020 tax return – even if they don't usually file – to provide information the IRS needs to send payments for a qualifying dependent. Eligible individuals in this group should file a 2020 tax return as quickly as possible to be considered for an additional payment for their qualifying dependents. People who don't normally have an obligation to file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness and others. Individuals who didn't get a first or second round Economic Impact Payment or got less than the full amounts may be eligible for the 2020 Recovery Rebate Credit, but they'll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. Free tax return preparation is available for qualifying people. The IRS reminds taxpayers that the income levels in this third round of Economic Impact Payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly). The payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment. Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.

https://www.irs.gov/newsroom/irs-procurement-office-to-hire-80-new-employees-nationwide-including-contract-specialists

IR-2021-126, June 8, 2021 WASHINGTON — The Internal Revenue Service is looking to hire motivated acquisition professionals interested in providing America's taxpayers top quality service. The agency's Procurement office plans to fill 80 vacancies nationwide, many of which are contract specialists. The IRS Procurement office provides acquisition services for IRS business units, Treasury departmental offices and Information Technology for the Bureau of Engraving and Printing. The office administers all aspects of the acquisition process from planning, contract award, management and closeout. IRS Procurement's goal is to create agile and innovative best value contract solutions to ensure the IRS meets its mission. "It's an exciting time to work for IRS Procurement. Our culture shift of embracing innovation, agility and speed means our procurement professionals are empowered to think outside the box and take intelligent risks," said Shanna Webbers, IRS Chief Procurement Officer. "Integrity in the procurement process is of utmost importance and leveraging Federal Acquisition Regulation (FAR) flexibilities allows us to be bold in enabling the IRS mission. We're looking for the "best of the best" to join Team Procurement." Contract specialists are responsible for a full range of planning, directing and administering complex acquisitions, which are often Servicewide in scope and for pre- and/or post-award. Contract specialists will also: Assist customers in developing statements of work and procurement strategy. Develop evaluation plans, pricing methodologies and administration plans. Recommend streamlining initiatives and utilize the use of innovative principles to improve procurement operations and customer service. Serve as an advisor on acquisitions for complex equipment, supplies and services, which have a significant impact on the effectiveness of the entire tax system nationwide. Solicit contractual proposals, as well as negotiate, execute, administer and terminate public contracts for the Service. Perform contract administration functions, such as verifying evidence of contractor's progress, negotiating modifications, issuing termination notices, reviewing contract claims, approving payments and conducting contract closeouts. Ensure that all requirements of law, executive orders, regulations and other applicable procedures have been met and report all unlawful behavior. Interested individuals can apply by creating a profile at usajobs.gov. To see all available IRS positions or share these job postings with friends, family or neighbors who may be interested and qualified for the positions visit  IRS Careers . The IRS is an equal opportunity employer. All employees must be U.S. citizens, pass an FBI fingerprint check and tax compliance verification, and meet the mandatory education, training and experience qualification requirements.

https://www.irs.gov/newsroom/irs-reminder-approaching-june-15-deadline-for-second-quarter-estimated-tax-payments

IR-2021-125, June 8, 2021 WASHINGTON — The Internal Revenue Service reminds taxpayers who pay estimated taxes that they have until June 15 to pay their estimated tax payment for the second quarter of tax year 2021 without penalty. Estimated tax is the method used to pay tax on income that isn't subject to withholding. This includes income from self-employment, interest, dividends, rent, gains from the sale of assets, prizes and awards. You may also have to pay estimated tax if the amount of income tax being withheld from your salary, pension or other income isn't enough. Who must pay estimated tax? Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when they file their return. Individual taxpayers can use the IRS Interactive Tax Assistant online to see if they are required to pay estimated taxes. They can also see the worksheet in Form 1040-ES, Estimated Tax for Individuals for more details on who must pay estimated tax. Corporations generally have to make estimated tax payments if they expect to owe tax of $500 or more when they file their return. Corporations can see Form 1120-W, Estimated Tax for Corporations for more information. Special rules apply to some groups of taxpayers, such as farmers, fishermen, certain higher income taxpayers, casualty and disaster victims, those who recently became disabled, recent retirees and those who receive income unevenly during the year. 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. Taxes are pay-as-you-go This means taxpayers need to pay most of their taxes owed during the year as income is received. There are two ways to do that: Withholding from pay, pension or certain government payments such as Social Security Making quarterly estimated tax payments during the year. Taxpayers can avoid an underpayment penalty by owing less than $1,000 at tax time or by paying most of their taxes during the year. Generally, for 2021 that means making payments of at least 90% of the tax expected on their 2021 return. Most taxpayers who pay at least 100 percent of the tax shown on their return for tax year 2020 may also avoid the penalty. There are special rules for farmers and fishermen, certain household employers and certain higher income taxpayers. For more information, refer to Form 1040-ES, Estimated Tax for Individuals. Generally, taxpayers should make estimated tax payments in four equal amounts to avoid a penalty. However, if they receive income unevenly during the year, they may be able to vary the amounts of the payments to avoid or lower the penalty by using the annualized installment method. Taxpayers can use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts to see if they owe a penalty for underpaying their estimated tax. Third quarter payments are due September 15 and the final estimated tax payment for tax year 2021 is due on January 17, 2022. Tax Withholding Estimator If a taxpayer receives salaries and wages, they can avoid having to pay estimated tax by asking their employer to withhold more tax from their earnings. To do this, they would submit a new Form W-4 to their employer. If a taxpayer receives a paycheck, the Tax Withholding Estimator can help them make sure they have the right amount of tax withheld from their pay. The Tax Withholding Estimator offers workers, as well as retirees, self-employed individuals and other taxpayers a clear, step-by-step method for effectively checking their withholding to protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year. How to pay estimated taxes Form 1040-ES includes instructions to help taxpayers figure their estimated taxes. The fastest and easiest ways for individuals to make an estimated tax payment is electronically by using IRS Direct Pay from their checking or savings account or pay using a debit or credit card. Taxpayers should note that the payment processor, not the IRS, charges a fee for debit and credit card payments. Both Direct Pay and the pay by debit or credit card options are available online at IRS.gov and through the IRS2Go app. Taxpayers can also use the Electronic Federal Tax Payment System (EFTPS) to make an estimated tax payment. Corporations must use electronic funds transfer to make all federal tax deposits (such as deposits of employment, excise, and corporate income tax). This includes installment payments of estimated tax. Generally, electronic funds transfer is made using the Electronic Federal Tax Payment System (EFTPS). However, if the corporation does not want to use EFTPS, it can arrange for its tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on its behalf. If taxpayers opt to mail a check or money order, they should make them payable to the "United States Treasury." For information on all payment options, visit IRS.gov/payments. IRS.gov assistance 24/7 Tax help is available 24/7 on IRS.gov. The IRS website offers a variety of online tools to help taxpayers answer common tax questions. For example, taxpayers can search the Interactive Tax Assistant, Tax Topics and Frequently Asked Questions to get answers to common questions. The IRS is continuing to expand ways to communicate to taxpayers who prefer to get information in other languages. The IRS has posted translated tax resources in 20 other languages on IRS.gov. For more information, see We Speak Your Language.

https://www.irs.gov/newsroom/irs-sending-letters-to-more-than-36-million-families-who-may-qualify-for-monthly-child-tax-credits-payments-start-july-15

IR-2021-124, June 7, 2021 WASHINGTON — The Internal Revenue Service has started sending letters to more than 36 million American families who, based on tax returns filed with the agency, may be eligible to receive monthly Child Tax Credit payments starting in July. The expanded and newly-advanceable Child Tax Credit was authorized by the American Rescue Plan Act, enacted in March. The letters are going to families who may be eligible based on information they included in either their 2019 or 2020 federal income tax return or who used the Non-Filers tool on IRS.gov last year to register for an Economic Impact Payment. Families who are eligible for advance Child Tax Credit payments will receive a second, personalized letter listing an estimate of their monthly payment, which begins July 15. Most families do not need to take any action to get their payment. Normally, the IRS will calculate the payment amount based on the 2020 tax return. If that return is not available, either because it has not yet been filed or it has not yet been processed, the IRS will instead determine the payment amount using the 2019 return. Eligible families will begin receiving advance payments, either by direct deposit or check. The payment will be up to $300 per month for each qualifying child under age 6 and up to $250 per month for each qualifying child ages 6 to 17.The IRS will issue advance Child Tax Credit payments on July 15, August 13, September 15, October 15, November 15 and December 15. Eligible families should file tax returns soon The IRS urges individuals and families who haven't yet filed their 2020 return – or 2019 return – to do so as soon as possible so they can receive any advance payment they're eligible for. Filing soon will also ensure that the IRS has their most current banking information, as well as key details about qualifying children. This includes people who don't normally file a tax return, such as families experiencing homelessness, the rural poor, and other underserved groups. For most people, the fastest and easiest way to file a return is by using the Free File system, available only on IRS.gov. Throughout the summer, the IRS will be adding additional tools and online resources to help with the advance Child Tax Credit. One of these tools will enable families to unenroll from receiving these advance payments and instead receive the full amount of the credit when they file their 2021 return next year. Additionally, later this year, individuals and families will also be able to go to IRS.gov and use a Child Tax Credit Update Portal to notify IRS of changes in their income, filing status, or number of qualifying children; update their direct deposit information; and make other changes to ensure they are receiving the right amount as quickly as possible. Other tools coming soon The IRS has created a special Advance Child Tax Credit 2021 page at IRS.gov/childtaxcredit2021, designed to provide the most up-to-date information about the credit and the advance payments. In the next few weeks, the page will also feature other useful new online tools, including: An interactive Child Tax Credit eligibility tool to help families determine whether they qualify for the Advance Child Tax Credit payments. Another tool, the Child Tax Credit Update Portal, will initially enable anyone who has been determined to be eligible for advance payments unenroll/ to opt out of the advance payment program. Later this year, it will allow people to check on the status of their payments, make updates to their information, and be available in Spanish. More details will be available soon about the online Child Tax Credit Update Portal. Child Tax Credit Changes The American Rescue Plan raised the maximum Child Tax Credit in 2021 to $3,600 for qualifying children under the age of 6 and to $3,000 per child for qualifying children between ages 6 and 17. Before 2021, the credit was worth up to $2,000 per eligible child, and 17 year-olds were not considered as qualifying children for the credit. The new maximum credit is available to taxpayers with a modified adjusted gross income (AGI) of: $75,000 or less for singles, $112,500 or less for heads of household, and $150,000 or less for married couples filing a joint return and qualified widows and widowers. For most people, modified AGI is the amount shown on Line 11 of their 2020 Form 1040 or 1040-SR. Above these income thresholds, the extra amount above the original $2,000 credit — either $1,000 or $1,600 per child — is reduced by $50 for every extra $1,000 in modified AGI. In addition, the entire credit is fully refundable for 2021. This means that eligible fam ilies can get it, even if they owe no federal income tax. Before this year, the refundable portion was limited to $1,400 per child. The IRS urges community groups, non-profits, associations, education organizations, and others with connections to people with children to share this critical information about the Child Tax Credit as well as other important benefits. The IRS will be providing in the near future additional materials and information that can be easily shared by social media, email and other methods. For the most up-to-date information on the Child Tax Credit and advance payments, visit Advance Child Tax Credit Payments in 2021.

https://www.irs.gov/newsroom/irs-sending-more-than-2-point-8-million-refunds-to-those-who-already-paid-taxes-on-2020-unemployment-compensation

IR-2021-123, June 4, 2021 WASHINGTON — The Internal Revenue Service is sending more than 2.8 million refunds this week to taxpayers who paid taxes on unemployment compensation that new legislation now excludes as income. IRS efforts to correct unemployment compensation overpayments will help most affected taxpayers avoid filing an amended tax return. So far, the IRS has identified 13 million taxpayers that may be eligible for the adjustment. Some will receive refunds, which will be issued periodically, and some will have the overpayment applied to taxes due or other debts. For some there will be no change. The American Rescue Plan Act of 2021 (ARPA) excluded up to $10,200 in unemployment compensation per taxpayer paid in 2020. The $10,200 is the maximum amount that can be excluded when calculating taxable income; it is not the amount of refunds. Earlier this month, the IRS began its programming review of tax returns filed prior to the enactment of ARPA to identify the excludible unemployment compensation. The IRS also is making corrections for the Earned Income Tax Credit, Premium Tax Credit and Recovery Rebate Credit affected by the exclusion. Taxpayers who have qualifying children and who become eligible for EITC after the exclusion is calculated may have to file an amended return to claim any new benefits. The IRS can adjust tax returns for those who are single with no children and who become eligible for EITC. The IRS also can adjust tax returns where EITC was claimed and qualifying children identified. To date, the IRS has reviewed over 3.1 million returns, with more than 2.8 million receiving refunds. The IRS plans to issue the next set of refunds in mid-June. The review of returns and processing corrections will continue during the summer as the IRS continues to review the simplest returns and then turns to more complex returns. Taxpayers will receive letters from the IRS, generally within 30 days of the adjustment, informing them of what kind of adjustment was made (such as refund, payment of IRS debt payment or payment offset for other authorized debts) and the amount of the adjustment.

https://www.irs.gov/newsroom/irs-reminds-taxpayers-living-and-working-abroad-of-june-15-deadline

IR-2021-122, June 2, 2021 WASHINGTON – The Internal Revenue Service today reminded taxpayers living and working outside of the United States that they must file their 2020 federal income tax return by Tuesday, June 15. This deadline applies to both U.S. citizens and resident aliens abroad, including those with dual citizenship. Just as most taxpayers in the United States are required to timely file their tax returns with the IRS, those living and working in another country are also required to file. An automatic two-month deadline extension is normally granted for those overseas and in 2021 that date is still June 15 even though the normal income tax filing deadline was extended a month from April 15 to May 17. Benefits and qualifications An income tax filing requirement generally applies even if a taxpayer qualifies for tax benefits, such as the Foreign Earned Income Exclusion or the Foreign Tax Credit, which substantially reduce or eliminate U.S. tax liability. These tax benefits are only available if an eligible taxpayer files a U.S. income tax return. A taxpayer qualifies for the special June 15 filing deadline if both their tax home and abode are outside the United States and Puerto Rico. Those serving in the military outside the U.S. and Puerto Rico on the regular due date of their tax return also qualify for the extension to June 15. IRS recommends attaching a statement if one of these two situations apply. Reporting required for foreign accounts and assets Federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to complete and attach Schedule B to their tax return. Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and usually requires U.S. citizens to report the country in which each account is located. In addition, certain taxpayers may also have to complete and attach to their return Form 8938, Statement of Foreign Financial Assets. Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on this form if the aggregate value of those assets exceeds certain thresholds. See the instructions for this form for details. Foreign accounts reporting deadline  Separate from reporting specified foreign financial assets on their tax return, taxpayers with an interest in, or signature or other authority over foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2020, must file electronically with the Treasury Department a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Because of this threshold, the IRS encourages taxpayers with foreign assets, even relatively small ones, to check if this filing requirement applies to them. The form is only available through the BSA E-filing System website. The deadline for filing the annual Report of Foreign Bank and Financial Accounts (FBAR) was April 15, 2021, but FinCEN is granting filers who missed the original deadline an automatic extension until October 15, 2021, to file the FBAR. There is no need to request this extension. Report in U.S. dollars Any income received or deductible expenses paid in foreign currency must be reported on a U.S. tax return in U.S. dollars. Likewise, any tax payments must be made in U.S. dollars. Both FINCEN Form 114 and IRS Form 8938 require the use of a December 31 exchange rate for all transactions, regardless of the actual exchange rate on the date of the transaction. Generally, the IRS accepts any posted exchange rate that is used consistently. For more information on exchange rates, see Foreign Currency and Currency Exchange Rates. Expatriate reporting Taxpayers who relinquished their U.S. citizenship or ceased to be lawful permanent residents of the United States during 2020 must file a dual-status alien tax return, and attach Form 8854, Initial and Annual Expatriation Statement. A copy of Form 8854 must also be filed with Internal Revenue Service, 3651 S IH35 MS 4301AUSC, Austin, TX 78741, by the due date of the tax return (including extensions). See the instructions for this form and Notice 2009-85PDF, Guidance for Expatriates Under Section 877A, for further details. More time is available Extra time is available for those who cannot meet the June 15 date. Individual taxpayers who need additional time to file can request a filing extension to Oct. 15 by printing and mailing Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. The IRS can't process extension requests filed electronically after May 17, 2021. Find out where to mail the form. Businesses that need additional time to file income tax returns must file Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns. Combat zone extension Members of the military qualify for an additional extension of at least 180 days to file and pay taxes if either of the following situations apply: They serve in a combat zone or they have qualifying service outside of a combat zone or They serve on deployment outside the United States away from their permanent duty station while participating in a contingency operation. This is a military operation that is designated by the Secretary of Defense or results in calling members of the uniformed services to active duty (or retains them on active duty) during a war or a national emergency declared by the President or Congress. Deadlines are also extended for individuals serving in a combat zone or a contingency operation in support of the Armed Forces. This applies to Red Cross personnel, accredited correspondents and civilian personnel acting under the direction of the Armed Forces in support of those forces. Spouses of individuals who served in a combat zone or contingency operation are generally entitled to the same deadline extensions with some exceptions. Extension details and more military tax information is available in IRS Publication 3, Armed Forces' Tax Guide. Visit IRS.gov for tax information Tax help and filing information is available anytime on IRS.gov. The IRS website offers a variety of online tools to help taxpayers answer common tax questions. For example, taxpayers can search the Interactive Tax Assistant, Tax Topics and Frequently Asked Questions to get answers to common questions. IRS.gov/payments provides information on electronic payment options. Other resources: About Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad About Publication 519, U.S. Tax Guide for Aliens

https://www.irs.gov/newsroom/irs-seeks-nominations-for-the-2022-internal-revenue-service-advisory-council

IR-2021-121, June 1, 2021 WASHINGTON — The Internal Revenue Service today announced it is accepting applications for the Internal Revenue Service Advisory Council (IRSAC). Applications will be accepted through July 9, 2021. The IRSAC serves as an advisory body to the IRS commissioner and provides an organized public forum for discussion of relevant tax administration issues between IRS officials and representatives of the public. The advisory council: proposes enhancements to IRS operations, recommends administrative and policy changes to improve taxpayer service, compliance and tax administration, discusses relevant information reporting issues, addresses matters concerning tax-exempt and government entities and conveys the public's perception of professional standards and best practices for tax professionals. IRSAC members are appointed to three-year terms by the IRS commissioner and submit a report to the commissioner annually at a public meeting. Applications are currently being accepted for terms that will begin in January 2022. Nominations of qualified individuals may come from individuals or organizations. IRSAC members are drawn from substantially diverse backgrounds representing a cross-section of the taxpaying public with substantial, disparate experience in: tax preparation for individuals, small businesses and large, multi-national corporations, tax-exempt and government entities information reporting and taxpayer or consumer perspective. Applications should document the proposed member's qualifications. In particular, the IRSAC is seeking applicants with knowledge and background in some of the following areas: Individual Wage & Investment Knowledge of tax law application/tax preparation experience, income tax issues related to refundable credits, the audit process, and/or how information returns are used and integrated for compliance, Experience educating on tax issues and topics with multi-lingual taxpayer communications and taxpayer advocacy or contact center operations, marketing/applying industry benchmarks to operations with tax software industry and/or with the creation or use of diverse information returns used to report income, deductions, withholding or other information for tax purposes, Familiarity with IRS tax forms and publications and Financial services information technology background with knowledge of technology innovations in public and private customer service sectors. Small Business & Self-Employed Knowledge or experience with virtual currency/cryptocurrency and/or peer to peer payment applications, Knowledge of passthrough entities and/or fiduciary tax and Experience with online or digital businesses, audit representation and/or educating on tax issues and topics Large Business & International International tax expertise, Experience as a certified public accountant or tax attorney working in or for a large, sophisticated organization and Experience working in-house at a major firm dealing with complex organizations. Tax Exempt & Government Entities Experience with exempt organizations and/or employee plans. Information Reporting Service provider, banking industry and/or insurance industry background with experience filing information returns. Applicants must be in good standing regarding their own tax obligations and demonstrate high professional and ethical standards. All applicants must complete and submit an application and pass a tax compliance and practitioner check. For those applicants deemed "Best Qualified," FBI fingerprint checks will also be required. More information, including the application form, is available at Open Season for Membership - Internal Revenue Service Advisory Council. Questions about the application process can be emailed to publicliaison@irs.gov.

https://www.irs.gov/newsroom/irs-announces-2021-supplemental-application-low-income-taxpayer-clinic-grant-recipient

IR-2021-162, July 30, 2021 WASHINGTON — The Internal Revenue Service announced today that West Virginia University (WVU) College of Law has been selected for its 2021 Supplemental Application Low Income Taxpayer Clinic matching grant. The IRS's LITC supplemental application expands coverage to states without a clinic, giving priority to qualified organizations in underrepresented geographic areas. WVU College of Law operates an important tax controversy litigation clinic and will now be available to assist low-income and English as a second language (ESL) taxpayers located within West Virginia, a state that has not had an LITC-funded clinic for two and a half years. WVU was awarded a grant for $100,000 with a period of performance of 18 months from July 1, 2021, to December 31, 2022. The LITC grant will allow the law school to expand the tax clinic and offer more tax assistance to students. LITCs represent low-income taxpayers in federal tax disputes with the IRS and provide taxpayer education and outreach to both low income and ESL taxpayers. They must provide all services for no more than a nominal fee. Through the LITC program, the IRS awards matching grants of up to $100,000 per year to qualifying organizations. The LITC program is a federal matching grant program administered by the Taxpayer Advocate Service, led by National Taxpayer Advocate Erin Collins. Although LITCs receive partial funding from the IRS, LITCs, their employees and volunteers operate independent of the IRS. "The LITC program has been extremely successful and very beneficial to taxpayers," Collins said. "Through outreach and education activities, LITCs strive to ensure individuals understand their rights and responsibilities as U.S. taxpayers by recently conducting more than 1,800 educational activities that were attended by nearly 42,000 people. More than 1,500 volunteers contributed to the success of LITCs by volunteering over 52,500 hours of their time." More information about LITCs, and the work they do to represent, educate, and advocate on behalf of low income and ESL taxpayers, is available in IRS Publication 5066, LITC Program ReportPDF. IRS Publication 4134, Low Income Taxpayer Clinic ListPDF, provides information about LITCs by geographic area, including contact information and details about the languages, in addition to English, in which each LITC offers services. Publication 5066 and Publication 4134 are available at IRS.gov.

https://www.irs.gov/newsroom/irs-businesses-charities-others-with-employer-identification-numbers-must-update-responsible-party-information-within-60-days-of-any-change

YouTube Video Five Things to Know about the Employer Identification Number IR-2021-161, July 30, 2021 WASHINGTON — Calling it a key security issue, the Internal Revenue Service today urged those entities with Employer Identification Numbers (EINs) to update their applications if there has been a change in the responsible party or contact information. IRS regulations require EIN holders to update responsible party information within 60 days of any change by filing Form 8822-B, Change of Address or Responsible Party - Business. It is critical that the IRS have accurate information in cases of identity theft or other fraud issues related to EINs or business accounts. The data around the "responsible parties" for business-type entities is often outdated or incorrect, meaning that the IRS does not have accurate records of who to contact for identity theft issues. This means a time-consuming process to identify the point of contact so the IRS can inquire about a suspicious filing. As a result, the IRS intends to step up its awareness efforts aimed at businesses, partnerships, trusts and estates, charities and other entities that are EIN holders. Starting in August, the IRS will begin sending letters to approximately 100,000 EIN holders where it appears the responsible party is outdated. All EIN applications (mail, fax, electronic) must disclose the name and Taxpayer Identification Number (Social Security number, Individual Taxpayer Identification Number or EIN) of the true principal officer, general partner, grantor, owner or trustor. The IRS defines the responsible party as the individual or entity who "controls, manages, or directs the applicant entity and the disposition of its funds and assets." Unless the applicant is a government entity, the responsible party must be an individual, not an entity. If there is more than one responsible party, the entity may list whichever party the entity wants the IRS to recognize as the responsible party. EINs are to be used strictly for tax administration purposes. Entities with EINs that are no longer in use should close their IRS tax accounts and follow steps outlined at Canceling an EIN - Closing Your Account.

https://www.irs.gov/newsroom/paid-leave-credit-available-for-providing-leave-to-employees-caring-for-individuals-obtaining-or-recovering-from-a-covid-19-immunization

IR-2021-160, July 29, 2021 WASHINGTON — The IRS today updated  frequently asked questions (FAQs)  on the paid sick and family leave tax credits under the American Rescue Plan Act of 2021 (ARP). The updates clarify that eligible employers can claim the credits for providing leave to employees to accompany a family or household member or certain other individuals to obtain immunization relating to COVID-19 or to care for a family or household member or certain other individuals recovering from the immunization. The paid sick and family leave credits reimburse eligible employers for the cost of providing paid sick and family leave for reasons related to COVID-19. The revised FAQs make clear this includes leave taken by employees to care for certain individuals to obtain immunization relating to COVID-19 or to recover from immunization relating to COVID-19. This new reason for paid sick or family leave also applies for the comparable credits for self-employed individuals. The paid sick and family leave tax credits under the ARP are similar to those put in place by the Families First Coronavirus Response Act (FFCRA), as amended and extended by the COVID-related Tax Relief Act of 2020 (Tax Relief Act), under which certain employers could receive tax credits for providing paid sick or family leave that met the requirements of the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act (as added by FFCRA). The tax credits under the FFCRA, as amended and extended by the Tax Relief Act, covered leave taken beginning April 1, 2020, through March 31, 2021. The ARP amends and extends these credits to leave taken beginning April 1, 2021, through September 30, 2021. The FAQs include information on how eligible employers may claim the paid sick and family leave credits, including how to file for and compute the applicable credit amounts, and how to receive advance payments for and refunds of the credits. Under the ARP, eligible employers, including businesses and tax-exempt organizations with fewer than 500 employees and certain governmental employers, may claim tax credits for qualified leave wages and certain other wage-related expenses (such as health plan expenses and certain collectively bargained benefits). Self-employed individuals may claim comparable credits on the Form 1040, U.S. Individual Income Tax Return.

https://www.irs.gov/newsroom/irs-continues-unemployment-compensation-adjustments-prepares-another-1-point-5-million-refunds

IR-2021-159, July 28, 2021 WASHINGTON — The Internal Revenue Service reported today that another 1.5 million taxpayers will receive refunds averaging more than $1,600 as it continues to adjust unemployment compensation from previously filed income tax returns. The American Rescue Plan Act of 2021, which became law in March, excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations. The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000. Refunds by direct deposit will begin July 28 and refunds by paper check will begin July 30. This is the fourth round of refunds related to the unemployment compensation exclusion provision. Since May, the IRS has issued over 8.7 million unemployment compensation refunds totaling over $10 billion. The IRS will continue reviewing and adjusting tax returns in this category this summer. The IRS effort focused on minimizing burden on taxpayers so that most people won't have to take any additional action to receive the refund. The IRS review means most taxpayers affected by this change will not have to file an amended return because IRS employees have reviewed and adjusted their tax returns for them. For taxpayers who overpaid, the IRS will either refund the overpayment or apply it to other outstanding taxes or other federal or state debts owed. For this round, the IRS identified approximately 1.7 million taxpayers due an adjustment. Of that number, approximately 1.5 million taxpayers are expected to receive a refund. The refund average is $1,686. The IRS started with the simplest tax returns and is now reviewing more complex returns. The average refund amount is higher for this round because the IRS included an adjustment to the Advance Premium Tax Credit (APTC). Most taxpayers need not take any action and there is no need to call the IRS. However, if, because of the excluded unemployment compensation, taxpayers are now eligible for deductions or credits not claimed on the original return, they should file a Form 1040-X, Amended U.S. Individual Income Tax Return. Taxpayers should file an amended return if they: did not submit a Schedule 8812 with the original return to claim the Additional Child Tax Credit and are now eligible for the credit after the unemployment compensation exclusion; did not submit a Schedule EIC with the original return to claim the Earned Income Tax Credit (with qualifying dependents) and are now eligible for the credit after the unemployment compensation exclusion; are now eligible for any other credits and/or deductions not mentioned below. Make sure to include any required forms or schedules. Taxpayers do not need to file an amended return if they: already filed a tax return and did not claim the unemployment exclusion; the IRS will determine the correct taxable amount of unemployment compensation and tax; have an adjustment, because of the exclusion, that will result in an increase in any non-refundable or refundable credits reported on the original return; did not claim the following credits on their tax return but are now eligible when the unemployment exclusion is applied: Recovery Rebate Credit, Earned Income Credit with no qualifying dependents or the Advance Premium Tax Credit. The IRS will calculate the credit and include it in any overpayment; filed a married filing joint return, live in a community property state, and entered a smaller exclusion amount than entitled on Schedule 1, line 8. Taxpayers will generally receive letters from the IRS within 30 days of the adjustment, informing them of what kind of adjustment was made (such as refund, payment of IRS debt payment or payment offset for other authorized debts) and the amount of the adjustment.

https://www.irs.gov/newsroom/security-summit-tax-pros-should-encourage-clients-to-obtain-ip-pins-to-protect-against-tax-related-identity-theft

IR-2021-158, July 27, 2021 WASHINGTON — Internal Revenue Service Security Summit partners today called on tax professionals to increase efforts to inform clients about the Identity Protection PIN Opt-In Program that can protect against tax-related identity theft. The IRS, state tax agencies and the nation's tax industry – working together as the Security Summit  – need assistance from tax professionals to spread the word to clients that the IP PIN is now available to anyone who can verify their identity. Sharing information about the IP PIN Opt-In Program is the second in a five-part weekly series sponsored by the Summit partners to highlight critical steps tax professionals can take to protect client data. This year's theme "Boost Security Immunity: Fight Against Identity Theft" is an effort to urge tax professionals to intensify efforts to secure their systems and protect client data during this pandemic and its aftermath. "An Identity Protection PIN prevents someone else from filing a tax return using your Social Security number," said Chuck Rettig, IRS commissioner. "We've now made the IP PIN available to anyone who can verify their identity. This is a free way for taxpayers to protect themselves, but we need the help of tax professionals to make sure more people know about it." The IRS created  Publication 5367 (EN-SP), IP PIN Opt-In Program for Taxpayers,PDF  in English and Spanish, so that tax professionals could print and share the IP PIN information with clients. There are also special posters available in EnglishPDF and SpanishPDF. For security reasons, tax professionals cannot obtain an IP PIN on behalf of clients. Taxpayers must obtain their own IP PIN. Summit partners urged taxpayers and tax professionals to protect the IP PIN from identity thieves. Taxpayers should share their IP PIN only with their trusted tax prep provider. Tax professionals should never store clients' IP PINs on computer systems. Also, the IRS will never call, email or text either taxpayers or tax preparers to request the IP PIN. Tax professionals who experience a data theft can assist clients by urging them to quickly obtain an IP PIN. Even if a thief already has filed a fraudulent return, an IP PIN would still offer protections for later years and prevent taxpayers from being repeat victims of tax-related identity theft. Here are a few things taxpayers should know about the IP PIN: It's a six-digit number known only to the taxpayer and the IRS. The opt-in program is voluntary. The IP PIN should be entered onto the electronic tax return when prompted by the software product or onto a paper return next to the signature line. The IP PIN is valid for one calendar year; taxpayers must obtain a new IP PIN each year. Only dependents who can verify their identities may obtain an IP PIN. IP PIN users should never share their number with anyone but the IRS and their trusted tax preparation provider. The IRS will never call, email or text a request for the IP PIN. Currently, taxpayers may obtain an IP PIN for 2021, which should be used when filing any federal tax returns during the year. New IP PINs will be available starting in January 2022. To obtain an IP PIN, the best option is the Get an IP PIN, the IRS online tool. Taxpayers must validate their identities through Secure Access authentication to access the tool and their IP PIN. Before attempting this rigorous process, see Secure Access: How to Register for Certain Online Self-Help Tools. The tool is offline between November and January. If you are unable to validate your identity online and if your income is $72,000 or less, you may file Form 15227, Application for an Identity Protection Personal Identification NumberPDF. The IRS will call the telephone number provided on Form 15227 to validate your identity. However, for security reasons, the IRS will assign an IP PIN for the next filing season. The IP PIN cannot be used for the current filing season. Taxpayers who cannot validate their identities online, or on the phone with an IRS employee after submitting a Form 15227, or who are ineligible to file a Form 15227 may call the IRS to make an appointment at a Taxpayer Assistance Center. They will need to bring one picture identification document and another identification document to prove their identity. Once verified, the taxpayer will receive an IP PIN via U.S. Postal Service within three weeks. The IP PIN process for confirmed victims of identity theft remains unchanged. These victims will automatically receive an IP PIN each year. Additional resources Tax professionals also can get help with security recommendations by reviewing the recently revised IRS Publication 4557, Safeguarding Taxpayer DataPDF, and Small Business Information Security: The FundamentalsPDF by the National Institute of Standards and Technology. The IRS Identity Theft Central pages for tax pros, individuals and businesses have important details as well. Publication 5293, Data Security Resource Guide for Tax ProfessionalsPDF, provides a compilation of data theft information available on IRS.gov. Also, tax professionals should stay connected to the IRS through subscriptions to e-News for Tax Professionals and Social Media. For more information, see Boost Security Immunity: Fight Against Identity Theft.

https://www.irs.gov/newsroom/more-than-2-point-2-million-additional-economic-impact-payments-disbursed-under-the-american-rescue-plan

IR-2021-157, July 21, 2021 WASHINGTON — The Internal Revenue Service, U.S. Department of the Treasury, and the Bureau of the Fiscal Service announced today they have disbursed more than 2.2 million additional Economic Impact Payments under the American Rescue Plan. Today's announcement covering the most recent six weeks of the effort brings the total disbursed so far under the American Rescue Plan to more than 171 million payments. They represent a total value of more than $400 billion since these payments began rolling out to Americans in batches on March 12. Here is additional information on the last six weeks of payments, which includes those with official payment dates through July 21: In total, this includes about 2.2 million payments with a value of more than $4 billion. About 1.3 million payments, with a value of approximately $2.6 billion, went to eligible individuals for whom the IRS previously did not have information to issue an Economic Impact Payment but who recently filed a tax return.  This also includes additional ongoing supplemental payments for people who earlier this year received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns. In the last six weeks, there were more than 900,000 of these "plus-up" payments, with a value of more than $1.6 billion. In all, the IRS has made more than 9 million of these supplemental payments this year worth approximately $18.5 billion. The IRS will continue to disburse Economic Impact Payments on a weekly basis. Ongoing payments will be sent to eligible individuals for whom the IRS previously did not have information to issue a payment but who recently filed a tax return, as well to people who qualify for "plus-up" payments. Special reminder for those who don't normally file a tax return Although payments are automatic for most people, the IRS continues to urge people who don't normally file a tax return and haven't received Economic Impact Payments to file a 2020 tax return to get all the benefits they're entitled to under the law, including tax credits such as the 2020 Recovery Rebate Credit, the Child Tax Credit, and the Earned Income Tax Credit. Filing a 2020 tax return will also assist the IRS in determining whether someone is eligible for monthly advance payments of the 2021 Child Tax Credit, which began earlier this month. For example, some federal benefits recipients may need to file a 2020 tax return – even if they don't usually file – to provide information the IRS needs to send payments for a qualifying dependent. Eligible individuals in this group should file a 2020 tax return as quickly as possible to be considered for an additional payment for their qualifying dependents. People who don't normally have an obligation to file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness, the rural poor, and other historically under-served groups. Individuals who didn't get a first or second round Economic Impact Payment or got less than the full amounts may be eligible for the 2020 Recovery Rebate Credit, but they'll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. The IRS has provided an online Non-Filer tool to allow individuals who weren't required to file (and have not filed) a tax return for 2020 to file a simplified tax return. This simplified tax return allows eligible individuals to register for advance Child Tax Credit payments and the third Economic Impact Payment, as well as claim the 2020 Recovery Rebate Credit. Free tax return preparation is also available for qualifying people. The IRS reminds taxpayers that the income levels in this third round of Economic Impact Payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly). The payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment. Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.

https://www.irs.gov/newsroom/irs-holds-additional-weekend-events-july-23-24-to-help-people-with-child-tax-credit-payments-and-economic-impact-payments

Friday, Saturday events in several cities support eligible families IR-2021-156, July 21, 2021 WASHINGTON — The Internal Revenue Service and partners in non-profit organizations, churches, community groups and others will host additional events in several cities this weekend to help eligible families register for the monthly Advance Child Tax Credit (AdvCTC) payments. The special events on July 23-24, 2021, will be hosted by IRS and partner groups to help people file income tax returns and register for the advance payments. Events will be held in Birmingham, Alabama; Bronx, New York; Charlotte, North Carolina; Chicago, Illinois; Cleveland, Ohio; Dallas, Texas; Indianapolis, Indiana; Memphis, Tennessee; Minneapolis/St. Paul, Minnesota; Newark, New Jersey; New Haven, Connecticut; Oklahoma City, Oklahoma; Paterson, New Jersey; Riverside, California; Seattle, Washington; and Tampa, Florida. With the help of a new Non-filer Sign-up Tool on the IRS website, volunteers and IRS employees will assist eligible individuals and families get these important tax credits and benefits. This tool, an update of last year's IRS Non-Filers tool, is also designed to help individuals register for the $1,400 third round of Economic Impact Payments (also known as stimulus checks) and claim the Recovery Rebate Credit for any amount of the first two rounds of Economic Impact Payments they may have missed. Individuals do not need to have children to attend these events and sign up for Economic Impact Payments. This is part of a larger effort underway at the IRS to reach people eligible for the payments and other credits. The IRS also continues working with partner groups across the country, both inside and outside of the tax community, to share information and raise awareness. These activities and events are in addition to this special weekend of activities. This is part of a wider effort to raise awareness of the expanded Child Tax Credit. The IRS also encourages its partners to use available online tools and toolkits to help non-filers, low-income families and other underserved groups sign up to receive the AdvCTC. People can check their eligibility for the advance payments by using the new Advance Child Tax Credit Eligibility Assistant. For this weekend's events, people are encouraged to have the following information when they come to one of these events: (1) Social Security numbers for their children, (2) Social Security numbers or Tax Identification Numbers for themselves and their spouse, (3) a reliable mailing address, (4) an e-mail address, and (5) their bank account information if they want to receive their payment by direct deposit. Some tax credits, such as the Child Tax Credit (CTC), are "refundable," meaning that even if taxpayers don't owe income tax, the IRS will issue them a refund if they're eligible; but they must file a tax return or register with the new Non-filer Sign-up Tool to receive it. Some people who haven't filed a 2020 tax return yet are also eligible for the $1,400 per person Economic Impact Payments and the Recovery Rebate Credit. The first monthly payments of the expanded and newly-advanceable CTC from the American Rescue Plan were made on July 15, and will be sent monthly through Dec 15. Most families began receiving monthly payments without any additional action. Eligible families will receive a payment of up to $300 per month for each child under age 6, and up to $250 per month for each child ages 6 to 17. People who need to file a 2020 federal income tax return, but are unable to attend one of these events, may be able to prepare and file their own federal income tax online using IRS Free File if their income is $72,000 or less. People who don't need to file a 2020 federal tax return can also use the Non-filer Sign-up Tool to register to receive the advance CTC payments, the third round of the Economic Impact Payment and the Recovery Rebate Credit. The IRS encourages people to request payments via direct deposit, which is faster and more secure than other payment methods. People who don't have a bank account should visit the Federal Deposit Insurance Corporation website for details on opening an account online. They can also use the FDIC's BankFind tool to locate an FDIC-insured bank. Finally, BankOn, American Bankers Association, Independent Community Bankers of America and National Credit Union Administration have lists of banks and credit unions that can open an account online. Veterans can see the Veterans Benefits Banking Program for financial services at participating banks. About the advance Child Tax Credit The expanded and newly-advanceable Child Tax Credit was authorized by the American Rescue Plan Act, enacted in March. Normally, the IRS will calculate the payment based on a family's 2020 tax return, including those who use the Non-filer Sign-up Tool. If that return is not available because it has not yet been filed or is still being processed, the IRS will instead determine the initial payment amounts using the 2019 return or the information entered using the Non-filers tool that was available in 2020. To make sure families have easy access to their money, the IRS is issuing these payments by direct deposit, as long as correct banking information has previously been provided to the IRS. Otherwise, people should watch their mail for their mailed payment. To learn more about advance CTC payments, visit IRS.gov/childtaxcredit2021 or see FAQs on the 2021 Child Tax Credit and Advance Child Tax Credit Payments.

https://www.irs.gov/newsroom/security-summit-partners-urge-tax-pros-to-use-multi-factor-authentication-critical-step-to-boost-protection-against-data-theft

IR-2021-155, July 20, 2021 WASHINGTON — With security incidents on the rise, the Internal Revenue Service, state tax agencies and the tax industry urged tax professionals and taxpayers to use a special feature – multi-factor authentication – available on tax software products to help protect against identity and data theft. The Security Summit partners today kicked off the annual 2021 "Protect Your Clients; Protect Yourself" summer campaign aimed at tax professionals. This year's theme is "Boost Security Immunity: Fighting Against Identity Theft" to urge tax professionals to step up their efforts to protect client data amid the pandemic and its aftermath. Multi-factor authentication, also known as two-factor authentication, provides more security. It allows the tax professional or taxpayer to use another feature such as a security code sent to a mobile device, a pin number or a fingerprint in addition to the username and password. A thief may steal usernames and passwords but cannot access accounts without the additional multifactor feature. "The Security Summit has made great strides to protect the tax community, but we need the help of everyone in the tax professional community," said IRS Commissioner Chuck Rettig. "Using the multi-factor authentication feature available on tax preparation products is one of the easiest and cheapest security measures any tax pro can take. It's offered for free by the tax software providers. As people continue to get vaccines, we urge tax professionals as well as taxpayers to boost their security immunity and help in the battle against identity theft." This marks the sixth year of the tax professional campaign, part of a wider effort by the Security Summit coalition of the IRS, state tax agencies and the nation's tax community to strengthen protections against identity and data theft threatening the tax system. This is the first in a series of weekly news releases running through August 17. Through June 30, 2021, there have been 222 data theft reports this year from tax professionals to the IRS, outpacing the rate of 211 in 2020 and 124 in 2019. Each individual report may involve hundreds to thousands of taxpayers. Client information stolen from tax professionals' offices is used to create fraudulent tax returns that are difficult to detect because the identity thief is using real financial data. Based on reports to the IRS in 2020, many tax professionals whose client data was stolen failed to use multifactor authentication, and the feature could have prevented some of the thefts. Tax professionals also should use multi-factor authentication features anywhere it is offered, such as commercial email products and cloud storage providers. Multi-factor authentication is just one of several security steps tax professionals – and taxpayers – should use to protect sensitive data. Other steps include: Use anti-virus software and set it for automatic updates. Anti-virus software scans existing files and drives on computers - and mobile phones – to protect from malware. Use a firewall to shield digital devices from external attacks. Use backup software/services to protect data. Making a copy of files can be crucial, especially if the user becomes a victim of a ransomware attack.  Use drive encryption to secure computer locations where sensitive files are stored. Encryption makes data on the files unreadable to unauthorized users. Create and secure Virtual Private Networks. A VPN provides a secure, encrypted tunnel to transmit data between a remote user via the Internet and the company network. Search for "Best VPNs" to find a legitimate vendor; major technology sites often provide lists of top services. The IRS also reminds tax professionals that federal law, enforced by the Federal Trade Commission, requires all professional tax preparers to create and implement a data security plan. The IRS also recommends tax professionals create a data theft response plan, which includes  contacting the IRS Stakeholder Liaisons  to report a theft. Additional resources Tax professionals also can get help with security recommendations by reviewing IRS Publication 4557, Safeguarding Taxpayer DataPDF, and Small Business Information Security: The FundamentalsPDF by the National Institute of Standards and Technology. The IRS Identity Theft Central pages for tax pros, individuals and businesses have important details as well. Publication 5293, Data Security Resource Guide for Tax ProfessionalsPDF, provides a compilation of data theft information available on IRS.gov. Also, tax professionals should stay connected to the IRS through subscriptions to e-News for Tax Professionals and Social Media. For more information, see Boost Security Immunity: Fight Against Identity Theft.

https://www.irs.gov/newsroom/irs-improves-services-to-taxpayers-with-digital-authorizations-and-launch-of-new-tax-pro-account

IR-2021-154, July 19, 2021 WASHINGTON — The Internal Revenue Service today launched a new feature that will give taxpayers digital control over who can represent them or view their tax records, a groundbreaking step in the agency's expansion of electronic options for taxpayers and tax professionals. The new feature, one of many recent enhancements to the Online Account for individuals, will allow individual taxpayers to authorize their tax practitioner to represent them before the IRS with a Power of Attorney (POA) and to view their tax accounts with a Tax Information Authorizations (TIA). "The ability for taxpayers to connect online with their tax professional is a groundbreaking step for the IRS," said Chuck Rettig, IRS Commissioner. "This is the first, basic step toward a more fully integrated digital tax system that will benefit taxpayers, tax professionals and the IRS." As of today, tax professionals may go to the new Tax Pro Account on IRS.gov to digitally initiate POAs and TIAs. These digital authorization requests are simpler versions of Forms 2848 and 8821. Once completed and submitted by the tax professional, the authorization requests will appear in the taxpayers' Online Account for their review, approval or rejection and electronic signature. Because the taxpayers' identities already are verified at the time of login, they simply check a box as their signature and submit the authorization request to the IRS. A key benefit is the completed digital authorization, if accurate, will go directly to the Centralized Authorization File (CAF) database and will not require manual processing. Most requests will be immediately recorded and appear on the list of approved authorizations in the taxpayer's Online Account and the tax professional's Tax Pro Account. Some authorizations may take up to 48 hours. Tax professionals may then go to e-Services Transcript Delivery Service to see the taxpayer's records. This new digital authorization option will be a much faster process. It will allow the IRS to reduce its current CAF inventory and to focus on authorization requests received through fax, mail or the Submit Forms 2848 and 8821 Online – all of which require IRS personnel to handle. To connect with their tax professionals, taxpayers either login to their Online Account using their IRS username and password or they must create an account after passing a one-time identity verification process. Taxpayers who cannot validate their identities cannot use this option, and their tax professional must use the fax, mail or online submission process. However, the IRS will be announcing a new process for this application later this year. Tax professionals should use their IRS usernames and passwords to access the Tax Pro Account or create an account after verifying their identities. This initial launch of the Tax Pro Account represents the first release of the tool. Over time, additional functionality will be added for taxpayers and tax professionals that will increase the options for electronic interactions. Currently, the digital authorization process is available only to individual taxpayers, not businesses or other entities. Also, tax professionals must be in good standing with the IRS and already have a CAF number prior to making requests through Tax Pro Account. To initiate the authorizations, tax professionals must enter their personal information and their clients' personal information exactly as it appears on IRS tax records. Also, the feature is available only to those with addresses in the United States. Tax Pro Account is a separate tool from e-Services. To help tax professionals educate their clients about this new process, the IRS has created two e-Posters that practitioners may share. These are: Publication 5533, Why You Should Create an IRS Online AccountPDF Publication 5533-A, How to Submit Authorizations Using Tax Pro Account and Online AccountPDF There are additional features available to individual taxpayers from their Online Account. Taxpayers can view: The amount they owe, updated for the current calendar day Their balance details by year Their payment history and any scheduled or pending payments Key information from their most recent tax return Payment plan details Digital copies of select notices from the IRS Their Economic Impact Payments, if any Their address on file Taxpayers can also: Make a payment online See payment plan options and request a plan via Online Payment Agreement Access their tax records via Get Transcript

https://www.irs.gov/newsroom/irs-monthly-child-tax-credit-payments-begin

IR-2021-153, July 15, 2021 WASHINGTON — The Internal Revenue Service and the Treasury Department announced today that millions of American families have started receiving monthly Child Tax Credit payments as direct deposits begin posting in bank accounts and checks arrive in mailboxes. This first batch of advance monthly payments worth roughly $15 billion reached about 35 million families today across the country. About 86% were sent by direct deposit. The payments will continue each month. The IRS urged people who normally aren't required to file a tax return to explore the tools available on IRS.gov. These tools can help determine eligibility for the advance Child Tax Credit or help people file a simplified tax return to sign up for these payments as well as Economic Impact Payments, and other credits you may be eligible to receive. Under the American Rescue Plan, each payment is up to $300 per month for each child under age 6 and up to $250 per month for each child ages 6 through 17. Normally, anyone who receives a payment this month will also receive a payment each month for the rest of 2021 unless they unenroll. Besides the July 15 payment, payment dates are: Aug. 13, Sept. 15, Oct. 15, Nov. 15 and Dec. 15. Here are further details on these payments: Families will see the direct deposit payments in their accounts starting today, July 15. For those receiving payment by paper check, they should remember to take into consideration the time it takes to receive it by mail. Payments went to eligible families who filed 2019 or 2020 income tax returns. Tax returns processed by June 28 are reflected in these payments. This includes people who don't typically file a return, but during 2020 successfully registered for Economic Impact Payments using the IRS Non-Filers tool or in 2021 successfully used the Non-filer Sign-up Tool for Advance CTC, also on IRS.gov. Payments are automatic. Aside from filing a tax return, including a simplified return from the Non-Filer Sign-Up tool, families don't have to do anything if they are eligible to receive monthly payments. Additional information is available on a special Advance Child Tax Credit 2021 page, designed to provide the most up-to-date information about the credit and the advance payments.

https://www.irs.gov/newsroom/irs-security-summit-announces-summer-campaign-to-raise-awareness-among-tax-pros-about-identity-theft-urges-practitioners-to-boost-security-immunity

IR-2021-152, July 14, 2021 WASHINGTON — Continuing an effort to battle tax-related identity theft, the IRS, state tax agencies and the tax industry announced today that the annual campaign to raise awareness among tax professionals about data security will begin next week. The 2021 campaign begins as the number of data thefts reported by tax professionals to the IRS continued to climb. Through June 30, 2021, there have been 222 data theft reports this year from tax professionals to the IRS, outpacing the rate of 211 in 2020 and 124 in 2019. Each report can impact hundreds of taxpayers and threaten the tax professional's business. "Boost Security Immunity: Fighting Against Identity Theft" will urge tax professionals to take basic actions to stem the data theft from their offices. This is the sixth year that the Security Summit partners – the IRS, state tax agencies and the nation's tax community – have worked to raise awareness about these issues. "The Security Summit continues to work cooperatively to battle tax-related identity theft, but we need the help of tax professionals in this effort," said IRS Commissioner Chuck Rettig. "We continue to see instances where tax professionals did not take simple steps that could have protected their clients and their business. Tax professionals must take a shot at basic security steps to protect against relentless efforts by identity thieves to steal data and tax information." Identity thieves and fraudsters were especially active last year and this year as they used the COVID-19 pandemic, the nationwide teleworking practices and the economic downturn as fuel for a variety of scams and schemes to steal money and identities. Tax professionals are key targets of criminal syndicates that are tech-savvy, tax-savvy and well-funded. These scammers either trick or hack their way into tax professionals' computer systems to access client data. They use stolen data to file fraudulent tax returns that make it more difficult for the IRS and the states to detect because the fraudulent returns use real financial information. The Security Summit formed in 2015 to take its own shot at fighting against identity theft. The Summit partners made great inroads against tax-related identity theft, dramatically reducing confirmed identity theft returns and saving billions in tax dollars. During the next five weeks, the Security Summit partners will highlight a series of simple actions that tax professionals can take to better protect client data from theft and help ensure that the progress in tax-related identity theft that started in 2015 continues on its path. Highlighted recommendations will be to: Use multi-factor authentication to protect tax preparation software accounts. All tax software providers now offer multi-factor authentication options, which require more than just a username and password to access accounts. This feature is offered on tax preparation products for both tax professionals and taxpayers. This is a key step to securing sensitive financial data. Multi-factor authentication is in addition to traditional actions such as using anti-virus software, strong password phrases and virtual private networks to protect connections between telework locations and offices – all critical steps for tax pros Sign up clients for Identity Protection PINs. The IRS now offers IP PINs to all taxpayers who can verify their identities online, on the phone with an IRS employee after filing a Form 15227 or in person. The IP PIN is a six-digit number that is known only to the taxpayer and the IRS. It helps prevent an identity thief from filing a fraudulent return in the taxpayer's name. Tax professionals cannot obtain an IP PIN for their clients. Clients must verify their identities to the IRS. The easiest way is at the Get an IP PIN tool on IRS.gov. Help clients fight unemployment compensation fraud. One of the larger scams of 2020 involved identity thieves using stolen identities to file for unemployment compensation benefits with the states during the pandemic-induced economic downturn. States issue Forms 1099-G to taxpayers and the IRS to report taxable unemployment income. For 2020, some taxpayers received multiple Forms 1099-G from states as thieves used their names to steal benefits. Avoid spear phishing scams. One of the most successful tactics used by identity thieves against tax professionals is the spear phishing scam. Thieves take time to craft personalized emails to entice tax professionals to open a link embedded in the email or open an attachment. For 2020, tax pros were especially vulnerable to spear phishing scams from thieves posing as potential clients. Thieves might carry on an email conversation with their target for several days before sending the email containing a link or attachment. The link or attachment may secretly download software onto the tax pros' computers that will give thieves remote access to the tax professionals' systems. Know the signs of identity theft. Many tax professionals who report data thefts to the IRS also say that they were unaware of the signs that a theft had occurred. There are many signs that tax pros should be aware. These include multiple clients suddenly receiving IRS letters requesting confirmation that they filed a tax return deemed suspicious. Tax professionals may see e-file acknowledgements for far more tax returns than they filed. Computer cursors may move seemingly on their own. More information on these tips will be available every Tuesday over the next five weeks. This summer series also coincides with the annual IRS Nationwide Tax Forums, which are being held virtually this summer over a five-week period beginning July 20. The 2021 Forums feature three webinars focused on cyber- and information security that will be live streamed as follows: "Cybersecurity for Tax Professionals – Advanced Session," presented by the American Coalition for Taxpayer Rights, July 28 at 2 p.m. ET. "Helping You and Your Clients Steer Clear of Fraud and Scams," presented by the Treasury Inspector General for Tax Administration, Aug. 4 at 11 a.m. ET. "IRS Criminal Investigation: Deeper Dive into Emerging Cyber Crimes and Crypto Tax Compliance," Aug. 5 at 11 a.m. ET. For more information and to register visit IRS Nationwide Tax Forum.

https://www.irs.gov/newsroom/irs-readies-nearly-4-million-refunds-for-unemployment-compensation-overpayments

IR-2021-151, July 13, 2021 WASHINGTON — The Internal Revenue Service announced today it will issue another round of refunds this week to nearly 4 million taxpayers who overpaid their taxes on unemployment compensation received last year. The American Rescue Plan Act of 2021, which became law in March, excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations. The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000. Refunds by direct deposit will begin July 14 and refunds by paper check will begin July 16. The IRS previously issued refunds related to unemployment compensation exclusion in May and June, and it will continue to issue refunds throughout the summer. To ease the burden on taxpayers, the IRS has been reviewing the Forms 1040 and 1040SR that were filed prior to the law's enactment to identify those people who are due an adjustment. For taxpayers who overpaid, the IRS will either refund the overpayment, apply it to other outstanding taxes or other federal or state debts owed. For this round, the IRS identified approximately 4.6 million taxpayers who may be due an adjustment. Of that number, approximately 4 million taxpayers are expected to receive a refund. The refund average is $1,265, which means some will receive more and some will receive less. Most taxpayers need not take any action and there is no need to call the IRS. However, if, as a result of the excluded unemployment compensation, taxpayers are now eligible for deductions or credits not claimed on the original return, they should file a Form 1040-X, Amended U.S. Individual Income Tax Return. Taxpayers should file an amended return if they: did not submit a Schedule 8812 with the original return to claim the Additional Child Tax Credit and are now eligible for the credit after the unemployment compensation exclusion; did not submit a Schedule EIC with the original return to claim the Earned Income Tax Credit (with qualifying dependents) and are now eligible for the credit after the unemployment compensation exclusion; are now eligible for any other credits and/or deductions not mentioned below. Make sure to include any required forms or schedules. Taxpayers do not need to file an amended return if they: already filed a tax return and did not claim the unemployment exclusion; the IRS will determine the correct taxable amount of unemployment compensation and tax; have an adjustment, because of the exclusion, that will result in an increase in any non-refundable or refundable credits reported on the original return; did not claim the following credits on their tax return but are now eligible when the unemployment exclusion is applied: Recovery Rebate Credit, Earned Income Credit with no qualifying dependents or the Advance Premium Tax Credit. The IRS will calculate the credit and include it in any overpayment; filed a married filing joint return, live in a community property state, and entered a smaller exclusion amount than entitled on Schedule 1, line 8. Taxpayers will generally receive letters from the IRS within 30 days of the adjustment, informing them of what kind of adjustment was made (such as refund, payment of IRS debt payment or payment offset for other authorized debts) and the amount of the adjustment.

https://www.irs.gov/newsroom/irs-online-child-tax-credit-eligibility-tool-now-available-in-spanish-other-multilingual-materials-help-families-see-if-they-qualify-for-advance-payments

IR-2021-150, July 12, 2021 WASHINGTON — The Internal Revenue Service has launched a new Spanish-language version of its online tool, Child Tax Credit Eligibility Assistant, designed to help families determine whether they qualify for the Child Tax Credit and the special monthly advance payments of the credit, due to begin on July 15. Available exclusively on IRS.gov, the new Spanish version of the tool, like its English-language counterpart, is interactive and easy to use. By answering a series of questions about themselves and their family members, a parent or other family member can quickly determine whether they qualify for the credit. Though anyone can use this tool, it may be particularly useful to families who don't normally file a federal tax return and have not yet filed either a 2019 or 2020 return. Often, these are people who receive little or no income, including those experiencing homelessness, low income households, and other underserved groups. Using this tool can help them decide whether they should take the next step and either register for the Child Tax Credit payments using another IRS tool, the Non-filer Sign-up Tool, or file a regular tax return using the IRS Free File system. To help people understand and receive this benefit, the IRS has developed materials in several languages and additional multi-lingual resources will roll out in coming weeks and months. All tools and materials, in English and other languages, are posted on a special Advance Child Tax Credit 2021 page at IRS.gov/childtaxcredit2021. Multilingual resources already available include: A step-by-step guide to using the Non-filer Sign-up Tool (Publication 5538) in Spanish, Chinese Simplified, Korean, Vietnamese, Haitian Creole and Russian.  A basic You Tube video on the Advance Child Tax Credit in Spanish and Chinese, as well as English. E-posters in various languages. Information about Free File in seven languages. Besides the Child Tax Credit, the IRS has a variety of tax-related tools and resources available in various languages.  Community partners can help The IRS urges community groups, especially those who serve non-English speakers, to help share this critical information about the Advance Child Tax Credit as well as other important benefits. This includes nonprofits, associations, education organizations and anyone else with connections to people with children. Among other things, The IRS is providing these groups with information that can be easily shared through social media, email and other methods. Watch out for scams The IRS urges everyone, especially those who speak languages other than English, to be on the lookout for scams related to both Advance Child Tax Credit payments and Economic Impact Payments. In particular, scammers often target non-English speakers and underserved communities. The IRS emphasized that the only way to get either of these benefits is by either filing a tax return with the IRS or registering online through the Non-filer Sign-up Tool, exclusively on IRS.gov. Any other option is a scam. Watch out for scams using email, phone calls or texts related to the payments. Remember, the IRS never sends unsolicited electronic communications asking anyone to open attachments or visit a non-governmental web site. More about the Child Tax Credit Eligibility Assistant The Child Tax Credit Eligibility Assistant does not request any personally-identifiable information (PII) for any family member. For that reason, its results are not an official determination by the IRS. Though the results are reliable, if the questions are answered accurately, they should be considered preliminary. Neither the answers supplied by the user, nor the results, are retained by the IRS. Non-filer Sign-Up Tool If the Child Tax Credit Eligibility Assistant indicates that a family qualifies for the credit, the next step is to either register with the IRS or file a return. For families who don't normally need to file a return, The online Non-filer Sign-Up Tool is the easiest way to register for the advance payments. This tool, an update of last year's IRS Economic Impact Payment Non-filers tool, is also designed to help eligible individuals who don't normally file tax returns register for the $1,400 third round of Economic Impact Payments (also known as stimulus checks). In addition, it can help them claim the Recovery Rebate Credit for any amount of the first two rounds of Economic Impact Payments they may have missed. Developed in partnership with Intuit and delivered through the Free File Alliance, the tool enables them to provide the IRS with basic information, such as their name, address, and social security numbers, as well as information about their qualifying children age 17 and under and their other dependents. It also enables them to provide their bank account information, so the IRS can quickly and easily deposit the payments directly into their checking or savings account. The Non-filer Sign-Up tool should not be used by anyone who has already filed a 2019 or 2020 federal income tax return, or plans to do so. Free File; a better option for some Though the Non-filer Sign-up Tool is the easiest way to register for Advance Child Tax Credit payments, it may not be the best option for all families. That's because many families also qualify for the Earned Income Tax Credit and other benefits for low-and moderate-income people. For them, a better option is filing a regular tax return using the Free File system, available only on IRS.gov. About the Advance Child Tax Credit The expanded and newly-advanceable Child Tax Credit was authorized by the American Rescue Plan Act, enacted in March. Normally, the IRS will calculate the payment based on a family's 2020 tax return, including those who use the Non-filer Sign-up Tool. If that return is not available because it has not yet been filed or is still being processed, the IRS will instead determine the initial payment amounts using the 2019 return or the information entered using the Non-filers tool that was available in 2020. The payment will be up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 through 17. To make sure families have easy access to their money, the IRS will issue these payments by direct deposit, as long as correct banking information has previously been provided to the IRS. Otherwise, people should watch their mail around July 15 for their mailed payment. The dates for the Advance Child Tax Credit payments are July 15, Aug. 13, Sept. 15, Oct. 15, Nov. 15, and Dec. 15. For more information, visit IRS.gov/childtaxcredit2021, or read FAQs on the 2021 Child Tax Credit and Advance Child Tax Credit Payments.

https://www.irs.gov/newsroom/irs-nationwide-tax-forum-kicks-off-july-20

July 13 is the last day to register to attend keynote address by IRS Commissioner Chuck Rettig IRS YouTube Videos: 2021 IRS Nationwide Tax Forum (obsolete) IR-2021-149, July 9, 2021 WASHINGTON — This Tuesday, July 13, is the last day for tax professionals to register to attend the 2021 IRS Virtual Nationwide Tax Forum and have access to all 30 webinars, including IRS Commissioner Chuck Rettig's keynote address on the first day of the forum. The 2021 Tax Forum is being held over a five-week period from July 20 through August 19. Webinars will be live-streamed on Tuesday, Wednesday and Thursday each week. To guarantee access to a webinar, registration must be completed a minimum of seven days in advance. Participants who register after July 13 will not have access to the full lineup of webinars. Webinars are scheduled for 11 a.m. and 2 p.m. EDT each Tuesday, Wednesday and Thursday. Participants are encouraged to view the Forum schedule and course descriptions to plan their experience. Tax Forum Virtual Expo Included with the registration, attendees may also visit the Forum's Virtual Expo with dozens of exhibitors representing tax and business services, IRS national association partners and several key IRS offices and initiatives in the "IRS Zone." Hours for the live Expo are noon - 2 p.m. and 3 p.m. - 5 p.m. EDT every Tuesday, Wednesday, and Thursday. However, registrants will have access to the Expo 24 hours per day from July 20 through August 20. Focus groups As a special feature of the 2021 Forum, the IRS invites attendees to participate in one or more virtual focus groups. Focus groups are arranged around the following topics: Improving the Taxpayer Experience Designing a Business Taxpayers Online Account & Envisioning a Form 1099 Filing Platform Changes in Partnership Environment & Where's Form 944? Improving the Offer in Compromise (OIC) Experience & Gig Economy Worker Tax Compliance Passport Program & Virtual Currency Tax Compliance Interest Abatement Feedback & Civil Penalties and Reasonable Cause Relief Due Diligence Documentation Requirements for EITC, CTC, AOTC, and HOH Correspondence and Form Improvement Multilingual Resources Continuing education Attendance at any of the 2021 Nationwide Tax Forum webinars qualifies as continuing education (CE) for enrolled agents, certified public accountants, Annual Filing Season Program participants, California Tax Education Council (CTEC) participants and Certified Financial Planners (CFP). Note: With two seminars this year presented in both English and Spanish, participants can earn up to 28 continuing education credits. Visit the CE and CFP Certification page for more information. Registration information For more information and to register online, visit the IRS Nationwide Tax Forum website.

https://www.irs.gov/newsroom/irs-provides-guidance-for-multiemployer-retirement-plans-receiving-assistance-from-the-pbgc

IR-2021-148, July 9, 2021 WASHINGTON — The Internal Revenue Service today provided guidance for multiemployer qualified retirement plans that receive special financial assistance from the Pension Benefit Guaranty Corporation (PBGC) and for participants and beneficiaries in those plans. Notice 2021-38PDF provides guidance under provisions of the American Rescue Plan Act of 2021 regarding special financial assistance paid by the PBGC to eligible multiemployer defined benefit pension plans that are financially at risk. The notice provides direction for multiemployer plans, and specifically addresses three important areas regarding: The reinstatement of previously suspended pension benefits, along with make-up payments, as a condition that eligible multiemployer plans must meet if they receive special financial assistance. The individual income tax treatment of these make-up payments. How a plan that receives special financial assistance must treat the plan's special financial assistance account for purposes of the minimum funding requirements for multiemployer defined benefit plans PBGC guidance on the application process for special financial assistance can be found at the  PBGC website.