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https://www.irs.gov/newsroom/irsgov-the-24-7-summertime-spot-for-tax-help

IR-2021-147, July 9, 2021 WASHINGTON — The IRS website provides millions of visitors with the answers they need to fit their busy summer schedules. On IRS.gov, waiting for service is not a problem and no appointment is needed to use the online tools. Many taxpayers who requested an extension to October 15 or missed the May 17 deadline can still prepare and e-file tax returns for free with IRS Free File. Here are some great reasons for taxpayers to add IRS.gov to their 'internet favorites' list this summer. Tax information when it's needed IRS.gov is always there. Taxpayers can view, download or print tax products right away. They can also do the following: Use the File tab on the home page for most federal income tax needs. Access the Interactive Tax Assistant tool that can answer many tax law questions. See their tax account with the View Your Account tool. With this, they can find information such as a payoff amount, the balance for each tax year owed, up to 24 months of their payment history and key information from their current tax year return as originally filed. Use the Get Transcript tool to view, print or download their tax transcripts after the IRS has processed the return. Find the most up-to-date information about tax refunds using the Where's My Refund? tool on IRS.gov and on the official IRS mobile app, IRS2Go. Taxpayers can start checking on the status of their refund 24 hours after the IRS acknowledges receipt of an e-filed return. Find answers in more languages than ever Many pages on IRS.gov are now available in Spanish, Vietnamese, Russian, Korean, Haitian Creole and Chinese − Simplified and Traditional. Earlier this year, the agency posted a Spanish language version of Form 1040PDF and the related instructionsPDF to IRS.gov. Help for people who use assistive technology At the online Alternative Media Center (AMC), taxpayers will find a variety of accessible products like screen reading software, refreshable Braille displays and screen magnifying software. These products include tax forms, instructions and publications that can be downloaded or viewed online as Section 508 compliant PDF, HTML, eBraille, text and large print. Please note that every product is not available in all formats. For example, tax forms are not available as HTML. To request paper copies of tax forms, instructions or publications in Braille or large print, call the tax form telephone number at 800-829-3676. Or if a taxpayer prefers to receive correspondence such as letters or notices from the IRS in an alternative format they can call 800-829-1040. Keep current with IRS Tax Tips Summer activities like homebuying or working a part-time job often affect taxes. Additionally, while many summertime and part-time workers may not earn enough to owe federal income tax, they should remember to file a return to get a refund for taxes withheld early next year. Subscribe to IRS Tax Tips to get easy-to-read articles by e-mail from the IRS that not only cover summer topics but also those topics which are good to know throughout the entire year. Tax Tips are brief, to the point and cover a wide range of subjects like common errors to avoid when you prepare your tax return and the latest guidance on current tax deductions and credits. Partner and promotional materials for Coronavirus Tax Relief Discover ready-to-use articles, e-posters, videos and much more on IRS.gov about Economic Impact Payments, the Recovery Rebate Credit, and the Advance Child Tax Credit. The IRS has placed a special emphasis on partnering with organizations that work with groups focusing on veterans, homeless and low-income taxpayers as well as non-English speaking audiences to share information. In all, the IRS has worked with thousands of partners across the country reaching organizations representing hundreds of millions of taxpayers. The IRS asks community groups, non-profits, associations, education organizations and anyone else with connections to people with children to share the critical information about the advance child tax credit as well as other important benefits. Adjust withholding now to avoid tax surprises next year Summer is a great time for taxpayers to check their withholding and avoid a tax surprise next filing season. Life events like marriage, divorce, having a child, or a change in income can all affect taxes. The IRS Tax Withholding Estimator on IRS.gov helps employees assess their income tax, credits, adjustments and deductions and determine whether they need to change their withholding by submitting a new Form W-4, Employee's Withholding Allowance Certificate. Taxpayers should remember that, if needed, they should submit their new W-4 to their employer, not the IRS.

https://www.irs.gov/newsroom/irs-holds-special-weekend-events-to-help-people-who-dont-normally-file-taxes-get-child-tax-credit-payments-and-economic-impact-payments

Friday, Saturday events in 12 cities held to support eligible families IR-2021-146, July 7, 2021 Note: More events coming soon. WASHINGTON — The Internal Revenue Service and partners in non-profit organizations, churches, community groups and others will host events in 12 cities this weekend to help people who don't normally file a federal tax return to register for the monthly Advance Child Tax Credit (AdvCTC) 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 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/Maryland. "This is part of a wider effort by the IRS to reach as many people as possible who don't file a tax return but may be eligible for the Child Tax Credit and Economic Impact Payments," said Ken Corbin, IRS Wage and Investment Commissioner and the agency's Chief Taxpayer Experience Officer. "We encourage people to share this information widely and encourage those who need help to visit these locations." 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. People can check their eligibility for the AdvCTC payments by using the new Advance Child Tax Credit Eligibility Assistant. For this weekend's events, 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. The IRS is also planning to do additional events in the future as well as work with partners inside and outside the tax community to share information as widely as possible to people who may be eligible for Child Tax Credits and the Economic Impact Payments. 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. 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 starting July 15. 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 also 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, Aug. 13, Sept. 15, Oct. 15, Nov. 15, and Dec. 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/irs-provides-answers-for-certain-transportation-companies-eligible-for-treasury-grants

IR-2021-145, July 6, 2021 WASHINGTON — The Internal Revenue Service today posted answers to questions that certain transportation companies may have regarding Treasury grants and related taxes. The Coronavirus Economic Relief for Transportation Services (CERTS) Act of the Consolidated Appropriations Act of 2021 authorizes the Department of the Treasury to provide grants to transportation service providers--including eligible motorcoach companies, school bus companies, and passenger vessel companies-- that experienced annual revenue losses of 25% or more as a result of COVID-19. These companies must generally prioritize the use of the grants for payroll costs, though grants may be used for certain operating expenses (including the acquisition of services and equipment needed to protect workers and customers from COVID-19) and the repayment of debt accrued to maintain payroll. Funds not used for eligible activities within one year of receipt of the grant must be returned to the Treasury Department. The FAQs posted today answer two important questions: Are the grants taxable? Yes, the receipt of a CERTS Act grant is not excluded from the recipient's gross income under the Code and therefore is taxable. Are costs for which the grants are used deductible? Yes, the costs are deductible to the extent that they are otherwise deductible under the law. The tax law generally permits the payment of wages, salaries, and benefits to employees and other amounts paid to carry on a trade or business to be deducted as ordinary and necessary business expenses. Additional information about tax relief for businesses affected by the COVID-19 can be found on IRS.gov.

https://www.irs.gov/newsroom/irs-wraps-up-its-2021-dirty-dozen-scams-list-with-warning-about-promoted-abusive-arrangements

IR-2021-144, July 1, 2021 WASHINGTON — The Internal Revenue Service today concludes the "Dirty Dozen" list of tax scams with a warning to taxpayers to watch out for schemes peddled by tax promoters, including syndicated conservation easements, abusive micro-captive insurance arrangements and other abusive arrangements. The IRS warns people to be on the lookout for promoters who peddle false hopes of large tax deductions from abusive arrangements. These "deals" are generally marketed by unscrupulous promoters who make false claims about their legitimacy and charge high fees to boot. These promoters frequently devise new ways to cheat the system and market them aggressively. Some taxpayers play the audit lottery hoping they don't get noticed. To fight the evolving variety of these abusive arrangements, the IRS recently created the Office of Promoter Investigations (OPI) to focus on participants and the promoters of abusive tax avoidance transactions. OPI coordinates service-wide enforcement activities. The best defense for a taxpayer approached by a promoter is to show caution: if it sounds too good to be true, it probably is. These aggressively marketed abusive arrangements wrap up the IRS's annual "Dirty Dozen" list and include the following: Syndicated conservation easements In syndicated conservation easements promoters take a provision of tax law for conservation easements and twist it through using inflated appraisals of undeveloped land and partnerships. These abusive arrangements are designed to game the system and generate inflated and unwarranted tax deductions, often by using inflated appraisals of undeveloped land and partnerships devoid of a legitimate business purpose. More information can be found at IRS increases enforcement action on Syndicated Conservation Easements. Abusive micro-captive arrangements In abusive "micro-captive" structures, promoters, accountants or wealth planners persuade owners of closely held entities to participate in schemes that lack many of the attributes of insurance. For example, coverages may "insure" implausible risks, fail to match genuine business needs or duplicate the taxpayer's commercial coverages. But the "premiums" paid under these arrangements are often excessive and used to skirt tax law. Additional information can be found at IRS offers settlement for micro-captive insurance schemes; letters being mailed to groups under audit. Recently, the IRS has stepped up enforcement against a variation using potentially abusive offshore captive insurance companies domiciled in Puerto Rico and elsewhere. Potentially abusive use of the US-Malta tax treaty Some U.S. citizens and residents are relying on an interpretation of the U.S.-Malta Income Tax Treaty (Treaty) to take the position that they may contribute appreciated property tax free to certain Maltese pension plans and that there are also no tax consequences when the plan sells the assets and distributes proceeds to the U.S. taxpayer. Ordinarily gain would be recognized upon disposition of the plan's assets and distributions of the proceeds. The IRS is evaluating the issue to determine the validity of these arrangements and whether Treaty benefits should be available in such instances and may challenge the associated tax treatment. Improper claims of business credits Improper claims for the research and experimentation credit generally involve failures to participate in, or substantiate, qualified research activities and/or satisfy the requirements related to qualified research expenses. To claim a research credit, taxpayers must evaluate and appropriately document their research activities over a period of time to establish the amount of qualified research expenses paid for each qualified research activity. Taxpayers should carefully review reports or studies to ensure they accurately reflect the taxpayer's activities. Improper monetized installment sales Promoters find taxpayers seeking to defer the recognition of gain upon the sale of appreciated property and organize an abusive shelter through selling them monetized installment sales. These transactions occur when an intermediary purchases appreciated property from a seller in exchange for an installment note, which typically provides for payments of interest only, with principal being paid at the end of the term. In these arrangements, the seller gets the lion's share of the proceeds but improperly delays the gain recognition on the appreciated property until the final payment on the installment note, often slated for many years later. The IRS continues to pursue actions against promoters of these schemes as well as the taxpayers who participate in them. "We are stepping up our enforcement against abusive arrangements," said IRS Commissioner Chuck Rettig. "Don't be lulled into these shady deals. The IRS recommends that anyone who participated in one of these abusive arrangements should consult independent counsel about coming into compliance." For more on tax schemes, visit IRS.gov/dirtydozen.

https://www.irs.gov/newsroom/irs-tax-relief-now-available-to-victims-of-hurricane-ida-oct-15-deadline-other-dates-extended-to-jan-3

IR-2021-175, August 31, 2021 WASHINGTON — Victims of Hurricane Ida that began on August 26 now have until January 3, 2022, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today. The IRS is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance. Currently this includes the entire state of Louisiana, but taxpayers in Ida-impacted localities designated by FEMA in neighboring states will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov. "During this difficult time, the IRS stands ready to help victims of Hurricane Ida," said IRS Commissioner Chuck Rettig. "We want people affected by this devastating hurricane focused on their safety and recovery for themselves and their families. To provide assistance now and in the weeks ahead, we have a variety of different types of relief available to help people and businesses affected by this disaster." The tax relief postpones various tax filing and payment deadlines that occurred starting on August 26, 2021. As a result, affected individuals and businesses will have until January 3, 2022, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return due to run out on October 15, 2021, will now have until January 3, 2022, to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief. The January 3, 2022 deadline also applies to quarterly estimated income tax payments due on September 15, 2021, and the quarterly payroll and excise tax returns normally due on November 1, 2021. It also applies to tax-exempt organizations, operating on a calendar-year basis, that had a valid extension due to run out on November 15, 2021. Businesses with extensions also have the additional time including, among others, calendar-year corporations whose 2020 extensions run out on October 15, 2021. In addition, penalties on payroll and excise tax deposits due on or after August 26 and before September 10, will be abated as long as the deposits are made by September 10, 2021. 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 (2020). Be sure to write the FEMA declaration number – 4611 − for Hurricane Ida in Louisiana 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 Hurricane Ida and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

https://www.irs.gov/newsroom/september-is-national-preparedness-month-irs-urges-taxpayers-to-prepare-for-natural-disasters

IR-2021-174, August 30, 2021 WASHINGTON — September is National Preparedness Month. With the height of hurricane season fast approaching and the ongoing threat of wildfires in some parts of the country, the Internal Revenue Service reminds everyone to develop an emergency preparedness plan. All taxpayers, from individuals to organizations and businesses, should take time now to create or update their emergency plans. Taxpayers can begin getting ready for a disaster with a preparedness plan that includes securing and duplicating essential tax and financial documents, creating lists of property and knowing where to find information once a disaster has occurred. Securing this information can help in the aftermath of a disaster, and it can help people more quickly take advantage of disaster relief available from the IRS. Start secure Taxpayers should keep critical original documents inside waterproof containers in a secure space. Documents such as tax returns, birth certificates, deeds, titles and insurance policies should also be duplicated and kept with a trusted person outside the area a natural disaster may affect. Make copies If original documents are available only on paper, taxpayers can use a scanner and save them on a USB flash drive, CD or in the cloud, which provide security and easy portability. Document valuables After a disaster hits, photographs and videos of a home or business's contents can help support claims for insurance or tax benefits. All property, especially expensive and high- value items, should be recorded. The IRS disaster-loss workbooks can help  individualsPDF  and businessesPDF compile lists of belongings or business equipment. Employer fiduciary bonds Employers using payroll service providers should check if their provider has a fiduciary bond in place to protect the employer in the event of a default by provider. Employers are encouraged to create an Electronic Federal Tax Payment System account at EFTPS.gov to monitor their payroll tax deposits and receive email alerts. Know where to go Reconstructing records after a disaster may be required for tax purposes, getting federal assistance or insurance reimbursement. Find out if financial institutions provide statements and documents electronically. Taxpayers who have lost some or all of their records during a disaster should visit IRS' Reconstructing Records webpage. IRS is ready to help Taxpayers living in a federally declared disaster can visit the IRS Tax Relief in Disaster Situations webpage or Around the Nation on IRS.gov and check for the available disaster tax relief. The IRS automatically identifies taxpayers located in the covered disaster area and applies filing and payment relief. Affected taxpayers can call 866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues. A taxpayer impacted by a disaster outside of a federally-declared disaster area may qualify for disaster relief. This includes taxpayers who are not physically located in a disaster area, but whose records necessary to meet a filing or payment deadline postponed during the relief period are located in a covered disaster area. For more information about National Preparedness Month, visit Ready.gov/september. Related items: Publication 2194, Disaster Resource Guide for Individuals and BusinessesPDF Publication 5307, Tax Reform: Basics for Individuals and Families PDF Publication 583, Starting a Business and Keeping RecordsPDF Publication 547, Casualties, Disasters, and TheftsPDF Reconstructing Records After a Natural Disaster or Casualty Loss Federal Emergency Management Agency Small Business Administration DisasterAssistance.gov Ready.gov

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

IR-2021-173, August 25, 2021 WASHINGTON — The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning October 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% percent for underpayments; and   5% percent for large corporate underpayments. Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point. The interest rates announced today are computed from the federal short-term rate determined during July 2021 to take effect August 1, 2021, based on daily compounding. Revenue Ruling 2021-17PDF, announcing the rates of interest, will appear in Internal Revenue Bulletin 2021-37, dated September 13, 2021.

https://www.irs.gov/newsroom/irs-accepting-applicants-for-the-compliance-assurance-process-for-2022

IR-2021-172, August 23, 2021 WASHINGTON — The Internal Revenue Service announced today the opening of the application period for the 2022 Compliance Assurance Process (CAP) program. The application period runs September 1 to November 1, 2021. The IRS will inform applicants if they're accepted into the program in February 2022. Launched in 2005, CAP employs real-time issue resolution, through transparent and cooperative interaction between taxpayers and the IRS, to improve federal tax compliance by resolving issues prior to the filing of a tax return. To be eligible to apply for CAP, new applicants must: Have assets of $10 million or more, Be a U.S. publicly traded corporation with a legal requirement to prepare and submit SEC Forms 10-K, 10-Q, and 8-K, and Not be under investigation by, or in litigation with, any government agency that would limit the IRS's access to current tax records. To be eligible to participate in CAP, taxpayers must adhere to CAP program limits on the number of open years. For 2022, the IRS is continuing the modification of the open-year criteria to allow- "two filed" open returns. General program information and the 2022 application details are available on the CAP webpage.

https://www.irs.gov/newsroom/child-tax-credit-new-update-address-feature-available-with-irs-online-portal-make-other-changes-by-august-30-for-september-payment

IR-2021-171, August 20, 2021 WASHINGTON — The Internal Revenue Service has launched a new feature allowing any family receiving monthly Child Tax Credit payments to quickly and easily update their mailing address using the Child Tax Credit Update Portal, found exclusively on IRS.gov. This feature will help any family that chooses to receive their payment by paper check avoid mailing delays or even having a check returned as undeliverable. Any family can easily have their September check and all future checks sent to their new address by using the portal to make an address change request. To have the change take effect in September, people need to complete the request before midnight Eastern Time on Monday, August 30. Families can still make changes after that date, but their request will not be effective until the next scheduled monthly payment. If you change your mailing address using the Child Tax Credit Update Portal, the IRS will use this updated address for all future IRS correspondence so the address change feature can also be helpful to taxpayers that are receiving payments by direct deposit. For example, the IRS will mail a year-end summary statement (Letter 6419) to all taxpayers who have received advance Child Tax Credit payments during 2021 and having a current address on file with the IRS will ensure prompt delivery of this statement. Families will need Letter 6419 to quickly and accurately fill out their 2021 federal income tax return next year. This is important because, for most families, the advance payments they are receiving during 2021 cover only half of the total credit. They will claim the remaining portion on their 2021 tax return. The address change feature joins a growing set of services available through the Child Tax Credit Update Portal. Available only on IRS.gov, the portal already allows families to verify their eligibility for the payments and then, if they choose to: Switch from receiving a paper check to direct deposit; Change the account where their payment is direct deposited; or Stop monthly payments for the rest of 2021. Any of these changes made before midnight ET on August 30, will apply to the September 15 payment and all subsequent monthly payments, scheduled for October 15, November 15, and December 15. Future enhancements are planned for the Child Tax Credit Portal Later this year, families will also be able to use the Update Portal tool to: Add or remove children in most situations; Report a change in marital status; or Report a significant change in income. Latest information for the Child Tax Credit payments on IRS.gov 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. For more information, visit IRS.gov/childtaxcredit2021. The web page now features an updated set of frequently asked questions and the new Publication 5549, IRS User Guide: Child Tax Credit Update PortalPDF. It also provides direct links to the portal, as well as two other online tools — the Non-Filer Sign Up Tool and the Child Tax Credit Eligibility Assistant — and other useful resources.

https://www.irs.gov/newsroom/security-summit-warns-tax-pros-to-watch-for-tell-tale-signs-of-identity-theft

IR-2021-170, August 17, 2021 WASHINGTON — With identity thieves continuing to target the tax community, Internal Revenue Service Security Summit partners today urged tax professionals to learn the signs of data theft so they can react quickly to protect clients. The IRS, state tax agencies and the tax industry – working together as the Security Summit – reminded tax professionals that they should contact the IRS immediately when there's an identity theft issue while also contacting insurance or cybersecurity experts to assist them with determining the cause and extent of the loss. "There are tell-tale signs of identity theft that tax pros can easily miss," said IRS Commissioner Chuck Rettig. "Identity thieves continue to look for ways to slip into the systems of tax pros to steal data. We urge practitioners to take simple steps and remain on the lookout for signs of data and identity theft. They are a critical first line of defense against identity theft." Knowing the signs of identity theft is the final part of a five-part 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 ," focused on urging tax professionals to try harder to secure their systems and protect client data during this pandemic and its aftermath. This summer-time Summit series, now in its sixth year, highlighted the protections offered by multi-factor authentication and key security steps, the use of the Identity Protection PIN for clients, scams to steal unemployment benefits and the dangers of phishing email/text scams. One common refrain the IRS hears from tax professionals reporting data thefts is that they did not immediately recognize its signs. Summit partners urged tax professionals to watch out for these critical signs: Client e-filed returns rejected because client's Social Security number was already used on another return. More e-file acknowledgements received than returns the tax pro filed. Clients responded to emails the tax pro didn't send. Slow or unexpected computer or network responsiveness such as: Software or actions take longer to process than usual, Computer cursor moves or changes numbers without touching the mouse or keyboard, Unexpectedly locked out of a network or computer. Tax professionals should also watch for warning signs when clients report they've received: IRS Authentication letters (5071C, 4883C, 5747C) even though they haven't filed a return. A refund even though they haven't filed a return. A tax transcript they didn't request. Emails or calls from the tax pro that they didn't initiate. A notice that someone created an IRS online account for the taxpayer without their consent. A notice the taxpayer wasn't expecting that: Someone accessed their IRS online account, The IRS disabled their online account. These are just a few common examples. Tax pros should ensure they have the highest security possible and contact these sources if they sense or see something amiss. If you or your firm are the victim of data theft, immediately: Report it to your local IRS Stakeholder Liaison Liaisons will notify IRS Criminal Investigation and others within the agency on the practitioner's behalf. Speed is critical. If reported quickly, the IRS can take steps to block fraudulent returns in the clients' names and will assist tax pros through the process. Email the Federation of Tax Administrators at statealert@taxadmin.org Get information on how to report victim information to the states. Most states require that the state attorney general be notified of data breaches. This notification process may involve multiple offices. Find more information at Data Theft Information for Tax Professionals. Additional resources Tax professionals can also 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/irs-families-now-receiving-august-child-tax-credit-payments-still-time-for-low-income-families-to-sign-up

IR-2021-169, August 13, 2021 WASHINGTON — The Internal Revenue Service and the Treasury Department announced today that millions of American families are now receiving their advance Child Tax Credit (CTC) payment for the month of August as direct deposits begin posting in bank accounts and checks arrive in mailboxes. This second batch of advance monthly payments, worth about $15 billion, are reaching about 36 million families today across the country. The majority will be issued by direct deposit. Under the American Rescue Plan, most eligible families received the first payment on July 15, and payments will continue each month for the rest of 2021. For these families, 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. Besides the July 15 and August 13 payments, payment dates are September 15, October 15, November 15 and December 15. Here are further details on these payments: Families will see the direct deposit payments in their accounts starting today, August 13. Like the first payments, the vast majority of families will receive these payments by direct deposit. The IRS wants to alert some recipients who received direct deposits in July that they will receive the August payments by mail. Due to an issue expected to be resolved by the September payments, a percentage of these recipients – less than 15% – who received payments by direct deposit in July will be mailed paper checks for the August payment. For those affected, no additional action is needed for the September payment to be issued by direct deposit. Families can visit the Child Tax Credit Update Portal to see if they're receiving a direct deposit or paper check this month. For those receiving their payments by paper check, be sure to allow extra time for delivery by mail through the end of August. Those wishing to receive future payments by direct deposit can make this change using the Child Tax Credit Update Portal, available only on IRS.gov. To access the portal or to get a new step-by-step guide for using it, visit  IRS.gov/childtaxcredit2021 . A change made by 11:59 p.m. ET on Aug. 30 will apply starting with the September payment. Payments went to eligible families who filed a 2019 or 2020 income tax return. Returns processed by August 2 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 on IRS.gov or in 2021 successfully used the Non-filer Sign-up Tool for advance CTC, also available only 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. The Non-Filer Sign-Up tool is available until October 15, 2021.  Families who did not get a July payment and are getting their first monthly payment in August will still receive their total advance payment for the year. This means that the total payment will be spread over five months, rather than six, making each monthly payment larger. For these families, each payment is up to $360 per month for each child under age 6 and up to $300 per month for each child ages 6 through 17 Additionally, the IRS is correcting an issue regarding the advance CTC payments for families where the parent(s) have an Individual Taxpayer Identification Number (ITIN) and the qualifying children have a Social Security number. Such families who did not receive a July payment are receiving a monthly payment in August, which also includes a portion of the July payment. They will receive the remainder of the July payment in late August. Low-income families can still sign up It's not too late for low-income families to sign up for advance CTC payments. The IRS urged anyone who normally isn't required to file a tax return to explore the tools available on IRS.gov. These tools can help determine eligibility for the advance CTC or help people file a simplified tax return to sign up for these payments as well as Economic Impact Payments and the Recovery Rebate Credit. People can get these benefits, even if they don't work and even if they receive no income. The IRS continues to raise awareness of the expanded Child Tax Credit. The IRS encourages partners and community groups to share information and use available online tools and toolkits to help non-filers, low-income families and other underserved groups sign up to receive the advance Child Tax Credits as well as Economic Impact Payments. People can check their eligibility for the advance payments by using the new advance Child Tax Credit Eligibility Assistant. Families can stop payments anytime Families can stop payments anytime, even after payments begin. 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 September and the rest of 2021, they must unenroll by 11:59 p.m. ET on August 30, 2021. For married couples, each spouse must unenroll separately. If they each choose to unenroll, they will receive no monthly payments. If only one spouse unenrolls, they will still receive monthly payments, but they will be half the normal amount. The unenroll feature can also be helpful to any family that no longer qualifies for the CTC or believes they will not qualify when they file their 2021 return. This could happen if, for example, someone else, such as an ex-spouse or another family member, qualifies to claim their child or children as dependents in 2021. Links to these tools, a step-by-step guide to using the Non-filer Sign-up Tool, answers to frequently asked questions and other helpful resources are available on the tax agency's special advance CTC 2021 page. It's at IRS.gov/childtaxcredit2021.

https://www.irs.gov/newsroom/irs-provides-relief-for-certain-employers-claiming-the-work-opportunity-tax-credit

IR-2021-168, August 10, 2021 WASHINGTON — The Internal Revenue Service today announced it is providing transition relief to certain employers claiming the Work Opportunity Tax Credit (WOTC). The WOTC is a federal income tax credit available to employers that hire certified members of certain groups specified in the Internal Revenue Code who face significant barriers to employment, including Designated Community Residents or Qualified Summer Youth Employees. The IRS today issued Notice 2021-43PDF, which extends the 28-day deadline for employers to submit a request to a designated local agency (DLA) to certify that an employee hired between January 1 and October 8 of this year is a Designated Community Resident or a Qualified Summer Youth Employee. To be certified as a Designated Community Resident or a Qualified Summer Youth Employee under the WOTC, an employee must have a principal place of residence within an Empowerment Zone where the employee continuously resides. Empowerment Zone designations terminated on December 31, 2020, but the Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted as Division EE of the Consolidated Appropriations Act, 2021, permitted the designations to be extended through 2025. On May 26, 2021, all Empowerment Zone designations were extended from Dec. 31, 2020 to December 31, 2025. The transition relief under this notice allows employers to submit Form 8850 (Pre-Screening Notice and Certification Request for the Work Opportunity Credit) for these employees until November 8, 2021. The notice also provides guidance to certain employers who submitted a Form 8850 to a DLA for these employees during the period of transition relief and received a denial due to the termination of Empowerment Zone designations on December 31, 2020, or who received a certification before Empowerment Zone designations were extended. The WOTC has been subject to several legislative extensions and modifications since its enactment by the Small Business Job Protection Act of 1996. The amount of the tax credit under WOTC equals a percentage of qualified wages paid in a given tax year to an employee certified by the DLA as being a member of the one of the groups specified in the law.

https://www.irs.gov/newsroom/treasury-irs-provide-gross-receipts-safe-harbor-for-employers-claiming-the-employee-retention-credit

IR-2021-167, August 10, 2021 WASHINGTON — The Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) today issued a safe harbor allowing employers to exclude certain items from their gross receipts solely for determining eligibility for the Employee Retention Credit (ERC). Revenue Procedure 2021-33PDF provides a safe harbor permitting employers to exclude certain amounts from gross receipts solely for determining eligibility for the ERC. These amounts are: The amount of the forgiveness of a Paycheck Protection Program (PPP) Loan; Shuttered Venue Operators Grants under the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act; and Restaurant Revitalization Grants under the American Rescue Plan Act of 2021. An employer elects to apply the safe harbor by excluding these amounts solely for determining whether it is an eligible employer for a calendar quarter for purposes of claiming the ERC on its employment tax return. Revenue Procedure 2021-33 requires employers to apply the safe harbor consistently for determining eligibility for the ERC. The employer must exclude the amounts from their gross receipts for each calendar quarter in which gross receipts are relevant to determining eligibility to claim the ERC. The employer claiming the credit must also apply the safe harbor to all employers treated as a single employer under the aggregation rules. An employer is not required to apply this safe harbor, and the safe harbor does not permit the exclusion of these amounts from gross receipts for any other federal tax purpose. Employers claim the ERC on their employment tax return, generally Form 941, Employers Quarterly Federal Tax ReturnPDF, or adjusted employment tax return, generally Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for RefundPDF. Revenue Procedure 2021-33, updates and amplifies guidance provided in Notice 2021-20PDF, which addressed the ERC as it applies to qualified wages paid after March 12, 2020, and before January 1, 2021, Notice 2021-23PDF, which addressed the ERC as it applies to qualified wages paid after December 31, 2020 and before July 1, 2021, and Notice 2021-49PDF, which addressed the ERC as it applies to qualified wages paid after June 30, 2021 and before January 1, 2022. Treasury and the IRS continue to closely monitor pending legislation related to the ERC and will provide additional information as needed.

https://www.irs.gov/newsroom/security-summit-warns-tax-pros-to-be-wary-of-pandemic-related-email-schemes

IR-2021-166, August 10, 2021 WASHINGTON — In a continuing twist on a common scam, the Internal Revenue Service, state tax agencies and tax industry today warned tax professionals to beware of evolving phishing scams that use various pandemic-related themes to steal client data. The Security Summit partners continue to see instances where tax professionals, especially those who engage in remote transactions, have been vulnerable this year to identity thieves posing as potential clients. The criminals then trick practitioners into opening email links or attachments that infect computer systems. Avoiding phishing emails is the fourth in a five-part series sponsored by the IRS, state tax agencies and the nation's tax community – working together as the Security Summit – highlighting 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 work to strengthen their systems and protect client data during this pandemic and its aftermath. "Identity thieves have been relentless in exploiting the pandemic and the resulting economic pain to trick taxpayers and tax professionals to disclose sensitive information," said IRS Commissioner Chuck Rettig. "Fighting back against phishing scams requires constant vigilance, and we urge tax pros to take some basic steps to help protect their clients and themselves." Phishing emails or SMS/texts (known as "smishing") attempt to trick the person receiving the message into disclosing personal information such as passwords, bank account numbers, credit card numbers or Social Security numbers. Tax pros are a common target. Scams may differ in themes, but they generally have two traits: They appear to come from a known or trusted source, such as a colleague, bank, credit card company, cloud storage provider, tax software provider or even the IRS. They tell a story, often with an urgent tone, to trick the receiver into opening a link or attachment. A specific kind of phishing email is called spear phishing. Rather than the scattershot nature of general phishing emails, scammers take time to identify their victim and craft a more enticing phishing email known as a lure. Scammers often use spear phishing to target tax professionals. In a reoccurring and very successful scam this year, criminals posed as potential clients, exchanging several emails with tax professionals before following up with an attachment that they claimed was their tax information. This scam was popular as many tax professionals worked remotely and communicated with clients over email versus in-person or over the telephone because of COVID. Once the tax pro clicks on the URL and/or opens the attachment, malware secretly downloads onto their computers, giving thieves access to passwords to client accounts or remote access to the computers themselves. Thieves then use this malware known as a remote access trojan (RAT) to take over the tax professional's office computer systems, identify pending tax returns, complete them and e-file them, changing only the bank account information to steal the refund. In recent months, international criminals have used a ransomware attack to shut down a variety of companies. Criminals use similar, smaller scale tactics against tax pros. When the unsuspecting tax professional opens a link or attachment, malware attacks the tax pro's computer system to encrypt files and hold the data for ransom. These scams highlight the importance of the basic security steps recommended by the Security Summit to protect data. For example, using the two-factor (2FA) or the multi-factor authentication (MFA) option offered by tax preparation providers or storage providers would protect client accounts even if passwords were inadvertently disclosed. Keeping anti-virus software automatically updated helps prevent scams that target software vulnerabilities. Using drive encryption and regularly backing up files helps stop theft and ransomware attacks. For tax professionals, securing their network to protect taxpayer data is their responsibility as a tax preparer. To help tax professionals guard against phishing scams and better protect taxpayer information, the IRS recently updated Publication 4557, Safeguarding Taxpayer DataPDF. The July 2021 version contains some of the latest suggestions such as using the multi-factor authentication option offered by tax software products and helping clients get an Identity Protection Pin. Additional resources In addition to reviewing the recently revised IRS Publication 4557, Safeguarding Taxpayer DataPDF, tax professionals can also get help with security recommendations by reviewing 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/treasury-irs-provide-additional-guidance-to-employers-claiming-the-employee-retention-credit-including-for-the-third-and-fourth-quarters-of-2021

IR-2021-165, August 4, 2021 WASHINGTON — The Treasury Department and the Internal Revenue Service today issued further guidance on the employee retention credit, including guidance for employers who pay qualified wages after June 30, 2021, and before January 1, 2022, and additional guidance on miscellaneous issues that apply to the employee retention credit in both 2020 and 2021. Notice 2021-49PDF amplifies prior guidance regarding the employee retention credit provided in Notice 2021-20PDF and Notice 2021-23PDF. Notice 2021-49 addresses changes made by the American Rescue Plan Act of 2021 (ARP) to the employee retention credit that are applicable to the third and fourth quarters of 2021. Those changes include, among other things: making the credit available to eligible employers that pay qualified wages after June 30, 2021, and before January 1, 2022, expanding the definition of eligible employer to include "recovery startup businesses," modifying the definition of qualified wages for "severely financially distressed employers," and providing that the employee retention credit does not apply to qualified wages taken into account as payroll costs in connection with a shuttered venue grant under section 324 of the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act, or a restaurant revitalization grant under section 5003 of the ARP. Notice 2021-49 also provides guidance on several miscellaneous issues with respect to the employee retention credit for both 2020 and 2021. This guidance responds to various questions that the Treasury Department and the IRS have been asked about the employee retention credit, including: The definition of full-time employee and whether that definition includes full-time equivalents, The treatment of tips as qualified wages and the interaction with the section 45B credit, The timing of the qualified wages deduction disallowance and whether taxpayers that already filed an income tax return must amend that return after claiming the credit on an adjusted employment tax return, and Whether wages paid to majority owners and their spouses may be treated as qualified wages. Reporting Eligible employers will report their total qualified wages and the related health insurance costs for each quarter on their employment tax returns (generally, Form 941) for the applicable period. If a reduction in the employer's employment tax deposits is not sufficient to cover the credit, certain employers may receive an advance payment from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19. Where can I find more information on the employee retention credit and other COVID-19 economic relief efforts? Treasury and the IRS continue to closely monitor pending legislation related to the employee retention credit and will provide additional information as needed. Updates on the implementation of this employee retention credit, Frequently Asked Questions on Tax Credits for Required Paid Leave and other information can be found on the Coronavirus page of IRS.gov.

https://www.irs.gov/newsroom/irs-reminds-heavy-vehicle-owners-of-august-31-highway-use-tax-return-deadline

IRS YouTube Video: Truckers: Mark Your Calendars to File Form 2290 IR-2021-164, August 4, 2021 WASHINGTON — The Internal Revenue Service reminds those who have registered, or are required to register, large trucks and buses that it's time to file Tax Year 2021 Form 2290, Heavy Highway Vehicle Use Tax ReturnPDF. The deadline to file and pay is August 31, 2021, for vehicles used on the road during July 2021. The highway use tax applies to highway motor vehicles with a taxable gross weight of 55,000 pounds or more. Taxpayers unsure if they must file can use the IRS online tool, "Do I Need to Pay the Heavy Highway Vehicle Use Tax?" The question-and-answer format helps owners determine if they are required to pay the highway use tax. The "Understanding Form 2290 – Heavy Highway Vehicle Use Tax" recorded webinar is also available. Ready to file? Gather information Employer Identification Number (EIN) – not a Social Security number. For those who do not have one, it can take about four weeks to establish a new EIN. See How to Apply for an EIN. Vehicle Identification Number and taxable gross weight of each vehicle. How to file E-file is required when reporting 25 or more vehicles on Form 2290 and is the preferred filing method. The IRS provides a watermarked Schedule 1 within minutes after accepting the electronically filed return.  Visit IRS.gov for a list of IRS-approved e-file providers. On paper. Complete and mail Form 2290. Expect to receive the stamped Schedule 1 within 6 weeks after the IRS receives the form. See Tax Year 2021 Instructions for Form 2290PDF for the correct mailing address. How to Pay Pay by credit card or debit card. Electronic funds withdrawal can be authorized as part of the e-file process. Electronic Federal Tax Payment System; requires advanced enrollment. Check or money order using Form 2290-V, Payment VoucherPDF, mailed to: Internal Revenue Service P.O. Box 932500 Louisville, KY 40293-2500 Vehicle registration date The filing deadline is not tied to the vehicle registration date. Regardless of the vehicle's registration renewal date, taxpayers must file Form 2290 by the last day of the month following the month in which the taxpayer first used the vehicle on a public highway during the taxable period. For more information, visit the Trucking Tax Center at IRS.gov/trucker (also available in Spanish). Need more help? Call the Form 2290 Call Site, weekdays between 8 a.m. and 6 p.m. Eastern time. From the U.S., 866-699-4096 (toll-free), from Canada or Mexico, 859-320-3581 (not toll-free). For more information, see Frequently Asked Questions for Truckers who e-file (also available in Spanish) and Frequently Asked Questions for Indian Tribal Governments Regarding Highway Use Tax.

https://www.irs.gov/newsroom/security-summit-tax-pros-can-help-clients-battle-identity-theft-risk-related-to-unemployment

IR-2021-163, August 3, 2021 WASHINGTON — Internal Revenue Service Security Summit partners today outlined for tax professionals how they can assist clients who were victims of unemployment compensation fraud schemes that targeted state workforce agencies in 2020 and 2021. The IRS, state tax agencies and the tax industry – working together as the Security Summit – reported that unemployment compensation fraud was one of the more common identity theft schemes that emerged in 2020 as criminals exploited the COVID-19 pandemic and the resulting economic impact. Addressing unemployment compensation fraud is the third in a five-part 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 try harder to secure their systems and protect client data during the pandemic and its aftermath. "Identity thieves always look for opportunities, and the unemployment surge presented a new opportunity to exploit the pain and financial hardships faced by Americans," said IRS Commissioner Chuck Rettig. "This particular scam is especially egregious because 23 million Americans were jobless or underemployed last year and desperately needed these benefits." The U.S. Department of Labor's Inspector General estimated approximately $89 billion in unemployment compensation was lost in 2020 due to fraud. Unemployment compensation is taxable income on federal taxes, although Congress waived the tax for 2020 for many people. States report compensation to the individual and to the IRS by using the Form 1099-G. Because of fraud and identity theft, many taxpayers received Forms 1099-G for compensation they did not receive. Some taxpayers received forms from multiple states. This scam could affect 2021 returns next year as well as 2020 returns this year. Here are a few steps tax professionals should take to assist clients who are victims of the unemployment compensation fraud scheme: File a Form 14039, Identity Theft AffidavitPDF, only if an e-filed tax return rejects because the client's Social Security number has already been used. Do not file the IRS Form 14039 to report unemployment compensation fraud to the IRS. Report the fraud to state workforce agencies, and request a corrected Form 1099-G. Each state has its own process for reporting unemployment compensation fraud. The U.S. Department of Labor has created an information page with all state contacts and other information at DOL.gov/fraud. File a tax return reporting only the actual income received. State workforce agencies may not be able to timely issue a corrected Form 1099-G. Even if the client has not received a corrected Form 1099-G, report only wages and income received and exclude any fraudulent claims. Consider an IRS Identity Protection PIN. Clients receiving Forms 1099-G are identity theft victims whose personal information could be used for additional criminal activities, such as filing fraudulent tax returns. All taxpayers who can verify their identities can now obtain an Identity Protection PIN to protect their SSNs. Read more about IP PINs at IRS.gov/ippin. Follow Federal Trade Commission recommendations for identity theft victims. Taxpayers should consider steps to protect their credit and other actions outlined by the FTC. The DOL also includes this information on its DOL.gov/fraud page. Finally, tax professionals' business clients can also assist in fighting unemployment compensation fraud by responding quickly to state notices about employees filing jobless claims, especially when it has no record of those employees. Although unemployment compensation is taxable, the American Rescue Plan Act of 2021 allows an exclusion of unemployment compensation of up to $10,200 for individuals for taxable year 2020. In the case of married individuals filing a joint Form 1040 or 1040-SR, this exclusion is up to $10,200 per spouse. To qualify for this exclusion, adjusted gross income (AGI) must be less than $150,000. This threshold applies to all filing statuses. The exclusion may ease the burden on many fraud victims. However, victims who received Forms 1099-G from multiple states may have fraud claims that exceed that exclusion amount. Clients should retain any records of fraud reports to states. Additional resources Tax professionals can also 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/irs-selects-seven-new-members-for-the-electronic-tax-administration-advisory-committee

IR-2021-195, September 28, 2021 WASHINGTON — The Internal Revenue Service has selected seven new members for the Electronic Tax Administration Advisory Committee (ETAAC). Established by statute in 1998, the ETAAC is a public forum for the discussion of issues in electronic tax administration. The committee's primary goal is to promote paperless filing of tax and information returns. ETAAC members work closely with the Security Summit, a joint effort of the IRS, state tax administrators and the nation's tax industry to fight identity theft and refund fraud. Committee members include state tax officials, consumer advocates, cybersecurity and information security specialists, tax preparers, tax software developers and representatives of the payroll and financial communities. The following individuals, grouped by the communities they represent, have been appointed to serve three-year terms on the committee beginning in September 2021: Payroll Industry James Paille, Ann Arbor, Michigan – Paille works for Thomson Reuters and has over 40 years of experience in the payroll industry, including front line, treasury and management experience. Paille is a member of the board of directors of the American Payroll Association and the Independent Payroll Providers Association. He is also an active member of the National Automated Clearinghouse Association, National Association of Computerized Tax Processors and the IRS Reporting Agents Forum. Tax Professionals Jihan Jude, Orlando, Florida – Jude is an attorney and counselor at law with the Davey Law Group in Maitland, Fla. She previously worked with ComplyRight, where she focused on business employment tax compliance, information return reporting requirements from the IRS and Social Security Administration and labor law legal issues. Jude also reviewed company guidance for business clients who used ComplyRight's tax solutions (paper and electronic filing of tax and information returns and proprietary tax filing software). State Government Peter Barca, Kenosha, Wisconsin – Barca is Secretary of the Wisconsin Department of Revenue and an active member and officer of the Federation of Tax Administrators Board of Trustees. Barca has served in the Wisconsin State Assembly, the United States House of Representatives and the United States Small Business Administration. He was also a business owner and President of Aurora Associates International. Vernon Barnett, Pike Road, Alabama – Barnett began his service as Commissioner of the Alabama Department of Revenue in May 2017. He has worked in state government for 25 years and served as a Deputy Solicitor General, Legal Advisor to the Governor, Deputy Commissioner of the Department of Corrections and Executive Counsel of the Department of Environmental Management. Barnett is current Chair of the Multistate Tax Commission and a member of the Federation of Tax Administrators Board of Trustees. Mark Godfrey, Jefferson City, Missouri – Prior to joining Ernst & Young's Digital Tax Administration - Government Services practice, Godfrey served as Taxation Division Director at the Missouri Department of Revenue. During that time, the Taxation Division team implemented an integrated tax system and underwent a reorganization to capitalize on processing efficiencies. Godfrey is an attorney and a certified public accountant. Jonathan Lunardini, Loomis, California – Lunardini is Section Manager of the California Franchise Tax Board's (FTB) Identity Theft/Fraud Program. He has been a member of the Security Summit since its inception in 2015, and has participated in its Information Sharing, Authentication and Financial Services working groups. Lunardini engages with the ISAC as a participating member of the metrics sub-team and also participates in the National Automated Clearinghouse Association and the National Association of Computerized Tax Processors. In his role with the FTB, Lunardini has partnered with the IRS, other states and industry partners on nationwide anti-fraud efforts. Terri Steenblock, Forest Lake, Minnesota – Steenblock is Compliance Director at the Federation of Tax Administrators. She supports state revenue agencies across the United States by providing compliance outreach, education and support to tax administrators focused on audit, collections, criminal investigations, fraud and electronic filing. Prior to working at FTA, she spent 15 years at the Minnesota Department of Revenue where she held various roles including serving as an Assistant Commissioner. Committee Leadership for 2021-2022 Courtney Kay-Decker, Of Counsel with Lane & Waterman LLP, will serve as chair of the ETAAC. Jared Ballew, Government/Industry Liaison with Drake Software, will serve as vice chair.

https://www.irs.gov/newsroom/starting-oct-28-new-67-user-fee-applies-to-estate-tax-closing-letters-irs-reminds-executors-of-free-transcript-option

IR-2021-194, September 27, 2021 WASHINGTON — The Internal Revenue Service announced today that starting Oct. 28, a new $67 user fee will apply to any estate that requests a closing letter for its federal estate tax return. The new user fee was authorized under final regulations, TD 9957PDF, available today in the Federal Register. Closing letter requests must be made using Pay.gov. The IRS will provide further procedural details before the user fee goes into effect. By law, federal agencies are required to charge a user fee to cover the cost of providing certain services to the public that confer a special benefit to the recipient. Moreover, agencies must review these fees every two years to determine whether they are recovering the cost of these services. Under the final regulations, the IRS has determined that issuing closing letters is a service that confers a special benefit warranting a user fee. That's because, though obtaining a closing letter from the IRS can be helpful to an executor of an estate, it is not required by law. Moreover, the estate has the option of obtaining from the IRS, free of charge, an account transcript, showing certain information from the estate tax return, comparable to that found in a closing letter. As noted in the final regulations, account transcripts can be used to confirm that an estate tax return examination has been completed and the IRS file has been closed, which is the reason most often cited for requesting a closing letter.

https://www.irs.gov/newsroom/irs-drought-stricken-farmers-and-ranchers-have-more-time-to-replace-livestock

IR-2021-193, September 24, 2021 WASHINGTON — Farmers and ranchers who were forced to sell livestock due to drought may have an additional year to replace the livestock and defer tax on any gains from the forced sales, according to the Internal Revenue Service. To qualify for relief, farmers or ranchers must have sold livestock on account of drought conditions in an applicable region. This is a county or other jurisdiction designated as eligible for federal assistance plus counties contiguous to it. Notice 2021-55PDF, posted today on IRS.gov, lists applicable regions in 36 states and one U.S. territory. The relief generally applies to capital gains realized by eligible farmers and ranchers on sales of livestock held for draft, dairy or breeding purposes. Sales of other livestock, such as those raised for slaughter or held for sporting purposes, or poultry, are not eligible. The sales must be solely due to drought, causing an area to be designated as eligible for federal assistance. Livestock generally must be replaced within a four-year period, instead of the usual two-year period. The IRS is authorized to further extend this replacement period if the drought continues. The one-year extension, announced in the notice, gives eligible farmers and ranchers until the end of their first tax year after the first drought-free year to replace the sold livestock. Details, including an example of how this provision works, can be found in Notice 2006-82PDF, available on IRS.gov. The IRS provides this extension to eligible farmers and ranchers who sold livestock on account of drought conditions in an applicable region that qualified for the four-year replacement period, if the applicable region is listed as suffering exceptional, extreme or severe drought conditions during any week between September 1, 2020, and August 31, 2021. This determination is made by the National Drought Mitigation Center. As a result, eligible farmers and ranchers whose drought-sale replacement period was scheduled to expire on December 31, 2021, in most cases now have until the end of their next tax year to replace the sold livestock. Because the normal drought-sale replacement period is four years, this extension impacts drought sales that occurred during 2017. The replacement periods for some drought sales before 2017 are also affected due to previous drought-related extensions affecting some of these localities. More information on reporting drought sales and other farm-related tax issues can be found in Publication 225, Farmer's Tax Guide, available on IRS.gov.

https://www.irs.gov/newsroom/irs-launches-new-webpage-to-assist-taxpayers-with-refunds-subject-to-joint-committee-on-taxation-review

IR-2021-192, September 22, 2021 WASHINGTON — The IRS today introduced a new webpage that provides information to taxpayers whose large refunds are subject to further review by the Joint Committee on Taxation (JCT or Joint Committee). By law, when taxpayers claim a federal tax refund or credit of more than $2 million ($5 million for a C corporation), the IRS must review the refund or credit and provide a report to the JCT, a non-partisan committee of the U.S. Congress. Refunds subject to this review are known as “Joint Committee Refund Cases.” Taxpayers can now find answers to most questions about Joint Committee case reviews and links to additional resources at Large Tax Refunds and Credits Subject to Review by the Joint Committee on Taxation – What to Expect. The new webpage covers the following topics: What is a Joint Committee Refund Case How the IRS handles a Joint Committee Refund Case What you need to do A Joint Committee Refund Case may arise from the following: A refund claim for previously assessed and paid taxes. A refund claim may be made on an amended return or be made by a claim submitted during an examination. A refund claim would be reviewed by the IRS and reported to the JCT before being paid. A tentative refund from tentative carrybacks of net operating losses, capital losses or credits. The tentative refund would be claimed on Form 1139, Corporation Application for Tentative Refund, or on Form 1045, Application for Tentative Refund. A tentative refund would be paid prior to IRS and JCT review. A refund or credit of income taxes due to certain losses relating to federally declared disasters. The IRS estimates the new webpage will help hundreds of taxpayers. The agency notifies taxpayers who have Joint Committee Refund Cases that are subject to review. Taxpayers who have been contacted by an IRS agent should work with the agent assigned to their Joint Committee Refund Case.

https://www.irs.gov/newsroom/irs-new-contracts-awarded-to-private-collection-agencies-taxpayers-may-be-contacted-by-one-of-three-groups

IR-2021-191, September 22, 2021 WASHINGTON — The Internal Revenue Service has awarded new contracts to three private-sector collection agencies for collection of overdue tax debts. The new contracts begin Thursday following today's expiration of the old contracts. Beginning Thursday, Sept. 23, 2021, taxpayers with unpaid tax bills may be contacted by one of the following three agencies: CBE Group, Inc. PO Box 2217 Waterloo, IA 50704 800-910-5837 Coast Professional, Inc. PO Box 526 Albion, NY 14411 888-928-0510 ConServe PO Box 307 Fairport, NY 14450 844-853-4875 Notification by IRS and the private collection agencies The IRS will always notify a taxpayer before transferring their account to a private collection agency (PCA). First, the IRS will send a letter to the taxpayer and their tax representative informing them that their account was assigned to a PCA and giving the name and contact information for the PCA. This mailing will include a copy of Publication 4518, What You Can Expect When the IRS Assigns Your Account to a Private Collection AgencyPDF.   Following IRS notification, the PCA will send its own letter to the taxpayer and their representative confirming the account transfer. To protect the taxpayer's privacy and security, both the IRS letter and the PCA's letter will contain information that will help taxpayers identify the tax amount owed and assure taxpayers that future collection agency calls they may receive are legitimate. How it works The private collectors will identify themselves as contractors collecting taxes on behalf of the IRS. Employees of these collection agencies must follow the provisions of the Fair Debt Collection Practices Act, and like IRS employees, must be courteous and must respect taxpayer rights. Private firms are not authorized to take enforcement actions against taxpayers. Only IRS employees can take these actions, such as filing a notice of Federal Tax Lien or issuing a levy. Payment options The private firms are authorized to discuss payment options, including setting up payment agreements with taxpayers. But as with cases assigned to IRS employees, any tax payment must be made directly to the IRS. A payment should never be sent to the private firm or anyone besides the IRS or the U.S. Treasury. Checks should only be made payable to the United States Treasury. To find out more about available payment options, visit IRS.gov/payments. More information The IRS established the Private Debt Collection program in 2016, as authorized under federal law, and contracted with several agencies to collect certain unpaid tax debts on the government's behalf. To learn more about the private debt collection program, visit the Private Debt Collection page. Additional information can be found at the following links: Private Debt Collection – Accounts Assigned to Private Collection Agencies Questions and answers Get Transcript  Private Collection of Overdue Taxes YouTube Video Publication 4518, What You Can Expect When the IRS Assigns Your Account to a Private Collection AgencyPDF Understanding Your CP40 Notice Taxpayer Bill of Rights

https://www.irs.gov/newsroom/expanded-tax-benefits-help-individuals-and-businesses-give-to-charity-during-2021-deductions-up-to-600-available-for-cash-donations-by-non-itemizers

IR-2021-190, September 17, 2021 WASHINGTON — The Internal Revenue Service today explained how expanded tax benefits can help both individuals and businesses give to charity before the end of this year. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted last December, provides several provisions to help individuals and businesses who give to charity. The new law generally extends through the end of 2021 four temporary tax changes originally enacted by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Here is a rundown of these changes. Deduction for individuals who don't itemize; cash donations up to $600 qualify Ordinarily, individuals who elect to take the standard deduction cannot claim a deduction for their charitable contributions. The law now permits these individuals to claim a limited deduction on their 2021 federal income tax returns for cash contributions made to certain qualifying charitable organizations. Nearly nine in 10 taxpayers now take the standard deduction and could potentially qualify to claim a limited deduction for cash contributions. These individuals, including married individuals filing separate returns, can claim a deduction of up to $300 for cash contributions made to qualifying charities during 2021. The maximum deduction is increased to $600 for married individuals filing joint returns. Cash contributions to most charitable organizations qualify. However, cash contributions made either to supporting organizations or to establish or maintain a donor advised fund do not qualify. Cash contributions carried forward from prior years do not qualify, nor do cash contributions to most private foundations and most cash contributions to charitable remainder trusts. In general, a donor-advised fund is a fund or account maintained by a charity in which a donor can, because of being a donor, advise the fund on how to distribute or invest amounts contributed by the donor and held in the fund. A supporting organization is a charity that carries out its exempt purposes by supporting other exempt organizations, usually other public charities. See Publication 526, Charitable Contributions for more information on the types of organizations that qualify. Cash contributions include those made by check, credit card or debit card as well as amounts incurred by an individual for unreimbursed out-of-pocket expenses in connection with the individual's volunteer services to a qualifying charitable organization. Cash contributions don't include the value of volunteer services, securities, household items or other property. 100% limit on eligible cash contributions made by itemizers in 2021 Subject to certain limits, individuals who itemize may generally claim a deduction for charitable contributions made to qualifying charitable organizations. These limits typically range from 20% to 60% of adjusted gross income (AGI) and vary by the type of contribution and type of charitable organization. For example, a cash contribution made by an individual to a qualifying public charity is generally limited to 60% of the individual's AGI. Excess contributions may be carried forward for up to five tax years. The law now permits electing individuals to apply an increased limit ("Increased Individual Limit"), up to 100% of their AGI, for qualified contributions made during calendar-year 2021. Qualified contributions are contributions made in cash to qualifying charitable organizations. As with the new limited deduction for nonitemizers, cash contributions to most charitable organizations qualify, but, cash contributions made either to supporting organizations or to establish or maintain a donor advised fund, do not. Nor do cash contributions to private foundations and most cash contributions to charitable remainder trusts Unless an individual makes the election for any given qualified cash contribution, the usual percentage limit applies. Keep in mind that an individual's other allowed charitable contribution deductions reduce the maximum amount allowed under this election. Eligible individuals must make their elections with their 2021 Form 1040 or Form 1040-SR. Corporate limit increased to 25% of taxable income The law now permits C corporations to apply an increased limit (Increased Corporate Limit) of 25% of taxable income for charitable contributions of cash they make to eligible charities during calendar-year 2021. Normally, the maximum allowable deduction is limited to 10% of a corporation's taxable income. Again, the Increased Corporate Limit does not automatically apply. C corporations must elect the Increased Corporate Limit on a contribution-by-contribution basis. Increased limits on amounts deductible by businesses for certain donated food inventory Businesses donating food inventory that are eligible for the existing enhanced deduction (for contributions for the care of the ill, needy and infants) may qualify for increased deduction limits. For contributions made in 2021, the limit for these contribution deductions is increased from 15% to 25%. For C corporations, the 25% limit is based on their taxable income. For other businesses, including sole proprietorships, partnerships, and S corporations, the limit is based on their aggregate net income for the year from all trades or businesses from which the contributions are made. A special method for computing the enhanced deduction continues to apply, as do food quality standards and other requirements. Keep good records The IRS reminds individuals and businesses that special recordkeeping rules apply to any taxpayer claiming a charitable contribution deduction. Usually, this includes obtaining an acknowledgment letter from the charity before filing a return and retaining a cancelled check or credit card receipt for contributions of cash. For donations of property, additional recordkeeping rules apply, and may include filing a Form 8283 and obtaining a qualified appraisal in some instances. For details on how to apply the percentage limits and a description of the recordkeeping rules for substantiating gifts to charity, see Publication 526, available on IRS.gov. The IRS also encourages employers to help get the word out about the advance payments of the Child Tax Credit because they have direct access to many employees and individuals who receive this credit. For more information about other Coronavirus-related tax relief, visit IRS.gov/coronavirus.

https://www.irs.gov/newsroom/oct-15-deadline-approaches-for-taxpayers-who-requested-extensions-to-file-2020-tax-returns

IR-2021-189, September 16, 2021 WASHINGTON — The Internal Revenue Service today reminds taxpayers about the upcoming October 15 due date to file 2020 tax returns. People who asked for an extension should file on or before the extension deadline to avoid the penalty for filing late. Electronic filing options, such as IRS Free File, are still available. Although October 15 is the last day for most people to file, some taxpayers may have more time. They include: Members of the military and others serving in a combat zone. They typically have 180 days after they leave the combat zone to file returns and pay any taxes due. Taxpayers in federally declared disaster areas who already had valid extensions. For details, see the disaster relief page on IRS.gov. There is usually no penalty for failure to file if the taxpayer is due a refund. However, people who wait too long to file and claim a refund, risk losing it altogether. Those who have yet to file a 2020 tax return, owe tax, and did not request an extension can generally avoid additional penalties and interest by filing the return as soon as possible and paying any taxes owed. Schedule federal tax payments electronically Taxpayers can file now and schedule their federal tax payments up to the October 15 due date. They can pay online, by phone or with their mobile device and the IRS2Go app. When paying federal taxes electronically taxpayers should remember: Electronic payment options are the optimal way to make a tax payment. They can pay when they file electronically using tax software online. If using a tax preparer, taxpayers should ask the preparer to make the tax payment through an electronic funds withdrawal from a bank account. IRS Direct Pay allows taxpayers to pay online directly from a checking or savings account for free, and to schedule payments up to 365 days in advance. Choices to pay with a credit card, debit card or digital wallet option are available through a payment processor. The payment processor, not the IRS, charges a fee for this service. The IRS2Go app provides the mobile-friendly payment options, including Direct Pay and debit or credit card payments on mobile devices. The Electronic Federal Tax Payment System (EFTPS) is convenient, safe and easy. Choose to pay online or by phone by using the EFTPS Voice Response System. 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, and Approve or reject authorization requests from tax professionals. Choose direct deposit for refunds The safest and fastest way for people to get a refund is to file electronically and have their refund electronically deposited into their bank or other financial account. Taxpayers can use direct deposit to deposit their refund into one, two or even three accounts. They can also purchase U.S. Savings Bonds. People who don't have a bank account can go to the FDIC website or the National Credit Union Association to use their Credit Union Locator Tool for information on where to open an online bank or credit union account. Veterans can use the Veterans Benefits Banking Program (VBBP) for access to financial services at participating banks. Monthly advance Child Tax Credit payments Millions of American families currently receive monthly advance Child Tax Credit payments either through direct deposit or paper check. These payments represent half of the increased Child Tax Credit from the American Rescue Plan and will continue through the end of the year. For those eligible and on extension for their 2020 tax returns, the IRS is using previous year tax information, 2019 for most, to determine the credit amount. The IRS urges people who requested an extension to file as soon as possible if they experienced a major change such as the birth of a child in 2020. Once that return is processed, the IRS can calculate the credit based on the 2020 return and pay it out in full over the remaining months in 2021. Those who file and have their 2020 return processed on or before November 1, may be eligible for two payments of half the credit in 2021. Similarly, people who file and have their return processed on or before November 29, may be eligible for one payment. To speed the processing of returns and to avoid delays, the IRS urges everyone to file electronically. Complete information on the advance Child Tax Credit is available on IRS.gov. Act soon to claim missing stimulus payments For anyone who missed out on the first two rounds of stimulus payments, it's not too late. People who didn't get a first and second Economic Impact Payment or got less than the full amounts can get that missing money if they're eligible for it, but they need to act soon. When it comes to missing stimulus payments, it's critical that eligible people file a 2020 tax return or use the Child Tax Credit Non-filer Sign-up Tool soon even if they don't usually file to provide information the IRS needs to send the payments. The IRS will also automatically evaluate the taxpayer's eligibility for the third economic impact payment when the 2020 return is processed. The IRS will continue to issue eligible taxpayers their third economic impact payment and plus-up payments through the end of 2021. File a 2020 tax return electronically as soon as possible to give the IRS time to process and issue the payments before the end of 2021. IRS.gov assistance Taxpayers will find answers to many questions using the Interactive Tax Assistant (ITA), a tax law resource that works using a series of questions and responses. Additionally, the IRS provides payment options at IRS.gov/payments and tax information is available in several languages by clicking on the "English" tab on the front page of IRS.gov.

https://www.irs.gov/newsroom/irs-families-now-receiving-september-child-tax-credit-payments

IR-2021-188, September 15, 2021 WASHINGTON — The Internal Revenue Service and the Treasury Department announced today that millions of American families are now receiving their advance Child Tax Credit (CTC) payment for the month of September. This third batch of advance monthly payments, totaling about $15 billion, is reaching about 35 million families today across the country. The majority of payments will be issued by direct deposit. Under the American Rescue Plan, most eligible families received payments dated July 15 and Aug. 13, along with today's September 15 payment. Future payments are scheduled for October 15, November 15 and December 15. For these families, 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. Here are further details on these payments: Families will see the direct deposit payments in their accounts starting today, September 15. Like the prior payments, the vast majority of families will receive them by direct deposit. For those receiving payments by paper check, be sure to allow extra time, through the end of September, for delivery by mail. Those wishing to receive future payments by direct deposit can make this change using the Child Tax Credit Update Portal available only on IRS.gov. To access the portal or to get a new step-by-step guide for using it, visit IRS.gov/childtaxcredit2021. A change made by 11:59 p.m. Eastern Time on October 4 will apply starting with the October payment. Payments went to eligible families who filed a 2019 or 2020 income tax return. Returns processed by Aug. 30 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 on IRS.gov or in 2021 successfully used the Non-filer Sign-up Tool for advance CTC, also available only on IRS.gov. Payments are automatic. Aside from filing a tax return, which could include filing 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. Families who did not get a July or August payment and are getting their first monthly payment in September will still receive their total advance payment for the year of up to $1,800 for each child under age 6 and up to $1,500 for each child ages 6 through 17. This means that the total payment will be spread over four months, rather than six, making each monthly payment larger. For these families, each payment is up to $450 per month for each child under age 6 and up to $375 per month for each child ages 6 through 17. Still time to sign up; additional details It's not too late for families who haven't filed a 2020 income tax return—including those who are not normally required to file because their incomes are too low—to sign up for advance CTC payments. Most low-income families can get these monthly payments. The IRS urges families who normally aren't required to file a tax return to explore the tools available on IRS.gov. These tools can help determine their eligibility or help them file a simplified tax return to sign up for these payments, as well as to be considered automatically for the third round of Economic Impact Payments of up to $1,400 per person and to claim the Recovery Rebate Credit covering any of the first two rounds of Economic Impact Payments they may have missed. The IRS encourages partners and community groups to share information and use available online tools and toolkits to help non-filers, low-income families and other underserved groups sign up to receive these benefits. Families can stop payments anytime, even after payments begin. They can 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 October and for the rest of 2021, they must unenroll by 11:59 p.m. ET on October 4, 2021. For married couples, each spouse must unenroll separately. If they each choose to unenroll, they will receive no monthly payments. If only one spouse unenrolls, they will still receive monthly payments, but they will be half the normal amount. The unenroll feature can also be helpful to any family that no longer qualifies for the CTC or believes they will not qualify when they file their 2021 return in 2022. This could happen if, for example, someone else, such as an ex-spouse or another family member, qualifies to claim their child or children as dependents in 2021. At the same time, IRS also reminded eligible families who are not getting these payments, especially those who receive little or no income, that the IRS Non-filer Sign-up Tool remains available to use until October 15. Links to these tools, a step-by-step guide to using the Non-filer Sign-up Tool, answers to frequently asked questions and other helpful resources are available on the IRS's special advance CTC 2021 page.

https://www.irs.gov/newsroom/irs-extends-dyed-diesel-fuel-penalty-relief-in-louisiana-due-to-hurricanes-ida-and-nicholas

IR-2021-187, September 15, 2021 WASHINGTON — The Internal Revenue Service, in response to the continued shortages of undyed diesel fuel caused by Hurricanes Ida and Nicholas, will extend the penalty relief provided in IR-2021-176 when dyed diesel fuel is sold or used on the highway. In IR-2021-176, released September 1, 2021, the IRS announced that due to the impact of Hurricane Ida it would not impose a penalty when dyed diesel fuel is sold for use or used on the highway for the following parishes in the state of Louisiana: Ascension, Assumption, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Martin, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Washington, West Baton Rouge and West Feliciana. That relief has been extended and is effective as of August 29, 2021 and will remain in effect through September 30, 2021. In addition, due to the impact of Hurricanes Ida and Nicholas, the IRS is also providing penalty relief to the parishes of Acadia, Allen, Avoyelles, Beauregard, Calcasieu, Cameron, Evangeline, Jefferson Davis, Lafayette, Rapides, St. Landry, Vermilion, and Vernon. This additional relief is effective as of August 29, 2021 and will remain in effect through September 30, 2021. This penalty relief is available to any person that sells or uses dyed fuel for highway use. In the case of the operator of the vehicle in which the dyed fuel is used, the relief is available only if the operator or the person selling the fuel pays the tax of 24.4 cents per gallon that is normally applied to diesel fuel for highway use. The IRS will not impose penalties for failure to make semimonthly deposits of this tax. IRS Publication 510, Excise TaxesPDF, has information on the proper method for reporting and paying the tax. Ordinarily, dyed diesel fuel is not taxed, because it is sold for uses exempt from excise tax, such as to farmers for farming purposes, for home heating use and to local governments for buses. Also, this waiver does not apply to the Internal Revenue Code penalty for using adulterated fuels that do not comply with applicable EPA regulations. Consequently, diesel fuel with sulfur content higher than 15 parts-per-million may not be used in highway vehicles. The IRS is closely monitoring the situation and will provide additional relief as needed.

https://www.irs.gov/newsroom/irs-reminds-business-owners-to-correctly-identify-workers-as-employees-or-independent-contractors

IR-2021-186, September 15, 2021 WASHINGTON — During National Small Business Week, the Internal Revenue Service reminds business owners that it's critical to correctly determine whether the individuals providing services are employees or independent contractors. An employee is generally considered to be anyone who performs services, if the business can control what will be done and how it will be done. What matters is that the business has the right to control the details of how the worker's services are performed. Independent contractors are normally people in an independent trade, business or profession in which they offer their services to the public. Doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers or auctioneers are generally independent contractors. Independent contractor vs. employee Whether a worker is an independent contractor or an employee depends on the relationship between the worker and the business. Generally, there are three categories to examine: Behavioral Control − Does the company control or have the right to control what the worker does and how the worker does the job? Financial Control − Does the business direct or control the financial and business aspects of the worker's job. Are the business aspects of the worker's job controlled by the payer? (Things like how the worker is paid, are expenses reimbursed, who provides tools/supplies, etc.) Relationship of the Parties − Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business? Misclassified worker  Misclassifying workers as independent contractors adversely affects employees because the employer's share of taxes is not paid, and the employee's share is not withheld. If a business misclassified an employee without a reasonable basis, it could be held liable for employment taxes for that worker. Generally, an employer must withhold and pay income taxes, Social Security and Medicare taxes, as well as unemployment taxes. Workers who believe they have been improperly classified as independent contractors can use IRS  Form 8919, Uncollected Social Security and Medicare Tax on Wages  to figure and report their share of uncollected Social Security and Medicare taxes due on their compensation. Voluntary Classification Settlement Program The Voluntary Classification Settlement Program (VCSP) is an optional program that provides taxpayers with an opportunity to reclassify their workers as employees for future tax periods for employment tax purposes with partial relief from federal employment taxes for eligible taxpayers that agree to prospectively treat their workers (or a class or group of workers) as employees. Taxpayers must meet certain eligibility requirements, apply by filing Form 8952, Application for Voluntary Classification Settlement Program, and enter into a closing agreement with the IRS. Who is self-employed? Generally, someone is self-employed if any of the following apply to them. They carry on a trade or business as a sole proprietor or an independent contractor. They are a member of a partnership that carries on a trade or business. They are otherwise in business for themselves (including a part-time business). Self-employed individuals generally are required to file an annual tax return and pay estimated tax quarterly. They generally must pay self-employment tax (Social Security and Medicare tax) as well as income tax. Self-employed taxpayers may be able to claim the home office deduction if they use part of a home for business. What about the gig economy? The gig economy − also called sharing economy or access economy−is activity where people earn income providing on-demand work, services or goods. Gig economy income must be reported on a tax return, even if the income is: from part-time, temporary or side work; not reported on a Form 1099-K, 1099-MISC, W-2 or other income statement; or paid in any form, including cash, property, goods or virtual currency. Help spread the word - Advance Child Tax Credit The IRS encourages employers to help get the word out about the advance payments of the Child Tax Credit during Small Business Week. Employers have direct access to many who may receive this credit. More information on the Advance Child Tax Credit is available on IRS.gov. The website has tools employers can use to deliver this information, including e-posters, drop-in articles (for paycheck stuffers, newsletters) and social media posts to share. For more information and help The Self-Employed Individuals Tax Center has information for those who are in an independent trade, business or profession in which they offer their services to the general public. Small Business Taxes: The Virtual Workshop is composed of nine interactive lessons designed to help new small business owners learn their tax rights and responsibilities. The IRS Video Portal contains video and audio presentations on topics of interest to small businesses, individuals and tax professionals.

https://www.irs.gov/newsroom/new-mailing-address-for-some-western-states-as-fresno-california-paper-tax-return-processing-center-closes

IR-2021-185, September 14, 2021 WASHINGTON — The Internal Revenue Service will close its paper return processing center in Fresno, California, permanently at the end of September this year. Originally announced in 2016, this closure is part of a larger, ongoing efficiency strategy as most taxpayers now file electronically. The number of individual returns taxpayers filed electronically has grown from 90 million in 2008 to over 145 million in 2020, which is more than 90% of all returns filed. The IRS expects this trend to continue for both individual and non-individual returns. Where to send returns Taxpayers located in Alaska, California, Hawaii, Ohio and Washington state who previously filed their federal tax returns with Fresno should now mail their returns to the Ogden, Utah, processing center. The Ogden address for filing paper individual returns is: Department of the Treasury Internal Revenue Service Ogden, UT 84201-0002 Fresno operations The IRS will maintain a presence in Fresno with many other operations still working at full capacity. This planned consolidation, however, allows IRS to streamline operations and make better use of existing space. When this consolidation was announced in September 2016, there were approximately 3,000 employees employed at the paper processing center in Fresno. Since that time, the IRS has taken steps to provide training and find continued employment opportunities for many of the impacted employees. Others have chosen to retire or separate from the IRS. The agency also maintains a Fresno submission processing consolidation update page on IRS.gov. IRS.gov assistance 24/7 The IRS reminds taxpayers that 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/renewed-tax-credit-can-help-employers-hire-workers-key-certification-requirement-applies

IR-2021-184, September 14, 2021 WASHINGTON — With many businesses facing a tight job market, the Internal Revenue Service reminds employers to check out a valuable tax credit available to them for hiring long-term unemployment recipients and other groups of workers facing significant barriers to employment. During National Small Business Week, the IRS is highlighting tax benefits and resources designed to help new and existing small businesses. For any business now hiring, the Work Opportunity Tax Credit (WOTC) may help. Legislation enacted in December extended the WOTC through the end of 2025. This long-standing tax benefit encourages employers to hire workers certified as members of any of ten targeted groups facing barriers to employment. With millions of Americans out of work at one time or another since the pandemic began, the IRS noted that one of these targeted groups is long-term unemployment recipients who have been unemployed for at least 27 consecutive weeks and have received state or federal unemployment benefits during part or all of that time. The other groups include certain veterans and recipients of various kinds of public assistance, among others. Specifically, the 10 groups are: Temporary Assistance for Needy Families (TANF) recipients, Unemployed veterans, including disabled veterans, Formerly incarcerated individuals, Designated community residents living in Empowerment Zones or Rural Renewal Counties, Vocational rehabilitation referrals, Summer youth employees living in Empowerment Zones, Supplemental Nutrition Assistance Program (SNAP) recipients, Supplemental Security Income (SSI) recipients, Long-term family assistance recipients, Long-term unemployment recipients. To qualify for the credit, an employer must first request certification by submitting IRS  Form 8850, Pre-screening Notice and Certification Request for the Work Opportunity Credit , to their state workforce agency (SWA). Do not submit this form to the IRS. Normally, Form 8850 must be submitted to the SWA within 28 days after the eligible worker begins work. But under a special relief provision, a November 8, 2021, submission deadline applies to two groups of new hires—qualified summer youth employees living in Empowerment Zones and designated community residents living in Empowerment Zones. To qualify for the Nov. 8 submission deadline, eligible employees must start work on or after January 1, 2021, and before October 9, 2021. Other requirements and further details can be found in Notice 2021-43PDF and the instructions to Form 8850PDF. Eligible businesses claim the WOTC on their federal income tax return. It is generally based on wages paid to eligible workers during the first year of employment. The credit is first figured on Form 5884, Work Opportunity Credit, and then is claimed on Form 3800, General Business Credit. Though the credit is not available to tax-exempt organizations for most groups of new hires, a special rule allows them to claim the WOTC for hiring qualified veterans. These organizations claim the credit against payroll taxes on Form 5884-C, Work Opportunity Credit for Qualified Tax Exempt Organizations. For more information about the Work Opportunity Tax Credit, visit IRS.gov/wotc. Help spread the word-advance Child Tax Credit The IRS encourages employers to help get the word out about the advance payments of the Child Tax Credit during Small Business Week. Employers have direct access to many who may receive this credit. More information on the Advance Child Tax Credit is available on IRS.gov. The website has tools employers can use to deliver this information, including e-posters, drop-in articles (for paycheck stuffers, newsletters) and social media posts to share.

https://www.irs.gov/newsroom/irs-tax-relief-now-available-to-ida-victims-in-pennsylvania-oct-15-deadline-other-dates-extended-to-jan-3

IR-2021-183, September 13, 2021 WASHINGTON — Victims of Hurricane Ida in parts of Pennsylvania now have until January 3, 2022, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today. The IRS has also provided relief to Ida victims in Louisiana, Mississippi, New Jersey and New York. The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance. Currently, this includes Bucks, Chester, Delaware, Montgomery, Philadelphia and York counties, but taxpayers in Ida-impacted localities in other parts of Pennsylvania, subsequently designated by FEMA, will automatically receive the same filing and payment relief. The current list of eligible localities is available on the disaster relief page on IRS.gov. “During this difficult time, the IRS stands ready to help victims of Hurricane Ida,” said IRS Commissioner Chuck Rettig. “We want people affected by this devastating hurricane focused on their safety and recovery for themselves and their families. To provide assistance now and in the weeks ahead, we have a variety of different types of relief available to help people and businesses affected by this disaster.” The tax relief postpones various tax filing and payment deadlines that occurred starting on August 31, 2021. As a result, affected individuals and businesses will have until January 3, 2022, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return due to run out on October 15, 2021, will now have until January 3, 2022, to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief. The January 3, 2022 deadline also applies to quarterly estimated income tax payments due on September 15, 2021, and the quarterly payroll and excise tax returns normally due on November 1, 2021. It also applies to tax-exempt organizations, operating on a calendar-year basis, that had a valid extension due to run out on November 15, 2021. Businesses with an original or extended due date also have the additional time including, among others, calendar-year partnerships and S corporations whose 2020 extensions run out on September 15, 2021 and calendar-year corporations whose 2020 extensions run out on October 15, 2021. In addition, penalties on payroll and excise tax deposits due on or after August 31 and before September 15, will be abated as long as the deposits are made by September 15, 2021. 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 (2020). Be sure to write the FEMA declaration number – DR-4618 for Pennsylvania − 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 Hurricane Ida and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

https://www.irs.gov/newsroom/irs-recognizes-small-business-week-resources-available-to-help-employers

IR-2021-182, September 13, 2021 WASHINGTON — During National Small Business Week, the Internal Revenue Service wants small business owners to know that information and resources to help them understand and meet their tax obligations are available free at IRS.gov. Small businesses play a pivotal role in our nation's economy. The IRS has a variety of resources available to help employers meet their tax responsibilities as well as help their employees. IRS online resources can also help employers with things like how to determine if workers should be classified as employees or independent contractors, when employment taxes are due and what forms they need to file. Employer Identification Number An Employer Identification Number, also known as a Federal Tax Identification Number is a must-have for a business. Applying for an EIN can be done online for free using an interview style application offered by the IRS. Five Things to Know about the EIN is a video that helps explain why it is critical the IRS has accurate and current information related to EINs or business accounts. Employment taxes It's important a small business understand employment taxes such as federal income tax, Social Security and Medicare taxes as well as Federal Unemployment (FUTA) Tax. Employers must regularly report wages, tips and other compensation paid to an employee by filing the required form(s) to the IRS. Most employers use Form 941, Employer's Quarterly Federal Tax Return to report federal income tax withheld and both the employer and employee Social Security and Medicare taxes. The smallest employers (those whose annual liability for Social Security, Medicare and withheld federal income taxes is $1,000 or less) file Form 944, Employer's Annual Federal Tax Return, and agricultural employers file Form 943, Employer's Annual Federal Tax Return for Agricultural Employees. Only the employer pays FUTA tax; it is not withheld from the employee's wages. Employers report their FUTA taxes by filing Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. If businesses compensate non-employees for services, or pay rent, commissions, the fees of attorneys and other professionals, or make certain other payments, businesses must obtain the Taxpayer Identification Number (TIN) of the payee before making the payment. If businesses don't have the payee's TIN at the time payment is made, businesses must withhold 24% from the payment as backup withholding. A payer is liable for backup withholding even if the tax is not deducted from the payment. Payers may use Form W-9 to request the payee's TIN. Payers use Form 945, Annual Return of Withheld Income Tax, to report backup withholding. There are two deposit schedules for employment taxes withheld and the employer's match − monthly and semi-weekly. Before the beginning of each calendar year, employers must determine which of the two deposit schedules they're required to use. To determine the businesses' payment schedule, review Publication 15 for Forms 941, 944 and 945, or Publication 51 for Form 943. Deposits for FUTA Tax (Form 940) are required for the quarter within which the tax due exceeds $500. The tax must be deposited by the end of the month following the end of the quarter. Small business taxpayers must use electronic funds transfer (EFTPS) to make all federal tax deposits. See the Employment Tax Due Dates page for information on when deposits are due. Estimated tax payments Taxes are pay-as-you-go. This means taxpayers need to pay most of their tax during the year, as they receive income, rather than paying at the end of the year. Small business owners, sole proprietors, partners and S corporation shareholders who don't have tax withheld from their earnings need to make estimated tax payments, usually quarterly. Anyone who pays too little taxPDF or does not pay on-time, may owe a penalty. Hiring others to prepare payroll To meet payroll and employment tax responsibilities, many businesses hire a payroll and payroll tax company. Most of these businesses provide quality service, however, sometimes a payroll service provider doesn't submit their client's payroll taxes and closes abruptly. The client remains legally responsible for paying the taxes due even if they sent funds for deposits or payments to the payroll service provider. The IRS urges employers to choose carefully when selecting a payroll provider. The IRS also encourages employers to enroll in the Electronic Federal Tax Payment System (EFTPS). It's free and when deposits are made under their EIN, it lets them monitor that their payroll service provider is making their tax deposits. Small businesses can share the word with employees about Child Tax Credit Due to the COVID-19 pandemic, new legislation was enacted to aid not only struggling business owners, but also individuals. Employers have direct access to people who may be eligible for advance Child Tax Credit payments. As part of its ongoing effort to help eligible people access advance Child Tax Credit payments and the increased Child Tax Credit for the 2021 tax year; IRS will be encouraging employers to help spread the word during National Small Business Week 2021. Materials for employers and others who can help are available on the IRS website at 2021 Child Tax Credit and Advance Child Tax Credit Payments: Resources and Guidance. This is part of a larger effort underway at the IRS to reach people eligible for the payments and other credits. Individuals can check their eligibility for the advance payments by using the Advance Child Tax Credit Eligibility Assistant. More information Online IRS resources available to small businesses to learn their employer tax responsibilities include: The Small Business and Self-Employed Tax Center features links to a variety of useful tools, a downloadable tax calendar and common forms with instructions. The IRS Tax Calendar for Businesses and Self-employed has important tax dates, including federal tax deposit due dates. The Self-Employed Individuals Tax Center is for sole proprietors and others who are in an independent trade, business or profession. The Gig Economy Tax Center can help people find answers to tax questions, as well as helpful tips and tax forms for business taxpayers. Information on IRS.gov may also be available in Spanish, Vietnamese, Chinese (Simplified and Traditional), Korean, Russian as well as Haitian Creole. IRS social media channels have helpful video and audio presentations. IRS2Go is a free mobile app to find free tax help, watch IRS YouTube videos and get IRS Tax Tips by email in English and Spanish. The IRS YouTube Video Channel has videos for small businesses on the small business playlist, with videos available in English, Spanish and American Sign Language. Small Business Taxes: The Virtual Workshop has interactive lessons designed to help new small business owners learn their tax rights and responsibilities.

https://www.irs.gov/newsroom/irs-cost-of-home-testing-for-covid-19-is-eligible-medical-expense-reimbursable-under-fsas-hsas

IR-2021-181, September 10, 2021 WASHINGTON — The Internal Revenue Service reminds taxpayers today that the cost of home testing for COVID-19 is an eligible medical expense that can be paid or reimbursed under health flexible spending arrangements (health FSAs), health savings accounts (HSAs), health reimbursement arrangements (HRAs), or Archer medical savings accounts (Archer MSAs). That is because the cost to diagnose COVID-19 is an eligible medical expense for tax purposes. The IRS also reminds taxpayers that the costs of personal protective equipment, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of COVID-19 are eligible medical expenses that can be paid or reimbursed under health FSAs, HSAs, HRAs, or Archer MSAs. Additional information is available on IRS.gov. For more information regarding details and requirements on deductibility of medical expenses, taxpayers can review Can I Deduct My Medical and Dental Expenses? and Publication 502, Medical and Dental Expenses.

https://www.irs.gov/newsroom/irs-hurricane-ida-victims-in-mississippi-now-eligible-for-tax-relief-october-15-deadline-other-dates-extended-to-november-1

IR-2021-180, September 9, 2021 WASHINGTON — Victims of Hurricane Ida in parts of Mississippi now have until November 1, 2021, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today. The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance. Currently, individuals and households affected by Hurricane Ida that reside or have a business in all 82 counties and the Mississippi Choctaw Indian Reservation qualify for tax relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov. "The IRS stands ready to help people and businesses affected by Hurricane Ida, now and in the weeks ahead," said IRS Commissioner Chuck Rettig. The tax relief postpones various tax filing and payment deadlines that occurred starting on Aug. 28, 2021. As a result, affected individuals and businesses will have until November 1, 2021, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return due to run out on October 15, 2021, will now have until November 1, 2021, to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief. The November 1, 2021 deadline also applies to quarterly estimated income tax payments due on September 15, 2021, and the quarterly payroll and excise tax returns normally due on November 1, 2021. Businesses with an original or extended due date also have the additional time including, among others, calendar-year partnerships and S corporations whose 2020 extensions run out on September 15, 2021 and calendar-year corporations whose 2020 extensions run out on October 15, 2021. In addition, penalties on payroll and excise tax deposits due on or after August 28, 2021 and before September 13, will be abated as long as the deposits are made by September 13, 2021. 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 (2020). Be sure to write the FEMA declaration number – EM-3569 − 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 Hurricane Ida and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

https://www.irs.gov/newsroom/irs-tax-relief-now-available-to-ida-victims-in-new-york-and-new-jersey-oct-15-deadline-other-dates-extended-to-jan-3

IR-2021-179, September 8, 2021 WASHINGTON — Victims of Hurricane Ida in parts of New York and New Jersey now have until January 3, 2022, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today. This is comparable to relief provided last week to Ida victims in Louisiana. The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA)  as qualifying for individual or public assistance. In New York, this currently includes Bronx, Kings, New York, Queens, Richmond and Westchester counties, and in New Jersey, it includes Bergen, Gloucester, Hunterdon, Middlesex, Passaic and Somerset counties. Taxpayers in Ida-impacted localities subsequently designated by FEMA in other parts of these states will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov. “During this difficult time, the IRS stands ready to help victims of Hurricane Ida,” said IRS Commissioner Chuck Rettig. “We want people affected by this devastating hurricane focused on their safety and recovery for themselves and their families. To provide assistance now and in the weeks ahead, we have a variety of different types of relief available to help people and businesses affected by this disaster.” The tax relief postpones various tax filing and payment deadlines that occurred starting on September 1, 2021. As a result, affected individuals and businesses will have until January 3, 2022, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return due to run out on October 15, 2021, will now have until January 3, 2022, to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief. The January 3, 2022 deadline also applies to quarterly estimated income tax payments due on September 15, 2021, and the quarterly payroll and excise tax returns normally due on November 1, 2021. It also applies to tax-exempt organizations, operating on a calendar-year basis, that had a valid extension due to run out on November 15, 2021. Businesses with an original or extended due date also have the additional time including, among others, calendar-year partnerships and S corporations whose 2020 extensions run out on September 15, 2021 and calendar-year corporations whose 2020 extensions run out on October 15, 2021. In addition, penalties on payroll and excise tax deposits due on or after September 1 and before September 16, will be abated as long as the deposits are made by September 16, 2021. 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 (2020). Be sure to write the FEMA declaration number – 4614 for New Jersey or 4615 for New York or  − 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 Hurricane Ida and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

https://www.irs.gov/newsroom/treasury-irs-issue-guidance-for-2021-on-reporting-qualified-sick-and-family-leave-wages

IR-2021-178, September 7, 2021 WASHINGTON — The Treasury Department and the Internal Revenue Service today issued Notice 2021-53PDF, which provides guidance to employers about reporting on Form W-2 the amount of qualified sick and family leave wages paid to employees for leave taken in 2021. The notice provides guidance under recent legislation, including: the Families First Coronavirus Response Act (FFCRA), as amended by the COVID-Related Tax Relief Act of 2020, and the American Rescue Plan Act of 2021. Employers will be required to report these amounts to employees either on Form W-2, Box 14, or in a separate statement provided with the Form W-2. The guidance provides employers with model language to use as part of the Instructions for Employee for the Form W-2 or on the separate statement provided with the Form W-2. The wage amount that the notice requires employers to report on Form W-2 will provide employees who are also self-employed with the information necessary to determine the amount of any sick and family leave equivalent credits they may claim in their self-employed capacities. In July 2020, the IRS issued Notice 2020-54, which provided guidance regarding W-2 reporting of qualified sick leave and family leave under FFCRA for wages paid to employees for leave taken in 2020. Additional information about tax relief for employers affected by the COVID-19 pandemic can be found on IRS.gov.

https://www.irs.gov/newsroom/irs-deadline-for-third-quarter-estimated-tax-payments-is-sept-15

IRS YouTube Video: Estimated Tax Payments IR-2021-177, September 7, 2021 WASHINGTON — The Internal Revenue Service reminds people that September 15, 2021, is the deadline for third quarter estimated tax payments. This generally applies to people who are self-employed and some investors, retirees and those who may not normally have taxes withheld from their paycheck by their employers. The U.S. tax system operates on a pay-as-you-go basis. This means taxpayers are to pay most of their tax during the year, as they earn or receive income. Therefore, individuals not subject to withholding may need to make quarterly estimated tax payments. Who should pay quarterly? In most cases, taxpayers should make  quarterly estimated tax payments  for 2021 if both of the following apply: Individuals expect to owe at least $1,000 in tax for 2021 after subtracting their withholding and tax credits. They expect their withholding and tax credits to be less than the smaller of: 90% of the tax to be shown on their 2021 tax return or 100% of the tax shown on their 2020 tax return. Their 2020 tax return must cover all 12 months. Taxpayers with income not subject to withholding, including interest, dividends, capital gains, alimony, cryptocurrency and rental income, normally make estimated tax payments. Special rules apply to some groups of taxpayers, such as farmers, fishermen, 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, provides more information on estimated tax rules. The worksheet in Form 1040-ES, Estimated Tax for Individuals, or Form 1120-W, Estimated Tax for Corporations, has details on who must pay estimated tax. Penalty for underpayment If a taxpayer underpaid their taxes, they may have to pay a penalty. This applies whether they paid through withholding or through estimated tax payments. A penalty may also apply for late estimated tax payments even if someone is due a refund when they file their tax return. To see if they owe a penalty, taxpayers should use Form 2210. The IRS may waive the penalty if someone underpaid because of unusual circumstances and not willful neglect. Examples include: casualty, disaster or another unusual situation, an individual retired after reaching age 62 during a tax year when estimated tax payments applied and an individual became disabled during a tax year when estimated tax payments applied. How to figure estimated tax To figure estimated tax, an individual must figure their expected adjusted gross income (AGI), taxable income, taxes, deductions and credits for the year. When figuring 2021 estimated tax, it may be helpful to use income, deductions and credits for 2020 as a starting point. Use the 2020 federal tax return as a guide. Taxpayers can use Form 1040-ES to figure their estimated tax. Nonresident aliens use Form 1040-ES (NR) to figure estimated tax. Taxpayers must make adjustments both for changes in their own situation and for recent changes in the tax law. For instance, tax provisions in the American Rescue Plan of 2021 may impact an individual taxpayer's situation. For more information, see Publication 505 under What's New for 2021PDF. For information about these and other changes in the law, visit IRS.gov. The instructions for Form 1040-ES include a worksheet to help taxpayers figure their estimated tax. Keep the worksheet for records. The Tax Withholding Estimator on IRS.gov offers taxpayers a clear, step-by-step method to have the right amount of tax withheld from wages and pensions. It also has instructions to file a new Form W-4 to give to their employer to adjust the amount withheld each payday. Other IRS.gov resources The Pay tab on the front page of IRS.gov provides complete tax payment information, how and when to pay, payment options and more. Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts Form 2220, Underpayment of Estimated Tax by Corporations IRS: Unemployment compensation is taxable; have tax withheld now and avoid a tax-time surprise The fourth and final 2021 estimated tax payment is due January 17, 2022.

https://www.irs.gov/newsroom/irs-grants-dyed-diesel-fuel-penalty-relief-in-louisiana-due-to-hurricane-ida

IR-2021-176, September 1, 2021 WASHINGTON — The Internal Revenue Service, in response to shortages of undyed diesel fuel caused by Hurricane Ida, will not impose a penalty when dyed diesel fuel is sold for use or used on the highway for a number of parishes in the state of Louisiana. The Louisiana parishes are: Ascension, Assumption, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Martin, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Washington, West Baton Rouge and West Feliciana. This relief is effective as of August 29, 2021, and will remain in effect through September 15, 2021. This penalty relief is available to any person that sells or uses dyed fuel for highway use. In the case of the operator of the vehicle in which the dyed fuel is used, the relief is available only if the operator or the person selling the fuel pays the tax of 24.4 cents per gallon that is normally applied to diesel fuel for highway use. The IRS will not impose penalties for failure to make semimonthly deposits of this tax. IRS Publication 510, Excise TaxesPDF, has information on the proper method for reporting and paying the tax. Ordinarily, dyed diesel fuel is not taxed, because it is sold for uses exempt from excise tax, such as to farmers for farming purposes, for home heating use and to local governments for buses. Also, this waiver does not apply to the Internal Revenue Code penalty for using adulterated fuels that do not comply with applicable EPA regulations. Consequently, diesel fuel with sulfur content higher than 15 parts-per-million may not be used in highway vehicles. The IRS is closely monitoring the situation and will provide additional relief as needed.

https://www.irs.gov/newsroom/child-tax-credit-families-with-income-changes-must-enter-them-in-irs-online-portal-on-monday-to-impact-nov-15-payment-spanish-version-coming-in-late-november

IR-2021-211, October 29, 2021 WASHINGTON — On Monday, November 1, the Internal Revenue Service will launch a new feature allowing any family receiving monthly Child Tax Credit payments to update their income using the Child Tax Credit Update Portal (CTC UP), found exclusively on IRS.gov. To help families plan ahead, the IRS also announced today that in late November it will launch a new Spanish-language version of the CTC UP. The IRS urges families to enter any significant income changes by midnight on November 1 in order for them to be reflected in their November payment, scheduled for November 15. If a family is unable to make the changes on November 1, enter them by November 29 so they are reflected in the December payment. Once the update is made, the IRS will adjust the remaining payment amounts to ensure people receive the total advance payment for the year. For married couples, if one spouse makes the income update, it will apply to both spouses and could impact both spouses' future monthly advance payments of the Child Tax Credit. Income feature right for some  The new income feature can help families make sure they are getting the right amount of advance Child Tax Credit payments during 2021. For that reason, it will be especially useful to any family who wants to raise or lower their monthly payments because their 2021 income has risen or fallen substantially, compared to 2020. In many, but not all, cases a big income swing can either raise or lower a family's monthly payments. Normally, this means that small changes in income will not impact the payment amount and need not be entered into the CTC UP. Any change to the monthly payment amount will be reflected in both the November 15 and December 15 payments, but only if a person completes their updated income request before midnight Eastern Time on Monday, November 1. Changes made after that date, but before midnight on November 29, will only impact the December 15 payment, which is the last scheduled monthly payment for 2021. The IRS will adjust the payment amount to reflect these changes and ensure people receive their total advance payment for the year of up to $1,800 for each child under age 6 and up to $1,500 for each child ages 6 through 17. Who qualifies for a bigger payment In some cases, families who are currently receiving monthly payments that are below the maximum may qualify to have their payments increased. This could happen if, for example, they experienced job loss during 2021, or for some other reason are receiving substantially less income this year. If the reduction in income is large enough, reporting that change now may increase the amount of their advance CTC payments for the rest of this year. For any family already receiving the maximum payment, a drop in income will not increase the payment amount. Normally, the maximum CTC payment is $300 per month for each qualifying child, under the age of 6, and $250 per month for each child, ages 6 to 17. Most families are receiving half of the total CTC through monthly payments. This means that any changes entered into the CTC UP will increase or decrease their monthly payments to ensure they receive half of their total expected credit before the end of 2021. They will claim the remaining portion on their 2021 tax return. Who should have their payments reduced Any family whose income rose substantially in 2021 should consider having their payments reduced. This is especially true if they are now receiving the maximum monthly payment, and they expect to qualify for less than the full credit when they file their 2021 federal income tax return. For more information on calculating the CTC, see Topic C of the agency's Frequently Asked Questions. In particular, where a family qualifies to receive less than the full amount, see QC 4 &  QC 5. Using the portal to report income changes Only families who are already eligible for and receiving advance CTC payments based on their 2020 tax return can use the CTC UP to update their income. Note that someone who filed a joint return for 2020 can only update their income if they plan to file a joint return for 2021 with the same spouse. IRS representatives cannot process income changes over the phone or at Taxpayer Assistance Centers. After an income update is completed, the Update Portal will acknowledge a change was made but will not display the change. Likewise, IRS representatives won't be able to confirm that an update was made. Low-income families can still sign up It's not too late for low-income families to sign up for advance CTC payments. The IRS urged any family not already receiving payments who normally isn't required to file a tax return to explore the tools available through IRS.gov. These tools can help determine eligibility for the advance CTC or help them file a simplified tax return to sign up for these payments as well as Economic Impact Payments and the Recovery Rebate Credit. The deadline to sign up is November 15, 2021. People can get these benefits, even if they don't work and even if they receive no income. Families who sign up will normally receive half of their total Child Tax Credit on December 15. This means a payment of up to $1,800 for each child, under 6, and up to $1,500 for each child, ages 6 to 17. Get ready to file next year Early in 2022, families will receive Letter 6419 documenting any advance payments issued to them during 2021 and the number of qualifying children used to calculate the advance payments. This letter can help them accurately reconcile the advance CTC payments they have received and claim any remaining portion of the CTC when completing their 2021 federal income tax return next year. The income change feature joins a growing set of services available through CTC UP. Available only on IRS.gov, the portal already allows families to verify their eligibility for the payments and then, if they choose to: Switch from receiving a paper check to direct deposit; Change the account where their payment is direct deposited; Update their address or Stop monthly payments for the rest of 2021. Latest information available on IRS.gov 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. The agency encourages partners and community groups to share information and use available online tools and toolkits to help non-filers, low-income families and other underserved groups sign up. People can check their eligibility by using the advance Child Tax Credit Eligibility Assistant. The webpage features a set of frequently asked questions and a user guide for the Child Tax Credit Update Portal (Publication 5549)PDF. It also provides direct links to the portal, as well as two other online tools – the Non-filer Sign up Tool and the Child Tax Credit Eligibility Assistant – and other useful resources.

https://www.irs.gov/newsroom/additional-hurricane-ida-relief-from-irs-sept-15-oct-15-deadlines-other-dates-further-extended-to-jan-3-for-parts-of-mississippi-nov-1-deadline-still-applies-to-the-rest-of-the-state

IR-2021-210, October 27, 2021 WASHINGTON — Victims of Hurricane Ida in parts of Mississippi now have additional time – until January 3, 2022 – to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today. Following last week's disaster declaration by the Federal Emergency Management Agency (FEMA), the IRS is offering this expanded relief to those parts of the state newly designated for either individual or public assistance. Previously, the IRS had provided special relief to the entire state of Mississippi, generally postponing various tax-filing and tax-payment deadlines until November 1, 2021. Currently, the expanded relief applies to Amite, Claiborne, Copiah, Covington, Franklin, Georgia, Hancock, Harrison, Jackson, Jefferson, Jefferson Davis, Lawrence, Lincoln, Pearl River, Pike, Simpson, Walthall, Wayne and Wilkinson counties. Any jurisdiction added to the October 22 FEMA declaration will automatically receive the expanded IRS relief. The deadline remains November 1 for affected taxpayers in other parts of Mississippi. The current list of eligible localities is always available on the disaster relief page on IRS.gov. The new relief postpones various tax filing and payment deadlines that occurred starting on August 28, 2021. As a result, affected individuals and businesses will have until January 3, 2022, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return that ran out on October 15, 2021, will now have until January 3, 2022, to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief. The January 3, 2022 deadline also applies to quarterly estimated income tax payments due on September 15, 2021, and the quarterly payroll and excise tax returns normally due on November 1, 2021. Businesses with an original or extended due date also have the additional time including, among others, calendar-year partnerships and S corporations whose 2020 extensions ran out on September 15, 2021 and calendar-year corporations whose 2020 extensions ran out on October 15, 2021. It also applies to calendar-year tax-exempt organizations whose 2020 extensions run out on November 15, 2021. In addition, penalties on payroll and excise tax deposits due on or after August 28, 2021 and before September 13, will be abated as long as the deposits were made by September 13, 2021. 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 (2020). Be sure to write the FEMA declaration number – EM-3569 associated with the earlier relief or EM-4626 for the new relief − 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 Hurricane Ida and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

https://www.irs.gov/newsroom/irs-security-summit-partners-remind-families-to-make-online-safety-a-priority-during-national-cybersecurity-month

IR-2021-209, October 22, 2021 WASHINGTON — The Internal Revenue Service today reminded families, teens and senior citizens about the continued importance of protecting personal and financial informationPDF online. Although the IRS and its Security Summit partners continue making strides in fighting identity theft and fraudulent tax returns, help is needed. The Security Summit works to protect taxpayers from criminals that file fraudulent returns for refunds. The Summit coalition includes representatives of the software industry, tax preparation firms, payroll and tax financial product processors as well as state tax administrators and the IRS, which work together year-round to protect taxpayers. During National Cybersecurity Month, the IRS is asking parents, families and others to be mindful of the pitfalls that can be found by sharing devices at home, shopping online and through navigating various social media platforms. Often, those who are less experienced can put themselves and others at risk by leaving an unnecessary trail of personal information for fraudsters. Staying safe online Here are a few common-sense suggestions that can make a difference for children, teens and other vulnerable groups to potential dangers to protect their personal data: Teach them to recognize and avoid scams. Phishing emails, threatening phone calls and texts from thieves posing as the IRS or legitimate organizations pose ongoing risks. Do not click on links or download attachments from unknown or suspicious emails. Remind them why security is important. Be careful not to reveal too much personal information. Keeping data secure and only providing what is necessary minimizes online exposure to scammers and criminals. Birthdates, addresses, age, financial information such as bank account and Social Security numbers are among things that should not be shared freely. Teach them about public Wi-Fi networks. Connection to Wi-Fi in a mall or coffee shop is convenient but it may not be safe. Hackers and cybercriminals can easily intercept personal information. Always use a virtual private network when connecting to public Wi-Fi. Always use security software with firewall and anti-virus protections. Make sure the security software is always turned on and can automatically update. Remember, to encrypt sensitive files such as tax records stored on computers. Be sure all family members have comprehensive protection especially if devices are being shared. Use strong, unique passwords for each account. Remember, the IRS does not use text messages or social media to discuss personal tax issues, such as those involving tax refunds, stimulus payments or tax bills. For more information, visit the Tax Scams and Consumer Alerts page on IRS.gov. Additional information about tax scams is also available on IRS social media sites, including YouTube videos. Also see Publication 4524, Security Awareness for TaxpayersPDF.

https://www.irs.gov/newsroom/covid-relief-irs-helps-employers-wanting-to-rehire-retirees-or-retain-employees-after-retirement-age

IR-2021-208, October 22, 2021 WASHINGTON — To help address COVID-related labor shortages, the Internal Revenue Service today reminded employers that they generally will not jeopardize the tax status of their pension plans if they rehire retirees or permit distributions of retirement benefits to current employees who have reached age 59 ½ or the plan's normal retirement age. With the COVID-19 pandemic, many employers, including governmental employers (such as public school districts), are looking for ways to encourage retirees to return to the workforce to fill open positions and experienced employees to stay on the job. The IRS is providing help to these employers in two new frequently asked questions (FAQs), designed to offer technical guidance to public and private employers who sponsor pension plans for their employees. The FAQs highlight existing ways that employers can meet their employment objectives and still comply with the plan qualification rules. Under the FAQs, an employer can generally choose to address unforeseen hiring needs by rehiring former employees, even if those employees have already retired and begun receiving pension benefit payments. Also, if permitted under plan terms, those employees may continue receiving the benefits after they are rehired. Moreover, an employer can generally choose to make retirement distributions available to existing employees who have reached age 59 ½ or the plan's normal retirement age. This may assist in the retention of employees eligible for retirement. Further details can be found in the two new FAQs now posted on IRS.gov. Also, next Wednesday and Thursday (October 27 and 28) from 4-5 p.m. ET, the Department of the Treasury and the Department of Education will be holding webinars for education leaders and other stakeholders to discuss approaches to addressing school staff labor shortages, including a discussion about these new FAQs. Webinars: Webinar 1: Teacher and substitute teacher shortages  October 27, 2021, 4 p.m. Eastern Time Participants should pre-register Webinar 2: Staff shortages, such as school bus drivers and food service workers October 28, 2021 at 4 p.m. Eastern Time Participants should pre-register

https://www.irs.gov/newsroom/irs-reminds-tax-professionals-that-its-time-to-renew-ptins

IR-2021-207, October 21, 2021 WASHINGTON — The Internal Revenue Service reminds the more than 759,000 federal tax return preparers they must renew their Preparer Tax Identification Numbers (PTINs) now for 2022. All current PTINs will expire December 31, 2021. "Taxpayers are relying on your expertise to help them meet their tax obligations and for some to complete their largest financial transaction for the year. Make sure you're ready by renewing your PTIN now," said Carol A. Campbell, director, Return Preparer Office. Anyone who prepares or assists in preparing a federal tax return for compensation must have a valid PTIN from the IRS before preparing returns. The PTIN needs to be included as the identifying number on any return filed with the IRS. All Enrolled Agents must also have a valid PTIN. The fee to renew or obtain a PTIN is $35.95 for 2022. The PTIN fee is non-refundable, and the exact amount must be paid to complete the PTIN process. Tax preparers with a 2021 PTIN should use the online renewal process, which takes about 15 minutes to complete. Form W-12PDF, along with the instructionsPDF, provides a paper option for PTIN applications and renewals. However, the paper form can take four to six weeks to process. Failure to have and use a valid PTIN may result in penalties. To renew a PTIN online: Start at IRS.gov/taxpros. Select the "Renew or Register" button. Enter the user ID and password to login to the online PTIN account. Follow the prompts to verify information and answer a few questions. Once completed, users will receive confirmation of their PTIN renewal. The online system not only allows PTIN renewal, but can also be used by tax preparers to view a summary of the number of filed returns their PTIN has appeared on in the current year, and to receive communications through a secure mailbox from the IRS Return Preparer Office. First-time PTIN applicants can also apply for a PTIN online. To apply for a PTIN online: Start at IRS.gov/taxpros. Select the "Renew or Register" button and select "Create Account" in the New User box. First time users are issued a temporary password and will be prompted to change their password upon logging in. Once logged in, select the appropriate "PTIN Sign Up" option. Follow the prompts to obtain the PTIN online. Opportunity for non-credentialed tax preparers The Annual Filing Season Program is a voluntary IRS program intended to encourage non-credentialed tax return preparers to take continuing education courses to increase their knowledge and improve their filing season readiness. Those who choose to participate must renew their PTIN, complete 18 hours of continuing education from IRS-approved CE providers and consent to adhere to specific obligations in Circular 230 by December 31, 2021. The IRS has a video available on how to sign the Circular 230 consent and print the Record of Completion. After completing the steps, the return preparer receives an Annual Filing Season Program Record of Completion from the IRS. Program participants are then included in a public directory of return preparers with credentials and select qualifications on the IRS website. The searchable IRS directory helps taxpayers find preparers in their area who have completed the program or hold professional credentials recognized by the IRS. Enrolled Agent credential The Enrolled Agent credential is an elite certification issued by the IRS to tax professionals who demonstrate special competence in federal tax planning, individual and business tax return preparation and representation matters. Enrolled Agents have unlimited representation rights, allowing them to represent any client before the IRS on any tax matter. As non-credentialed return preparers think about next steps in their professional career, the IRS encourages them to consider becoming an Enrolled Agent. All Enrolled Agents, regardless of whether they prepare returns, must renew their PTIN annually in order to maintain their active status.

https://www.irs.gov/newsroom/irs-reminds-employers-to-e-file-payroll-tax-returns-timely

IR-2021-206, October 20, 2021 WASHINGTON — The Internal Revenue Service today reminded employers that the next quarterly payroll tax return is due November 1, 2021. The IRS urges employers to use the speed and convenience of filing the returns electronically. E-filing is the most accurate method to file returns and saves taxpayers time by performing calculations and auto-populating forms and schedules with a step-by-step process. The IRS acknowledges receipt of e-filed returns within 24 hours, giving taxpayers reassurance that their return was not misplaced or lost in the mail. Electronically filed returns reduce processing time and have fewer errors, which reduces a taxpayer's chance of receiving an IRS notice. E-file users also receive missing information alerts. Two options for electronically filing payroll tax returns: Self file Purchase IRS-approved  software . Business owners may need to pay a fee to electronically file their returns. Apply for an online signature PIN or scan and attach Form 8453-EMP for the required signature. Tax professional file Use the Authorized IRS e-file Provider Locator Service to find a tax professional who can file on behalf of the business. The IRS requires all authorized IRS e-file providers to ensure only authorized users have access to secure information. Only the business owner, authorized signers and reporting agents can apply for an online signature PIN. Third parties (such as attorneys, CPAs, tax return preparers or other tax professionals) can't request a PIN on behalf of the business, nor can they use the PIN to sign returns on behalf of their clients. For more information on electronic filing of payroll tax returns, see the E-file Employment Tax Forms page. COVID-related Employer Tax Credits The credit for qualified sick and family leave wages has been extended and amended. The employer tax credits for qualified sick and family leave wages gives all American businesses with fewer than 500 employees funds to provide their employees with paid leave, either for the employee's own health needs or to care for family members. The American Rescue Plan of 2021 further amended and extended the tax credits (and the availability of advance payments of the tax credits) for paid sick and family leave. See Notice 2021-24PDF for guidance on the ability to reduce deposits and request advances for the credits for periods of leave through September 30, 2021. The Employee Retention Credit has been extended and amended. The Employee Retention Credit is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees. The modified and extended credit is available for qualified wages paid before January 1, 2022. Generally, the rules for the Employee Retention Credit for the second quarter of 2021 and the third and fourth quarters of 2021 are substantially similar. For more information about other coronavirus-related tax relief, visit IRS.gov/coronavirus. Advance Child Tax Credit The IRS encourages employers to help get the word out about the advance payments of the Child Tax Credit. Employers have direct access to many who may receive this credit. More information on the Advance Child Tax Credit is available on IRS.gov. The website has tools employers can use to deliver this information, including e-posters, drop-in articles (for paycheck stuffers, newsletters) and social media posts to share. For more information see Advance Child Tax Credit Payments.

https://www.irs.gov/newsroom/irs-joins-international-organizations-in-fighting-charity-fraud-during-special-awareness-week

IR-2021-205, October 18, 2021 WASHINGTON — The Internal Revenue Service is joining international organizations and other regulators in highlighting Charity Fraud Awareness Week, October 18-22. The campaign is run by a partnership of charities, regulators, law enforcers and other not-for-profit stakeholders from across the world. The purpose of the week is to raise awareness of fraud and cybercrime affecting organizations and to create a safe space for charities and their supporters to talk about fraud and share good practice. According to the Fraud Advisory Panel, a UK-based organization leading the effort, cybercrime is on the rise, exacerbated by the pandemic, including attacks on charities, their supporters and beneficiaries. It estimates that the average charitable organization will lose 5% of its revenue to fraud each year. The IRS is a partner in Charity Fraud Awareness Week as part of its ongoing commitment to fight fraud against charities, businesses and individuals. In addition to cybercrime targeting charities, criminals who create fake charities are also a problem. Fake charities are once again part of the IRS's Dirty Dozen tax scams for 2021. Taxpayers can find legitimate and qualified charities with the Tax Exempt Organization Search tool on IRS.gov. "We especially advise taxpayers to be on the lookout for scammers who set up fake organizations to take advantage of the public's generosity," said IRS Director of Exempt Organizations and Government Entities Rob Malone. "They take advantage of tragedies and disasters, such as the COVID-19 pandemic. Campaigns like Charity Fraud Awareness Week can help remind everyone to remain vigilant." 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. A cornerstone of international Charity Fraud Awareness Week is a social media campaign focused on the theme of "We Can Do This" and featuring the hashtag #StopCharityFraud. A special website was created for the campaign and features information to help partners, charities and other tax-exempt organizations and non-profits find: Details about the awareness week Free resources A fraud pledge for organizations A listing of webinars and other events held as part of the week Those encouraged to participate in the week's activities include: Trustees, staff and volunteers from charities, non-government organizations, and non-profits Organizations that represent the interests of non-profits Accountants, auditors and those acting as professional advisors to non-profits Regulators, law enforcement officials and policymakers working to safeguard non-profits Visit the Fraud Advisory Panel website to learn more about Charity Fraud Awareness Week and how to get involved.

https://www.irs.gov/newsroom/irs-extends-videoconferencing-to-large-business-taxpayers

IR-2021-204, October 18, 2021 WASHINGTON — The Internal Revenue Service today announced that beginning October 18, the IRS's large business division will accept all taxpayer requests to meet with IRS employees using secure videoconferencing. This step extends the practice used during the pandemic to accommodate taxpayers who sought more than meeting with an IRS employee over telephone calls. "Since 2020, we advanced several measures to better interact virtually and digitally with large business taxpayers," said Nikole Flax, IRS commissioner of the Large Business and International Division (LB&I). "Our success in using these tools and the convenience and efficiency for taxpayers and their representatives convinced us that the way forward will continue to involve the use of video-teleconferencing." The new guidance, Video Meetings with LB&I Taxpayers and their RepresentativesPDF, requires LB&I employees to grant large business taxpayer requests for a secure video meeting with IRS-approved platforms in lieu of an in-person or telephone discussion with a compliance function. Today's announcement represents a step forward in the IRS's effort to work with taxpayers in a virtual environment, including the expanded use of secure email and the launch of a virtual reading room environment to enable large LB&I taxpayers and IRS agents to share certain privileged taxpayer documents in a read-only capacity. In addition, LB&I also launched and expanded its use of paperless processes so that cases can continue to move swiftly through examination and resolution. These efforts are aimed at continuing to improve service to meet the needs of large business taxpayers and their representatives and are a part of the IRS's ongoing commitment to find more convenient and effective ways to interact with taxpayers and the community of tax professionals. LB&I is responsible for tax administration activities for domestic and foreign businesses with a United States tax reporting requirement and assets equal to or exceeding $10 million, as well as the Global High Wealth and International Individual Compliance programs.

https://www.irs.gov/newsroom/irs-sets-forth-required-information-for-a-valid-research-credit-claim-for-refund

Updated September 30, 2022: The IRS is extending for another year (through January 10, 2024) the transition period during which taxpayers are provided 45 days to perfect a research credit claim for refund prior to IRS’s final determination on the claim.   Updated April 19, 2022: Taxpayers who file a claim for refund that includes an IRC Section 41 research credit must comply with the requirement to provide the five items of information when the claim for refund is based on an IRC Section 41 research credit from a pass-through entity. For more information on IRC Section 41 research credit claims for refund involving BBA partnerships and non-BBA pass-through entities such as a TEFRA partnership, S corporation, estate, trust, cooperative, or other non-TEFRA or non-BBA pass-through entities, and their partners, shareholders, beneficiaries, or member-patrons, please see the Research Credit Claims frequently asked questions.   Updated January 5, 2022: The timeframe for perfecting research credit claims has been modified to 45 days. For further information, see the Research Credit Claims frequently asked questions. IR-2021-203, October 15, 2021 WASHINGTON — The IRS has set forth the information that taxpayers will be required to include for a research credit claim for refund to be considered valid. Existing Treasury Regulations require that for a refund claim to be valid, it must set forth sufficient facts to apprise IRS of the basis of the claim. The Chief Counsel memorandumPDF will be used to improve tax administration with clearer instructions for eligible taxpayers to claim the credit while reducing the number of disputes over such claims. Effective tax administration entails ensuring taxpayers understand what is required to support the claim for the research and experimentation (R&E) credit. Each year, the IRS receives thousands of R&E claims for credits in the hundreds of millions of dollars from corporations, businesses, and individual taxpayers. Claims for research credit under IRC Section 41 are currently examined in a substantial number of cases and consume significant resources for both the IRS and taxpayers. The Chief Counsel legal advice released today is the result of ongoing efforts to manage research credit issues and resources in the most effective and efficient manner. By requiring taxpayers to provide the information referenced below, the IRS will be better able to determine upfront if an R&E credit claim for refund should be paid immediately or whether further review is needed. Specifically, the opinion provides that for a Section 41 research credit claim for refund to be considered a valid claim, taxpayers are required to provide the following information at the time the refund claim is filed with the IRS: Identify all the business components to which the Section 41 research credit claim relates for that year. For each business component, identify all research activities performed and name the individuals who performed each research activity, as well as the information each individual sought to discover. Provide the total qualified employee wage expenses, total qualified supply expenses, and total qualified contract research expenses for the claim year. This may be done using Form 6765, Credit for Increasing Research ActivitiesPDF. The IRS will provide a grace period (until January 10, 2022) before requiring the inclusion of this information with timely filed Section 41 research credit claims for refund. Upon the expiration of the grace period, there will be a one-year transition period during which taxpayers will have 30 days to perfect a research credit claim for refund prior to the IRS' final determination on the claim. Further details will be forthcoming; however, taxpayers may begin immediately providing this information. The IRS plans to continue engaging with stakeholders on research credit issues. Comments may be sent to irs.feedback.recredit.claims@irs.gov.

https://www.irs.gov/newsroom/irs-updates-process-for-frequently-asked-questions-on-new-tax-legislation-and-addresses-reliance-concerns

IR-2021-202, October 15, 2021 WASHINGTON — Today, the Internal Revenue Service is updating its process for certain frequently asked questions (FAQs) on newly enacted tax legislation. The IRS is updating this process to address concerns regarding transparency and the potential impact on taxpayers when these FAQs are updated or revised. At the same time, the IRS is also addressing concerns regarding the potential application of penalties to taxpayers who rely on FAQs by providing clarity to taxpayers as to their ability to rely on FAQs for penalty protection. Significant FAQs on newly enacted tax legislation, as well as any later updates or revisions to these FAQs, will now be announced in a news release and posted on IRS.gov in a separate Fact Sheet. These Fact Sheet FAQs will be dated to enable taxpayers to confirm the date on which any changes to the FAQs were made. Additionally, prior versions of Fact Sheet FAQs will be maintained on IRS.gov to ensure that, if a Fact Sheet FAQ is later changed, taxpayers can locate the version they relied on if they later need to do so. In addition to significant FAQs on new legislation, the IRS may apply this updated process in other contexts, such as when FAQs address emerging issues. To address concerns about the potential application of penalties to taxpayers who rely on an FAQ, the IRS is today releasing a statement clarifying that if a taxpayer relies on any FAQ (including FAQs released before today) in good faith and that reliance is reasonable, the taxpayer will have a "reasonable cause" defense against any negligence penalty or other accuracy-related penalty if it turns out the FAQ is not a correct statement of the law as applied to the taxpayer's particular facts. For more information on taxpayer reliance, see the General Overview of Taxpayer Reliance on Guidance Published in the Internal Revenue Bulletin and FAQs. As part of today's revision of the FAQ process, the following legend will be added to Fact Sheet FAQs: These FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible. Accordingly, these FAQs may not address any particular taxpayer's specific facts and circumstances, and they may be updated or modified upon further review. Because these FAQs have not been published in the Internal Revenue Bulletin, they will not be relied on or used by the IRS to resolve a case. Similarly, if an FAQ turns out to be an inaccurate statement of the law as applied to a particular taxpayer's case, the law will control the taxpayer's tax liability. Nonetheless, a taxpayer who reasonably and in good faith relies on these FAQs will not be subject to a penalty that provides a reasonable cause standard for relief, including a negligence penalty or other accuracy-related penalty, to the extent that reliance results in an underpayment of tax. Any later updates or modifications to these FAQs will be dated to enable taxpayers to confirm the date on which any changes to the FAQs were made. Additionally, prior versions of these FAQs will be maintained on IRS.gov to ensure that taxpayers, who may have relied on a prior version, can locate that version if they later need to do so. General Overview of Taxpayer Reliance on Guidance Published in the Internal Revenue Bulletin and FAQs Guidance Published in the Internal Revenue Bulletin The Internal Revenue Bulletin (Bulletin) is the authoritative instrument of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conventions, legislation, court decisions, and other items of general interest. It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application of the tax laws, including all rulings that supersede, revoke, modify, or amend any of those previously published in the Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of internal practices and procedures that affect the rights and duties of taxpayers are published. Revenue rulings represent the conclusions of the Service on the application of the law to the pivotal facts stated in the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices, identifying details and information of a confidential nature are deleted to prevent unwarranted invasions of privacy and to comply with statutory requirements. Rulings and procedures reported in the Bulletin do not have the force and effect of Treasury Department Regulations, but they may be used as precedents. Rulings not published in the Bulletin will not be relied on, used, or cited as precedents by Service personnel in the disposition of other cases. In applying published rulings and procedures, the effect of subsequent legislation, regulations, court decisions, rulings and procedures must be considered, and Service personnel and others concerned are cautioned against reaching the same conclusions in other cases unless the facts and circumstances are substantially the same. FAQs FAQs are a valuable alternative to guidance published in the Bulletin because they allow the IRS to more quickly communicate information to the public on topics of frequent inquiry and general applicability. FAQs typically provide responses to general inquiries rather than applying the law to taxpayer-specific facts and may not reflect various special rules or exceptions that could apply in any particular case. FAQs that have not been published in the Bulletin will not be relied on, used or cited as precedents by Service personnel in the disposition of cases. Similarly, if an FAQ turns out to be an inaccurate statement of the law as applied to a particular taxpayer's case, the law will control the taxpayer's tax liability. Only guidance that is published in the Bulletin has precedential value. Notwithstanding the non-precedential nature of FAQs, a taxpayer's reasonable reliance on an FAQ (even one that is subsequently updated or modified) is relevant and will be considered in determining whether certain penalties apply. Taxpayers who show that they relied in good faith on an FAQ and that their reliance was reasonable based on all the facts and circumstances will have a valid reasonable cause defense and will not be subject to a negligence penalty or other accuracy-related penalty to the extent that reliance results in an underpayment of tax. See Treas. Reg. § 1.6664-4(b) for more information. In addition, FAQs that are published in a Fact Sheet that is linked to an IRS news release are considered authority for purposes of the exception to accuracy-related penalties that applies when there is substantial authority for the treatment of an item on a return. See Treas. Reg. § 1.6662-4(d) for more information. Keyword: IRS-FAQ

https://www.irs.gov/newsroom/irs-families-now-receiving-october-child-tax-credit-payments-still-time-for-eligible-families-to-sign-up-for-advance-payments

IR-2021-201, October 15, 2021 WASHINGTON — The Internal Revenue Service and the Treasury Department announced today that millions of American families are now receiving their advance Child Tax Credit (CTC) payment for the month of October. This fourth batch of advance monthly payments, totaling about $15 billion, is reaching about 36 million families today across the country. The majority of payments will be issued by direct deposit. Under the American Rescue Plan, most eligible families received payments dated July 15, August 13 and September 15. Future payments are scheduled for November 15 and December 15. For these families, 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. The vast majority will be issued by direct deposit. Here are more details on those payments: Families will see the direct deposit payments in their accounts starting October 15. Like the prior payments, the vast majority of families will receive them by direct deposit. For those receiving payments by paper check, be sure to allow extra time, through the end of October, for delivery by mail. Those wishing to receive future payments by direct deposit can make this change using the Child Tax Credit Update Portal, available only on IRS.gov. To access the portal or to get a new step-by-step guide for using it, visit IRS.gov/childtaxcredit2021. Payments went to eligible families who filed a 2019 or 2020 income tax return. Returns processed by October 4 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 on IRS.gov or in 2021 successfully used the Non-filer Sign-up Tool for advance CTC, also available only 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. Families who did not get a July, August or September payment and are getting their first monthly payment this month will still receive their total advance payment for the year. This means that the total payment will be spread over three months, rather than six, making each monthly payment larger. The IRS is currently sending letters to some Americans reminding them it is not too late for families who haven't filed a 2020 income tax return — including those who are not normally required to file because their incomes are too low — to sign up for advance CTC payments. Most low-income families can get these monthly payments. The IRS urges families who normally aren't required to file a tax return to visit IRS.gov for more information on how to file a return and receive their credit. Update on September advance Child Tax Credit payments In September, the IRS successfully delivered a third monthly round of approximately 36 million Child Tax Credit payments, totaling more than $15 billion. Given the new components of this program, the IRS continues to work hard to make improvements and deliver payments timely. After the September payment was issued, the IRS resolved a technical issue, which the agency estimates caused fewer than 2% of CTC recipients not to receive their September payment on the scheduled payment date. Payments have since gone out to affected individuals. The impacted group primarily included taxpayers who recently made an update to their bank account or address information using the IRS Child Tax Credit Update Portal. In particular, the issue affected payments to married taxpayers filing jointly where only one spouse made a bank account or address change, which usually results in payments being split into two (between the existing account or address and the new account or address). In some of these cases, the split payment caused a delay in making payments, and further caused individuals to receive slightly more than the correct payment in September. To address this, the payment that each spouse receives in October, November and December will be reduced slightly to adjust for the overpayment. For each taxpayer receiving a payment, the typical overpayment was $31.25 per child between 6 and 17 years old and $37.50 per child under 6 years old. This will result in about a $10 to $13 reduction per child in the three remaining monthly payments. The IRS will send letters to affected individuals with this information. The IRS continues to closely monitor this program and the agency appreciates the patience of those whose payments were affected. The IRS encourages partners and community groups to share information and use available online tools and toolkits to help non-filers, low-income families and other underserved groups sign up to receive these benefits. Links to online tools, a step-by-step guide to using the Non-filer Sign-up Tool, answers to frequently asked questions and other helpful resources are available on the IRS' special advance CTC 2021 page. It's at IRS.gov/childtaxcredit2021.

https://www.irs.gov/newsroom/irs-announces-2022-tax-counseling-for-the-elderly-and-volunteer-income-tax-assistance-program-grants

IR-2021-200, October  12, 2021 WASHINGTON — The Internal Revenue Service recently awarded over $41 million in Tax Counseling for the Elderly (TCE) and Volunteer Income Tax Assistance (VITA) grants to organizations that provide free federal tax return preparation. This year, the IRS awarded grants to 34 TCE and 300 VITA applicants. The IRS received 379 applications requesting over $70 million. The TCE program, established in 1978, provides free tax counseling and federal return preparation to individuals who are age 60 or older. Volunteers receive training and technical assistance to provide assistance at community locations across the nation. The VITA program, created in 1969, assists underserved communities, such as low- and moderate-income individuals and limited English proficient taxpayers. VITA grant recipients provide free federal tax return preparation and electronic filing. The grant program helps to expand VITA services to underserved populations. The IRS forms partnerships with a wide variety of organizations across the country to develop VITA and TCE programs. Community partners include non-profit agencies, faith-based organizations, community centers and large employers. The IRS provides tax law training, certification and oversight to these organizations assisting their efforts to prepare accurate returns. For information on applying for the TCE or VITA programs along with a list of current grant recipients, visit the TCE webpage or the VITA Grant webpage. For details on becoming a TCE or VITA volunteer, visit IRS Tax Volunteers.

https://www.irs.gov/newsroom/give-tax-withholding-a-fresh-look-as-2021-year-end-nears

IR-2021-199, October 8, 2021 WASHINGTON — The Internal Revenue Service reminds taxpayers today that the last quarter of 2021 is a good time to check withholding. Life brings constant changes to individual financial situations. Events like marriage, divorce, a new child or home purchase can all be reasons to adjust withholding. The convenient Tax Withholding Estimator, also available in Spanish, will help taxpayers determine if they have too much withheld and how to make an adjustment to put more cash into their own pocket now. In other cases, it will help taxpayers see that they should withhold more or make an estimated tax payment to avoid a tax bill when they file their tax return next year. Items that may affect 2021 taxes Things to consider when adjusting withholding for 2021 are: Coronavirus tax relief – Tax help for taxpayers, businesses, tax-exempt organizations and others – including health plans – affected by coronavirus (COVID-19). Disasters such as wildfires and hurricanes – Special tax law provisions may help taxpayers and businesses recover financially from the impact of a disaster, especially when the federal government declares their location to be a major disaster area. Job loss – IRS Publication 4128, Tax Impact of Job LossPDF, explains how this unfortunate circumstance can create new tax issues. Workers moving into the gig economy due to the pandemic – IRS advises people earning income in the gig economy to consider estimated tax payments to avoid a balance or penalties when they file. Life changes such as marriage or childbirth – Getting married or having a child are just a couple of life events that can affect your refund or how much you owe. Pay as you go Taxes are generally paid throughout the year whether from salary withholding, quarterly estimated tax payments or a combination of both. About 70% of taxpayers, however, over withhold their taxes every year, which typically results in a refund. The average refund in 2021 was more than $2,700. Taxpayers can pay online, by phone or from the IRS2Go app. They can schedule payments for future dates, which can be useful during filing season, for payment plan payments or for estimated tax payments. Taxpayers can also log into their IRS.gov/account to view the amount they owe, their payment plan details and options, their payment history (up to 5 years), any scheduled or pending payments, and key tax return information from their most recent tax return. Tax Withholding Estimator The IRS Tax Withholding Estimator makes it easier for everyone to have the right amount of tax withheld. This is especially important for anyone who faced an unexpected tax bill or a penalty when they filed this year, or whose jobs or tax circumstances have changed during the year. The tool offers workers, as well as retirees, self-employed individuals and other taxpayers, a user-friendly, step-by-step tool for effectively tailoring the amount of income tax they have withheld from wages and pension payments. For more information about taxes, estimated taxes and tax withholding, see Tax Withholding at IRS.gov.

https://www.irs.gov/newsroom/irs-free-file-program-available-through-oct-15

IR-2021-198, October 5, 2021 WASHINGTON — The Internal Revenue Service announced today that Free File remains available through Oct. 15 for those taxpayers who still need to file their 2020 tax returns. Free File is the IRS' public-private partnership with tax preparation software industry leaders to provide their brand-name products for free. Free File provides two ways for taxpayers to prepare and file their federal income tax online for free: Traditional IRS Free File provides free online tax preparation and filing options on IRS partner sites. Taxpayers whose adjusted gross income (AGI) is $72,000 or less qualify for any IRS Free File partner offers. For taxpayers whose income (AGI) is greater than $72,000, there's the Free File Fillable Forms option. It provides electronic federal tax forms that can be filled out and filed online for free. To use this option taxpayers should know how to prepare their own tax return. Always start at IRS.gov: From the homepage select File Your Taxes for Free Pick an option based on income Follow links to the chosen Free File provider's website Taxpayers who requested the six-month filing extension should complete their tax returns and file on or before the Oct. 15 deadline. Only current year tax returns can be filed using IRS Free File. The IRS does not allow electronic filing for prior year returns through self-preparation websites. Prior year returns can only be filed electronically by registered tax preparers for the two previous tax years. Otherwise, taxpayers must print, sign and mail prior year returns. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications lists qualified local preparers.

https://www.irs.gov/newsroom/irs-nationwide-tax-forums-online-launches-18-new-seminars

Tax pros: 2021 self-study seminars now available for continuing education credit IR-2021-197, October 4, 2021 WASHINGTON — The Internal Revenue Service today announced that 18 new self-study seminars are available through the IRS Nationwide Tax Forums Online. Tax professionals – CPAs, enrolled agents, Annual Filing Season Program participants and others – can earn continuing education for $29 per credit. The new seminars were recorded in July and August at the 2021 IRS Nationwide Tax Forum. 2021 Nationwide Tax Forums Online course listing Advocating for Taxpayers in Order to Avoid Abusive Tax Schemes Be Tax Ready – Understanding Rules for Due Diligence and the Child Tax Credit and Earned Income Tax Credit Under the American Rescue Plan Act of 2021 Charities & Tax-Exempt Organizations Update Closer Look at the IRS Independent Office of Appeals Collection Flexibilities During Difficult Economic Times Common Issues Presented to OPR and Best Practices to Address Them Determining an Individual's Tax Residency Status e-Services and You Gig Economy  Helping You and Your Clients Steer Clear of Fraud and Scams  Key Enforcement Issues Keynote Address Keys to Mastering Due Diligence Requirements and What to Expect During a Due Diligence Audit  Overview of Taxpayer Civil Rights  Professional Responsibility Obligations when Practicing before the IRS: OPR and Circular 230  Retirement Plans - IRS Compliance Initiatives  Tax Law Changes from a Forms Perspective  Virtual Currency These 18 courses are now available in addition to 37 sessions from previous years that are also available for credit. Information on continuing education credits The Nationwide Tax Forums Online is a qualified sponsor of continuing education registered with the IRS Return Preparer Office (RPO) and the National Association of State Boards of Accountancy (NASBA). To earn credit, tax pros need to create an account, answer review questions throughout the seminar and pass a short test. The online seminars can be reviewed for free. Individuals who choose this option will not have access to the review questions or final examination and will not receive credit. For more information, visit  IRS Nationwide Tax Forums Online .

https://www.irs.gov/newsroom/oct-15-fbar-extension-deadline-nears-for-foreign-bank-and-financial-account-holders

IR-2021-196, October 1, 2021 WASHINGTON — The Internal Revenue Service reminds U.S. citizens, resident aliens and any domestic legal entity that the extension deadline to file their annual Report of Foreign Bank and Financial Accounts (FBAR) is Oct. 15, 2021. Filers missing the April 15 annual due date earlier this year received an automatic extension until Oct. 15, 2021, to file the FBAR. They did not need to request the extension. Filers affected by a natural disaster may have their FBAR due date further extended. It's important filers review relevant FBAR Relief Notices for complete information. Who needs to file? The Bank Secrecy Act requires U.S. persons to file an 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 located outside the United States, 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. How to file Filers do not file the FBAR with their federal income tax return. The 2020 FBAR must be filed electronically with the Financial Crimes Enforcement Network (FinCEN) and is only available through the BSA E-Filing System website. Those who are unable to e-file their FBAR must call FinCEN at 800-949-2732, or from outside the U.S. at 703-905-3975. Avoid penalties 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. FBAR resources on IRS.gov: How to report foreign bank and financial accounts International Taxpayers  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/national-tax-security-awareness-week-day-2-giving-tuesday-reminder-that-scammers-can-use-fake-charities-to-get-sensitive-information

IR-2021-237, November 30, 2021 WASHINGTON — The Internal Revenue Service and Security Summit partners today warned taxpayers to be wary of fake charities used by scammers to get money as well as sensitive financial and personal information from victims. Today being Giving Tuesday marks a special day as the holidays approach and people give to their favorite causes through charitable organizations. Scammers can take advantage of this by setting up fake charities to trick unsuspecting donors into providing not only money, but also their sensitive information. The Security Summit –– a coalition of state tax agencies, the nation's tax community and the IRS –– urged people to make sure they are giving to a legitimate charity. This can help protect taxpayer's personal and financial data and help prevent tax-related identity theft. Donors should always check to make sure they are giving to a legitimate charity and can easily do so by using a special IRS tool: the Tax Exempt Organization Search Tool. This is Day 2 of National Tax Security Awareness Week, now in its sixth year. The IRS, state tax agencies and the nation's tax industry –– working together as the Security Summit –– are providing tips this week to help protect people against identity theft as well as help safeguard sensitive tax information that criminals can use to try filing fake tax returns and obtaining refunds. The special week includes special informational graphics and social media efforts on platforms including Twitter and Instagram through @IRSnews and #TaxSecurity. The combination of the holiday shopping season, the upcoming tax season and the pandemic create additional opportunities for criminals to steal sensitive information. People should take extra care while shopping online or viewing emails and texts. The Summit partners remind taxpayers to be on the lookout for scammers and identity thieves who set up fake organizations to take advantage of the public's generosity. Scammers take advantage of tragedies and disasters. Scams requesting donations for disaster relief efforts are especially common over the phone. Taxpayers should always check out a charity before they donate, and they should not feel pressured to give immediately. Tips to help taxpayers avoid 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 their own research. Confirm the charity is real. Potential donors should ask the fundraiser for the charity's exact name, website and mailing address so they can confirm it later. Some dishonest telemarketers use names that sound like well-known charities to confuse people. Be careful about how a donation is made. Taxpayers shouldn't work with charities that ask for donations by giving numbers from a gift card or by wiring money. That's a scam. It's safest to pay by credit card or check –– and only after researching the charity. 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. However, to receive a deduction, taxpayers must donate to a qualified charity. To check the status of a charity, they can use the IRS Tax Exempt Organization Search tool. The IRS, state tax agencies, the private sector tax industry, including tax professionals, work in partnership as the Security Summit to help protect taxpayers from identity theft and refund fraud. This is part of a week-long series of tips to raise awareness about identity theft. See IRS.gov/securitysummit for more details.

https://www.irs.gov/newsroom/taxpayer-alert-as-holidays-tax-season-approach-watch-out-for-scams-protect-financial-information-national-tax-security-awareness-week-day-1-highlights-important-tips

IR-2021-236, November 29, 2021 IRS YouTube Video: Security Measures Protect Against Tax-Related Identity Theft WASHINGTON — Kicking off a special week, the Internal Revenue Service and the Security Summit partners today warned taxpayers and tax professionals to beware of a dangerous combination of events that can increase their exposure to tax scams or identity theft. The combination of the holiday shopping season, the upcoming tax season and the pandemic create additional opportunities for criminals to steal sensitive personal or finance information. People should take extra care while shopping online or viewing emails and texts. The IRS, state tax agencies and the nation's tax industry – working together as the Security Summit – mark today's start of the 6th annual National Tax Security Awareness Week with tips on basic safeguards everyone should take. These can help protect against identity theft as well as help safeguard sensitive tax information that criminals can use to try filing fake tax returns and obtaining refunds. "Don't let this be the most wonderful time of the year for identity thieves," said IRS Commissioner Chuck Rettig. "The approach of the holidays and tax season increases risk for taxpayers and opportunities for criminals. We urge people to be extra careful with their personal and financial information during this period while shopping online or getting suspicious emails or text. Taking a few simple steps can keep people from becoming victims of identity theft and protect their sensitive personal information needed for tax returns and refunds." Since 2015, the IRS and Security Summit partners have taken important steps to protect taxpayers and the nation's tax professionals from tax-related identity theft. But progress in this area led identity thieves to evolve their tactics, trying to obtain sensitive information from taxpayers and tax professionals to help prepare fraudulent tax returns. Taxpayers can help in this fight by protecting their financial and tax information. Summit partners continue to highlight safety steps in the "Taxes.Security.Together" effort. As part of that effort, National Tax Security Awareness Week is designed to help share information with taxpayers and tax professionals during this critical period. The special week includes special informational graphics and social media efforts on platforms including Twitter and Instagram through @IRSnews and #TaxSecurity. A special emphasis for this year on social media will be focusing tax security awareness on younger and older Americans. Even if someone doesn't file a tax return, their online interactions can lead to scam artists obtaining sensitive information and using it to try obtaining a refund. 10 key steps to protect sensitive information: To help taxpayers and tax professionals, the Security Summit offers 10 basic steps everyone should remember during the holidays and as the 2022 tax season approaches: Don't forget to use security software for computers, tablets and mobile phones – and keep it updated. Protect electronic devices of family members, especially teens and young children. Make sure anti-virus software for computers has a feature to stop malware, and there is a firewall enabled that can prevent intrusions. Phishing scams – like imposter emails, calls and texts -- are the No. 1 way thieves steal personal data. Don't open links or attachments on suspicious emails. This year, fraud scams related to COVID-19, Economic Impact Payments and other tax law changes are common. Use strong and unique passwords for online accounts. Use a phrase or series of words that can be easily remembered or use a password manager. Use multi-factor authentication whenever possible. Many email providers and social media sites offer this feature. It helps prevent thieves from easily hacking accounts. Shop at sites where the web address begins with "https" – the "s" is for secure communications over the computer network. Also, look for the "padlock" icon in the browser window. Don't shop on unsecured public Wi-Fi in places like a mall. Remember, thieves can eavesdrop. At home, secure home Wi-Fis with a password. With more homes connected to the web, secured systems become more important, from wireless printers, wireless door locks to wireless thermometers. These can be access points for identity thieves. Back up files on computers and mobile phones. A cloud service or an external hard drive can be used to copy information from computers or phones – providing an important place to recover financial or tax data. Working from home? Consider creating a virtual private network (VPN) to securely connect to your workplace. Other common warning signs; additional places for information The IRS and Summit partners continue to see identity thieves trying to look like government agencies and others in the tax community by emailing or texting about tax refunds, stimulus payments or other items. Remember, the IRS will not call or send unexpected texts or emails about things like refunds. More information about these common scams is available at IRS Tax Tip: Common tax scams and tips to help taxpayers avoid them. The IRS and Security Summit partners are sharing YouTube videos on security steps for taxpayers. The videos can be viewed or downloaded at Easy Steps to Protect Your Computer and Phone and Here's How to Avoid IRS Text Message Scams. Employers also can share Publication 4524, Security Awareness for TaxpayersPDF, with their employees and customers while tax professionals can share with clients. In addition, the Summit partners remind people these security measures include mobile phones – an area that people sometimes can overlook. Thieves have become more adept at compromising mobile phones. Phone users also are more prone to open a scam email from their phone than from their computer. Taxpayers can check out security recommendations for their specific mobile phone by reviewing the Federal Communications Commission's Smartphone Security Checker. Since phones are used for shopping and even for doing taxes, remember to make sure phones and tablets are just as secure as computers. During the pandemic, there continue to be numerous scams related to COVID-19. These can be attempts to gain sensitive personal or financial information. The Federal Trade Commission also has issued alerts; consumers can keep atop the latest scam information and report COVID-related scams. The IRS, state tax agencies, the private sector tax industry, including tax professionals, work in partnership as the Security Summit to help protect taxpayers from identity theft and refund fraud. This is the first in a week-long series of tips to raise awareness about identity theft. See IRS.gov/securitysummit for more details.

https://www.irs.gov/newsroom/child-tax-credit-payments-irs-online-portal-now-available-in-spanish-nov-29-is-last-day-for-families-to-opt-out-or-make-other-changes

IR-2021-235, November 23, 2021 WASHINGTON — The Internal Revenue Service this week launched a new Spanish-language version of the Child Tax Credit Update Portal (CTC-UP). This tool is designed to help families quickly and easily make changes to the monthly Child Tax Credit payments they are receiving from the IRS. Families who are already receiving monthly payments use the CTC-UP to update their accounts. Now, all the features that have only been available in English are also available in Spanish. Updates made by 11:59 p.m. Eastern Time on November 29 will be reflected in the last monthly payment for 2021, scheduled for Deember 15. Under the American Rescue Plan, most eligible families began receiving monthly payments starting in July. For these families, 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. Payments are based on returns filed for 2019 or 2020, including those who registered online with the IRS. Available only on IRS.gov, CTC-UP allows families to verify their eligibility for the payments and then, if they choose to: Switch from receiving a paper check to direct deposit; Change the account where their payment is direct deposited; Update their mailing address; Stop monthly payments and Reflect significant changes in their income that could potentially raise or lower their monthly payments. Be sure to make any changes by 11:59 p.m. ET on November 29. To access the portal, visit IRS.gov/childtaxcredit2021. Families are typically receiving half of their total CTC in advance monthly payments during 2021. They can claim the rest of the credit when they file their 2021 federal income tax return next year. To help them do that, early in 2022, families will receive Letter 6419 documenting any advance payments issued to them during 2021 and the number of qualifying children used to calculate the advance payments. Non-filers can get lump-sum next year; community partners can help The IRS encourages partners and community groups to share information and use available online tools to help non-filers, low-income families and other underserved groups learn about the expanded Child Tax Credit. While it's now too late to sign up for advance payments of the CTC during 2021, it's not too late for eligible families to get the full benefit of the credit. To do that, any eligible family who missed out on this year's monthly payments can still get a lump-sum payment by filing a 2021 federal income tax return next year. This includes families who don't normally need to file a return with the IRS. Links to online tools, answers to frequently asked questions and other helpful resources are available on the IRS' special advance CTC 2021 page.

https://www.irs.gov/newsroom/interest-rates-remain-the-same-for-the-first-quarter-of-2022

IR-2021-234, November 23, 2021 WASHINGTON — The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning January 1, 2022. The rates will be: 3% for overpayments (two (2) percent 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 October 2021 to take effect November 1, 2021, based on daily compounding. Revenue Ruling 2021-24PDF, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2021-50, dated December 13, 2021.

https://www.irs.gov/newsroom/scam-risks-remain-during-pandemic-security-summit-focuses-special-week-on-taxpayer-tax-professional-protection-against-identity-theft

IR-2021-233, November 19, 2021 WASHINGTON — With the 2022 tax season and the holidays rapidly approaching, the Internal Revenue Service, state tax agencies and the nation's tax industry today announced a special week focusing attention on taxpayers protecting sensitive financial information against identity thieves. Working together as the Security Summit, the coalition of the IRS, the states and the nation's tax community plan the 6th Annual National Tax Security Awareness Week to take place from November 29–December 3. The announcement coincides with International Fraud Awareness Week coming to a conclusion. The Summit partners warned that taxpayers and tax professionals face a heightened risk in coming months as fraudsters continue to use the pandemic as a way of tricking people into sharing sensitive personal information by email, text message and online. Identity thieves can use that information to try filing tax returns and stealing refunds. As Security Summit partners have increased their joint defenses against identity theft, including through the Identity Theft Information Sharing and Analysis Center (ISAC), fraudsters have increasingly looked for ways to obtain sensitive personal financial information to help slip past common defenses. That has made tax professionals – who hold valuable tax information for their clients – a tempting target for scam artists. "The nation's tax community has successfully joined forces to protect taxpayers through the Security Summit effort, but we need help in this continuing battle," said IRS Commissioner Chuck Rettig. "Taxpayers and tax professionals are the first line of defense against scammers looking for refunds. We are entering a sensitive holiday and tax period, and we urge people to protect their personal information – and avoid problems at tax time." The IRS and Summit partners continue to see constantly evolving threats and scams. They can mimic IRS and others in the tax community with fake emails, texts and online scams. These schemes can lurk underneath COVID-related messages, stimulus payments or tax refunds. And they can frequently use recent tragedies or charitable groups to coax people into sharing sensitive financial data. To help combat this, the Summit partner's National Tax Security Awareness Week will feature a week-long series of educational materials to help protect individuals, businesses and tax pros from identity theft. The effort will include special informational graphics and a social media effort on Twitter and Instagram with @IRSnews and #TaxSecurity. A special emphasis for this year will be focusing tax security awareness on younger and older Americans. Even if someone doesn't file a tax return, their online interactions can lead to scam artists obtaining sensitive information and using it to try obtaining a refund. As part of the larger effort, the IRS and Security Summit partners are sharing YouTube videos on security steps for taxpayers. The videos can be viewed or downloaded at Easy Steps to Protect Your Computer and Phone and Security Measures Help Protect Against Tax-Related Identity Theft. Employers also can share Publication 4524, Security Awareness for Taxpayers, with their employees and customers while tax professionals can share with clients. Highlights of this year's National Tax Security Awareness Week include: Day 1 – Cyber Monday: Protect personal and financial information online The IRS and the Security Summit partners remind people to take these basic steps: Use security software for computers and mobile phones – and keep it updated. Avoid phishing scams, especially related to tax refunds and COVID-19, Economic Impact Payments and other tax law changes. Use strong and unique passwords for all accounts. Use multi-factor authentication whenever possible. Shop only secure websites; look for the "https" in web addresses and the padlock icon; avoid shopping on unsecured and public Wi-Fi in places like coffee shops, malls or restaurants. Day 2 – Giving Tuesday: Beware of scammers using fake charities The IRS and the Security Summit partners warn people to avoid getting scammed when donating to charities. The agency provides the following tips: Individuals should never let any caller pressure them into giving a donation without allowing time for them to do some research. Confirm the charity is real by asking for its exact name, website and mailing address and confirming it later. Be careful about how a donation is made. After researching the charity, pay by credit card or check and not by gift card or wiring money. Day 3 – Get an Identity Protection PIN Taxpayers who can verify their identities online may opt into the IRS IP PIN program – a major expansion of the program from previous years. This is another tool taxpayers can use to protect themselves – and their tax refund. Here's what taxpayers need to know: The Identity Protection PIN or IP PIN is a six-digit code known only to the individual and the IRS. It provides another layer of protection for taxpayers' Social Security numbers on tax returns. Use the Get an Identity Protection PIN (IP PIN) tool at IRS.gov/ippin to immediately get an IP PIN. Never share the IP PIN with anyone but a trusted tax provider. Day 4 Tax professionals should review their security protocols As identity thieves continue targeting tax professionals, the IRS and the Summit partners urge practitioners to review the "Taxes-Security-Together" Checklist, including: Deploy basic security measures. Use multi-factor authentication to protect tax software accounts. Create a Virtual Private Network if working remotely. Create a written data security plan as required by federal law. Know about phishing and phone scams, especially related to Electronic Filing Identification Numbers (EFINs), COVID-19 related tax-law changes including Economic Impact Payments. Create data security and data theft recovery plans. Use digital signatures to submit IRS forms and check account details on secure portal The IRS began accepting digital signatures on a variety of forms this past year. Additionally, the agency made improvements to its online accounts platform to help both tax pros and individuals. Tax pros may go to the new Tax Pro Account on IRS.gov to digitally initiate Power of Attorney and Tax Information Authorization requests. Taxpayers have digital control over who can represent them or see their account information on the Online Account portal. The IRS now accepts a wide array of digital signatures on a number of forms that cannot be electronically filed. Day 5 – Businesses should implement safeguards; watch out for tax-related scams Most cyberattacks are aimed at small businesses with fewer than 100 employees. Here are some details from this segment: Learn about best security practices for small businesses. IRS continues protective masking of sensitive information on business transcripts. A Business Identity Theft Affidavit – Form 14039-B – is available for all businesses to report theft to the IRS. Beware of various scams, especially the W-2 scam that attempts to steal employee income information. Check out the "Business" section on IRS's Identity Theft Central at IRS.gov/identitytheft. Also today, the IRS published the latest executive column "A Closer Look," which features James Lee, IRS Criminal Investigation Chief, and Damon Rowe, Executive Director, IRS Office of Fraud Enforcement, providing a glimpse of how the IRS investigates and helps prosecute fraud.

https://www.irs.gov/newsroom/irs-criminal-investigation-releases-annual-report-highlighting-2500-plus-investigations-law-enforcement-partnerships

Enforcement actions focused on tax and COVID-related fraud, money laundering, cybercrimes IR-2021-232, November 18, 2021 WASHINGTON — Over 2,500 criminal investigations, the identification of more than $10 billion from tax fraud and financial crimes, and a nearly 90% conviction rate are just a few highlights from the IRS-Criminal Investigation (IRS-CI) Fiscal Year 2021 Annual ReportPDF. The report, released Thursday, details statistics, important partnerships and significant criminal enforcement actions from IRS-CI, the criminal investigative arm of the IRS, for the past fiscal year, which began October 1, 2020 and ended September 30, 2021. "IRS-CI agents are the only federal law enforcement officers with the authority to investigate criminal violations of the U.S. tax code. Their work reinforces the backbone of our voluntary compliance tax system – a system that funds services and benefits for our nation, including defense, infrastructure and education," said IRS Commissioner Chuck Rettig. In fiscal year 2021, IRS-CI built upon its existing network of U.S. field offices and international attachés to combat financial crimes across the globe. The agency's alliance with the Joint Chiefs of Global Tax Enforcement (J5) helped strengthen public-private partnerships with financial institutions and the Fin-Tech industry to deter and identify criminal activity. Additionally, IRS-CI established its first cyber attaché in The Hague, Netherlands, to proactively support cyber investigative needs in coordination with Europol. "IRS-CI continues to lead tax and financial investigations here in the U.S. and across the globe," said IRS-CI Chief Jim Lee. "In fiscal year 2021, as we faced the second year of a global pandemic, our team of agents continued to overcome personal and professional challenges to target criminals who exploited the U.S. tax and financial systems for personal gain." While IRS-CI agents spent most of their investigative man-hours, about 72%, investigating tax-related crimes like tax evasion and tax fraud during fiscal year 2021, they also made significant contributions to money laundering, narcotics trafficking, public corruption, terrorism and COVID-19 fraud investigations. Case examples include: In April 2021, a dual Russian-Swedish national was arrested in Los Angeles on criminal charges related to his alleged operation of the longest-running bitcoin money laundering service on the darknet dubbed Bitcoin Fog. The bulk of cryptocurrency laundered through Bitcoin Fog came from darknet marketplaces and was tied to illegal narcotics, computer fraud and identity theft. This case marked the second U.S. prosecution of a cryptocurrency mixing service; both were investigated by IRS-CI. The ringleader of a transnational criminal organization, with ties to the Sinaloa Cartel, operating in California and along the East Coast was sentenced to 33 years in prison in July 2021 for narcotics trafficking-related charges. The sentencing followed a multiagency operation dubbed Operation Cookout that netted 65 kilograms of illegal drugs, 24 firearms, more than $700,000 in cash and guilty pleas from 45 defendants. Numerous IRS-CI investigations resulted in individuals being sentenced for fraudulently obtaining small business relief loans under the CARES Act. One of those cases involved a Texas businessman who was sentenced in September 2021 to 31 months confinement and 36 months of supervised release after he created a scheme to fraudulently obtain more than $3.3 million in Paycheck Protection Program loans for personal use. The report includes additional case examples for each U.S. field office, an overview of IRS-CI's international footprint, details about the specialized services provided by IRS-CI and investigative statistics, broken down by discipline, for fiscal year 2021.

https://www.irs.gov/newsroom/irs-provides-answers-to-states-and-local-governments-on-taxability-and-reporting-of-payments-from-coronavirus-state-and-local-fiscal-recovery-funds

IR-2021-231, November 17, 2021 WASHINGTON — The Internal Revenue Service today provided answers regarding Coronavirus State and Local Fiscal Recovery Funds (SLFR Funds). These funds give eligible state and local governments a substantial infusion of resources to meet pandemic response needs. The answers are in FAQs (FS-2021-16) and detail the tax consequences for individual recipients and the reporting requirements for the states and local governments and employers, as applicable. Some SLFR Fund recipients may have to report certain payments as income and may owe tax depending on the purpose of the payment. Today's FAQs also provide answers regarding payments used to assist with childcare or other basic needs. States and local government administrators will find answers regarding their filing requirements, including when Forms 1099 need to be filed. These FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible. More information about reliance is available. IRS-FAQ

https://www.irs.gov/newsroom/irs-all-of-mississippi-now-qualifies-for-expanded-hurricane-ida-relief-sept-15-oct-15-deadlines-other-dates-extended-to-jan-3

IR-2021-230, November 17, 2021 WASHINGTON — Victims of Hurricane Ida throughout Mississippi now have additional time -- until January 3, 2022 -- to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today. Following the recent decision by the Federal Emergency Management Agency (FEMA) to add 63 counties to its October 22 disaster declaration, the IRS is offering this expanded relief to these newly-designated localities, as well as the 19 counties listed in the original FEMA declaration. Previously, the IRS relief period for the 63 newly-designated counties had ended on November 1. The current list of eligible localities is always available on the disaster relief page on IRS.gov. The updated relief, now covering the entire state of Mississippi, postpones various tax filing and payment deadlines that occurred starting on August 28, 2021. As a result, affected individuals and businesses will have until January 3, 2022, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return that ran out on October 15, 2021, will now have until January 3, 2022, to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief. The January 3, 2022 deadline also applies to quarterly estimated income tax payments due on September 15, 2021, and the quarterly payroll and excise tax returns normally due on November 1, 2021. Businesses with an original or extended due date also have the additional time including, among others, calendar-year partnerships and S corporations whose 2020 extensions ran out on September 15, 2021 and calendar-year corporations whose 2020 extensions ran out on October 15, 2021. It also applies to calendar-year tax-exempt organizations whose 2020 extensions ran out on November 15, 2021. In addition, penalties on payroll and excise tax deposits due on or after August 28, 2021 and before September 13, will be abated as long as the deposits were made by September 13, 2021. 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 (2020). Be sure to write the FEMA declaration number – EM-3569 associated with the earlier relief or EM-4626 for the new relief−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 Hurricane Ida and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

https://www.irs.gov/newsroom/irs-offers-how-to-videos-to-help-taxpayers-apply-for-offers-in-compromise-and-avoid-scams

IR-2021-229, November 17, 2021 WASHINGTON — The Internal Revenue Service today unveiled a new how-to video series enabling taxpayers to avoid potential scams by considering and applying for an Offer in Compromise (OIC) themselves and avoid paying excessive fees to companies advertising outlandish claims. "We encourage eligible taxpayers in real financial distress to consider looking into an Offer in Compromise to resolve their tax issues," said IRS Commissioner Chuck Rettig. "People also need to use caution with the program. Some companies routinely overstate how they can help with this program and clear up people's back taxes for pennies on the dollar. A quick visit to IRS.gov can provide important information to help people with this program." An Offer in Compromise allows you to settle your tax debt for less than the full amount you owe if you qualify. It may be a legitimate option if you can't pay your full tax liability or doing so creates a financial hardship. The IRS considers your unique set of facts and circumstances when making that determination. The OIC program serves an important purpose for a select group of taxpayers. The IRS periodically warns against hiring and paying needless fees to these "Offer in Compromise mills" that contort the IRS program into something it's not and mislead people who have no chance of meeting the requirements while charging excessive fees, often thousands of dollars. OIC mills were listed in the last two annual IRS Dirty Dozen lists of tax scams to avoid. "I encourage taxpayers who may qualify for an Offer in Compromise to watch these videos and review information on IRS.gov to help them determine if the program is right for them," Rettig said. "Don't go to costly promoters advertising on television or radio who can make overstated claims or suggestions that the IRS will accept an OIC without even reviewing your situation first." The video playlist marks another improvement for IRS online educational videos by breaking the videos' information out into easy-to-navigate chapters and sections that coincide with the layout of the OIC booklet and forms. It also offers taxpayers the ability to bookmark information they'd like to revisit later. This new OIC video playlist provides: An overview of the OIC process, forms and pre-qualifier tool for help in getting started Step-by-step walkthroughs of Forms 433 – A & B OIC, which are known as "collection information statements" and needed for individual and business-related offers A step-by-step example of how to complete the OIC application, Form 656PDF And a finalizing checklist to ensure everything needed is included to submit a valid offer The vast majority of tax professionals are honest and don't make false claims about getting taxpayers special deals that only they can get. Taxpayers should consult a trusted reputable tax professional when needed. The videos and web materials make it easier for taxpayers to navigate the OIC process on their own. IRS.gov contains complete information on the collection process and payment options. Publication 594, The IRS Collection ProcessPDF, also provides helpful information on the options available to taxpayers. Form 656 BookletPDF provides detailed instructions for submitting an OIC and includes all of the necessary financial forms. Some taxpayers may not be required to pay the $205 OIC application fee or the required payments, depending on their income and the basis of their offer. Taxpayers can determine if they qualify for the waiver of fees and payment(s) by consulting the Low-Income Guidelines in Form 656. The low-income guideline exception applies only to individuals. All publications and forms are on IRS.gov or taxpayers may order copies by calling 800-829-3676. All publications and forms are available for free. Taxpayers may feel they need the assistance of a qualified tax professional to prepare and submit an OIC. Taxpayers may contact local or state tax professional associations for enrolled agents, CPAs or attorneys to locate someone who has the education and experience to assist them.

https://www.irs.gov/newsroom/irs-unveils-new-online-identity-verification-process-for-accessing-self-help-tools

IR-2021-228, November 17, 2021 WASHINGTON — The Internal Revenue Service today announced the launch of an improved identity verification and sign-in process that enables more people to securely access and use IRS online tools and applications. Taxpayers using the new mobile-friendly verification procedure can gain entry to existing IRS online services such as the: Child Tax Credit Update Portal, Online Account, Get Transcript Online, Get an Identity Protection PIN (IP PIN) and Online Payment Agreement. Additional IRS applications will transition to the new method over the next year. "Identity verification is critical to protect taxpayers and their information. The IRS has been working hard to make improvements in this area, and this new verification process is designed to make IRS online applications as secure as possible for people," said IRS Commissioner Chuck Rettig. "To help taxpayers and the tax community, we are improving the accessibility of online tools that help families manage their Child Tax Credit, check on their IRS accounts and securely perform other routine tasks online." The new process can reach more people through the expanded use of identity documents and increased help desk assistance for taxpayers who encounter a problem when attempting to verify their identity online. Developed under the Secure Access Digital Identity initiative (SADI), the new process complies with a federal mandate. To provide verification services, the IRS is using ID.me, a trusted technology provider. The new process is one more step the IRS is taking to ensure that taxpayer information is provided only to the person who legally has a right to the data. The IRS also integrated this new account-creation process into some applications used by tax professionals, including those used to request powers of attorney or tax information authorizations online using Tax Pro Account or to submit Forms 2848 and 8821 online. Accessing IRS tools When accessing the tools listed above, taxpayers will be asked to sign in with an ID.me account. People who already have IRS usernames may continue to use their credentials from the old system to sign-in until summer 2022, but are prompted to create an ID.me account as soon as possible. Anyone with an existing ID.me account from the Child Tax Credit Update Portal, or from another government agency, can sign in with their existing credentials. To verify their identity with ID.me, taxpayers need to provide a photo of an identity document such as a driver's license, state ID or passport. They'll also need to take a selfie with a smartphone or a computer with a webcam. Once their identity has been verified, they can securely access IRS online services. Taxpayers who need help verifying their identity or submitting a support ticket can visit the ID.me IRS Help Site.

https://www.irs.gov/newsroom/irs-advisory-council-issues-2021-annual-report

IR-2021-227, November 17, 2021 WASHINGTON — The Internal Revenue Service Advisory Council (IRSAC) today issued its annual report for 2021PDF, including recommendations to the IRS on new and continuing issues in tax administration. The IRSAC is a federal advisory committee that provides an organized public forum for discussion of relevant tax administration issues between IRS officials and representatives of the public. IRSAC members offer constructive observations regarding current or proposed IRS policies, programs and procedures. The 2021 Public Report includes recommendations on 24 issues, which cover a broad range of topics including: Adequate funding for the IRS Implementation of Section 1302 of the Taxpayer First Act Independent Office of Appeals Reduction in electronic filing threshold for information return filers Revisions to Circular 230 Postponing certain deadlines under Rev. Proc. 2018-58 Digital assets Continuation of Rev. Proc. 94-69 The Compliance Effort Around Abusive Promoters and Preparers Online IRS Guidance for Federal, State, and Local Governments Improving the Taxpayer Experience with the Taxpayer Digital Communication The IRSAC is administered under the Federal Advisory Committee Act by the Office of National Public Liaison, part of IRS Communications and Liaison, and draws its members from the taxpaying public, the tax professional community, representatives of the low-income community, small and large businesses, tax-exempt and government entities, the payroll industry and academia. Five subgroups report to the parent IRSAC: Information Reporting, Large Business & International, Small Business/Self-Employed, Tax Exempt/Government Entities and Wage & Investment. Commissioner Chuck Rettig and IRS executives thanked members of the council whose terms end this year: Alexandra Cruz – Cruz served as Chair of the Information Reporting Subgroup Ben Deneka – Deneka served as Chair of the IRSAC Deborah Fox – Fox served on the Information Reporting Subgroup April Goff – Goff served as Chair of the Tax Exempt/Government Entities Subgroup Antonio Gonzalez – Gonzalez served on the Wage & Investment Subgroup Martin Rule – Rule served on the Wage & Investment Subgroup Dan Welytok – Welytok served on the Tax Exempt/Government Entities Subgroup Mary Jo Werner – Werner served on the Small Business/Self-Employed Subgroup Charles Yovino – Yovino served on the Tax Exempt/Government Entities Subgroup The full 2021 IRSAC Public ReportPDF is available at IRS.gov.

https://www.irs.gov/newsroom/tax-professionals-can-now-order-more-transcripts-from-the-irs

IR-2021-226, November 16, 2021 WASHINGTON – The Internal Revenue Service today announced that, effective Nov. 15, 2021, tax professionals are able to order up to 30 Transcript Delivery System (TDS) transcripts per client through the Practitioner Priority Service® line. This is an increase from the previous 10 transcripts per client limit. "Increasing the number of transcripts a caller can receive addresses the concerns the IRS has received from PPS callers. This is another example of addressing concerns from our partners and stakeholders," said Ken Corbin, the Wage and Investment Commissioner and the IRS Taxpayer Experience Officer. Through PPS, tax professionals can order a variety of transcripts. Practitioners can receive transcripts for up to five clients per call. There's no change to the number of clients. Transcripts available under this newly-expanded limit include the: Tax Return Transcript, Tax Account Transcript, Wage and Income Transcript, Record of Account and Verification of Non-Filing Letter. Transcripts not listed above continue to be limited to 10 per client and count toward the total of 30 transcripts per client. Tax professionals will continue to receive TDS transcripts in their e-Services Secure Object Repository mailboxes. The change also applies to other IRS toll-free lines. Ordering transcripts online Tax practitioners can continue to order TDS transcripts using the Transcript Delivery System application on IRS.gov. Individual taxpayers can request their own TDS transcripts using Get Transcript. These tools remain the fastest way to receive transcripts. More information is available at Transcript Types and Ways to Order Them on IRS.gov.

https://www.irs.gov/newsroom/irs-provides-guidance-on-per-diem-rates-and-the-temporary-100-percent-deduction-for-food-or-beverages-from-restaurants

IR-2021-225, November 16, 2021 WASHINGTON — The Internal Revenue Service today issued Notice 2021-63PDF to make clear how the temporary 100% business deduction for food or beverages from restaurants applies to taxpayers properly applying the rules of Revenue Procedure 2019-48PDF for using per diem rates. Previously, the IRS issued Notice 2021-25PDF providing guidance under the Taxpayer Certainty and Disaster Relief Act of 2020, which 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, as long as the expense is paid or incurred in 2021 or 2022. For a taxpayer properly applying the rules of Revenue Procedure 2019-48, Notice 2021-63 provides a special rule that allows the taxpayer to treat the full meal portion of a per diem rate or allowance as being attributable to food or beverages from a restaurant beginning January 1, 2021, through December 31, 2022. Taxpayers should refer to section 6.05 of Revenue Procedure 2019-48 to determine the meal portion of a per diem rate or allowance paid or incurred. More information for businesses seeking coronavirus-related tax relief can be found at IRS.gov.

https://www.irs.gov/newsroom/more-california-wildfire-relief-from-irs-sept-15-oct-15-deadlines-other-dates-further-extended-to-jan-3-for-certain-areas

IR-2021-224, November 15, 2021 WASHINGTON — Wildfire victims in parts of California now have until January 3, 2022, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today. Under relief provided in August, these extensions were generally due to run out on November 15. The IRS is providing this additional relief, based on the recent Federal Emergency Management Agency (FEMA) decision to end the incident period for this disaster declaration on October 25. By law, the IRS must provide disaster relief until at least 60 days after the end of the FEMA-designated incident period. Accordingly, the IRS is now providing more time to any area of California designated by FEMA for either individual or public assistance. Currently, this includes Lassen, Nevada, Placer, Plumas, Tehama and Trinity counties. Any jurisdiction added to the FEMA declaration will automatically receive the IRS relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov. This relief postpones various tax filing and payment deadlines that occurred starting on July 14, 2021. As a result, affected individuals and businesses will have until January 3, 2022, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return that ran out on October 15, 2021, will now have until January 3, 2022, to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief. The January 3, 2022 deadline also applies to quarterly estimated income tax payments due on September 15, 2021, and the quarterly payroll and excise tax returns normally due on Aug. 2 and November 1, 2021. Businesses with an original or extended due date also have the additional time including, among others, calendar-year partnerships and S corporations whose 2020 extensions ran out on September 15, 2021 and calendar-year corporations whose 2020 extensions ran out on October 15, 2021. It also applies to calendar-year tax-exempt organizations whose 2020 extensions run out on November 15, 2021. In addition, penalties on payroll and excise tax deposits due on or after July 14, 2021 and before July 29, will be abated as long as the deposits were made by July 29, 2021. 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 (2020). Be sure to write the FEMA declaration number – DR-4610 −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 wildfires and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

https://www.irs.gov/newsroom/irs-announces-new-online-tool-to-help-us-withholding-agents-validate-their-1042-s-data-prior-to-filing

IR-2021-223, November 15, 2021 WASHINGTON – The Internal Revenue Service today launched a new online tool designed to help U.S. withholding agents comply with their reporting and withholding responsibilities with respect to IRS Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding. The tool performs a quality review of data before submission to the IRS. Use of the tool does not change a withholding agent's obligations to file Forms 1042-S with the IRS and furnish a copy of the Form 1042-S to the payee. "U.S. withholding agents play an important role in helping the IRS administer the tax code so we are delighted to be able to provide this tool free of charge to assist agents in meeting their filing requirement," said Nikole Flax, IRS Large Business and International division commissioner. About the tool In general, withholding agents, such as banks, insurance companies, universities, entertainment venues and resorts, or other financial institutions must file an information return on Form 1042-S to report amounts paid from U.S. sources to foreign persons. The definition of a withholding agent includes any person, U.S. or foreign, that has control, receipt or custody of amounts that are subject to the rules under Internal Revenue Code Chapter 3 (Withholding of Tax on Nonresident Aliens and Foreign Corporations) or Chapter 4 (Taxes to Enforce Reporting on Certain Foreign Accounts, i.e. FATCA or the Foreign Account Tax Compliance Act). The tool is designed to accept Form 1042-S data in common file formats that can be generated by most withholding agents' back office systems. After uploading the data, the user will receive a report indicating errors and potential errors. A tutorial on how to use the tool can be viewed online or downloaded. Even though the tool identifies data errors, the withholding agent remains responsible for making changes to the data on the agent's system of record before submission to the IRS. The list of resources below will help agents understand and correct errors before submitting the Forms 1042-S. The tool can be used as many times as necessary on new or revised data. The IRS has no access to the users' data. Use of the tool is voluntary, but the IRS will take into account a withholding agent's use of the tool when making enforcement and penalty determinations. Help spread the word The IRS urges information reporting and withholding industry experts and withholding agents to share this critical information with any withholding agents that may benefit from using this tool. Nonresident alien withholding resources Form 1042-S, instructions in PDF or HTML and any recent updates Form 1042, instructions in PDF or HTML and any recent updates Publication 1187, Specifications for Electronic Filing of Form 1042-S, Foreign Person's U.S. Source Income Subject to WithholdingPDF Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities

https://www.irs.gov/newsroom/irs-families-will-soon-receive-november-advance-child-tax-credit-payments-time-running-out-to-sign-up-online-to-get-an-advance-payment-in-december

IR-2021-222, November 12, 2021 WASHINGTON — The Internal Revenue Service and the Treasury Department announced today that millions of American families will soon receive their advance Child Tax Credit (CTC) payment for the month of November. Low-income families who are not getting payments and have not filed a tax return can still get one, but they must sign up on IRS.gov by 11:59 pm Eastern Time on Monday, November 15. This fifth batch of advance monthly payments, totaling about $15 billion, will reach about 36 million families across the country. The majority of payments are being made by direct deposit. Under the American Rescue Plan, most eligible families received payments dated July 15, August 13, September 15 and October 15. The last payment for 2021 is scheduled for December 15. For these families, 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. Here are more details on the November payments: Families will see the direct deposit payments in their accounts starting November 15. Like the prior payments, the vast majority of families will receive them by direct deposit. For those receiving payments by paper check, be sure to allow extra time, through the end of November, for delivery by mail. Those wishing to receive their December payment by direct deposit can make this change using the Child Tax Credit Update Portal, available only on IRS.gov. Be sure to make the change by 11:59 pm Eastern Time on November 29. To access the portal, visit IRS.gov/childtaxcredit2021. Payments are going to eligible families who filed a 2019 or 2020 income tax return. Returns processed by November 1 are reflected in these payments. This includes people who don't typically file a return but either during 2020 successfully filed a return to register for Economic Impact Payments using the IRS Non-Filers tool on IRS.gov, or in 2021 successfully filed a return by using the Non-filer Sign-up Tool for advance CTC. Payments are automatic. Aside from filing a tax return, including a return from the Non-filer Sign-up Tool, families don't have to do anything if they are eligible to receive monthly payments. Families who did not get a July, August, September or October payment and are getting their first monthly payment this month will still receive their total advance payment amount for the year (which is half of their total Child Tax Credit). This means that the total payment will be spread over two months, rather than six, making each monthly payment larger. Sign up by November 15 Recently, the IRS sent letters to many Americans urging them to check out the Child Tax Credit and if they qualify, to sign up soon to get advance payments. Whether or not they got one of these letters, an eligible family who is not already getting monthly payments can still sign up to get an advance payment of the Child Tax Credit. Treasury and IRS urge any low-income family who doesn't normally need to file a return to sign up now to get their payment. The deadline is 11:59 pm Eastern Time on Monday, November 15. Right now, they can only sign up online. To do so, quickly and securely, visit IRS.gov/childtaxcredit2021. Families can choose to file either in English or Spanish. Families signing up now will normally receive half of their total Child Tax Credit on December 15. This means a payment of up to $1,800 for each child under 6, and up to $1,500 for each child age 6 to 17. This is the same total amount that most other families have been receiving in up to six monthly payments that began in July. Any family who receives advance payments of the CTC during 2021 can claim the rest of the credit when they file their 2021 Federal income tax return. To help them do that, early in 2022 families will receive Letter 6419 documenting any advance payments issued to them during 2021 and the number of qualifying children used to calculate the advance payments. Families can make changes to their account Families who are already receiving monthly payments can use the Child Tax Credit Update Portal (CTC UP) to quickly update their account. Available only on IRS.gov, CTC UP already allows families to verify their eligibility for the payments and then, if they choose to: Switch from receiving a paper check to direct deposit; Change the account where their payment is direct deposited; Update their mailing address; Stop monthly payments and Reflect significant changes in their income that could potentially raise or lower their monthly payments. Updates made by 11:59 pm Eastern Time on November 29 will be reflected in the monthly payment scheduled for December 15. Later this month, the IRS will launch a Spanish-language version of the tool. In addition, new features will be added to enable families to raise or lower their final monthly payment to reflect life changes, such as another child born or adopted in 2021. Community partners can help The IRS encourages partners and community groups to share information and use available online tools and toolkits to help non-filers, low-income families and other underserved groups sign up to receive these benefits. Links to online tools, answers to frequently asked questions and other helpful resources are available on the IRS' special advance CTC 2021 page.

https://www.irs.gov/newsroom/irs-updates-faqs-for-2020-unemployment-compensation-exclusion

IR-2021-221, November 12, 2021 WASHINGTON — The Internal Revenue Service today updated its frequently-asked-questions (FAQs) on 2020 Unemployment Compensation Exclusion. These updated FAQs (FS-2021-14)PDF are: Question 2, Topic D: Amended Return (Form 1040-X)  Questions 8 & 9, Topic G: Receiving a Refund, Letter, or Notice  Question 3, Topic I: Post Unemployment Compensation Exclusion Adjustment. These FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible. More information about reliance is available. IRS-FAQ

https://www.irs.gov/newsroom/irs-financial-report-available-on-irsgov

IR-2021-220, November 10, 2021 WASHINGTON — The Internal Revenue Service published its Financial Report on IRS.gov today. This new report provides the American people with a comprehensive view of the IRS's financial activities as well as the accomplishments of its finance management community. In fiscal year 2021, the IRS managed more than $4.1 trillion in tax revenue, $1.1 trillion in refunds and $658 billion in unpaid assessments, as well as the resources that support its mission. In addition, Congress and both Administrations entrusted the IRS with $2.4 billion in supplemental funding to support the nation's recovery from the COVID-19 pandemic. "The IRS disbursed an unprecedented $1.1 trillion to Americans in fiscal year 2021," said Teresa Hunter, IRS Chief Financial Officer. "To implement legislative requirements resulting in the expedient roll out of Economic Impact Payments, COBRA, Premium Tax Credit changes and the advanced Child Tax Credits, we overcame significant barriers. I'm proud of the finance management community's hard work and dedication," she said. "We strive for excellence in reporting and will continue to ensure taxpayer dollars are managed with integrity and accuracy." For more information see Publication 5456, IRS FY 2021 Financial ReportPDF.

https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2022

IR-2021-219, November 10, 2021 WASHINGTON — The Internal Revenue Service today announced the tax year 2022 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2021-45PDF provides details about these annual adjustments. Highlights of changes in Revenue Procedure 2021-45: The tax year 2022 adjustments described below generally apply to tax returns filed in 2023. The tax items for tax year 2022 of greatest interest to most taxpayers include the following dollar amounts: The standard deduction for married couples filing jointly for tax year 2022 rises to $25,900 up $800 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,950 for 2022, up $400, and for heads of households, the standard deduction will be $19,400 for tax year 2022, up $600.   The personal exemption for tax year 2022 remains at 0, as it was for 2021, this elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act.    Marginal Rates: For tax year 2022, the top tax rate remains 37% for individual single taxpayers with incomes greater than $539,900 ($647,850 for married couples filing jointly). The other rates are: 35%, for incomes over $215,950 ($431,900 for married couples filing jointly); 32% for incomes over $170,050 ($340,100 for married couples filing jointly); 24% for incomes over $89,075 ($178,150 for married couples filing jointly); 22% for incomes over $41,775 ($83,550 for married couples filing jointly); 12% for incomes over $10,275 ($20,550 for married couples filing jointly). The lowest rate is 10% for incomes of single individuals with incomes of $10,275 or less ($20,550 for married couples filing jointly).   For 2022, as in 2021, 2020, 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.   The Alternative Minimum Tax exemption amount for tax year 2022 is $75,900 and begins to phase out at $539,900 ($118,100 for married couples filing jointly for whom the exemption begins to phase out at $1,079,800). The 2021 exemption amount was $73,600 and began to phase out at $523,600 ($114,600 for married couples filing jointly for whom the exemption began to phase out at $1,047,200).   The tax year 2022 maximum Earned Income Tax Credit amount is $6,935 for qualifying taxpayers who have three or more qualifying children, up from $6,728 for tax year 2021. The revenue procedure contains a table providing maximum EITC amount for other categories, income thresholds and phase-outs.   For tax year 2022, the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $280.   For the taxable years beginning in 2022, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $2,850. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $570, an increase of $20 from taxable years beginning in 2021.   For tax year 2022, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,450, up $50 from tax year 2021; but not more than $3,700, an increase of $100 from tax year 2021. For self-only coverage, the maximum out-of-pocket expense amount is $4,950, up $150 from 2021. For tax year 2022, for family coverage, the annual deductible is not less than $4,950, up from $4,800 in 2021; however, the deductible cannot be more than $7,400, up $250 from the limit for tax year 2021. For family coverage, the out-of-pocket expense limit is $9,050 for tax year 2022, an increase of $300 from tax year 2021.   The modified adjusted gross income amount used by joint filers to determine the reduction in the Lifetime Learning Credit provided in § 25A(d)(2) is not adjusted for inflation for taxable years beginning after December 31, 2020. The Lifetime Learning Credit is phased out for taxpayers with modified adjusted gross income in excess of $80,000 ($160,000 for joint returns).   For tax year 2022, the foreign earned income exclusion is $112,000 up from $108,700 for tax year 2021.   Estates of decedents who die during 2022 have a basic exclusion amount of $12,060,000, up from a total of $11,700,000 for estates of decedents who died in 2021.   The annual exclusion for gifts increases to $16,000 for calendar year 2022, up from $15,000 for calendar year 2021.   The maximum credit allowed for adoptions for tax year 2022 is the amount of qualified adoption expenses up to $14,890, up from $14,440 for 2021. More Information News Release IR-2021-216, IRS announces 401(k) limit increases to $20,500.

https://www.irs.gov/newsroom/irs-updates-2021-child-tax-credit-and-advance-child-tax-credit-payments-frequently-asked-questions

IR-2021-218, November 9, 2021 WASHINGTON — The Internal Revenue Service today updated frequently-asked-questions (FAQs) for the 2021 Child Tax Credit and Advance Child Tax Credit Payments to describe how taxpayers can now provide the IRS an estimate of your 2021 income using the Child Tax Credit Update Portal (CTC UP). These FAQs updatePDF the Advance Child Tax Credit Topic A FAQs by adding a new question, question 17 and Topic F FAQs by adding new questions, questions 2 through 6. These FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible. More information about reliance is available. Additional Advance Child Tax Credit information The IRS has created a special Advance Child Tax Credit Payments in 2021 page designed to provide the most up-to-date information about the credit and the advance payments. It's at IRS.gov/childtaxcredit2021. The IRS encourages partners and community groups to share information and use available online tools and toolkits to help non-filers, low-income families and other underserved groups sign up. People can check their eligibility by using the Advance Child Tax Credit Eligibility Assistant. The webpage features a set of frequently asked questions. It also provides direct links to the portal, as well as two other online tools – the Non-filer Sign up Tool and the Child Tax Credit Eligibility Assistant – and other useful resources. IRS-FAQ

https://www.irs.gov/newsroom/get-ready-for-taxes-easy-steps-taxpayers-can-take-now-to-make-tax-filing-easier-in-2022

IR-2021-217, November 8, 2021 WASHINGTON — The Internal Revenue Service today encouraged taxpayers, including those who received stimulus payments or advance Child Tax Credit payments, to take important steps this fall to help them file their federal tax returns in 2022. Planning ahead can help people file an accurate return and avoid processing delays that can slow tax refunds. This is the first in a series of reminders to help taxpayers get ready for the upcoming tax filing season. A special page, updated and available on IRS.gov, outlines steps taxpayers can take now to prepare to file a 2021 tax return next year. Gather and organize tax records Organized tax records make preparing a complete and accurate tax return easier. It helps avoid errors that lead to processing and refund delays. Individuals should have all their tax information available before filing to ensure the return is complete and accurate. They should notify the IRS if their address changes and notify the Social Security Administration of a legal name change. Remember, most income is taxable. Recordkeeping for individuals includes: Forms W-2 from employer(s) Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, distributions from a pension, annuity or retirement plan Form 1099-K, 1099-MISC, W-2 or other income statement for workers in the gig economy Form 1099-INT for interest received Other income documents and records of virtual currency transactions Income documents can help individuals determine if they're eligible for deductions or credits. Additionally, people who need to reconcile their advance payments of the Child Tax Credit and Premium Tax Credit will need their related 2021 information. Those who received third Economic Impact Payments and think they qualify for an additional amount will need their stimulus payment and plus-up amounts to figure and claim the 2021 Recovery Rebate Credit. Taxpayers should also keep end of year documents including: Letter 6419, 2021 Total Advance Child Tax Credit Payments, to reconcile advance Child Tax Credit payments Letter 6475, Your 2021 Economic Impact Payment, to determine eligibility to claim the Recovery Rebate Credit Form 1095-A, Health Insurance Marketplace Statement, to reconcile advance Premium Tax Credits for Marketplace coverage Online Account securely provides tax account information on IRS.gov; helps provide important filing information Taxpayers who access Online Account can securely gain entry to the Child Tax Credit Update Portal to see their payment dates and amounts. Taxpayers will need this information to reconcile their advance Child Tax Credit payments with the Child Tax Credit they can claim when they file their 2021 tax returns. Eligible individuals claiming a 2021 Recovery Rebate Credit can log in to their online account to see their Economic Impact Payment amounts so they can accurately claim the credit when they file. Individuals who have not set up an Online Account yet should act soon to create an account. People who have already set up an Online Account should make sure they can still log in successfully. Taxpayers who have an Online Account may: View the amounts of their Economic Impact Payments Access Child Tax Credit Update Portal for information about their advance Child Tax Credit payments View key data from your most recent tax return and access additional records and transcripts View details of your payment plan if you have one View 5 years of payment history and any pending or scheduled payments Taxpayers should make sure they've withheld enough tax Individuals may want to consider adjusting their withholding if they owed taxes or received a large refund the previous year. Changing withholding can help avoid a tax bill or let individuals keep more money each payday. Life changes – getting married or divorced, welcoming a child or taking on a second job – may also be reasons to change withholding. Taxpayers might think about completing a new Form W-4, Employee's Withholding Certificate, each year and when personal or financial situations change. People also need to consider estimated tax payments. Individuals who receive a substantial amount of non-wage income like self-employment income, investment income, taxable Social Security benefits and in some instances, pension and annuity income should make quarterly estimated tax payments. The last payment for 2021 is due on Jan. 18, 2022. Individuals can log in to their Online Account to make a payment online or go to IRS.gov/payments. ITINs need to be renewed only if expired and if needed on a U.S. federal tax return If an Individual Taxpayer Identification Number (ITIN) was not included on a U.S. federal tax return at least once for tax years 2018, 2019 and 2020, the ITIN will expire on Dec. 31, 2021. As a reminder, ITINs with middle digits 70 through 88 have expired. In addition, ITINs with middle digits 90 through 99, IF assigned before 2013, have expired. Individuals who previously submitted a renewal application that was approved, do not need to renew again. Want a faster refund? Getting banked speeds tax refunds with direct deposit Direct deposit gives individuals access to their refund faster than a paper check. Those without a bank account can learn how to open an account at an FDIC-Insured bank or through the National Credit Union Locator Tool. Veterans should see the Veterans Benefits Banking Program (VBBP) for access to financial services at participating banks. Volunteer to help eligible taxpayers file their returns The IRS and its community partners are preparing for the upcoming filing season and are looking for people around the country to become IRS-certified volunteers. Join the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs. VITA/TCE volunteers provide free tax return preparation for eligible taxpayers. With many people experiencing financial changes this year, additional volunteers are needed to assist them. Visit IRS.gov/volunteers to learn more and sign up. After signing up, more information about attending a virtual orientation will be provided.

https://www.irs.gov/newsroom/irs-announces-401k-limit-increases-to-20500

IR-2021-216, November 4, 2021 WASHINGTON — The Internal Revenue Service announced today that the amount individuals can contribute to their 401(k) plans in 2022 has increased to $20,500, up from $19,500 for 2021 and 2020. The IRS today also issued technical guidance regarding all of the cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2022 in Notice 2021-61PDF, posted today on IRS.gov. Highlights of changes for 2022 The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is increased to $20,500, up from $19,500. The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs, and to claim the Saver's Credit all increased for 2022. Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or the taxpayer's spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase-out ranges for 2022: For single taxpayers covered by a workplace retirement plan, the phase-out range is increased to $68,000 to $78,000, up from $66,000 to $76,000. For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is increased to $109,000 to $129,000, up from $105,000 to $125,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is increased to $204,000 to $214,000, up from $198,000 to $208,000. For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000. The income phase-out range for taxpayers making contributions to a Roth IRA is increased to $129,000 to $144,000 for singles and heads of household, up from $125,000 to $140,000. For married couples filing jointly, the income phase-out range is increased to $204,000 to $214,000, up from $198,000 to $208,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000. The income limit for the Saver's Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $68,000 for married couples filing jointly, up from $66,000; $51,000 for heads of household, up from $49,500; and $34,000 for singles and married individuals filing separately, up from $33,000. The amount individuals can contribute to their SIMPLE retirement accounts is increased to $14,000, up from $13,500. Key employee contribution limits that remain unchanged The limit on annual contributions to an IRA remains unchanged at $6,000. The IRA catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan remains unchanged at $6,500. Therefore, participants in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan who are 50 and older can contribute up to $27,000, starting in 2022. The catch-up contribution limit for employees aged 50 and over who participate in SIMPLE plans remains unchanged at $3,000. Details on these and other retirement-related cost-of-living adjustments for 2022 are in Notice 2021-61PDF, available on IRS.gov.

https://www.irs.gov/newsroom/irs-releases-reporting-guidance-for-partnership-interests-held-in-connection-with-the-performance-of-services

IR-2021-215, November 3, 2021 WASHINGTON — The Internal Revenue Service today posted detailed reporting directions for certain passthrough entities and taxpayers reporting of partnership interests held in connection with the performance of services, often referred to as "carried interests," in the form of frequently asked questions (FAQs). The FAQs contain sample worksheets that certain passthrough entities and taxpayers may be required to use in reporting "carried interests," partnership interests held in connection with the performance of services for tax returns, filed after December 31, 2021 in which a passthrough entity applies the final regulations. In addition, the FAQs contain additional instructions for certain passthrough entities and taxpayers who though not required to file the sample worksheets must provide similar information and must disclose whether the information was determined under the proposed regulations or another method for tax returns filed after December 31, 2021 for a taxable year beginning before January 19, 2021. A 2017 tax law change recharacterized certain net long-term capital gains of a partnership that holds one or more applicable partnership interest (APIs) as short-term capital gains. The provision generally requires that a capital asset be held for more than three years for capital gains allocated with respect to any API to be treated as a long-term capital gain. The purpose of the FAQs is to provide guidance relating to both Passthrough Entity filing and reporting requirements and Owner Taxpayer filing requirements in accordance with Department of the Treasury regulations revised in TD 9945PDF. This updated reporting guidance will also be added to the next revision of Publication 541, PartnershipsPDF, which will be released in 2022.

https://www.irs.gov/newsroom/year-end-giving-reminder-special-tax-deduction-helps-most-people-give-up-to-600-to-charity-even-if-they-dont-itemize

IR-2021-214, November 3, 2021 WASHINGTON — The Internal Revenue Service today reminded taxpayers that a special tax provision will allow more Americans to easily deduct up to $600 in donations to qualifying charities on their 2021 federal income tax return. Ordinarily, people who choose to take the standard deduction cannot claim a deduction for their charitable contributions. But a temporary law change now permits them to claim a limited deduction on their 2021 federal income tax returns for cash contributions made to qualifying charitable organizations. Nearly nine in 10 taxpayers now take the standard deduction and could potentially qualify. Under this provision, individual tax filers, including married individuals filing separate returns, can claim a deduction of up to $300 for cash contributions made to qualifying charities during 2021. The maximum deduction is increased to $600 for married individuals filing joint returns. Included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in March 2020, a more limited version of this temporary tax benefit originally only applied to tax-year 2020. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted last December, generally extended it through the end of 2021. Cash contributions include those made by check, credit card or debit card as well as amounts incurred by an individual for unreimbursed out-of-pocket expenses in connection with their volunteer services to a qualifying charitable organization. Cash contributions don't include the value of volunteer services, securities, household items or other property. The IRS reminds taxpayers to make sure they're donating to a recognized charity. To receive a deduction, taxpayers must donate to a qualified charity. To check the status of a charity, they can use the IRS Tax Exempt Organization Search tool. Cash contributions to most charitable organizations qualify. But contributions made either to supporting organizations or to establish or maintain a donor advised fund do not. Contributions carried forward from prior years do not qualify, nor do contributions to most private foundations and most cash contributions to charitable remainder trusts. In general, a donor-advised fund is a fund or account maintained by a charity in which a donor can, because of being a donor, advise the fund on how to distribute or invest amounts contributed by the donor and held in the fund. A supporting organization is a charity that carries out its exempt purposes by supporting other exempt organizations, usually other public charities. Keep good records Special recordkeeping rules apply to any taxpayer claiming a charitable contribution deduction. Usually, this includes obtaining an acknowledgment letter from the charity before filing a return and retaining a cancelled check or credit card receipt for contributions of cash. For details on the recordkeeping rules for substantiating gifts to charity, see Publication 526, Charitable Contributions, available on IRS.gov. Remind families about the Child Tax Credit Besides the special charitable contribution deduction, the IRS also encourages employers to help get the word out about the advance payments of the Child Tax Credit because they have direct access to many employees and individuals who receive this credit. In particular, remind low-income workers, especially those who don't normally file returns, that the deadline for signing up for these payments is now November 15, 2021. More information on the advance Child Tax Credit is available on IRS.gov. For more information about other coronavirus-related tax relief, visit IRS.gov/coronavirus.

https://www.irs.gov/newsroom/more-ida-relief-from-irs-sept-15-oct-15-deadlines-other-dates-extended-to-jan-3-for-parts-of-connecticut

IR-2021-213, November 3, 2021 WASHINGTON — Victims of Hurricane Ida in parts of Connecticut now have until January 3, 2022, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today. Following the October 30 disaster declaration by the Federal Emergency Management Agency (FEMA), the IRS is offering this relief to those parts of the state designated for either individual or public assistance. Currently, this includes Fairfield and New London counties, including the Mashantucket Pequot Tribal Nation and the Mohegan Tribal Nation. Any jurisdiction added to the FEMA declaration will automatically receive the IRS relief. The current list of eligible localities is always available on the disaster relief page. This relief postpones various tax filing and payment deadlines that occurred starting on September 1, 2021. As a result, affected individuals and businesses will have until January 3, 2022, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return that ran out on October 15, 2021, will now have until January 3, 2022, to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief. The January 3, 2022 deadline also applies to quarterly estimated income tax payments due on September 15, 2021, and the quarterly payroll and excise tax returns normally due on November 1, 2021. Businesses with an original or extended due date also have the additional time including, among others, calendar-year partnerships and S corporations whose 2020 extensions ran out on September 15, 2021 and calendar-year corporations whose 2020 extensions ran out on October 15, 2021. It also applies to calendar-year tax-exempt organizations whose 2020 extensions run out on November 15, 2021. In addition, penalties on payroll and excise tax deposits due on or after September 1, 2021 and before September 16, will be abated as long as the deposits were made by September 16, 2021. 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 (2020). Be sure to write the FEMA declaration number – DR-4629 −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 Hurricane Ida and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

https://www.irs.gov/newsroom/irs-issues-another-430000-refunds-for-adjustments-related-to-unemployment-compensation

IR-2021-212, November 1, 2021 WASHINGTON — The Internal Revenue Service recently sent approximately 430,000 refunds totaling more than $510 million to taxpayers who paid taxes on unemployment compensation excluded from income for tax year 2020. The IRS efforts to correct unemployment compensation overpayments will help most of the affected taxpayers avoid filing an amended tax return. So far, the IRS has identified over 16 million taxpayers who may be eligible for the adjustment. Some will receive refunds, while others will have the overpayment applied to taxes due or other debts. The American Rescue Plan Act (ARPA) of 2021, enacted in March, excluded the first $10,200 in unemployment compensation per taxpayer paid in 2020. The $10,200 is the amount excluded when calculating one's adjusted gross income (AGI); it is not the amount of refund. The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000. Earlier this year, the IRS began its review of tax returns filed prior to the enactment of ARPA to identify the excludible unemployment compensation. To date, the IRS has issued over 11.7 million refunds totaling $14.4 billion. This latest batch of corrections affected over 519,000 returns, with 430,000 taxpayers receiving refunds averaging about $1,189. The review of returns and processing corrections is nearly complete as the IRS already reviewed the simplest returns and is now concentrating on more complex returns. The IRS plans to issue another batch of corrections before the end of the year. Impacted taxpayers will generally receive letters from the IRS within 30 days of the adjustment, informing them of what kind of adjustment was made (refund, payment of IRS debt payment or payment offset for other authorized debts) and the amount of the adjustment. The IRS also is making corrections for Earned Income Tax Credit, Additional Child Tax Credit, American Opportunity Credit, Premium Tax Credit and Recovery Rebate Credit amounts affected by the exclusion. Most taxpayers need not take any action and there is no need to call the IRS. The IRS will be sending notices in November and December to individuals who did not claim the Earned Income Tax Credit or the Additional Child Tax Credit but may now be eligible for them. These notices are not confirmation that they are eligible for these credits and will require a response from the taxpayer if eligible rather than filing an amended return. For taxpayers who become eligible for other credits and/or deductions after the exclusion is calculated but not claimed on their original return, they must file a Form 1040-X, Amended U.S. Individual Income Tax Return, to claim any new benefits. See the 2020 Unemployment Compensation Exclusion FAQs for more information, including details on filing an amended return.

https://www.irs.gov/newsroom/irs-reminder-for-many-employers-and-self-employed-people-deferred-social-security-tax-payment-due-jan-3

IR-2021-256, December 27, 2021 WASHINGTON — The Internal Revenue Service today reminded employers and self-employed individuals that chose to defer paying part of their 2020 Social Security tax obligation that a payment is due on January 3, 2022. Most affected employers and self-employed individuals received reminder billing notices from the IRS. The agency noted, however, that those affected are still required to make the payment on time, even if they did not receive a bill. As part of the COVID relief provided during 2020, employers and self-employed people could choose to put off paying the employer's share of their eligible Social Security tax liability, normally 6.2% of wages. Half of that deferral is now due on January 3, 2022, and the other half on January 3, 2023. Under separate COVID relief, employers could choose to forgo withholding Social Security taxes from eligible employees, and instead withhold tax this year and then pay those amounts to the IRS. For details, visit What employers need to know about repayment of deferred payroll taxes on IRS.gov. How to repay the deferred taxes Employers and individuals can make the deferral payments through the Electronic Federal Tax Payment System or by credit or debit card, money order or with a check. To be sure these payments are credited properly, they must be made separately from other tax payments. EFTPS has an option to make a deferral payment. On the Tax Type Selection screen, choose Deferred Social Security Tax and then change the date to the applicable tax period (typically, the calendar quarter in 2020 for which tax was deferred). Visit EFTPS.gov, or call 800-555-4477 or 800-733-4829 for details. Individual taxpayers can also use Direct Pay, available only on IRS.gov. Select the "balance due" reason for payment. If paying with a debit or credit card, select "installment agreement." Apply the payment to the 2020 tax year where the payment was deferred.

https://www.irs.gov/newsroom/irs-issues-information-letters-to-advance-child-tax-credit-recipients-and-recipients-of-the-third-round-of-economic-impact-payments-taxpayers-should-hold-onto-letters-to-help-the-2022-filing-season

IR-2021-255, December 22, 2021 WASHINGTON — The Internal Revenue Service announced today that it will issue information letters to Advance Child Tax Credit recipients starting in December and to recipients of the third round of the Economic Impact Payments at the end of January. Using this information when preparing a tax return can reduce errors and delays in processing. The IRS urged people receiving these letters to make sure they hold onto them to assist them in preparing their 2021 federal tax returns in 2022. Watch for advance Child Tax Credit letter To help taxpayers reconcile and receive all of the Child Tax Credits to which they are entitled, the IRS will send Letter 6419, 2021 advance CTC, starting late December 2021 and continuing into January. The letter will include the total amount of advance Child Tax Credit payments taxpayers received in 2021 and the number of qualifying children used to calculate the advance payments. People should keep this and any other IRS letters about advance Child Tax Credit payments with their tax records. Families who received advance payments will need to file a 2021 tax return and compare the advance Child Tax Credit payments they received in 2021 with the amount of the Child Tax Credit they can properly claim on their 2021 tax return. The letter contains important information that can make preparing their tax returns easier. People who received the advance CTC payments can also check the amount of their payments by using the CTC Update Portal available on IRS.gov. Eligible families who did not receive any advance Child Tax Credit payments can claim the full amount of the Child Tax Credit on their 2021 federal tax return, filed in 2022. This includes families who don't normally need to file a tax return. Economic Impact Payment letter can help with the Recovery Rebate Credit The IRS will begin issuing Letter 6475, Your Third Economic Impact Payment, to EIP recipients in late January. This letter will help Economic Impact Payment recipients determine if they are entitled to and should claim the Recovery Rebate Credit on their tax year 2021 tax returns that they file in 2022. Letter 6475 only applies to the third round of Economic Impact Payments that was issued starting in March 2021 and continued through December 2021. The third round of Economic Impact Payments, including the "plus-up" payments, were advance payments of the 2021 Recovery Rebate Credit that would be claimed on a 2021 tax return. Plus-up payments were additional payments the IRS sent to people who received a third Economic Impact Payment based on a 2019 tax return or information received from SSA, RRB or VA; or to people who may be eligible for a larger amount based on their 2020 tax return. Most eligible people already received the payments. However, people who are missing stimulus payments should review the information to determine their eligibility and whether they need to claim a Recovery Rebate Credit for tax year 2020 or 2021. Like the advance CTC letter, the Economic Impact Payment letters include important information that can help people quickly and accurately file their tax return. More information about the advance Child Tax Credit, Economic Impact Payments and other COVID-19-related tax relief may be found at IRS.gov. As the 2022 tax filing season approaches, the IRS urges people to make sure to file an accurate tax return and use electronic filing with direct deposit to avoid delays.

https://www.irs.gov/newsroom/hurricane-ida-tax-relief-extended-to-february-15-for-part-or-all-of-six-qualifying-states

Updated: December 30, 2021 IR-2021-254, December 22, 2021 WASHINGTON — Victims of Hurricane Ida in six states now have until February 15, 2022, extended from January 3, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today. The updated relief covers the entire states of Louisiana and Mississippi, as well as parts of New York, New Jersey, Connecticut and Pennsylvania. The current list of eligible localities is always available on the Around the Nation section of the disaster relief page on IRS.gov. The updated relief postpones various tax filing and payment deadlines that occurred starting on dates that vary by state: August 26, 2021 for Louisiana, August 28, 2021 for Mississippi, August 31, 2021 for Pennsylvania and September 1, 2021 for New York, New Jersey and Connecticut. As a result, affected individuals and businesses will have until February 15, 2022, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return that ran out on October 15, 2021, will now have until February 15, 2022, to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief. The February 15 extended deadline also applies to quarterly estimated income tax payments that were due on September 15, 2021, and January 18, 2022. The February 15 deadline also applies to the quarterly payroll and excise tax returns normally due on November 1, 2021, and January 31, 2022. Businesses with an original or extended due date also have the additional time including, among others, calendar-year partnerships and S corporations whose 2020 extensions ran out on September 15, 2021, and calendar-year corporations whose 2020 extensions ran out on October 15, 2021. It also applies to calendar-year tax-exempt organizations whose 2020 extensions ran out on November 15, 2021. The Disaster Assistance and Emergency Relief for Individuals and Businesses 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 (2020). See Publication 547 for details. The tax relief is part of a coordinated federal response to the damage caused by Hurricane Ida and is based on local damage assessments by the Federal Emergency Management Agency (FEMA). For information on disaster recovery, visit DisasterAssistance.gov.

https://www.irs.gov/newsroom/united-states-malta-sign-a-competent-authority-arrangement-caa-confirming-pension-fund-meaning

IR-2021-253, December 21, 2021 WASHINGTON — The competent authorities of the United States and Malta signed a competent authority arrangement (CAA) confirming their understanding of the meaning of pension fund for purposes of the United States–Malta income tax treaty (Treaty). The competent authorities have entered into this agreement after becoming aware that U.S. taxpayers with no connection to Malta were misconstruing the pension provisions of the Treaty to avoid income tax on the earnings of, and distributions from, personal retirement schemes established in Malta. The CAAPDF confirms the U.S. and Malta competent authorities' understanding that (except in the case of a qualified rollover from a pension fund in the same country) a fund, scheme or arrangement is not operated principally to provide pension or retirement benefits if it allows participants to contribute property other than cash, or does not limit contributions by reference to income earned from employment and self-employment activities. Because Maltese personal retirement schemes contain these features, they are not properly treated as a pension fund for Treaty purposes and distributions from these schemes are not pensions or other similar remuneration. The IRS put taxpayers on notice earlier this year that it was reviewing the use of Maltese personal retirement schemes. The IRS is actively examining taxpayers who have set up these arrangements and recognizes that other taxpayers may have filed tax returns claiming Treaty benefits as a result of their participation in these arrangements. These taxpayers should consult an independent tax advisor prior to filing their 2021 tax returns and take appropriate corrective actions on prior filings. The IRS also cautions taxpayers against entering into any substantially similar arrangements that would seek to misconstrue the provisions of a bilateral income tax treaty of the United States to avoid income tax. IRS enforcement, both the civil and criminal divisions, is committed to pursuing abuse and those who market and participate in abusive transactions. The CAAPDF is available on IRS.gov and will be published in the Internal Revenue Bulletin.

https://www.irs.gov/newsroom/for-illinois-and-tennessee-tornado-victims-irs-extends-2021-tax-filing-deadline-other-deadlines-to-may-16

IR-2021-252, December 20, 2021 WASHINGTON — Victims of this month's tornadoes in parts of Illinois and Tennessee will have until May 16, 2022, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today. This is the same relief already provided to storm victims in Kentucky. Following last week's emergency declarations 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 starting on December 10 in parts of Illinois and Tennessee. Currently, relief is available to affected taxpayers who live or have a business in Bond, Cass, Coles, Effingham, Fayette, Jersey, Macoupin, Madison, Montgomery, Morgan, Moultrie, Pike and Shelby counties in Illinois and Cheatham, Decatur, Dickson, Dyer, Gibson, Lake, Obion, Stewart, and Weakley counties in Tennessee. But the IRS will provide the same relief to any other localities designated by FEMA in these or neighboring states. The current list of eligible localities is always available on the disaster relief page on IRS.gov, including numerous counties in Kentucky announced last week. The tax relief postpones various tax filing and payment deadlines that occurred starting on December 10. As a result, affected individuals and businesses will have until May 16 to file returns and pay any taxes that were originally due during this period. This includes 2021 individual income tax returns due on April 18, as well as various 2021 business returns normally due on March 15 and April 18. Among other things, this means that affected taxpayers will have until May 16 to make 2021 IRA contributions. In addition, farmers who choose to forgo making estimated tax payments and normally file their returns by March 1 will now have until May 16, 2022 to file their 2021 return and pay any tax due. The May 16 deadline also applies to quarterly estimated income tax payments due on January 18 and April 18. Among other things, this means that individual taxpayers can skip making the fourth quarter estimated tax payment, normally due January 18, 2022, and instead include it with the 2021 return they file, on or before May 16. In addition, the quarterly payroll and excise tax returns normally due on January 31 and May 2, 2022 are also now due on May 16. In addition, penalties on payroll and excise tax deposits due on or after December 10 and before December 27 will be abated as long as the deposits are made by December 27, 2021. 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, 2020 in this instance. Be sure to write the FEMA declaration number – 3577EM for Illinois or 3576EM for Tennessee − 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.

https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2022

IR-2021-251, December 17, 2021 WASHINGTON — The Internal Revenue Service today issued the 2022 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on January 1, 2022, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 58.5 cents per mile driven for business use, up 2.5 cents from the rate for 2021, 18 cents per mile driven for medical, or moving purposes for qualified active-duty members of the Armed Forces, up 2 cents from the rate for 2021 and 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2021. The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs. It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details see Moving Expenses for Members of the Armed Forces. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Taxpayers can use the standard mileage rate but must opt to use it in the first year the car is available for business use. Then, in later years, they can choose either the standard mileage rate or actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen. Notice 22-03PDF, contains the optional 2022 standard mileage rates, as well as the maximum automobile cost used to calculate the allowance under a fixed and variable rate (FAVR) plan. In addition, the notice provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2022 for which employers may use the fleet-average valuation rule in or the vehicle cents-per-mile valuation rule.

https://www.irs.gov/newsroom/irs-makes-tax-exempt-organization-search-primary-source-to-get-exempt-organization-data

IR-2021-250, December 16, 2021 WASHINGTON – The Internal Revenue Service announced today that the publicly available data it provides on electronically filed Forms 990 in a machine-readable format will be available solely on the Tax Exempt Organization Search webpage. Beginning December 31, 2021, the IRS will no longer update the Form 990 Series data on Amazon Web Services. This change is to provide access to public data for organizations with tax-exempt status in one location on IRS.gov on the Charities and Nonprofits webpage. The Tax Exempt Organization Search Bulk Data Downloads webpage has multiple data sets of information about organizations' tax-exempt status and filings with instruction on how to download. The Form 990 series data set includes XML and individual PDF files of Form 990, Return of Organization Exempt from Income Tax; Form 990-EZ, Short Form Return of Organization Exempt from Income Tax; and Form 990-PF, Return of Private Foundation and related schedules. The IRS redacts personally identifiable tax-identification numbers to prevent the data's misuse. The Form 990 series returns are the primary tool for IRS to gather information about tax-exempt organizations and promote compliance with tax-law requirements. Organizations also use the Form 990 to share information with the public about their programs. Additionally, most states rely on the Form 990 to perform charitable and other regulatory oversight and to satisfy state income tax filing requirements for organizations claiming exemption from state income tax. A tax-exempt organization must file an annual information return or notice with the IRS unless an exception applies. Annual information returns include Form 990, Form 990-EZ and Form 990-PF. Form 990-N (e-Postcard) is an annual notice. For updates on TEOS and other issues related to charities and nonprofits, please subscribe to the Exempt Organization Update newsletter.

https://www.irs.gov/newsroom/families-will-soon-receive-their-december-advance-child-tax-credit-payment-those-not-receiving-payments-may-claim-any-missed-payments-on-the-upcoming-2021-tax-return

IR-2021-249, December 15, 2021 WASHINGTON — The Internal Revenue Service and the Treasury Department announced today that millions of American families will soon receive their final advance Child Tax Credit (CTC) payment for the month of December. Eligible families who did not receive advance payments can claim the Child Tax Credit on their 2021 federal tax return to receive missed payments and the other half of the credit. This final batch of advance monthly payments for 2021, totaling about $16 billion, will reach more than 36 million families across the country. Most payments are being made by direct deposit. Under the American Rescue Plan, eligible families have received more than 200 million payments totaling more than $93 billion. Most eligible families received payments dated July 15, August 13, September 15, October 15, November 15 and December 15. For eligible families, 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. Here are more details on the December payments: Families will see the direct deposit payments in their accounts starting December 15. Like the prior payments, the vast majority of families will receive them by direct deposit. For those receiving payments by paper check, be sure to allow extra time, through the end of December, for delivery by mail. Payments are going to eligible families who filed a 2019 or 2020 federal income tax return. Returns processed by December 1 are reflected in these payments. This includes people who don't typically file a return but either during 2020 successfully filed a return to register for Economic Impact Payments using the IRS Non-Filers tool on IRS.gov, or in 2021 successfully filed a return by using the Non-filer Sign-up Tool for advance CTC. Families who did not get a July, August, September, October or November payment and are getting their first monthly payment this month will still receive their total advance payment amount for the year (which is half of their total Child Tax Credit). This means that the total advance payment amount will be made in one December payment. Claim the full Child Tax Credit on the 2021 tax return Eligible families who did not receive any advance Child Tax Credit payments can claim the full amount of the Child Tax Credit on their 2021 federal tax return, filed in 2022. This includes families who don't normally need to file a return. Families who received advance payments will need to file a 2021 tax return and compare the advance Child Tax Credit payments they received in 2021 with the amount of the Child Tax Credit they can properly claim on their 2021 tax return. To help taxpayers reconcile the advance payments, the IRS will send Letter 6419 in January 2022 with the total amount of advance Child Tax Credit payments taxpayers received in 2021 and the number of qualifying children used to calculate the advance payments. People should keep this and any other IRS letters about advance Child Tax Credit payments with their tax records. See Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return for more information. Links to online tools, answers to frequently asked questions and other helpful resources are available on the IRS's special advance CTC 2021 page.

https://www.irs.gov/newsroom/for-kentucky-tornado-victims-irs-extends-2021-tax-filing-deadline-other-deadlines-to-may-16

Updated 12/17/21: This news release has been updated to include Christian, Hart, Hickman, Logan, Lyon, and Ohio counties. IR-2021-248, December 14, 2021 WASHINGTON — Victims of this weekend's tornadoes in Kentucky will have until May 16, 2022, 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 starting on December 10 in parts of Kentucky. Currently, relief is available to affected taxpayers who live or have a business in Caldwell, Christian, Fulton, Graves, Hart, Hickman, Hopkins, Logan, Lyon, Marshall, Muhlenberg, Ohio, Taylor and Warren counties. But the IRS will provide the same relief to any other localities designated by FEMA in Kentucky or neighboring states. 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 December 10. As a result, affected individuals and businesses will have until May 16 to file returns and pay any taxes that were originally due during this period. This includes 2021 individual income tax returns due on April 18, as well as various 2021 business returns normally due on March 15 and April 18. Among other things, this means that affected taxpayers will have until May 16 to make 2021 IRA contributions. In addition, farmers who choose to forgo making estimated tax payments and normally file their returns by March 1 will now have until May 16, 2022 to file their 2021 return and pay any tax due. The May 16 deadline also applies to quarterly estimated income tax payments due on January 18 and April 18. Among other things, this means that individual taxpayers can skip making the fourth quarter estimated tax payment, normally due January 18, 2022, and instead include it with the 2021 return they file, on or before May 16. In addition, the quarterly payroll and excise tax returns normally due on January 31 and May 2, 2022 are also now due on May 16. In addition, penalties on payroll and excise tax deposits due on or after December 10 and before December 27 will be abated as long as the deposits are made by December 27, 2021. 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, 2020 in this instance. Be sure to write the FEMA declaration number – 4630DR − 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.

https://www.irs.gov/newsroom/irs-joins-leading-nonprofit-groups-to-highlight-special-charitable-tax-benefit-available-through-dec-31

Special rule helps most people get a deduction of up to $300 per individual, $600 for couples for gifts to charity; National Council of Nonprofits and Independent Sector highlight how donations can help the nation's charitable community IR-2021-247, December 13, 2021 WASHINGTON — The Internal Revenue Service joined today with several leading nonprofit groups to highlight a special tax provision that allows more people to deduct donations to qualifying charities on their 2021 federal income tax return. The Independent Sector and National Council of Nonprofits joined with the IRS to highlight this pandemic-related provision where married couples filing jointly can deduct up to $600 in cash donations and individual taxpayers can deduct up to $300 in donations. Under the temporary law, taxpayers don't need to itemize deductions on their tax returns to take advantage of this, which creates tax-favorable donation options not normally available to about 90 percent of tax filers. Ordinarily, people who choose to take the standard deduction cannot claim a deduction for their charitable contributions. But this special provision permits them to claim a limited deduction on their 2021 federal income tax returns for cash contributions made to qualifying charitable organizations by year's end, December 31, 2021. At a time when many charitable groups are struggling during the pandemic, the IRS highlights the new provision and urges people to make sure they donate to a qualifying charity. The special Tax Exempt Organization Search tool on IRS.gov can help people make sure they donate to a qualified charity. "The pandemic has created unique challenges for tax-exempt organizations, and we want to make sure people don't overlook this special tax deduction that's available this year," said Sunita Lough, IRS Commissioner of the Tax Exempt and Government Entities division. "Donations to qualifying charities can reduce people's tax bill when they file in 2022." Leaders from the National Council of Nonprofits and the Independent Sector, two prominent organizations representing the nation's charitable groups, highlighted that the special tax provision can provide additional assistance to organizations hit hard by the pandemic. Some groups have seen reduced charitable donations and others have seen increased demand for their services during this unprecedented period. "At a time when nonprofits continue to see immense demand for services, are facing significant challenges hiring and retaining staff to deliver those services--every donation counts," said David L. Thompson, Vice President of Public Policy at National Council of Nonprofits. "We're thankful that the universal (or non-itemizer) deduction is available through the end of the year to encourage every taxpayer give a little bit more to the missions they care about." "Over the past two years, charities have helped America confront generational health, economic and social crises. They have answered the call to serve their communities despite facing lost revenue, disrupted operations and dramatically increased need," said Daniel J. Cardinali, president and CEO of Independent Sector. "Congress has sent a powerful message that everyone – not just those who itemize on their taxes – has a role to play in helping meet this moment, and we know people in America will respond in kind. We hope charitable contributions and deductions will increase in the coming years." Included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in March 2020, a more limited version of this temporary tax benefit originally only applied to tax-year 2020. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted last December, generally extended it through the end of 2021. Nearly nine in 10 taxpayers now take the standard deduction and could potentially qualify. Under this provision, tax year 2021 individual tax filers, including married individuals filing separate returns, can claim a deduction of up to $300 for cash contributions made to qualifying charities during 2021. The maximum deduction is increased to $600 for married individuals filing joint returns. Cash contributions include those made by check, credit card or debit card as well as amounts incurred by an individual for unreimbursed out-of-pocket expenses in connection with their volunteer services to a qualifying charitable organization. Cash contributions don't include the value of volunteer services, securities, household items or other property. The IRS reminds taxpayers that to receive a deduction, they must donate to a qualified charity. To check the status of a charity, they can use the IRS Tax Exempt Organization Search tool. Cash contributions to most charitable organizations qualify for a deduction. But contributions made either to supporting organizations or to establish or maintain a donor advised fund do not. Contributions carried forward from prior years do not qualify, nor do contributions to most private foundations and most cash contributions to charitable remainder trusts. In general, a donor-advised fund is a fund or account maintained by a charity in which a donor can, because of their donor status, advise the fund on how to distribute or invest amounts contributed by the donor and held in the fund. A supporting organization is a charity that carries out its exempt purposes by supporting other exempt organizations, usually other public charities. The IRS encourages all donors to be wary of scams masked as charitable solicitations. Criminals create fake charities to take advantage of the public's generosity. Fake charities once again made the IRS's Dirty Dozen list of tax scams for 2021. In October, the IRS also joined international organizations and other regulators in highlighting the fight against charity fraud. Keep good records Special recordkeeping rules apply to any taxpayer claiming a charitable contribution deduction. Usually, this includes obtaining an acknowledgment letter from the charity before filing a return and retaining a cancelled check or credit card receipt for contributions of cash. For details on the recordkeeping rules for substantiating gifts to charity, see Publication 526, Charitable Contributions, available on IRS.gov.

https://www.irs.gov/newsroom/irs-provides-revised-questions-and-answers-for-2020-recovery-rebate-credit

IR-2021-246, December 10, 2021 WASHINGTON – The Internal Revenue Service today updated frequently asked questions (FAQs) regarding the 2020 Recovery Rebate CreditPDF (FS-2021-17). Individuals who didn't get the full first and second Economic Impact Payments may be eligible to claim the 2020 Recovery Rebate Credit. The first and second rounds of Economic Impact Payments were issued in 2020 and early 2021. The first two rounds of Economic Impact Payments were advance payments of the 2020 Recovery Rebate Credit claimed on a 2020 tax return. Individuals who are missing the first or second stimulus payments should review the revised answers to determine their eligibility and whether they need to claim a Recovery Rebate Credit for tax year 2020. If they're eligible to claim the Recovery Rebate Credit, they will need to file a 2020 tax return if they have not filed yet or amend their 2020 tax return if it's already been processed. These FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible More information about reliance is available. More information on the Recovery Rebate Credit is available on IRS.gov. IRS-FAQ

https://www.irs.gov/newsroom/most-retirees-must-take-required-minimum-distributions-by-dec-31

IR-2021-245, December 8, 2021 WASHINGTON — The Internal Revenue Service today reminded retirement plan participants and individual retirement account owners that payments, called required minimum distributions, must usually be taken by December 31. Required minimum distributions (RMDs) generally are minimum amounts that retirement plan account owners must withdraw annually starting with the year they reach 72 or, if later, the year they retire. However, if the retirement plan account is an IRA or the account owner is a 5% owner of the business sponsoring the retirement plan, the RMDs must begin once the account holder is age 72, even if they're still working. RMD amounts not timely withdrawn from accounts may be subject to penalties. Individuals who reached 70 ½ in 2019, (70th birthday was June 30, 2019 or earlier) did not have an RMD due for 2020, but will have to take one by December 31, 2021. Individuals who reach 72 in 2021 (and their 70th birthday was July 1, 2019 or later) have their first RMD due by April 1, 2022. The required distribution rules apply to: Owners of traditional Individual Retirement Arrangements (IRAs) Owners of traditional Simplified Employee Pension (SEP) IRAs Owners of Savings Incentive Match Plans for Employees (SIMPLE) IRAs Participants in various workplace retirement plans, including 401(k), Roth 401(k), 403(b) and 457(b) plans Roth IRAs do not require distributions while the original owner is alive. An IRA trustee, or plan administrator, must report the amount of the RMD to the IRA owner. An IRA owner, or trustee, must calculate the RMD separately for each IRA owned. However, they can choose to withdraw the total amount from one or more of the IRAs. In contrast, RMDs required from workplace retirement plans must be taken separately from each plan. Not taking a required distribution, or not withdrawing enough, could mean a 50% excise tax on the amount not distributed. The RMD is based on the taxpayer's life expectancy and their account balance. Often, a trustee will use Form 5498, IRA Contribution Information, to report the RMD to the recipient. For most taxpayers, life expectancy used to calculate the RMD is based on Uniform Lifetime Table III in Publication 590-B, Distributions from IRAs. Individuals can use online worksheets on IRS.gov to figure the RMD. 2020 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. A 2020 RMD that qualified 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 2020 withdrawal from an inherited IRA could not be repaid to the inherited IRA but may be spread over three years for income inclusion. IRS online tools and publications can help Taxpayers can find frequently asked questions, forms and instructions and easy-to-use tools at IRS.gov. FAQs regarding Required Minimum Distributions Individual Retirement Arrangements (IRAs) Coronavirus Relief for Retirement Plans and IRAs

https://www.irs.gov/newsroom/irs-is-seeking-qualified-applicants-for-the-electronic-tax-administration-advisory-committee

IR-2021-244, December 8, 2021 WASHINGTON — The Internal Revenue Service is seeking qualified applicants for nomination to the Electronic Tax Administration Advisory Committee (ETAAC). The ETAAC is an organized public forum for discussion of issues in electronic tax administration, such as prevention of identity theft and refund fraud. The committee supports the overriding goal that paperless filing should be the preferred and most convenient method of filing tax and information returns. ETAAC members work closely with the Security Summit, a joint effort of the IRS, state tax administrators and private-sector tax partners to fight electronic fraud. The IRS is looking for up to 10 qualified individuals who will serve three-year terms beginning in September 2022. Applicants should have experience in such areas as state tax administration, cybersecurity and information security, tax software development, tax preparation, payroll and tax financial product processing, systems management and improvement, and implementation of customer service initiatives. The IRS also strongly encourages applications from people representing the viewpoints of average taxpayers, including consumer advocates and others with an interest in tax issues. Applications will be accepted through January 31, 2022. Nominations of qualified individuals may be made by letter and received from organizations or the individuals themselves. Applicants should complete the ETAAC application PDFand include a short statement of interest and a resume. Applicants should describe and document their qualifications, past and current affiliations, and dealings with cybersecurity and electronic tax administration. Applicants must complete and submit a tax check waiver form and undergo an IRS practitioner background check and an FBI background check. Information on the tax check waiver and FBI background check will be provided upon receipt of application. More information can be found at: Apply for Membership on the Electronic Tax Administration Advisory Committee (ETAAC). ETAAC is a Federal Advisory Committee established by the Internal Revenue Service Restructuring and Reform Act of 1998. Questions about the ETAAC and the application process can be e-mailed to publicliaison@irs.gov.

https://www.irs.gov/newsroom/get-ready-for-taxes-whats-new-and-what-to-consider-when-filing-in-2022

IR-2021-243, December 7, 2021 WASHINGTON — The Internal Revenue Service today encouraged taxpayers to take important actions this month to help them file their federal tax returns in 2022, including special steps related to Economic Impact Payments and advance Child Tax Credit payments. This is the second in a series of reminders to help taxpayers get ready for the upcoming tax filing season. A special page, updated and available on IRS.gov, outlines steps taxpayers can take now to make tax filing easier in 2022. Here are some key items for taxpayers to consider before they file next year. Check on advance Child Tax Credit payments Families who received advance payments will need to compare the advance Child Tax Credit payments that they received in 2021 with the amount of the Child Tax Credit that they can properly claim on their 2021 tax return. Taxpayers who received less than the amount for which they're eligible will claim a credit for the remaining amount of Child Tax Credit on their 2021 tax return. Taxpayers who received more than the amount for which they're eligible may need to repay some or all of the excess payment when they file. In January 2022, the IRS will send Letter 6419 with the total amount of advance Child Tax Credit payments taxpayers received in 2021. People should keep this and any other IRS letters about advance Child Tax Credit payments with their tax records. See Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return for more information. Eligible families who did not get monthly advance payments in 2021 can still get a lump-sum payment by claiming the Child Tax Credit when they file a 2021 federal income tax return next year. This includes families who don't normally need to file a return. Economic Impact Payments and claiming the Recovery Rebate Credit Individuals who didn't qualify for the third Economic Impact Payment or did not receive the full amount may be eligible for the Recovery Rebate Credit based on their 2021 tax information. They'll need to file a 2021 tax return, even if they don't usually file, to claim the credit. Individuals will also need the amount of their third Economic Impact Payment and any Plus-Up Payments received to calculate their correct 2021 Recovery Rebate Credit amount when they file their tax return. Ensuring they use the correct payment amounts will help them avoid a processing delay that may slow their refund. In early 2022, the IRS will send Letter 6475 that contains the total amount of the third Economic Impact Payment and any Plus-Up Payments received. People should keep this and any other IRS letters about their stimulus payments with other tax records. Individuals can also log in to their IRS.gov Online Account to securely access their Economic Impact Payment amounts. See IRS.gov/rrc for more information. Charitable deduction changes Taxpayers who don't itemize deductions may qualify to take a charitable deduction of up to $600 for married taxpayers filing joint returns and up to $300 for all other filers for cash contributions made in 2021 to qualifying organizations. For more information, read Publication 526, Charitable Contributions. Get banked to get ready to direct deposit Direct deposit gives taxpayers access to their refund faster than a paper check. Those without a bank account can learn how to open an account at an FDIC-insured bank or through the National Credit Union Locator Tool. Veterans should see the Veterans Benefits Banking Program for access to financial services at participating banks. Links to online tools, publications and other helpful resources are available at IRS.gov/getready.

https://www.irs.gov/newsroom/irs-issues-guidance-regarding-the-retroactive-termination-of-the-employee-retention-credit

IR-2021-242, December 6, 2021 WASHINGTON – The Internal Revenue Service today issued guidance for employers regarding the retroactive termination of the Employee Retention Credit. The Infrastructure Investment and Jobs Act, which was enacted on November 15, 2021, amended the law so that the Employee Retention Credit applies only to wages paid before October 1, 2021, unless the employer is a recovery startup business. Notice 2021-65PDF applies to employers that paid wages after September 30, 2021 and received an advance payment of the Employee Retention Credit for those wages or reduced employment tax deposits in anticipation of the credit for the fourth quarter of 2021 but are now ineligible for the credit due to the change in the law. The notice also provides guidance regarding how the rules apply to recovery startup businesses during the fourth quarter of 2021. Employers who Received Advance Payments Generally, employers that are not recovery startup businesses and received advance payments for fourth quarter wages of 2021 will avoid failure to pay penalties if they repay those amounts by the due date of their applicable employment tax returns. Employers who Reduced Employment Tax Deposits Employers that reduced deposits on or before December 20, 2021, for wages paid during the fourth calendar quarter of 2021 in anticipation of the Employee Retention Credit and that are not recovery startup businesses will not be subject to a failure to deposit penalty with respect to the retained deposits if— The employer reduced deposits in anticipation of the Employee Retention Credit, consistent with the rules in Notice 2021-24PDF, The employer deposits the amounts initially retained in anticipation of the Employee Retention Credit on or before the relevant due date for wages paid on December 31, 2021 (regardless of whether the employer actually pays wages on that date). Deposit due dates will vary based on the deposit schedule of the employer, and The employer reports the tax liability resulting from the termination of the employer's Employee Retention Credit on the applicable employment tax return or schedule that includes the period from October 1, 2021, through December 31, 2021. Employers should refer to the instructions to the applicable employment tax return or schedule for additional information on how to report the tax liability. Due to the termination of the Employee Retention Credit for wages paid in the fourth quarter of 2021 for employers that are not recovery startup businesses, failure to deposit penalties are not waived for these employers if they reduce deposits after December 20, 2021. If an employer does not qualify for relief under this Notice, it may reply to a notice about a penalty with an explanation and the IRS will consider reasonable cause relief. More information for businesses seeking coronavirus-related tax relief can be found at IRS.gov.

https://www.irs.gov/newsroom/national-tax-security-awareness-week-day-5-security-summit-partners-remind-businesses-to-tighten-security-be-aware-of-steps-to-help-prevent-protect-data-loss

IR-2021-241, December 3, 2021 WASHINGTON — The Internal Revenue Service, state tax agencies and the nation's tax industry urged businesses to be alert to cyberattacks aimed at gaining access to business data and customer information and be aware of steps to help them on tax-related issues related to identity theft. The partners, operating cooperatively as the  Security Summit  to fight identity theft, marked the final day of National Tax Security Awareness Week with a warning to businesses to use the strongest measures possible to protect their data and systems. "Businesses, just like individuals and tax pros, need to stay alert," said IRS Commissioner Chuck Rettig. "Thieves may steal enough information to file a business tax return or use other scams that involve the company or its employees." More than 70% of cyberattacks are aimed at businesses with 100 or fewer employees. Con artists can target credit card or payment information, the business identity information or employee identity information. Businesses are encouraged to follow best practices from the Federal Trade Commission including: Set security software to update automatically, Back up important files, Require strong passwords for all devices, Encrypt devices and Use multi-factor authentication. More information is available at FTC's Cybersecurity for Small Businesses. Businesses should especially be alert to any COVID-19 or tax-related phishing email scams that attempt to trick employees into opening embedded links or attachments. IRS related scams may be sent to phishing@irs.gov. Starting late last year, the IRS began masking sensitive information from business tax transcripts, the summary of corporate tax returns, to help prevent thieves from obtaining identifiable information that would allow them to file fake business tax returns. Only financial entries are fully visible. All other information has varying masking rules. For example, only the first four letters of each first and last name – of individuals and businesses – will display. Only the last four digits of the Employer Identification Number will be visible. The IRS also has the Form 14039-B, Business Identity Theft AffidavitPDF, that will allow companies to proactively report possible identity theft to the IRS when, for example, an e-filed tax return is rejected. Businesses should file the Form 14039-B if it receives a: Rejection notice for an electronically filed return because a return already is on file for that same period. Notice about a tax return that the entity didn't file. Notice about Forms W-2 filed with the Social Security Administration that the entity didn't file. Notice of a balance due that is not owed. This form will enable the IRS to respond to the business much faster than in the past and work to resolve issues created by a fraudulent tax return. Businesses should not use the form if they experience a data breach but see no tax-related impact. For more information, see Identity Theft Central's Business section. Although various tax scams can come and go, all employers should remain alert to Form W-2 theft schemes. In the most common version, a thief poses as a high-ranking company executive who emails payroll employees and asks for a list of employees and their W-2s. Businesses often don't know they've been scammed until an employee reports a fraudulent tax return has been filed. There is a special reporting procedure for employers who experience the W-2 scam. It also may be found at Identity Theft Central's Business section. Finally, Security Summit partners urge businesses to keep their EIN application information current. Changes of address or responsible party may be reported using Form 8822-B. Reminder: Changes in the responsible party must be reported to the IRS within 60 days. Current information can help the IRS find a point of contact to resolve identity theft and other issues. The IRS, state tax agencies, the private sector tax industry, including tax professionals, work in partnership as the Security Summit to help protect taxpayers from identity theft and refund fraud. This is the final installment in a week-long series of tips to raise awareness about identity theft. See IRS.gov/securitysummit for more details. Also, check out the most recent A Closer Look column on National Tax Security Awareness Week.

https://www.irs.gov/newsroom/national-tax-security-awareness-week-tax-pros-taxpayers-can-use-secure-online-account-and-digital-signature-options

IR-2021-240, December 2, 2021 WASHINGTON — The Internal Revenue Service, state tax agencies and the tax industry marked the fourth day of National Tax Security Awareness Week with a reminder to tax professionals and taxpayers that they can use digital signatures on a variety of common IRS forms and access a secure online platform to view and make changes to their account. The partners, working together as the Security Summit, today added to the 6th annual National Tax Security Awareness Week, a week-long effort to heighten awareness about identity theft and data security measures among taxpayers, businesses and tax professionals. To help reduce burden for the tax community, the IRS allows taxpayers to use electronic or digital signatures on certain paper forms they cannot file electronically. The IRS is balancing the e-signature option with critical security and protection needed against identity theft and fraud. "The pandemic and the need for increased telework has created opportunities for sophisticated cybercriminals to scam people," said IRS Commissioner Chuck Rettig. "As an agency, we've been working to strengthen our defenses, and working to help taxpayers. These efforts include accepting digital signatures and improving our online platforms to give people protected access to their tax information." Types of acceptable electronic signatures The IRS will accept a wide range of electronic signatures. An electronic signature is a way to get approval on electronic documents. It can be in many forms and created by many technologies. Acceptable electronic signature methods include: A typed name on a signature block, A scanned or digitized image of a handwritten signature that's attached to an electronic record, A handwritten signature input onto an electronic signature pad, A handwritten signature, mark or command input on a display screen with a stylus device or A signature created by a third-party software. The IRS doesn't specify what technology a taxpayer must use to capture an electronic signature. The IRS will accept images of signatures (scanned or photographed) including common file types supported by Microsoft 365 such as .tiff, .jpg, .jpeg, .pdf, Microsoft Office suite or Zip. The IRS allows taxpayers and representatives to use electronic or digital signatures on certain paper forms which they cannot file using IRS e-file. The forms are available at IRS.gov and through tax professional's software products. Online accounts and added features A new feature, added this year, gives 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 Authorization (TIA). 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 are already 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 sign in to their Online Account using their IRS username or ID.me account. The IRS unveiled an improved identity verification and sign-in process using ID.me that enables more people to securely access and use IRS online tools and applications. This new process also applies to Tax Pro Account. The Security Summit partners remind all tax professionals to review their security measures. IRS Publication 4557, Safeguarding Taxpayer DataPDF, provides tax pros with a starting point for basic steps to protect clients. In addition to the required information security plan, tax pros should also consider an emergency response plan should they experience a breach and data theft. This time-saving step should include contact information for the IRS Stakeholder Liaisons, who are the first point of contact for data theft reporting to the IRS and to the states. IRS Publication 5293, Data Security Resource Guide for Tax ProfessionalsPDF, provides a compilation of data theft information available on IRS.gov, including the reporting processes. The IRS, state tax agencies, the private sector tax industry, including tax professionals, work in partnership as the Security Summit to help protect taxpayers from identity theft and refund fraud. This is part of a week-long series of tips to raise awareness about identity theft. See IRS.gov/securitysummit for more details. Also, check out the most recent A Closer Look column on National Tax Security Awareness Week.

https://www.irs.gov/newsroom/national-tax-security-awareness-week-day-4-security-summit-warns-tax-pros-that-pandemic-adds-to-data-theft-risks-offers-tips-and-outlines-common-scams

IR-2021-239, December 2, 2021 WASHINGTON — The Internal Revenue Service, state tax agencies and the nation's tax industry today warned tax professionals that they face additional security risks from cybercriminals seeking to use the pandemic and phishing scams to steal sensitive client information. The partners, working together as the  Security Summit , urged tax pros to remain focused on security issues and ensure they follow important steps to safeguard their information, including using multi-factor authentication and using a Virtual Private Network to guard against data loss. And Summit partners continued to remind tax pros, both large and small, that they are required to have a security plan in place. This is part of the National Tax Security Awareness Week. Now in its sixth year, the initiative aims to heighten awareness about identity theft and data security measures among taxpayers, businesses, and tax professionals. This effort is particularly important right now as the 2022 tax filing season approaches, and identity thieves continue trying to steal sensitive data to file fraudulent tax returns. "We continue to see scams and security risks during this period targeting tax professionals and the sensitive information they hold," said IRS Commissioner Chuck Rettig. "Identity thieves continue to evolve with the times and use the pandemic and other tricks to take advantage of tax pros and gain access to their data. We continue to urge tax preparers to remain aware of this changing threat. Taking important security steps can help avoid a security breach that can be devastating to them and their clients." As the IRS and Security Summit partners took important steps to strengthen defenses against cybercriminals, identity thieves increasingly turned to tax professionals, targeting their offices and systems. Data thefts from tax professionals can provide valuable information to thieves trying to file fraudulent tax returns. The Summit partners remind tax professionals to review their security measures. IRS Publication 4557, Safeguarding Taxpayer DataPDF, provides tax professionals with a starting point for basic steps to protect clients. The Security Summit also created the "Taxes-Security-Together" Checklist to help tax professionals identify the basic steps they should take. As more tax preparers work from home or remote locations because of COVID-19, these measures are even more critical for securing tax data. Basic protections - the "Security Six" measures These easy steps can make a big difference, both for tax pros and taxpayers: Use anti-virus software and set it for automatic updates to keep systems secure. This includes all digital products, computers and mobile phones. Use firewalls. Firewalls help shield computers from outside attacks but cannot protect systems in cases where users accidentally download malware, for example, from phishing email scams. Use multi-factor authentication to protect all online accounts, especially tax products, cloud software providers, email providers and social media. Back up sensitive files, especially client data, to secure external sources, such as external hard drive or cloud storage. Encrypt data. Tax professionals should consider drive encryption products for full-drive encryption. This will encrypt all data. Use a Virtual Private Network (VPN) product. As more practitioners work remotely during the pandemic, a VPN is critical for secure connections. Use multi-factor authentication to protect tax accounts In 2021, all online tax preparation products for tax professionals included an option for using multi-factor authentication. The Security Summit urges all tax professionals to use this option as the 2022 filing season approaches. Practitioners can download to their mobile phones readily available authentication apps offered through Google Play or the Apple Store. These apps will generate a security code. Codes also may be sent to preparer's email or text, but the IRS notes those are not as secure as the authentication apps. Search for "Authentication apps" in a search engine to learn more. Use virtual private networks to protect remote sites A VPN provides a secure, encrypted tunnel to transmit data between a remote user via the Internet and the company network. As teleworking or working from home continues during COVID-19, VPNs are critical to protecting and securing internet connections. Failing to use VPNs can add risks to remote takeovers by cyberthieves, giving criminals access to the tax professional's entire office network simply by accessing an employee's remote internet. Tax professionals should seek out cybersecurity experts whenever possible. Practitioners can also search for "Best VPNs" to find a legitimate vendor, or major technology sites often provide lists of top services. Remember, never click on a "pop-up" ad that's marketing a security product. Those generally are scams. Avoid phishing scams, including attempts to gain EFINs Phishing emails generally have an urgent message, such as "your account password expired." They direct users to an official-looking link or attachment. But the link may take users to a fake site made to appear like a trusted source, where it requests a username and password. Or, the attachment may contain malware, which secretly downloads software that tracks keystrokes and allows thieves to eventually steal all the tax pro's passwords. Remember, scam emails can target tax pros by seeking EFIN information. One scam example says it's from "IRS Tax E-Filing" and carries the subject line "Verifying your EFIN before e-filing." The IRS warns tax pros not to take any of the steps outlined in these types of email, especially responding to the email. The body of the bogus email states:   In order to help protect both you and your clients from unauthorized/fraudulent activities, the IRS requires that you verify all authorized e-file originators prior to transmitting returns through our system. That means we need your EFIN (e-file identification number) verification and Driver's license before you e-file. Please have a current PDF copy or image of your EFIN acceptance letter (5880C Letter dated within the last 12 months) or a copy of your IRS EFIN Application Summary, found at your e-Services account at IRS.gov, and Front and Back of Driver's License emailed in order to complete the verification process. Email: (fake email address) If your EFIN is not verified by our system, your ability to e-file will be disabled until you provide documentation showing your credentials are in good standing to e-file with the IRS. © 2021 EFILE. All rights reserved. Trademarks 2800 E. Commerce Center Place, Tucson, AZ 85706   Tax professionals who received the scam should save the email as a file and then send it as an attachment to phishing@irs.gov. They also should notify the Treasury Inspector General for Tax Administration to report the IRS impersonation scam. Both TIGTA and the IRS Criminal Investigation division are aware of the scam. Like all phishing email scams, it attempts to bait the receiver to take action (opening a link or attachment) with a consequence for failing to do so (disabling the account). The links or attachment may be set up to steal information or to download malware onto the tax professional's computer. In this case, the tax preparers are being asked to email documents that would disclose their identities and EFINs to the thieves. The thieves can use this information to file fraudulent returns by impersonating the tax professional. Tax professionals also should be aware of other common phishing scams that seek EFINs, Preparer Tax Identification Numbers (PTINs) or e-Services usernames and passwords. Some thieves also pose as potential clients, an especially effective scam currently because there are so many remote transactions during the pandemic. The thief may interact repeatedly with a tax professional and then send an email with an attachment that claims to include their tax information. The attachment may contain malware that allows the thief to track keystrokes and eventually steal all passwords or take over control of the computer systems. Some phishing scams are ransomware schemes in which the thief gains control of the tax professionals' computer systems and holds the data hostage until a ransom is paid. The Federal Bureau of Investigation (FBI) has warned against paying a ransom because thieves often leave the data encrypted. The need for a security plan and data theft plan The IRS and Security Summit partners remind tax professionals that federal law requires them to have a written information security plan. In addition to the required information security plan, tax pros also should consider an emergency response plan should they experience a breach and data theft. This time-saving step should include contact information for the IRS Stakeholder Liaisons, who are the first point of contact for data theft reporting to the IRS and to the states. IRS Publication 5293, Data Security Resource Guide for Tax ProfessionalsPDF, provides a compilation of data theft information available on IRS.gov, including the reporting processes. The IRS, state tax agencies, the private sector tax industry - including tax professionals - work in partnership as the Security Summit to help protect taxpayers from identity theft and refund fraud. This is the fourth in a week-long series of tips to raise awareness about identity theft. See IRS.gov/securitysummit for more details. Also, check out the most recent A Closer Look column on National Tax Security Awareness Week.

https://www.irs.gov/newsroom/national-tax-security-awareness-week-day-3-choosing-a-special-identity-protection-pin-adds-extra-safety-for-taxpayers

IRS YouTube Video: Security Measures Help Protect Against Tax-Related Identity Theft IR-2021-238, December 1, 2021 WASHINGTON — As part of a wider effort to increase security, the Internal Revenue Service today reminded taxpayers they can get extra protection starting in January by joining the agency's Identity Protection Personal Identification Number (IP PIN) program. Anyone who can verify their identity can protect themselves against tax-related identity theft by opting into the IP PIN program. More than 5.1 million taxpayers are now participating in the IP PIN program, enabling them to proactively protect themselves against identity theft. The IRS has made recent changes to the program to make it easier for more taxpayers to join. The fastest and easiest way to receive an IP Pin is by using the Get an IP PIN tool. Today's reminder marks the third day of National Tax Security Awareness Week, which runs through December 3. This annual observance is sponsored by the Security Summit, a partnership that includes state tax agencies, the nation's tax industry and the IRS. The Security Summit was established in 2015 to protect taxpayers and the nation's tax system against tax-related identity theft. This unique collaboration between the public and private sectors has increased mutual defenses against criminals trying to file fraudulent tax returns and steal refunds. One of the key features of the IRS system involves an IP PIN, which is a six-digit number assigned to eligible taxpayers to help prevent the misuse of their Social Security number or Individual Taxpayer Identification Number on fraudulent federal income tax returns. An IP PIN is known only to the taxpayer and the IRS. Originally designed for confirmed victims of tax-related identity theft, the IP PIN program was expanded in 2021 to include any taxpayer, nationwide, who wants the additional protection and security of using an IP PIN to file tax returns with the IRS. "When people have this special code, it prevents someone else from filing a tax return in their name," said IRS Commissioner Chuck Rettig. "The fastest way to get an Identity Protection PIN is to use our online tool, but keep in mind people must pass a rigorous authentication process. We must know that the person asking for the IP PIN is who they really say they are." An IP PIN helps the IRS verify a taxpayer's identity and accept their federal income tax returns, regardless of whether they are filing electronically or on paper. The online Get an IP PIN tool at IRS.gov/ippin immediately displays the taxpayer's IP PIN. In each subsequent year, any participating taxpayer will then use the tool to obtain a new number. The IRS urges any IP PIN applicant previously rejected during the identity authentication process to try applying again in 2022. The authentication process has been refined and improved, now enabling many taxpayers screened out in the past to have a better chance of passing the authentication process. Before applying, keep in mind these key points about the IP PIN program: For 2022, the Get an IP PIN tool is scheduled to launch on January 10. It's the fastest and easiest way to get an IP PIN. It is also the only option that immediately reveals the IP PIN to the taxpayer. For that reason, the IRS urges everyone to try the Get an IP PIN tool first, before pursuing other options. No identity theft affidavit is required for taxpayers opting in. This means that anyone who voluntarily applies for an IP PIN doesn't need to file Form 14039, Identity Theft Affidavit, with the IRS. The IP PIN is valid for one year. This means that each January any participating taxpayer must obtain a newly generated IP PIN. Be sure to enter the IP PIN on any return, whether it is filed electronically or on paper. This includes any amended returns or returns for prior years. Doing so will help avoid processing delays or having the return rejected by the IRS. Anyone with either a Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN) who can verify their identity is eligible for the IP PIN opt-in program. Any eligible family member can get an IP PIN. This includes the primary taxpayer (the person listed first on a tax return), the secondary taxpayer (on a joint return, the person listed second on the return) or any of their dependents. With one key exception, never reveal an IP PIN to anyone. The only exception is a taxpayer who uses a trusted tax professional to file their return. Even then, only share the IP PIN with the trusted tax pro when it is time to sign and submit the return. The IRS will never ask for an IP PIN. Remember to watch out: Phone calls, emails and texts requesting an IP PIN are scams.   Identity theft victims should still fill out an ID theft affidavit. This means that any confirmed victim of tax-related identity theft still needs to file Form 14039 with the IRS if their e-filed tax return was rejected by the agency due to a duplicate SSN filing. The IRS will then investigate their case. Once the fraudulent tax return is removed from their account, the IRS will automatically mail an IP PIN to the confirmed victim at the start of the next calendar year. Because of security risks, confirmed identity theft victims cannot opt out of the IP PIN program. Options for people who can't pass the online authentication process Two options are available for people who cannot pass the IRS online identity authentication process. One involves filing Form 15227 and the other requires a visit to an IRS Taxpayer Assistance Center (TAC). Unlike the online option, both of these options involve, for security reasons, a delay in receiving an IP PIN. Form 15227PDF: For processing year 2022, individuals with an adjusted gross income of $73,000 or less and those married filing jointly with an AGI of $146,000 or less with access to a telephone can complete Form 15227 and either mail or fax it to the IRS. An IRS representative will then call them to verify their identity with a series of questions. Taxpayers choosing this option who pass the identity authentication process will generally receive their IP PIN in about a month. IRS Taxpayer Assistance Centers: Any taxpayer who is ineligible to file a Form 15227 may make an appointment to visit an IRS Taxpayer Assistance Center (TAC). Anyone using this option must bring two forms of picture identification. Because this is an in-person identity verification, an IP PIN will be mailed to the taxpayer after their visit. Normally, allow three weeks for delivery. To find the nearest TAC, use the IRS Local Office Locator online tool or call 844-545-5640. The IRS, state tax agencies, the private sector tax industry, including tax professionals, work in partnership as the Security Summit to help protect taxpayers from identity theft and refund fraud. This is the third in a week-long series of tips to raise awareness about identity theft. See IRS.gov/securitysummit for more details. Also, check out the most recent A Closer Look column on National Tax Security Awareness Week.

https://www.irs.gov/newsroom/irs-takes-next-step-on-abusive-micro-captive-transactions-nearly-80-percent-accept-settlement-12-new-audit-teams-established

IR-2020-26, January 31, 2020 WASHINGTON — The Internal Revenue Service announced today the overwhelming acceptance of a time-limited settlement offer made to certain taxpayers under audit who participated in abusive micro-captive insurance transactions. Nearly 80% of taxpayers who received offer letters elected to accept the settlement terms. In addition, the IRS is establishing 12 new examination teams that are expected to open audits related to thousands of taxpayers in coming months. "The overwhelming acceptance rate of the private settlement offer is a reflection of the success of the government's work to stop this abuse," said IRS Commissioner Chuck Rettig. "Taxpayers who elected to accept the IRS' terms have done the right thing by coming into compliance with their federal tax obligations and putting this behind them. Putting an end to abusive schemes is a high priority for the IRS." Abusive micro-captives have been a threat to tax administration and a concern to the IRS for several years. The transaction has appeared on the IRS "Dirty Dozen" list of tax scams since 2014. In 2016, the Department of the Treasury and IRS issued Notice 2016-66PDF, which identified certain micro-captive transactions as having the potential for tax avoidance and evasion. The settlement offer followed three U.S. Tax Court decisions confirming that certain micro-captive arrangements are not eligible for federal tax benefits. The terms of the settlement required substantial concession of the income tax benefits claimed by the taxpayer together with appropriate penalties. The IRS will continue to vigorously pursue those involved in these and other similar abusive transactions going forward. Enforcement activity in this area is being significantly increased. To that end, the IRS is deploying additional resources, which includes standing up 12 new examination teams comprised of employees from the IRS Large Business and International and Small Business/Self-Employed divisions that will be working to address these abusive transactions and open additional exams. These teams will use all available enforcement tools, including summonses, to obtain necessary information. Examinations impacting micro-captive insurance transactions of several thousand taxpayers will be opened by these teams in the coming months. Potential civil outcomes can include full disallowance of claimed captive insurance deductions, inclusion of income by the captive entity and imposition of all applicable penalties. The IRS reminds taxpayers and advisors that disclosure of participation in micro-captive insurance transactions is required with the IRS Office of Tax Shelter Analysis under Notice 2016-66. Failure to properly disclose can result in significant civil penalties. Taxpayers involved in these abusive transactions should immediately consult with independent, competent tax advisors on the proper treatment for past and future tax years to consider best available options.

https://www.irs.gov/newsroom/irs-revises-form-1023-for-applying-for-tax-exempt-status

IR-2020-25, January 31, 2020 WASHINGTON — As part of an ongoing effort to improve service for the tax-exempt community, the Internal Revenue Service has revised Form 1023 to allow electronic filing for the first time starting later this month. To help charities apply for Section 501(c)(3) tax-exempt status, the IRS has revised Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, and its instructions. "Filing electronically reduces errors, and we believe this will help provide a smoother application process for those seeking tax exemption," said Tammy Ripperda, Commissioner of the IRS Tax Exempt and Government Entities division. "As we've seen with the 1023-EZ, we believe this change will help with application processing time and help with our wider efforts to improve our work with the tax-exempt community." The IRS expects the electronic Form 1023 benefits to mirror those realized when Form 1023-EZ went online in 2014. IRS statistics show the 1023-EZ improved application processing time for both the Form 1023 and 1023-EZ while maintaining similar approval and rejection rates between the two forms. Beginning January 31, 2020, applications for recognition of exemption on Form 1023 must be submitted electronically online at Pay.gov. The IRS will provide a 90-day grace period during which it will continue to accept paper versions of Form 1023 (Rev. 12-2017). The required user fee for Form 1023 will remain $600 for 2020. Applicants must pay the fee through Pay.gov when submitting the form. Payment can be made directly from a bank account or by credit or debit card. Updates about Form 1023 can be obtained by subscribing to Exempt Organizations Update, a free e-Newsletter from the IRS Exempt Organizations' office. EO Update provides information on tax policy, services and information that's important to tax-exempt organizations including: News releases from the IRS related to exempt organizations New forms, guidance and other publications Changes and additions to the IRS Charities and Nonprofits webpage Upcoming IRS training and outreach events Additional information on how to apply for IRS recognition of tax-exempt status is available: Applying for Tax-Exempt Status on IRS.gov Form 1023 Electronic Filing Overview presentation on StayExempt.irs.gov Applying for 501(c)(3) Status course on StayExempt.irs.gov