Rev. Proc. 2021-12 extends to September 30, 2021, the expiration dates relevant to the application of the safe harbors in Rev. Proc. 2020 26, 2020-18 I.R.B. 753, and Rev. Proc. 2020 34, 2020-26 I.R.B. 990.

Rev. Proc. 2012-12 will appear in IRB 2021-5, dated Feb. 1, 2021.

WASHINGTON − The Internal Revenue Service today reminded businesses and other payors that the revised Form 1099-MISC, Miscellaneous Income, and the new Form 1099-NEC, Nonemployee Compensation, must be furnished to most recipients by Feb. 1, 2021.

Redesigned Form 1099-MISC

The IRS revised Form 1099-MISC for the 2020 tax year to accommodate the creation of a new Form 1099-NEC. The redesigned 1099-MISC has different box numbers for reporting certain income. Businesses must send Form 1099-MISC to recipients by Feb. 1, 2021, and file it with the IRS by March 1 (March 31 if filing electronically).

If businesses are using Forms 1099-MISC to report amounts in box 8, Substitute Payments in Lieu of Dividends or Interest, or box 10, Gross Proceeds Paid to An Attorney, there is an exception to the normal due date. Those forms are due to recipients by Feb. 16, 2021.

New Form 1099-NEC

Form 1099-NEC is a new form for tax year 2020 for nonemployee compensation of $600 or more to a payee. This form should be filed with the IRS, on paper or electronically, and sent to recipients by Feb. 1, 2021.

There is no automatic 30-day extension to file Form 1099-NEC. However, an extension to file may be available under certain hardship conditions. Also, nonemployee compensation may be subject to backup withholding if a payee has not provided a taxpayer identification number to the payer or the IRS notifies the payer that the Taxpayer Identification Number provided was incorrect.

Deadlines help fraud detection

The due dates for information returns, like Forms 1099-MISC and 1099-NEC help the IRS more easily detect refund fraud by verifying income that individuals report on their tax returns. Payors can help support that process, and avoid penalties, by filing the forms on time and without errors. The IRS recommends e-file as the quickest, most accurate and convenient way to file these forms.

For more information, the instructions for Forms 1099-MISC and 1099-NEC are available on IRS.gov.

Revenue Procedure 2021-11 provides methods for calculating W-2 wages for purposes of section 199A(g)(1)(B)(i), which, for certain specified agricultural or horticultural cooperatives  provides a limitation based on W-2 wages to the amount of a deduction under section 199A(g)(1)(A) of 9 percent of the lesser of qualified production activities income or taxable income of a Specified Cooperative.  This Revenue Procedure also modifies Revenue Procedure 2019-11, 2019-09 I.R.B. 742, to amend the method for determining W-2 wages for taxpayers with short taxable years.

Revenue Procedure 2021-11 will be in IRB: 2021-5, dated 02/01/2021.

WASHINGTON − Taxpayers who paid too little tax during 2020 can still avoid a tax-time bill and possible penalties by making a quarterly estimated tax payment now, directly to the Internal Revenue Service. The deadline for making a payment for the fourth quarter of 2020 is Friday, Jan. 15, 2021.

Income taxes are pay-as-you-go. This means that by law, taxpayers are required to pay most of their taxes during the year as income is received. There are two ways to do this:

Either method can help avoid a surprise tax bill at tax time and the accompanying penalties that often apply. If a taxpayer failed to make required quarterly estimated tax payments earlier in the year, making a payment to cover these missed payments, as soon as possible, will usually lessen and may even eliminate any possible penalty.

The IRS recommends that everyone check their possible tax liability by using the IRS Tax Withholding Estimator. This online tool allows taxpayers to see if they are withholding the right amount and find out if they need to make an estimated tax payment. Form 1040-ES, available on IRS.gov, includes a worksheet for figuring the right amount to pay as well.

This is especially important for anyone who owed taxes when they filed their 2019 return. Taxpayers in this situation may include those who itemized in the past, two wage-earner households, employees with non-wage sources of income and those with complex tax situations.

Taxpayers who owed taxes when they last filed and who did not adjust their 2020 withholding may find that they owe taxes again, and even a penalty, when they file their 2020 return next year. Making a quarterly estimated tax payment now can help. 

Taxpayers should know:

In addition, various financial transactions, especially late in the year, can often have an unexpected tax impact. Examples include year-end and holiday bonuses, stock dividends, capital gain distributions from mutual funds and stocks, bonds, virtual currency, real estate or other property sold at a profit.

Publication 505, Tax Withholding and Estimated Tax, has additional details, including worksheets and examples, that can be especially helpful to those who have dividend or capital gain income, owe alternative minimum tax or self-employment tax, or have other special situations.

The fastest and easiest ways to make an estimated tax payment is to do so electronically using IRS Direct Pay, the IRS2Go app or the Treasury Department’s Electronic Federal Tax Payment System (EFTPS). For information on other payment options, visit IRS.gov/payments. If paying by check, be sure to make the check payable to the “United States Treasury.”

Though it’s too early to file a 2020 return, it’s never too early to get ready for the tax-filing season ahead. For more tips and resources, check out the Get Ready page on IRS.gov.

WASHINGTON — The Internal Revenue Service today announced the appointment of 13 new members to the Internal Revenue Service Advisory Council.

The IRSAC, established in 1953, is an organized public forum for IRS officials and representatives of the public to discuss various issues in tax administration. The council provides the IRS commissioner with relevant feedback, observations and recommendations. It will submit its annual report to the agency at a public meeting in November 2021.

The IRS strives to appoint members to the IRSAC who represent the taxpaying public, the tax professional community, small and large businesses, tax exempt and government entities and information reporting interests.

The following people were appointed to serve three-year appointments on the council beginning this month:

Jeremiah Coder −Tax Director, PwC, Washington, D.C. − Coder has 15 years of technical tax expertise focused on domestic, international and state tax policy issues spanning different industries, client types, issues and countries. Currently, he provides policy and technical advice to clients regarding international, U.S. and Organization for Economic Cooperation and Development tax developments, including digital taxation and information reporting programs like the Common Reporting Standard/Foreign Account Tax Compliance Act, Country-by-Country Reporting, International Compliance Assurance Program, and other international initiatives dealing with the supply of information to tax authorities. He previously worked as an adviser to the OECD and at a global law firm. Coder represents large business and international industries and is a member of the American Bar Association, Federal Bar Association, International Fiscal Association and Business at OECD Tax Committee.

Sam Cohen − Government Affairs/Legal Officer, Santa Ynez Band of Chumash Mission Indians, Santa Ynez, Calif. − Cohen is chief legal and government affairs officer for a federally recognized Indian tribe, the Santa Ynez Band of Chumash Mission Indians. He advises the tribe and its members on the application of federal, state and tribal laws. He has worked with IRS Indian Tribal Governments Office on a notice for draw-down loans and a notice for refunding tribal government bonds. Cohen has also worked on a $93 million Tribal Economic Development Bond issuance for a new hotel tower and parking garage. He is a member of the General Welfare Exclusion Subcommittee of the Treasury Tribal Advisory Committee. Cohen represents Indian Tribal Governments.

Jodi Kessler − Assistant Director Tax, MIT, Cambridge, Mass. − Kessler has 13 years of experience in higher education focusing on all aspects of taxation, including federal, state, local and international filing rules and requirements; gifts to and from a university; rules on withholding and reporting of all types of payments made by a university; and providing information on entity creation and dissolution. Kessler has collaborated with several departments to advise on all types of tax rules and informational reporting at universities including The Ohio State University and Harvard University. At the Massachusetts Institute of Technology, she analyzed reporting and developed improved processes for reporting payments including employee compensation, service and non-service scholarships and fellowships, independent contractors and foreign recipients; she has developed trainings on the tax implications and reporting requirements of payments MIT issues to both U.S. tax residents and nonresidents. Kessler represents colleges and universities. She is a member of the National Association of College & University Business Officers.

Steve Klitzner – Attorney, Steven N. Klitzner, P.A., North Miami Beach, Fla.− Klitzner has more than 20 years of experience representing taxpayers before the IRS. He devotes 100% of his law practice to tax resolution and controversy work. He is admitted to the U.S. Supreme Court, U.S. District Court Southern District of Florida, and U.S. Tax Court. Klitzner has had multiple speaking engagements with the American Society of Tax Problem Solvers and teaches continuing education courses to certified public accountants, enrolled agents and attorneys around the country. Klitzner represents small business and individual taxpayers and is a member of the Florida Bar Tax Section, American Society of Tax Problem Solvers, Advisory Board of the Tax Freedom Institute, South Florida Tax Litigation Association and Florida Lawyers Network.

Charles Parr – Partner, ABIP CPAs & Advisors, San Antonio, Texas − Parr has over 40 years of diversified tax and audit experience with small to large publicly and privately held companies, both in private practice and with two Big-Four Firms; merger and acquisition representation, due diligence review, feasibility studies, financing and tax consultation; litigation support in bankruptcy and non-bankruptcy proceedings on corporate reorganizations and other technical tax testimony; medium to large corporate bankruptcy “turnaround” reorganization planning, business management consultation, and related tax compliance; planning, supervision of information gathering, and technical review for compliance and information reporting of U.S. based multi-nationals and non-U.S. multi-nationals operating within the U.S; feasibility study, implementation and ongoing compliance filings for large and small Foreign Sales Corporations and Interest Charge – DISCS; domestic and foreign large-case corporate IRS examination representation and coordination with legal counsel in provision of information, technical research and expert witness testimony. Parr represents large business and international industries and is a member of American Institute of Certified Public Accountants and the Texas Society of CPAs.

Luis Parra – CEO, Key Accounting and Tax Services, Bronx, N.Y. − Parra has 20 years of experience in tax audit representation, accounting, taxes, budget planning for diverse individuals, and business and non-profit organizations in the Northeast and Caribbean. Parra previously worked for 12 years in payroll in Puerto Rico. He is an enrolled agent who has worked with field and office examinations, appeals examinations, collections and representation. Parra has been a tax instructor for more than 20 years, teaching in English and Spanish throughout the country through his continuing education company, “American Tax Club, Inc.” (Ameritax). He serves as a Spanish instructor designated by the IRS Stakeholder Liaison Office in New York and the Latino Tax Professionals Association. Parra represents small business and individual taxpayers and is founder and past president of the Latino Association of Tax Preparers. He is also a member of the National Association of Tax Professionals, National Association of Enrolled Agents, Latino Tax Professionals Association, and United States Hispanic Chamber of Commerce.

Phil Poirier − Vita Volunteer; Consulting Services, Del Mar, Calif. − Poirier has been a Senior Fellow with the Center for Social Development at Washington University in St. Louis. His work focuses on finding ways to improve the tax and financial lives of low- and moderate-income Americans, including active-duty military service members. He has experience as a Volunteer Income Tax Assistance preparer with low income and military taxpayers; national VITA organizations on program issues, including cybersecurity; with Washington University in assisting taxpayers in improving their financial lives; and with companies focused on the development of tax-related online tools and mobile user experiences. Poirier has extensive background in tax, electronic tax administration, consumer and professional online and mobile offerings, and regulatory/policy issues in the digital economy. For almost 20 years, he worked with Intuit in legal, policy, business development and compliance positions. Poirier is former chair of the IRS Electronic Tax Administration Advisory Committee. Poirier represents VITA and the digital services community and is a member of the Taxpayer Opportunity Network.

Seth Poloner − Executive Director/Global Head of Operational Tax Advisory Group, Morgan Stanley, New York, N.Y. − Poloner has 16 years of experience as a tax attorney at both a large international law firm and a major global financial services firm. In his current role, he leads a team of tax attorneys and professionals responsible for legal interpretation, advice and risk management related to global operational taxes. He provides advice on all aspects of U.S. information reporting and withholding, including non-resident alien and backup withholding; Forms 1042-S and 1099 reporting, including cost basis; validation of Forms W-9 and W-8; and the Foreign Account Tax Compliance Act, Qualified Intermediary and Qualified Derivatives Dealer regimes. Poloner also provides business unit advisory support for the firm’s retail wealth management business, including advising with respect to new products and transactions, addressing client inquiries and drafting and updating tax-related policies and communications. Poloner represents the information reporting and withholding community and is a member of the Securities Industry and Financial Markets Association Tax Compliance Committee.

Dawn Rhea − Legal Officer, Evergreen Financing Management/Hampstead Ventures, Inc. Woodland Hills, Calif. − Rhea’s practice area focuses on complex legal and tax issues arising in the context of financing, asset and equity acquisitions and mergers. Rhea was previously a National Tax Director with Moss Adams LLP where her practice focused on tax controversy and the complex tax issues arising in the context of mergers and acquisitions. She worked with middle market taxpayers, largely comprised of West Coast-based C corporations, S Corporations and partnerships, including many Silicon Valley-based high-tech companies, as well as the shareholders, partners and individual owners of such entities in sales to private equity, assets/equity sales to strategic investors; privately owned foreign companies in venture capital financing. She was a leader in the firm’s tax controversy and strategic planning, transaction cost and 280G practices. Rhea represents large business and international industries and is a member of the California Bar, the New York Bar, the American Bar Association and the Society of Louisiana CPAs.

Paul Sterbenz − Director of Information Reporting, Fifth Third Bank, Cincinnati, Ohio − Sterbenz has 25 years of experience performing information reporting and withholding in the financial services industry. He manages consultation and support to areas of the bank responsible for the production and filing of information reports (including Forms 1099 series, 1042-S, etc.) and the production and filing of annual withholding tax returns (including Forms 945 and 1042). Sterbenz is responsible for managing the bank’s Foreign Bank and Financial Account Report filings and manages the bank’s relationship with IRS and other tax authorities with respect to audits and process issues including the corporation's response to penalty and B notices. He monitors regulatory and legislative developments and advises management on the potential tax implications of new legislation, regulations and rulings. Sterbenz is a member of the American Banking Association’s Information Reporting Advisory Group and was the moderator of the 2019 Tax Reporting & Withholding Conference held in Washington, D.C. Sterbenz represents the information reporting community and is a member of the American Bankers Association.

Kathryn Tracy − Managing Partner, Kat & Bud Enterprises LLC, Buckeye, Ariz. − Tracy has owned and operated an accounting and income tax firm since 1992. Her accounting practice offers full-service electronic bookkeeping, accounting and tax preparation services. She prepares over 1,600 returns annually for individuals, corporations, partnerships, non-profit organizations, and estates and trusts. She also prepares information reporting returns. Tracy is a former IRS Revenue Agent (1987-1992) with individual and business audit experience, including payroll returns. She played an active part in the fraud-non-filer group researching complex tax law issues. Tracy works with the IRS local Taxpayer Advocate Service office and speaks to various professional groups throughout Arizona. She has been a VITA volunteer and instructor for 32 years and served on team that wrote the 2019 and 2020 Form 6744 VITA/TCE Volunteer Assistor’s Test/Retest. Tracy represents VITA and individual taxpayers and is a member of the National Association of Enrolled Agents.

Wendy Walker − Solution Principal, Sovos, Minneapolis, Minn. − Walker is Solution Principal at Sovos, a global tax software company. She helps ensure customers (including financial institutions and insurers, multinational corporations, cryptocurrency exchanges, gig platforms and more) remain compliant with their obligations., Walker appears regularly in business and industry publications such as Law360, CPA Practice Advisor and Cointelegraph. She previously worked at J.P. Morgan Chase, where she led the team responsible for the implementation of operational policies and processes for Forms W-8 collection and validation in corporate procurement, and where she was responsible for information reporting of mortgage servicing and default related transactions, as well as oversight of the production and filing of more than 12 million Forms 1098, 1099-INT, 1099-A, 1099-C, 1042-S and 1099-MISC annually. Walker represents the information reporting community and is a member of the Chamber of Digital Commerce, Council for Electronic Revenue Communication Advancement and National Association of Computerized Tax Processors.

Katrina Welch − Dallas, Texas − Welch has over 25 years of tax, management and strategic decision-making experience. Most recently, she worked for Ecolab, the global leader in water, hygiene and energy technologies and services, with operations in more than 170 countries; she led a team of tax professionals with strategic and operational responsibility for planning, tax provision, compliance and controversy, as well as global mergers and acquisitions. Previously she was the leader of global tax function at Texas Instruments. She served as the Tax Executives Institute 2019-2020 International President and has been a TEI member for over 20 years, previously serving as TEI Senior Vice President, a member of TEI Executive Committee and on the TEI Board of Directors.  Welch represents large business and international industries and is a member of the Tax Executives Institute.

The 2021 IRSAC Chair is Ben Deneka, program manager with The Tax Institute at H&R Block. In addition to managing H&R Block’s relationship with the IRS, Deneka represents H&R Block in the Security Summit and various industry working groups, including CERCA. He currently resides in Pittsburgh, Pa.

For more information, please visit the IRSAC overview page on IRS.gov.

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WASHINGTON — National Taxpayer Advocate Erin M. Collins today released her 2020 Annual Report to Congress, focusing on the unprecedented challenges taxpayers faced in filing their tax returns and receiving refunds and stimulus payments during a year consumed by the COVID-19 pandemic. The report also finds that a roughly 20% inflation-adjusted reduction in the IRS’s budget since fiscal year (FY) 2010 has left the agency with antiquated technology and inadequate staffing levels to meet taxpayers’ needs.

As part of the report, Collins released the fourth edition of the National Taxpayer Advocate’s “Purple Book,” a compilation of 66 legislative recommendations designed to strengthen taxpayer rights and improve tax administration.

“During 2020, the COVID-19 pandemic affected almost all facets of our lives, and U.S. tax administration was no exception,” Collins said in releasing the report. “Taxpayers could not meet in person with their tax return preparers. IRS personnel who open and process tax returns and answer the toll-free telephone lines had to follow social distancing guidelines and stay-at-home orders, limiting their ability to assist taxpayers. And Congress assigned the IRS the task of issuing two rounds of stimulus payments, stretching its resources even further.”

The 2020 filing season and Economic Impact Payments

The report says the IRS in most cases “can effectively handle whatever it can automate,” and as a result, most taxpayers were well served. As of Nov. 20, 2020, the IRS had received about 169 million individual income tax returns, including about 8.4 million that were filed solely to claim stimulus payments (referred to by the IRS as “economic impact payments” or “EIPs”). About 90% of returns were e-filed and therefore were not delayed by the pandemic. Similarly, the overwhelming majority of EIPs were issued by direct deposit or automated mailings and were successfully and timely transmitted.

However, the report says millions of taxpayers experienced major problems, including the following:

Inadequate funding is the source of many (not all) taxpayer problems

By statute, the National Taxpayer Advocate is required to identify the ten most serious problems encountered by taxpayers in their dealings with the IRS. In her preface to the report, Collins wrote: “If this year’s Most Serious Problems are read in combination, one overriding theme emerges: To improve taxpayer service, the IRS needs more resources to hire employees and more resources to modernize its information technology (IT) systems.”

Among the Most Serious Problems are the following:

Other Most Serious Problems include inadequate digital communication options; limitations on the ability of some taxpayers to e-file their tax returns; challenges in the correspondence examination process; inappropriate imposition of foreign information reporting penalties; delays in the processing of amended tax returns; and refund delays attributable to refund fraud filters.

The report says a common link among these taxpayer problems is inadequate funding to allow the IRS to administer the tax system as well as it could. “The IRS is the accounts receivable department of the federal government,” Collins wrote. “In FY 2020, it collected about $3.5 trillion on a budget of about $11.51 billion, producing a remarkable return on investment of more than 300:1. For this reason, it is economically irrational to underfund the IRS.”

The report says the IRS needs more funding to hire enough customer service representatives to answer taxpayer telephone calls and significant additional funding to modernize its IT systems. The IRS has developed a roadmap known as the “Integrated Modernization Business Plan” that would replace legacy systems with modern technology systems and enable the agency to provide improved service to taxpayers and deliver long-term budget efficiencies. The IRS has estimated it will require between $2.3 billion and $2.7 billion in additional funding over the next six years to implement this plan. Yet in FY 2020, the Business Systems Modernization account was funded at only $180 million. The funding level has been raised to $223 million in FY 2021, but the report calls that amount “a drop in the bucket compared to the IRS’s IT funding needs.”

The report points out that the IRS recently developed comprehensive multi-year plans to improve taxpayer services and modernize its IT systems, as required by the Taxpayer First Act. Included in the plans are initiatives TAS has been proposing for several years, “including customer callback, robust online accounts, a focus on resolving taxpayer issues at the earliest possible time, and the use of digital tools to improve service.” Collins wrote that the plans, if implemented, “will be a game-changer for taxpayers,” but noted they are dependent on funding.

National Taxpayer Advocate “Purple Book” of legislative recommendations

The National Taxpayer Advocate’s 2021 Purple Book proposes 66 legislative recommendations for consideration by Congress. Among them are the following:

Other issues

The report also contains a final assessment of the extended 2020 filing season, a taxpayer rights assessment that presents performance measures and other relevant data, a summary of key TAS systemic advocacy accomplishments, a discussion of the ten federal tax issues most frequently litigated during the preceding year, and a description of TAS’s case advocacy operations during FY 2020. It also includes a research study that finds the IRS Collection function can and should implement an algorithm to identify taxpayers at high risk of economic hardship and spare them from entering into installment agreements they cannot afford.

Please visit https://www.taxpayeradvocate.irs.gov/AnnualReport2020 for more information.

In addition, TAS has recently released an Online Digital Roadmap Tool that will assist taxpayers with navigating the complexity of the tax system. By entering a notice or letter number, taxpayers can determine where they are on the roadmap, why they received the notice or letter, what rights they have, what they must do next, and where they can get additional help.

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About the Taxpayer Advocate Service

TAS is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. Your local advocate’s number is available in your local directory and at https://taxpayeradvocate.irs.gov/contact-us. You may also call TAS toll-free at 877-777-4778. TAS can help if you need assistance resolving an IRS problem, if your problem is causing financial difficulty, or if you believe an IRS system or procedure isn’t working as it should. And our service is free. For more information about TAS and your rights under the Taxpayer Bill of Rights, go to https://taxpayeradvocate.irs.gov. You can get updates on tax topics at facebook.com/YourVoiceAtIRS, Twitter.com/YourVoiceatIRS, and YouTube.com/TASNTA

WASHINGTON – The Internal Revenue Service today assured taxpayers and tax professionals that updates to key federal tax forms and instructions are complete and will be available when Americans begin filing their tax returns.

Most individual taxpayers file IRS Form 1040 or Form 1040-SR once they receive Forms W-2 and other earnings information from their employers and payers. IRS has incorporated recent changes to the tax laws into the forms and instructions, and shared the updates with its partners who develop the software used by individuals and tax professionals to prepare and file their returns. Forms 1040 and 1040-SR and the associated instructions are available now on IRS.gov and are being printed for taxpayers who need a hard copy.

Economic Impact Payments are an advance payment of the Recovery Rebate Credit. Important updates include the Recovery Rebate Credit worksheet on page 59 of the 1040/1040-SR instructions. Anyone who didn’t receive the full amount of both Economic Impact Payments should include the amounts they received, before any offsets, when they file. Anyone who received the full amount for both Economic Impact Payments should not include any information about the advance payments when they file their tax return.

Also new this year is the option to use prior year income amounts when computing the Earned Income Tax Credit and the Additional Child Tax Credit. 

The IRS has not yet announced a start date for the 2021 filing season. IRS Free File will open in mid-January when participating providers begin accepting returns. The IRS Free File providers will accept completed tax returns and hold them until they can be filed electronically with the IRS. 

Latest Economic Impact Payments are automatic for eligible taxpayers

This month, the Treasury Department and the IRS are sending the second round of Economic Impact Payments to millions of Americans as part of the implementation of the Coronavirus Response and Relief Supplemental Appropriations Act.

Taxpayers don’t need to take any action to receive these payments. Economic Impact Payments are automatic for eligible taxpayers who filed a 2019 tax return and those who receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) and Veterans Affairs beneficiaries who didn’t file a tax return.

These second round of payments follow the successful delivery of more than $270 billion in CARES Act Economic Impact Payments to about 160 million Americans in 2020.
 
Eligible individuals who did not receive an Economic Impact Payment  – either the first or the second payment – can claim a Recovery Rebate Credit when they file their 2020 taxes this year. The IRS urges taxpayers who didn’t receive an advance payment to review the eligibility criteria when they file their 2020 taxes; many people, including recent college graduates, may be eligible for a credit.

Eligible individuals who didn’t receive the full amount of both Economic Impact Payments should claim the missing amount as a credit. Anyone who did receive the full amount for both Economic Impact Payments should not include any information about their payment when they file their taxes – they’ve already received the full amount of the Recovery Rebate Credit as advance payments.

For the latest IRS forms and instructions, visit the IRS website at www.irs.gov/forms.

Please visit IRS.gov for the latest information about the Economic Impact Payments and filing your 2020 tax return.

IRS YouTube Video:
Get an Identity Protection PIN - English | Spanish

WASHINGTON – The Internal Revenue Service today expanded the Identity Protection PIN Opt-In Program to all taxpayers who can verify their identities.

The Identity Protection PIN (IP PIN) is a six-digit code known only to the taxpayer and to the IRS. It helps prevent identity thieves from filing fraudulent tax returns using a taxpayers’ personally identifiable information.

“This is a way to, in essence, lock your tax account, and the IP PIN serves as the key to opening that account,” said IRS Commissioner Chuck Rettig. “Electronic returns that do not contain the correct IP PIN will be rejected, and paper returns will go through additional scrutiny for fraud.”

The IRS launched the IP PIN program nearly a decade ago to protect confirmed identity theft victims from ongoing tax-related fraud. In recent years, the IRS expanded the program to specific states where taxpayers could voluntarily opt into the IP PIN program. Now, the voluntary program is going nationwide.

About the IP PIN Opt-In Program
Here are a few key things to know about the IP PIN Opt-In program:

How to get an IP PIN
Taxpayers who want an IP PIN for 2021 should go to IRS.gov/IPPIN and use the Get an IP PIN tool. This online process will require taxpayers to verify their identities using the Secure Access authentication process if they do not already have an IRS account. See IRS.gov/SecureAccess for what information you need to be successful. There is no need to file a Form 14039, an Identity Theft Affidavit, to opt into the program

Once taxpayers have authenticated their identities, their 2021 IP PIN immediately will be revealed to them. Once in the program, this PIN must be used when prompted by electronic tax returns or entered by hand near the signature line on paper tax returns.

All taxpayers are encouraged to first use the online IP PIN tool to obtain their IP PIN. Taxpayers who cannot verify their identities online do have options.

Taxpayers whose adjusted gross income is $72,000 or less may complete Form 15227, Application for an Identity Protection Personal Identification Number, and mail or fax to the IRS. An IRS customer service representative will contact the taxpayer and verify their identities by phone. Taxpayers should have their prior year tax return at hand for the verification process.

Taxpayers who verify their identities through this process will have an IP PIN mailed to them the following tax year. This is for security reasons. Once in the program, the IP PIN will be mailed to these taxpayers each year.

Taxpayers who cannot verify their identities online or by phone and who are ineligible for file Form 15227 can contact the IRS and make an appointment at a Taxpayer Assistance Center to verify their identities in person. Taxpayers should bring two forms of identification, including one government-issued picture identification.

Taxpayers who verify their identities through the in-person process will have an IP PIN mailed to them within three weeks. Once in the program, the IP PIN will be mailed to these taxpayers each year.

No change for confirmed identity theft victims
Taxpayers who are confirmed identity theft victims or who have filed an identity theft affidavit because of suspected stolen identity refund fraud will automatically receive an IP PIN via mail once their cases are resolved. Current tax-related identity theft victims who have been receiving IP PINs via mail will experience no change.

See IRS.gov/IPPIN for additional details.

The IRS also encourages tax professionals and employers to share information with taxpayers about the availability of the IP PIN. Tax professionals and employers can print or email Publication 5367 or share IRS social media/e-poster products. 

WASHINGTON − The Internal Revenue Service is seeking qualified applicants for nomination to the Electronic Tax Administration Advisory Committee.
 
The ETAAC provides an organized public forum for discussion of electronic tax administration issues − such as prevention of identity theft and refund fraud − in support of the overriding goal that paperless filing should be the preferred and most convenient method of filing tax and information returns. ETAAC members work closely with the Security Summit, a joint effort of the IRS, state tax administrators and tax industry to fight electronic fraud.

The IRS is looking for qualified individuals who will serve three-year terms beginning in September 2021. 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 encourages representatives from consumer groups with an interest in tax issues to apply. Applications will be accepted through March 1, 2021.

Nominations of qualified individuals may be made by letter and received from organizations or the individuals themselves. Applicants should complete the ETAAC application and include a short statement of interest and a resume. Applicants should describe and document their qualifications, past and current affiliations, and involvement with cybersecurity and electronic tax administration.

In addition, applicants must successfully complete a tax compliance check, practitioner background check and FBI criminal background check.

ETAAC is a Federal Advisory Committee established by the Internal Revenue Service Restructuring and Reform Act of 1998.

Questions about the ETAAC and the application process can be e-mailed to publicliaison@irs.gov.

WASHINGTON – The IRS today sent the Taxpayer First Act Report to Congress, a comprehensive set of recommendations that will reimagine the taxpayer experience, enhance employee training and restructure the organization to increase collaboration and innovation.

The IRS will continue conversations with key stakeholders and congressional committees to secure funding and begin to work toward implementation of these recommendations over the next several years.

“The way we interact with taxpayers and the tax community, the way that we train our employees and the way we structure our organizational structure are important foundations for our future success,” said IRS Commissioner Chuck Rettig. “Guided by the law, we will fundamentally change the way we operate, building upon our strengths, with additional focus on areas to improve the important service we provide to our great country.”

The Taxpayer First Act, signed into law in July 2019, was designed to improve taxpayer service and ensure the IRS continues to enforce the tax law in a fair and impartial manner. The report to Congress includes three integrated sets of recommendations required by the law, including:

The IRS will begin work to implement several of the recommendations in the report as early as 2021, building upon work already underway to expand digital services, reach underserved communities and improve proactive outreach.

“Over the next 10 years, taxpayers will find expanded options for information and services and an increasingly better experience across all of their interactions with the IRS,” Rettig said.

The report to Congress is available on IRS.gov.