WASHINGTON – The IRS reminds taxpayers that one of the best ways to check on their refund is the “Where’s My Refund?” tool on the IRS website and the IRS2Go app. Updated once a day, usually overnight, this useful tool gives taxpayers a projected refund issuance date as soon as it is approved.

The IRS issues nine out of 10 refunds in less than 21 days, and the fastest way to get a refund is to use IRS e-file and direct deposit. Taxpayers should also know they can have their refunds divided into up to three separate accounts.

Due to the COVID-19 pandemic, IRS live phone assistance is extremely limited. People are encouraged to first check the “Where’s My Refund?” tool on the IRS website and the IRS2Go app. Taxpayers can also review the IRS Services Guide which links to additional IRS online services.

Please note: Ordering a tax transcript will not speed delivery of tax refunds nor does the posting of a tax transcript to a taxpayer’s account determine the timing of a refund delivery. Calls to request transcripts for this purpose are unnecessary. Transcripts are available online and by mail at Get Transcript.

A few necessary items
To use the “Where’s My Refund?” tool, taxpayers will need to enter their Social Security number, tax filing status (single, married, head of household) and exact amount of the tax refund claimed on the return.

Taxpayers who file electronically can check “Where’s My Refund?” within 24 hours after they receive their e-file acceptance notification. The tool can tell taxpayers when their tax return has been received, when the refund is approved and the date the refund is to be issued.

Some refunds may take longer
While the IRS continues to process electronic and paper tax returns, issue refunds, and accept payments, there are delays in processing paper tax returns due to limited staffing. If a taxpayer filed a paper tax return, the return will be processed in the order in which it was received. Do not file a second tax return or call the IRS.

Many different factors can affect the timing of a refund. In some cases, a tax return may require additional review. It is also important to consider the time it takes for a financial institution to post the refund to an account or for a refund check to be delivered by mail.

Taxpayers who owe
The IRS encourages taxpayers who owe to do a Paycheck Check Up every year to ensure enough tax is withheld from their pay to avoid an unexpected tax bill.

WASHINGTON — Because of the burdens the COVID-19 pandemic has placed on hospitals, the Internal Revenue Service today provided additional relief to hospital organizations that must meet the Community Health Needs Assessments (CHNA) requirements.

Notice 2020-56 extends the deadline for conducting a CHNA and adopting an implementation strategy to meet the community health needs identified through the CHNA to Dec. 31, 2020.

Tax-exempt hospital organizations filing Forms 990 must indicate on Schedule H if they have conducted a CHNA in the current taxable year or in either of the two immediately preceding taxable years and if they have adopted an implementation strategy to meet the significant health needs identified through the most recently completed CHNA. Since these requirements may affect the hospital’s tax-exempt status and because the law imposes a $50,000 tax on a hospital organization for each hospital facility that fails to meet either or both of these requirements, the extension provided in the notice provides significant relief.

Under Notice 2020-56, the time for hospitals to comply with any CHNA requirements due to be performed on or after April 1, 2020, and before Dec. 31, 2020, is extended to Dec. 31, 2020.

Previously, the IRS issued guidance extending the due date to July 15, 2020; today’s guidance further extends that due date.

Hospitals using the relief in today’s notice that file Form 990 prior to Dec. 31, 2020, should state in the narrative of Part V.C. of Schedule H (Form 990) that they are eligible for and are relying on the relief provided in the notice, and should not be treated as failing to meet the requirements of section 501(r)(3) prior to Dec. 31, 2020.

Additional tax relief related to the COVID-19 pandemic can be found on IRS.gov.

Notice 2020-56 extends the deadline for conducting a CHNA and adopting an implementation strategy to meet the community health needs identified through the CHNA to December 31, 2020.  Because of the burdens the COVID-19 pandemic has placed on hospitals, the Internal Revenue Service today provided additional relief to hospital organizations that must meet the Community Health Needs Assessments (CHNA) requirements.

Notice 2020-56 will be in IRB: 2020-32, dated 8/3/2020.

WASHINGTON – The Treasury Department and the IRS today released a proposed redesigned partnership form for tax year 2021 (filing season 2022). The proposed form is designed to provide greater clarity for partners on how to compute their U.S. income tax liability with respect to items of international tax relevance, including claiming deductions and credits. 

The redesigned form and instructions provide guidance to partnerships on how to report international tax information to their partners in a standardized format. This proposed form would apply to a partnership required to file Form 1065 only if the partnership has items of international tax relevance (generally foreign activities or foreign partners). The proposed changes would not affect domestic partnerships with no international tax items to report.

This early release is intended to afford time for stakeholder input and engagement.  Treasury and IRS invite comments from affected stakeholders through Sept. 14, 2020. Written comments should be sent to the following email address: lbi.passthrough.international.form.changes@irs.gov with the subject line: “International Form Changes.”

The Treasury Department and the IRS will be actively engaged with stakeholders to solicit input on these proposed changes before the forms are finalized later in 2020.

Currently, partners are required to report international tax information on their tax returns on several tax forms and schedules. Partners generally obtain the information required to be reported from their partnerships, usually through narrative statements attached to K-1s. Those statements are compiled in a variety of formats and may be difficult for partners to translate onto their own returns.  The proposed changes intend to ease this burden through a standard format that offers greater clarity to both partnerships and their partners.

The standard format of the new partnership schedules is designed to better align the information that partnerships provide on the schedules with the tax forms used by partners, allowing partners to more easily prepare their tax returns and the IRS to more efficiently verify taxpayer compliance.  It is intended that all of the information to be reported on the new schedules is already necessary for the partnership to provide to partners or is available to the partnership. 

The Treasury Department and the IRS are releasing the draft new Schedule K-2 (Form 1065), Partners’ Distributive Share Items - International and Schedule K-3 (Form 1065), Partner’s – Share of Income, Deductions, Credits, etc. – International, both for tax year 2021 (filing season 2022), and the draft instructions, to allow partnerships and other stakeholders time to consider the proposed changes and to provide comments that can be taken into account in finalizing the schedules and instructions. 

The proposed parts included in new Schedule K-2 (Form 1065) replace portions of existing Form 1065, Schedule K, lines 16(a) through 16(r). The proposed schedule provides for international tax information to be reported in a standardized manner generally corresponding to the tax forms listed above. 

The proposed parts included in new Schedule K-3 (Form 1065) replaces portions of Schedule K-1, Part III, Boxes 16 and 20, and provides information to the partner generally in the format of the following forms that might be completed by the partner:

The Treasury Department and the IRS plan similar revisions, as applicable, to Form 1120-S (U.S. Income Tax Return for an S Corporation) and Form 8865 (Return of U.S. Persons With Respect to Certain Foreign Partnerships).  The Treasury Department and the IRS welcome comments on similar changes to be made to Forms 1120-S and 8865 for the 2021 tax year.

WASHINGTON − The Internal Revenue Service today reminded business taxpayers that their 2019 tax returns and tax payments, as well as their first two 2020 estimated tax payments, are due on Wednesday, July 15.

The July 15 due date generally applies to any tax return or tax payment deadline that was postponed due to COVID-19. In April, the IRS said that this postponement applied to all taxpayers that had a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. No late-filing penalty, late-payment penalty or interest will be due for payments prior to July 15.

Corporations, trusts and estates, as well as individuals and other non-corporate tax filers qualify for the extra time. A complete list of qualifying filing and payment deadlines are available at IRS.gov/Coronavirus.

Businesses that need a tax-filing extension beyond the July 15 deadline can get one by filing Form 7004. An extension to file is not an extension to pay. To avoid interest charges and any possible late-payment penalties, be sure to estimate any tax liability and pay it by the July 15 deadline. Individuals who file Form 1040, including sole proprietors, farmers and landlords, can get an extension by filing Form 4868.

The fastest and easiest way to meet the July 15 deadline is to file returns and pay any taxes due electronically. For more information on e-file and e-payment options, visit IRS.gov/efile.

WASHINGTON – The Internal Revenue Service today reminds taxpayers that they have until the postponed due date of July 15, 2020, to file an extension for their 2019 federal tax return. The extension gives taxpayers until Oct. 15 to file, but taxes owed are due by July 15.

The July 15 due date generally applies to all taxpayers who have an income tax filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. Taxpayers and tax professionals should continue to use electronic options. The IRS encourages taxpayers to file electronically. Doing so, whether through e-file or IRS Free File, reduces tax return errors, as the tax software does the calculations, flags common errors and prompts taxpayers for missing information. Free File Fillable Forms means there is a free option for everyone.
 
Here’s how to get an extension of time to file
Individual taxpayers who need additional time to file beyond the July 15 deadline can request a filing extension to Oct. 15 in one of two ways:

Businesses that need additional time to file income tax returns must file Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns.

IRS.gov assistance
Taxpayers may find answers to many of their questions using the Interactive Tax Assistant (ITA), a tax law resource that works using a series of questions and responses. IRS.gov has answers for Frequently Asked Questions. The IRS website has tax information in: Spanish (Español); Chinese (中文); Korean (한국어); Russian (Pусский); Vietnamese (Tyng Việt); and Haitian Creole (Kreyòl ayisyen). Go to IRS.gov/payments for electronic payment options.

WASHINGTON — On July 9, the U.S. Tax Court struck down four more abusive syndicated conservation easement transactions. The Internal Revenue Service calls on any taxpayer involved in syndicated conservation easement transactions who receives a settlement offer from the agency to accept it soon.

These time-limited settlement offers, announced June 25, are only being made to certain taxpayers with pending docketed Tax Court cases involving this type of abusive transaction.

These and other recent Tax Court decisions support the abusive nature of the underlying syndicated conservation easement deduction. The four most recent U.S. Tax Court decisions disallowed conservation easement deductions totaling nearly $21 million.

“The IRS will continue to actively identify, audit and litigate these syndicated conservation easement deals as part of its vigorous and relentless effort to combat abusive transactions,” said IRS Commissioner Chuck Rettig. “These abusive transactions undermine the public's trust in private land conservation and defraud the government of revenue. We strongly recommend that participants seek the advice of competent, independent advisors. Ending these abusive schemes remains a top priority for the IRS."

The IRS recognizes the important role of legitimate conservation easement deductions in incentivizing land preservation for future generations. However, abusive syndicated conservation easement transactions have been of concern to the IRS for several years.

The IRS is aware that some promoters of these abusive transactions have downplayed the significance of the string of recent court decisions holding in the government’s favor, arguing that their cases are somehow different or that those decisions might be reversed on appeal. These promoters ignore common sense and argue that the real dispute is about value, neglecting to explain how the reporting of short-term appreciation, often exceeding many multiples of reality, could possibly withstand judicial scrutiny.

“Taxpayers should ignore this nonsense, take an objective look at their cases, and cut their losses,” said IRS Chief Counsel Mike Desmond. “Abusive transactions, like settlement offers, do not get better with time, and this is a good opportunity to get out.”  

In listed syndicated conservation easement structures, promoters syndicate ownership interests in real property through partnerships, using promotional materials to suggest that prospective investors may be entitled to a share of a conservation easement contribution deduction that equals or exceeds two and one-half times the investment amount. The promoters obtain an appraisal that greatly inflates the value of the conservation easement based on a fictional and unrealistic highest and best use of the property before it was encumbered with the easement.

After the investors invest in the partnership, the partnership donates a conservation easement to a land trust. Investors in the partnership then claim a deduction based on an inflated value. The investors typically claim charitable contribution deductions that grossly multiply their actual investment in the transaction and defy common sense.

For more details, see IR-2020-130.

WASHINGTON – Leaders from five international tax organizations are marking the two-year anniversary of the formation of the Joint Chiefs of Global Tax Enforcement (J5) this week. 

The J5 includes the Australian Taxation Office (ATO, the Canadian Revenue Agency (CRA), the Dutch Fiscal Information and Investigation Service (FIOD), Her Majesty’s Revenue and Customs (HMRC) from the UK and the Internal Revenue Service Criminal Investigation Division (IRS-CI) from the US.

Taking advantage of each country’s strengths, the J5’s initial focus was on enablers of tax crime, virtual currency and platforms that enable each country to share information in a more efficient manner.  Within the framework of each country’s laws, J5 countries shared information and were able to open new cases, more completely develop existing cases, and find efficiencies to reduce the time it takes to work cases. Operational results have always been the goal of the organization and they have started to materialize.

“While operational results matter, I’ve been most excited at the other benefits that this group’s existence has provided,” said Don Fort, Chief, IRS Criminal Investigation. “In speaking with law enforcement partners domestically and abroad as well as stakeholders in various public and private tax organizations, there is real support for this organization and tangible results we have all seen due to the cooperation and global leadership of the J5.”

During the two years since the J5’s inception, hundreds of data exchanges between J5 partner agencies have occurred with more data being exchanged in the past year than the previous 10 years combined. Each J5 country brings different strengths and skillsets to the J5 and leveraging those skills and capabilities enhance the effectiveness and success of the J5.

Experts from the J5 countries have seen indications that tax offenders are embracing ever more complex methods to conceal their wrongdoings, creating multiple mechanisms and structures that are split across jurisdictions, taking advantage of those areas that offer secrecy and regulatory benefits. With this information, the J5 finds itself continuously adapting to the latest criminal methods and changing behaviors to prioritize the collective operational activity to tackle this dynamic threat picture. 

Since the inception of the organization, two J5 countries have hosted events known as “Challenges” aimed at developing operational collaboration. FIOD hosted the first J5 “Challenge” in Utrecht in 2018 and brought together leading data scientists, technology experts and investigators from all J5 countries in a coordinated push to track down those who make a living out of facilitating and enabling international tax crime.  The event identified, developed, and tested tools, platforms, techniques, and methods that contribute to the mission of the J5 focusing on identifying professional enablers facilitating offshore tax fraud. The following year, the U.S. hosted a second “Challenge” in Los Angeles and brought together investigators, cryptocurrency experts and data scientists in a coordinated push to track down individuals perpetrating tax crimes around the world.

Last week, a Romanian man was arrested in Germany and admitted to conspiring to engage in wire fraud and offering and selling unregistered securities in connection with his role in the BitClub Network, a cryptocurrency mining scheme worth at least $722 million. This plea was the first for a case under the J5 umbrella and stemmed from collaboration with the Netherlands during the “Challenge” in Los Angeles in 2019.

“The value of the Challenges cannot be overstated,” said Fort. “When you take some of the smartest people from each organization and put them in a room for a few days, the results are truly impressive.  Each country found investigative leads and was able to further cases utilizing tools and techniques created by each country’s experts specifically for the Challenge. I see us doing more of these events in the future.” 

Last year, the United States and the World Bank hosted cyber training in Washington, DC bringing together more than 120 international and domestic law enforcement partners from approximately 20 countries to address emerging areas associated with cybercrime, virtual currency, blockchain and the dark web. Additionally, to ensure J5 countries were using all law enforcement and legal tools available during their collaborative work, trainings were held in Sydney and the Netherlands on international elements of the UK corporate criminal offense legislation and prosecution opportunities to lawyers and public prosecutors.

After two years of collaboration, data sharing and accelerated casework, the J5 began seeing operational results in early 2020. J5 countries participated in a globally coordinated day of action to put a stop to the suspected facilitation of offshore tax evasion. The action was part of a series of investigations in multiple countries into an international financial institution located in Central America, whose products and services are believed to be facilitating money laundering and tax evasion for customers across the globe. Evidence, intelligence and information collection activities such as search warrants, interviews and subpoenas were undertaken in each country and significant information was obtained and shared as a result. That investigation is ongoing.

“To see each country participate in a coordinated enforcement action all over the world at the same time with the same goal in mind was a real watershed moment for this organization,” said Fort.  “And that was just the beginning.  With dozens of cases in our collective pipelines, I’m excited to see what the next year brings in terms of operational results.”

In addition to the group’s work with enablers and virtual currency, the J5 also focused on platforms that enable each country to share information in a more organized manner.  FCInet is one such platform that each country has invested in to further that goal.  FCInet is a decentralized virtual computer network that enables agencies to compare, analyse and exchange data anonymously. It helps users to obtain the right information in real-time and enables agencies from different jurisdictions to work together while respecting each other’s local autonomy.  Organizations can jointly connect information, without needing to surrender data or control to a central database. FCInet doesn’t collect data, rather it connects data.

The J5 was formed in 2018 after a call to arms from the OECD Taskforce on Tax Crime and has been working together to gather information, share intelligence and conduct coordinated operations, making significant progress in each country’s fight against transnational tax crime.

For more information about J5, please visit www.irs.gov/J5.

WASHINGTON — The Internal Revenue Service today reminded taxpayers with a filing requirement to file an accurate tax return on time even if a balance due can’t be paid in full. The deadline to submit 2019 tax returns is July 15, 2020, for most people. Members of the military serving overseas may have more time.

File electronically to avoid most common errors
Filing electronically and choosing direct deposit remains the fastest and safest way to file an accurate income tax return and receive a refund. Filing electronically reduces tax return errors as the tax software does the calculations, flags common errors and prompts taxpayers for missing information.

An inaccurate tax return can delay a refund.

Some common errors to avoid include:

In most cases, tax software helps to reduce or eliminate these. Find complete details on all the benefits of filing electronically, including IRS Free File, commercial tax prep software or an authorized e-File provider from the “File” page on IRS.gov.

Checking on refunds
The IRS is processing electronic and paper tax returns and issuing refunds. The IRS normally issues most refunds in less than 21 days. Taxpayers who mailed a tax return will experience a longer wait time. There is no need to mail a second tax return or call the IRS. “Where’s My Refund?”  on IRS.gov is the most convenient way to check the status of a refund. It has a tracker that displays progress through three phases: (1) Return Received; (2) Refund Approved; and (3) Refund Sent.

All that is needed to use “Where’s My Refund?” is the taxpayer’s Social Security number, tax filing status (such as single, married, head of household) and exact amount of the tax refund claimed on the 2019 tax return. It is updated no more than once every 24 hours, usually overnight, so there’s no need to check the status more often.

Taxpayers should file now, schedule full or partial tax payments up to the July 15 due date
Taxpayers can pay online, by phone or with their mobile device and the IRS2Go app. When paying federal taxes electronically taxpayers should remember:

Can’t pay a tax bill?
Everyone should file their 2019 tax return by the July 15 tax filing deadline regardless of whether or not they can pay in full. Taxpayers who owe and can’t pay all taxes due have options including: 

Find more information on when, how and where to file see Tax Information for Individuals.

Need an extension of time to file a 2019 tax return?
Those who need more time to prepare their 2019 federal tax return can apply for an extension of time to file.  An extension of time to file does not grant an extension of time to pay taxes owed.  File an extension request, estimate and pay any owed taxes by the July 15 deadline to avoid possible penalties.

Individual tax filers, regardless of income, can use Free File to electronically request an automatic tax-filing extension. Filing this form gives the taxpayer until Oct. 15 to file a return. To get the extension, the taxpayer must estimate their tax liability on this form and pay any amount due

Taxpayers can also get an extension by paying all or part of their estimated income tax due and indicate that the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or a credit or debit card. This way they won’t have to file a separate extension form and will receive a confirmation number for their records.

Check withholding
The IRS encourages taxpayers to do a Paycheck Checkup as soon as possible to avoid having too much or too little tax withheld this year. Too much normally results in a refund while too little lends itself to taxes owed next year. Taxpayers should check their withholding each year and when life changes occur, such as marriage, childbirth, adoption or buying a home.

The IRS Tax Withholding Estimator is an excellent tool to help people plan and make any needed tax withholding adjustments. 

Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov. They can use these resources to get help when it’s needed at home, at work or on the go.

More resources:

• Interactive Tax Assistant
• IRS Podcast: Owe Taxes But Can’t Pay?

WASHINGTON — The Internal Revenue Service is reminding taxpayers that using the IRS Tax Withholding Estimator to do a Paycheck Checkup can help them have the right amount of tax withheld and avoid surprises when filing next year.

Because income taxes are pay-as-you-go, taxpayers are required by law to pay most of their tax as income is received. There are two ways to do this:

Income tax withholding is generally based on the worker’s expected filing status and standard deduction. The Tax Withholding Estimator is a tool on IRS.gov designed to help taxpayers determine how to have the right amount of tax withheld from their paychecks. It offers workers, retirees, self-employed individuals and other taxpayers a clear, step-by-step method to help determine if there is a need to adjust their withholding and submit a new Form W-4 to their employer. The latest update of the Tax Withholding Estimator provides detailed explanations to withholding recommendations on the Results Page.

When to do a Paycheck Check-up

Taxpayers should check their withholding annually and when life changes occur, such as marriage, childbirth, adoption and buying a home. The IRS recommends anyone who changed their withholding this year or received a tax bill after they filed their 2019 return should do a Paycheck Checkup.

Estimated taxes

Taxpayers with a substantial portion of their income not subject to withholding − the self-employed, investors, retirees, those with interest, dividends, capital gains, alimony and rental income − often need to pay quarterly installments of estimated tax.

The IRS reminds taxpayers that 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.

Form 1040-ES, Estimated Tax for Individuals, includes instructions to help taxpayers figure their estimated taxes. They can also visit IRS.gov/payments to pay electronically. IRS offers two free electronic payment options where taxpayers can schedule their estimated federal tax payments up to 30 days in advance with IRS Direct Pay or up to 365 days in advance with the Electronic Federal Tax Payment System (EFTPS).

For information see:
Tax Withholding Estimator FAQs
FAQs on the 2020 Form W-4