Notice 2020-17; Payment relief on account of Coronavirus Disease 2019 (COVID-19) emergency. The Treasury Department and IRS are extending the due date for Federal income tax payments due April 15, 2020, to July 15, 2020, for payments due of up to $10 million for corporations and up to $1 million for individuals - regardless of filing status – and other unincorporated entities. Associated interest, additions to tax, and penalties for late payment will also be suspended until July 15, 2020.

Notice 2020-17 will be in IRB 2020-15, dated April 6, 2020.

The IRS established a special webpage on IRS.gov/coronavirus to include all of the available tax-related information. This page will be updated as more information is available.

Treasury News Release:  Treasury and IRS Issue Guidance on Deferring Tax Payments Due to COVID-19 Outbreak

WASHINGTON — The Internal Revenue Service today reminded taxpayers to remain vigilant with their personal information by securing computers and mobile phones. Proper cybersecurity protection and scam recognition can reduce the threat of identity theft inside and outside the tax system.

This news release is part of a series called the Tax Time Guide, a resource to help taxpayers file an accurate tax return. Additional help is available in Publication 17, Your Federal Income Tax.

The IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. People should be alert to scammers posing as the IRS to steal personal information. There are ways to know if it’s really the IRS calling or knocking on someone’s door.

The IRS also works with the Security Summit, a partnership with state tax agencies and the private-sector tax industry, to help protect taxpayer information and defend against identity theft. Taxpayers and tax professionals can take steps to help in this effort.

Below are a few tips to help minimize exposure to fraud and identity theft:

Set password and encryption protections for wireless networks. If a home or business Wi-Fi is unsecured, it allows any computer within range to access the wireless network and potentially steal information from connected devices. Whenever it is an option for a password-protected account, users also should opt for a multi-factor authentication process.

Set security software to update automatically so it can be updated as threats emerge. Educate children and those with less online experience about the threats of opening suspicious web pages, emails or documents.

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. 

Notice 2020-16 provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under § 417(e)(3), and the 24-month average segment rates under § 430(h)(2) of the Internal Revenue Code.  In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I), as reflected by the application of § 430(h)(2)(C)(iv). 

Notice 2020-16 will be in IRB: 2020-14, dated March 30, 2020.

WASHINGTON — The Internal Revenue Service today announced the release of final regulations that increase the Offer in Compromise application fee to $205 and provide an additional way for the IRS to waive the Offer in Compromise application fee for low-income taxpayers, based on their adjusted gross income (AGI).

An Offer in Compromise (OIC) is an agreement between a taxpayer and the IRS to settle a tax debt for less than the full amount owed. Generally, it may be an option for taxpayers who can’t pay their full tax debt, or if doing so would create a financial hardship. The IRS considers the taxpayer’s overall financial circumstances when considering an OIC in an effort to administratively resolve the amount due.

 Applicants who meet the definition of a “low-income taxpayer” receive a waiver of their OIC application fee. A new provision from the Taxpayer First Act provides an additional way for low-income taxpayers to qualify for a waiver of the OIC application fee.

Normally, the IRS determines if taxpayers fall at or below 250% of the poverty level by looking at their household’s size and gross monthly income. The new law provides an additional standard for the IRS to use in making the calculation. The IRS will now also look at a taxpayer’s AGI from the most recent tax return to determine whether it is at or below 250% of the poverty level.

Taxpayers with an outstanding tax debt are encouraged to timely respond to IRS notices and should not ignore correspondence received from the IRS. Taxpayers with an outstanding tax debt should contact the IRS at the phone number set forth in the notice, online or by visiting a local Taxpayer Assistance Center (TAC) – a listing of local TACs is available at IRS.gov. Taxpayers may also seek assistance from the Taxpayer Advocate Service (TAS). Contact information for TAS is available online, including a listing of local TAS offices.

For more information, see Offer in Compromise on IRS.gov.

Notice 2020-15 provides tax relief to health plans as a result of the public health emergency posed by COVID-19, and the need to eliminate potential administrative and financial barriers to testing for and treatment of COVID-19. A health plan that otherwise satisfies the requirements to be a high deductible health plan (HDHP) under section 223(c)(2)(A) will not fail to be an HDHP merely because the health plan provides medical care services and items purchased related to testing for and treatment of COVID-19 prior to the satisfaction of the applicable minimum deductible. As a result, the individuals covered by such a plan will not fail to be eligible individuals under section 223(c)(1) merely because of the provision of those health benefits for testing and treatment of COVID-19.

Notice 2020-15 will be in IRB:   IRB 2020-14, dated March 30, 2020.

WASHINGTON — The Internal Revenue Service today advised that high-deductible health plans (HDHPs) can pay for 2019 Novel Coronavirus (COVID-19)-related testing and treatment, without jeopardizing their status. This also means that an individual with an HDHP that covers these costs may continue to contribute to a health savings account (HSA).   

In Notice 2020-15, posted today on IRS.gov, the IRS said that health plans that otherwise qualify as HDHPs will not lose that status merely because they cover the cost of testing for or treatment of COVID-19 before plan deductibles have been met. The IRS also noted that, as in the past, any vaccination costs continue to count as preventive care and can be paid for by an HDHP.

Today’s notice applies only to HSA-eligible HDHPs. Employees and other taxpayers in any other type of health plan with specific questions about their own plan and what it covers should contact their plan.

WASHINGTON – The Internal Revenue Service is encouraging taxpayers to take control of the size of their refund using the Tax Withholding Estimator on IRS.gov.

The estimator has a “slider” feature to let users to choose the refund they want from a range of amounts based on the information they enter. The feature helps taxpayers set their withholding to get a large refund or more money in their paychecks throughout the year.

This news release is part of a series called the Tax Time Guide with information to help taxpayers file an accurate tax return. 

Withholding 
Starting in 2020, income tax withholding is generally based on the worker’s expected filing status and standard deduction. Employers generally use withholding tables to determine how much tax to withhold and send to the IRS. Those who are not subject to withholding should make quarterly estimated tax payments during the year.

The improved and mobile-friendly estimator offers retirees, employees and self-employed individuals a user-friendly way to check their withholding. It also has features specially tailored to the unique needs of those receiving pension payments and Social Security benefits.

People with more than one job and families where both spouses work may need to adjust their withholding to avoid having too little withheld. Not paying enough during the year, either through withholding or by making timely estimated tax payments, may mean paying a penalty.

When to check
Taxpayers should check their withholding annually. They should also check when life changes occur, such as marriage, childbirth, adoption and when buying a home. The IRS recommends anyone who changed their withholding late in 2019 should do a Paycheck Checkup. Taxpayers who receive a tax bill after they file should use the estimator to ensure the right amount is being withheld for 2020.

Taxpayers can use the results from the IRS Withholding Calculator to determine if they should complete a new Form W-4, Employee’s Withholding Certificate.

Submitting a new Form W-4
Employees submit a completed Form W-4 to their employer, not the IRS. Beginning in 2020, all new employees must use the redesigned form. Employees who submitted Form W-4 in 2019 or before are not required to submit a new form. However, the new form must be used to adjust their withholding. New employees who fail to submit a Form W-4 will be treated as a single filer with no other adjustments. This means that a single filer’s standard deduction with no other entries will be considered in determining withholding. 

The new Form W-4 is simpler than the old form and increases the transparency and accuracy of the withholding system. The new design replaces complicated worksheets with more straightforward questions that make accurate withholding easier for employees.

Self-employed
Those who have self-employment income will generally owe both income tax and self-employment tax. Form W-4 is primarily to be used by employees who are not subject to self-employment tax and does not compute self-employment tax. See Form 1040-ES Estimated Tax for Individuals and IRS Publication 505, Tax Withholding and Estimated Tax.

For more information see the Tax Withholding Estimator FAQs and FAQs on the 2020 Form W-4. Whether at home, at work or on the go, taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov.

WASHINGTON — The Internal Revenue Service today reminded taxpayers, businesses, tax professionals and others to take advantage of a wide variety of free IRS e-mail subscription services that feature things like the annual "Dirty Dozen" list of tax scams, which is coming this month.

The e-News Subscription service issues tax information by email for many different audiences providing tips, tools and helpful materials of interest to taxpayers  and organizations. Among others, the IRS offers subscription services tailored to tax exempt and government entities, small and large businesses as well as individuals. The service is easy to use; sign up for by visiting IRS e-News Subscriptions.

The IRS currently has 20 registration-based e-News options, including: 

For more information and other IRS subscriptions designed for specific groups, visit IRS e-News Subscriptions. The resources will help taxpayers and organizations keep up with the latest information during and after filing season.

WASHINGTON – Victims of this week’s tornadoes and severe storms in parts of Tennessee, including Nashville, will have until July 15, 2020, 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 assistance. Currently this includes Davidson, Putnam and Wilson counties, but taxpayers in localities added later to the disaster area 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.

The tax relief postpones various tax filing and payment deadlines that occurred starting on March 3. As a result, affected individuals and businesses will have until July 15, 2020, to file returns and pay any taxes that were originally due during this period. This includes 2019 individual and business returns normally due on April 15, as well as various 2019 business returns due on March 15. Among other things, this also means that affected taxpayers will have until July 15 to make 2019 IRA contributions.

The July 15 deadline also applies to quarterly estimated income tax payments due on April 15 and June 15 and the quarterly payroll and excise tax returns normally due on April 30. It also applies to tax-exempt organizations, operating on a calendar-year basis, that have a 2019 return due on May 15.    

In addition, penalties on payroll and excise tax deposits due on or after March 3 and before March 18 will be abated as long as the deposits are made by March 18.

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 2020 return normally filed next year), or the return for the prior year. This means that taxpayers can, if they choose, claim these losses on the 2019 return they are filling out this tax season. Be sure to write the FEMA declaration number – 4476 − 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.

Notice 2020-14 sets forth the 2020 Cumulative List of Changes in Plan Qualification Requirements for Pre-Approved Defined Benefit Plans (2020 Cumulative List). The 2020 Cumulative List sets forth specific matters the IRS has identified for review in determining whether a defined benefit plan document that has been filed for an opinion letter has been properly updated. The provisions in the 2020 Cumulative List include statutory and regulatory provisions that were issued between October 1, 2012 and December 1, 2019.

Notice 2020-14 will be in IRB:    2020-13, dated March 23, 2020.