WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued proposed regulations and temporary regulations that provide guidance for consolidated groups regarding net operating losses (NOLs).

The Tax Cuts and Jobs Act (TCJA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) amended the rules for NOLs. After amendment, the NOL deduction is the sum of:

The TCJA generally eliminated NOL carrybacks and permitted NOLs to be carried forward indefinitely. The TCJA also provides special rules for nonlife insurance companies and farming losses. Nonlife insurance companies are permitted to carry back NOLs two years and forward 20 years, and the 80% limitation does not apply. Farming losses are permitted to be carried back two years and carried forward indefinitely, subject to the 80% limitation.

The CARES Act effectively delays the application of the TCJA amendments until January 1, 2021. Additionally, the CARES Act permits a five-year carryback for NOLs, including farming losses and NOLs of nonlife insurance companies, for taxable years beginning after December 31, 2017 and before January 1, 2021.

The proposed regulations provide guidance to consolidated groups on the application of the 80% limitation. Additionally, the proposed regulations would remove obsolete provisions from the rules for consolidated groups that contain both life insurance companies and nonlife insurance companies. 

Because the CARES Act allows certain NOLs to be carried back five years, the temporary regulations allow certain acquiring consolidated groups to make an election to waive all or a portion of the pre-acquisition portion of the extended carryback period for certain losses attributable to certain acquired members.

For more information about this and other TCJA provisions, visit IRS.gov/taxreform. Additional information about tax relief for businesses affected by the COVID-19 pandemic can be found on IRS.gov.

WASHINGTON — With the federal income tax deadline just around the corner, the Internal Revenue Service wants to remind taxpayers that IRS.gov offers tips on finding a qualified tax professional.

Over 84 million tax returns were prepared by a paid return preparer last year. Though most tax professionals provide honest, high-quality service, taxpayers should keep in mind these basic tips when selecting a tax professional:

The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications is a free searchable and sortable database. It includes the name, city, state and zip code of credentialed return preparers who are CPAs, enrolled agents or attorneys, as well as those who have completed the requirements for the IRS Annual Filing Season Program. A search of the database can help taxpayers verify credentials and qualifications of tax professionals or locate a tax professional in their geographic area.There is also a page with IRS Tax Pro Association Partners that includes links to national nonprofit tax professional groups that can help taxpayers seek the right type of qualified help from a tax preparer.

More resources:

The Internal Revenue Service is issuing proposed regulations,
REG-123027-19  relating to the compliance-monitoring duties of state agencies for purposes of the low-income housing credit.  The proposed regulations relax the minimum compliance-monitoring sampling requirement for purposes of physical inspections and low-income certification review, providing flexibility and reduced burdens with respect to the requirements set forth in the final regulations published on February 26, 2019.

WASHINGTON ― The Internal Revenue Service today announced additional retail partners are accepting cash payments for federal taxes. This cash payment option is for individual and business taxpayers.

The IRS' continuing partnership with ACI Worldwide's OfficialPayments.com and the PayNearMe Company allows taxpayers to make a payment without a bank account or credit card at participating 7-Eleven stores, Ace Cash Express and Casey's General Stores nationwide.

"We continuously look for ways to enhance the services we provide for our taxpayers," said IRS Wage and Investment Division Commissioner Ken Corbin. "The IRS offers many ways for taxpayers to pay their tax bills including direct debit, credit card and through electronic funds withdrawal when filing electronically. This cash option lets people pay their taxes without having to make an appointment at an IRS Taxpayer Assistance Center."

Individuals wishing to take advantage of this payment option should visit the IRS.gov/payments, select the cash option in the "Other Ways You Can Pay" section and follow the instructions. There is a $1,000 payment limit per day and a $3.99 fee per payment.

Because PayNearMe involves a three-step process, the IRS urges taxpayers choosing this option to start the process well ahead of the tax deadline to avoid interest and penalty charges.

The IRS reminds individuals without the need to pay in cash that there are other ways to pay online, by phone or with a mobile device and the IRS2Go app. IRS Direct Pay is a secure online payment option that allows taxpayers to pay directly from their bank accounts for free. The IRS has been partnering with Official Payments since 1999 for taxpayers wanting to use a credit card to pay their taxes.

The IRS reminds taxpayers to watch out for email schemes. Taxpayers will only receive an email from OfficialPayments.com or PayNearMe if they have initiated the payment process.

IRS provides tax relief for the low-income housing credit and bonds for qualified residential rental projects

WASHINGTON – In response to the ongoing COVID-19 pandemic, the Internal Revenue Service today issued Notice 2020-53 (PDF) to provide tax relief to issuers, operators, owners, and tenants of qualified low-income housing projects or qualified residential rental projects financed with exempt facility bonds, and state agencies that have jurisdiction over these projects.

For certain time-sensitive actions scheduled to be performed and requirements to be met on or after April 1, 2020 and before December 31, 2020, owners and operators now have until December 31, 2020 to perform the actions and satisfy the requirements.

Further, between April 1, 2020 and December 31, 2020, owners of qualified low-income housing projects are not required to perform certain income recertifications or reduce the eligible basis in a building because of the temporary closure of an amenity or common area due to the COVID-19 pandemic, and state agencies that have jurisdiction over the projects are not required to conduct compliance-monitoring.

Additionally, between April 1, 2020 and December 31, 2020, owners and operators of these projects, issuers, and state agencies may treat medical personnel and other essential workers providing services during the COVID-19 pandemic as if they were Displaced Individuals, as defined in Rev. Procs. 2014-49 and 2014-50, and therefore, may provide emergency housing for these persons as described in these revenue procedures.

Additional information about tax relief for those affected by the COVID-19 pandemic can be found on IRS.gov.

The Internal Revenue Service also is issuing proposed regulations (PDF) relating to the compliance-monitoring duties of state agencies for purposes of the low-income housing credit. The proposed regulations relax the minimum compliance-monitoring sampling requirement for purposes of physical inspections and low-income certification review, providing flexibility and reduced burdens with respect to the requirements set forth in the final regulations published on February 26, 2019.

Notice 2020-53 provides temporary relief from certain requirements under § 42 of the Internal Revenue Code (Code) for qualified low-income housing projects.

WASHINGTON – Unclaimed income tax refunds worth more than $1.5 billion await an estimated 1.4 million individual taxpayers who did not file a 2016 federal income tax return, according to the Internal Revenue Service. 

“The IRS wants to help taxpayers who are owed refunds but haven’t filed their 2016 tax returns yet,” said IRS Commissioner Chuck Rettig. “Time is quickly running out for these taxpayers. There’s only a three-year window to claim these refunds, and the window closes on July 15. To claim the refund, a return for tax year 2016 must be filed by July 15, 2020.”

In Notice 2020-23, the IRS extended the due date for filing tax year 2016 returns and claiming refunds for that year to July 15, 2020, as a result of the COVID-19 pandemic. As the IRS is issuing Economic Impact Payments to Americans, the agency urges taxpayers who haven’t filed past due tax returns to file now to claim these valuable refunds. 

To collect refunds for tax year 2016, taxpayers must file their 2016 tax returns with the IRS no later than this year's extended tax due date of July 15, 2020. 

The IRS estimates the midpoint for the potential refunds for 2016 to be $861 — that is, half of the refunds are more than $861 and half are less. 

In cases where a federal income tax return was not filed, the law provides most taxpayers with a three-year window of opportunity to claim a tax refund. If they do not file a tax return within three years, the money becomes the property of the U.S. Treasury. 

For 2016 tax returns, the window closes July 15, 2020, for most taxpayers. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by the July 15 date. 

The IRS reminds taxpayers that there is no penalty for filing late when a refund is involved. Taxpayers seeking a 2016 tax refund should know that their checks may be held if they have not filed tax returns for 2017 and 2018. In addition, the refund will be applied to any amounts owed to the IRS or a state tax agency and may be used to offset unpaid child support or past due federal debts, such as student loans. 

By failing to file a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2016. Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC). For 2016, the credit was worth as much as $6,269. 

The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2016 were: 

Current and prior year tax forms (such as the tax year 2016 Form 1040, 1040A and 1040EZ) and instructions are available on the IRS.gov Forms and Publications page or by calling toll-free 800-TAX-FORM (800-829-3676). 

Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years 2016, 2017 or 2018 should request copies from their employer, bank or other payer. Taxpayers who are unable to get missing forms from their employer or other payer can order a free wage and income transcript at IRS.gov using the Get Transcript Online tool. Alternatively, they can mail Form 4506-T to request a wage and income transcript. A wage and income transcript shows data from information returns received by the IRS, such as Forms W-2, 1099, 1098, Form 5498 and IRA contribution information. Taxpayers can use the information from the transcript to file their tax return. 

State-by-state estimates of individuals who may be due 2016 income tax refunds 

State or	Estimated	Median	Total
District	Number of	Potential	Potential
	Individuals	Refund	Refunds
Alabama	23,300	$859	$24,614,400
Alaska	5,500	$979	$6,754,900
Arizona	32,400	$762	$32,281,600
Arkansas	13,400	$822	$13,798,800
California	130,600	$816	$135,981,300
Colorado	27,500	$809	$28,276,500
Connecticut	14,300	$930	$16,213,300
Delaware	5,600	$878	$6,114,500
District of Columbia	3,700	$904	$4,224,600
Florida	99,000	$874	$105,706,400
Georgia	48,600	$792	$49,682,700
Hawaii	7,700	$932	$8,785,600
Idaho	6,200	$727	$5,876,000
Illinois	51,700	$909	$57,312,200
Indiana	32,700	$887	$35,129,700
Iowa	14,700	$908	$15,735,600
Kansas	14,600	$877	$15,706,800
Kentucky	18,700	$869	$19,517,100
Louisiana	24,400	$849	$26,410,100
Maine	5,600	$802	$5,482,200
Maryland	28,200	$873	$31,619,700
Massachusetts	29,900	$956	$34,261,900
Michigan	46,600	$853	$49,591,400
Minnesota	21,000	$803	$21,155,300
Mississippi	12,900	$777	$12,931,600
Missouri	32,400	$828	$33,522,400
Montana	4,600	$781	$4,582,000
Nebraska	7,800	$845	$8,081,700
Nevada	15,900	$859	$16,922,300
New Hampshire	6,500	$965	$7,474,300
New Jersey	36,200	$936	$41,268,900
New Mexico	9,600	$833	$10,219,600
New York	70,300	$958	$80,830,100
North Carolina	44,900	$833	$46,044,500
North Dakota	4,000	$949	$4,539,800
Ohio	52,900	$841	$54,542,900
Oklahoma	21,000	$866	$22,600,000
Oregon	21,400	$762	$21,237,200
Pennsylvania	55,200	$919	$60,505,200
Rhode Island	3,900	$926	$4,410,100
South Carolina	17,200	$769	$17,323,700
South Dakota	3,800	$899	$3,976,100
Tennessee	29,000	$840	$29,834,800
Texas	143,400	$898	$159,809,900
Utah	11,100	$766	$11,037,700
Vermont	2,800	$892	$2,897,400
Virginia	37,900	$827	$39,977,600
Washington	37,200	$918	$42,273,300
West Virginia	7,200	$921	$7,830,000
Wisconsin	19,900	$781	$19,483,100
Wyoming	3,400	$920	$3,766,100
Total	1,418,300	$861	$1,518,154,900

IRS has easy ways to help taxpayers who need more time or payment options 

WASHINGTON ― The Department of the Treasury and IRS today announced the tax filing and payment deadline of July 15 will not be postponed. Individual taxpayers unable to meet the July 15 due date can request an automatic extension of time to file until Oct. 15.

Due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15 to July 15.

The IRS reminds taxpayers filing Form 1040 series returns that they must file Form 4868 by July 15 to obtain the automatic extension to Oct. 15. The extension provides additional time to file the tax return – it is not an extension to pay any taxes due.

The IRS urges people who owe taxes, even if they have a filing extension, to carefully review their situation and pay what they can by July 15 to avoid penalties and interest. For people facing hardships, including those affected by COVID-19, who cannot pay in full, the IRS has several options available to help. To avoid interest and penalties, the IRS encourages them to pay what they can and consider a variety of payment options available for the remaining balance.

“The IRS understands that those affected by the coronavirus may not be able to pay their balances in full by July 15, but we have many payment options to help taxpayers,” said IRS Commissioner Chuck Rettig. “These easy-to-use payment options are available on IRS.gov, and most can be done automatically without reaching out to an IRS representative.”

Automatic Extension of Time to File

Taxpayers who need more time to prepare and file their federal tax return can apply for an extension of time to file until Oct. 15. To get an extension, taxpayers must estimate their tax liability on the extension form and pay any amount due.

Individual taxpayers have several easy ways to file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, by the July 15 deadline. Tax software providers have an electronic version available. In addition, all taxpayers, regardless of income, can use IRS Free File to electronically request an automatic tax-filing extension.

Save a step: Get an extension when you make a payment 

Taxpayers can also get an extension by paying all or part of their 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. When getting an extension by making a payment, taxpayers do not have to file a separate extension form and will receive a confirmation number for their records.

State deadlines may differ

The IRS also reminds taxpayers to check their state filing and payment deadlines, which may differ from the federal July 15 deadline. A list of state tax division websites is available through the Federation of Tax Administrators.

Payment options

Taxpayers who owe taxes can choose from the following payment options:

The IRS recommends that taxpayers who are unable to pay their taxes in full should act as quickly as possible. Tax bills can quickly accumulate more interest and penalties the longer they sit. 

Several payment options are available on IRS.gov/payments to help taxpayers who can’t pay in full and some can offer taxpayers smaller penalties. Though interest and late-payment penalties continue to accrue on any unpaid taxes after July 15, the failure to pay tax penalty rate is cut in half while an installment agreement is in effect. The usual penalty rate of 0.5% per month is reduced to 0.25% For the calendar quarter beginning July 1, 2020, the interest rate for underpayment is 3%.

Most taxpayers who cannot pay in full have the following payment options:

In addition, taxpayers can consider other options for payment, including getting a loan to pay the amount due. In many cases, loan costs may be lower than the combination of interest and penalties the IRS must charge under federal law.

IRS releases new Data Book with redesigned, expanded format to provide more detailed view of service, compliance activities in FY 2019

WASHINGTON – The Internal Revenue Service today unveiled the 2019 IRS Data Book, featuring a redesigned format that provides a different and expanded look at IRS accomplishments during the past year. 

Available now on IRS.gov, the redesigned Fiscal Year 2019 edition of the IRS Data Book provides the annual set of statistical tables summarizing tax filings, revenue collections, taxpayer services, enforcement activities and agency operations. The new Data Book features an updated format with additional tables designed to more accurately reflect the way the IRS does business today. 

“The IRS is changing from many perspectives, and the Data Book reflects that change as well,” IRS Commissioner Chuck Rettig wrote in the Data Book’s introduction. “Along those lines, we’ve redesigned the Data Book for Fiscal Year (FY) 2019 by reorganizing key material and adding new information. This is part of an effort to help the Data Book provide a more complete view of our extensive service and compliance operations in a clear format that is easier to use for taxpayers and the tax community.” 

The Data Book complements the new IRS Progress Update, a new annual report that premiered in January. 

“In presenting this information, our goal is to help everyone understand the scope of our work for the nation,” Rettig added. “The IRS touches more Americans than any other entity, public or private. Our employees take pride in providing top-quality service to taxpayers — helping them meet their tax obligations through clear guidance while ensuring their rights are protected. When citizens can perform their civic duty each year by preparing and filing their taxes and paying only what they should, they help fund critical aspects of the United States, ranging from schools and roads to Social Security payments and the nation’s military.” 

Rettig also notes the IRS response to COVID-19 in the new Data Book. The coronavirus delayed publication of this year’s Data Book. 

As Rettig further noted, “we realize when the public thinks of compliance, they think of audits, but there is so much more to our work to ensure appropriate compliance with the tax law and serve the nation. We’ve created a new section called “Compliance Presence,” so everyone can easily see the many different activities related to enforcement. Beyond traditional examinations, these activities include more than 5 million compliance steps the IRS takes every year to ensure fairness in our tax system.” 

Among the compliance steps, illustrated by statistics in this section, are math error notices, matching tax return entries to information returns filed by employers, banks and other third parties, and casework by IRS Criminal Investigation. 

Recognizing that audits can take several years to complete, for example, new Table 17a takes a long-term view by presenting both audits closed and audits in progress, tied to tax returns for tax-years 2010 through 2018. The new table also presents data based on the taxpayer’s total positive income, excluding losses, the same measure the IRS uses to assign exam codes. 

This year for the first time, the Data Book also shows the number of installment payment agreements set up by individuals and businesses with the IRS. Another addition is the number of Identity Protection Personal Identification Numbers (IP PINs) issued for filing years 2011-2020 to certain victims of tax-related identity theft. 

The new Data Book shows that during FY 2019, the IRS:

To view or download a pdf file of the complete FY 2019 IRS Data Book, Excel files of any of its 34 tables, or Data Books or tables from past years, visit IRS.gov/statistics/soi-tax-stats-irs-data-book.

Notice 2020-52 clarifies the requirements that apply to a mid-year amendment to a safe harbor 401(k) or 401(m) plan that reduces only contributions made on behalf of highly compensated employees.  This notice also provides temporary relief in connection with the ongoing Coronavirus Disease 2019 (COVID-19) pandemic from certain requirements that would otherwise apply to a mid-year amendment to a safe harbor 401(k) or 401(m) plan adopted between March 13, 2020, and August 31, 2020, that reduces or suspends safe harbor contributions.  

Notice 2020-52 will be in IRB:  2020-29, dated 07/13/2020.