Revenue Ruling 2022-04 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, and the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by § 1274. 

The rates are published monthly for purposes of sections 42, 382, 412, 642, 1288, 1274, 7520, 7872, and various other sections of the Internal Revenue Code.

Revenue Ruling 2022-04 will be in IRB: 2022-10, dated March 7, 2022.

WASHINGTON — The Internal Revenue Service today updated its frequently asked questions (FAQs) on Higher Education Emergency Grants.

This updated FAQ adds questions 8 and 9 in (FS-2022-11) PDF.

In IR-2021-70, Emergency aid granted to students due to COVID is not taxable, the IRS issued FAQs on how students and higher education institutions should report pandemic-related emergency financial aid grants. These FAQs were subsequently updated on May 18, 2021.

These updated FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible.

More information about reliance is available.

IRS-FAQ

WASHINGTON –The Internal Revenue Service announced today that Form 14457, Voluntary Disclosure Practice Preclearance Request and Application, has been revised, including expanding a section on reporting virtual currency. Form 14457 permits taxpayers who may face criminal prosecution for willful violation of tax law to voluntarily disclose information to the IRS that they failed to previously disclose.

Updates and additions to this form include:

The updates reflect input from practitioners and stakeholders and take into account trends in the type of financial asset that taxpayers hold.

“This is an important form and process for people who recognize it’s better to step forward and address their tax situations head-on, before facing IRS enforcement action,” said Doug O'Donnell, Deputy Commissioner Services and Enforcement. “The revised form includes a number of updates, and we encourage people to review the guidelines and consult a trusted tax professional.”

Thousands of taxpayers have used the Voluntary Disclosure Practice since its inception. It serves as a compliance option for taxpayers who have potential criminal exposure and wish to come into compliance with the tax laws. Those making such disclosure are still subject to civil examination and the payment of all applicable taxes, interest and penalties.

Taxpayers who did not commit any tax or tax-related crimes and wish to correct mistakes or file delinquent returns should consider other options available to comply with their tax and reporting obligations. The IRS encourages taxpayers to consult with professional tax or legal advisors in determining which option is the most appropriate.

A taxpayer’s voluntary disclosure must be timely, accurate and complete. The taxpayer must also cooperate with the IRS in determining the correct tax liability, and make full payment of the tax, interest and any applicable penalties.

Cooperation includes full payment of all tax, interest and penalties. A taxpayer who is unable to make full payment may request that the IRS consider other payment arrangements. If a taxpayer anticipates they cannot pay the total amount of tax, interest and penalties required, they must disclose this and submit a proposed payment arrangement and a completed, and executed, Collection Information Statement (Form 433-A). The burden is on the taxpayer to establish inability to pay, to the satisfaction of the IRS, based on full disclosure of all assets and income, domestic and foreign, under the taxpayer’s control.

For more information on the Voluntary Disclosure Practice, as well as other options to come into compliance with the law please visit:

WASHINGTON –To help taxpayers and tax professionals, the Internal Revenue Service today announced a special new page on IRS.gov to provide the latest details and information affecting the 2022 filing season and ongoing efforts by the agency to address the inventory of previously filed tax returns.

During this tax season, taxpayers face a number of issues due to critical tax law changes that took place in 2021 and ongoing challenges related to the pandemic. To raise awareness about these issues and provide people with the latest timely information, the IRS has created a special tax season web page. This page will provide people with a quick overview of information to help people filing tax returns as well as those who have previous year tax returns awaiting processing by the IRS.

“The IRS is taking numerous steps to keep this tax season going smoothly while also taking additional action to address the inventory of tax returns filed last year,” said IRS Commissioner Chuck Rettig. “We’re off to a good start processing tax returns and issuing refunds. But we want people to have an easy way to see the latest information. This new page provides a one-stop shop for the latest key information people and the tax community may need.”

The “special tax season alerts” page will be available through the IRS.gov home page and shared through social media and other channels.

The page will include the latest filing season updates. The IRS began tax season on Jan. 24, and in less than two weeks more than 4 million tax refunds have gone out worth nearly $10 billon. Millions more will go out in the weeks ahead as the IRS enters an important period of the tax season.

The page also includes links to important information related to ongoing efforts by the IRS to address the inventory of unprocessed tax returns filed before this year. This includes steps to stop more than a dozen common letters to taxpayers, and updates on IRS operations and the number of unprocessed tax returns.

“The combination of the pandemic, new tax laws and numerous other factors led to an unprecedented amount of unprocessed tax returns and correspondence remaining in the IRS inventory during 2021,” Rettig said. “We must continue pursuing innovative strategies while supporting the hard work and dedication of our employees to fulfill our commitment to return inventories to a healthy level before entering the 2023 filing season. These steps are making a difference. Refunds for tax returns and amended tax returns in the inventory continue to flow out to taxpayers.”

The IRS continues to urge taxpayers to carefully review their tax filings for accuracy and file electronically with direct deposit to speed refunds. Special tips are available in several places on IRS.gov, including these top 5 tips; basics on the 2022 tax season and IRS Tax Time Guide.

WASHINGTON – As part of ongoing efforts to provide additional help for people during this period, the IRS announced today the suspension of more than a dozen additional letters, including the mailing of automated collection notices normally issued when a taxpayer owes additional tax, and the IRS has no record of a taxpayer filing a tax return.

These mailings include balance due notices and unfiled tax return notices. The IRS entered this filing season with several million original and amended returns filed by individuals and businesses that have not been processed due to challenges of the historic pandemic and is taking this step to help avoid confusion for taxpayers and tax professionals.

“IRS employees are committed to doing everything possible with our limited resources to help people during this period,” said IRS Commissioner Chuck Rettig. “We are working hard, long hours pushing creative paths forward in an effort to be part of the solution, rather than the problem. Our employees continue to expend every effort to balance a confluence of multiple, unprecedented demands − including successfully starting the filing season, working our inventory of unprocessed tax returns as well as looking for additional ways to minimize burden for taxpayers, tax professionals and businesses.

“Our efforts are not limited to suspension of these additional letters and the possibility of similar actions going forward. We have redeployed and reallocated resources throughout the IRS and have implemented innovative strategies in an ongoing effort to provide a meaningful reduction in our inventories,” Rettig said.

These automatic notices have been temporarily stopped until the backlog is worked through. The IRS will continue to assess the inventory of prior year returns to determine the appropriate time to resume the notices.

Some taxpayers and tax professionals may still receive these notices during the next few weeks. Generally, there is no need to call or respond to the notice as the IRS continues to process prior year tax returns as quickly as possible.

However, if a taxpayer or tax professional believes a notice is accurate, they should act to rectify the situation for the well-being of the taxpayer. For example, the IRS cautions people with a balance due that interest and penalties can continue to accrue. In addition, IRS employees may in select circumstances issue notices to particular taxpayers to resolve specific compliance issues.

The IRS does not have the authority to stop all notices as many are legally required to be issued within a certain timeframe. The IRS will continue to assess other changes and system modifications that the IRS may be able to implement to assist taxpayers on an array of issues. The IRS will continue to make information available to taxpayers throughout the filing season.

The IRS encourages those who have a filing requirement and have yet to file a prior year tax return or to pay any tax due to promptly do so as interest and penalties will continue to accrue. Visit IRS.gov for payment options.

The suspended notices include:

WASHINGTON — The Internal Revenue Service's Low Income Taxpayer Clinic (LITC) Program office today announced highlights from its 2021 annual report. The report describes how LITCs provide representation, education and advocacy for individual taxpayers who are low-income or speak English as a second language (ESL).

The LITC Program is a federal grant program administered by the Taxpayer Advocate Service, led by National Taxpayer Advocate Erin M. Collins. LITCs represent individuals whose incomes are generally at or below 250% of the federal poverty guideline and who are seeking to resolve tax problems with the IRS, such as audits, appeals and tax collection disputes. LITCs can represent taxpayers in court as well as before the IRS. They also can provide information about taxpayer rights and responsibilities in different languages for ESL taxpayers. LITCs provide services for free or a small fee. They receive IRS grants but work independently to assist and advocate for taxpayers.

Thousands of taxpayers assisted
During 2020, LITCs represented nearly 20,000 taxpayers dealing with an IRS tax controversy and provided consultations or advice to another 18,000 taxpayers. They helped taxpayers secure more than $5.8 million in tax refunds and reduced or corrected taxpayers' liabilities by over $116 million. They also brought more than 2,900 taxpayers back into payment compliance.

Through outreach and education activities, LITCs strived to ensure individuals understood their rights as U.S. taxpayers by conducting more than 1,000 educational activities that were attended by nearly 134,000 individuals. Some 1,500 volunteers contributed to the success of LITCs by volunteering over 42,000 hours of their time. Nearly 65% of the volunteers were attorneys, certified public accountants or enrolled agents.

LITCs used a variety of approaches to successfully advocate for taxpayers. These included utilizing collection alternatives to resolve issues administratively within the IRS, litigating cases in the United States Tax Court and other federal courts, and elevating systemic issues through the Taxpayer Advocate Service's Systemic Advocacy Management System.

One success story among many
Here is one example of how an LITC assisted a taxpayer in need: A low-income taxpayer was working in a local grocery store making minimum wage. She was the sole breadwinner for her family of four and had never filed a federal income tax return.

The IRS sent her Statutory Notices of Deficiency for four tax years, asserting that she owed several thousands of dollars based on unreported income. Unsure what she could do to resolve the issue, the taxpayer sought help from an LITC.

The LITC evaluated the case and explained that she needed to contest the notices in the U.S. Tax Court. The LITC helped her file a Tax Court petition and argued that the taxpayer did not owe tax but instead was due refunds, as she was eligible for the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC).

The LITC’s advocacy on the taxpayer’s behalf was a success. She ultimately received over $16,000 in refunds, providing the taxpayer with a valuable financial lifeline. In addition to helping the taxpayer resolve her tax issue, the LITC educated her about tax administration and the tax law, including how to have future tax returns prepared and filed for free at a local Volunteer Income Tax Assistance site, and the availability of anti-poverty tax benefits such as the EITC and the CTC.

The full report contains extensive details about the LITC Program and more stories about the extraordinary results that LITCs achieved on behalf of their clients.

How to Become an LITC
Through the LITC Program, the IRS awards matching grants of up to $100,000 per year to qualifying organizations. If anyone is interested in learning more about the LITC Grant Program, they should contact Karen Tober at Karen.Tober@irs.gov or review Publication 3319, Grant Application and Guidelines.

WASHINGTON – The Internal Revenue Service today urged Americans to file a 2021 federal income tax return so they can take advantage of key tax benefits included in the American Rescue Plan and other recent legislation.

Often, individuals and families can get these expanded tax benefits, even if they have little or no income from a job, business or other source. This means that many people who don’t normally need to file a return should consider doing so this year. Because claiming these benefits could result in tax refunds for many people, individuals should file an accurate return electronically and choose direct deposit to avoid processing delays and speed delivery of their refund.

Expanded tax benefits
A new fact sheet, FS-2022-10, available now on IRS.gov, describes many of these expanded tax benefits. But the IRS emphasized that these benefits are only available to people who file a 2021 federal income tax return. Benefits include:

See the fact sheet for more information.

The IRS reminds early filers that by law, the agency cannot issue EITC refunds before mid-February. The same rule applies to refunds that include the Additional Child Tax Credit (ACTC). This year, the ACTC is typically claimed by Americans abroad who did not have a main home in the United States for more than half of 2021. Normally, the mid-February restriction does not apply to the Refundable Child Tax Credit (RCTC) claimed by people who had a main home in the U.S., unless they also claim the EITC.

Helpful reminders
The IRS urges everyone to make sure they have all their year-end statements in hand before filing their 2021 return. Besides all W-2s and 1099s, this includes two statements issued by the IRS -- Letter 6419, showing their total advance Child Tax Credit payments, and Letter 6475, showing their total EIP3 payments. Individuals can also use IRS Online Account to see the total amounts of their third round of Economic Impact Payments or advance Child Tax Credit payments. Married spouses who received joint payments will each need to sign into their own account to retrieve their separate amounts.

For most Americans, the tax-filing deadline is April 18, 2022. For residents of Maine and Massachusetts, the deadline is April 19, 2022. For Americans who live and work abroad, it’s June 15, 2022. Anyone who needs more time to file can get an automatic extension until Oct. 17, 2022.

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.

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.

WASHINGTON — The Internal Revenue Service today updated frequently asked questions (FAQs) for the 2021 Recovery Rebate Credit.

These FAQs (FS-2022-09) updated:

2021 Recovery Rebate Credit — Topic A: General Information: Q3
2021 Recovery Rebate Credit — Topic D: Claiming the 2021 Recovery Rebate Credit: Q1, Q2,Q6
2021 Recovery Rebate Credit — Topic F: Receiving the Credit on a 2021 Tax Return, Q8, Q9
2021 Recovery Rebate Credit — Topic G: Finding the Third Economic Impact Payment Amount to Calculate the 2021 Recovery Rebate Credit: Q2

Individuals who did not qualify for, or did not receive, the full amount of the third Economic Impact Payment may be eligible to claim the 2021 Recovery Rebate Credit based on their 2021 tax year information.  Individuals may have received their third Economic Impact Payment through initial and “plus-up” payments in 2021.

Note:  Third Economic Impact Payments are different than the monthly advance Child Tax Credit payments that the IRS disbursed from July through December 2021.

Most eligible people already received their Economic Impact Payments and won’t include any information about their payment when they file. However, people who are missing stimulus payments should review the information on the Recovery Rebate Credit page to determine their eligibility and whether they need to claim a Recovery Rebate Credit for tax year 2021.

To claim any remaining credit for 2021, eligible people must file a 2021 tax return, even if they usually do not file taxes.  Also, people who did not receive all of their first and second Economic Impact Payments in 2020 can receive those amounts only by filing a 2020 tax return (or amending a previously filed return) and claiming the 2020 Recovery Rebate Credit.  They should review the Recovery Rebate Credit page to determine their eligibility.

The 2021 Recovery Rebate Credit can reduce any taxes owed or be included in the tax refund for the 2021 tax year. Filers must ensure to not mix information from their 2020 and 2021 tax years. In particular, filers should take care to NOT include any information regarding the first and second Economic Impact Payments received in 2020, or the 2020 Recovery Rebate Credit, on their 2021 return. They will need the total of the third payment received to accurately calculate the 2021 Recovery Rebate Credit when they file their 2021 federal tax return in 2022. 

Individuals can now view this information in their online account.

People can also locate this information on Letter 1444-C, which they received from the IRS during 2021 after each payment, as well as Letter 6475, which the IRS will mail to them  through March 2022. 

The FAQ’s cover most questions relating to claiming the credit and are for use by taxpayers and tax professionals and are being issued as expeditiously as possible.

File for free and use direct deposit

Taxpayers with income of $73,000 or less can file their federal tax returns electronically for free through the IRS Free File Program. The fastest way to receive a tax refund is to file electronically and have it direct deposited into a financial account. Refunds can be directly deposited into bank accounts, prepaid debit cards or mobile apps as long as a routing and account number is provided.

More information about reliance is available.

WASHINGTON − The IRS announced it will transition away from using a third-party service for facial recognition to help authenticate people creating new online accounts. The transition will occur over the coming weeks in order to prevent larger disruptions to taxpayers during filing season.

During the transition, the IRS will quickly develop and bring online an additional authentication process that does not involve facial recognition. The IRS will also continue to work with its cross-government partners to develop authentication methods that protect taxpayer data and ensure broad access to online tools.

“The IRS takes taxpayer privacy and security seriously, and we understand the concerns that have been raised,” said IRS Commissioner Chuck Rettig. “Everyone should feel comfortable with how their personal information is secured, and we are quickly pursuing short-term options that do not involve facial recognition.”

The transition announced today does not interfere with the taxpayer’s ability to file their return or pay taxes owed. During this period, the IRS will continue to accept tax filings, and it has no other impact on the current tax season. People should continue to file their taxes as they normally would.

WASHINGTON – As part of a larger effort to help people during this year’s filing season, the Internal Revenue Service today announced special Saturday hours at many Taxpayer Assistance Centers (TACs) across the country.

TACs provide taxpayers with in-person help. Select TACs are open from 9 a.m. to 4 p.m., February 12, March 12, April 9 and May 14. Normally, these centers are not open on Saturdays. No appointments are required.

“The IRS continues to do everything we can to help people during this unprecedented period,” said IRS Commissioner Chuck Rettig. “Opening these assistance centers for special Saturday hours is designed to provide yet another way for people to get the help they need. We encourage people to review the details on these special Saturday hours so we can help serve them. I’m also extremely grateful to our employees who have stepped up to provide this special assistance.”

People can receive walk-in help on all services, however, the TACs will not accept cash payments on these Saturdays. During the extra operating hours, people can also ask about reconciling advance Child Tax Credit payments and receive other help.

To see which TACs will be open, visit IRS.gov/saturdayhours.

Come prepared
To arrive prepared, individuals should bring the following information:

During the visit, IRS staff may also request the following information:

“We encourage people to receive payments and their tax refunds via direct deposit, which is faster and more secure than other payment methods,” said IRS Wage & Investment Commissioner and Taxpayer Experience Officer Ken Corbin. “People who don't have a bank account should visit the Federal Deposit Insurance Corporation website for details on opening an account online. They can also use the FDIC's BankFind tool to find an FDIC-insured bank.”

BankOn, American Bankers Association, Independent Community Bankers of America, National Credit Union Administration have lists of banks and credit unions that allow opening an account online. Veterans can use the Veterans Benefits Banking Program to learn about financial services at participating banks.

Services provided
The IRS’s Contact Your Local Office site lists all services provided at specific TACs.

If someone has a question(s) about a tax bill or an IRS audit, or needs help resolving a tax problem, they will receive assistance from IRS employees specializing in these services. If these employees are not available, the individual will receive a referral for these services. Taxpayer Advocate Service employees may also be available to assist with issues that meet certain criteria.

IRS staff will schedule appointments for a later date for Deaf or Hard of Hearing individuals who need sign language interpreter services. Foreign language interpreters will also be available.

The IRS follows Centers for Disease Control social distancing guidelines for COVID-19, and availability may change without notice. People are required to wear face masks and social distance at these events.

People who need assistance preparing tax returns can visit a Volunteer Income Tax Assistance Center (VITA) or Tax Counseling for the Elderly location. VITA sites offer free tax help to qualified individuals who need assistance in preparing their own tax returns, including:

People who need to pay their federal taxes with cash can visit IRS.gov/payments to get information on several payment options.

More information: