WASHINGTON — To help address COVID-related labor shortages, the Internal Revenue Service today reminded employers that they generally will not jeopardize the tax status of their pension plans if they rehire retirees or permit distributions of retirement benefits to current employees who have reached age 59 ½ or the plan’s normal retirement age.

With the COVID-19 pandemic, many employers, including governmental employers (such as public school districts), are looking for ways to encourage retirees to return to the workforce to fill open positions and experienced employees to stay on the job.

The IRS is providing help to these employers in two new frequently asked questions (FAQs), designed to offer technical guidance to public and private employers who sponsor pension plans for their employees. The FAQs highlight existing ways that employers can meet their employment objectives and still comply with the plan qualification rules.

Under the FAQs, an employer can generally choose to address unforeseen hiring needs by rehiring former employees, even if those employees have already retired and begun receiving pension benefit payments. Also, if permitted under plan terms, those employees may continue receiving the benefits after they are rehired. Moreover, an employer can generally choose to make retirement distributions available to existing employees who have reached age 59 ½ or the plan’s normal retirement age. This may assist in the retention of employees eligible for retirement.

Further details can be found in the two new FAQs now posted on IRS.gov.  Also, next Wednesday and Thursday (Oct 27 and 28) from 4-5 pm ET, the Department of the Treasury and the Department of Education will be holding webinars for education leaders and other stakeholders to discuss approaches to addressing school staff labor shortages, including a discussion about these new FAQs. 

Webinar 1: Teacher and substitute teacher shortages                      
Time: Oct 27, 2021 04:00 PM Eastern Time. Participants should pre-register.

Webinar 2: Staff shortages, such as school bus drivers and food service workers
Time: Oct 28, 2021 04:00 PM Eastern Time. Participants should pre-register. 

Notice 2021-56 sets forth current standards that a limited liability company (LLC) must satisfy to receive a determination letter recognizing it as tax-exempt under section 501(a) of the Internal Revenue Code and described in section 501(c)(3). This notice also requests public comments on these standards as well as specific issues relating to tax-exempt status for LLCs. This notice does not affect the status of organizations currently recognized as described in section 501(c)(3).

Notice 2021-56 will be published in IRB 2021-45 on November 8, 2021.

WASHINGTON — The Internal Revenue Service reminds the more than 759,000 federal tax return preparers they must renew their Preparer Tax Identification Numbers (PTINs) now for 2022. All current PTINs will expire Dec. 31, 2021.

“Taxpayers are relying on your expertise to help them meet their tax obligations and for some to complete their largest financial transaction for the year. Make sure you’re ready by renewing your PTIN now,” said Carol A. Campbell, director, Return Preparer Office.

Anyone who prepares or assists in preparing a federal tax return for compensation must have a valid PTIN from the IRS before preparing returns. The PTIN needs to be included as the identifying number on any return filed with the IRS. All Enrolled Agents must also have a valid PTIN.

The fee to renew or obtain a PTIN is $35.95 for 2022. The PTIN fee is non-refundable, and the exact amount must be paid to complete the PTIN process.

Tax preparers with a 2021 PTIN should use the online renewal process, which takes about 15 minutes to complete. Form W-12, along with the instructions, provides a paper option for PTIN applications and renewals. However, the paper form can take four to six weeks to process. Failure to have and use a valid PTIN may result in penalties.

To renew a PTIN online:

Once completed, users will receive confirmation of their PTIN renewal.

The online system not only allows PTIN renewal, but can also be used by tax preparers to view a summary of the number of filed returns their PTIN has appeared on in the current year, and to receive communications through a secure mailbox from the IRS Return Preparer Office.

First-time PTIN applicants can also apply for a PTIN online.

To apply for a PTIN online:

Opportunity for non-credentialed tax preparers

The Annual Filing Season Program is a voluntary IRS program intended to encourage non-credentialed tax return preparers to take continuing education courses to increase their knowledge and improve their filing season readiness.

Those who choose to participate must renew their PTIN, complete 18 hours of continuing education from IRS-approved CE providers and consent to adhere to specific obligations in Circular 230 by Dec. 31, 2021. The IRS has a video available on how to sign the Circular 230 consent and print the Record of Completion.

After completing the steps, the return preparer receives an Annual Filing Season Program Record of Completion from the IRS. Program participants are then included in a public directory of return preparers with credentials and select qualifications on the IRS website.

The searchable IRS directory helps taxpayers find preparers in their area who have completed the program or hold professional credentials recognized by the IRS.

Enrolled Agent credential

The Enrolled Agent credential is an elite certification issued by the IRS to tax professionals who demonstrate special competence in federal tax planning, individual and business tax return preparation and representation matters. Enrolled Agents have unlimited representation rights, allowing them to represent any client before the IRS on any tax matter.

As non-credentialed return preparers think about next steps in their professional career, the IRS encourages them to consider becoming an Enrolled Agent.

All Enrolled Agents, regardless of whether they prepare returns, must renew their PTIN annually in order to maintain their active status.

Notice 2021-60 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for October 2021 used under § 417(e)(3)(D), the 24-month average segment rates applicable for October 2021, and the 30-year Treasury rates, as reflected by the application of § 430(h)(2)(C)(iv). 

 

The IRS and its community partners encourage people to make a difference in communities across the country by becoming an IRS-certified volunteer. These volunteers will help taxpayers file their tax returns during the upcoming tax season.

• Volunteer Income Tax Assistance offers free tax return preparation to eligible taxpayers who generally earn $58,000 or less, people with disabilities and limited English-speaking taxpayers.
• Tax Counseling for the Elderly is mainly for people age 60 or older. Although the program focuses on tax issues unique to seniors, most taxpayers can usually get free assistance. Many sites in the TCE program are operated through AARP Foundation Tax-Aide.

There are many reasons to volunteer:

• Volunteers can work flexible hours. Volunteers can generally choose their own hours and days to volunteer. Tax preparation sites are usually open from late January through the tax filing deadline in April. Some sites are even open all year.
• Volunteers can work virtually from anywhere. Some volunteer sites will offer virtual help for taxpayers. This allows volunteers to help taxpayers complete their tax returns over the phone or online. Some volunteers will conduct a virtual quality review with the taxpayer before e-filing their tax return.
• No prior experience needed. Volunteers receive specialized training to become IRS-certified. They can also choose from a variety of volunteer roles to serve. VITA and TCE programs want volunteers of all backgrounds and ages, as well as individuals who are fluent in other languages.
• The IRS provides free tax law training and materials. Volunteers receive training materials at no charge. The tax law training covers how to prepare basic federal tax returns electronically. The training also covers tax topics, such as deductions and credits.
• Tax pros can earn continuing education credits. Enrolled agents and non-credentialed tax return preparers can earn continuing education credits when volunteering as a VITA or TCE instructor, quality reviewer or tax return preparer.
• Read testimonials from real VITA volunteers. Learn more about volunteers who help people in their communities.

More Information:
VITA Volunteer sign-up page
Learn new skills as an IRS-certified volunteer
IRS Free Tax Return Preparation Programs
Link & Learn Taxes

Share this tip on social media -- #IRSTaxTip: Here’s how people can become an IRS-certified volunteer. https://go.usa.gov/xMtS2

WASHINGTON — The Internal Revenue Service today reminded employers that the next quarterly payroll tax return is due Nov. 1, 2021. The IRS urges employers to use the speed and convenience of filing the returns electronically. 

E-filing is the most accurate method to file returns and saves taxpayers time by performing calculations and auto-populating forms and schedules with a step-by-step process. The IRS acknowledges receipt of e-filed returns within 24 hours, giving taxpayers reassurance that their return was not misplaced or lost in the mail. Electronically filed returns reduce processing time and have fewer errors, which reduces a taxpayer's chance of receiving an IRS notice. E-file users also receive missing information alerts. 

Two options for electronically filing payroll tax returns: Self file

• Purchase IRS-approved software.
• Business owners may need to pay a fee to electronically file their returns.
• Apply for an online signature PIN or scan and attach Form 8453-EMP for the required signature. Tax professional file 
• Use the Authorized IRS e-file Provider Locator Service to find a tax professional who can file on behalf of the business. 

The IRS requires all authorized IRS e-file providers to ensure only authorized users have access to secure information. Only the business owner, authorized signers and reporting agents can apply for an online signature PIN. Third parties (such as attorneys, CPAs, tax return preparers or other tax professionals) can't request a PIN on behalf of the business, nor can they use the PIN to sign returns on behalf of their clients. 

For more information on electronic filing of payroll tax returns, see the E-file Employment Tax Forms page. 

COVID-related Employer Tax Credits 

For more information about other Coronavirus-related tax relief, visit IRS.gov/Coronavirus. 

Advance Child Tax Credit 

The IRS encourages employers to help get the word out about the advance payments of the Child Tax Credit. Employers have direct access to many who may receive this credit. More information on the Advance Child Tax Credit is available on IRS.gov. The website has tools employers can use to deliver this information, including e-posters, drop-in articles (for paycheck stuffers, newsletters) and social media posts to share. 

For more information see Advance Child Tax Credit Payments.

WASHINGTON — The Internal Revenue Service is joining international organizations and other regulators in highlighting Charity Fraud Awareness Week, Oct. 18-22. 

The campaign is run by a partnership of charities, regulators, law enforcers and other not-for-profit stakeholders from across the world. The purpose of the week is to raise awareness of fraud and cybercrime affecting organizations and to create a safe space for charities and their supporters to talk about fraud and share good practice. 

According to the Fraud Advisory Panel, a UK-based organization leading the effort, cybercrime is on the rise, exacerbated by the pandemic, including attacks on charities, their supporters and beneficiaries. It estimates that the average charitable organization will lose 5% of its revenue to fraud each year. The IRS is a partner in Charity Fraud Awareness Week as part of its ongoing commitment to fight fraud against charities, businesses and individuals. 

In addition to cybercrime targeting charities, criminals who create fake charities are also a problem. Fake charities are once again part of the IRS’s “Dirty Dozen” tax scams for 2021. Taxpayers can find legitimate and qualified charities with the Tax Exempt Organization Search tool on IRS.gov. 

“We especially advise taxpayers to be on the lookout for scammers who set up fake organizations to take advantage of the public's generosity,” said IRS Director of Exempt Organizations and Government Entities Rob Malone. “They take advantage of tragedies and disasters, such as the COVID-19 pandemic. Campaigns like Charity Fraud Awareness Week can help remind everyone to remain vigilant.” 

Scams requesting donations for disaster relief efforts are especially common on the phone. Taxpayers should always check out a charity before they donate, and they should not feel pressured to give immediately. 

A cornerstone of international Charity Fraud Awareness Week is a social media campaign focused on the theme of “We Can Do This” and featuring the hashtag #StopCharityFraud. 

A special website was created for the campaign and features information to help partners, charities and other tax-exempt organizations and non-profits find:

Those encouraged to participate in the week’s activities include:

WASHINGTON – The Internal Revenue Service today announced that beginning Oct. 18, the IRS’s large business division will accept all taxpayer requests to meet with IRS employees using secure videoconferencing. This step extends the practice used during the pandemic to accommodate taxpayers who sought more than meeting with an IRS employee over telephone calls. 

“Since 2020, we advanced several measures to better interact virtually and digitally with large business taxpayers,” said Nikole Flax, IRS commissioner of the Large Business and International Division (LB&I). “Our success in using these tools and the convenience and efficiency for taxpayers and their representatives convinced us that the way forward will continue to involve the use of video-teleconferencing.” 

The new guidance, Video Meetings with LB&I Taxpayers and their Representatives, requires LB&I employees to grant large business taxpayer requests for a secure video meeting with IRS-approved platforms in lieu of an in-person or telephone discussion with a compliance function. 

Today’s announcement represents a step forward in the IRS’s effort to work with taxpayers in a virtual environment, including the expanded use of secure email and the launch of a virtual reading room environment to enable large LB&I taxpayers and IRS agents to share certain privileged taxpayer documents in a read-only capacity. In addition, LB&I also launched and expanded its use of paperless processes so that cases can continue to move swiftly through examination and resolution. 

These efforts are aimed at continuing to improve service to meet the needs of large business taxpayers and their representatives and are a part of the IRS’s ongoing commitment to find more convenient and effective ways to interact with taxpayers and the community of tax professionals.  

LB&I is responsible for tax administration activities for domestic and foreign businesses with a United States tax reporting requirement and assets equal to or exceeding $10 million, as well as the Global High Wealth and International Individual Compliance programs.

Revenue Ruling 2021-21  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.

WASHINGTON — The IRS has set forth the information that taxpayers will be required to include for a research credit claim for refund to be considered valid. Existing Treasury Regulations require that for a refund claim to be valid, it must set forth sufficient facts to apprise IRS of the basis of the claim. The Chief Counsel memorandum will be used to improve tax administration with clearer instructions for eligible taxpayers to claim the credit while reducing the number of disputes over such claims.

Effective tax administration entails ensuring taxpayers understand what is required to support the claim for the research and experimentation (R&E) credit. Each year, the IRS receives thousands of R&E claims for credits in the hundreds of millions of dollars from corporations, businesses, and individual taxpayers. Claims for research credit under IRC Section 41 are currently examined in a substantial number of cases and consume significant resources for both the IRS and taxpayers. 

The Chief Counsel legal advice released today is the result of ongoing efforts to manage research credit issues and resources in the most effective and efficient manner. By requiring taxpayers to provide the information referenced below, the IRS will be better able to determine upfront if an R&E credit claim for refund should be paid immediately or whether further review is needed. 

Specifically, theopinion provides that for aSection 41 research credit claim for refund to be considered a valid claim, taxpayers are required to provide the following information at the time the refund claim is filed with the IRS: 

The IRS will provide a grace period [until January 10, 2022] before requiring the inclusion of this information with timely filed Section 41 research credit claims for refund. Upon the expiration of the grace period, there will be a one-year transition period during which taxpayers will have 30 days to perfect a research credit claim for refund prior to the IRS’ final determination on the claim. Further details will be forthcoming; however, taxpayers may begin immediately providing this information. 

The IRS plans to continue engaging with stakeholders on research credit issues. Comments may be sent to IRS.Feedback.RECredit.Claims@irs.gov.