WASHINGTON — The Internal Revenue Service today said that it continues its efforts to expand ways to communicate to taxpayers who prefer to get information in other languages. For the first time ever, the agency has posted to IRS.gov a Spanish language version of Form 1040 and the related instructions.

“Being able to talk to and receive information from the nation’s tax agency in their preferred language is something we hope to eventually provide to all taxpayers,” said IRS Commissioner Chuck Rettig. “We want everyone to be on the same playing field, so to speak, and each day that we can move forward with that goal is a good one.”

The new Form 1040 Schedule LEP, in English and Spanish, with instructions available in English and 20 other languages, can be filed with a tax return by those taxpayers who prefer to communicate with the IRS in another language. They can indicate their language of preference for IRS-issued written communications or change their language of preference. While communications may not be immediately sent in the selected language, the IRS will use this information to allocate resources and develop communication alternatives based on the reported language preferences.

“When it comes to filing taxes, being able to ask questions and read forms and instructions is crucial,” said Ken Corbin, IRS Taxpayer Experience Officer. “We take that very seriously and continue to work toward ensuring all taxpayers have what they need without obstacles.”

IRS Publication 17, Your Federal Income Tax, has been streamlined for tax year 2020, and is now available in Spanish, Chinese (Simplified); Chinese (Traditional); Vietnamese; Korean; and Russian.

Many pages of IRS.gov are now available in seven other languages: Spanish, Vietnamese, Russian, Korean, Haitian Creole and Chinese − Simplified and Traditional. Here are some additional materials and services that are now available in multiple languages:

The agency is also inserting information about translation services and other multilingual options into the top notices sent to taxpayers. For more information, see the “We Speak Your Language” page on IRS.gov.

Revenue Ruling 2021-07 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 Internal Revenue Service today announced it will accept applications for an 18-month Low Income Taxpayer Clinic (LITC) matching grant from all qualified organizations.

The application period will run from March 15, 2021-April 16, 2021. The budget and the period of performance for the supplemental grant will be July 1, 2021-Dec. 31, 2022.  Organizations currently receiving a grant for 2021 are not eligible to apply.

Qualified organizations that are awarded grants will ensure the fairness and integrity of the tax system for taxpayers who are low-income or speak English as a second language (ESL taxpayers) by: providing pro bono representation on their behalf in tax disputes with the IRS, educating them about their rights and responsibilities as taxpayers, and identifying and advocating for issues that impact these taxpayers.

Applications will be accepted from all areas, but priority consideration will be given to organizations that can provide services in the identified geographic areas, listed below.

Geographic underserved areas in need of LITC services:

The LITC Program is a federal grant program administered by the Office of the Taxpayer Advocate at the IRS, led by National Taxpayer Advocate Erin M. Collins. The LITC Program awards matching grants of up to $100,000 per year to qualifying organizations to develop, expand or continue low income taxpayer clinics.

The LITC Program funds organizations to represent low-income taxpayers who have a tax controversy with the IRS and to educate ESL taxpayers about their rights and responsibilities as U.S. taxpayers. An LITC must provide services for free or for no more than a nominal fee.

Although LITCs receive partial funding from the IRS, LITCs, their employees and their volunteers operate independently from the IRS. Examples of qualifying organizations include but are not limited to:

Applications must be submitted electronically at www.grants.gov by 11:59 p.m. (Eastern Time) on April 16, 2021. The funding number is TREAS-GRANTS-052021-002.

Copies of IRS Publication 3319, 2021 Grant Application Package and Guidelines, can be downloaded from IRS.gov, ordered online from IRS.gov or ordered by phone by calling 800-TAX-FORM (800-829-3676).

Questions about the LITC Program or grant application process can be addressed to the LITC Program Office at 202-317-4700 (not a toll-free call) or by email at LITCProgramOffice@irs.gov. In addition, individuals may also contact Bill Beard at (949) 575-6200 (not a toll-free number) or by e-mail at beard.william@irs.gov.

More information about LITCs and the work they do to represent, educate and advocate on behalf of low-income and ESL taxpayers is available in IRS Publication 5066, LITC Program Report. A short video about the LITC program is available on the IRS website.

Anyone can join the LITC staff for a Zoom webinar where they will provide information about the LITC program and the application process. For details on the date and time of the webinar, please check the LITC page on IRS.gov.

WASHINGTON – The Internal Revenue Service announced today that the third round of Economic Impact Payments will begin reaching Americans over the next week.

Following approval of the American Rescue Plan Act, the first batch of payments will be sent by direct deposit, which some recipients will start receiving as early as this weekend, and with more receiving this coming week.

Additional batches of payments will be sent in the coming weeks by direct deposit and through the mail as a check or debit card. The vast majority of these payments will be by direct deposit.

No action is needed by most taxpayers; the payments will be automatic and, in many cases, similar to how people received the first and second round of Economic Impact Payments in 2020. People can check the “Get My Payment” tool on IRS.gov on Monday to see the payment status of the third stimulus payment.

“Even though the tax season is in full swing, IRS employees again worked around the clock to quickly deliver help to millions of Americans struggling to cope with this historic pandemic,” said IRS Commissioner Chuck Rettig. “The payments will be delivered automatically to taxpayers even as the IRS continues delivering regular tax refunds. We urge people to visit IRS.gov for the latest details on the stimulus payments, other new tax law provisions and tax season updates.”

Highlights of the third round of Economic Impact Payments; IRS will automatically calculate amounts

In general, most people will get $1,400 for themselves and $1,400 for each of their qualifying dependents claimed on their tax return. As with the first two Economic Impact Payments in 2020, most Americans will receive their money without having to take any action. Some Americans may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of March 17.

Because these payments are automatic for most eligible people, contacting either financial institutions or the IRS on payment timing will not speed up their arrival. Social Security and other federal beneficiaries will generally receive this third payment the same way as their regular benefits. A payment date for this group will be announced shortly.

The third round of Economic Impact Payments (EIP3) will be based on the taxpayer’s latest processed tax return from either 2020 or 2019. This includes anyone who successfully registered online at IRS.gov using the agency’s Non-Filers tool last year, or alternatively, submitted a special simplified tax return to the IRS. If the IRS has received and processed a taxpayer’s 2020 return, the agency will instead make the calculation based on that return.

In addition, the IRS will automatically send EIP3 to people who didn’t file a return but receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) or Veterans Affairs benefits. This is similar to the first and second rounds of Economic Impact Payments, often referred to as EIP1 and EIP2.

For those who received EIP1 or EIP2 but don’t receive a payment via direct deposit, they will generally receive a check or, in some instances, a prepaid debit card (referred to as an “EIP Card). A payment will not be added to an existing EIP card mailed for the first or second round of stimulus payments.

Under the new law, an EIP3 cannot be offset to pay various past-due federal debts or back taxes. 

The IRS reminds taxpayers that the income levels in this new round of stimulus payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly.) The reduced payments end at $80,000 for individuals ($160,000); people above these levels are ineligible for a payment. More information is available on IRS.gov.

New payments differ from earlier Economic Impact Payments

The third round of stimulus payments, those authorized by the 2021 American Rescue Plan Act, differs from the earlier payments in several respects:

Additional information is available on IRS.gov.

WASHINGTON — The Internal Revenue Service notes that taxpayers of all ages may be able to claim a deduction on their 2020 tax return for contributions to their Individual Retirement Arrangement made through April 15, 2021. There is no longer a maximum age for making IRA contributions.

An IRA is designed to enable employees and the self-employed to save for retirement. Most taxpayers who work are eligible to start a traditional or Roth IRA or add money to an existing account.

Contributions to a traditional IRA are usually tax deductible, and distributions are generally taxable. There is still time to make contributions that count for a 2020 tax return, if they are made by April 15, 2021. Taxpayers can file their return claiming a traditional IRA contribution before the contribution is actually made. The contribution must then be made by the April due date of the return. While contributions to a Roth IRA are not tax deductible, qualified distributions are tax-free. In addition, low- and moderate-income taxpayers making these contributions may also qualify for the Saver’s Credit.

Generally, eligible taxpayers can contribute up to $6,000 to an IRA for 2020. For someone who was 50 years of age or older at the end of 2020, the limit is increased to $7,000. The restrictions on taxpayers age 70 1/2 or older to make contributions to their IRA were removed in 2020.

Qualified contributions to one or more traditional IRAs are deductible up to the contribution limit or 100% of the taxpayer’s compensation, whichever is less.

For 2020, if a taxpayer is covered by a workplace retirement plan, the deduction for contributions to a traditional IRA is generally reduced depending on the taxpayer’s modified adjusted gross income:

Single or head of household filers with income of $65,000 or less can take a full deduction up to the amount of their contribution limit. For incomes more than $65,000 but less than $75,000, there is a partial deduction and if $75,000 or more there is no deduction.

Filers that are married filing jointly or a qualifying widow(er) with $104,000 or less of income, a full deduction up to the amount of the contribution limit is permitted. Filers with more than $104,000 but less than $124,000 can claim a partial deduction and if their income is at least $124,000, no deduction is available.

For joint filers, where the spouse making the IRA contribution is not covered by a workplace plan, but their spouse is covered, a full deduction is available if their modified AGI is $196,000 or less. There’s a partial deduction if their income is between $196,000 and $206,000 and no deduction if their income is $206,000 or more.

Filers who are married filing separately and have an income of less than $10,000 can claim a partial deduction. If their income is at least $10,000, there is no deduction.

Worksheets are available in the Form 1040 Instructions or in Publication 590-A, Contributions to Individual Retirement Arrangements. The deduction is claimed on Form 1040, Schedule 1. Nondeductible contributions to a traditional IRA are reported on Form 8606.

Even though contributions to Roth IRAs are not tax deductible, the maximum permitted amount of these contributions begins to phase out for taxpayers whose modified adjusted gross income is above a certain level:

The Saver’s Credit, also known as the Retirement Savings Contributions Credit, is often available to IRA contributors whose adjusted gross income falls below certain levels. In addition, beginning in 2018, designated beneficiaries may be eligible for a credit for contributions to their Achieving a Better Life Experience (ABLE) account. For 2018, the income limits are:

Taxpayers should use Form 8880, Credit for Qualified Retirement Savings Contributions, to claim the Saver’s Credit, and its instructions for details on figuring the credit correctly.

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 For Individuals.

More resources

• Do I Qualify for the Retirement Savings Contributions Credit?

Today, the IRS published the latest executive column, “A Closer Look,” which features Frank Nolden, Stakeholder Partnership, Education and Communications Director, discussing the benefits and history of  volunteer tax preparation sites. “The Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs…help millions of low-to-moderate income taxpayers accurately prepare and file their tax returns for free with help from IRS-certified volunteers,” said Nolden. Read more here. Read the Spanish version here

“A Closer Look” is a column from IRS executives that covers a variety of timely issues of interest to taxpayers and the tax community. It also provides a detailed look at key issues affecting everything from IRS operations and employees to issues involving taxpayers and tax professionals.

Check here for prior posts and new updates.

WASHINGTON – The Internal Revenue Service today urged people to continue practicing proper cybersecurity habits by securing computers, phones and other devices. Scams and schemes using the IRS as a lure can take on many variations, so practicing personal information security is vital.

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 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 by doing things like minimizing cybersecurity footprints, staying vigilant in protecting personal tax and financial information and being aware of common scams and schemes.

As a reminder, the IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. Generally, the IRS first mails a paper bill to a person who owes taxes. In some special situations, the IRS will call or come to a home or business.

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.

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

- Protect personal information. Treat personal information like cash – don’t hand it out to just anyone. Social Security numbers, credit card numbers, bank and even utility account numbers can be used to help steal a person’s money or open new accounts.

- Safeguard personal data. Provide a Social Security number, for example, only when necessary. Only offer personal information or conduct financial transactions on sites that have been verified as reputable, encrypted websites.

- Use strong passwords. Use a password phrase or series of words that will be easy for you to remember. Use at least 10 characters; 12 is ideal for most home users. Mix letters, numbers and special characters. Try to be unpredictable – don’t use names, birthdates or common words. Don’t use the same password for many accounts and avoid sharing them. Keep passwords in a secure place or use password management tools.

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 should also opt for a multi-factor authentication process. Multi-factor authentication is critical to protecting your password.

- Avoid phishing scams. The easiest way for criminals to steal sensitive data is simply to ask for it. IRS urges people to learn to recognize phishing emails, calls or texts that pose as familiar organizations such as banks, credit card companies or even the IRS. Keep sensitive data safe and:

- Use security software. An anti-virus program should provide protection from viruses, Trojans, spyware and adware. The IRS urges people, especially tax professionals, to use an anti-virus program and always keep it up to date.

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.

- Back up files. No system is completely secure. Copy important files, including federal and state tax returns, onto removable discs or back-up drives and cloud storage. Store discs, drives and any paper copies in secure, locked locations.

- ID Theft Central. Designed to improve online access to information on identity theft, it serves taxpayers, tax professionals and businesses.

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.

Today, the IRS published the latest executive column, “A Closer Look,” which features Dietra Grant, Customer Account Services Director, discussing the benefits of using Free File options to get tax breaks. “So many people were adversely affected last year in the job market, and their income may be substantially different in 2020 than it was in 2019. Don’t leave money on the table, use Free File online to help,” said Grant. Read more here. Read the Spanish version here.

“A Closer Look” is a column from IRS executives that covers a variety of timely issues of interest to taxpayers and the tax community. It also provides a detailed look at key issues affecting everything from IRS operations and employees to issues involving taxpayers and tax professionals.

Check here for prior posts and new updates, and refer to the this News Release for more IRS.gov tax time tools.

WASHINGTON — The Internal Revenue Service reminds taxpayers that its website, IRS.gov, continues to be the first and best place for people seeking information and assistance on their federal taxes. It is available 24 hours a day from the comfort of home, on a desktop, or from just about anywhere with a mobile device.

The array of online tools and resources available at IRS.gov range from tax preparation and refund tracking to research tools like the Interactive Tax Assistant and answers for Frequently Asked Questions on many subjects.

View tax account online
Taxpayers can use their online account to securely see important information when preparing to file their tax return or following up on balances or notices. This includes:

Additionally, taxpayers can view:

Get a tax return transcript
The Get Transcript tool is free and also accessible through an online account. It allows taxpayers to view, print or download their tax transcripts after the IRS has processed the return. A tax return transcript shows most line items from an original tax return, along with any forms and schedules, but not changes made after it was filed.

Get an Identity Protection PIN
An Identity Protection PIN (IP PIN) is a six-digit number that prevents someone from filing a tax return using another taxpayer’s Social Security number. The IP PIN is known only to the real taxpayer and the IRS and helps the IRS verify the taxpayer’s identity when they file their electronic or paper tax return. Starting in 2021, any taxpayer who can verify his or her identity can voluntarily opt into the IP PIN program. See Get an IP PIN for details and to access the online tool. There are options for those who cannot verify their identities online.

Locate local free tax preparation
The IRS's Volunteer Income Tax Assistance (VITA) program has operated for over 50 years. It offers free basic tax return preparation to qualified individuals:

The Tax Counseling for the Elderly (TCE) program also offers free tax help for taxpayers, particularly those age 60 and older. The VITA/TCE Site Locator can help eligible taxpayers find the nearest community-based site staffed by IRS-trained and certified volunteers. Please note that some VITA/TCE sites are not operating at full capacity this year and others are not opening. Demand is high for this service so taxpayers may experience longer wait times for appointments. Taxpayers can use the locator tool to find an available site near them. It is updated throughout the tax season, so individuals should check back if they don’t see a nearby site listed.

DIY tax preparation for free
The IRS Free File program offers 70% of all taxpayers the choice of nine brand-name tax preparation software packages to use at no cost. Those who earned less than $72,000 in 2020 can choose which package is best for them. Some even offer free state tax return preparation.

Those who earned more than $72,000 in 2020 and are comfortable preparing their own taxes can use Free File Fillable Forms. This electronic version of paper IRS tax forms can also be used to file tax returns online.

Free File is available only through IRS.gov. Read more about the Free File program in this week’s A Closer Look.

Find a local tax professional
The searchable directory on IRS.gov can help taxpayers find a tax professional in their area. The list can be sorted by credentials and qualifications. Tax return preparers have differing levels of skills, education and expertise. Most tax return preparers provide outstanding and professional service. However, each year, some taxpayers are hurt financially because they choose the wrong tax return preparer. Be sure to check our tips for choosing a tax preparer and how to avoid unethical "ghost" return preparers.

Track refunds with ‘Where’s My Refund?’
Taxpayers can easily find the most up-to-date information about their tax refund using the "Where’s My Refund?" tool on IRS.gov and on the official IRS mobile app, IRS2Go. Within 24 hours after the IRS acknowledges receipt of an e-filed return, or four weeks after a paper return is mailed, taxpayers can start checking on the status of their refund.

Make a tax payment
Taxpayers can visit the “Pay” tab on IRS.gov to see their payment options. Most tax software products give taxpayers various payment options, including the option to schedule a payment from a bank account when filing their return.

IRS Direct Pay offers taxpayers a free, fast, secure and easy way to make an electronic payment from their bank account to the U.S. Treasury. Other ways to pay include:

Make a plan to pay
Taxpayers can meet their tax obligation in monthly installments by applying for a payment plan. Most can be setup on IRS.gov/paymentplan or through an online account in a matter of minutes. Setup fees may apply for some types of plans. Options include a full-pay agreement, a short-term plan of up to 120 days or a long-term monthly payment plan (installment agreement). The amount a taxpayer owes and their tax- filing compliance determines which payment plan options may be available.

Other options available may include an offer in compromise -- a way for a taxpayer to settle their tax debt for less than the full amount -- or requesting the IRS to temporarily delay collection until the taxpayer’s financial situation improves.

The IRS2Go app offers great features

The Tax Time Guide is series of news releases designed to help taxpayers get the information they need to file an accurate tax return. Additional help is available in Publication 17, Your Federal Income Tax, on IRS.gov.

Revenue Ruling 2021-06 provides the rates for interest determined under Section 6621 of the code for the calendar quarter beginning April 1, 2021, will be 3 percent for overpayments (2 percent in the case of a corporation), 3 percent for underpayments, and 5 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 0.5 percent.

Revenue Ruling 2021-06 will be  in IRB:  2021-12, dated March 22, 2021.