Submitting Form 2848, Power of Attorney and Form 8821, Tax Information Authorization, are currently done on paper. By moving to a new online submission process, it gives tax professionals and taxpayers a safe option to electronically sign and upload these critical documents without an in-person meeting, explains Sharyn Fisk, Director, Office of Professional Responsibility, in the latest edition of “A Closer Look.”

WASHINGTON – The Internal Revenue Service today reminded people  who don’t normally file tax returns that they have until Nov. 21 at 3 p.m. Eastern time to register for an Economic Impact Payment. They also may be eligible to get to a $1,200 payment for their spouse and $500 for each qualifying child. 

The extended Nov. 21 deadline also gives more time to federal beneficiaries who already received an EIP but didn't register to receive supplemental $500 payments for qualifying children. Those eligible to provide this information include people with qualifying children who receive Social Security retirement, survivor or disability benefits, Supplemental Security Income (SSI), Railroad Retirement benefits and Veterans Affairs Compensation and Pension (C&P) benefits and did not file a tax return in 2018 or 2019.

The IRS also urges anyone who didn't have a requirement to file a tax return in 2018 or 2019 to register for an Economic Impact Payment by using the Non-Filers tool before the Nov. 21 deadline. This includes qualified low-income families.

The Non-Filers tool is designed for people with incomes typically below $24,400 for married couples, and $12,200 for singles, who could not be claimed as a dependent by someone else. This includes couples and individuals who are experiencing homelessness.

As a reminder, anyone using the Non-Filers tool can speed the arrival of their payment by choosing to receive it by direct deposit. Those not choosing this option will get a check. Beginning two weeks after they register, people can track the status of their payment using the Get My Payment tool, available only on IRS.gov.

The only way for those who don’t have a filing requirement to get both the basic payment and the additional amount for each qualifying child is to register using the Non-Filers: Enter Your Payment Info Here tool on IRS.gov. The tool will automatically calculate the payment for any eligible couple or individual who registers and includes the requested information for their qualifying children. In addition, those who have already registered will soon get a payment to cover their qualifying children.

Who should not use the Non-Filers tool?

Those who are required to file a 2018 or 2019 tax return should NOT use the Non-Filers tool; they should file their tax return electronically. Those who can be claimed as a dependent on another person’s tax return should also NOT use the Non-Filers tool.

For persons required to file a tax return

For people who filed 2019 tax return, the IRS used information from it about them, their spouse, their income, filing status and qualifying children to calculate the amount and issued a payment. For those who haven’t filed a 2019 tax return, or it has not been processed yet, the IRS used the information from the 2018 tax return to calculate the amount and issued a payment. The IRS is not able to correct or issue additional payments at this time and will provide further details on IRS.gov on the action people may need to take in the future.

What is a qualifying child?

In general, this is your dependent who was under age 17 during 2019. This may include your children, grandchildren, nieces and nephews. Any of them who can be claimed as a dependent by someone else don’t qualify. Likewise, anyone who was at least 17 years old in 2019 also does not qualify. More specifically, a qualifying child is anyone who:

All of these requirements must be met.

New in 2021: Those who didn't receive an EIP may be able to claim the Recovery Rebate Credit

For individuals who did not receive an Economic Impact Payment or the full amount that they believe they are entitled to, they will be able to claim the additional amount when they file a 2020 tax return in 2021. This will be called the Recovery Rebate Credit.

Taxpayers may be able to claim the Recovery Rebate Credit if they met the eligibility criteria in 2020 and:

Keep the Notice 1444, Your Economic Impact Payment, received in the mail regarding the Economic Stimulus Payment with tax records. This notice will be mailed to each recipient’s last known address within a few weeks after the payment is made. When filing a 2020 tax return next year, taxpayers can refer to Notice 1444 and claim additional credits on a 2020 tax return if eligible. The IRS will provide further details on IRS.gov on the action they may need to take.

WASHINGTON − The Internal Revenue Service, state tax agencies and the nation's tax industry today announced that the 5th Annual National Tax Security Awareness Week will take place between Nov. 30 and Dec. 4.

This year, there’s a heightened need for security as fraudsters seek to use the COVID-19 to scam taxpayers and tax preparers. New protections being offered by Security Summit partners in January can help protect people against tax-related identity theft.

"As the holiday season and tax season approach, everyone should remember to take basic steps to protect themselves," said IRS Commissioner Chuck Rettig. "With more taxpayers and tax preparers working remotely, identity thieves are trying to use COVID-19 to scare and scam people out of their identities or money. All of us must be on guard and use the strongest security measures we can. The goal of National Tax Security Awareness Week is to remind people about important steps they can take to protect themselves and their tax information.”

The IRS warned taxpayers to remain vigilant due to constantly evolving threats and scams from fraudsters. There are thousands of variations of COVID-related scams, including many related to the economic stimulus payment by the IRS.

National Tax Security Awareness Week will feature a week-long series of educational materials to help protect individuals, businesses and tax pros from identity theft. The effort will include special informational graphics and a social media effort on Twitter and Instagram with @IRSnews and #TaxSecurity.

As part of the effort, the IRS and Security Summit partners are sharing YouTube videos on security steps for taxpayers. The videos can be viewed or downloaded at Easy Steps to Protect Your Computer and Phone and Avoid Phishing Emails.

Employers also can share Publication 4524, Security Awareness for Taxpayers, with their employees and customers while tax professionals can share with clients.

The National Tax Security Awareness Week features basic security guidance for those most at-risk: individual taxpayers, business taxpayers and tax professionals. Highlights include:

Day 1: Cyber Monday: Protect personal and financial information online
The IRS and the Security Summit partners remind people to take these basic steps:

Day 2: Use multi-factor authentication
Remember to use multi-factor authentication options being offered by tax software providers:

Day 3 – Get an Identity Protection PIN
Starting in January, taxpayers who can verify their identities may now opt into the IRS IP PIN program. Here’s what you need to know:

Day 4 – Businesses at risk for identity theft
Most cyberattacks are aimed at small businesses with fewer than 100 employees. Here’s are some details:

Day 5 – Tax professionals should review their safeguards
The IRS and the Summit partners urge tax pros to review the “Taxes-Security-Together” Checklist, including:

Revenue Procedure 2020-51 provides a safe harbor for certain Paycheck Protection Program loan participants, whose loan forgiveness has been partially or fully denied, or who decide to forego requesting loan forgiveness, to claim a deduction for certain otherwise deductible eligible payments on (1) the taxpayer’s timely filed, including extensions, original income tax return or information return, as applicable, for the 2020 taxable year, or (2) an amended return or an administrative adjustment request (AAR) under section 6227 of the Internal Revenue Code (Code) for the 2020 taxable year, as applicable.  For taxpayers that decide to forego requesting loan forgiveness, the safe also allows these taxpayer to claim a deduction for the otherwise deductible eligible payments on an original income tax return or information return, as applicable, for the taxable year in which the taxpayer decides to forego requesting forgiveness.

Revenue Ruling 2020-27 provides guidance on whether a Paycheck Protection Program (PPP) loan participant that paid or incurred certain otherwise deductible expenses can deduct those expenses in the taxable year in which the expenses were paid or incurred if, at the end of such taxable year, the taxpayer reasonably expects to receive forgiveness of the covered loan.  The revenue ruling also provides guidance if, as of the end of the 2020 taxable year, the PPP loan participant has not applied for forgiveness, but intends to apply in the next taxable year.

Both Revenue Procedure 2020-51 & Revenue Ruling 2020-27 will be in IRB:  2020-50, dated 12/7/2020.

WASHINGTON — The Internal Revenue Service Advisory Council today issued its annual report for 2020, including recommendations to the IRS on new and continuing issues in tax administration.
 
The IRSAC is a federal advisory committee that provides an organized public forum for discussion of relevant tax administration issues between IRS officials and representatives of the public. IRSAC members offer constructive observations regarding current or proposed IRS policies, programs and procedures.

The 2020 Public Report includes recommendations on 26 issues, which cover a broad range of topics including:

The IRSAC is administered under the Federal Advisory Committee Act by the Office of National Public Liaison, part of IRS Communications and Liaison, and draws its members from the taxpaying public, the tax professional community, representatives of the low income community, small and large businesses, tax-exempt and government entities, the payroll industry and academia. It is comprised of four subgroups aligned to the IRS operating divisions: Large Business & International, Small Business/Self-Employed, Tax Exempt/Government Entities and Wage & Investment.

Commissioner Chuck Rettig and IRS executives thanked members of the council whose terms end this year:

• Martin Bentsen – Bentsen served on the Large Business & International Subgroup
• Mike Engle – Engle served as Chair of the Tax Exempt/Government Entities Subgroup
• Diana Erbsen – Erbsen served as Chair of the IRSAC
• Sanford Kelsey – Kelsey served on the Large Business & International Subgroup
• Phyllis Jo Kubey – Kubey served as Chair of the Wage & Investment Subgroup
• Mas Kuwana – Kuwana served on the Small Business/Self-Employed Subgroup
• Emily Lindsey – Lindsey served on the Small Business/Self-Employed Subgroup
• Charles “Sandy” Macfarlane – Macfarlane served as Chair of the Large Business & International Subgroup
• Charles Read – Read served on the Small Business/Self-Employed Subgroup
• Jeffrey Schneider – Schneider served on the Small Business/Self-Employed Subgroup
• Jean Swift – Swift served on the Tax Exempt/Government Entities Subgroup
• Patricia Thompson – Thompson served as Chair of the Small Business/Self-Employed Subgroup

The full 2020 IRSAC Public Report is available at IRS.gov.

The latest post of “A Closer Look,” features what went on behind the scenes for the IRS to simultaneously execute a highly successful filing season while taking on significant new responsibilities to deliver Economic Impact Payments and implement other tax relief to help Americans during the COVID-19 pandemic. Continue reading here. 

“A Closer Look” 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.

People can check here for prior posts and new updates.

WASHINGTON – The Internal Revenue Service today reminded anyone who doesn’t normally file a tax return that they have until 3 p.m. EST this Saturday, Nov. 21, to register with the IRS for an Economic Impact Payment.

The only way remaining to get a payment in 2020 is to register using the Non-Filers: Enter Info Here tool on IRS.gov before the Saturday deadline.

The only people who should register are those who don't typically file a tax return, are not required to do so and have not yet registered, or for certain benefit recipients who got an EIP for themselves but need to provide information about a non-beneficiary spouse or qualifying child. Anyone else who normally files a tax return, including low- and moderate-income workers and families claiming the Earned Income Tax Credit, Child Tax Credit or other tax benefits, cannot use the tool.

In partnership with the U.S. Treasury Department, the Bureau of the Fiscal Service, Social Security Administration and the Department of Veteran’s Affairs and software industry partners, the IRS has issued about 160 million Economic Impact Payments totaling approximately $270 billion. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the IRS will continue issuing these payments during the final weeks of 2020, and some people may be eligible to claim them when they file their 2020 tax returns in 2021.

Anyone can check the status of their payment by using the Get My Payment application, available only on IRS.gov. The Get My Payment application will show “Payment Status Not Available” until the payment is scheduled to be issued. This response does not mean a person is not eligible or will not receive a payment.

Economic Impact Payments aren’t taxable

Economic Impact Payments received in 2020 are not taxable for federal income tax purposes. Taxpayers can claim the recovery rebate credit on their tax year 2020 tax return in 2021 if they didn’t receive a payment or if their payment wasn’t the correct amount.

Didn’t receive a payment? Claim the Recovery Rebate Credit when filing a tax return next year

When people file their 2020 taxes next year and they weren’t eligible for an Economic Impact Payment this year, they may be eligible for the Recovery Rebate Credit. The Recovery Rebate Credit is figured like the Economic Impact Payment, except the amounts are based on tax year 2020, instead of tax year 2019 or tax year 2018, information. The eligibility criteria are the same, and the maximum credit is $1,200, or $2,400 if married filing jointly, plus $500 for each qualifying child. This means anyone who received the full Economic Impact Payment amount during 2020 for both themselves and their qualifying children cannot get the credit.

The credit can be claimed on either Form 1040 or Form 1040-SR. The 2020 instructions for these forms will include a Recovery Rebate Credit worksheet to help determine eligibility and figure the credit.

Visit the IRS Economic Impact Payment Information Center for answers to questions about eligibility, payment amounts, payment timing and more.

WASHINGTON – The Internal Revenue Service today encouraged taxpayers to take necessary actions this fall to help them file their federal tax returns timely and accurately in 2021, including special steps related to Economic Impact Payments.

This is the first in a series of reminders to help taxpayers get ready for the upcoming tax filing season. A special page, updated and available on IRS.gov, outlines steps taxpayers can take now to prepare for the 2021 tax return filing season ahead.

Steps taxpayers can take now to make tax filing easier in 2021

Taxpayers should gather Forms W-2, Wage and Tax Statement, Forms 1099-Misc, Miscellaneous Income, and other income documents to help determine if they’re eligible for deductions or credits. They’ll also need their Notice 1444, Your Economic Impact Payment, to calculate any Recovery Rebate Credit they may be eligible for on their 2020 Federal income tax return.

Most income is taxable, including unemployment compensation, refund interest and income from the gig economy and virtual currencies.

Taxpayers with an Individual Tax Identification Number should ensure it hasn’t expired before they file their 2020 federal tax return. If it has, IRS recommends they submit a Form W-7, Application for IRS Individual Taxpayer Identification Number, now to renew their ITIN. Taxpayers who fail to renew an ITIN before filing a tax return next year could face a delayed refund and may be ineligible for certain tax credits.

Taxpayers can use the Tax Withholding Estimator on IRS.gov to help determine the right amount of tax to have withheld from their paychecks. If they need to adjust their withholding for the rest of the year time is running out, they should submit a new Form W-4, Employee’s Withholding Certificate, to their employer as soon as possible.

Taxpayers who received non-wage income like self-employment income, investment income, taxable Social Security benefits and in some instances, pension and annuity income, may have to make estimated tax payments. Payment options can be found at IRS.gov/payments.

New in 2021: Those who didn’t receive an EIP may be able to claim the Recovery Rebate Credit

Taxpayers may be able to claim the Recovery Rebate Credit if they met the eligibility criteria in 2020 and:

Received interest on a federal tax refund? Remember these are taxable; include when filing

Taxpayers who received a federal tax refund in 2020 may have been paid interest. The IRS sent interest payments to individual taxpayers who timely filed their 2019 federal income tax returns and received refunds. Most interest payments were received separately from tax refunds. Interest payments are taxable and must be reported on 2020 federal income tax returns. In January 2021, the IRS will send a Form 1099-INT, Interest Income, to anyone who received interest totaling at least $10.

Although the IRS issues most refunds in less than 21 days, the IRS cautions taxpayers not to rely on receiving a 2020 federal tax refund by a certain date, especially when making major purchases or paying bills. Some returns may require additional review and may take longer.

EITC/ACTC-related refunds should be available by first week of March

By law, the IRS cannot issue refunds for people claiming the Earned Income Tax Credit or Additional Child Tax Credit before mid-February. The law requires the IRS to hold the entire refund − even the portion not associated with EITC or ACTC. The IRS expects most EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards by the first week of March, if they chose direct deposit and there are no other issues with their tax return. Taxpayers should “Where’s My Refund?” for their personalized refund date.

With social distancing continuing, taxpayers can stay home and stay safe with IRS online tools

Taxpayers can find online tools and resources to help get the information they need. These IRS.gov tools are easy-to-use and available 24 hours a day. Millions of people use them to find information about their accounts, get answers to tax questions or file and pay their taxes.  

Almost everyone can file electronically for free.The IRS Free File program, available only through IRS.gov or the IRS2Go app, offers brand-name tax preparation software packages at no cost. The software does all the work of finding deductions, credits and exemptions for you. It‘s free for those who earned $72,000 or less in 2020. Some of the Free File packages also offer free state tax return preparation.

If you’re comfortable filling out  your own tax forms electronically, you can use Free File Fillable Forms, regardless of your income, to file your tax returns either by mail or online.

Taxpayers have several options to find a tax preparer. One resource is Choosing a Tax Professional, which offers a wealth of information for selecting a tax professional.

The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help taxpayers find preparers in their area who currently hold professional credentials recognized by the IRS, or who hold an Annual Filing Season Program Record of Completion.

Taxpayers can use the Interactive Tax Assistant beginning in January 2021 to get answers to a number of tax law questions. The ITA can help determine if a type of income is taxable, if someone is eligible to claim certain credits, or if they can deduct expenses on their tax return.

Taxpayers can check the status of their refund using "Where's My Refund?". The status is available within 24 hours after the IRS receives their e-filed tax return or up to four weeks if they after they mailed a paper return. The “Where’s My Refund?” tool updates once every 24 hours, usually overnight, so taxpayers only need to check once a day.

The best and fastest way for taxpayers to get their tax refund is to have it direct deposited into their financial account. Taxpayers who don’t have a financial account can visit the FDIC website for information to help open an account online.

Taxpayers are invited to join the Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs. VITA/TCE volunteers receive training to provide free tax return preparation for eligible taxpayers. There’s never been a better time to get ready to help others file and the IRS is rolling out new ways to make volunteering easier. Visit IRS.gov/volunteers to learn more.

Notice 2020-81 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 2020-81 will be in IRB: 2020-49, dated November 30, 2020.

WASHINGTON — The Internal Revenue Service today released the Criminal Investigation Division's annual report, highlighting the agency’s successes and criminal enforcement actions taken in fiscal year 2020, the majority of which occurred during COVID-19. A key achievement was the identification of over $10 billion in tax fraud and other financial crimes. 

"The special agents and professional staff who make up Criminal Investigation continue to perform at an incredibly high-level year after year," said IRS Commissioner Chuck Rettig. "Even in the face of a global pandemic, the CI workforce initiated nearly 1,600 investigations and identified $2.3 billion in tax fraud schemes. This is no small feat during a challenging year, and their work is critical to protecting taxpayers and the integrity of our tax system."

Key focuses of CI in fiscal year 2020 included COVID-19 related fraud, cybercrimes, with an emphasis on virtual and cryptocurrencies, traditional tax investigations, international tax enforcement, employment tax, refund fraud and tax-related identity theft.

In response to COVID-19 related crimes, CI special agents quickly adapted their investigative techniques to initiate cases into fraudulent claims for Economic Impact Payments, Paycheck Protection Program loans, and refundable payroll tax credits from the Coronavirus Aid, Relief, and Economic Security Act.

"This year, more than any in recent memory, demonstrated the extraordinary agility and adaptability of the CI workforce," said Jim Lee, Chief of CI. "Clearly, unscrupulous individuals sought to exploit the economic safeguards put in place to buttress a nation in crisis. These individuals and groups were instead met with a cadre of special agents determined to thwart their efforts.”

In fiscal year 2020, CI initiated 1,598 cases, applying 73% of its time to tax related investigations. The number of CI special agents increased by one percent, following special agent hiring to offset planned retirements. CI continued increasing its usage of data analytics and strengthening its international partnerships to assist in finding the most impactful cases. One important partnership remained the Joint Chiefs of Global Tax Enforcement (J5); a transnational committee comprised of tax organizations from five countries. In FY 2020 alone, more information was shared regarding cryptocurrency, tax crimes, and related enforcement, than in the previous ten years combined. CI also saw the first guilty pleas for a case under the J5 umbrella. 

As the only federal law enforcement agency with jurisdiction over federal tax crimes, CI has one of the highest conviction rates in federal law enforcement − at 90.4%. The high conviction rate reflects the thoroughness of CI investigations and the high caliber of CI agents. CI is routinely called upon by prosecutors and partner agencies across the country to lead financial investigations on a wide variety of financial crimes.

"While the annual report is an excellent summation of the hard work and dedication exhibited by CI, this year’s report takes on special significance," Lee said. "This report unequivocally reflects the efforts of a workforce undaunted by unprecedented personal and professional challenges. I am profoundly grateful to serve with the men and women of CI."

The 2020 report is interactive, summarizes a wide variety of CI activity during the year and features examples of cases from each field office on a wide range of financial crimes. The federal fiscal year begins Oct. 1 and ends on Sept. 30.