WASHINGTON — National Taxpayer Advocate Erin M. Collins today released her statutorily mandated mid-year report to Congress. The report presents an assessment of the 2021 filing season, identifies key objectives the Taxpayer Advocate Service (TAS) will pursue during the upcoming fiscal year, and contains the IRS’s responses to each of the 73 administrative recommendations the Advocate made in her 2020 Annual Report to Congress.

The Advocate’s report emphasizes that the difficulties the IRS faced in performing its traditional work due to the COVID-19 pandemic and the added responsibilities it was assigned to make three rounds of stimulus payments combined to create significant challenges for taxpayers.

“This past year and the 2021 filing season conjure up every possible cliché for taxpayers, tax professionals, the IRS, and its employees,” Collins wrote. “It was a perfect storm; it was the best of times and the worst of times; patience is a virtue; with experience comes wisdom and with wisdom comes experience; out of the ashes we rise; and we experienced historical highs and lows.”

The IRS Timely Processed Most Tax Returns and Timely Issued Most Stimulus Payments

During the 2021 tax filing season, the IRS processed 136 million individual income tax returns and issued 96 million refunds totaling about $270 billion. That matches up closely to the results of the last typical filing season in 2019. In addition to its traditional work, the IRS was directed by Congress to issue three rounds of stimulus payments over the past 15 months and has made about 475 million payments worth $807 billion to mitigate the impact of the pandemic on U.S. families and businesses. 

“The IRS and its employees deserve tremendous credit for what they have accomplished under very difficult circumstances,” Collins wrote, “but there is always room for improvement.”

The IRS Finished the Filing Season with Over 35 Million Tax Returns Awaiting Manual Reviews

Although most taxpayers successfully filed their returns and received their refunds, a historically high number did not. At the conclusion of the filing season, the IRS faced a backlog of over 35 million individual and business income tax returns that require manual processing – meaning that employee involvement is generally needed before a return can advance to the next stage in the processing pipeline.  The backlog includes about 16.8 million paper tax returns waiting to be processed; about 15.8 million returns suspended during processing that require further review; and about 2.7 million amended returns awaiting processing. The backlog resulted largely from the pandemic-related evacuation order that restricted employee access to IRS facilities.

Processing backlogs matter greatly, the report says, because most taxpayers overpay their tax through wage withholding or estimated tax payments and are entitled to receive refunds when they file their returns. The government also uses the tax system to distribute financial benefits. So far for tax year 2020, in addition to refunding overpayments of tax, the IRS has issued about 20 million refunds that include Earned Income Tax Credits worth up to $6,660 and about 15 million refunds that include Additional Child Tax Credits worth up to $1,400 per qualifying child. This year, over eight million taxpayers also may be eligible to receive Recovery Rebate Credits.

“For taxpayers who can afford to wait, the best advice is to be patient and give the IRS time to work through its processing backlog,” Collins wrote. “But particularly for low-income taxpayers and small businesses operating on the margin, refund delays can impose significant financial hardships.”

The IRS Received a Record Volume of Telephone Calls, and Only 7 Percent of Callers Reached a Telephone Assistor on the Accounts Management Lines

When a taxpayer needs general information or is responding to an audit or collection notice, the IRS’s toll-free lines are often the taxpayer’s first or second option.  During the 2021 filing season, the IRS received 167 million telephone calls – over four times as many calls as during the 2019 filing season. IRS employees could not keep pace with this massive volume of calls, resulting in the poorest service ever. 

The IRS reported a “Level of Service” on its Accounts Management telephone lines of 15 percent, with only seven percent of taxpayer calls reaching a telephone assistor. On the “1040” line, the most frequently called IRS toll-free number, taxpayers placed about 85 million calls, and only three percent (i.e., three out of 100) reached a telephone assistor.

“When so few callers can get through to a telephone assistor, problems remain unsolved and taxpayer frustration mounts,” Collins wrote.

The IRS Can Apply Lessons Learned from the Past Year to Improve Its Operations in the Future

Over the long run, the report says the lessons learned from the pandemic can be useful in helping to identify or reprioritize needs for improved tax administration and taxpayer service. 

Collins wrote: “The pandemic exposed weaknesses and vulnerabilities that must be strengthened; it forced the IRS to experiment with new approaches to old problems; it led to a renewed awareness of the impact of cuts to the IRS’s budget over the past decade and the IRS’s need for additional funding; and it is causing the IRS and congressional overseers to collaborate on steps to improve the IRS’s performance going forward to provide taxpayers with the service they deserve.”

The report recommends the IRS take these proactive steps to improve service and communication with taxpayers:

TAS has recommended the IRS evaluate the feasibility of expanding the use of these technologies to as many taxpayer-facing functions as possible without removing the in-person options for taxpayers. Videoconferencing should continue to be expanded and offered as an option to taxpayers because it can help fill current or future voids in face-to-face service at Taxpayer Assistance Centers (TACs) and in working with revenue agents or revenue officers. It can also be a useful tool to supplement correspondence audits, where conversing face-to-face may facilitate a better understanding of the taxpayer’s return. In addition, taxpayers who are geographically remote from a TAC and taxpayers with mobility or transportation challenges find videoconferencing technology more helpful and economical than traveling for an in-person conference. 

IRS Responses to National Taxpayer Advocate Administrative Recommendations

The National Taxpayer Advocate is required by statute to submit a year-end report to Congress that, among other things, makes administrative recommendations to resolve taxpayer problems.  Section 7803(c)(3) of the Internal Revenue Code authorizes the National Taxpayer Advocate to submit administrative recommendations to the Commissioner and requires the IRS to respond within three months. Under this authority, the National Taxpayer Advocate annually transmits to the Commissioner all administrative recommendations proposed in her year-end report for response.

The National Taxpayer Advocate made 73 administrative recommendations in her 2020 year-end report and then submitted them to the Commissioner for response. The IRS has agreed to implement 48 (or 66 percent) of the recommendations in full or in part.

The IRS’s responses are published in an appendix to the report.

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The National Taxpayer Advocate is required by statute to submit two annual reports to the House Committee on Ways and Means and the Senate Committee on Finance. The statute requires these reports to be submitted directly to the Committees without any prior review or comment from the Commissioner of Internal Revenue, the Secretary of the Treasury, the IRS Oversight Board, any other officer or employee of the Department of the Treasury, or the Office of Management and Budget. The first report must identify the objectives of the Office of the Taxpayer Advocate for the fiscal year beginning in that calendar year. The second report must include a discussion of the ten most serious problems encountered by taxpayers, identify the ten tax issues most frequently litigated in the courts, and make administrative and legislative recommendations to resolve taxpayer problems.

The National Taxpayer Advocate blogs about key issues in tax administration. Click here to subscribe.  Past blogs from the National Taxpayer Advocate can be found here.

About the Taxpayer Advocate Service

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. Your local taxpayer advocate’s number is in your local directory and at https://www.taxpayeradvocate.irs.gov/contact-us. You can also call TAS toll-free at 877-777-4778.  TAS can help if you need assistance in resolving an IRS problem, if your problem is causing financial difficulty, or if you believe an IRS system or procedure isn’t working as it should. Our service is free. For more information about TAS and your rights under the Taxpayer Bill of Rights, go to https://www.taxpayeradvocate.irs.gov/. You can get updates on tax topics at facebook.com/YourVoiceAtIRS, Twitter.com/YourVoiceatIRS, and YouTube.com/TASNTA.

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued guidance for taxpayers developing renewable energy projects to address delays related to the COVID-19 pandemic. 

In prior IRS notices, the Treasury Department and the IRS established the Continuity Safe Harbor that allows an eligible renewable energy project to be deemed to satisfy the continuity requirement for taking the production tax credit and the investment tax credit (Continuity Safe Harbor) if the taxpayer places the project in service within a certain period that starts in the taxable year in which construction of the project began. 

The Treasury Department and the IRS recognize that the COVID-19 pandemic continues to cause delays in the development of certain projects eligible for the production tax credit and the investment tax credit. As a result, many taxpayers may not place projects in service in time to meet the Continuity Safe Harbor, which may significantly impact project financing and development. Today’s guidance provides relief to taxpayers impacted by project delays related to the pandemic by allowing additional time to satisfy the Continuity Safe Harbor. It also adds flexibility for taxpayers to satisfy the continuity requirement outside of the safe harbor.

As provided in IRS guidance, a taxpayer has two methods to demonstrate the taxpayer has begun construction of a project, the Physical Work Test and the Five Percent Safe Harbor. After a taxpayer begins construction of a project, the taxpayer must also make continuous progress toward completion to satisfy beginning of construction requirements. Under the Physical Work Test, a taxpayer uses the Continuous Construction Test to demonstrate continuous progress whereas under the Five Percent Safe Harbor, a taxpayer uses the Continuous Efforts Test.

The guidance issued today in Notice 2021-41 provides that the period of the Continuity Safe Harbor provided and extended by prior IRS notices is further extended for projects for which construction began in 2016 through 2020:

Notice 2021-41 also clarifies that if the Continuity Safe Harbor does not apply, the continuity requirement is satisfied if the taxpayer demonstrates satisfaction of either the Continuous Construction or the Continuous Efforts Tests, regardless of the method that the taxpayer used to begin construction.

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

Notice 2021-41 clarifies and modifies the prior Internal Revenue Service notices addressing the beginning of construction requirement for both the production tax credit for qualified facilities under § 45 and the investment tax credit for energy property under § 48. In response to the Coronavirus Disease 2019 (COVID-19) pandemic, this notice provides that the safe harbor originally provided in section 3.02 of Notice 2013-60 and in section 6.05 of Notice 2018-59 and extended in prior IRS notices (Continuity Safe Harbor) is further extended for property the construction of which began in 2016 through 2020. This notice also provides a clarification of the methods that taxpayers may use to satisfy the Continuity Requirement (as provided in prior IRS notices and defined in section 2 of this notice) to satisfy the beginning of construction requirements under §§ 45 and 48.

Notice 2021-41 will be in IRB:  2021-29, dated 7/19/2021.

WASHINGTON – The Internal Revenue Service today continues its “Dirty Dozen” scam series with a warning to taxpayers to watch out for unexpected schemes in the form of emails, text or social media messages and phone calls.

Unscrupulous individuals seek to obtain personal information for the purpose of tax-related identity theft. Whether through a telephone call, text message or email, the con artist tries to convince the recipient that they need to provide Social Security numbers, bank account or credit card information or passwords. The scam may also include sending links that once clicked on can download malicious software that collects, or “mines” personal data.

Often, criminals pose as someone the recipient knows or frequently interacts with, whether a social or family relationship or a business contact. They gather much of this information from social media. A person’s contacts or ‘friends’ are used to bait the recipient into thinking they’re dealing with someone they know.

More information on the IRS’s “Dirty Dozen” list can be found on a special section of IRS.gov.

Tax-realted phishing scams persist

The IRS warns taxpayers, businesses and tax professionals to be alert for a continuing surge of fake emails, text messages, websites and social media attempts to steal personal information. These attacks tend to increase during tax season and remain a major cause of identity theft throughout the year.

Phishing scams target individuals with communications appearing to come from legitimate sources to collect victims’ personal and financial data and potentially infect their devices by convincing the target to download malicious programs. Cybercriminals usually send these phishing communications by email but may also use text messages or social media posts or messaging.

These phishing schemes can be tricky and cleverly disguised to look like they’re from the IRS or from others in the tax community. Taxpayers are reminded to continually watch out for emails and other scams posing as the IRS, like those promising a big refund, missing stimulus payment or even issuing a threat. People should not open attachments or click on links in those emails or text messages.

Phishing scams targeting tax professionals

As part of the Security Summit effort, the IRS warns tax professionals about phishing scams involving verification of Electronic Filing Identification Numbers (EFIN) and Centralized Authorization File (CAF) numbers. The agency has seen an increase in these kinds of scams, along with offers to buy and sell EFINs and CAFs.

Tax professionals have reported receiving scam e-mails from the fictitious "IRS Tax E-Filing" and the IRS reminds tax professionals who receive those e-mails to not open any attachments or click any links. Rather, they should report the scam to the Treasury Inspector General for Tax Administration.

The IRS reminds tax professionals to protect themselves against the unauthorized use of an EFIN. Tax professionals must not transfer their EFIN or ETIN by sale, merger, loan, gift or otherwise to another entity.

Phishing – new client scams target tax pros

The “New Client” scam continues to be a prevalent form of phishing for tax pros. Here’s an example in the form of an email: “I just moved here from Michigan. I have an urgent tax issue and I was hoping you could help,” the email begins. “I hope you are taking on new clients.”

The email says one attachment is an IRS notice and the other attachment is the prospective client’s prior-year tax return. This scam has many variations so tax professionals should be wary and avoid opening attachments or clicking links when they don’t know the e-mail sender.

Knowing what to watch for can help. Below is an actual example of another recent new client scam e-mail:

Impersonator phone calls/vishing

Individuals should be wary of unexpected phone calls asking for personal financial information. The IRS has seen an increase in voice-related phishing, or ‘vishing,’ particularly from scams related to federal tax liens. For those receiving phone calls out of the blue, security experts recommend asking questions of the caller but not providing any personal information. If in doubt, hang up immediately.

During 2020, almost 400 vishing scams were reported, a 14% increase from the prior year. Of those vishing scams, 25% were scammers who tried to use fake tax lien information. The number of tax-lien related scams increased from 58 in 2019 to 104 in 2020, an increase of 79%. The IRS urges taxpayers to refrain from engaging potential scammers on the phone or online.

While both the IRS and the Federal Trade Commission have seen a decline in the number of reports of scammers claiming to be from the IRS telephoning potential victims, the agency urges taxpayers to be wary. (The IRS has seen a 43% decrease in the number of reports of calls from callers claiming to be from the IRS: 20,500 in 2020 compared to 36,000 in 2019. The FTC saw a 67% decline from 7,694 reports in 2019 to 2,571 in 2020.)

While the numbers may be on the decline, the IRS urges taxpayers to remain vigilant and to remember the following things about the IRS:

Recipients of these calls should hang up before giving out any information. If anyone receives an unexpected call from the IRS that they believe to be a scam, they can report it to the Treasury Inspector General for Tax Administration (TIGTA).

Social media scams continue

Taxpayers should be aware of social media scams, which frequently use events like COVID-19 to try to trick people. Social media enables unscrupulous individuals to lurk on accounts and extract personal information to use against the victim. These cons may send emails impersonating the victim’s family, friends or co-workers.

Social media scams have also led to tax-related identity theft. The basic element of social media scams is convincing a potential victim that he or she is dealing with a person close to them that they trust via email, text or social media messaging.

Using personal information, a scammer may email a potential victim and include a link to something of interest to the recipient, but which contains malware intended to commit more crimes. Scammers also infiltrate their victim's emails and cell phones to go after their friends and family with fake emails that appear to be real, and text messages soliciting, for example, small donations to fake charities that are appealing to the victims.

Individuals should know that any of their information that is publicly shared on social media platforms can be collected and used against them. One way to circumvent these scams is to review privacy settings and limit data that is publicly shared.

Ransomware on the rise

Financial institutions should be aware of trends and indicators of ransomware, which is a form of malicious software (“malware”) designed to block access to a computer system or data. Access is often blocked by encrypting data or programs on information technology (IT) systems to extort ransom payments from victims in exchange for decrypting the information and restoring victims’ access to their systems or data. In some cases, in addition to the attack, the perpetrators threaten to publish sensitive files belonging to the victims, which can be individuals or business entities.

The U.S. Treasury Financial Crimes Enforcement Network (FINCEN), has noted that ransomware attacks continue to rise across various sectors, particularly across governmental entities as well as financial, educational and healthcare institutions. Ransomware attacks on small municipalities and healthcare organizations have increased, likely due to the victims’ weaker cybersecurity controls, such as inadequate system backups and ineffective incident response capabilities.

Tactics

Cybercriminals using ransomware often resort to common tactics, such as wide-scale phishing and targeted spear-phishing campaigns that induce victims to download a malicious file or go to a malicious site. They may also exploit remote desktop protocol endpoints and software vulnerabilities or deploy “drive-by” malware attacks that host malicious code on legitimate websites. Proactive prevention through effective cyber hygiene, cybersecurity controls and other best practices are often the best defense against ransomware.

Ransomware actors are increasingly engaging in selective targeting of larger enterprises to demand bigger payouts – commonly referred to as “big game hunting.” Many cybercriminals are sharing resources to enhance the effectiveness of ransomware attacks, such as ransomware exploit-kits that come with ready-made malicious codes and tools. These kits can be purchased, although they are also offered free of charge.

Some ransomware groups are also forming partnerships to share advice, code, trends, techniques and illegally obtained information over shared platforms.

Ransomware criminals are also increasingly engaging in “double extortion schemes,” which involve removing sensitive data from the targeted networks, encrypting the system files and demanding ransom.

The consequences of a ransomware attack can be severe and far-reaching, with losses of sensitive, proprietary, and critical information and loss of business functionality. The role of financial intermediaries in facilitating ransomware payments and ransomware attacks are a growing concern for the financial sector because of the critical role financial institutions play in the collection of ransom payments.

The IRS reminds taxpayers and tax professionals to keep abreast of news about fraud-related behavior. Report any instances of fraud immediately.

For more information visit Tax Fraud Alerts and Tax Scams – How to Report Them.

WASHINGTON – The Internal Revenue Service and the Treasury Department released information today detailing how many people in each state received the third round of Economic Impact Payments through early June.

The new details, available on IRS.gov, are through June 3 and provide a look at the number of payments by state, income category, filing status and other features.

The IRS continues to distribute Economic Impact Payments and the related 2020 Recovery Rebate Credit on a weekly basis as people continue to file income tax returns and as returns are processed. Ongoing payments will be sent to eligible individuals for whom the IRS previously did not have information to issue a payment but who recently filed a tax return, as well to people who qualify for "plus-up" payments.

The statistics released today provide details on more than 163 million payments worth approximately $390 billion.

Special reminder for those who don't normally file a tax return

Although payments are automatic for most people, the IRS continues to urge people who don't normally file a tax return and haven't received Economic Impact Payments to file a 2020 tax return to get all the benefits they're entitled to under the law, including tax credits such as the 2020 Recovery Rebate Credit, the Child Tax Credit and the Earned Income Tax Credit. Filing a 2020 tax return will also assist the IRS in determining whether someone is eligible for an advance payment of the 2021 Child Tax Credit, which will begin to be disbursed this summer.

For example, some federal benefits recipients may need to file a 2020 tax return – even if they don't usually file – to provide information the IRS needs to send payments for a qualifying dependent. Eligible individuals in this group should file a 2020 tax return as quickly as possible to be considered for an additional payment for their qualifying dependents.

People who don't normally have an obligation to file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness and others. Individuals who didn't get a first or second round Economic Impact Payment or got less than the full amounts may be eligible for the 2020 Recovery Rebate Credit, but they'll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return.

Free tax return preparation is available for qualifying people.

The IRS reminds taxpayers that the income levels in this third round of Economic Impact 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 payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment.

Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.

Americans urged to watch out for tax scams during the pandemic

WASHINGTON – The Internal Revenue Service today began its “Dirty Dozen” list for 2021 with a warning for taxpayers, tax professionals and financial institutions to be on the lookout for these 12 nefarious schemes and scams.

This year’s “Dirty Dozen” will be separated into four separate categories: pandemic-related scams like Economic Impact Payment theft; personal information cons including phishing, ransomware and phone ‘vishing’; ruses focusing on unsuspecting victims like fake charities and senior/immigrant fraud; and schemes that persuade taxpayers into unscrupulous actions such as Offer In Compromise mills and syndicated conservation easements.

The agency compiled the list into these categories based on who perpetuates the schemes and who they impact. In addition to today’s scams the IRS will highlight the other schemes over the next three days.

The IRS urges all taxpayers to be on guard, especially during the pandemic, not only for themselves, but also for other people in their lives.

"We continue to see scam artists use the pandemic to steal money and information from honest taxpayers in a time of crisis," said IRS Commissioner Chuck Rettig. "We provide this list to alert taxpayers about common scams that fraudsters use against their victims. At the IRS, we are dedicated to stopping these criminals, but it’s up to all of us to remain vigilant to protect ourselves and our families."

Taxpayers are encouraged to review the “Dirty Dozen: list in a special section on IRS.gov and should be alert to these scams during tax filing season and throughout the year.

Economic Impact Payment theft
A continuing threat to individuals is from identity thieves who try to steal Economic Impact Payments (EIPs), also known as stimulus payments. Most eligible people will get their payments automatically from the IRS. Taxpayers should watch out for these tell-tale signs of a scam:

Taxpayers should remember that the IRS website, IRS.gov, is the agency’s official website for information on payments, refunds and other tax information.

Unemployment fraud leading to inaccurate taxpayer 1099-Gs

Because of the COVID-19 pandemic, many taxpayers lost their jobs and received unemployment compensation from their state. However, scammers also took advantage of the pandemic by filing fraudulent claims for unemployment compensation using stolen personal information of individuals who had not filed claims. Payments made on these fraudulent claims went to the identity thieves.

The IRS reminds taxpayers to be on the lookout for receiving a Form 1099-G reporting unemployment compensation that they didn’t receive. For people in this situation, the IRS urges them to contact their appropriate state agency for a corrected form. If a corrected form cannot be obtained so that a taxpayer can file a timely tax return, taxpayers should complete their return claiming only the unemployment compensation and other income they actually received. See Identity Theft and Unemployment Benefits for tax details and DOL.gov/fraud for state-by-state reporting information.

Additional protection to help protect taxpayers

IRS makes IP PINs available to all taxpayers – adding another layer of security
To help taxpayers avoid identity theft, the IRS this year made its Identity Protection PIN (IP PIN) program available to all taxpayers. Previously it was available only to victims of ID theft or taxpayers in certain states. The IP PIN is a six-digit code known only to the taxpayer and to the IRS. It helps prevent identity thieves from filing fraudulent tax returns using a taxpayer’s personally identifiable information.

Using an IP PIN is, in essence, a way to lock a tax account. The IP PIN serves as the key to opening that account. Electronic returns that do not contain the correct IP PIN will be rejected and paper returns will go through additional scrutiny for fraud.

Reducing fraud
The IRS and its Security Summit partners in the states and the private-sector tax community have made changes to help reduce identity theft-related refund fraud that are noticeable to the average person filing a return:

Multi-factor authentication can help
It is important for taxpayers filing in 2021 to know that online tax software products available to both taxpayers and tax professionals will contain options for multi-factor authentication. Multi-factor authentication allows users to better protect online accounts. One way this is accomplished is by requiring a security code sent to a mobile phone in addition to the username and password used to access the account.

The IRS and its Security Summit partners have formed an information sharing center that allows them to quickly identify emerging scams and react to protect taxpayers. The Identity Theft Tax Refund Fraud Information Sharing and Analysis Center is now operational.

Also, check out our recent A Closer Look column for more on how to be vigilant about tax scams. Visit Identity Theft Central and Tax Fraud Alerts for more information on how to protect against or report identity theft or fraud.

Today, the IRS published the latest executive column “A Closer Look,” which features Scott Irick, Director of Examination discussing how the IRS has a variety of compliance programs and outreach efforts to help employers meet their employment tax responsibilities. “The tax law can be complex for these taxpayers, and part of my role as director is to use a variety of tools to help people understand and meet their tax obligations,” said Irick. 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.

Today, the IRS announced that the “Dirty Dozen” tax scams for 2021 will be issued in a four-part series, starting Monday, June 28. Just like in prior years, this “Dirty Dozen” will highlight a variety of common scams. While the income tax filing deadline has passed for many, some may be waiting to hear from the IRS about a refund, an Economic Impact Payment, advance Child Tax Credit payments or other tax benefit. The IRS encourages taxpayers to be vigilant, as this can be a peak season for scammers. These schemes can continue throughout the year with multiple variations as con artists work to catch people off guard.

This year’s “Dirty Dozen” will be separated into the following categories:

Check out the “Dirty Dozen” tax scams from prior years here.

WASHINGTON —The Internal Revenue Service today issued the Data Book detailing the agency’s activities during fiscal year 2020 (Oct. 1, 2019 – Sept. 30, 2020).

“This year's Data Book describes the important work that IRS employees accomplish on behalf of the public,” said IRS Commissioner Chuck Rettig. “The IRS accounts for approximately 96% of the funding that supports the federal government’s operations, while proudly serving and interacting with more Americans than any other public or private organization.”

“The 2020 Data Book also details the extraordinary measures the IRS took to protect the health and safety of taxpayers and IRS employees during the COVID-19 pandemic while implementing critical economic relief legislation – the largest economic rescue packages in US history,” Rettig added.

The Data Book details how during the COVID-19 pandemic the IRS developed new technologies and provided the equipment necessary to allow thousands of employees to work from home, which enabled the IRS to resume processing returns and providing phone assistance to taxpayers.

At the same time, the agency eased burdens on people facing tax issues by extending the deadline to file and pay federal income taxes from April 15, 2020, to July 15, 2020.

The agency also launched the People First Initiative, which eased payment guidelines, postponed compliance actions and suspended most collection enforcement activities, such as new notices of lien or levy, from April 15, 2020, to July 15, 2020.

Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the IRS issued 161.9 million Economic Impact Payments (EIPs) in the first round: 122.5 million by direct deposit, 35.8 million by check, and nearly 3.6 million by debit card. Under the COVID-Related Tax Relief (CRTR) Act of 2020 the IRS issued 146.5 million second-round EIPs, including 112.8 million by direct deposit, 25.7 million by check, and 8 million by debit card. Combined, the IRS provided $412.9 billion in relief under these programs during the calendar year.

The IRS continued its operations, processing more than 240 million tax returns, and collected nearly $3.5 trillion in federal taxes during the fiscal year – about 96% of federal revenue from all sources.

“You’ll find many interesting statistics within the Data Book," said Rettig. "But there’s more to the IRS story than charts and tables. IRS employees care, and our agency is made up of people who give back to their communities and help one another. Our employees provide significant support for those devastated by hurricanes, wildfires, and other natural disasters, and across the nation, they did amazing work in their communities to help those impacted by COVID-19."

The IRS Data Book for fiscal 2020 comprises 33 tables describing all IRS activities from returns processed and revenue collected to numbers and amounts from examinations of returns and collection methods, as well as budget and personnel information.

WASHINGTON — The Treasury Department and the Internal Revenue Service today urged families to take advantage of a special online tool that can help them determine whether they qualify for the Child Tax Credit and the special monthly advance payments beginning on July 15.

Available exclusively on IRS.gov, the new Child Tax Credit Eligibility Assistant, launched earlier this week, is interactive and easy to use. By answering a series of questions about themselves and their family members, a parent or other family member can quickly determine whether they qualify for the credit.

Though anyone can use this tool, it may be particularly useful to families who don’t normally file a federal tax return and have not yet filed either a 2019 or 2020 tax return. Often, these are people who receive little or no income, including those experiencing homelessness, low income households, and other underserved groups. Using this tool can help them decide whether they should take the next step and register for the Child Tax Credit payments on another new IRS tool unveiled earlier this week.

“This new tool provides an important first step to help people understand if they qualify for the Child Tax Credit, which is especially important for those who don’t normally file a tax return,” said IRS Commissioner Chuck Rettig. “The eligibility assistant works in concert with other features on IRS.gov to help people receive this important credit. The IRS is working hard to deliver the expanded Child Tax Credit, and we will be rolling out additional help for taxpayers in the near future. Where possible, please help us help others by distributing CTC information in your communities.”

To help people understand and receive this benefit, the IRS has created a special Advance Child Tax Credit 2021 page at IRS.gov/childtaxcredit2021 designed to provide the most up-to-date information about the credit and the advance payments. Among other things, the page already features a link to both the Non-filer Sign-up Tool, and the Child Tax Credit Eligibility Assistant, along with a third tool launched earlier this week—the Child Tax Credit Update Portal.

The Child Tax Credit Eligibility Assistant does not request any personally-identifiable information (PII) for any family member. For that reason, its results are not an official determination by the IRS. Though the results are reliable, if the questions are answered accurately, they should be considered preliminary. Neither the answers supplied by the user, nor the results, are retained by the IRS.

After checking the Eligibility Assistant, Non-filer Sign-Up Tool is available to help those who don’t normally file tax returns

The online Non-filer Sign-Up Tool is designed to help eligible families who don’t normally file tax returns register for the monthly Advance Child Tax Credit payments.

This tool, an update of last year’s IRS Economic Impact Payment Non-filers tool, is also designed to help eligible individuals who don’t normally file tax returns register for the $1,400 third round of Economic Impact Payments (also known as stimulus checks) and claim the Recovery Rebate Credit for any amount of the first two rounds of Economic Impact Payments they may have missed.

Developed in partnership with Intuit and delivered through the Free File Alliance, this tool provides a free and easy way for eligible people who don’t make enough income to have an income tax return-filing obligation to provide the IRS the basic information needed to figure and issue their Advance Child Tax Credit payments. This includes name, address, and social security numbers. This also enables them to provide information about their qualifying children age 17 and under, their other dependents, and their direct deposit bank information so the IRS can quickly and easily deposit the payments directly into their checking or savings account. It is available only on IRS.gov.

The Non-filer Sign-Up tool should not be used by anyone who has already filed a 2019 or 2020 federal income tax return.

No action needed by most other families

Eligible families who already filed or plan to file 2019 or 2020 income tax returns should not use the Non-filer Sign-Up Tool. Once the IRS processes their 2019 or 2020 tax return, the information will be used to determine eligibility and issue advance payments.

Families who want to claim other tax benefits, such as the Earned Income Tax Credit for low-and moderate-income families, should not use this tool and instead file a regular tax return. For them, the fastest and easiest way to file a return is the Free File system, available only on IRS.gov.

Watch out for scams

The IRS urges everyone to be on the lookout for scams related to both Advance Child Tax Credit payments and Economic Impact Payments. The IRS emphasized that the only way to get either of these benefits is by either filing a tax return with the IRS or registering online through the Non-filer Sign-up Tool, exclusively on IRS.gov. Any other option is a scam.

Watch out for scams using email, phone calls or texts related to the payments. Remember, the IRS never sends unsolicited electronic communications asking anyone to open attachments or visit a non-governmental web site.

Child Tax Credit Update Portal

Earlier this week, Treasury and IRS launched another useful tool, the Child Tax Credit Update Portal. Initially, this tool only enables anyone who has been determined to be eligible for advance payments to see that they are eligible and unenroll from (opt out of) the advance payment program. Later, it will allow people to check on the status of their payments and make updates to their information, including their bank account information. Later this year, the tool will also be available in Spanish.

Community partners can help

The IRS urges community groups, non-profits, associations, education organizations and anyone else with connections to people with children to share this critical information about the Advance Child Tax Credit as well as other important benefits. Among other things, the IRS is already working closely with its community partners to ensure wide access to the Non-filer Sign-up Tool and the Child Tax Credit Update Portal. The agency is also providing additional materials and information that can be easily shared by social media, email and other methods.

About the Advance Child Tax Credit

The expanded and newly-advanceable Child Tax Credit was authorized by the American Rescue Plan Act, enacted in March. Normally, the IRS will calculate the payment based on a family’s 2020 tax return, including those who use the Non-filer Sign-up Tool.  If that return is not available because it has not yet been filed or is still being processed, the IRS will instead determine the initial payment amounts using the 2019 return or the information entered using the Non-filers tool that was available in 2020.

The payment will be up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 through 17.

To make sure families have easy access to their money, the IRS will issue these payments by direct deposit, as long as correct banking information has previously been provided to the IRS. Otherwise, people should watch their mail around July 15 for their mailed payment. The dates for the Advance Child Tax Credit payments are July 15, Aug. 13, Sept. 15, Oct. 15, Nov. 15, and Dec. 15.

For more information, visit IRS.gov/childtaxcredit2021, or read FAQs on the 2021 Child Tax Credit and Advance Child Tax Credit Payments.