WASHINGTON – The Internal Revenue Service announced today that the next batch of Economic Impact Payments will be issued to taxpayers this week, with many of these coming by paper check or prepaid debit card.

For taxpayers receiving direct deposit, this batch of payments began processing on Friday and will have an official pay date of Wednesday, March 24, with some people seeing these in their accounts earlier, potentially as provisional or pending deposits. A large number of this latest batch of payments will also be mailed, so taxpayers who do not receive a direct deposit by March 24 should watch the mail carefully in the coming weeks for a paper check or a prepaid debit card, known as an Economic Impact Payment Card, or EIP Card.

No action is needed by most people to obtain this round of Economic Impact Payments (EIPs). People can check the Get My Payment tool on IRS.gov on to see if the their payment has been scheduled.

“The IRS continues to send the third round of stimulus payments in record time,” said IRS Commissioner Chuck Rettig. “Since this new set of payments will include more mailed payments, we urge people to carefully watch their mail for a check or debit card in the coming weeks.”

Following enactment of the American Rescue Plan Act on March 11, the IRS moved quickly to start delivering the third round of Economic Impact Payments. The IRS initiated the first batch of the $1,400 stimulus payments, mostly by direct deposit, on March 12.

Today marks the second batch of payments, with additional payments anticipated on a weekly basis going forward. The vast majority of taxpayers receiving EIPs will receive it by direct deposit. In addition, the IRS and the Bureau of the Fiscal Service leveraged data in their systems to convert many payments to direct deposits that otherwise would have been sent as paper checks or debit cards. This accelerated the disbursement of these payments by weeks.

Watch the mail for paper checks, EIP Cards

Taxpayers should note that the form of payment for the third EIP may be different than earlier stimulus payments. More people are receiving direct deposits, while those receiving them in the mail may get either a paper check or an EIP Card – which may be different than how they received their previous stimulus payments. IRS and the Treasury Department urge eligible people who have not received a direct deposit to watch their mail carefully during this period.

Paper checks will arrive by mail in an envelope from the U.S. Department of the Treasury. For those taxpayers who received their tax refund by mail, this paper check will look similar, but will be labeled as an “Economic Impact Payment.”

Today, the IRS published the latest executive column, “A Closer Look,” which features Commissioner Chuck Rettig discussing how IRS employees helped taxpayers, members of their community and each other during the pandemic. “I’m proud to be on this journey with my dedicated colleagues, and I want everyone to know: Our people make a difference, they care, and they take pride in serving our country.” said Rettig. 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 Office of Chief Counsel has embarked on its most far-reaching Settlement Days program ever, declaring the month of March 2021 as “National Settlement Month.”

This ambitious program builds upon the success achieved from last year’s many settlement day events, when Chief Counsel shifted the program to a virtual format due to the pandemic. Virtual Settlement Day (VSD) events will be conducted by every Chief Counsel office across the country and will serve taxpayers in all 50 states and the District of Columbia.

"Virtual Settlement Day events enable the IRS to deliver meaningful resolution options to taxpayers as the nation works through the pandemic," said IRS Commissioner Chuck Rettig. "Virtual options are an addition to traditional methods of communication and interaction with taxpayers that the IRS will always make available under normal circumstances."

Settlement Days events are coordinated efforts to resolve cases in the United States Tax Court by providing taxpayers who are not represented by counsel with the opportunity to receive free tax advice from Low Income Taxpayer Clinics (LITCs), American Bar Association (ABA) volunteer attorneys and other pro bono organizations.

Taxpayers can also discuss their Tax Court cases and related tax issues with members of the Office of Chief Counsel, the IRS Independent Office of Appeals and IRS Collection representatives. These communications can aid in reaching a settlement by providing taxpayers with a better understanding of what is needed to support their case.

If settlement is reached, IRS Collection personnel will be available to discuss potential payment alternatives. For those who choose to take their cases to court, the VSD process can also help by giving taxpayers a better understanding of what information they need to present to the court to be successful.

Taxpayer Advocate Service (TAS) employees also participate in VSDs to assist taxpayers with tax issues attributable to non-docketed years. Local Taxpayer Advocates and their staff can work with and inform taxpayers about how TAS may be able to assist with other unresolved tax matters, or to provide further assistance after the Tax Court matter is concluded. If a taxpayer experiences difficulties concerning collection, TAS can also assist with collection alternatives.

How does one go about participating in a VSD event? One way is to be notified and invited to attend by the IRS working with LITCs and pro bono attorneys. The IRS proactively identifies and reaches out to taxpayers with Tax Court cases which appear most suitable for this settlement day approach. The IRS also generally encourages taxpayers with active Tax Court cases to contact the assigned Chief Counsel attorney or paralegal about participating in the March VSD events.

"I strongly encourage all taxpayers who have the ability to participate in a settlement day event to do so because they will understand their own case better while not giving up their day in court if they so choose," Rettig said.

This year’s VSD program includes several locations where these events have never been offered before, including: Albuquerque, Billings, Buffalo, Cheyenne,  Cleveland, Denver, Des Moines, Indianapolis, Little Rock, Milwaukee, Nashville, Peoria, Omaha, Reno, Sacramento, San Diego, and San Jose. Chief Counsel has partnered with LITCs and the ABA to ensure there will be volunteers available to assist  taxpayers in all 50 states and the District of Columbia.

The IRS first announced virtual settlement days in May of last year. (IR-2020-87) Since then, Chief Counsel and LITCs have successfully used VSD events  to help more than 259 taxpayers resolve Tax Court cases without having to go to trial. This saves taxpayers and the government time and money. The legal assistance to taxpayers can potentially help achieve a better resolution to their cases.  Of course, the Counsel attorneys or paralegals assigned to cases are always available to settle cases outside of the VSD program. 

LITCs can contact their local Chief Counsel offices about the event for their area. If additional information is needed, reach out to Chief Counsel’s Settlement Day Cadre, or contact Sarah Sexton Martinez at (312) 368-8604 (not a toll-free call).

Pro bono volunteers are encouraged to contact Meg Newman with the American Bar Association Tax Section at Megan.Newman@americanbar.org. In addition to local events, volunteers are being matched to serve where there are gaps in service.

WASHINGTON — The Internal Revenue Service today reminds taxpayers that the most convenient way to check on a tax refund is by using the “Where’s My Refund?” tool at IRS.gov or through the IRS2Go Mobile App.

Taxpayers can start checking their refund status within 24 hours after an e-filed return is received. In addition, “Where’s My Refund?" provides a personalized date after the return is processed and a refund is approved.

Go paperless

Now more than ever, the safest and best way to file a complete and accurate tax return and get a refund is to file electronically and use direct deposit. Taxpayers can visit IRS.gov/filing for more details about IRS Free File, Free File Fillable Forms and free tax preparation sites. E-filing is also available through a trusted tax professional.

Refund timing

While most tax refunds are issued within 21 days, some may take longer because the return requires additional review. 

There are several reasons a tax refund may take long:

The IRS will contact taxpayers by mail if more information is needed to process a return. 

Taxpayers claiming the Recovery Rebate Credit on their tax return will not cause a delay in the processing of that tax return. However, it is important that taxpayers claim the correct amount. If a correction is needed, there may be a slight delay in processing the return and the IRS will send a notice explaining any change made. Refunds may be delayed while the IRS makes any necessary corrections.

Fast and easy refund updates

Taxpayers can use “Where’s My Refund?” to start checking on the status of their return within 24 hours after the IRS acknowledges receipt of an electronically filed return or four weeks after the taxpayer mails a paper return. The tool’s tracker displays progress through three phases: (1) Return Received; (2) Refund Approved; and (3) Refund Sent. To use it a taxpayer must enter their Social security number or ITIN (Individual Taxpayer Identification Number) , their filing status and the exact whole dollar amount of their refund. The IRS updates “Where’s My Refund?” once a day, usually overnight, so there’s no need to check more frequently.

Calling IRS doesn’t speed up refund timing

Calling the IRS won’t expedite a tax refund. The information available on “Where’s My Refund?” is the same information available to IRS telephone assistors.

Most taxpayers who want to prepare their own returns can file electronically for free with IRS Free File. Alternatively, taxpayers who qualify can get free tax help from trained volunteers at community sites around the country.

Ignore refund myths

Some people mistakenly believe they can expedite their refund by ordering a tax transcript, calling the IRS or calling their tax preparer. Ordering a tax transcript will not help a taxpayer get their refund faster or find out when they'll get their refund.

Filing options

Taxpayers can use several options to help find a paid tax preparer. One resource is Choosing a Tax Professional, which includes a list of consumer tips for selecting a tax professional.

The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications is a free searchable and sortable database. It includes the name, city, state and zip code of credentialed return preparers who are CPAs, enrolled agents or attorneys, as well as those who have completed the requirements for the IRS Annual Filing Season Program. A search of the database can help taxpayers verify credentials and qualifications of tax professionals.

Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov anytime. No appointment required and no waiting on hold.

This news release is part of a group of IRS tips called the Tax Time Guide. The guide is designed to help taxpayers as they near the May 17, 2021, tax filing deadline.

WASHINGTON — The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days.

“This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities,” said IRS Commissioner Chuck Rettig. “Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds. Filing electronically with direct deposit is the quickest way to get refunds, and it can help some taxpayers more quickly receive any remaining stimulus payments they may be entitled to.”

Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.

Individual taxpayers do not need to file any forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the May 17 deadline can request a filing extension until Oct. 15 by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Filing Form 4868 gives taxpayers until Oct. 15 to file their 2020 tax return but does not grant an extension of time to pay taxes due. Taxpayers should pay their federal income tax due by May 17, 2021, to avoid interest and penalties.

The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds associated with e-filed returns are issued within 21 days.

This relief does not apply to estimated tax payments that are due on April 15, 2021. These payments are still due on April 15. Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments. In general, estimated tax payments are made quarterly to the IRS by people whose income isn't subject to income tax withholding, including self-employment income, interest, dividends, alimony or rental income. Most taxpayers automatically have their taxes withheld from their paychecks and submitted to the IRS by their employer.

State tax returns

The federal tax filing deadline postponement to May 17, 2021, only applies to individual federal income returns and tax (including tax on self-employment income) payments otherwise due April 15, 2021, not state tax payments or deposits or payments of any other type of federal tax. Taxpayers also will need to file income tax returns in 42 states plus the District of Columbia. State filing and payment deadlines vary and are not always the same as the federal filing deadline. The IRS urges taxpayers to check with their state tax agencies for those details.

Winter storm disaster relief for Louisiana, Oklahoma and Texas

Earlier this year, following the disaster declarations issued by the Federal Emergency Management Agency (FEMA),  the IRS announced relief for victims of the February winter storms in Texas, Oklahoma and Louisiana. These states have until June 15, 2021, to file various individual and business tax returns and make tax payments. This extension to May 17 does not affect the June deadline. 

For more information about this disaster relief, visit the disaster relief page on IRS.gov.

WASHINGTON – Today, the Internal Revenue Service, the U.S. Department of the Treasury and the Bureau of the Fiscal Service announced they disbursed approximately 90 million Economic Impact Payments from the American Rescue Plan. As announced last week, Economic Impact Payments are rolling out in tranches to millions of Americans in the coming weeks.

The first batch of payments were mostly sent by direct deposit, which some recipients started receiving this past weekend. As of today, all recipients of this first batch of direct deposit payments will have access to their funds. Here is additional information on this first batch of payments:

Additional batches and 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 all Economic Impact Payments will be issued by direct deposit. No action is needed by most taxpayers; the payments are automatic and, in many cases, similar to how people received their first and second round of Economic Impact Payments in 2020.

Individuals can check the “Get My Payment” tool on IRS.gov to see the payment status of these payments. Additional information on these Economic Impact Payments, along with a Fact Sheet of Frequently Asked Questions, is available on IRS.gov.

WASHINGTON — The Internal Revenue Service today reminded taxpayers about the rules for required minimum distributions (RMDs) from retirement accounts.

A retirement plan account owner must normally begin taking an RMD annually starting the year he or she reaches 70 ½ or 72, depending on their birthdate and maybe the year they retire. Retirement plans requiring RMDs include traditional, Simplified Employee Pension Plan (SEP) and Savings Incentive Match Plan for Employees (SIMPLE) Individual Retirement Accounts; 401(k), 403(b), 457(b), profit sharing and other defined contribution plans.

The Setting Every Community Up for Retirement Enhancement (SECURE) Act changed the age when individuals must begin taking withdrawals from their retirement accounts. Someone born on or before June 30, 1949, was required to start getting RMDs for the year they reached the age of 70½. However, under the SECURE Act, if a person’s 70th birthday is July 1, 2019, or later, they do not have to take their first RMD until the year they reach age 72.

The Coronavirus, Aid, Relief and Economic Security (CARES) Act waived RMDs during 2020 so seniors and retirees, including beneficiaries with inherited accounts, were not required to take money out of IRAs and workplace retirement plans. The waiver included RMDs for individuals who turned age 70½ in 2019 and took their first RMD in 2020.

Individuals who reached age 70 ½ before 2020 and were still employed, but terminated employment in 2020, would normally have a 2020 RMD due by April 1, 2021, from their workplace retirement plan. This RMD is also waived as part of the CARES Act relief. Roth IRAs do not require withdrawals until after the death of the owner. 

2021 RMDs

Individuals who reached 70 ½ in 2019 or earlier, did not have an RMD due for 2020. For 2021, they will have an RMD due by Dec. 31, 2021. Individuals who did not reach age 70 ½ in 2019 will reach age 72 in 2021 will have their first RMD due by April 1, 2022, and their second RMD due by Dec. 31, 2022. To avoid having both amounts included in their income for the same year, the taxpayer can make the first withdrawal by Dec. 31, 2021, instead of waiting until April 1, 2022. After the first year, all RMDs must be made by Dec. 31.

An IRA trustee must either report the amount of the RMD to the IRA owner or offer to calculate it for the owner. Calculating the amount of the RMD depends on the type of IRA or if they are from multiple accounts. Not taking a required distribution, or not withdrawing enough, could mean a 50% excise tax on the amount not distributed.

Some can delay RMDs

Though the April 1 deadline for taking the first RMD is mandatory for all owners of traditional IRAs, participants in workplace retirement plans who are still working usually can, if their plan allows, wait until April 1 of the year after they retire to start receiving distributions from these plans. Individuals who reached age 70 ½ before 2020 and were still employed, but terminated employment in 2020, would normally have a 2020 RMD due by April 1, 2021 from their workplace retirement plan. This RMD is also waived as part of the CARES Act relief.

Employees of public schools and certain tax-exempt organizations should check with their employer, plan administrator or provider to see how to treat these accruals.

Coronavirus-related distributions and loans

The CARES Act made it easier to access savings in IRAs and workplace retirement plans for those affected by the coronavirus. This relief provided favorable tax treatment for certain withdrawals from retirement plans and IRAs, including expanded loan options.

Distributions: Certain distributions made from Jan. 1, 2020, through Dec. 30, 2020, from IRAs or workplace retirement plans to qualified individuals may be treated as coronavirus-related distributions. These distributions are not subject to the 10% additional tax on early distributions (including the 25% additional tax on certain SIMPLE IRA distributions).

Taxes on coronavirus-related distributions are includible in taxable income:

Coronavirus-related distributions may be repaid to an IRA or workplace retirement plan within three years.

If you had an outstanding loan balance in when you left employment, the plan sponsor will usually offset the loan balance against your benefit.

RMDs: An IRA owner or beneficiary who received an RMD in 2020 had the option of returning it to their account or other qualified plan to avoid paying taxes on that distribution. RMDs in 2020 that were not rolled over or repaid may be eligible to be treated as coronavirus-related distributions if the individual is a qualified individual. A 2020 RMD that otherwise qualifies as a coronavirus-related distribution may be repaid over a 3-year period or have the taxes due on the distribution spread over three years.

A withdrawal from an inherited IRA to a qualified individual may also be a coronavirus-related distribution. Income from the withdrawal may be spread over three years for income inclusion; however, the withdrawal may not be repaid to the inherited IRA.

IRS Notice 2020-51 provided that the one rollover per 12-month period limitation and the restriction on rollovers to inherited IRAs did not apply to repayments made by Aug. 31, 2020. The RMD suspension did not apply to qualified defined benefit plans.

The CARES Act included special rules for plan loans made to qualified individuals. Plans could suspend loan repayments for up to one year, although, typically, repayments resumed in January 2021. This effectively gives up to six years (instead of five) to repay a typical plan loan.

IRS online tools and publications can help

Taxpayers can find answers, forms and instructions and easy-to-use tools at IRS.gov.

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.

Notice 2021-17 clarifies section IV.E of Notice 2021–12 https://www.irs.gov/pub/irs-drop/n-21-12.pdf, 2021–6 I.R.B. 828, by providing a more precise citation in the scope of that provision. 

Notice 2021-17 will be in IRB:  2021-14, dated  April 5, 2021

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.