Rev. Proc. 2021-23
Table of Contents
SECTION 1. PURPOSE
SECTION 2. CHANGES
SECTION 3. 2021 INCREASED REFUNDABLE CHILD TAX CREDIT
SECTION 4. 2021 EARNED INCOME CREDIT AS MODIFIED AND SURPERSEDED
SECTION 5. APPLICABLE PERCENTAGE TABLE FOR 2021 AS MODIFIED AND SUPERSEDED
SECTION 6. EFFECT ON OTHER DOCUMENTS
SECTION 7. EFFECTIVE DATE
SECTION 8. DRAFTING INFORMATION
SECTION 1. PURPOSE
The Internal Revenue Service’s Office of the Chief Procurement Officer today announced the successful development of a web app called Projected Contract Award Date. The interactive forecast dashboard statistically predicts when contracts will be signed.
“This effort is a new trend in contract management that adjusts our business processes based on timing factors in the government contracting process, using cutting-edge data science technologies,” said Shanna Webbers, IRS Chief Procurement Officer. “The web app will help us shorten the lead time in awards and save valuable time for our procurement staff as well as help contractors.”
The IRS has $2.5 billion in contracts a year. ‘When will a contract be signed?’ is a key question for the IRS and generally for the federal government. This tool gives insight about when each request is likely to turn into a contract. The tool provides a technique other federal agencies can implement, potentially effecting $600 billion in government contracts.
Individual taxpayers and business owners can use the IRS’s recently updated Offer in Compromise Booklet to learn how an offer in compromise works and decide if it could help them resolve their tax debt.
An offer in compromise is an agreement between a taxpayer and the IRS that settles a tax debt for less than the full amount owed. An offer in compromise is an option when a taxpayer can’t pay their full tax liability. It is also an option when paying the entire tax bill would cause the taxpayer a financial hardship. The goal is a compromise that suits the best interest of both the taxpayer and the agency.
When reviewing applications, the IRS considers the taxpayer’s unique set of facts and any special circumstances affecting the taxpayer’s ability to pay as well as the taxpayer’s:
2 Million More Economic Impact Payments Disbursed Under The American Rescue Plan; Continuing Payments Reach Approximately 163 Million
The Internal Revenue Service, the U.S. Department of the Treasury, and the Bureau of the Fiscal Service announced they are disbursing nearly 2 million payments in the seventh batch of Economic Impact Payments from the American Rescue Plan.
Today’s announcement brings the total disbursed so far to approximately 163 million payments, with a total value of approximately $384 billion, since these payments began rolling out to Americans in batches as announced on March 12.
The seventh batch of payments began processing on Friday, April 23, with an official payment date of April 28, with some people receiving direct payments in their accounts earlier as provisional or pending deposits. Here is additional information on this batch of payments:
Building on the success of Settlement Days and Virtual Settlement Days, the Internal Revenue Service Office of Chief Counsel hosted its first National Virtual Settlement Month in March 2021. The results are impressive.
Settlement Days events are coordinated efforts to resolve cases in the United States Tax Court by providing taxpayers who are not represented by counsel the opportunity to receive free tax advice from Low Income Taxpayer Clinics (LITCs), American Bar Association (ABA) volunteer attorneys and other pro bono organizations.
“The March Settlement Days campaign yielded great results with well over half of participating taxpayers settling their cases on a basis agreeable to them without having to represent themselves in Tax Court,” said IRS Commissioner Chuck Rettig. “These strong results could not be achieved without the dedication and support of our partner groups–the LITCs, ABA and other pro bono organizations.”
American Rescue Plan tax credits available to small employers to provide paid leave to employees receiving COVID-19 vaccines; new fact sheet outlines details
The Internal Revenue Service and the Treasury Department announced further details of tax credits available under the American Rescue Plan to help small businesses, including providing paid leave for employees receiving COVID-19 vaccinations.
The additional details, provided in a fact sheet released today, spell out some basic facts about the employers eligible for the tax credits. It also provides information on how these employers may claim the credit for leave paid to employees related to COVID-19 vaccinations
Eligible employers, such as businesses and tax-exempt organizations with fewer than 500 employees and certain governmental employers, can receive a tax credit for providing paid time off for each employee receiving the vaccine and for any time needed to recover from the vaccine. For example, if an eligible employer offers employees a paid day off in order to get vaccinated, the employer can receive a tax credit equal to the wages paid to employees for that day (up to certain limits).
Internal Revenue Service officials today urged participants in abusive micro-captive insurance arrangements to exit these transactions as soon as possible. The IRS has stepped up examinations of these arrangements and has recently won yet another case in U.S. Tax Court that such arrangements are not eligible for the tax benefits claimed.
On March 10, 2021, the U.S. Tax Court held in Caylor Land & Dev. v. Commissioner, T.C. Memo. 2021-30 (2021), that yet another micro-captive arrangement failed to qualify as insurance for federal tax purposes. This decision follows several earlier Tax Court decisions that also confirmed the IRS’s determinations that certain micro-captive arrangements were not eligible for the claimed federal tax benefits. In Caylor, the Tax Court also sustained the IRS’s determination of accuracy-related penalties and rejected the taxpayer’s claim of reliance on tax advice.
Taxpayers who engaged in abusive micro-captive transactions are once again encouraged to consult an independent tax advisor prior to filing their 2020 tax returns. Taxpayers should consider exiting the transaction and not reporting deductions associated with abusive micro-captive insurance transactions.
The Internal Revenue Service is reminding U.S. citizens, resident aliens and any domestic legal entity that the deadline to file their annual Report of Foreign Bank and Financial Accounts (FBAR) is still April 15, 2021.
The extension of the federal income tax filing due date and other tax deadlines for individuals to May 17, 2021, does not affect the FBAR requirement.
However, filers missing the April 15 deadline will receive an automatic extension until October 15, 2021, to file the FBAR. They don’t need to request the extension.
The Bank Secrecy Act requires U.S. persons to file a FBAR if they have:
The IRS reminds taxpayers they may have money waiting for them. An estimated 1.3 million taxpayers didn’t file a 2017 Form 1040 federal income tax return and are due a refund.
Here are some things taxpayers should know about these unclaimed refunds:
Today, the Internal Revenue Service, the U.S. Department of the Treasury, and the Bureau of the Fiscal Service announced they are disbursing more than 25 million payments in the fourth batch of Economic Impact Payments from the American Rescue Plan.
Today’s announcement brings the total disbursed so far to more than 156 million payments, with a total value of approximately $372 billion, since these payments began rolling out to Americans in batches, as announced on March 12.
The fourth batch of payments began processing on Friday, April 2, with an official payment date of April 7, with some people receiving direct payments in their accounts earlier as provisional or pending deposits. Here is additional information on this batch of payments:
As people across the country file their 2020 tax returns, some are claiming the 2020 Recovery Rebate Credit (RRC). The IRS is mailing letters to some taxpayers who claimed the 2020 credit and may be getting a different amount than they expected.
It’s important to remember that the first and second Economic Impact Payments (EIP) were advance payments of the 2020 credit. Most eligible people already received the first and second payments and shouldn’t or don’t need to include this information on their 2020 tax return.
People who didn’t receive a first or second EIP or received less than the full amounts may be eligible for the 2020 RRC. They must file a 2020 tax return to claim the credit, even if they don’t usually file a tax return.
Today, the Internal Revenue Service, the U.S. Department of the Treasury and the Bureau of the Fiscal Service announced they are disbursing several million more payments in the third batch of Economic Impact Payments from the American Rescue Plan. This brings the total disbursed so far to more than 130 million payments worth approximately $335 billion.
As announced on March 12, Economic Impact Payments continue to roll out in batches to millions of Americans. The third batch of payments began processing on Friday, March 26, with an official payment date of March 31, with some people receiving direct payments in their accounts earlier as provisional or pending deposits. Here is additional information on this batch of payments:
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