IRS | TaxConnections

01 Apr 2021

IRS Bulletin On Revenue Ruling Requests: 2021 Update

Rev. Proc. 2021-1, Page 1.
This procedure contains revised procedures for letter rulings and information letters issued by the Associate Chief Counsel (Corporate), Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes), Associate Chief Counsel (Financial Institutions and Products), Associate Chief Counsel (Income Tax and Accounting), Associate Chief Counsel (International), Associate Chief Counsel (Passthroughs and Special Industries), and Associate Chief Counsel (Procedure and Administration). This procedure also contains revised procedures for determination letters issued by the Large Business and International Division, Small Business/Self Employed Division, Wage and Investment Division, and Tax Exempt and Government Entities Division. Rev. Proc. 2020-1 superseded.

Written by IRS | Posted in https://www.irs.gov/pub/irs-irbs/irb21-01.pdf

31 Mar 2021

IRS Projects Stimulus Payments To Non-Filer Social Security And Other Federal Beneficiaries Will Be Disbursed

As work continues on issuing millions of Economic Impact Payments to Americans, the Internal Revenue Service and Treasury Department announced today that they anticipate payments will begin to be issued this weekend to Social Security recipients and other federal beneficiaries who do not normally file a tax return, with the projection that the majority of these payments would be sent electronically and received on April 7.

After receiving data from the Social Security Administration on Thursday, March 25, the IRS began the multi-step process to review, validate, and test tens of millions of records to ensure eligibility and proper calculation of Economic Impact Payments. If no additional issues arise, the IRS currently expects to complete that work and to begin processing these payment files at the end of this week. Because the majority of these payments will be disbursed electronically – through direct deposits and payments to existing Direct Express cards – they would be received on the official payment date of April 7.

Written by IRS | Posted in Social Security Beneficiaries Stimulus Checks

29 Mar 2021

IRS Criminal Investigation Pledges Continued Commitment To Investigating COVID-19 Fraud

The Internal Revenue Service’s Criminal Investigation Division (IRS-CI) marks the one-year anniversary of the Coronavirus Aid, Relief and Economic Security (CARES) Act by pledging its continued commitment to investigating COVID-19 fraud.

Over the last year, IRS-CI has been combatting COVID-19 fraud related to the Economic Impact Payments, Paycheck Protection Program (PPP) and Employee Retention Credit. The agency has investigated more than 350 tax and money laundering cases nationwide totaling $440 million. These investigations covered a broad range of criminal activity, including fraudulently obtained loans, credits and payments meant for American workers, families, and small businesses.

Written by IRS | Posted in IRS Notice

26 Mar 2021

Retirement Savings Contributions Credit (Saver’s Credit)

You may be able to take a tax credit for making eligible contributions to your IRA or employer-sponsored retirement plan. And, beginning in 2018, if you’re the designated beneficiary, you may be eligible for a credit for contributions to your Achieving a Better Life Experience (ABLE) account.

Who’s Eligible For The Credit?

You’re eligible for the credit if you’re:

Age 18 or older,
Not claimed as a dependent on another person’s return, and
Not a student.

You were a student if during any part of 5 calendar months of the tax year you:

Written by IRS | Posted in Retirement Savings Contributions Credit

26 Mar 2021

IRS Statement – American Rescue Plan Act of 2021

The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021. Additional information about a new round of Economic Impact Payments, the expanded Child Tax Credit, including advance payments of the Child Tax Credit, and other tax provisions will be made available as soon as possible on IRS.gov. The IRS strongly urges taxpayers to not file amended returns related to the new legislative provisions or take other unnecessary steps at this time.

Written by IRS | Posted in IRS Statement • Unemployment Benefits

25 Mar 2021

People Who Adopt May Benefit From This Special Tax Credit

The adoption process can be expensive. Fortunately, the adoption tax credit can help offset some those expenses Taxpayers who adopted or started the adoption process in 2020 should review the rules for this credit.

Here are some facts to help people understand the credit and if they can claim it when filing their taxes:

The maximum adoption credit taxpayers can claim on their 2020 tax return is $14,300 per eligible child.
There are income limits that could affect the amount of the credit
Taxpayers should complete Form 8839, Qualified Adoption Expenses. They use this form to figure how much credit they can claim on their tax return.
An eligible child must be younger than 18. If the adopted person is older, they must be physically or mentally unable to take care of themselves.
This credit is non-refundable. This means the amount of the credit is limited to the taxpayer’s taxes due for 2020. Any credit leftover from their owed 2020 taxes can be carried forward for up to five years.
Read More

Written by IRS | Posted in Adoption Tax Credit • IRS Notice

24 Mar 2021

Qualified Business Income Deduction

Many owners of sole proprietorships, partnerships, S corporations and some trusts and estates may be eligible for a qualified business income (QBI) deduction – also called Section 199A – for tax years beginning after December 31, 2017. The deduction allows eligible taxpayers to deduct up to 20 percent of their qualified business income (QBI), plus 20 percent of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income. Income earned through a C corporation or by providing services as an employee is not eligible for the deduction. For more information on what qualifies as a trade or business, see Determining your qualified trades or businesses in Publication 535. PDF

The deduction is available, regardless of whether taxpayers itemize deductions on Schedule A or take the standard deduction. Eligible taxpayers can claim it for the first time on the 2018 federal income tax return they file in 2019.

The deduction has two components.

Written by IRS | Posted in Qualified Business Income Deduction

19 Mar 2021

IRS Office Of Chief Counsel Unveils National Virtual Settlement Days

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.”

Written by IRS | Posted in IRS Notice

18 Mar 2021

Tax Day For Individuals Extended To May 17: Treasury, IRS Extend Filing And Payment Deadline

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.”

Written by IRS | Posted in TaxConnections

17 Mar 2021

Your Economic Impact Payment Is Available: Find Out Status

Find Out How And When You Receive Your Stimulus Check

The IRS enables you to check when your 2021 Economic Impact Payment is available. The tool updates once each day, usually overnight. The IRS asks that you do not call them and encourage you to use this feature to check the status of your payment.

Previous payment information is no longer available in the feature “Get My Payment”. The first batch of payments will be sent by direct deposit with some recipients who have started to receive them by March 12, 2021. Additional batches of payments will be sent in the coming weeks by direct deposit or by mail as a check or debit card.

Status Messages

You’ll see one of these messages when you use Get My Payment:

Payment Status:

A payment has been processed, a payment date is available and payment is to be sent either by direct deposit or mail. Note: mail means you may be issued an EIP Card or a check.

You’re eligible, but a payment has not been processed and a payment date is not yet available.

It will not show the amount of your 2021 Economic Impact Payment.

Payment Status Not Available: We haven’t yet processed your payment or you’re not eligible for a payment

Go to Government Link To Check For Stimulus Payment

Written by IRS | Posted in 2021 Stimulus Check • Economic Impact Payment: How To Check

12 Mar 2021

Get Credit For IRA Contributions Made By April 15 On 2020 Tax Returns

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

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

Written by IRS | Posted in IRA Contributions

11 Mar 2021

IRS Provides Guidance For Employers Claiming The Employee Retention Credit For 2020, Including Eligibility Rules For PPP Borrowers

The Internal Revenue Service today issued guidance for employers claiming the employee retention credit under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), as modified by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act), for calendar quarters in 2020. The guidance in Notice 2021-20 PDF is similar to the information in the employee retention credit FAQs, but includes clarifications and describes retroactive changes under the new law applicable to 2020, primarily relating to expanded eligibility for the credit.

For 2020, the employee retention credit can be claimed by employers who paid qualified wages after March 12, 2020, and before January 1, 2021, and who experienced a full or partial suspension of their operations or a significant decline in gross receipts. The credit is equal to 50 percent of qualified wages paid, including qualified health plan expenses, for up to $10,000 per employee in 2020. The maximum credit available for each employee is $5,000 in 2020.

Written by IRS | Posted in Employee Retention Credit • PPP Eligibility Rules