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Tag Archive for IRS Notice

Economic Impact Payments Issued; Eligible People Can Claim Recovery Rebate Credit

Economic Impact Payments Issued; Eligible People Can Claim Recovery Rebate Credit

The IRS announced that, as required by law, all legally permitted first and second round of Economic Impact Payments have been issued and the IRS now turns its full attention to the 2021 filing season.

Beginning in April 2020, the IRS and Treasury Department began delivering the first round of Economic Impact Payments within two weeks of the legislation. The IRS issued more than 160 million EIPs to taxpayers across the country totaling over $270 billion, while simultaneously managing an extended filing season. In addition, since Congress enacted the COVID-related Tax Relief Act of 2020, the IRS has delivered more than 147 million EIPs in the second-round totaling over $142 billion.

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IRS Notice 2021-10 Provides Additional Short-term Relief For Qualified Opportunity Fund Requirements

IRS Notice 2021-10 Provides Additional Short-term Relief For Qualified Opportunity Fund Requirements

As a result of the continuing COVID-19 impact on businesses and individuals the IRS released a second Notice (IRS Notice 2021-10) on January 19, 2021 to provide Opportunity Zone (OZ) investors with additional time to roll capital gains into a Qualified Opportunity Fund (QOF), as well as additional time to make “substantial improvements” to acquired property and additional time to acquire Qualified Opportunity Zone Business Property (QOZBP).  This Notice follows the June 2020 Notice 2020-39 which extended various 2019 and 2020 OZ Program deadlines and testing dates – generally through December 31st. The extended relief under 2021-10 is generally through March 31, 2021.

Details of the relief given by Notice 2021-10 are outlined below:

  • 180-day investment period.Previously, Notice 2020-39 had postponed the investment period to December 31, 2020. Notice 2021-10 further postpones the last day of the 180-day investment period to March 31, 2021, if the last day of the original 180-day investment period fell on or after April 1, 2020

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IRS Offers Guidance To Taxpayers On Identity Theft Involving Unemployment Benefits

IRS Offers Guidance To Taxpayers On Identity Theft Involving Unemployment Benefits

The Internal Revenue Service today urged taxpayers who receive Forms 1099-G for unemployment benefits they did not actually get because of identity theft to contact their appropriate state agency for a corrected form.

States issue Forms 1099-G to the taxpayer and to the IRS to report what taxable income, such as refunds or unemployment benefits, were issued by state agencies.

During 2020, millions of taxpayers were impacted by the COVID-19 pandemic through job loss or reduced work hours. Some taxpayers who faced unemployment or reduced work hours applied for and received unemployment compensation from their state. Under federal law, unemployment benefits are taxable income.

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Treasury Issues Millions Of Second Economic Impact Payments By Debit Card

Treasury Issues Millions Of Second Economic Impact Payments By Debit Card

Starting this week, the Treasury Department and the Internal Revenue Service are sending approximately 8 million second Economic Impact Payments (EIPs) by prepaid debit card.

These EIP Cards follow the millions of payments already made by direct deposit and the ongoing mailing of paper checks that are delivering the second round of Economic Impact Payments as rapidly as possible.

For those who don’t receive a direct deposit, they should watch their mail for either a paper check or a prepaid debit card. To speed delivery of the payments to reach as many people as soon as possible the Treasury’s Bureau of Fiscal Service is sending payments out by prepaid debit card.

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Eligible Paycheck Protection Program Expenses Now Deductible

Eligible Paycheck Protection Program Expenses Now Deductible

The Treasury Department and the Internal Revenue Service issued guidance PDF today allowing deductions for the payments of eligible expenses when such payments would result (or be expected to result) in the forgiveness of a loan (covered loan) under the Paycheck Protection Program (PPP).

Today’s guidance, Revenue Ruling 2021-02 PDF, reflects changes to law contained in the COVID-related Tax Relief Act of 2020, enacted as part of the Consolidated Appropriations Act, 2021 (Act), Public Law 116-260, which was signed into law on December 27, 2020.

The COVID-related Tax Relief Act of 2020 amended the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to say that no deduction is denied, no tax attribute is reduced, and no basis increase is denied by reason of the exclusion from gross income of the forgiveness of an eligible recipient’s covered loan. This change applies for taxable years ending after March 27, 2020.

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IRS: Economic Impact Payments On Their Way

IRS States Economic Impact Payments On Their Way

The Internal Revenue Service urged people to visit IRS.gov for the most current information on the second round of Economic Impact Payments rather than calling the agency or their financial institutions or tax software providers. IRS phone assistors do not have additional information beyond what’s available on IRS.gov.

The IRS and the Treasury Department began issuing a second round of Economic Impact Payments, often referred to as stimulus payments, last week.

The direct deposit payments may take several days to post to individual accounts. Some Americans may have seen the direct deposit payments as pending or as provisional payments in their accounts before the scheduled payment date of January 4, 2021, which is the official date funds are available.

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IRS Provides Guidance On Legislation That Increases Automatic Enrollment Cap Percentage And Eases Burdens For Certain Safe Harbor Plans

IRS Provides Guidance On Legislation That Increases Automatic Enrollment Cap Percentage And Eases Burdens For Certain Safe Harbor Plans

The Internal Revenue Service today issued Notice 2020-86 PDF addressing certain provisions of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) affecting safe harbor plans, including safe harbor 401(k) plans and certain 403(b) plans.

A safe harbor 401(k) plan is similar to a traditional 401(k) plan but is structured in a way that certain compliance testing can be avoided. Among other things, a safe harbor 401(k) plan must provide for employer contributions that are fully vested when made. These contributions may be employer matching contributions, limited to employees who defer, or employer contributions made on behalf of all eligible employees, regardless of whether they make elective deferrals.

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How The IRS Prioritizes Compliance Work On High Income Non-Filers Through National And International Efforts

How The IRS Prioritizes Compliance Work On High Income Non-Filers Through National And International Efforts

“Our pursuit of these high income non-filers provides an important service and shows respect to the majority of Americans who pay their taxes.”

Like many at the IRS, I’ve dedicated my career here at the agency for more than 30 years to support fairness and integrity in our nation’s voluntary tax system.

I’ve done this through many different roles at the IRS, including my work for many years in Criminal Investigation and now as Commissioner of the IRS Small Business/Self-Employed division.

Even in a challenging year like this, when the IRS has provided assistance and help for those affected by COVID-19 through Economic Impact Payments and various tax relief efforts, people should understand we haven’t lost focus on identifying and pursuing high income non-filers who live here in the United States and abroad.

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Here’s Who Qualifies For The Employee Business Expense Deduction

qualifies for the employee business expense deduction

Employee business expenses can be deducted as an adjustment to income only for specific employment categories and eligible educators.

Taxpayers can no longer claim unreimbursed employee expenses as miscellaneous itemized deductions, unless they are a qualified employee or an eligible educator. They must complete Form 2106, Employee Business Expenses to take the deduction.

If someone falls into one of these employment categories, they are considered a qualified employee:

  • Armed Forces reservists
  • Qualified performing artists
  • Fee-basis state or local government officials
  • Employees with impairment-related work expenses

No other type of employee is eligible to claim a deduction for unreimbursed employee expenses.

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IRS Extends Economic Impact Payment Registration Deadline For Non-Filers To Nov. 21

IRS Extends Economic Impact Payment Registration Deadline For Non-Filers To Nov. 21

The deadline to register for an Economic Impact Payment using the Non-Filers tool is extended to November 21, 2020.

The IRS urges people who don’t typically file a tax return – and haven’t received an Economic Impact Payment – to register as quickly as possible using the Non-Filers: Enter Info Here tool on IRS.gov. The tool will not be available after November 21.

This additional time is solely for those who haven’t registered or received their EIP and don’t normally file a tax return. For taxpayers who requested an extension of time to file their 2019 tax return, that deadline is Thursday, October 15.

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IRS Issues Final Regulations For Achieving A Better Life Experience Accounts

IRS Issues Final Regulations For Achieving A Better Life Experience Accounts

The Internal Revenue Service posted to IRS.gov final regulations today for Achieving a Better Life Experience (ABLE) accounts.

The regulations issued today finalize two previously issued proposed regulations. The first proposed regulation was published in 2015 after the enactment of the ABLE Act. The second proposed regulation was published in 2019 in response to the Tax Cuts and Jobs Act, which made significant changes to ABLE accounts. 

Eligible individuals may now put more money into their ABLE account and roll money from their qualified tuition programs (529 plans) into their ABLE accounts. Also, certain contributions made to ABLE accounts by low- and moderate-income workers may now qualify for the Saver’s Credit.

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