Notice 2020-73 announces that the Department of the Treasury and the Internal Revenue Service intend to amend the regulations under section 987 to defer the applicability date of the final regulations under section 987, as well as certain related final regulations, by one additional year.  The applicability date of these regulations has been deferred under prior notices to taxable years beginning after December 7, 2020.  The Treasury Department and the IRS intend to amend §§1.861-9T, 1.985-5, 1.987-11, 1.988-1, 1.988-4, and 1.989(a)-1 of the 2016 final regulations and §§1.987-2 and 1.987-4 of the 2019 final regulations (the related 2019 final regulations) to provide that the 2016 final regulations and the related 2019 final regulations apply to taxable years beginning after December 7, 2021.  The Notice also states that taxpayers may rely on certain related proposed regulations that cross-reference temporary regulations which have expired.

Notice 2020-73 will be in IRB:  2020-41, dated October 5, 2020.

WASHINGTON –The Internal Revenue Service today released a state-by-state breakdown of the roughly nine million people receiving a special mailing this month encouraging them to see if they’re eligible to claim an Economic Impact Payment. 

The IRS will mail the letters to people who typically aren’t required to file federal income tax returns but may qualify for an Economic Impact Payment. The letter urges recipients to visit the special Non-Filers: Enter Payment Info tool on IRS.gov before the Oct. 15 deadline to register for an Economic Impact Payment. 

“The IRS continues to work hard to reach people eligible for these payments,” said IRS Commissioner Chuck Rettig. “These mailings are the latest step by the IRS to reach as many people as possible for these important payments. We are releasing this state-by-state information so that state and local leaders and organizations can better understand the size of this population in their communities and assist them in claiming these important payments. Time is running out to claim a payment before the deadline.” 

These letters are part of a final stage of the IRS’s sweeping outreach and public awareness campaign on the Economic Impact Payments that began in March. These efforts included IRS outreach to thousands of partner groups across the nation, including partner groups serving underserved communities, people experiencing homelessness, and those whose primary language isn’t English. 

So far, more than 7 million people have already used the Non-Filers tool to register for a payment. 

This month’s letters, delivered from an IRS address, are being sent to people who haven’t filed a return for either 2018 or 2019. Based on an internal analysis, these are people who don’t typically have a tax return filing requirement because they appear to have very low incomes based on Forms W-2 and 1099, and other third-party statements available to the IRS. 

The breakdown below shows the number of individuals in each state to whom the IRS is sending a letter. 

The letter urges the recipient to register at IRS.gov by Oct. 15 in order to receive a payment by the end of the year. Individuals can receive up to $1,200, and married couples can receive up to $2,400. People with qualifying children under age 17 at the end of 2019 can get up to an additional $500 for each qualifying child. 

The letter, officially known as IRS Notice 1444-A, is written in English and Spanish and includes information on eligibility criteria. If they haven’t done so already, this letter urges eligible individuals to register using the free Non-Filers: Enter Payment Info tool, available in English and Spanish and only on IRS.gov. To help address fraud concerns, a copy of the letter is available on IRS.gov. 

The IRS cautions that receiving a letter is not a guarantee of eligibility. An individual is likely eligible for an Economic Impact Payment if they:

The registration deadline for non-filers to claim an Economic Impact Payment through the Non-Filers tool is Oct. 15, 2020. People who are eligible should not wait to receive a letter and should register now. Alternatively, people can wait until next year and claim the recovery rebate credit on their 2020 federal income tax return by filing in 2021. 

The IRS emphasized that anyone required to file either a 2018 or 2019 tax return should file the tax return and not use the Non-Filers tool. That tool is designed for people with incomes typically below $24,400 for married couples, and $12,200 for singles. This includes couples and individuals who are experiencing homelessness. 

Those unable to access the Non-Filers tool may submit a simplified paper return following the procedures described in the Economic Impact Payment FAQs on IRS.gov.

People can qualify for a payment, even if they don’t work or have no earned income. But low- and moderate-income workers and working families eligible to receive special tax benefits, such as the Earned Income Tax Credit or Child Tax Credit, cannot use this tool. They will need to file a regular tax return as soon as possible. The IRS will use their tax return information to determine and issue any Economic Impact Payment for which they are eligible.

Anyone using the Non-Filers tool can speed up the arrival of their payment by choosing to receive it by direct deposit. Those not choosing this option will get a check. 

Beginning two weeks after they register, people can track the status of their payment using the Get My Payment tool, available only on IRS.gov. 

State	State Postal Code	Total Number of EIP Payments
Armed Forces Americas	AA	522
Armed Forces Non-Americas	AE	3,096
Alabama	AL	148,242
Armed Forces Pacific	AP	2,177
Alaska	AK	30,807
Arizona	AZ	239,037
Arkansas	AR	91,386
California	CA	1,186,896
Colorado	CO	177,502
Connecticut	CT	89,458
Delaware	DE	32,875
District of Columbia	DC	33,964
Florida	FL	567,425
Georgia	GA	348,631
Hawaii	HI	48,767
Iowa	IA	71,382
Idaho	ID	40,943
Illinois	IL	309,972
Indiana	IN	150,154
Kansas	KS	69,595
Kentucky	KY	117,136
Louisiana	LA	159,575
Maine	ME	32,346
Maryland	MD	192,153
Massachusetts	MA	187,768
Michigan	MI	270,590
Minnesota	MN	115,914
Mississippi	MS	86,669
Missouri	MO	159,077
Montana	MT	30,977
Nebraska	NE	38,201
Nevada	NV	94,472
New Hampshire	NH	29,680
New Jersey	NJ	216,145
New Mexico	NM	72,333
New York	NY	537,726
North Carolina	NC	245,623
North Dakota	ND	19,596
Ohio	OH	283,194
Oklahoma	OK	123,473
Oregon	OR	131,647
Pennsylvania	PA	276,066
Rhode Island	RI	24,686
South Carolina	SC	142,382
South Dakota	SD	19,391
Tennessee	TN	171,065
Texas	TX	796,525
Utah	UT	69,140
Vermont	VT	13,665
Virginia	VA	205,600
Washington	WA	203,978
West Virginia	WV	27,788
Wisconsin	WI	111,426
Wyoming	WY	14,506
Total		8,863,344

For more information on the Economic Impact Payment, including updated answers to frequently asked questions and other resources, visit IRS.gov/coronavirus.

File and pay electronically, request direct deposit for refunds

WASHINGTON – The Internal Revenue Service today reminds taxpayers who filed an extension that the Oct. 15 due date to file 2019 tax returns is approaching. Taxpayers should complete their tax returns and file on or before the Oct. 15 deadline.

Convenient electronic filing options, including IRS Free File, are still available. Taxpayers and tax professionals should continue to use electronic options to support social distancing and speed the processing of tax returns, refunds and payments.

Although Oct. 15 is the last day for most people to file, some taxpayers may have more time. They include:

Taxpayers who did not request an extension and have yet to file a 2019 tax return can generally avoid additional penalties and interest by filing the return as soon as possible and paying any taxes owed.

Choose direct deposit for refunds
The safest and fastest way for taxpayers to get their refund is to have it electronically deposited into their bank or other financial account. Taxpayers can use direct deposit to deposit their refund into one, two or even three accounts. Direct deposit is much faster than waiting for a paper check to arrive in the mail.

After filing, use the Where's My Refund? tool on IRS.gov or download the IRS2Go mobile app to track the status of a refund.

Schedule federal tax payments electronically
Taxpayers who filed an extension can file now and schedule their federal tax payments up to the Oct. 15 due date. They can pay online, by phone or with their mobile device and the IRS2Go app. When paying federal taxes electronically taxpayers should remember:

Economic Impact Payments-Non-Filers can still get one; must act by Oct. 15
Though most Americans − more than 160 million in all − have already received their Economic Impact Payments, the IRS reminds anyone with little or no income who is not required to file a tax return that they may be eligible to receive an Economic Impact Payment.

Available in both English and Spanish, the Non-Filers tool on IRS.gov is designed for people with incomes typically below $24,400 for married couples, and $12,200 for singles. This includes couples and individuals who are experiencing homelessness. People must enter their information by Oct. 15 to get a payment this year.

People can qualify for a payment, even if they don’t work or have no earned income. But low- and moderate-income workers and working families eligible to receive special tax benefits, such as the Earned Income Tax Credit or Child Tax Credit, cannot use this tool. They will need to file a regular return as soon as possible. The IRS will use their tax return information to determine and issue any EIP for which they are eligible.

IRS.gov assistance
Taxpayers may find answers to many of their questions using the Interactive Tax Assistant (ITA), a tax law resource that works using a series of questions and responses. IRS.gov has answers for Frequently Asked Questions. The IRS website has tax information in: Spanish (Español); Chinese (中文); Korean (한국어); Russian (Pусский); Vietnamese (Tyng Việt); and Haitian Creole (Kreyòl ayisyen). Go to IRS.gov/payments for electronic payment options.

WASHINGTON – The Internal Revenue Service continues to look for ways to assist taxpayers affected by the COVID-19 pandemic.  As part of that effort, the IRS reminds taxpayers and tax practitioners of the procedures for requesting expedited handling of requests for letter rulings under Rev. Proc. 2020-1, 2020-1 I.R.B. 1 (Jan. 2, 2020).

As set forth in Rev. Proc. 2020-1, the IRS ordinarily processes requests for letter rulings in the order that they were received.  A taxpayer with a compelling need to have a request processed more quickly may request expedited handling.  The request for expedited handling must be made in writing, preferably in a separate letter submitted with the letter ruling request.  Requests for expedited handling are granted at the discretion of the IRS and typically involve a factor outside of the taxpayer’s control that creates a real business need to obtain a letter ruling before a certain date in order to avoid serious business consequences.  Requests for expedited handling should be submitted as promptly as possible after the taxpayer has become aware of the deadline or compelling business need. 

The COVID-19 pandemic is a factor outside of the taxpayer’s control that can support a request for expedited handling under Rev. Proc. 2020-1. As a result, and consistent with Executive Order 13924 of May 19, 2020, taxpayers are encouraged to seek expedited handling if they face a compelling need related to COVID-19.  Such requests will be handled as provided in Rev. Proc. 2020-1.

More information on the procedures for requesting expedited handling is provided in Section 7.02(4) of Rev. Proc. 2020-1.  In addition, Rev. Proc. 2020-29, 2020-21 I.R.B. 859 (May 18, 2020), sets forth procedures for the electronic submission of letter ruling requests.

The IRS has issued an advance copy of TD 9914 on Eligible Terminated S Corporations.

WASHINGTON — The Internal Revenue Service today issued final regulations for taxpayers who claim the rehabilitation credit. 

The Tax Cuts and Jobs Act (TJCA) amended the rehabilitation credit so that taxpayers now claim the rehabilitation credit over a five-year period.  The TCJA amendments generally apply to a taxpayer’s qualified rehabilitation expenditures paid or incurred after Dec. 31, 2017. 

Taxpayers, however, may claim the credit all in one year under pre-TCJA rules for projects that qualify under a transition rule. The transition rule allows taxpayers to use the prior law if the project meets these conditions:

The final regulations require taxpayers to determine the rehabilitation credit amount in the year they place the building into service and allocate that amount ratably over the five-year period.

The final regulations also include a rule to coordinate the TCJA amendments with the special rules for the investment credit, of which the rehabilitation credit is part.  Finally, the final regulations include examples illustrating how to apply the rules.
 
Updates on the implementation of the TCJA can be found on the Tax Reform page of IRS.gov.

Revenue Ruling 2020-20 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. 

Revenue Ruling 2020-20 will be in IRB:  2020-41, dated October 5, 2020.

Notice 2020-72 provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under § 417(e)(3), and the 24-month average segment rates under § 430(h)(2) of the Internal Revenue Code.  In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I), as reflected by the application of § 430(h)(2)(C)(iv). 

Notice 2020- 72 will be IRB:  IRB 2020-40, dated 09/28/2020.

WASHINGTON — The final regulations for the business interest expense deduction limitation published in the Federal Register today. The final regulations vary slightly from the document released on IRS.gov on July 28, 2020.

The Treasury Department and the IRS released a version of the final regulations on the business interest expense deduction limitation on IRS.gov on July 28, 2020. The version released on IRS.gov contains a disclaimer that the document had been submitted to the Office of the Federal Register for publication, and notes that the version of the final regulations may vary slightly from the document published in the Federal Register.

The version of the final regulations published in the Federal Register contains minor editorial changes.  In response to questions from taxpayers and practitioners, the final regulations published in the Federal Register clarify that taxpayers may rely on the final regulations for any taxable year beginning after Dec. 31, 2017, provided that certain conditions are met. 

The document published in the Federal Register is the official document.

For more information about this and other TCJA provisions, visit IRS.gov/taxreform

Notice 2020-71 announces the special per diem rates effective October 1, 2020, which taxpayers may use to substantiate the amount of expenses for lodging, meals, and incidental expenses when traveling away from home.  This notice provides the special transportation industry rate, the rate for the incidental expenses only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method. 

Notice 2020-71 will be in IRB:   2020-40, dated 9/28/20.