WASHINGTON — The Internal Revenue Service reminds businesses required to file reports of large cash transactions that e-filing is a fast, easy and secure option for filing their reports. Now, businesses can batch file their reports, which is especially helpful to those required to file many forms. 

Although businesses have the option of filing Form 8300, Report of Cash Payments Over $10,000, on paper, many have already found the free and secure e-filing system is a more convenient and cost-effective way to meet the reporting deadline. The form is due 15 days after a transaction and there’s no charge for the e-file option.

Although many cash transactions are legitimate, information reported on this form can help stop those who evade taxes, profit from the drug trade, engage in terrorist financing and conduct other criminal activities. The government can often trace money from these illegal activities through the payments reported on Form 8300 and other cash reporting forms.

Businesses that file Form 8300 electronically get free, automatic acknowledgment of receipt when they file. In addition, electronic filing is more accurate, reducing the need for follow-up correspondence with the IRS.

To file Form 8300 electronically, a business must set up an account with FinCEN’s BSA E-Filing System. For more information, interested businesses can call the BSA E-Filing Help Desk at 866-346-9478 or email them at BSAEFilingHelp@fincen.gov. The help desk is available Monday through Friday from 8 a.m. to 6 p.m. Eastern time.

For more information about the reporting requirement, see FS-2020-11, available on IRS.gov.

RP 2020-36 provides indexing adjustments required by statute for certain provisions under section 36B.  Specifically, this revenue procedure updates the applicable percentage table used to calculate an individual’s premium tax credit for taxable years beginning in calendar year 2021 and updates the required contribution percentage for plan years beginning after calendar year 2020.

It will appear in IRB 2020-32 dated Aug. 3, 2020.

WASHINGTON – The Internal Revenue Service announced today the creation of the new Enterprise Digitalization and Case Management office, which will spearhead IRS efforts to empower taxpayers and IRS employees to rapidly resolve issues in a simplified digital environment.

The office’s efforts will support overall IRS modernization and implementation of long-term changes stemming from the Taxpayer First Act.

Serving as co-directors of the new office will be Hampden “Harrison” Smith, IV, currently the agency’s Deputy Chief Procurement Officer, and Justin Lewis Abold-LaBreche, who is the Director of Enterprise Case Management.

The new stand-alone office will focus on enhancing the taxpayer experience by improving business processes and modernizing systems. The office will apply agile, customer-centered thinking and draw on leading industry test-and-learn practices to rapidly identify what combination of business process and technology works best for the IRS’s customers and employees. In the digitalization space, a portfolio-based approach will be utilized for the challenges the IRS faces, in the form of multiple small pilot projects for business process changes and technology solutions. The pilots will be focused on a desired outcome instead of a prescriptive approach, and they will be scaled and funded as they demonstrate value and return on investment. In the case management space, the office has already procured a commercial-off-the-shelf platform, Pega Systems, and its first release is well underway.

The IRS has had a dedicated team focused on the Enterprise Case Management initiative, which is focused on standing up a consolidated enterprise case management approach to overcome the challenges the IRS currently faces from having case work taking place on more than 60 aging systems, most of which can’t talk with one another. As the team continued its work, it became clear that the digitalization of processes as well as paper, including items such as case files, was an integral part of improving overall case management and the mission of the agency.

“Ultimately, you cannot improve case management without improving the digitalization of paper records,” said Jeff Tribiano, Deputy Commissioner for Operations Support. “To reflect the importance of this area, we decided to establish this new office to help focus our efforts on moving forward.”

The office will report to both Tribiano and Sunita Lough, the Deputy Commissioner for Services and Enforcement. Staffing for the new office is still being determined, and employees currently working on case management issues will continue in their current roles.

“This new office reflects an agency-wide priority,” Lough said. “To help this effort, we turned to Harrison and Justin, who bring a variety of skills and expertise to help us navigate this challenging area that holds promise for improved service and efficiency for both taxpayers and the IRS.”

Smith has served as the deputy in the IRS procurement office since July 2019 and has recently been focused on the application of automation and machine learning technologies in the procurement space.  Prior to joining the IRS, he served as the Industry Liaison for the Department of Homeland Security (DHS), where he focused on industry engagement, innovation labs, and creative pricing arrangements, and also served as a principal adviser to the DHS Chief Procurement Officer. Smith has 15 years of operational procurement experience with various DHS offices and the Naval Sea Systems Command. A former Presidential Management Fellow, Smith also worked on policy and strategic analysis positions in Congress. He holds a B.A. in International Relations and an M.A. in US Foreign Policy from The American University, and an M.B.A. from George Washington University. 

Abold-LaBreche has served as the Director, Enterprise Case Management Office since May 2019. Prior to this assignment, he held executive positions in each of the IRS’s business operating divisions including: acting Director, Government Entities and Shared Services, Tax Exempt and Government Entities (TE/GE) Division;  Field Director, Accounts Management, Austin in the Wage and Investment (W&I) Division; acting Director of Examination Policy in Small Business / Self-Employed (SB/SE) Division; and Assistant to the Industry Director, Global High Wealth in the Large Business and International (LB&I) Division. Abold-LaBreche also served as the Initiative Director and then acting Director and Senior Advisor to the IRS Commissioner in the Office of Compliance Analytics. Abold-LaBreche also worked in DHS and is a former U.S. Air Force officer. A Fulbright Scholar, he holds a PhD from Oxford University, M.S. in Strategic Intelligence from the National Defense Intelligence College and a B.S. in Applied Mathematics from Yale University.

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued a final regulation addressing the treatment of income earned by certain foreign corporations that is subject to a high rate of foreign tax. 

The final regulations allow taxpayers to exclude certain high-taxed income of a controlled foreign corporation from their Global Intangible Low Taxed Income (GILTI) computation on an elective basis. 

Treasury and the IRS today also issued a proposed regulation regarding the high-tax exception with the GILTI high-tax exclusion. Treasury and the IRS welcome public comments. 

Updates on the TCJA can be found on the Tax Reform page of IRS.gov.

WASHINGTON — For those who missed the July 15 tax deadline and didn’t request an extension, the Internal Revenue Service reminds taxpayers about some important tips, including filing electronically as soon as possible to reduce potential penalties. 

Some taxpayers may have extra time to file and pay any taxes due without penalties and interest. These include:

The IRS offers these after-tax-day tips:

File to get a tax refund
The only way to get a refund is to file a tax return. There is no penalty for filing after the deadline if a refund is due. Use electronic filing options including  IRS Free File available on IRS.gov through Oct. 15 to prepare and file returns electronically.

The IRS reminds taxpayers that, while we continue to process electronic and paper tax returns, issue refunds, and accept payments, we’re experiencing delays in processing paper tax returns due to limited staffing. If a taxpayer filed a paper tax return, we will process it in the order we received it. Do not file a second tax return or call the IRS.

Taxpayers can track a refund using the “Where’s My Refund?” tool on IRS.gov, IRS2Go and by phone at 800-829-1954. Taxpayers need the primary Social Security number on the tax return, the filing status and the expected refund amount. The tool updates once daily, usually overnight, so checking more frequently will not yield different results. The “Where’s My Refund?” tool cannot be used to track Economic Impact Payments.

File to reduce penalties and interest
Normally, taxpayers should file their tax return, or request an extension, and pay any taxes they owe by the deadline to avoid penalties and interest. Taxpayers need to remember that an extension to file is not an extension to pay. Penalties and interest will apply to taxes owed after July 15.

Even if a taxpayer can’t afford to immediately pay the taxes they owe, they should still file a tax return as soon as possible to reduce possible penalties. The IRS has more information for taxpayers who owe the IRS, but cannot afford to pay.

Ordinarily, the failure-to-file penalty is 5% of the tax owed for each month or part of a month that a tax return is late. But if a return is filed more than 60 days after the due date, the minimum penalty is either $435 or 100% of the unpaid tax, whichever is less. Filing and paying as much as possible is important because the late-filing penalty and late-payment penalty add up quickly. The basic failure-to-pay penalty rate is generally 0.5% of unpaid tax owed for each month or part of a month. For more see IRS.gov/penalties.

Taxpayers who have a history of filing and paying on time often qualify for penalty relief. A taxpayer will usually qualify if they have filed and paid timely for the past three years and meet other requirements. For more information, see the first-time penalty abatement page on IRS.gov.

Pay taxes due electronically
Those who owe taxes can view their balance, pay with IRS Direct Pay, by debit or credit card or apply online for a payment plan, including an installment agreement. Several other electronic payment options are available on IRS.gov/payments. They are secure and easy to use. Taxpayers paying electronically receive immediate confirmation when they submit their payment. With Direct Pay and the Electronic Federal Tax Payment System (EFTPS), taxpayers can opt in to receive email notifications about their payments.

Need help? Tips for selecting a tax professional
Taxpayers can also look for help from a tax professional. Taxpayers can use several options to help find a tax preparer. One resource is Choosing a Tax Professional, which includes a wealth of consumer guidance for selecting a tax professional. There are various types of tax return preparers, including enrolled agents, certified public accountants, attorneys and some who don't have a professional credential.

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 or locate a tax professional in their geographic area.

Taxpayer Bill of Rights
Taxpayers have fundamental rights under the law that protect taxpayers when they interact with the IRS. The Taxpayer Bill of Rights presents these rights in 10 categories. IRS Publication 1, Your Rights as a Taxpayer, highlights these rights and the agency’s obligation to protect them. 

WASHINGTON — The Internal Revenue Service and the Security Summit partners today urged tax professionals this summer to review critical security steps to ensure they are fully protecting client data whether working in the office or a remote location.

To help tax practitioners, the IRS, state tax agencies and the nation’s tax industry next week will begin a five-part summer awareness initiative called Working Virtually: Protecting Tax Data at Home and at Work. The initiative highlights security actions key to protecting tax professionals as they respond to COVID-19 while working remotely from their office and clients. Taxpayers can also benefit from some of the security tips.

“During COVID-19, the community should remember there’s more than one virus to be concerned about,” said IRS Commissioner Chuck Rettig. “This challenging period creates new opportunities for cybercriminals and new threats for tax professionals. Our latest Security Summit initiative calls on tax professionals to make sure to take precautions to meet the new challenges of the workplace. With more practitioners working from home or dealing with clients via email, it’s critical to make sure your security measures are keeping pace.”

Since the IRS, state tax administrators and the nation’s tax industry created the Security Summit five years ago, stolen identity refund fraud has dropped dramatically. Between 2015 and 2019, the number of taxpayers reporting they were identity theft victims to the IRS fell 80%, and the number of confirmed identity theft returns stopped by the IRS declined by 68%. In 2019, there were 443,000 confirmed identity theft tax returns compared to 1.4 million in 2015. 

As the IRS and Summit partners increased their defenses, cybercriminals have adjusted their sights to focus on tax professionals and their client data. While trying to obtain taxpayer information, data thefts from practitioner offices continue. Tax records and information stolen from preparer offices allow thieves to create fraudulent tax returns that are more difficult to detect.

The Security Summit launched the “Protect Your Client, Protect Yourself” campaign in 2016 to heighten security awareness among tax professionals and their personnel. Security measures are only as good as the least informed employee in the office.

In its fourth year, the 2020 campaign will feature a series of news releases each Tuesday for the next five weeks. The campaign will highlight:

In addition, tax professional security will be a special focus of this year’s Nationwide Tax Forums, which will be virtual this year. The sessions begin July 21 and conclude Aug. 20.

Additional resources

Tax professionals also can get help with security recommendations by reviewing the recently revised IRS Publication 4557, Safeguarding Taxpayer Data (PDF), and Small Business Information Security: the Fundamentals (PDF) by the National Institute of Standards and Technology.

Publication 5293, Data Security Resource Guide for Tax Professionals (PDF), provides a compilation of data theft information available on IRS.gov. Also, tax professionals should stay connected to the IRS through subscriptions to e-News for Tax Professionals and Social Media or visit Identity Theft Central at IRS.gov/IdentityTheft.

Qualified individuals affected by COVID-19 may be able to withdraw up to $100,000 from their eligible retirement plans, including IRAs, between Jan. 1 and Dec. 30, 2020.

These coronavirus-related distributions aren’t subject to the 10% additional tax that generally applies to distributions made before reaching age 59 and a half, but they are still subject to regular tax. Taxpayers can include coronavirus-related distributions as income on tax returns over a three-year period. They must repay the distribution to a plan or IRA within three years.

Some plans may have relaxed rules on plan loan amounts and repayment terms. The limit on loans made between March 27 and Sept. 22, 2020 is raised to $100,000. Plans may suspend loan repayments due between March 27 and Dec. 31, 2020.

Qualifications for relief
The law defines a qualifying person as someone who:

Employers can choose whether to implement these coronavirus-related distribution and loan rules.Qualified individuals can claim the tax benefits of coronavirus-related distribution rules even if plan provisions aren't changed. Administrators can rely on an individual's certification that they’re a qualified person.

Required minimum distributions
People who already took a required minimum distribution from certain retirement accounts in 2020 can now roll those funds back into a retirement account.

The 60-day rollover period has been extended to Aug. 31, 2020.

Under the relief, taxpayers with required minimum distributions from certain retirement plans can skip them this year. Distributions that can be skipped were due in 2020 from a defined-contribution retirement plan. These include a 401(k) or 403(b) plan, as well as an IRA. Among the people who can skip them are those who would have had to take the first distribution by April 1, 2020. This waiver does not apply to defined-benefit plans.

More information
Guidance for Coronavirus-Related Distributions and Loans from Retirement Plans Under the CARES Act
Coronavirus-related relief for retirement plans and IRAs questions and answers
Guidance on Waiver of 2020 Required Minimum Distributions

Share this tip on social media -- #IRSTaxTip: COVID Tax Tip 2020-85: Major changes to retirement plans due to COVID-19. https://go.usa.gov/xfgge

WASHINGTON — The Internal Revenue Service today reminds seniors and retirees that they are not required to take money out of their IRAs and workplace retirement plans this year.

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, waives required minimum distributions during 2020 for IRAs and retirement plans, including beneficiaries with inherited accounts. This waiver includes RMDs for individuals who turned age 70 ½ in 2019 and took their first RMD in 2020. Roth IRAs do not require withdrawals until after the death of the owner. 

What if I already took my RMD?

If an individual has already taken an RMD in 2020, including someone who turned 70 ½ during 2019, the individual will have the option of returning the distribution to their account or other qualified plan.

Since the RMD rule is suspended, RMDs taken in 2020 are considered eligible for rollover. Therefore, RMDs can be rolled over to another IRA, another qualified retirement plan, or returned to the original plan.

An IRA owner or beneficiary who has already received an RMD in 2020 can also repay the distribution to the distributing IRA no later than Aug. 31, 2020, to avoid paying taxes on that distribution.

IRS Notice 2020-51 also provides that the one rollover per 12-month period limitation and the restriction on rollovers to inherited IRAs do not apply to this repayment.

The CARES Act provisions apply to most retirement plans, including traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k) plans, 403(b) plans, 457(b) plans, profit sharing plans and other defined contribution plans. The RMD suspension does not apply to qualified defined benefit plans.

Where can I find more information?

More information on the CARES Act and retirement plans, including FAQs, can be found on at Coronavirus-related relief for retirement plans and IRAs questions and answers.

Notice 2020-57 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 2020-57 will be in IRB: 2020-32, dated August 3, 2020.

WASHINGTON ― With the July 15 tax deadline now past, the Internal Revenue Service reminds all taxpayers that there is no secret way to find out when a refund will be issued.

Most taxpayers have already filed their federal tax return, and many have already received their refund. Those that have not are understandably eager for details about when their refund will arrive. When it comes to tax refunds, a few common myths keep circulating and misinforming taxpayers.

Some key facts can help people understand the refund process better:

Processing delays for paper tax returns
The IRS continues to process electronic and paper tax returns, issue refunds, and accept payments.

The IRS is experiencing delays in processing paper tax returns due to limited staffing. This is causing refund delays. Taxpayers who have already filed a paper return should know that the IRS is processing paper returns in the order in which they are received. In addition, interest on individual 2019 refunds reflected on returns filed by July 15, 2020, will generally be paid from April 15, 2020, until the date of the refund. Interest payments may be received separately from the refund and are considered taxable income in the year received.

Taxpayers who filed a paper return should not file the same tax return again or call the IRS.

Common myths about tax refunds include:

Getting a refund this year means there's no need to adjust withholding for 2020
To help avoid a possible surprise next year, taxpayers should look to make changes now. Adjusting tax withholding with an employer can help ensure that neither too much nor too little tax is withheld from an employee's paycheck. The Tax Withholding Estimator helps taxpayers figure out the right amount.

Calling the IRS or a tax professional will provide a better refund date
Contacting the IRS or a tax professional will not expedite a refund. IRS assistors and tax professionals cannot move up a refund date nor do they have access to any “special” information that will provide a more accurate refund date.

Ordering a tax transcript is a secret way to get a refund date
Ordering a tax transcript will not help taxpayers find out when they will get their refund and it does not accelerate the issue date of a refund.

The ‘Where's My Refund?’ tool is wrong because there's no deposit date yet
When Where’s My Refund? shows the tax return status is received it means that we have received the tax return and are processing it. Some returns may take longer to process than others and needs further review. This includes when a return:

Taxpayers will be contacted by mail if the IRS needs more information to process a tax return. People waiting for a refund in the mail should plan for the additional time a check takes to arrive.

Something is wrong when the refund amount is less than expected
There are a lot of reasons that cause a tax refund to be different than expected. Situations that could decrease a refund include:

The IRS will mail a letter of explanation if these adjustments are made. Some taxpayers may also receive a letter from the Department of Treasury's Bureau of the Fiscal Service if their refund was reduced to offset certain financial obligations.

Taxpayers can call the IRS’s automated refund hotline at 800-829-1954, which uses the same information as “Where's My Refund?”. There is no need to call the IRS unless “Where's My Refund?” says to do so.