WASHINGTON – The IRS today reminds taxpayers who took advantage of the People First Initiative tax relief and did not make previously owed tax payments between March 25 to July 15 that they need to restart their payments.

As the IRS continues to reopen its operations across the country, taxpayers who were in payment agreements and skipped any payments from March 25 and July 15 should start paying again to avoid penalties and possible default on their agreements.

“Through the People First Initiative, we have endeavored to provide unprecedented relief to help those who owed federal taxes and allow them extra time,” said IRS Commissioner Chuck Rettig. “As we resume a phased-in approach to our normal operations, we are sympathetic to the many Americans still suffering COVID-related hardships and stand ready to continue offering help to those who need it.”

Here’s what taxpayers should do to resume their payment agreements to the IRS, including Installment Agreements, Offers in Compromise, and Private Debt Collection program payments:

Installment Agreements
Taxpayers who suspended their installment agreement payments between April 1 and July 15, 2020, will need to resume their payments by their first monthly payment due date after July 15. Taxpayers should be aware that the IRS didn’t default their agreement, but interest did accrue, and the balance remained.

Taxpayers who had their bank suspend direct debit payments should contact the bank immediately to ensure their first monthly payment due date occurring on or after July 15, 2020 is sent to avoid penalties.

If a taxpayer can’t meet their current installment agreement terms due to a COVID related hardship, they can revise the agreement on IRS.gov/paymentplan or call the customer service number on their IRS notice if they have a Direct Debit Installment Agreement (DDIA).

Offer in Compromise
Pending Offers: If the IRS is currently reviewing a taxpayer's submitted offer but hasn’t accepted it yet, the taxpayer should resume their required payments starting July 15, 2020. The IRS will amend the taxpayer's offer to allow them to pay any skipped payments at the end of the offer period, if the offer is accepted.

Already Accepted Offers: If a taxpayer has an Offer in Compromise agreement, and the taxpayer was unable to make the payments on their accepted offer because of a COVID-19 hardship, the taxpayer should resume payments and make up the missed payments by July 15, 2020. If the taxpayer is unable to make up the missed payments, they can contact the number on the IRS notice to discuss their situation.

Private Debt Collection
The IRS did not forward new delinquent accounts to Private Collection Agencies (PCAs) from April 1 through July 15, 2020, and PCA interaction with taxpayers was limited to inbound telephone calls unless requested by a taxpayer in a voicemail or correspondence.

Taxpayers who had their PCA payments on hold should resume payments by July 15. The IRS encourages taxpayers to work with their assigned PCA to establish a new payment arrangement or restructure an existing one based on their current situation.

Taxpayers Who Owe But Can’t Pay
The IRS reminds taxpayers who are experiencing a hardship or who have questions about their payments to call the customer service number provided on their notice but be mindful that wait times could be long. Phone lines remain extremely busy as the IRS resumes operations. Taxpayers also have a variety of options through IRS.gov/payments to make one time or recurring payments without having to contact the IRS.

WASHINGTON — The Internal Revenue Service today reminds tax-exempt organizations that certain forms they file with the IRS are due on July 15, 2020. For organizations that operate on a calendar-year basis, this includes the 2019 Form 990 they would have normally filed on May 15. The upcoming July 15 deadline applies to many forms that were originally due May 15, including:                                                                                                                                                                                                                                                                                    

Tax-exempt organizations that need additional time to file beyond the July 15 deadline can request an automatic extension by filing Form 8868, Application for Extension of Time to File an Exempt Organization Return. An organization will be allowed a six-month extension beyond the original due date. For a calendar-year 2019 return, this means the extended deadline would be Nov. 15, 2020. In situations where tax is due, extending the time for filing a return does not extend the time for paying tax. 

The IRS urges all organizations to take advantage of the speed and convenience of filing their returns electronically when possible.

WASHINGTON – The Internal Revenue Service today encouraged members of the military and their families to learn more about the special tax benefits available to them as the July 15 tax filing season deadline approaches.

Most military bases offer free tax preparation and filing assistance during the tax filing season. Some also offer free tax help after the July tax filing deadline. Some of these programs may be impacted by the current COVID-19 so it’s best to check first.

Service members who prepare their own tax return qualify to e-file their federal return for free using IRS Free File if their income in 2019 was below $69,000. All military members and some qualified veterans may use MilTax, a free tax service from the Department of Defense and Military OneSource. The IRS also offers Free Fillable Forms which can completed online and then filed electronically regardless of income amount.

“Military members serving our country at home and abroad earn the IRS’ highest appreciation and ongoing support,” said IRS Commissioner Chuck Rettig. “We have resources available at IRS.gov that detail the special circumstances that can affect tax payment and return filing deadlines for military personnel and their families. We encourage them to visit our website. We are also very proud of the many veterans employed by and part of the IRS team.”

IRS Publication 3, Armed Forces Tax Guide, is a free booklet filled with valuable information and tips designed to help service members and their families take advantage of all the tax benefits allowed by law. Several key benefits are outlined below.

A service member and their spouse can each choose to have their nontaxable combat pay included in their earned income for purposes of the EITC. Service members are encouraged to select the option that best benefits them.

Both spouses normally must sign a joint income tax return, but if one spouse is absent due to certain military duty or conditions, the other spouse may be able to sign for him or her. A power of attorney is required in other instances. A military installation’s legal office may be able to help.

The IRS has a special page on IRS.gov with Tax Information for Members of the U.S. Armed Forces.

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued proposed regulations and temporary regulations that provide guidance for consolidated groups regarding net operating losses (NOLs).

The Tax Cuts and Jobs Act (TCJA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) amended the rules for NOLs. After amendment, the NOL deduction is the sum of:

The TCJA generally eliminated NOL carrybacks and permitted NOLs to be carried forward indefinitely. The TCJA also provides special rules for nonlife insurance companies and farming losses. Nonlife insurance companies are permitted to carry back NOLs two years and forward 20 years, and the 80% limitation does not apply. Farming losses are permitted to be carried back two years and carried forward indefinitely, subject to the 80% limitation.

The CARES Act effectively delays the application of the TCJA amendments until January 1, 2021. Additionally, the CARES Act permits a five-year carryback for NOLs, including farming losses and NOLs of nonlife insurance companies, for taxable years beginning after December 31, 2017 and before January 1, 2021.

The proposed regulations provide guidance to consolidated groups on the application of the 80% limitation. Additionally, the proposed regulations would remove obsolete provisions from the rules for consolidated groups that contain both life insurance companies and nonlife insurance companies. 

Because the CARES Act allows certain NOLs to be carried back five years, the temporary regulations allow certain acquiring consolidated groups to make an election to waive all or a portion of the pre-acquisition portion of the extended carryback period for certain losses attributable to certain acquired members.

For more information about this and other TCJA provisions, visit IRS.gov/taxreform. Additional information about tax relief for businesses affected by the COVID-19 pandemic can be found on IRS.gov.

WASHINGTON — With the federal income tax deadline just around the corner, the Internal Revenue Service wants to remind taxpayers that IRS.gov offers tips on finding a qualified tax professional.

Over 84 million tax returns were prepared by a paid return preparer last year. Though most tax professionals provide honest, high-quality service, taxpayers should keep in mind these basic tips when selecting a tax professional:

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.There is also a page with IRS Tax Pro Association Partners that includes links to national nonprofit tax professional groups that can help taxpayers seek the right type of qualified help from a tax preparer.

More resources:

The Internal Revenue Service is issuing proposed regulations,
REG-123027-19  relating to the compliance-monitoring duties of state agencies for purposes of the low-income housing credit.  The proposed regulations relax the minimum compliance-monitoring sampling requirement for purposes of physical inspections and low-income certification review, providing flexibility and reduced burdens with respect to the requirements set forth in the final regulations published on February 26, 2019.

WASHINGTON ― The Internal Revenue Service today announced additional retail partners are accepting cash payments for federal taxes. This cash payment option is for individual and business taxpayers.

The IRS' continuing partnership with ACI Worldwide's OfficialPayments.com and the PayNearMe Company allows taxpayers to make a payment without a bank account or credit card at participating 7-Eleven stores, Ace Cash Express and Casey's General Stores nationwide.

"We continuously look for ways to enhance the services we provide for our taxpayers," said IRS Wage and Investment Division Commissioner Ken Corbin. "The IRS offers many ways for taxpayers to pay their tax bills including direct debit, credit card and through electronic funds withdrawal when filing electronically. This cash option lets people pay their taxes without having to make an appointment at an IRS Taxpayer Assistance Center."

Individuals wishing to take advantage of this payment option should visit the IRS.gov/payments, select the cash option in the "Other Ways You Can Pay" section and follow the instructions. There is a $1,000 payment limit per day and a $3.99 fee per payment.

Because PayNearMe involves a three-step process, the IRS urges taxpayers choosing this option to start the process well ahead of the tax deadline to avoid interest and penalty charges.

The IRS reminds individuals without the need to pay in cash that there are other ways to pay online, by phone or with a mobile device and the IRS2Go app. IRS Direct Pay is a secure online payment option that allows taxpayers to pay directly from their bank accounts for free. The IRS has been partnering with Official Payments since 1999 for taxpayers wanting to use a credit card to pay their taxes.

The IRS reminds taxpayers to watch out for email schemes. Taxpayers will only receive an email from OfficialPayments.com or PayNearMe if they have initiated the payment process.

IRS provides tax relief for the low-income housing credit and bonds for qualified residential rental projects

WASHINGTON – In response to the ongoing COVID-19 pandemic, the Internal Revenue Service today issued Notice 2020-53 (PDF) to provide tax relief to issuers, operators, owners, and tenants of qualified low-income housing projects or qualified residential rental projects financed with exempt facility bonds, and state agencies that have jurisdiction over these projects.

For certain time-sensitive actions scheduled to be performed and requirements to be met on or after April 1, 2020 and before December 31, 2020, owners and operators now have until December 31, 2020 to perform the actions and satisfy the requirements.

Further, between April 1, 2020 and December 31, 2020, owners of qualified low-income housing projects are not required to perform certain income recertifications or reduce the eligible basis in a building because of the temporary closure of an amenity or common area due to the COVID-19 pandemic, and state agencies that have jurisdiction over the projects are not required to conduct compliance-monitoring.

Additionally, between April 1, 2020 and December 31, 2020, owners and operators of these projects, issuers, and state agencies may treat medical personnel and other essential workers providing services during the COVID-19 pandemic as if they were Displaced Individuals, as defined in Rev. Procs. 2014-49 and 2014-50, and therefore, may provide emergency housing for these persons as described in these revenue procedures.

Additional information about tax relief for those affected by the COVID-19 pandemic can be found on IRS.gov.

The Internal Revenue Service also is issuing proposed regulations (PDF) relating to the compliance-monitoring duties of state agencies for purposes of the low-income housing credit. The proposed regulations relax the minimum compliance-monitoring sampling requirement for purposes of physical inspections and low-income certification review, providing flexibility and reduced burdens with respect to the requirements set forth in the final regulations published on February 26, 2019.

Notice 2020-53 provides temporary relief from certain requirements under § 42 of the Internal Revenue Code (Code) for qualified low-income housing projects.

WASHINGTON – Unclaimed income tax refunds worth more than $1.5 billion await an estimated 1.4 million individual taxpayers who did not file a 2016 federal income tax return, according to the Internal Revenue Service. 

“The IRS wants to help taxpayers who are owed refunds but haven’t filed their 2016 tax returns yet,” said IRS Commissioner Chuck Rettig. “Time is quickly running out for these taxpayers. There’s only a three-year window to claim these refunds, and the window closes on July 15. To claim the refund, a return for tax year 2016 must be filed by July 15, 2020.”

In Notice 2020-23, the IRS extended the due date for filing tax year 2016 returns and claiming refunds for that year to July 15, 2020, as a result of the COVID-19 pandemic. As the IRS is issuing Economic Impact Payments to Americans, the agency urges taxpayers who haven’t filed past due tax returns to file now to claim these valuable refunds. 

To collect refunds for tax year 2016, taxpayers must file their 2016 tax returns with the IRS no later than this year's extended tax due date of July 15, 2020. 

The IRS estimates the midpoint for the potential refunds for 2016 to be $861 — that is, half of the refunds are more than $861 and half are less. 

In cases where a federal income tax return was not filed, the law provides most taxpayers with a three-year window of opportunity to claim a tax refund. If they do not file a tax return within three years, the money becomes the property of the U.S. Treasury. 

For 2016 tax returns, the window closes July 15, 2020, for most taxpayers. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by the July 15 date. 

The IRS reminds taxpayers that there is no penalty for filing late when a refund is involved. Taxpayers seeking a 2016 tax refund should know that their checks may be held if they have not filed tax returns for 2017 and 2018. In addition, the refund will be applied to any amounts owed to the IRS or a state tax agency and may be used to offset unpaid child support or past due federal debts, such as student loans. 

By failing to file a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2016. Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC). For 2016, the credit was worth as much as $6,269. 

The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2016 were: 

Current and prior year tax forms (such as the tax year 2016 Form 1040, 1040A and 1040EZ) and instructions are available on the IRS.gov Forms and Publications page or by calling toll-free 800-TAX-FORM (800-829-3676). 

Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years 2016, 2017 or 2018 should request copies from their employer, bank or other payer. Taxpayers who are unable to get missing forms from their employer or other payer can order a free wage and income transcript at IRS.gov using the Get Transcript Online tool. Alternatively, they can mail Form 4506-T to request a wage and income transcript. A wage and income transcript shows data from information returns received by the IRS, such as Forms W-2, 1099, 1098, Form 5498 and IRA contribution information. Taxpayers can use the information from the transcript to file their tax return. 

State-by-state estimates of individuals who may be due 2016 income tax refunds 

State or	Estimated	Median	Total
District	Number of	Potential	Potential
	Individuals	Refund	Refunds
Alabama	23,300	$859	$24,614,400
Alaska	5,500	$979	$6,754,900
Arizona	32,400	$762	$32,281,600
Arkansas	13,400	$822	$13,798,800
California	130,600	$816	$135,981,300
Colorado	27,500	$809	$28,276,500
Connecticut	14,300	$930	$16,213,300
Delaware	5,600	$878	$6,114,500
District of Columbia	3,700	$904	$4,224,600
Florida	99,000	$874	$105,706,400
Georgia	48,600	$792	$49,682,700
Hawaii	7,700	$932	$8,785,600
Idaho	6,200	$727	$5,876,000
Illinois	51,700	$909	$57,312,200
Indiana	32,700	$887	$35,129,700
Iowa	14,700	$908	$15,735,600
Kansas	14,600	$877	$15,706,800
Kentucky	18,700	$869	$19,517,100
Louisiana	24,400	$849	$26,410,100
Maine	5,600	$802	$5,482,200
Maryland	28,200	$873	$31,619,700
Massachusetts	29,900	$956	$34,261,900
Michigan	46,600	$853	$49,591,400
Minnesota	21,000	$803	$21,155,300
Mississippi	12,900	$777	$12,931,600
Missouri	32,400	$828	$33,522,400
Montana	4,600	$781	$4,582,000
Nebraska	7,800	$845	$8,081,700
Nevada	15,900	$859	$16,922,300
New Hampshire	6,500	$965	$7,474,300
New Jersey	36,200	$936	$41,268,900
New Mexico	9,600	$833	$10,219,600
New York	70,300	$958	$80,830,100
North Carolina	44,900	$833	$46,044,500
North Dakota	4,000	$949	$4,539,800
Ohio	52,900	$841	$54,542,900
Oklahoma	21,000	$866	$22,600,000
Oregon	21,400	$762	$21,237,200
Pennsylvania	55,200	$919	$60,505,200
Rhode Island	3,900	$926	$4,410,100
South Carolina	17,200	$769	$17,323,700
South Dakota	3,800	$899	$3,976,100
Tennessee	29,000	$840	$29,834,800
Texas	143,400	$898	$159,809,900
Utah	11,100	$766	$11,037,700
Vermont	2,800	$892	$2,897,400
Virginia	37,900	$827	$39,977,600
Washington	37,200	$918	$42,273,300
West Virginia	7,200	$921	$7,830,000
Wisconsin	19,900	$781	$19,483,100
Wyoming	3,400	$920	$3,766,100
Total	1,418,300	$861	$1,518,154,900