WASHINGTON — The Internal Revenue Service today released the Criminal Investigation Division's annual report, highlighting the agency’s successes and criminal enforcement actions taken in fiscal year 2020, the majority of which occurred during COVID-19. A key achievement was the identification of over $10 billion in tax fraud and other financial crimes. 

"The special agents and professional staff who make up Criminal Investigation continue to perform at an incredibly high-level year after year," said IRS Commissioner Chuck Rettig. "Even in the face of a global pandemic, the CI workforce initiated nearly 1,600 investigations and identified $2.3 billion in tax fraud schemes. This is no small feat during a challenging year, and their work is critical to protecting taxpayers and the integrity of our tax system."

Key focuses of CI in fiscal year 2020 included COVID-19 related fraud, cybercrimes, with an emphasis on virtual and cryptocurrencies, traditional tax investigations, international tax enforcement, employment tax, refund fraud and tax-related identity theft.

In response to COVID-19 related crimes, CI special agents quickly adapted their investigative techniques to initiate cases into fraudulent claims for Economic Impact Payments, Paycheck Protection Program loans, and refundable payroll tax credits from the Coronavirus Aid, Relief, and Economic Security Act.

"This year, more than any in recent memory, demonstrated the extraordinary agility and adaptability of the CI workforce," said Jim Lee, Chief of CI. "Clearly, unscrupulous individuals sought to exploit the economic safeguards put in place to buttress a nation in crisis. These individuals and groups were instead met with a cadre of special agents determined to thwart their efforts.”

In fiscal year 2020, CI initiated 1,598 cases, applying 73% of its time to tax related investigations. The number of CI special agents increased by one percent, following special agent hiring to offset planned retirements. CI continued increasing its usage of data analytics and strengthening its international partnerships to assist in finding the most impactful cases. One important partnership remained the Joint Chiefs of Global Tax Enforcement (J5); a transnational committee comprised of tax organizations from five countries. In FY 2020 alone, more information was shared regarding cryptocurrency, tax crimes, and related enforcement, than in the previous ten years combined. CI also saw the first guilty pleas for a case under the J5 umbrella. 

As the only federal law enforcement agency with jurisdiction over federal tax crimes, CI has one of the highest conviction rates in federal law enforcement − at 90.4%. The high conviction rate reflects the thoroughness of CI investigations and the high caliber of CI agents. CI is routinely called upon by prosecutors and partner agencies across the country to lead financial investigations on a wide variety of financial crimes.

"While the annual report is an excellent summation of the hard work and dedication exhibited by CI, this year’s report takes on special significance," Lee said. "This report unequivocally reflects the efforts of a workforce undaunted by unprecedented personal and professional challenges. I am profoundly grateful to serve with the men and women of CI."

The 2020 report is interactive, summarizes a wide variety of CI activity during the year and features examples of cases from each field office on a wide range of financial crimes. The federal fiscal year begins Oct. 1 and ends on Sept. 30.

Revenue Ruling 2020-26 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 2020-26 will be in IRB:  2020-50, dated December 7, 2020.

Any eligible self-supporting college student who doesn't need to file a tax return should register using the Non-Filers tool by 3:00 p.m. ET November 21 to receive an Economic Impact Payment before the end of this year.

Generally, a self-supporting student who registers will receive a $1,200 payment if they are single or $2,400 if married and file a joint return and the student or their spouse cannot be claimed as a dependent. If they have dependent children, they may also get an additional $500 for each qualifying child.

Only self-supporting students who are not required to file a tax return should use the Non-Filers tool. Dependent students do not qualify. This means any student who is claimed as a dependent by their parents or someone else cannot get a payment.

Recent college graduates may not have received an Economic Impact Payment because they were claimed as a dependent by their parents or someone else. If their situation changes, these graduates may be eligible for the Recovery Rebate Credit when they file their 2020 tax return in 2021.

People who don't normally file a tax return may be able to register for an Economic Impact Payment quickly using the Non-Filers tool on IRS.gov.

Students who need to or want to file a regular tax return should not use the Non-Filers tool. This includes any student who had federal income tax withheld from their pay and wants to file a tax return to claim a refund. Working students who have a summer or part-time job should consider filing a tax return so they can receive a potential federal tax refund.

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.

People can track the status of their payment using the Get My Payment tool starting two weeks after they register.

Anyone who misses the November 21 deadline will have to wait until next year to claim the Recovery Rebate Credit, if they’re eligible, when they file their 2020 federal income tax return.

More Information:
Economic Impact Payment Information Center
A Closer Look

Share this tip on social media -- #IRSTaxTip: Self-supporting college students may qualify for an Economic Impact Payment. https://go.usa.gov/x7RWQ

Notice 2020-82 provides that the IRS will treat a contribution to a single-employer defined benefit pension plan with an extended due date of January 1, 2021 pursuant to § 3608(a)(1) of the CARES Act, as timely if it is made no later than January 4, 2021 (which is the first business day after January 1, 2021).

Notice 2020-82 will appear in IRB 2020-49, dated Nov. 30, 2020.

WASHINGTON – Moving to protect business taxpayers from identity theft, the Internal Revenue Service today announced that starting Dec. 13 it will begin masking sensitive data on business tax transcripts.

The announcement provides 30 days for stakeholders to make any adjustments. The IRS began informing tax professionals of this change during the summer Nationwide Tax Forums. The agency previously masked sensitive data on individual tax transcripts two years ago.

A tax transcript is a summary of a tax return. Transcripts are often used by tax professionals to prepare prior year tax returns or represent the client before the IRS. Lenders and others use tax transcripts for income verification purposes.

Here’s what is visible on the new tax transcript:

For both the individual and business tax transcript, there is space for a Customer File Number. The Customer File Number is an optional 10-digit number that can be created usually by third parties that allow them to match a transcript to a taxpayer. The Customer File Number field will appear on the transcript when that number is entered on Line 5 of Form 4506-T, Request for Transcript of Tax Return, and Form 4506T-EZ.

Here’s how it would work for a taxpayer seeking to verify income for a lender:

More information about the masking of transcripts can be found at IRS.gov’s e-Services page after Dec. 13.

WASHINGTON – The Internal Revenue Service today urged anyone who doesn’t normally file a tax return and has not yet received an Economic Impact Payment (EIP) to take advantage of “National EIP Registration Day,” on Tuesday, Nov. 10. National EIP Registration Day is part of the agency’s further concerted push with partners across the country to make sure every eligible American has registered before the Nov. 21 deadline to receive their Economic Impact Payment this year.

National EIP Registration Day will take place just a few days ahead of the Nov. 21 deadline for registering online to receive an Economic Impact Payment. This special event will feature support from IRS partner groups inside and outside of the tax community, including those that work with low-income and underserved communities. These groups will help spread the word about the new Nov. 21 deadline and, in some cases, provide special support for people who still need to register for the payments on IRS.gov.

Earlier this fall, the IRS sent nearly 9 million letters to people who appear to qualify for the Economic Impact Payments but don’t normally file a tax return. To help tax professionals and other partners reach out to these non-filers, the IRS has posted a zip-code level breakdown of the number of these letters. The letters, along with the special Nov. 10 event, urge people to use the Non-Filers: Enter Info Here tool, available exclusively on IRS.gov.

“Our partner groups have been vital to our efforts to reach many underserved communities,” said IRS Commissioner Chuck Rettig. “Already, millions of Americans have successfully used the Non-Filers portal and received their Economic Impact Payment. Registration is quick and easy, and we urge everyone to share this information to reach as many people before time runs out on Nov. 21.”

Many partner groups have been working with the IRS, helping translate and making available Economic Impact Payment information and resources in 35 languages. The IRS is also conducting a multilingual push on social media to support the final registration drive.

Since the Non-Filers tool launched in the spring, nearly 8.3 million people who normally aren’t required to file a tax return have registered for the payments. The IRS continues to work to reach others who haven’t used the tool yet, which led to this fall’s mailing and the Nov. 10 registration event.

The tool is designed for people with incomes typically below $24,400 for married couples, and $12,200 for singles who could not be claimed as a dependent by someone else. This includes couples and individuals who are experiencing homelessness.

Normally, an eligible individual who registers will receive a $1,200 payment if they are single or $2,400 if married and file a joint return. If they have dependent children, they will normally also get an additional $500 for each qualifying child.

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. For other EIP-related information, including answers to frequently asked questions, visit the Economic Impact Payment Information Center on IRS.gov.

Notice 2020-75 announces that the Department of Treasury and the Internal Revenue Service (IRS) intend to issue proposed regulations to clarify that State and local income taxes imposed on and paid by a partnership or an S corporation on its income are allowed as a deduction by the partnership or S corporation in computing its non-separately stated taxable income or loss for the taxable year of payment, and therefore are not subject to the State and local tax deduction limitation for partners and shareholders who itemize deductions.

Notice 2020-75 will appear in IRB 2020-49, dated Nov. 30, 2020

WASHINGTON — The Internal Revenue Service (IRS) today issued Notice 2020-75, which announces rules to be included in forthcoming proposed regulations.  Specifically, the proposed regulations will clarify that State and local income taxes imposed on and paid by a partnership or S corporation on its income are allowed as a deduction by the partnership or S corporation in computing its  non-separately stated taxable income or loss for the taxable year of payment, and therefore are not subject to the State and local tax deduction limitation for partners and shareholders who itemize deductions.  

The notice describing the forthcoming proposed regulations applies to these types of income taxes starting today, and also allows taxpayers to apply these rules to specified income tax payments made in a taxable year of a partnership or an S corporation ending after Dec. 31, 2017, and before the date the forthcoming proposed regulations are published in the Federal Register.

Updates on the implementation of the Tax Cuts and Jobs Act (TCJA) can be found on the Tax Reform page of IRS.gov.

Dear IVES Participants,

We have received questions from the IVES community about the Form 4506-C, IVES Request for Transcript of Tax Return. Below are the questions we received most often and the answers to those questions. If you have further questions after reviewing this information please contact us at wi.ives.participant.assistance@irs.gov.

Thank you,

IRS IVES Team

 

Can I use the Form 4506-C now?

Yes. However, starting March 1, 2021, all IVES requests received by the IRS must be on Form 4506-C.

Can I still use the Form 4506-T?

Yes, you can still send IVES requests on Form 4506-T (September 2018 and March 2019 versions only) and Form 4506T-EZ until February 28, 2021. You cannot use the June 2019 revision of Form 4506-T for IVES requests. The last day that IRS will accept an IVES request on a Form 4506-T or a Form 4506T-EZ will be February 28, 2021.

Can I send batches that include both the Form 4506-C and the Form 4506-T/Form 4506T-EZ?

Yes, but only until February 28, 2021.

Does the 2:00 p.m. local time cut-off apply to sending a Form 4506-T on February 28, 2021?

No, you can send a Form 4506-T or Form 4506T-EZ for IVES processing through 11:59 p.m. your local time.

What happens if I send a Form 4506-T or Form 4506T-EZ on or after March 1, 2021?

IRS will reject the form back to the participant.

Will IRS be releasing a Form 4506C-EZ for IVES participants to use?

No, IRS will be not be releasing a Form 4506C-EZ.

Do I still have to use the Qualified Disclosures Only and the Non-Qualified Disclosures Only coversheets?

Yes, you still need to separate Qualified Disclosure requests from Non-Qualified Disclosure requests with the corresponding IVES fax coversheet when sending the Form 4506-C.

The mandatory separation of Qualified and Non-Qualified IVES requests has been in effect since March 1, 2020. Use of the Form 4506-C does not change this policy.

What is a Qualified Disclosure and Non-Qualified Disclosure?

As a reminder, per the Taxpayer First Act, a "qualified disclosure" means a disclosure under section 6103(c) of the Internal Revenue Code of 1986 of returns or return information by the IRS to a person seeking to verify the income or creditworthiness of a taxpayer who is a borrower in the process of a loan application. Common examples of “qualified disclosures” are disclosures to lenders verifying income or creditworthiness on customers for various types of loans (auto, home mortgage, business, etc.). Some examples of non-qualified disclosures would be disclosures for tax administration, employment verification checks, and other non-lending purposes.

 

What are the differences between the Form 4506-T and Form 4506-C?

There are some minor differences between the Form 4506-T and Form 4506-C. These include:

• Removal of the Tip at the top of the form, because the Tip did not apply to IVES requests.
• Line 5a was changed to include IVES participant name, address and Secure Object Repository (SOR) mailbox ID.
• The Caution language below Line 5b was updated to be limited for IVES requests.
• Because the Verification of Non-Filing product has never been available through IVES, the option for that product was removed.
• Date formatting instructions were added for Line 8 entries.
• A field was added below the signature lines to print or type the name(s) of the individual(s) signing the form.
• IVES Service Center fax numbers replaced the tables showing states and corresponding fax numbers. The fax numbers by state were not for IVES usage.
• Notification language for designated recipients and taxpayers was added to advise that a designated recipient will be subject to penalties for unauthorized access, other use, or redisclosure of the taxpayer’s information without the taxpayer’s express permission and authorization.

The Caution underneath Line 5b instructs the taxpayer to make sure that Lines 5 through 8 are complete before signing. Can I add the Customer File Number and the SOR mailbox after the taxpayer signs?

Yes, you can still add the SOR mailbox information on Line 5a and the Customer File Number on Line 5b after the taxpayers sign the form.

Can I still make a notation in the upper right corner of the Form 4506-C?

You can still put a unique identifier in the upper right corner of Form 4506-C. You cannot put your SOR mailbox information in the upper right corner on Form 4506-C. SOR mailbox information must go on Line 5a.

How do I request a Verification of Non-Filing product?

This product is not available through IVES. The taxpayer can request it for themselves via the IRS Get Transcript website or by sending a completed Form 4506-T.

Do I have to complete the printed or typed name of the taxpayers signing the form underneath the taxpayers’ signatures? What if it is a legible, handwritten signature or an electronic signature?

Yes, the printed/typed name must be completed on Form 4506-C in order to be processable. This is true even if the individuals’ wet signatures are legible or they electronically sign the form. The IRS will reject forms that don’t have the printed/typed name underneath the signature.

Will IRS be updating the IVES Rejection Code listing?

Yes, the IVES Rejection Code listing will be updated to show the form will reject if the printed or typed name is not present on the Form 4506-C.

Did the acceptable signature business titles change for Form 4506-C?

No, the acceptable signature business titles have not changed with the release of the Form 4506-C.

Is the taxpayer’s phone number an optional entry or does it have to be entered on the Form 4506-C?

No, the phone number is not required for the Form 4506-C to be processed.

Can I fax batches that include Form 4506-C to any of the IVES fax numbers in the instructions?

No, IVES participants must continue to fax their requests to their assigned IVES Service Center.

Will the taxpayer consent form still be required with the new Form 4506-C form or was it specific to the Form 4506-T?

The taxpayer is providing consent for the IRS to disclose tax return information to the specific IVES participant entered on line 5a of the Form 4506-T or Form 4506-C. The IRS does not require a separate taxpayer consent form in order to process either form. If the IVES participant or lender is collecting a separate taxpayer consent to meet an industry or legal requirement for disclosure of information, do not send this consent form to the IRS with either the Form 4506-T or the Form 4506-C.

Revenue Procedure 2020-50 provides guidance for taxpayers wishing to apply Section 168(k) to certain depreciable property acquired and placed in service after September 27, 2017, by the taxpayer during its taxable years ending on or after September 28, 2017, and before the taxpayer’s first taxable year that begins on or after January 1, 2021;

(2) certain plants planted or grafted, as applicable, after September 27, 2017, by the taxpayer during its taxable years ending on or after September 28, 2017, and before the taxpayer’s first taxable year that begins on or after January 1, 2021;

(3) components acquired or self-constructed after September 27, 2017, of certain larger self-constructed property and placed in service by the taxpayer during its taxable years ending on or after September 28, 2017, and before the taxpayer’s first taxable year that begins on or after January 1, 2021. 

If the taxpayer retroactively applies §§ 1.168(k)-2 and 1.1502-68, or relies on the 2019 proposed regulations, this revenue procedure also allows the taxpayer to make a late election under § 168(k)

Revenue Procedure 2020-50 will be in IRB-2020-48, dated 11/23/2020.