WASHINGTON — The Internal Revenue Service issued final regulations that provide guidance on deductions for foreign-derived intangible income (FDII) and global intangible low-taxed income allowed to domestic corporations under the Internal Revenue Code.

These final regulations provide guidance on both the computation of the deductions available and the determination of FDII.

In addition, the guidance provides rules for the computation of FDII in the consolidated return context.

The guidance published today also finalizes the reporting rules requiring the filing of Form 8993, Section 250 Deduction for Foreign-Derived Intangible Income and Global Intangible Low-Taxed Income.

For more information about this and other Tax Cuts and Jobs Act provisions, visit IRS.gov/taxreform.

WASHINGTON — The Internal Revenue Service today reminded people that contributions to traditional Individual Retirement Arrangements (IRAs) made by the postponed tax return due date of July 15, 2020, are deductible on a 2019 tax return.

Taxpayers can file their 2019 tax return now and claim the deduction before the contribution is actually made. But the contribution must then be made by the July 15 due date of the return, not including extensions.

Most taxpayers who work and are under age 70 ½ at the end of 2019 are eligible to start a traditional IRA or add money to an existing account.Taxpayers can contribute to a Roth IRA at any age. Starting with tax year 2020, taxpayers of any age – even those over 70 ½ –  can start a traditional IRA.

Contributions to a traditional IRA are usually tax deductible and withdrawals are generally taxable. Contributions to a Roth IRA are not tax deductible, but qualified withdrawals are tax-free. In addition, low and moderate-income taxpayers who make contributions to a traditional or Roth IRA may also qualify for the Saver’s Credit.

Eligible taxpayers can usually contribute up to $6,000 to an IRA for 2019. The limit is increased to $7,000 for taxpayers who were age 50 or older by the end of 2019. 

Contributions to traditional IRAs are deductible up to the lesser of the contribution limit or 100% of the taxpayer’s compensation. Compensation is generally what a person earns from working.

However, if a taxpayer is covered by a workplace retirement plan, the deduction for contributions to a traditional IRA for tax year 2019 is reduced if the taxpayer’s modified adjusted gross income (MAGI) is:

Even though contributions to Roth IRAs are not tax deductible, for tax year 2019 the maximum amount a taxpayer can contribute is reduced if their MAGI is:

The Retirement Savings Contributions Credit, also known as the Saver’s Credit, is often available for IRA contributors if their adjusted gross income falls below certain levels. For 2019, taxpayers may be able to claim the credit if their MAGI was not more than:

Taxpayers should use Form 8880, Credit for Qualified Retirement Savings Contributions, to claim the Saver’s Credit. The instructions have details on how to figure the credit.

Worksheets related to IRAs are available in the Form 1040 Instructions or in Publication 590-A, Contributions to Individual Retirement Arrangements. The deduction for IRA contributions is claimed on Form 1040, Schedule 1. Nondeductible contributions to a traditional IRA are reported on Form 8606.

Taxpayers should also be aware that special rules allow for tax-favored withdrawals and repayments from certain retirement plans for those affected by the coronavirus or those who suffer economic loss as a result of certain major disasters. Taxpayers can find answers to questions, get forms and instructions and find easy-to-use tools online at IRS.gov.

More resources:

• Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs)
• Do I Qualify for the Retirement Savings Contributions Credit?

WASHINGTON — As the July due date for filing a tax return draws closer, the Internal Revenue Service reminds taxpayers about the many resources available on IRS.gov. Whether on home computers or mobile devices, the number of taxpayers visiting IRS.gov continues to grow year after year.

Easy-to-use tools, available 24 hours a day on the IRS website, have been used more than 1.2 billion times this year.

IRS.gov is home to IRS Free File, "Where's My Refund?", the Tax Withholding Estimator and a host of other convenient applications. Additional help is available in Publication 17, Your Federal Income Tax, available on IRS.gov. Publication 17 is also available as an eBook.

Taxpayers who have yet to file their tax returns should file electronically now and choose direct deposit if they’re getting a refund. Taxpayers who owe for tax year 2019 can pay anytime up to the July 15 due date.

File electronically for free

Taxpayers whose income was $69,000 or less last year are eligible to use the IRS Free File software to do their taxes. Also, regardless of income, any taxpayer who is comfortable preparing their own taxes can use Free File Fillable Forms. Taxpayers can use these electronic versions of IRS tax forms to complete their taxes and file them online. Free File options are available at IRS.gov/freefile.

Get answers to tax questions

Taxpayers can find answers to many of their questions using the Interactive Tax Assistant. It’s a tax law resource that uses a series of questions and responses to help. IRS.gov also has answers to Frequently Asked Questions on a variety of topics. The IRS website also has tax information in: Spanish (Español); Chinese (中文); Korean (한국어); Russian (Pусский); Vietnamese (Tiếng Việt); and Haitian Creole (Kreyòl ayisyen).

"Where's My Refund?"

Taxpayers can easily find the most up-to-date information about their tax refund using the "Where's My Refund?" tool on IRS.gov and on the IRS mobile app, IRS2Go. Within 24 hours after the IRS acknowledges receipt of an electronically filed return, taxpayers can start checking on the status of their refund.

Schedule a payment

Taxpayers can file now and schedule their federal tax payments up to the July 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:

Not required to file a tax return? Non-Filers tool available to register for Economic Impact Payments

People who are not normally required to file a tax return and don’t plan to do so can use the Non-Filers tool to get an Economic Impact Payment. The only way they can get this payment is to register with the IRS by using this free tool. Available in both English and Spanish, the tool was developed jointly by the IRS and the Free File Alliance. The registration deadline is Oct. 15, 2020.

More information

IRS.gov/COVIDtaxdeadlines
IRS.gov/payments
IRS.gov/account
IRS.gov/ITA
IRS.gov/estimatedtaxes

Notice 2020-54 provides guidance to employers on the requirement to report the amount of qualified sick leave wages and qualified family leave wages paid to employees under the Families First Coronavirus Response.  Employers are required to report these amounts either on Form W-2, Box 14, or on a separate statement.  This required reporting provides employees who are also self-employed with information necessary for properly claiming qualified sick leave equivalent or qualified family leave equivalent credits under the Families First Act.

Notice 2020-54 will be in IRB:  2020-31, dated July 27, 2020.

WASHINGTON – The Treasury Department and the Internal Revenue Service today provided guidance in Notice 2020-54 to employers requiring them to report the amount of qualified sick and family leave wages paid to employees under the Families First Coronavirus Response Act (FFCRA) on Form W-2.

Employers will be required to report these amounts either on Form W-2, Box 14, or in a statement provided with the Form W-2. The guidance provides employers with optional language to use in the Form W-2 instructions for employees.

The wage amount that the notice requires employers to report on Form W-2 will provide self-employed individuals who are also employees with the information necessary to determine the amount of any sick and family leave equivalent credits they may claim in their self-employed capacities.

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

Revenue Procedure 2020-37 provides: (1) tables of limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2020; and (2) a table of amounts that must be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2020. The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7). For purposes of this revenue procedure, the term “passenger automobiles” includes trucks and vans.

Revenue Procedure 2020-37 will be in IRB: 2020-31, dated 7/27/2020.

WASHINGTON — As the tax-filing deadline fast approaches, the Internal Revenue Service reminds taxpayers with limited English proficiency and who have yet to file their 2019 tax returns that there are a variety of ways to get help and information in languages other than English.

“Providing additional materials in more languages to help taxpayers is a priority for the IRS,” said IRS Commissioner Chuck Rettig. “These resources are just a start for the IRS. In the months ahead, we will be working to add more material on IRS.gov. We also continue to work with our partners in the tax community to help translate and share more tax materials into different languages. For example, we are extremely proud to have material related to Economic Impact Payments translated into more than 30 different languages with the help of our partners.”

The IRS provides some tax information on its IRS.gov website in up to seven languages, including English, Spanish, Chinese, Korean, Russian, Vietnamese and Haitian-Creole.

To get information in one of these languages, taxpayers can click on the language dropdown tab at the top of IRS.gov pages. The tab displays the current language selection and other languages a taxpayer can choose to view translated content. IRS.gov pages translated into one or more languages also have links to available translations on the right side of the page, just below the title.

For example, the Let Us Help You page highlights IRS resources for taxpayers in six languages. This page offers information on notices, payments and numerous other topics. A helpful page for people wanting to plan for the future is the Steps To Take Now To Get A Jump On Next Year's Taxes page, available in seven languages. 

Other resources for people with limited English proficiency on IRS.gov include:

Watch out for scams targeted to non-English speakers
IRS impersonators and other scammers target people with limited access to information, including individuals not entirely comfortable with the English language. These scams are often threatening in nature and pose a major threat to these communities.

These scams frequently take the form of a “robocall” (a text-to-speech recorded message with instructions for returning the call), but in some cases may be made by an actual person. These con artists may have some personal data, including the taxpayer’s address, the last four digits of their Social Security number, among other things – making the calls seem more legitimate.

One common IRS impersonation scam involves the taxpayer receiving a telephone call threatening jail time, deportation or revocation of a driver’s license from someone claiming to be with the IRS. Taxpayers who are recent immigrants to the United States often are the most vulnerable and should ignore these threats and not engage the scammers.

People should watch out for scams using email, phone calls or texts related to the payments. Be careful and cautious: The IRS will not send unsolicited electronic communications asking people to open attachments, visit a website or share personal or financial information.

Information on how to Report Phishing and Online Scams is available in six languages.

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.