The IRS continues to review the details and impact of the new tax law signed this week, but a number of these provisions will require changing forms and updating our processing systems involving non-1040 business returns. As a result, electronic filing of many business returns will be delayed while we update forms, related instructions and corresponding systems. This delay is not expected to significantly impact business filers since most of these returns with reporting periods ending Dec. 31, 2012, are not due until March or April 2013, depending on the form.

The IRS will not accept these business tax returns for processing through MeF at this time*:
§ All 2012 tax year business forms (other than Forms 2290 and 7004)
§ Form 8849, Schedule 3 - Certain Fuel Mixtures and the Alternative Fuel Credit
§ Form 990 series (Tax Exempt tax returns)

Beginning Jan. 7, 2013, the IRS will accept these forms for processing through MeF:
§ Fiscal year returns with a year ending prior to 12/31/2012
§ All 2011 tax year and 2012 fiscal year business returns, including Form 1120 series
§ 2012 tax year Form 2290, Heavy Highway Vehicle Use Tax Return
§ 2012 tax year Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information and Other Returns

We will share additional information on when we can accept the remaining 2012 tax year business forms as soon as it becomes available. More information will also be available soon regarding 2012 individual 1040 tax returns impacted by this week’s legislation.

The Internal Revenue Service released updated income-tax withholding tables for 2013 reflecting this week’s changes by Congress.

ATTN: Software Developers, Return Transmitters and Authorized IRS e-file Providers/EROs

IRS has posted Frequently Asked Questions (FAQs) to help Authorized IRS e-file Providers (Providers) understand the correct usage of Electronic Filing Identification Numbers (EFINs).  Providers must ensure that they are using their correct EFIN.

When a Provider is doing business with another Provider, you must check to see that the other Provider also has a valid EFIN.

Please remind your clients, age 70½ or older to take their 2012 required minimum distributions (RMD) by Dec. 31 or April 1, 2013, if they were 70½ in 2012, to avoid the 50 percent excise tax on any amount of an RMD they do not take on time.

Additionally, if they have exceeded the 2012 IRA contribution limit, they may withdraw excess contributions from their accounts by the due date of their tax returns (including extensions). Otherwise, they must pay a 6 percent tax each year on the excess amounts remaining in their account.

Go to the RMD page on IRS.gov for more information.

The IRS is taking several steps to improve taxpayers' ability to understand their refund status in 2013. To begin with, taxpayers will get a personalized refund date when they use Where’s My Refund? and the tool will have a new look. Where’s My Refund? will include a tracker that displays progress through 3 stages: (1) Return Received, (2) Refund Approved and (3) Refund Sent along with narrative that provides more detail such as the approved refund amount and the date the refund will be sent. Taxpayers will also be able to check on the status of their return sooner - within 24 hours after we’ve received an e-filed return or 4 weeks after a paper return is mailed.

Where’s My Refund? will provide a refund date as soon as the IRS processes the tax return and approves the refund. This means taxpayers won’t get an estimated refund date right away. Instead Where’s My Refund? will give each taxpayer personalized refund information based on the processing of his or her own tax return.

The IRS issued more than 9 out of 10 refunds to taxpayers in less than 21 days last year. The same results are expected in 2013.

The Publication 2043, previously the Refund Cycle Chart, has been re-purposed as IRS Refund Information Guidelines for the Tax Preparation Community. The new "What to expect for refunds in 2013" page on IRS.gov includes official IRS 2013 refund communications, including
Publication 2043, to help you prepare for the filing season.  

• Pub 2043: IRS Refund Information Guidelines for the Tax Preparation Community
  Tax Tip SETT-2012-13 - Season of Giving Tips
  Video: When will I get my refund?

Reminder: Any claims by Providers concerning faster refunds by virtue of electronic filing must be consistent with the language in official IRS publications. Per the advertising standards in Publication 3112, IRS e-file Applications and Participation, and Publication 1345, Handbook for Authorized IRS e-file Providers of Individual Income Tax, providers must not use improper or misleading advertising in relation to IRS e-file, including the time frames for refunds or other financial products. This reminder serves as the IRS’s request to the tax preparation community to follow these messaging guidelines. The IRS will monitor Industry practice during filing season, but anticipates and expects voluntary compliance from its partners in support of this important effort to help taxpayers understand their refund status.

The recent webinar, Circular 230 Overview: Key Provisions and Responsibilities for Tax Professionals, will be rebroadcast on Jan. 29, 2013. Sign up now.

In mid-December 2012, the IRS sent notices to more than 600,000 taxpayers identified as victims (or potential victims) of identity theft. Notice CP01A "We've Assigned You An Identity Protection Personal Identification Number," provides the IP PIN that a victim will need to complete his or her 2012 tax return.

The IP PIN helps the IRS quickly distinguish between the genuine taxpayer and a potential identity thief and helps prevent processing delays for victims’ federal tax returns. IP PINs are valid for the current year’s federal tax return only. The IRS issues a new IP PIN each December when the taxpayer remains at risk for identity theft.

Important changes for this year:

New notices. The CP01A notice replaces the 4869CS letter used last year. 

IP PIN requirement. If a required IP PIN is missing or incorrect on an electronic return, the return will be rejected. Taxpayers can correct or include the IP PIN, request a replacement IP PIN or file a paper return. If an IP PIN is missing or incorrect on a paper return, the return will require a manual review, which will delay any refund to which the taxpayer is entitled. This review is for the protection of the taxpayer who has previously been the victim of identity theft.

Easier replacement IP PIN process. If a taxpayer misplaces the IP PIN, she can quickly get a replacement IP PIN by contacting the IRS by calling the Identity Theft Specialized Unit, or IPSU at 1-800-908-4490, ext. 245, or the IRS Help Desk at 1-800-829-1040 or by visiting a Taxpayer Assistance Center. The replacement IP PIN allows the return to be electronically "accepted" (subject to standard validation tests). However, the return will then require a manual review prior to processing, which may delay any refund to which the taxpayer is entitled. 

What should tax preparers do?

• Ask the taxpayer, as part of the interview process, whether he contacted the IRS regarding identity theft or if the IRS notified them of potential identity theft. If so, ask if he received a notice from the IRS in December containing a six-digit Identity Protection PIN.
  If you cannot locate where to enter the IP PIN in commercial tax software, contact the tax software provider. Due to variances in software programs, IRS assistors cannot help with this matter.

Information for POAs

Since the Identity Protection PIN issued in 2012 is for filing the tax year 2012 income tax return, the IP PIN is considered tax year 2012 information. IRS representatives have limited ability to discuss the IP PIN or any other tax information related to the 2012 tax year unless there is a valid Power of Attorney on file that includes 2012. Disclosure laws restrict the IRS from releasing any information to a third party unless the POA is valid for the year related to that information.

If you have any questions, comments or suggestions regarding the Identity Protection PIN, please submit them to ippin.Questions@irs.gov. Please do not include sensitive or personally identifiable information in your email. Additionally, remember that the IRS does not initiate taxpayer communications through email.

Victims of Hurricane Sandy, which began on Oct. 26 in parts of Maryland, may qualify for tax relief from the Internal Revenue Service.

Individuals and businesses making contributions to charity should keep in mind some key tax provisions that have taken effect in recent years, especially those affecting donations of clothing and household items and monetary donations.