IRS Tax News

  • 27 Apr 2020 8:07 AM | Anonymous

    Special alert for VA, SSI recipients who don’t file a tax return and have dependents

    VA, SSI recipients with eligible children need to act by May 5 to quickly add money to their automatic Economic Impact Payment; ‘Plus $500 Push’ continues

    WASHINGTON — The Internal Revenue Service today issued a special alert for Supplemental Security Income and Department of Veterans Affairs beneficiaries to act by May 5 if they didn’t file a tax return in 2018 or 2019 and have dependents so they can quickly receive the full amount of their Economic Impact Payment.

    Their $1,200 payments will be issued soon and, in order to add the $500 per eligible child amount to these payments, the IRS needs the dependent information before the payments are issued. Otherwise, their payment at this time will be $1,200 and, by law, the additional $500 per eligible child amount will be paid in association with a return filing for tax year 2020.

    “We want to ‘Plus $500’ these groups so they can get their maximum Economic Impact Payment of $1,200 and their $500 for each eligible child as quickly as possible,” said IRS Commissioner Chuck Rettig. “They’ll get $1,200 automatically, but they need to act quickly and use the Non-Filers tool on IRS.gov to get the extra $500 per child added to their payment. Everyone should share this information widely and help others with the Plus $500 Push, so that more Americans get more money as fast as possible.”

    Following extensive work by the IRS and partner government agencies, $1,200 automatic payments will be starting soon for those receiving Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) and VA Compensation and Pension (C&P) beneficiaries who didn’t file a tax return in the last two years. No action is needed by these groups; they will automatically receive their $1,200 payment.

    For VA and SSI recipients who have a qualifying child and didn’t file a 2018 or 2019 tax return, they have a limited window to register to have $500 per eligible child added automatically to their soon-to-be-received $1,200 Economic Impact Payment. A quick trip to a special Non-Filers tool on IRS.gov by May 5 for these groups may help put all of their eligible Economic Income Payment into a single payment. The Non-Filers tool is available in English and Spanish.

    To help spread the word to recipients with children about this special “Plus $500 Push,” the IRS has additional material available on a special partners page that can be shared with friends, family members and community groups.

    SSI and VA recipients: Have a child but don’t file a tax return? Visit IRS.gov now

    SSI and VA recipients who have children and who weren’t required file a tax return in 2018 or 2019 should visit the Non-Filers: Enter Payment Info Here tool on IRS.gov. By quickly taking steps to enter information on the IRS website about them and their qualifying children, they can receive the $500 per dependent child payment automatically in addition to their $1,200 individual payment. Otherwise, their payment at this time will be $1,200 and, by law, the additional $500 per eligible child amount would be paid in association with a return filing for tax year 2020.

    SSI and VA recipients who receive Compensation and Pension (C&P) benefit payments should receive their automatic payments by mid-May. If they have children and aren’t required to file a tax return, both groups are urged to use the Non-Filers tool as soon as possible before the May 5 deadline. Once the deadline passes and processing begins on the $1,200 payment, they will not be eligible to use the Non-Filers tool to add eligible children. Their payment will be $1,200 and, by law, the additional $500 per eligible child amount would be paid in association with a return filing for tax year 2020.

    SSA / Railroad Retirees: Economic Impact Payments arriving next week

    For recipients of Social Security retirement, survivors or disability insurance benefits (SSDI) and Railroad Retirement benefits (RRB), automatic payments of $1,200 are scheduled to begin arriving next week. No action is needed on their part. This includes people who don’t normally file a tax return.

    For Social Security / RRB beneficiaries who don’t normally file a tax return, have a child and registered using the IRS Non-Filers tool by the April 22 deadline, more payments are scheduled to begin arriving next week as well.

    For SSA/RRB beneficiaries who don’t normally file a tax return and have a child but did not register on the IRS Non-Filers tool by April 22, they will still receive their automatic $1,200 beginning next week. Given the deadline has passed, by law, the additional $500 per eligible child amount would be paid in association with filing a tax return for 2020. This group can no longer use the Non-Filers tool to add eligible children.

    Note - Direct Express Account Holders:You may use the Non-Filers tool, but you cannot receive your and your children’s payment on your Direct Express account. You may only select a bank account for direct deposit or leave bank information blank and receive the money by mail.

    No action needed by most taxpayers

    The Treasury Department will make these automatic payments to SSA, SSI, RRB and VA recipients. Recipients will generally receive the automatic $1,200 payments by direct deposit, Direct Express debit card or by paper check, just as they would normally receive their benefits.

    For more information related to veterans and their beneficiaries who receive Compensation and Pension (C&P) benefit payments from VA, please visit VA.gov.

    General IRS information about the Economic Impact Payments is available on a special section of IRS.gov.

    Watch out for scams related to Economic Impact Payments

    The IRS urges taxpayers to be on the lookout for scams related to the Economic Impact Payments. There is no fee required to receive these payments.

  • 24 Apr 2020 10:23 AM | Anonymous

    WASHINGTON — The Internal Revenue Service today announced it is accepting applications for the Internal Revenue Service Advisory Council (IRSAC). Applications will be accepted through June 12, 2020.

    The IRSAC serves as an advisory body to the Commissioner of the Internal Revenue Service and provides an organized public forum for discussion of relevant tax administration issues between IRS officials and representatives of the public. The IRSAC proposes enhancements to IRS operations, recommends administrative and policy changes to improve taxpayer service, compliance and tax administration, discusses relevant information reporting issues, addresses matters concerning tax-exempt and government entities and conveys the public’s perception of professional standards and best practices for tax professionals.

    IRSAC members are appointed to three-year terms by the Commissioner of the Internal Revenue Service and submit a report to the Commissioner annually at a public meeting. Applications are currently being accepted for approximately 14 appointments that will begin in January 2021.

    Nominations of qualified individuals may come from individuals or organizations. IRSAC members are drawn from substantially diverse backgrounds representing a cross-section of the taxpaying public with substantial, disparate experience in: tax preparation for individuals, small businesses and/or large, multi-national corporations; information reporting, tax-exempt and government entities; digital services; and professional standards of tax professionals. 

    Applications should document the proposed member’s qualifications. In particular, the IRSAC is seeking applicants with knowledge and background in one of the following areas:

    Large Business & International

    • International tax expertise
    • Experience as a certified public accountant or tax attorney working in or for a large, sophisticated organization, and/or
    • Experience working in-house at a major firm dealing with complex organizations

    Small Business & Self-Employed

    • Experience with online or digital businesses
    • Experience with audit representation
    • Experience educating on tax issues and topics
    • Knowledge of passthrough entities, and/or
    • Knowledge of fiduciary tax

    Tax Exempt & Government Entities

    • Experience in exempt organizations
    • Experience with Indian tribal governments and/or
    • Experience with other aspects of TE/GE

    Wage & Investment

    • Knowledge of tax law application/tax preparation experience
    • Familiarity with IRS tax forms and publications
    • Knowledge of the audit process
    • Experience educating on tax issues and topics
    • Knowledge of income tax issues related to refundable credits
    • Tax software industry experience
    • Volunteer Income Tax Assistance and Tax Counseling for the Elderly experience
    • Experience applying industry benchmarks to operations
    • Financial services information technology background with knowledge of technology innovations in public and private customer service sectors

    Applicants must be in good standing regarding their own tax obligations and demonstrate high professional and ethical standards. All applicants must complete and submit an application and pass a tax compliance and practitioner check. For those applicants deemed “Best Qualified,” FBI fingerprint checks will also be required.

    More information, including the application form, is available on the IRS Web site. Questions about the application process can be emailed to publicliaison@irs.gov.

  • 23 Apr 2020 3:01 PM | Anonymous

    The Internal Revenue Service has posted new Frequently Asked Questions (FAQs) about Carrybacks of Net Operating Losses (NOLs) for Taxpayers who have had Section 965 Inclusions.

    It is a follow up to the material on temporary procedures that we issued last week.


  • 23 Apr 2020 12:11 PM | Anonymous

    WASHINGTON – WASHINGTON — The Treasury Department and Internal Revenue Service today issued proposed regulations under the Tax Cuts and Jobs Act (TCJA) that provide guidance for tax-exempt organizations that are subject to the unrelated business income tax with more than one unrelated trade or business on how to calculate their unrelated business taxable income (UBTI).

    The proposed regulations issued today provide guidance on identifying separate trades or businesses, including investment activities, as well as certain other amounts included in UBTI.

    Changes under the TCJA require tax-exempt organizations subject to the UBTI tax to compute UBTI, including any NOL deduction, separately for each trade or business (referred to as a “silo”).

    Under prior law, UBTI was the gross income of all unrelated trades or businesses less the allowed deductions from all unrelated trades or businesses. Starting in tax-year 2018 (tax years beginning after Dec. 31, 2017), the loss from one trade or business may not offset the income from another, separate trade or business.

    Updates on the implementation of the TCJA can be found on the Tax Reform page of IRS.gov.
  • 22 Apr 2020 3:22 PM | Anonymous

    Announcement 2020-05 provides additional guidance on an issue not addressed in 2017 and 2018 IRB guidance on the subject of prematurely deteriorating concrete foundations due to the presence of the mineral pyrrhotite in the concrete mixture used to pour the foundations.  Specifically, in response to requests for this additional guidance from Connecticut Members of Congress, the Announcement clarifies the Federal income tax treatment of a payment made by the Connecticut Foundation Solutions Indemnity Company, Inc., an entity organized by the State of Connecticut, to Connecticut homeowners who have not claimed Federal income tax deductions for amounts paid to repair damage to personal residences with concrete foundations that prematurely deteriorated.

    Announcement 2020-05 will be in IRB: 2020-19, dated 05/04/2020.

  • 22 Apr 2020 7:42 AM | Anonymous

    FAQs: Payroll Support for Air Carriers and Contractors under the CARES Act

    Division A, Title IV, Subtitle B, of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) authorizes the Department of the Treasury (Treasury Department) to provide payments to passenger air carriers, cargo air carriers, and certain contractors that must be exclusively used for the continuation of payment of employee wages, salaries, and benefits (Payroll Support).  Section 4117 of the CARES Act provides that the Treasury Department may receive warrants, options, preferred stock, debt securities, notes, or other financial instruments issued by a company receiving Payroll Support (Recipient) to provide appropriate compensation to the Federal Government for the provision of the financial assistance (Taxpayer Protection Instruments).

    The Payroll Support Program Agreement provides that unless otherwise provided in guidance issued by the Treasury Department or the Internal Revenue Service, “the form of any Taxpayer Protection Instrument held by the Treasury Department and any subsequent holder will be treated as such form for purposes of the Internal Revenue Code of 1986 (for example, a Taxpayer Protection Instrument in the form of a note will be treated as indebtedness for purposes of the Internal Revenue Code of 1986).”

    Additional non-Federal income tax information on the Treasury Department’s Payroll Support program for air carriers and contractors is available at https://home.treasury.gov/policy-issues/cares/preserving-jobs-for-american-industry.

    Q. If a Recipient does not issue Taxpayer Protection Instruments to the Treasury Department in exchange for Payroll Support, is the receipt of the Payroll Support taxable to the Recipient under the Internal Revenue Code (Code)?

    A. Yes.  If the Recipient does not provide Taxpayer Protection Instruments to the Treasury Department as compensation for the Payroll Support, the receipt of the Payroll Support is not excluded from the Recipient’s gross income under the Code and therefore is taxable.

    Q. When a Recipient that does not issue any Taxpayer Protection Instruments uses the Payroll Support to pay wages, salaries, and benefits to its employees as required under the Payroll Support Program, are all of those expenses deductible under the Code?

    A. Yes.  The Code generally permits the payment of wages, salaries, and benefits to employees to be deducted as ordinary and necessary business expenses.

    Q. If a Recipient issues to the Treasury Department any warrants, options, preferred stock, debt securities, or notes (or a combination of these Taxpayer Protection Instruments) as compensation for the Payroll Support, is the receipt of the Payroll Support taxable under the Code?

    A. Part of the Payroll Support received is taxable and part of the Payroll Support received is not taxable.  Payroll Support in excess of the fair market value of the warrants, options, or preferred stock, plus the issue prices of any debt securities or notes issued, is taxable to the Recipient under the Code.  The remaining Payroll Support is not taxable to the Recipient under the Code.

    Q. When a Recipient that issues Taxpayer Protection Instruments to the Treasury Department uses the Payroll Support to pay wages, salaries, and benefits to its employees as required, are all of these expenses deductible under the Code?

    A. Yes.  The Code generally permits the payment of wages, salaries, and benefits to employees to be deducted as ordinary and necessary business expenses, regardless of whether the Recipient issues Taxpayer Protection Instruments.

  • 21 Apr 2020 2:25 PM | Anonymous

    Revenue Procedure 2020-20 provides relief to certain nonresident individuals who, but for COVID-19 Emergency Travel Disruptions, would not have been in the United States long enough during 2020 to be considered resident aliens under the “substantial presence test” (“SPT”) or to be ineligible for treaty benefits on services income.  With respect to the relief provided under the SPT, this revenue procedure establishes procedures to apply the SPT’s medical condition exception to exclude up to 60 consecutive days spent in the United States during a time period starting on or after February 1, 2020 and on or before April 1, with the specific start date to be chosen by each individual (the “COVID-19 Emergency Period”).  It also provides procedures for an individual to exclude those days of presence in order to claim benefits under an income tax treaty with respect to services income.

    Rev. Proc. 2020-20 will be published in Internal Revenue Bulletin 2020-20, to be issued on May 11, 2020.

    Revenue Procedure 2020-27 provides that The Secretary of the Treasury has determined that the global health emergency caused by the outbreak of COVID-19 is an adverse condition that precludes the normal conduct of business globally.  Therefore, relief is being provided to any individual that reasonably expected to become a “qualified individual” for purposes of claiming the foreign earned income exclusion under section 911 but left the foreign jurisdiction during the period described in this revenue procedure. 

    Rev. Proc. 2020-27 will be published in Internal Revenue Bulletin 2020-20, to be issued on May 11, 2020.

  • 21 Apr 2020 2:19 PM | Anonymous

    WASHINGTON –The Treasury Department and the Internal Revenue Service today issued guidance that provides relief to individuals and businesses affected by travel disruptions arising from the COVID-19 emergency. 

    The guidance includes the following:

    1. Revenue Procedure 2020-20, which provides that, under certain circumstances, up to 60 consecutive calendar days of U.S. presence that are presumed to arise from travel disruptions caused by the COVID-19 emergency will not be counted for purposes of determining U.S. tax residency and for purposes of determining whether an individual qualifies for tax treaty benefits for income from personal services performed in the United States;
    2. Revenue Procedure 2020-27, which provides that qualification for exclusions from gross income under I.R.C. section 911 will not be impacted as a result of days spent away from a foreign country due to the COVID-19 emergency based on certain departure dates; and
    3. An FAQ, which provides that certain U.S. business activities conducted by a nonresident alien or foreign corporation will not be counted for up to 60 consecutive calendar days in determining whether the individual or entity is engaged in a U.S. trade or business or has a U.S. permanent establishment, but only if those activities would not have been conducted in the United States but for travel disruptions arising from the COVID-19 emergency. 

    The Treasury Department and the IRS are continuing to monitor these and other issues related to the COVID-19 emergency, and updated information about relief will continue to be posted on Coronavirus Tax Relief on IRS.gov.  

  • 20 Apr 2020 4:32 PM | Anonymous

    Special alert for benefit recipients who don’t file a tax return and have dependents

    WASHINGTON – The Internal Revenue Service today issued a special alert for several groups of federal benefit recipients to act by this Wednesday, April 22, if they didn’t file a tax return in 2018 or 2019 and have dependents so they can quickly receive the full amount of their Economic Impact Payment.

    Their $1,200 payments will be issued soon and, in order to add the $500 per eligible child amount to these payments, the IRS needs the dependent information before the payments are issued. Otherwise, their payment at this time will be $1,200 and, by law, the additional $500 per eligible child amount would be paid in association with a return filing for tax year 2020.

    Following extensive work by the IRS and other government agencies, $1,200 automatic payments will be starting soon for those receiving Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) and Veterans Affairs beneficiaries who didn’t file a tax return in the last two years. No action is needed by these groups; they will automatically receive their $1,200 payment.

    For those benefit recipients with children who aren’t required to file a tax return, an extra step is needed to quickly add $500 per eligible child onto their automatic payment of $1,200.

    For people in these groups who have a qualifying child and didn’t file a 2018 or 2019 tax return, they have a limited window to register to have $500 per eligible child added automatically to their soon-to-be-received $1,200 Economic Impact Payment. A quick trip to a special non-filer tool on IRS.gov by noon Eastern time, Wednesday, April 22, for some of these groups may help put all of their eligible Economic Income Payment into a single payment.

    “We want to ‘Plus $500’ these recipients with children so they can get their maximum Economic Impact Payment of $1,200 plus $500 for each eligible child as quickly as possible,” said IRS Commissioner Chuck Rettig. “They’ll get $1,200 automatically, but they need to act quickly and register at IRS.gov to get the extra $500 per child added to their payment. These groups don’t normally have a return filing obligation and may not realize they qualify for a larger payment. We’re asking people and organizations throughout the country to share this information widely and help the IRS with the Plus $500 Push.”

    To help spread the word to recipients with children about this special “Plus $500 Push,” the IRS has additional material available on a special partners page that can be shared with friends, family members and community groups. This effort will focus on the initial April 22 deadline and continue this spring to reach as many people as possible since the child payments will continue to be made in the weeks and months ahead.

    Have a child but don’t file a tax return? Visit IRS.gov now

    Those receiving federal benefits – including Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) or Veterans Administration benefits – who have with children and who weren’t required file a tax return in 2018 or 2019 should visit the Non-Filer: Enter Payment Info Here tool on IRS.gov. By quickly taking steps to enter information on the IRS website about them and their qualifying children, they can receive the $500 per dependent child payment automatically in addition to their $1,200 individual payment. Otherwise, their payment at this time will be $1,200 and, by law, the additional $500 per eligible child amount would be paid in association with a return filing for tax year 2020.
     
    First window affects SSA/RRB recipients with children; SSI and VA recipients have slightly more time to add $500 to automatic payments
     
    For certain SSA / RRB beneficiaries who don’t normally file a tax return and do not register with the IRS by April 22, they will still be eligible to receive the separate payment of $500 per qualifying child. For those who miss the April 22 deadline, their payment at this time will be $1,200 and, by law, the additional $500 per eligible child amount would be paid in association with a return filing for tax year 2020. They will not be eligible to use the Non-Filer tool to add eligible children once their $1,200 payment has been issued.
     
    SSI and VA beneficiaries have some additional time beyond April 22 to add their children since their $1,200 automatic payments will be made at a later date. SSI recipients will receive their automatic payments in early May, and the VA payment schedule for beneficiaries who receive Compensation and Pension (C&P) benefit payments is still being determined. If they have children and aren’t required to file a tax return, both groups are urged to use the Non-Filer tool as soon as possible. Once their $1,200 payment has been issued, they will not be eligible to use the Non-Filer tool to add eligible children. Their payment will be $1,200 and, by law, the additional $500 per eligible child amount would be paid in association with a return filing for tax year 2020.
     
    No action needed by most taxpayers
     
    The Treasury Department will make these automatic payments to SSA, SSI, RRB and VA recipients. Recipients will generally receive the automatic $1,200 payments by direct deposit, Direct Express debit card or by paper check, just as they would normally receive their benefits.
     
    For information about Social Security retirement, survivors and disability insurance beneficiaries, please visit the SSA website at SSA.gov. For more information related to veterans and their beneficiaries who receive Compensation and Pension (C&P) benefit payments from VA, please visit VA.gov.
     
    General IRS information about the Economic Impact Payments is available on a special section of IRS.gov.
     
    Watch out for scams related to Economic Impact Payments
     
    The IRS urges taxpayers to be on the lookout for scams related to the Economic Impact Payments. There is no fee required to receive these payments.

  • 20 Apr 2020 3:51 PM | Anonymous

    Revenue Procedure 2020-28 provides two tax return filing procedures for certain individuals who are eligible for the economic impact payment https://www.irs.gov/coronavirus/economic-impact-payments under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Public Law 116-136, 134 Stat. 281 (March 27, 2020), but are not otherwise required to file 2019 Federal income tax returns. The first procedure is a simplified procedure for eligible individuals who voluntarily wish to file a Federal income tax return only to receive allowed economic impact payments. These eligible individuals are encouraged to use the “Non-Filers: Enter Payment Info Here” https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here tool, available at www.irs.gov/coronavirus, to submit information to the Internal Revenue Service (IRS) to receive their allowed economic impact payment much more quickly than if they filed a paper return. The second procedure accommodates zero AGI electronic filers who utilize tax return preparation software or otherwise need to provide more detail in filing State or local tax returns than that allowed by the simplified procedure. 

    Federal income tax returns filed in accordance with these procedures should be filed as soon as possible but not later than October 15, 2020, to ensure that the IRS will have sufficient time to process all returns and make all resulting economic impact payments before December 31, 2020, as required by the CARES Act. The “Get My Payment” tool provides the most up-to-date information regarding the status of an eligible individual’s economic impact payment. 

    Revenue Procedure 2020-28 will be in IRB:    2002-19, dated 05/04/2020.

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