Revenue Ruling 2021-10 provides interest rates for underpayments and overpayments for the 3rd quarter 2021. The rates for interest determined under Section 6621 of the code for the calendar quarter beginning July 1, 2021, will be 3 percent for overpayments (2 percent in the case of a corporation), 3 percent for underpayments, and 5 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 0.5 percent.

Revenue Ruling 2021-10 will be in IRB:  2021-25, dated June 21, 2021.

WASHINGTON — Today, the Internal Revenue Service, the U.S. Department of the Treasury, and the Bureau of the Fiscal Service announced they have disbursed more than 1.8 million additional Economic Impact Payments under the American Rescue Plan.

Today’s announcement covering the most recent two weeks of the effort brings the total disbursed so far to nearly 167 million payments. They represent a total value of approximately $391 billion since these payments began rolling out to Americans in batches on March 12. 

Here is additional information on the last two weeks of payments, which includes those with official payment dates through May 26:

The IRS will continue to make Economic Impact Payments on a weekly basis. Ongoing payments will be sent to eligible individuals for whom the IRS previously did not have information to issue a payment but who recently filed a tax return, as well to people who qualify for “plus-up” payments.

Special reminder for those who don't normally file a tax return

Although payments are automatic for most people, the IRS continues to urge people who don’t normally file a tax return and haven’t received Economic Impact Payments to file a 2020 tax return to get all the benefits they’re entitled to under the law, including tax credits such as the 2020 Recovery Rebate Credit, the Child Tax Credit, and the Earned Income Tax Credit.  Filing a 2020 tax return will also assist the IRS in determining whether someone is eligible for an advance payment of the 2021 Child Tax Credit, which will begin to be disbursed this summer.

For example, some federal benefits recipients may need to file a 2020 tax return – even if they don't usually file – to provide information the IRS needs to send payments for a qualifying dependent. Eligible individuals in this group should file a 2020 tax return as quickly as possible to be considered for an additional payment for their qualifying dependents.

People who don't normally file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness, the rural poor, and others. Individuals who didn't get a first or second round Economic Impact Payment or got less than the full amounts may be eligible for the 2020 Recovery Rebate Credit, but they’ll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return.

Free tax return preparation is available for qualifying people.

The IRS reminds taxpayers that the income levels in this third round of Economic Impact Payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly). The payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment.

Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.

Tax pros may earn continuing education credits and more

IRS YouTube Video:
2021 IRS Tax Forum Will Be Virtual – English

IR-2021-118, May 24, 2021

WASHINGTON — The Internal Revenue Service today announced that the 2021 Virtual IRS Nationwide Tax Forum will be held over five weeks starting July 20, with a series of live-streamed webinars every Tuesday, Wednesday and Thursday. 

Held each summer for 30 years, the IRS Nationwide Tax Forums are the IRS’s marquee outreach event to the tax professional community. This year, the IRS decided once again to provide these events in a virtual format in an abundance of caution and for the safety of the tax professional community.

The virtual format allows experts from the IRS and its association partners to educate and update the tax professional community on tax law, cybesecurity, ethics and other topics. Registering and attending these virtual seminars will allow many to fully satisfy their annual continuing education requirements. 

Tax professionals are encouraged to register now to take advantage of this virtual program. 

Seminar dates and agenda

The 2021 Virtual Nationwide Tax Forum will begin on July 20 and continue through Aug. 19 with live-streamed webinars broadcast on Tuesdays, Wednesdays and Thursdays. Registration enables attendees to participate in all of the live webinars earning up to 28 continuing education credits.

The Nationwide Tax Forum will feature a keynote address from Commissioner Chuck Rettig, a plenary session with tax law and publications updates, and multiple sessions on high-interest topics such as the new Advance Child Tax Credit, virtual currencies, the gig economy, tax professional ethics, advanced cybersecurity and more. Presentations are made by both IRS experts and partner associations.

This year, the plenary session and an ethics webinar will be offered both in English and Spanish. Additional multilngual resources will be available for attendees in the Virtual Expo.

Course details, including webinar titles, descriptions and schedule are available now.

2021 registration and fees

Tax professionals who register by June 15 at 5 p.m. ET qualify for an Early Bird rate of $240 per person. The standard rate, starting June 16, will be $289.

Discounts for national association members

Members of the IRS’s national partner associations listed below qualify for a discount of $10 off the Early Bird rate, but only if they register by June 15. Participating association members should contact their association directly for more information:

• American Bar Association (ABA) Section of Taxation
• American Institute of Certified Public Accountants (AICPA)
• National Association of Enrolled Agents (NAEA)
• National Association of Tax Professionals (NATP)
• National Society of Accountants (NSA)
• National Society of Tax Professionals (NSTP)
• Low Income Taxpayer Clinics (LITC)
• Volunteer Income Tax Assistance Program (VITA)

Virtual Expo and Focus Groups

Registration at the 2021 Virtual IRS Nationwide Tax Forum includes access to the Virtual Expo. The Virtual Expo provides a great opportunity to visit with exhibitors representing dozens of commercial leaders in the industry, as well as leading national associations and several key IRS offices.

New this year is the IRS’s multilingual engagement and services booth, which will feature the expanded resources, IRS publications, forms and webpages that are now available in various languages. They will also share some related efforts coming soon. Highlights of the Virtual Expo include:

• The latest tax products and software
• The IRS Zone and engagement with representatives from IRS program offices
• Bonus Q&A sessions in the Speaker's Corner
• Live webinars from many of our sponsors

In addition, attendees are invited to share their experiences and discuss innovative ideas directly with the IRS in small, virtual focus groups. Please check the website for the list of topics and qualifying criteria

WASHINGTON — The Internal Revenue Service reminds taxpayers who missed the recent tax-filing deadline who are due a refund that there is no penalty for filing late. Those who owe and missed the deadline without requesting an extension should file quickly to limit penalties and interest.

Extra time to file and pay any taxes due without penalties and interest is available for some taxpayers. Included are:

• Members of the military who served or are currently in a combat zone. They may qualify for an additional extension of at least 180 days to file and pay taxes.
• Support personnel in combat zones or a contingency operation in support of the Armed Forces. They may also qualify for a filing and payment extension of at least 180 days.
• Some disaster victims. Those who qualify have more time to file and pay what they owe.

Here are some tips for late filers:

File to get a tax refund
The only way to get a refund is to file a tax return. There is no penalty for filing after the deadline if a refund is due. Use electronic filing options including IRS Free File available on IRS.gov through October 15 to prepare and file returns electronically.

COVID-19 continues to cause delays in some IRS services. If a taxpayer filed a paper tax return, the IRS will process it in the order it was received. Taxpayers should not file a second tax return or call the IRS. The IRS issues more than nine out of 10 refunds in less than 21 days. However, it’s possible a tax return may require additional review and take longer.

Taxpayers can track a refund using the Where's My Refund? tool on IRS.gov, IRS2Go and by phone at 800-829-1954. Taxpayers need the primary Social Security number on the tax return, the filing status and the expected refund amount. The tool updates once daily, usually overnight, so there’s no need to check more frequently. The "Where's My Refund?" tool cannot be used to track Economic Impact Payments.

File to reduce penalties and interest
Normally, taxpayers should file their tax return, or request an extension, and pay any taxes they owe by the deadline to avoid penalties and interest. An extension to file is not an extension to pay. Penalties and interest will apply to taxes owed after May 17.

Even if a taxpayer can't afford to immediately pay the taxes they owe, they should still file a tax return as soon as possible to reduce possible penalties. The IRS has more information for taxpayers who owe the IRS, but cannot afford to pay.

Ordinarily, the failure to file penalty is 5% of the tax owed for each month or part of a month that a tax return is late, up to five months, reduced by the failure to pay penalty amount for any month where both penalties apply. If a return is filed more than 60 days after the due date, the minimum penalty is either $435 or 100% of the unpaid tax, whichever is less. Filing and paying as much as possible is important because the late-filing penalty and late-payment penalty add up quickly. The failure to pay penalty rate is generally 0.5% of unpaid tax owed for each month or part of a month until the tax is fully paid or until 25% is reached. The rate is subject to change. For more information see IRS.gov/penalties.

Taxpayers who have a history of filing and paying on time often qualify for penalty relief. A taxpayer will usually qualify if they have filed and paid timely for the past three years and meet other requirements. For more information, see the first-time penalty abatement page on IRS.gov.

Interest is charged on tax and penalties until the balance is paid in full.

Pay taxes due electronically

Those who owe taxes can pay with IRS Direct Pay, by debit or credit card or apply online for a payment plan (including an installment agreement). For more electronic payment options visit IRS.gov/payments. They are secure and easy to use. Taxpayers paying electronically receive immediate confirmation when they submit their payment. With Direct Pay and the Electronic Federal Tax Payment System (EFTPS), taxpayers can opt in to receive email notifications about their payments.

Selecting a tax professional
The IRS offers tips to help taxpayers choose a tax return preparer wisely. The Choosing a Tax Professional page has information about tax return preparer credentials and qualifications and guidance on avoiding unscrupulous tax return preparers

The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help taxpayers find tax return preparers who hold a professional credential recognized by the IRS or who have completed the requirements for the IRS Annual Filing Season Program.

Taxpayer Bill of Rights
Taxpayers have fundamental rights under the law that protect taxpayers when they interact with the IRS. The Taxpayer Bill of Rights presents these rights in 10 categories. IRS Publication 1, Your Rights as a Taxpayer, highlights these rights and the agency's obligation to protect them.

WASHINGTON — The Internal Revenue Service today continued an ongoing effort to help those experiencing homelessness by reminding people who don’t have a permanent address or a bank account that they may still qualify for stimulus payments and other credits, including the advance Child Tax Credit.

The agency is also asking for help from groups that assist vulnerable or underserved people who may have difficulty getting a stimulus payment automatically. Filing a 2020 tax return, even if people don’t have to, could put money in their pocket.

While the third round of Economic Impact Payments continue to be made automatically to most eligible people, the IRS can’t issue a payment to eligible Americans when information about them isn’t available in the tax agency’s systems.

To help people experiencing homelessness, the rural poor and other historically underserved groups, the IRS urges community groups, employers and others to share information about Economic Impact Payments, the upcoming advance Child Tax Credit and other tax details to help more eligible people file a tax return so they can receive everything to which they’re eligible.

Advance Child Tax Credit: Payments begin soon
The IRS and the U.S. Department of the Treasury announced earlier this week that the first monthly payment of the expanded and newly-advanceable Child Tax Credit (CTC) from the American Rescue Plan will be made on July 15. Roughly 39 million households—covering 88% of children in the United States—are slated to begin receiving monthly payments without any further action required.

IRS and Treasury also announced the increased CTC payments will be made on the 15th of each month unless the 15th falls on a weekend or holiday. Families who receive the credit by direct deposit can plan their budgets around receipt of the benefit. Eligible families will receive a payment of up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 and above. 

The American Rescue Plan increased the maximum Child Tax Credit in 2021 to $3,600 for children under the age of 6 and to $3,000 per child for children between ages 6 and 17. The American Rescue Plan is projected to lift more than five million children out of poverty this year, cutting child poverty by more than half.

Households covering more than 65 million children will receive the monthly CTC payments through direct deposit, paper check, or debit cards, and IRS and Treasury are committed to maximizing the use of direct deposit to ensure fast and secure delivery. While most taxpayers will not be required to take any action to receive their payments, Treasury and the IRS will continue outreach efforts with partner organizations over the coming months to make more families aware of their eligibility.

How to help
The IRS urges community groups, employers and others to share information about the Child Tax Credit, Economic Impact Payments and other key programs to help more eligible people file a tax return so they can receive everything to which they’re eligible. IRS.gov has a variety of information and tools to help people.

Economic Impact Payments, also known as stimulus payments, are different from most other tax benefits; people are eligible for the payments even if they have little or no income and even if they don’t usually file a tax return. This is true as long as they have a Social Security number and are not being supported by someone else who can claim them as a dependent. For anyone who missed out on the first two rounds of payments, it’s not too late.

However, filing a 2020 tax return is the only way, if they’re eligible, to get the money from the first or second payment now. People will need to claim the 2020 Recovery Rebate Credit. Most people who don’t usually file can use IRS Free File to provide very basic information. There’s even a special section on IRS.gov that can help: Claiming the 2020 Recovery Rebate Credit if you aren’t required to file a tax return.

When the individual answers the questions in Free File, they may also find that they’re eligible for other tax credits which may mean a bigger refund. The IRS will process the tax return and issue a refund. The individual can expect two payments because the 2020 Recovery Rebate Credit is paid as part of the tax refund. After the refund is issued, if they’re eligible, they’ll get another payment shortly afterward for the third Economic Impact Payment.

For the third round of payments, people who are experiencing homelessness may qualify to receive $1,400 for themselves. If they are married or have eligible dependents, they can get an additional $1,400 for each of their family members.

Filing a 2020 federal income tax return that provides very basic information about the person is something that can be done electronically using a smartphone or a computer. When the IRS receives the return, it will automatically calculate and issue the Economic Impact Payments to eligible individuals. People do not need a permanent address or a bank account. They don’t need to have a job. For eligible individuals, the IRS will still issue the payment even if they haven’t filed a tax return in years.

Permanent address not required
People can claim the Recovery Rebate Credit or other credits or get a third Economic Impact Payment even if they don’t have a permanent address. For example, someone experiencing homelessness may list the address of a friend, relative or trusted service provider, such as a shelter, drop-in day center or transitional housing program, on the return filed with the IRS. If they are unable to choose direct deposit, a check or debit card for the tax refund and the third Economic Impact Payment can then be mailed to this address.

For those with no bank account
Many financial institutions will help a person lacking an account to open a low-cost or no-cost bank account. Individuals who open accounts will then have an account and routing number available if they file and request a direct deposit of the Economic Impact Payment.

Visit the Federal Deposit Insurance Corporation (FDIC) website for details, in both English and Spanish, on opening an account online. Among other things, people can use the FDIC’s BankFind tool to locate a nearby FDIC-insured bank. In addition, BankOn, the American Bankers Association, Independent Community Bankers of America and the National Credit Union Administration have all compiled lists of banks and credit unions that can open an account online.

For veterans, see the Veterans Benefits Banking Program (VBBP) for access to financial services at participating banks.

People with a prepaid debit card may be able to have their refund applied to the card. Many reloadable prepaid cards or mobile payment apps have account and routing numbers that can be provided to the IRS. Individuals would need to check with the financial institution to ensure the card can be used and to obtain the routing number and account number, which may be different from the card number.

Workers experiencing homelessness can also receive the EITC
A worker experiencing homelessness might also qualify for an Earned Income Tax Credit (EITC). To get the credit, federal law requires that a worker live in the U.S. for more than half of the year and meet other requirements. This means living in a home in any of the 50 states or the District of Columbia. Therefore, individuals experiencing homelessness, including those who reside at one or more homeless shelters, can meet that requirement.

More details on the Earned Income Tax Credit
For people experiencing homelessness who have a job, filing a return often carries an added bonus—getting a refund based on various tax benefits, especially the EITC for low-and moderate-income workers and working families.

Like many other workers, some workers experiencing homelessness still qualify for the credit even if they earned too little income during 2020 to owe tax. For 2020, the income limit is $15,820 for singles with no children ($21,710 for couples with no children). The income limit is higher for people with children. For example, the limit is $50,594 for singles with three or more children ($56,844 for couples with three or more children). Those who make less must also meet other eligibility requirements.

Because it’s a refundable credit, those who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund. The EITC can put up to $6,660 into a worker’s pocket. The amount varies depending upon the worker’s income, filing status and other factors.

The IRS recognizes that eligible workers experiencing homelessness often encounter unique challenges not faced by other people.

To find out if they’re eligible, people can use the EITC Assistant on IRS.gov. It’s available in both English and Spanish.

File for free
The fastest and easiest way to claim the 2020 Recovery Rebate Credit and Earned Income Tax Credit (EITC) or to get the third Economic Impact Payment is to file a return electronically using IRS Free File. People can use a smartphone or computer to visit IRS.gov.

Through the Free File system, anyone who qualifies for the EITC also qualifies to use brand-name software to prepare and electronically file their return for free. The IRS urges anyone experiencing homelessness who has a smartphone or access to a computer to take advantage of this service.

Direct deposit speeds payments
Direct deposit is the safest and fastest way to receive a refund and the third Economic Impact Payment. People will need to include direct deposit information on their 2020 tax return to get their payment directly deposited.

Anyone with a savings, checking or brokerage account can choose to have their refund electronically deposited in that account. Taxpayers can also purchase U.S. Savings Bonds with their refund. Direct deposit is available even for people who file a paper tax return, but processing of paper returns takes longer.

Help spread the word
Employers can help by making their employees aware of the third Economic Impact Payment, 2020 Recovery Rebate Credit and Earned Income Tax and Child Tax Credit, and by encouraging them to file for these benefits based on tax year 2020 rules. In addition, the American Rescue Plan, enacted in March 2021, expands EITC and the Child Tax Credit benefits for the 2021 tax year.

Some people will be able to get advance payments of the Child Tax Credit later this year. There is nothing those who qualify need to do at this point other than file a 2020 tax return.

The IRS also continues to work extensively with community groups across the country to get people to file tax returns and receive all the Economic Impact Payments and credits they’re entitled to. These efforts helped lead to more than 8 million people last year to submit tax returns who normally don’t file.

For more information, check out the outreach material, available on IRS.gov.

Notice 2021-33 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for May 2021 used under § 417(e)(3)(D), the 24-month average segment rates applicable for May 2021, and the 30-year Treasury rates, as reflected by the application of § 430(h)(2)(C)(iv). 

Notice 2021-33 will be in IRB:   2021-23, dated June 7, 2021.

WASHINGTON —The Internal Revenue Service today provided guidance on tax breaks under the American Rescue Plan Act of 2021 for continuation health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).

Notice 2021-31 provides guidance for employers, plan administrators, and health insurers regarding the new credit available to them for providing continuation health coverage to certain individuals under COBRA.

The American Rescue Plan provides a temporary 100% reduction in the premium that individuals would have to pay when they elect COBRA continuation health coverage following a reduction in hours or an involuntary termination of employment. The new law provides a corresponding tax credit for the entities that maintain group health plans, such as employers, multiemployer plans, and insurers. The 100% reduction in the premium and the credit are also available with respect to continuation coverage provided for those events under comparable State laws, sometimes referred to as “mini-COBRA.”

Notice 2021-31 provides information regarding the calculation of the credit, the eligibility of individuals, the premium assistance period, and other information vital to employers, plan administrators, and insurers to understand the credit.

COBRA provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. COBRA generally covers health plans maintained by private-sector employers with 20 or more full and part-time employees. It also covers employee organizations or federal, state or local governments. State mini-COBRA laws often provide similar benefits for insured small employers not subject to Federal COBRA.

The IRS will continue to update information related to health plans on IRS.gov.

Notice 2021-31 provides guidance on issues relating to the application of recently enacted § 9501 of the American Rescue Plan Act of 2021 (the ARP), which provides temporary premium assistance for Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) continuation coverage. Section 9501 of the ARP provides for a full reduction in the premium otherwise payable by certain individuals and their families who elect COBRA continuation coverage due to a loss of coverage as the result of a reduction in hours or an involuntary termination of employment. The COBRA premium assistance is available beginning April 1, 2021 through September 30, 2021. The ARP also allows certain individuals a second chance to elect COBRA continuation coverage with the subsidy beginning April 1. The ARP also adds § 6432 to the Code, which provides a refundable payroll tax credit for an amount equal to the COBRA premium not paid by the individuals who receive the premium assistance.

Notice 2021-31 will appear in IRB 2021-23, dated June 7, 2021.

Revenue Procedure 21-24 provides two procedures for individuals not otherwise required to file 2020 Federal income tax returns to file returns to receive advance child tax credit payments, 2020 recovery rebate credit payments, additional 2020 recovery rebate credit payments, and third-round economic impact payments. The first procedure permits these individuals to file simplified returns.  The second procedure enables these individuals to file complete returns electronically even if they have zero adjusted gross income.

Revenue Procedure 21-24 will be in IRB:  2021-23, dated 6/7/2021.

Today, the IRS published the latest executive column “A Closer Look,” which features IRS Commissioner, Charles Rettig, discussing how taxpayers who file and pay on time play a vital role in the tax system. “More than 98 percent of the tax revenue collected by the IRS comes in voluntarily from taxpayers. When you do your part by filing your tax return, you should feel confident that others are doing the right thing too,” said Rettig. Read more here. Read the Spanish version here.

“A Closer Look” is a column from IRS executives that covers a variety of timely issues of interest to taxpayers and the tax community. It also provides a detailed look at key issues affecting everything from IRS operations and employees to issues involving taxpayers and tax professionals.

Check here for prior posts and new updates.