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Issue Number:  2019-06

Inside This Issue

1. ETAAC’s 2019 report recommends additional steps to battle tax-related identity theft and refund fraud
2. It’s not too late to review and comment on drafts of new Form W-4 and
   Pub 15-T
3. Highlights from the IRS’ special campaign encouraging taxpayers to check their withholding
4. Understanding backup withholding notices
5. Methods for calculating W-2 wages for purposes of Section 199A(g)
6. MeF upgrading to a new system – two upcoming scheduled outages – plan accordingly
7. What taxpayers should know if they get a CP 2000 notice from the IRS
8. Draft forms and new publications on IRS.gov

The Electronic Tax Administration Advisory Committee (ETAAC) released its annual report to Congress, featuring recommendations focused on the prevention of identity theft and refund fraud.

The report groups a total of 10 recommendations into three sections: enabling and expanding the IRS-sponsored Security Summit, improving security in key areas of the tax system and protecting and enabling taxpayers.

ETAAC members represent various segments of the tax community, including individual and business taxpayers, tax professionals and preparers, tax software developers, payroll service providers, the financial industry and state and local governments.

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The IRS encourages all payroll professionals to take advantage of this opportunity and provide comments on these drafts by:

• July 1 – 2020 Form W-4
  • The goals of the new Form W-4 design are to provide simplicity, accuracy and privacy for employees while minimizing burden for employers and payroll processors
• July 8 – Publication 15-T
  • Publication 15-T, Federal Income Tax Withholding Methods for use in 2020, will contain all the federal income tax withholding tables

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On June 10, the IRS ran a special week-long campaign encouraging taxpayers to do a Paycheck Checkup now to make sure they are having the right amount of tax taken out of their paychecks for 2019.

Here’s links to the news releases issued during the campaign to share with anyone you think might find them useful:

• IR-2019-108, IRS reminder: Get tax withholding right; do a Paycheck Checkup at least once every year
• IR-2019-110, IRS Withholding Calculator can help workers have right amount of tax withheld following tax law changes
• IR-2019-111, IRS reminds taxpayers to adjust tax withholding to pay the right tax amount
• IR-2019-112, IRS reminder: Taxpayers can help determine the right amount of tax to withhold from their paychecks by doing a Paycheck Checkup now

The IRS Withholding Calculator can help taxpayers get their withholding right for their situation. Taxpayers should make any changes with their employer as soon as possible.

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The IRS issues Backup Withholding CP2100 or CP2100A Notices to payers. These notices let payers know backup withholding may need to begin for some taxpayers.

Backup withholding begins if a taxpayer identification number (TIN) is missing or for incorrect name/TIN combinations.

Payers who receive these notifications should compare the information in the notice with their records.

• For missing TINs: Determine if backup withholding is already set up, if not, begin immediately
• For incorrect TINs: Compare the accounts on the listing. If they agree notify the taxpayer. If not, correct or update

Payers don’t need to send corrections made to the IRS and shouldn’t respond to the notice.

For more information, see Publication 1281 and IRS Tax Tip 2019-77.

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Notice 2019-27 contains a proposed revenue procedure that provides guidance on methods for calculating W-2 wages for purposes of section 199A(g) of the Internal Revenue Code and proposed §§1.199A-8 through 1.199A-12 of the Income Tax Regulations (26 CFR part 1). Both are contained in a notice of proposed rulemaking (REG-118425-18) being published at the same time with this notice.

Specifically, this notice provides three methods for calculating W-2 wages for purposes of section 199A(g). The guidance contained in this notice is necessary because changes may be made to the underlying Form W-2 more frequently than updates to the regulations under section 199A(g).

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The IRS Modernized E-File system (MeF) will be upgrading to a new system beginning in July. During the migration, MeF will be unavailable for use. The system shutdown will occur in two phases from:

• 12:01 a.m., July 18, 2019 through noon July 22, 2019
• 12:01 a.m., August 3, 2019 through noon August 5, 2019

MeF submissions should not be made during the outage periods, so please plan accordingly. A Quick Alert bulletin will be issued once MeF is available for submissions again. 

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Taxpayers that receive an IRS Notice CP2000 are often confused. This notice is sent when financial information received from a third party doesn't match the information the taxpayer reported on their tax return. It gives detailed information about issues and provides steps taxpayers should take to resolve those issues.

An IRS Tax Tip and a short YouTube video explains more about CP2000s to help education your employees, clients and customers about what to do if they get one.

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Draft forms:

• Form W-4, Employee's Withholding Allowance Certificate
• Form 944, Employer's Annual Federal Tax Return
• Form 945, Annual Return of Withheld Federal Income Tax
• Form 8922, Third-Party Sick Pay Recap

New publications:

• Pub 505, Tax Withholding and Estimated Tax
• Pub 5303, Paycheck Checkup
• Pub 5303 (SP), Paycheck Checkup (Spanish Version)

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