Issue Number: 2019-47
Inside This Issue
- Identity Protection PIN Availability Expands
- File Employer Wage Statements, Contractor Forms by Jan. 31
- New Downloadable Assistant Helps Small Businesses Withhold the Right Amount of Income Tax
- IRS Urges Careful Communication of Form W-4 Process
- IRS Seeks Applications for the Electronic Tax Administration Advisory Committee
- Form 3800 General Business Credits
- IRS and Treasury Finalize Opportunity Zone Guidance
- Proposed Regulations on Compensation Deductions for Publicly Held Corporations
- Next e-News for Tax Pros to Publish Jan. 3
- News from the Justice Department’s Tax Division
-
Technical Guidance
1. Identity Protection PIN Availability Expands
When the IRS begins the 2020 tax filing season, taxpayers in more locations will be eligible to opt into the online Identity Protection (IP) PIN program. The IP PIN is a 6-digit number that adds another layer of protection for taxpayers’ Social Security numbers and helps protect against tax-related identity theft.
Taxpayers will be eligible for this voluntary program if they filed a federal tax return last year from Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Illinois, Maryland, Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, Texas and Washington.
The IRS has created a new publication – Publication 5367, Identity Protection PIN Opt-In Program for Taxpayers – to help taxpayers understand the required steps. Please inform clients who are eligible and interested in this program.
Back to top
2. File Employer Wage Statements, Contractor Forms by Jan. 31
The IRS reminds tax professionals that wage statements and independent contractor forms still have a Jan. 31 filing deadline.
These forms include:
• Form W-2, Wage and Tax Statement
• Form W-3, Transmittal of Wage and Tax Statements
• Certain Forms 1099-MISC, Miscellaneous Income
Due to the early filing date, the IRS can more easily detect refund fraud by verifying income that individuals report on their tax returns. Using e-file, employers can avoid penalties by filing the forms on time and without errors. Before January, employers should verify employees' information including names, addresses, and Social Security or individual taxpayer identification numbers. They should also ensure their company's account information is current and active with the Social Security Administration.
Back to top
3. New Downloadable Assistant Helps Small Businesses Withhold the Right Amount of Income Tax
The IRS launched a new online assistant designed to help employers, especially small businesses, determine the right amount of federal income tax to withhold from their workers' pay. The Income Tax Withholding Assistant for Employers is a new spreadsheet-based tool designed to help employers easily transition to the redesigned withholding system by helping them implement new income-tax withholding requests from employees who fill out the redesigned 2020 Form W-4, Employee's Withholding Certificate.
"We've been working closely with the payroll community and other partners to make improvements in the withholding process," said IRS Commissioner Chuck Rettig. "As part of this effort and based on feedback from partners, the IRS has created a new spreadsheet-based tool that's designed to help small businesses navigate a variety of situations involving their employees to help ensure the right amount of withholding.
Back to top
4. IRS Urges Careful Communication of Form W-4 Process
IRS released the final Form W-4 last week and the final FAQs on Wednesday. The agency strongly recommends that, for the purpose of any communication and products distributed to your clients, you rely on these updated and final versions instead of earlier drafts.
One issue the IRS wanted to clarify is that it is not accurate to say that Steps 2 through 4 are optional. While everyone must complete Steps 1 and 5, taxpayers are to complete Steps 2 through 4 only if they apply to their situation. Thus, any of the steps that do not apply to the taxpayer’s situation should be skipped. However, neither the form nor the instructions state that taxpayers with multiple jobs may treat Step 2 as optional; the only step that is explicitly optional is Step 4.
Back to top
5. IRS Seeks Applications for the Electronic Tax Administration Advisory Committee
The IRS is seeking 10 qualified applicants for nomination to the Electronic Tax Administration Advisory Committee (ETAAC). The ETAAC is an organized public forum for discussion of electronic tax administration issues works closely with the Security Summit, a joint effort of the IRS, state tax administrators and the nation's tax industry, to fight identity theft and refund fraud.
The new ETAAC members will serve three-year terms beginning in September 2020. Interested applicants should have experience in such areas as state tax administration, cybersecurity and information security, tax software development, tax preparation, payroll and tax financial product processing, systems management and improvement and implementation of customer service initiatives. The IRS also strongly encourages representatives from consumer groups with an interest in tax issues to apply.
Applications will be accepted through Feb. 14. IRS.gov has more information about the ETAAC and the application process.
Back to top
6. Form 3800 General Business Credits
For the latest information about developments on Form 3800, General Business Credits and its instructions, such as legislation enacted after they were published, go to IRS.gov/Form3800.
Back to top
7. IRS and Treasury Finalize Opportunity Zone Guidance
The IRS issued final regulations this week providing details about investment in qualified opportunity zones (QOZ). The final regulations provide additional guidance for taxpayers eligible to make an election to temporarily defer the inclusion in gross income of certain eligible gain. The final regulations also address, the ability of such taxpayers' eligibility to increase the basis in their qualifying investment equal to the fair market value of the investment on the date that it is sold, after holding the equity interest for at least 10 years.
Related forms, instructions and other information taxpayers need to take advantage of this update will be made available in January. For more information about this and other TCJA provisions, visit IRS.gov/taxreform.
Back to top
8. Proposed Regulations on Compensation Deductions for Publicly Held Corporations
The Treasury Department and IRS issued proposed regulations to reflect changes from the Tax Cuts and Jobs Act (TCJA) on the tax deductibility of officers’ compensation by publicly held corporations. The proposed regulations update the definitions of covered employee, publicly held corporation and applicable employee compensation. The TCJA also provided a transition, or “grandfather” rule, for certain outstanding compensatory arrangements.
IRS and Treasury welcome public comments. Updates on the implementation of the TCJA can be found on the Tax Reform page of IRS.gov.
Back to top
9. Next e-News for Tax Pros to Publish Jan. 3
This issue of e-News for Tax Professionals will be the final edition for 2019. E-News for Tax Professionals will resume publishing on Jan. 3.
Back to top
10 News from the Justice Department’s Tax Division
The U.S. Department of Justice Tax Division this week reported:
An Alexandria, Va., tax lobbyist was sentenced to one year in prison for willfully filing a false tax return. According to court documents, attorney James F. Miller, 67, underreported his gross income on his 2010 through 2014 tax returns by more than $2.2 million. Miller, a tax policy lobbyist and former employee of the Justice Department’s Tax Division, filed multiple false tax returns with the IRS. These returns omitted partnership income he received from two law firms and the gross receipts he received from his own lobbying firm. The total tax loss resulting from Miller’s fraudulent conduct was more than $730,000. In addition to the term of imprisonment, Miller was ordered to serve one year of supervised release and to pay $735,933 in restitution to the United States.
A Raleigh, N.C., man was sentenced to 45 months in prison for conspiring to defraud the United States. According to court documents and statements made in court, from 2011 through 2014, Garvey Imhotep conspired with others to file false tax returns for clients of several tax return preparation businesses, including Tax Kings, Two Brothers Tax Service, and Taxes Done Right. Imhotep and his co-conspirators filed returns claiming false education expenses and other fraudulent items in order to increase clients’ tax refunds. To conceal his involvement and evade IRS detection, Imhotep used tax preparer identification numbers that are assigned to other individuals. Imhotep’s conduct caused a tax loss of more than $1.5 million to the United States. In addition to the prison term, Imhotep was ordered to serve three years of supervised release and to pay $2,144,888 in restitution to the IRS.
Back to top
11. Technical Guidance
Revenue Procedure 2020-10 provides that the third six-year remedial amendment cycle for pre-approved defined benefit plans begins on May 1, 2020, and ends on Jan. 31, 2025.
Revenue Ruling 2020-01 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, the adjusted federal long-term tax-exempt rate.
Notice 2020-02 announces that Treasury and the IRS intend to amend the section 871(m) regulations to delay the effective/applicability date of certain rules in those final regulations and extends the phase-in period provided in Notice 2018-72, 2018-40 I.R.B. 522, for certain provisions of the section 871(m) regulations.
Notice 2020-03 provides guidance for the 2020 calendar year regarding withholding from periodic payments for pensions, annuities, and certain other deferred income under section 3405(a), including the rules for withholding from periodic payments under section 3405(a) when no withholding certificate has been furnished.
Back to top
    
Thank you for subscribing to e-News for Tax Professionals an IRS e-mail service.
If you have a specific concern about your client's tax situation, call the IRS Practitioner Priority Service 1-866-860-4259.
This message was distributed automatically from the mailing list e-News for Tax Professionals. Please Do Not Reply To This Message
To subscribe to or unsubscribe from another list, please go to the e-News Subscriptions page on the IRS Web site.
|
