e-News for Tax Professionals 2020-03

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Issue Number:  2020-03

Inside This Issue

1. IRS Launches Improved Tax Withholding Estimator
2. Redesigned IRS e-News Subscriptions
3. New Year Brings Change to the IRS CAA Program
4. News from the Justice Department’s Tax Division
5. Technical Guidance

The IRS launched a new and improved Tax Withholding Estimator, designed to help workers target the refund they want by having the right amount of federal income tax taken out of their pay. The Tax Withholding Estimator incorporates the changes from the redesigned Form W-4, Employee's Withholding Certificate, that employees can fill out and give to their employers this year.

You can find the updated Tax Withholding Estimator and the redesigned 2020 Form W-4 on IRS.gov.

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As the 2020 tax season approaches, the IRS encourages taxpayers, businesses, tax professionals and others to take advantage of a variety of improved e-mail subscription services. The redesigned e-News Subscription Service was updated to make it easier to subscribe to specific areas that people and organizations are interested in.

For more information about IRS subscriptions designed for specific groups, visit IRS e-News Subscriptions and keep up with the latest information during and after filing season.

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The IRS has made an important change to the Certifying Acceptance Agent (CAA) program. CAAs may no longer authenticate the foreign military identification card for an Individual Tax Identification Number (ITIN) application.

See the ITIN Acceptance Agent Program Change page at IRS.gov for more details.

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The U.S. Department of Justice Tax Division this week reported:

A former Gulfport, Miss., tax return preparer pleaded guilty to aiding and assisting in the preparation of false tax returns. According to documents and information provided to the court, Alvin Mays owned and operated City Tax Service, a tax return preparation business in the Gulfport area. From 2012 through 2017, Mays prepared—and trained his employees to prepare—false tax returns. To fraudulently inflate client refunds, the returns claimed false education credits and losses from fictitious businesses. Mays charged his clients exorbitant preparation fees, sometimes as high as $1,600 per return. In total, May’s conduct caused a tax loss to the United States of more than $900,000. Mays is scheduled for sentencing on April 16 and faces a statutory maximum sentence of three years in prison on each count and a period of supervised release and monetary penalties. In his plea agreement, Mays agreed to pay restitution of $321,605 to the United States.

A second Gulfport, Miss., tax return preparer was sentenced to 15 months in prison for aiding and assisting in the preparation of false tax returns. According to documents and information provided to the court, Stacey Pritchett Williams owned and operated Stacey’s Unique Tax Service, a tax return preparation business located in the Gulfport area. From 2015 through 2016, Williams filed returns for her clients that reported false business income, education credits, and fuel credits to obtain inflated refunds from the IRS. Williams often deducted her fee from the client’s refunds and, at times, charged $999 to prepare a return. In all, Williams caused a tax loss to the United States of at least $100,000. In addition to the term of imprisonment, Williams was ordered to serve one year of supervised release and to pay restitution of $102,382 to the United States.

A Charlotte, N.C., tax return preparer pleaded guilty to aiding and assisting in filing a false tax return. According to court documents and statements made in court, Ramonda Byrd owned and operated Divine Financial Solutions, a Charlotte tax preparation business with locations on Beatties Ford Road and Central Avenue. From 2012 through 2017, Byrd prepared false tax returns on behalf of her clients. By reporting fictitious business income and expenses as well as false medical expenses, charitable contributions, and child and dependent care expenses, she sought to cause the IRS to pay inflated refunds. Byrd’s fee was then often deducted from the client’s refund. In all, Byrd’s conduct caused a tax loss to the United States of more than $270,000. Byrd faces a maximum sentence of three years in prison and a period of supervised release, restitution and monetary penalties.

A federal grand jury in Washington, D.C. returned an indictment charging an Indianapolis, In., resident with conspiracy to file false claims, wire fraud, aggravated identity theft, aiding and assisting the preparation of false tax returns, and tax evasion. According to the indictment, Awett Tedla was the owner and operator of Speedy Tax Services LLC, a tax preparation business in Washington, D.C. and District Heights, Md. From 2012 through 2016, Tedla and her coconspirators allegedly obtained and used third party identities to file fraudulent tax returns with the IR) claiming tax refunds. The indictment also charges that from 2013 through 2016, Tedla falsified her own personal returns by omitting business receipts. If convicted, Tedla faces a statutory maximum sentence of 20 years in prison for each count of wire fraud, 10 years in prison for conspiring to file false claims for refunds, five years in prison for each count of tax evasion, and a mandatory sentence of two years in prison for aggravated identity theft. Tedla also faces a term of supervised release, restitution and monetary penalties.

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Revenue Procedure 2020-11 provides relief to additional taxpayers who took out federal or private student loans to finance attendance at a nonprofit or for-profit school. 

Revenue Ruling 2020-03 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 2020-08 provides the rules that claimants must follow to make a one-time claim for the credits and payments for biodiesel (including renewable diesel) mixtures and alternative fuels sold or used during calendar years 2018 and 2019.  

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