e-News for Tax Professionals 2020-12

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e-News for Tax Professionals March 21, 2020

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Issue Number:  2020-12

Inside This Issue

  1. Tax Day now July 15: Treasury, IRS extend filing deadline and federal tax payments regardless of amount owed
  2. Coronavirus: Paid Leave for Workers and Tax Credits for Small and Midsize Businesses
  3. IRS.gov: Special coronavirus web page
  4. Taxpayer First Act: What we’ve heard from you
  5. News from the Justice Department’s Tax Division
  6. Technical Guidance

1.  Tax Day now July 15: Treasury, IRS extend filing deadline and federal tax payments regardless of amount owed

The Treasury Department and IRS announced that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.

Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.

Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004.

The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds are still being issued within 21 days.

"Even with the filing deadline extended, we urge taxpayers who are owed refunds to file as soon as possible and file electronically," said IRS Commissioner Chuck Rettig. "Filing electronically with direct deposit is the quickest way to get refunds. Although we are curtailing some operations during this period, the IRS is continuing with mission-critical operations to support the nation, and that includes accepting tax returns and sending refunds. As a federal agency vital to the overall operations of our country, we ask for your personal support, your understanding – and your patience. I'm incredibly proud of our employees as we navigate through numerous different challenges in this very rapidly changing environment."

The IRS will continue to monitor issues related to the COVID-19 virus, and updated information will be posted on a special coronavirus page on IRS.gov.

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2.  Coronavirus: Paid Leave for Workers and Tax Credits for Small and Midsize Businesses

The U.S. Treasury Department, IRS, and the U.S. Department of Labor announced today that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed by President Trump on March 18, 2020.

The Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members. The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.

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3.  IRS.gov: Special coronavirus web page

The IRS has established a special web page to help taxpayers, businesses and others affected by the coronavirus. The web page will be updated as new information becomes available.

For health information about the COVID-19 virus, visit the Centers for Disease Control and Prevention (https://www.coronavirus.gov). Other information about actions being taken by the U.S. government is available at https://www.usa.gov/coronavirus and in Spanish at https://gobierno.usa.gov/coronavirus.

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4.  Taxpayer First Act: What we’ve heard from you

The implementation of the Taxpayer First Act (TFA) gives the IRS a unique opportunity to make significant improvements in the way the agency serves tax professionals, businesses and taxpayers, and how it continues to enforce the tax laws in a fair and impartial manner.

The TFA Office has been on a “listening tour” gathering ideas and suggestions from stakeholders inside and outside the tax administration universe. If you haven’t shared your comments or ideas on how we can better serve you and your clients, please consider sending your thoughts to TFAO@irs.gov or share them with your regular IRS contact point.

So far, the TFA Office has received and considered thousands of pieces of feedback. We’re continuing to analyze this information and convert it into concepts that will shape the TFA Report to Congress, which we plan to submit later this year. Below is a high-level overview of the feedback received from external and internal sources.

External stakeholder input and feedback from other internal sources are consistently falling into six areas of opportunity:

  • Deliver a seamless taxpayer experience
  • Expand secure digital communications
  • Empower, equip and fully enable employees
  • Resolve issues timely and efficiently
  • Provide access to information and promote transparency
  • Improve services and compliance to promote fairness and help public perception of the IRS

For more information about TFA, visit www.irs.gov/taxpayer-first-act.

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5.  News from the Justice Department’s Tax Division

A federal court in Tampa, Fl., has permanently barred Steven Doletzky, formerly doing business as Liberty Tax Service, from operating a tax return preparation business and preparing federal tax returns for others. The court also ordered Doletzky to disgorge $175,000 of ill-gotten gains that the United States alleges he received from filing federal tax returns that claimed improper tax refunds, understated customers’ federal tax liabilities, or otherwise included false or fraudulent claims. Doletzky was sued along with two co-defendants, Michael Garno and Michael Bass. According to the complaint, employees at stores owned by Doletzky, Garno, and Bass prepared federal income tax returns that claimed fraudulent claims for tax credits, including for education credits and the Earned Income Tax Credit. The court previously entered orders of permanent injunction and disgorgement against Garno and Bass. Doletzky, Garno, and Bass agreed to entry of the permanent injunctions and disgorgement judgments without admitting to factual allegations in the complaint.

A Tampa federal court also found that Jasen Harvey and Harveys Tax Service violated preliminary and permanent injunctions that barred them from preparing, filing, or assisting in the preparation or filing of federal tax returns for others. The court held Jasen Harvey and Harveys Tax Service in contempt and ordered them to pay $19,550 to the United States, representing the fees Jasen Harvey and Harvey’s Tax Service received for 92 tax returns they prepared or filed in violation of the court’s injunctions. The court ordered those defendants to reimburse the government for $631.04 in travel costs the U.S. incurred to attend the contempt hearing held on March 13, 2020.

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6.  Technical Guidance

Revenue Ruling 2020-09 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. These rates are determined as prescribed by section 1274.

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