e-News for Tax Professionals 2020-16

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Issue Number:  2020-16

Inside This Issue

1. IRS needs your help spreading the word on Economic Impact Payments
2. Get My Payment application debuts on IRS.gov
3. Veterans Affairs recipients will receive automatic Economic Impact Payments
4. SSI recipients to receive Economic Impact Payments automatically
5. Additional security measures needed to protect taxpayer data
6. Temporary procedures to fax certain Forms 1139 and 1045 due to COVID-19
7. Technical Guidance

To get the word out about Economic Impact Payments (EIP), the IRS compiled a variety of information and outreach materials that can be shared with your families, friends, partners and clients, posted to your websites, included in your internal newsletters and employee emails and shared on social media.

The IRS has prepared a special new page devoted to materials that can be shared by anyone. These materials are available at www.irs.gov/EIPpartners.

For other information on COVID-19 issues and the CARES Act, new information appears regularly on IRS.gov/coronavirus, including the latest on EIP.

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Working with the Treasury Department, the IRS this week unveiled the new Get My Payment application to let taxpayers check on their Economic Impact Payments. The application will answer common questions as an initial round of more than 80 million Economic Impact Payments hits recipients’ bank accounts.

Get My Payment will show the projected date when a deposit has been scheduled, similar to the “Where’s My Refund tool” many taxpayers are already familiar with. Get My Payment also allows people to provide their bank account information. People who did not use direct deposit on their last tax return can also use the application to input their bank information to receive the payment by direct deposit, expediting receipt.

Last week the Treasury Department and the IRS launched a web tool allowing registration for Economic Impact Payments for those who don’t normally file a tax return. The non-filer tool was designed for people who don't have a return filing obligation, including those whose income falls beneath the filing threshold.

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The IRS, working in partnership with the Treasury Department and the Department of Veterans Affairs, announced today that recipients of VA benefits will automatically receive automatic Economic Impact Payments. Veterans and their beneficiaries who receive Compensation and Pension benefit payments from VA will receive a $1,200 Economic Impact Payment with no further action needed on their part. Timing on the payments is still being determined.

“Since many VA recipients typically aren’t required to file tax returns, the IRS had to work with these other government agencies to determine a way to quickly and accurately deliver Economic Impact Payments to this group,” said IRS Commissioner Chuck Rettig. “Additional programming work remains, but this step simplifies the process for VA recipients to quickly and easily receive these $1,200 payments automatically. We deeply appreciate the sacrifices and service to our country by each and every veteran and their families, as well as the assistance of VA and the Bureau of Fiscal Services in this effort.”

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The IRS, in partnership with the Treasury Department and the Social Security Administration, announced that recipients of Supplemental Security Income (SSI) will automatically receive automatic Economic Impact Payments. SSI recipients will receive a $1,200 Economic Impact Payment with no further action needed on their part. The IRS projects the payments for this group will go out no later than early May.

"Since SSI recipients typically aren't required to file tax returns, the IRS had to work extensively with these other government agencies to determine a way to quickly and accurately deliver Economic Impact Payments to this group," said IRS Commissioner Chuck Rettig. "Additional programming work remains, but this step simplifies the process for SSI recipients to quickly and easily receive these $1,200 payments automatically. We appreciate the assistance of SSA and the Bureau of Fiscal Services in this effort."

General information about the Economic Impact Payments is available on the Economic Impact Payment Information Center page of IRS.gov.  For more information and additional updates, visit IRS.gov/coronavirus.

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The IRS and its Security Summit partners urged tax professionals to take additional security steps immediately to protect taxpayer data as more practitioners telework and security risks increase. The IRS, state tax agencies and the nation’s tax industry continue to see an upswing in data thefts from tax professionals as cybercriminals try to take advantage of COVID-19 and Economic Impact Payments to create new scams.

“Identity thieves view the pandemic as a chance to exploit tax professionals as well as taxpayers,” said IRS Commissioner Chuck Rettig. “They are using every trick of their criminal trade to con people as well as steal valuable personal and financial information to help enable tax-related identity theft. In many ways, tax pros are one of the first lines of defense. We urge the entire tax community to take additional steps and protect their sensitive data.”

For more information on cybersecurity, please review the security measures outlined in Publication 4557, Safeguarding Taxpayer Data.

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In response to the COVID-19 Pandemic and solely to implement the following provisions of the CARES Act, until further notice, the IRS is implementing the following temporary procedures for digital transmission of Form 1139 and Form 1045:

• Section 2303 makes several modifications to net operating losses, including requiring a taxpayer with a net operating loss arising in a taxable year beginning in 2018, 2019, or 2020 to carry that loss back to each of the five preceding years unless the taxpayer elects to waive or reduce the carryback; and providing a carryback for a two-year period of NOLs arising during a taxable year that began in 2017 and ended during 2018
  
  
• Section 2305 modifies the credit for prior-year minimum tax liability of corporations, including to accelerate the recovery of remaining minimum tax credits of a corporation for its 2019 taxable year from its 2021 taxable year and to permit a corporation to elect instead to recover 100 percent of any of its remaining minimum tax credits in its 2018 taxable year.

Only claims allowed under sections 2303 and 2305 of the CARES Act made on Form 1139 or Form 1045 are eligible refund claims under the following temporary procedures. Starting on April 17, 2020, and until further notice, the IRS will accept eligible refund claims Form 1139 submitted via fax to 844-249-6236 and eligible refund claims Form 1045 submitted via fax to 844-249-6237. Before then, these fax numbers will not be operational. We encourage taxpayers to wait until this procedure is available rather than mail their Forms 1139 and 1045 since mail processing is being impacted by the emergency. A maximum of 100 pages can be initially faxed to either of the fax numbers listed above.

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Revenue Procedure 2020-23 allows an eligible partnership to file an amended Form 1065, U.S. Return of Partnership Income, and furnish a corresponding Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc., to each of its partners as an alternative option to filing an administrative adjustment request (AAR).

Revenue Procedure 2020-25 provides guidance allowing a taxpayer to change its depreciation under section 168 for certain qualified improvement property. This revenue procedure also allows a taxpayer to make a late election, or to revoke or withdraw an election, under section 168(g)(7), (k)(5), (k)(7) or (k)(10) of the Code for certain years.

Revenue Ruling 2020-08 suspends Rev. Rul. 71-533 pending reconsideration of whether the ten-year limitations period provided by section 6511(d)(3)(A) of the Internal Revenue Code applies to claims for refund or credit of an overpayment resulting from a foreign tax credit (FTC) carryback arising as a result of a net operating loss (NOL) carryback from a subsequent year.  As part of this reconsideration, Rev. Rul. 68-150 is also being reconsidered and is suspended with respect to adjustments that arise from a change to the FTC limitation, including as the result of the correction of mathematical errors or the application of an NOL carryback.

Revenue Ruling 2020-11 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.

Notice 2020-27 provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under section 417(e)(3), and the 24-month average segment rates under section 430(h)(2) of the Internal Revenue Code. In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under 431(c)(6)(E)(ii)(I), as reflected by the application of section 430(h)(2)(C)(iv). 

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