e-News for Tax Professionals 2020-20

Useful Links:

IRS.gov

Tax Professionals Home

All Forms and Instructions

Stakeholders Partners'
Headliners

Training and
Communication Tools

e-Services

Taxpayer Advocate Service

Disaster Relief

Internal Revenue Bulletins

IRS Social Media

Upcoming Events

Seminars, Workshops, Conferences, and Other Practitioner Activities By State:

Nationwide Webinars

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas

Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina

North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

Back to top

Issue Number:  2020-20

Inside This Issue

1. IRS expands partner materials for Economic Impact Payments; continues sweeping effort to share details in multiple languages
2. Why the Economic Impact Payment amount could be different than anticipated
3. New credits fund employers for Coronavirus-related paid leave
4. IRS provides tax relief through increased flexibility for taxpayers in section 125 cafeteria plans
5. May 21 Webinar: Tax Security 2.0: A Tax Pro’s Security Checklist
6. IRS provides guidance on the deductibility and reporting of certain amounts paid to, or at the direction of, governments
7. News from the Justice Department’s Tax Division
8. Technical Guidance

The IRS announced the availability of additional material for partner groups sharing information related to Economic Impact Payments, including a new toolkit in Spanish and a variety of other print and visual items available. Even with more than 130 million Economic Impact Payments delivered to date and millions more on the way, many people may not realize they may qualify for a payment of $1,200 or more. To help reach people who don’t normally file a tax return, the IRS has embarked on a sweeping outreach effort to share information in multiple languages inside and outside the tax community.

“From the enactment of the CARES Act, the IRS has embarked on an unprecedented outreach effort to share information about Economic Impact Payments,” said IRS Commissioner Chuck Rettig. “We want to reach every eligible person and encourage everyone to share this information with family and friends, and groups and businesses to send it to partners and clients. During these difficult times, each of you can make a difference by helping us help others.”

The IRS has placed a special emphasis on partnering with new organizations that work with groups focusing on veterans, homeless, low-income taxpayers as well as non-English speaking audiences to share information about the payments. In all, the IRS has worked with thousands of partners across the country reaching organizations representing hundreds of millions of taxpayers.

Back to top

The IRS and Treasury have successfully delivered nearly 130 million Economic Impact Payments (EIP) to Americans in less than a month, and more are on the way. However, the following scenarios may explain why some of your clients may have received a payment amount different than what they expected: 

• Your clients have not filed a 2019 tax return, or the IRS has not finished processing their 2019 return 
• Claimed dependents are not eligible for an additional $500 payment
• Dependents are college students
• Claimed dependents are parents or relatives, age 17 or older
• Past-due child support was deducted from the payment 
• Garnishments by creditors reduced the payment amount

For more Information on EIPs, including answers to frequently-asked questions and other resources, visit IRS.gov/coronavirus.

Back to top

The Families First Coronavirus Response Act provides tax credits to reimburse employers for the costs of providing paid sick leave and paid family and medical leave to employees unable to work because of the coronavirus (COVID-19). These credits are refundable. That means if the amount of the credit exceeds the amount of tax owed, the remainder is refunded to the business or organization.
 
The law is intended to allow employers to keep employees on their payrolls, while at the same time making sure employees aren’t forced to choose between their paychecks and public health measures needed to combat COVID-19.
 
These credits are available to eligible employers beginning April 1, 2020, for qualifying leave they provide between April 1 and Dec. 31, 2020.

Back to top

The IRS released guidance this week to allow temporary changes to section 125 cafeteria plans. These changes extend the claims period for health flexible spending arrangements (FSAs) and dependent care assistance programs and allow taxpayers to make mid-year changes. The guidance addresses unanticipated changes in expenses because of the 2019 Novel Coronavirus (COVID-19) pandemic and provides that previously provided temporary relief for high deductible health plans may be applied retroactively to Jan. 1, 2020, and it also increases for inflation the $500 permitted carryover amount for health FSAs to $550.

The newly released guidance can be found in Notice 2020-29 and Notice 2020-33.

Back to top

The IRS will present the webinar, Tax Security 2.0: A Tax Pro’s Security Checklist, at 2 p.m. ET on May 21. The 120-minute webinar will cover:

• The “Security Six” basic protections
• How to create a written data security plan and a data theft recovery plan 
• How to recognize phishing scams and the signs of client data theft

Tax Pros can earn two continuing education credits by participating.

Back to top

The IRS issued proposed regulations under the Tax Cuts and Jobs Act (TCJA) that provide guidance to taxpayers and governments with respect to fines, penalties and certain other amounts. The proposed regulations describe how taxpayers may meet these requirements and define key terms and phrases such as restitution, remediation, and paid to come into compliance with a law.

The TCJA also requires governments to report these amounts to the Internal Revenue Service and taxpayers. The proposed regulations provide guidance to governments related to these reporting requirements.
For more information about this and other TCJA provisions, visit IRS.gov/taxreform.   

Back to top

The U.S. has filed a complaint seeking to bar a Chicago area tax return preparer from preparing federal income tax returns for others. The civil complaint against Andreana Smith alleges that she prepared federal income tax returns for over 100 Chicago-area taxpayers that significantly understated her customers’ tax liabilities. The suit also alleges that Smith made up or exaggerated her customers’ business expenses, and she fabricated residential energy credits and education credits. The complaint alleges that, by repeatedly understating her customers’ tax liabilities, Smith has caused the United States to lose substantial tax revenue.

Back to top

Notice 2020-37 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. 

Revenue Ruling 2020-12 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates for June 2020, 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.

Back to top