e-News for Tax Professionals Issue 2020-23

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Issue Number:  2020-23

Inside This Issue

1. 159 million Economic Impact Payments processed; Low-income people and others not required to file tax returns can register for payment with IRS Non-Filers tool
2. Updates to debit cards being used for Economic Impact Payments: replacement fees waived; transaction limits raised
3. IRS Nationwide Tax Forums go virtual in 2020: Webinar topics now posted
4. Qualified Opportunity Funds: Answers to questions about Coronavirus-related tax relief
5. Chief Counsel expands virtual national Settlement Days
6. Reminder: June 15 tax deadline postponed to July 15 for taxpayers who live and work abroad
7. Flowchart helps employers understand new tax credits
8. Direct Deposit is the fastest way for your clients to get their refund
9. Reminder: Schedule and electronically pay federal taxes due by July 15
10. Technical Guidance

With 159 million Economic Impact Payments processed, the IRS reminds many low-income Americans who do not usually file tax returns to register for a payment by October 15. Millions of low-income people and others who aren't required to file a tax return may be eligible for an Economic Impact Payment and can easily register for a payment by using the free Non-Filers tool, available only on IRS.gov.

"IRS employees worked around the clock to deliver the Economic Impact Payments and new tools to help taxpayers in record time," said IRS Commissioner Chuck Rettig. "Even with these unprecedented steps, there remain people eligible for these payments who need to take action. Registering to receive the payments is easy, and millions of non-filers have already taken this step. We urge everyone to share this information widely to help more people receive these payments."

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

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The IRS continues to remind taxpayers that some payments are being sent by prepaid debit card, and the debit cards arrive in a plain envelope from "Money Network Cardholder Services." Nearly 4 million people are being sent their Economic Impact Payment by prepaid debit card, instead of paper check. The determination of which taxpayers received a debit card was made by the Bureau of the Fiscal Service, a part of the Treasury Department that works with the IRS to handle distribution of the payments.

In addition, there are two recent changes from MetaBank, the issuing company for the EIP Card program. Individuals who have lost or destroyed their EIP Card may request a free replacement through MetaBank Customer Service. The standard fee of $7.50 will be waived for the first reissuance of any EIP Card. The company has also increased the limit on ACH transfers to a bank account from $1,000 to $2,500 per transaction.  Additional information is available at EIPcard.com and the IRS FAQs, starting at Question 45.

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Topics and course descriptions are now posted for the virtual 2020 IRS Nationwide Tax Forum. The virtual Tax Forum will offer 30 live, 60-minute webinars. Attendees can earn up to 30 continuing education credits for one price. The webinars will be offered Tuesdays, Wednesdays, and Thursdays each week from July 21 through Aug. 20. Dates and times for each webinar will be posted in the near future.

To view the complete list of webinar topics or to register, visit IRS Nationwide Tax Forums.

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The IRS has released guidance for Qualified Opportunity Funds (QOFs) and their investors in response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic. Notice 2020-39 answers questions regarding relief from certain requirements under section 1400Z-2 of the Internal Revenue Code (Code) and the implementing regulations. Additionally, the IRS has updated the Qualified Opportunity Zones frequently asked questions.

For more information about tax relief resulting from the COVID-19 pandemic, go to the Coronavirus Tax Relief and Economic Impact Payments page on IRS.gov.

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The IRS Office of Chief Counsel is expanding its Virtual Settlement Days program after a successful debut in May. More Virtual Settlement Days will be announced in the coming weeks. The IRS encourages unrepresented taxpayers with active Tax Court cases to contact the assigned Chief Counsel attorney or paralegal about participating in a Virtual Settlement Days event.

"Virtual settlement days represent a continuing effort by the IRS to deliver meaningful resolution options to taxpayers, especially during these difficult times," IRS Commissioner Chuck Rettig said. "Virtual options represent an addition to traditional methods of communication and resolution, not a replacement. The IRS strives to assist every taxpayer, including many who do not have the ability to interact in a virtual environment. The IRS is open to innovative approaches like the virtual settlement days to help people. We welcome comments from taxpayers and others regarding additional methods by which the IRS can ease the burdens on people of our country facing tax issues."

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Individuals who live and work abroad have until July 15, 2020, to file their 2019 federal income tax return and pay any tax due. This extension was included in a wide range of Coronavirus-related relief announced in early April. The extension generally applies to all taxpayers who have an income tax filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020.

All individuals, including Americans who live and work abroad, nonresident aliens and foreign entities with a U.S. filing and payment requirement, have until July 15 to file their 2019 federal income tax return and pay any tax due. Visit IRS.gov/coronavirus for details.

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Recently issued Publication 5419, New Employer Tax Credits can help employers understand the tax credits available to them due to the coronavirus pandemic. The one-page document breaks down the details of the Employer Retention Credit and the credits for paid sick and family leave in easy-to-follow charts. Using the document, employers can determine whether they are eligible for the credits, the amount of the credits and which wages apply to the credits.

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If your clients do not request a Direct Deposit, the IRS asks that you encourage them to do so. Direct Deposit is the fastest way to get a federal tax refund. Publication 5349, Year-round tax planning is for everyone, includes a tax preparation checklist you can share with your clients. Also, Publication 2043, IRS Refund Information Guidelines for the Tax Preparation Community, includes Direct Deposit information for tax professionals.

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A new IRS Fact Sheet outlines all your clients need to know about filing and paying federal taxes due July 15. Find information on scheduling or rescheduling a payment, electronic payment options, estimated tax payments, and requesting an extension.

For more information about paying taxes due July 15, see frequently asked questions available on IRS.gov.

IRS.gov has tax information in: Spanish (Español); Chinese (中文); Korean (한국어); Russian (Pусский); Vietnamese (Tyng Việt); and Haitian Creole (Kreyòl ayisyen).

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Announcement 2020-7 states that 1) the IRS plans to issue opinion letters with regard to the third six-year remedial amendment cycle for pre-approved defined contribution plans by June 30, 2020 or soon thereafter, 2) the IRS will accept from an employer eligible to submit a determination letter request an application for an individual determination letter under the third six-year remedial amendment cycle for pre-approved defined contribution plans from August 1, 2020 to July 31, 2022, and 3) an employer adopting a newly approved plan will be required to adopt the plan document by July 31, 2022. 

Notice 2020-42 provides participants, beneficiaries, and administrators of qualified retirement plans and other tax-favored retirement arrangements with temporary relief from the physical presence requirement in section 1.401(a)-21(d)(6) for any participant election (1) witnessed by a notary public in a state that permits remote notarization, or (2) witnessed by a plan representative using certain safeguards.

Revenue Ruling 2020-13 provides the interest rates for the third quarter of 2020. The rates for interest determined under section 6621 of the code for the calendar quarter beginning July 1, 2020, will be 3 percent for overpayments (2 percent in the case of a corporation), 3 percent for underpayments, and 5 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 0.5 percent.

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