e-News for Tax Professionals 2020-24

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Issue Number:  2020-24

Inside This Issue

1. COVID-19 fraud and other financial schemes
2. IRS Tax Forums: Early Bird Rate extended
3. Balance due notice mailings: Due dates extended to help taxpayers
4. Reminder: File now, choose direct deposit or schedule tax payments electronically before the July 15 deadline
5. New markets tax credit: Tax relief for investors and businesses affected by COVID-19
6. Proposed regulations address direct primary care arrangements and health care sharing ministry memberships
7. June 18 Webinar: Foreign Payments Practice: Qualified Intermediary Certification Review Process
8. Reminder: Business payment P.O. Boxes in Cincinnati and Hartford close July 1
9. IRS mission-critical functions continue; Stay up to date on operations and services
10. News from the Justice Department’s Tax Division
11. Technical Guidance

The IRS this week warned against tax fraud and other related financial scams related to COVID-19. In the last few months, the IRS Criminal Investigation division (CI) has seen a variety of Economic Impact Payment scams and other financial schemes looking to take advantage of unsuspecting taxpayers. CI continues to work with law enforcement agencies domestically and abroad to educate taxpayers about these scams and investigate the criminals perpetrating them during this challenging time.

"Criminals seize on every opportunity to exploit bad situations, and this pandemic is no exception," said IRS Commissioner Chuck Rettig. "The IRS is fully focused on protecting Americans while delivering Economic Impact Payments in record time. The pursuit of those who participate in COVID-19 related scams, intentionally abusing the programs intended to help millions of Americans during these uncertain times, will long remain a significant priority of both the IRS and IRS-CI."

Coronavirus-related (COVID-19) scams should be reported to the National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or submitted through the NCDF web Complaint Form. Official IRS information about the COVID-19 pandemic and economic impact payments can be found on the Coronavirus Tax Relief page on IRS.gov, which is updated frequently.

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The Early Bird Rate for the IRS Nationwide Tax Forums has been extended to June 30. Take advantage of the lower $240 rate to register for up to 30 webinars to be streamed live over five weeks starting July 21. The Standard Rate of $289 will go into effect July 1.

Because of restrictions on travel and large gatherings, the IRS Nationwide Tax Forums are going virtual this year. Register today to receive your continuing education and the latest tax news directly from the IRS and its partners – all from the comfort of your own home. Visit www.irstaxforum.com to register and learn more.

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Due to the COVID-19 pandemic, the IRS was unable to mail some previously printed balance due notices as a result of office closures. As IRS operations continue to reopen, these notices will be delivered to taxpayers in the next few weeks. Given the time it would take to reprogram IRS systems, and generate updated notices, some of the notices taxpayers will receive have due dates that have already passed. However, each notice will include an insert confirming that the due dates printed on the notices have been extended.

Extended payment due dates: The payment due dates printed on the notices have been extended, as described in the insert. The new payment due date will be either July 10, 2020, or July 15, 2020, depending upon the type of tax return and original due date. Taxpayers should be sure to read the insert included with the notice that explains the delay and provides the correct payment due dates.

For questions about balance due, recipients of the notice should visit the website listed or call the number provided on their notice. However, phone lines remain extremely busy as the IRS resumes operations.

Notices that will include the insert:

• CP11, Math Error on Return - Balance Due
• CP14, Balance Due, No Math Error
• CP15, Civil Penalty Notice
• CP15B, Civil Penalty Notice for Trust Fund Recovery Penalty
• CP15H, Shared Responsibility Payment Due
• CP21A, Data Processing Adjustment Notice, Balance Due of
• CP22A, Data Processing Adjustment Notice, Balance Due of
• CP23, Estimated Tax Credits Discrepancy - We Changed Your Return to Match Your Credits or Payments Posted to Your Account - Balance Due
• CP23T, Estimated Tax Discrepancy, Balance Due of $5 or More
• CP47A, Tax Assessed- Notification of the Requested Credit Elect/Refund Being Applied to Section 965 Tax Liability
• CP47B, Tax Assessed- Notification of a Credit Elect/Refund Being Applied to Section 965 Tax Liability
• CP47C, Tax Assessed- Including Section 965 Tax Liability
• CP51A, We've Calculated Your Income Tax For You - Balance Due
• CP60, We Removed a payment Erroneously Applied to Your Account. - Balance Due
• CP94, Criminal Restitution Final Demand Notice
• CP101, Math Error, Balance Due of $5 or More on Form 940
• CP102, Math Error, Balance Due of $5 or More on Forms 941, 941SS, 943, 944, 944SS, 945
• CP103, Math Error, Balance Due - Form CT-1
• CP104, Math Error, Balance Due of $5 or More - Form 720
• CP105, Math Error, Balance Due of $5 or More - Forms 11C, 2290, 706, 709, 730
• CP107, Math Error, Balance Due of $5 or More - Form 1042
• CP126, Math Error, Balance Due or Overpayment Less Than $1 on Forms 990PF, 4720, 5227
• CP132, Math Error, Balance Due on Forms 990C, 990T,1041, 1120, 8804
• CP134B, Federal Tax Deposit(s) (FTD) Discrepancy - Balance Due
• CP141L, We Charged a Penalty Under Internal Revenue Code Section 6652(c) - Form Filed Late
• CP161, No Math Error, Balance Due (Except Form 1065)
• CP162, Untimely Filing Penalty - Partnership
• CP165, Penalty Assessed for Dishonored Check
• CP210, Examination (Audit) or Data Processing Tax Adjustment - Balance Due, Overpayment, or Even Balance
• CP215, Civil Penalty - 500 and 600 Series
• CP220, Examination (Audit) or Data Processing Tax Adjustment - Balance Due, Overpayment, or Even Balance
• CP220J, Employer Shared Responsibility Payment (ESRP) 4980H Adjustment - Balance Due, Even Balance or Overpayment Notice
• CP230, Combined Annual Wage Reporting - CAWR/DP Tax Adjustment Amended Return Filed
• CP233J, 4980H Adjustment bal due, even bal or overpayment Notice (ESRP)
• CP240, Combined Annual Wage Reporting - CAWR/DP Discrepancy Tax Adjustment
• CP260, An Erroneous Payment Previously Applied to Your Account Has Been Reversed - Balance Due
• CP283, Penalty Charged on Your Form 5500 - Late or Incomplete Form
• CP711, Spanish Math Error - Balance Due - Error en la Planilla - Saldo Adeudado
• CP714, Spanish Balance Due - No Math Error - Planilla Radicada - Saldo Adeudado
• CP721A, Data Processing Adjustment Notice, Balance Due (Spanish) - Cambios a su Planilla - Saldo Adeudado
• CP722A, Spanish Data Processing Adjustment Notice, Balance Due of $5 or more - Cambios a su Planilla - Saldo Adeudado
• CP802, Spanish BMF Math Error, Balance Due of $5 or More on Forms 941PR, 943PR - Hemos Hecho Cambios a su Planilla Porque Creemos que hay un Error de Cálculo
• CP834B, Federal Tax Deposit(s) (FTD) Discrepancy - Balance Due (Spanish)
• CP865, Spanish Penalty for Dishonored Check on Forms 94XPR FTD

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As the July 15 tax-filing deadline draws near, the IRS reminds all who have yet to file their 2019 federal tax return to file electronically now, choose direct deposit for their refund, or pay any tax owed electronically. Taxpayers who owe for tax year 2019 or need to pay 2020 estimated taxes originally due for the first quarter on April 15 or the second quarter on June 15 can schedule an electronic payment up to the July 15 due date.

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The Treasury Department and the Internal Revenue Service today provided tax relief for certain taxpayers affected by the COVID-19 pandemic involved in new markets tax credit transactions.

The taxpayers receiving relief through today’s guidance are community development entities (CDEs) and qualified active low-income community businesses (QALICBs) investing and conducting businesses in low-income communities.

Notice 2020-49 provides a CDE or QALICB with relief for certain specified time-sensitive acts that are due to be performed between April 1, 2020, and Dec. 31, 2020, in order to meet requirements under section 45D of the Internal Revenue Code and its regulations. A CDE or QALICB may perform these acts by Dec. 31, 2020.

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The IRS released proposed regulations addressing the treatment of certain medical care arrangements under section 213 of the Internal Revenue Code. The proposed regulations address direct primary care (DPC) arrangements and health care sharing ministry (HCSM) memberships, and provide the following guidance:

• Payments for DPC arrangements are expenses for medical care under section 213 of the Code. Because these payments are for medical care, a health reimbursement arrangement (HRA) provided by an employer generally may reimburse an employee for DPC arrangement payments.
• Payments for membership in a HCSM are expenses for medical care under section 213 of the Code. Because these payments are for medical care, an HRA provided by an employer generally may reimburse an employee for HCSM membership payments.

The proposed regulations respond to Executive Order 13877, which directs the Secretary of the Treasury, to the extent consistent with law, to “propose regulations to treat expenses related to certain types of arrangements, potentially including direct primary care arrangements and healthcare sharing ministries, as eligible medical expenses under Section 213(d)” of the Code.

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The IRS will present the webinar, Foreign Payments Practice: Qualified Intermediary Certification Review Process, at 10 a.m. ET on June 18. The 120-minute webinar will consider:

• The different components of QI/WP/WT compliance and major areas of responsibility that must be reviewed during the Periodic Review.
• How to navigate the QI/WP/WT Certification within the QI/WP/WT Application and Account Management System.
• How to locate resources that will assist in navigating and responding to the questions within the certification system. 

Tax Pros can earn two continuing education credits by participating.

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July 1 marks the closing of several business payment P.O. Boxes (also known as Lockbox addresses), in the Cincinnati and Hartford areas. Payments will be returned to sender. No forwarding service will be offered. Go to Where to File on IRS.gov for current payment addresses. See Publication 3891, Lockbox Addresses for 2020, for more information.

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To protect the public and employees, and in compliance with orders of local health authorities around the country, certain IRS services such as live assistance on telephones, processing paper tax returns and responding to correspondence are extremely limited or suspended until further notice. As the IRS begins to reopen, the IRS Operations During COVID-19: Mission-critical functions continue webpage is updated regularly. Bookmark the page and check back often for up-to-date information on IRS operations and services.

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The United States filed a complaint seeking to permanently bar Markham, Ill., tax preparer Patricia Rivers, her daughter-in-law, Ki’esha M. Gary, and Rivers’s business, Alpha II Omega Tax, from preparing federal tax returns for others. The complaint alleges that those parties prepare false federal income tax returns on which they understate their customers’ tax liabilities by reporting false or exaggerated itemized deductions, sole proprietorship business expenses, and rental real estate losses. The government contends in the complaint that Rivers and Gary prepared over 2,750 income tax returns between 2016 and 2019, and the returns of just the 38 customers the IRS interviewed reflect an actual tax loss to the IRS of $278,461. The complaint also asks the court to order the defendants to turn over the ill-gotten tax preparation fees they earned while engaging in this fraudulent conduct.

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Notice 2020-44 provides that the adjusted applicable dollar amount that applies for determining the PCORTF fee for policy years and plan years ending on or after October 1, 2019 and before October 1, 2020 is equal to $2.54.

Notice 2020-46 provides guidance under the Internal Revenue Code on the federal income and employment tax treatment of cash payments made by employers under leave-based donation programs to aid victims of the ongoing Coronavirus Disease 2019 (COVID-19) pandemic as described in the notice.

Revenue Procedure 2020-16 provides an automatic procedure for a state or local government in which an empowerment zone is located to extend the empowerment zone designation made under section 1391(a) of the Internal Revenue Code (Code).

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