e-News for Tax Professionals Issue 2020-34

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:  2020-34

Inside This Issue

1. IRS temporarily stops mailing three notices to taxpayers with balances due
2. Failure to deposit penalties on some employers claiming new tax credits
3. Coronavirus Tax Relief: 2019 tax refund interest
4. Tax year 2019 Form 1040-X can now be filed electronically
5. Working Virtually, Part 5: Make a plan for protecting data and reporting theft
6. Unemployment compensation is taxable; have tax withheld now and avoid a tax-time surprise
7. Important things all extension filers should remember
8. Aug. 27 Webinar: Understanding Third Party Authorizations – Power of Attorney Form 2848
9. News from the Justice Department’s Tax Division
10. Technical Guidance

The IRS has suspended the mailing of three notices – the CP501, the CP503 and the CP504 – that go to taxpayers who have a balance due on their taxes. As the IRS works to stop these mailings at our processing centers, some taxpayers and tax professionals may still receive these notices during the next few weeks due to delivery of existing mailings.

Back to top

The IRS is aware that a small population of employers that reduced their tax deposits in anticipation of claiming the sick and family leave credits, or employee retention credit, may have received a notice stating there was a failure to deposit penalty applicable to the Form 941 on which the credits were claimed. The IRS is taking actions to identify these employer accounts and correct them as soon as possible.

Back to top

Nearly 14 million individuals who filed their 2019 federal income tax returns on time and received refunds will receive interest on the refunds. Most taxpayers who received their tax refunds by direct deposit will have their interest payments direct deposited in the same accounts.

Back to top

Individuals who need to amend their 2019 Forms 1040 or 1040-SR can now file the Form 1040- X, Amended U.S. Individual Income Tax Return electronically using available tax software products. Taxpayers must have e-filed their original 2019 to be able to electronically file the amended return.

Because the IRS continues to work through backlogs, the normal processing time of up to 16 weeks for F1040X submitted on paper also applies to the electronic Forms 1040-X. Taxpayers can still submit a paper version of the 1040-X and should follow the instructions for preparing and submitting the paper form. Taxpayers filing their 1040-X electronically can use the "Where's My Amended Return?" online tool to check the status of their amended return.

Back to top

Making a plan for protecting data and reporting theft is the last of a five-part series called Working Virtually: Protecting Tax Data at Home and at Work. The special Security Summit initiative spotlights basic security steps for all practitioners, especially those working remotely or social distancing in response to COVID-19.

Back to top

With many of your clients receiving taxable unemployment compensation for the first time, the IRS reminds them they can have tax withheld from their benefits now to help avoid owing taxes on this income when they file their federal income tax return next year.

By law, unemployment compensation is taxable and must be reported on a 2020 federal income tax return. Taxable benefits include any of the special unemployment compensation authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted this spring.

Back to top

October 15 is the last day to file for most people who requested an extension for their 2019 tax return. Extension filers can file any time before Thursday, Oct. 15 if they have all of their required tax documents. They can also pay part or all of their taxes anytime on IRS.gov.

Back to top

The IRS will present the webinar, Understanding Third Party Authorizations – Power of Attorney Form 2848, at 2 p.m. ET on Aug. 27. The 75-minute webinar will consider:

• Common mistakes on Form 2848 and how to avoid them
• Withdrawing or revoking a POA
• How to get a list of all the clients under your CAF number
• IRS resources for Power of Attorney issues

Tax Pros can earn one continuing education credit for participating.

Back to top

A federal grand jury in Detroit returned an indictment charging a Farwell, Mi., businessman with failing to pay payroll taxes to the Internal Revenue Service (IRS) and failing to file his own returns. Meanwhile, a Gilmore, TX couple has been indicted and charged with felony violations.

Back to top

Notice 2020-64 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.

Rev. Rul. 2020-16 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.

Back to top