e-News for Tax Professionals 2020-45

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Issue Number:  2020-45

Inside This Issue

1. Many college students may still qualify for an Economic Impact Payment; Partner information highlighted in new edition of “A Closer Look”
2. Enrolled Agent renewal season starts
3. Security Summit partners warn of new COVID-related text scam
4. Client affected by COVID? It’s now easier to set up payment agreements
5. IRS Fiscal 2021 Focus Guide
6. Reminder: Work Opportunity Tax Credit available
7. IRS hiring collection representatives across country
8. News from the Justice Department’s Tax Division
9. Technical Guidance

The IRS urged any eligible self-supporting college student who does not need to file a tax return to register by Nov. 21 to receive an Economic Impact Payment before the end of the year. In advance of the National EIP Registration Day on Nov. 10, the IRS is reminding people who do not normally file a tax return they may be able to register for an Economic Impact Payment with a quick visit to the Non-Filers tool on IRS.gov. In particular, the IRS wants to remind self-supporting students with little or no income that they may be eligible for payments of $1,200 or more.

The IRS also encouraged tax pros and partners to share information about the upcoming EIP deadline with their clients and members. A new edition of “A Closer Look” highlights some of the steps the IRS has taken to help raise awareness for people who don’t normally file a tax return.

“The IRS is working hard with our partners across the country to raise awareness about the upcoming deadline to register for a payment,” said IRS Commissioner Chuck Rettig. “College students in particular should be careful not to overlook these payments if they’re supporting themselves and can’t be claimed as a dependent on someone’s tax returns. A few minutes of research could really help students.”

Remember, only self-supporting students who are not required to file a tax return should use the Non-Filers tool. Dependent students who are claimed as a dependent by their parents or someone else cannot get a payment. Recent college graduates recently claimed as a dependent on a tax return may be eligible to claim the EIP when they file their 2020 tax return in early 2021; see IRS.gov for more details.

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On Nov. 1, renewal season began for enrolled agents (EAs) with social security numbers (SSNs) ending in 7, 8, 9 or no SSN. The following email reminder was sent to affected EAs.

EAs must renew by Jan. 31, 2021, to ensure they receive their new enrollment cards before their current enrollment expires on March 31, 2021.

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The IRS, state tax agencies and the tax industry this week warned of a new text scam created by thieves that trick people into disclosing bank account information under the guise of receiving the $1,200 Economic Impact Payment. The Security Summit reminded taxpayers that neither the IRS nor state agencies will ever text taxpayers asking for bank account information so that an EIP deposit may be made.

“Criminals are relentlessly using COVID-19 and Economic Impact Payments as cover to try to trick taxpayers out of their money or identities,” said IRS Commissioner Chuck Rettig. “This scam is a new twist on those we’ve been seeing much of this year. We urge people to remain alert to these types of scams.”

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The IRS announced a number of changes designed to help struggling taxpayers impacted by COVID-19 more easily settle their tax debts with the IRS. The IRS assessed its collection activities to see how it could apply relief for taxpayers who owe but are struggling financially because of the pandemic, expanding taxpayer options for making payments and alternatives to resolve balances owed.

“We want people to know our IRS employees are committed to continue helping taxpayers wherever possible, including offering many options for those struggling to pay their tax bills,” said Darren Guillot, the IRS Small Business/Self-Employed Deputy Commissioner for Collection and Operations Support. Guillot discussed the new relief options in a new edition of IRS “A Closer Look.”

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The IRS Small Business/Self-Employed division released its Fiscal 2021 Focus Guide -- It’s Still the Time -- laying out its compliance and service strategies for the coming year. This document provides an overview for both internal and external audiences to understand the agency operational priorities for SB/SE audit and collection activities, which continue to focus on the health and safety of employees and taxpayers. Like the SB/SE Annual Report, the purpose of the Fiscal Focus Guide is to provide transparency to the public and employees on the operational direction and assessment of SBSE responsibilities.

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The Work Opportunity Tax Credit is a tax credit available to employers who hire long-term unemployment recipients and others certified by their state workforce agency if the individual began or begins work for the employer after Dec. 31, 2014 and before Jan. 1, 2021.

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The IRS Small Business/Self-Employed division seeks to fill more than 150 collection representative vacancies throughout the country. Tax professionals are encouraged to share the external announcements with interested friends, family or clients.

Collection representatives provide a full range of administrative and technical assistance for taxpayers and their representatives. To review information about the two job announcements, Contact Representative and Seasonal Contact Representative, visit usajobs.gov.

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A Moss Point, Miss., resident was sentenced to 22 months in prison for preparing false tax returns. According to information provided to the court, Talvesha Glaude owned and operated a tax return preparation business under multiple names, including TMG Tax Service and Regional Tax Service. From 2013 through 2019, Glaude prepared tax returns for clients seeking from the IRS inflated refunds based on fraudulent dependents, federal income tax withholdings, and education credits. In addition to preparing false returns for her clients, Glaude also filed false returns for herself for the tax years 2014 through 2018. In addition to the term of imprisonment, U.S. District Judge Halil Ozerden also ordered Glaude to serve one year of supervised release and to pay restitution to the IRS in the amount of $183,360.

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Revenue Ruling 2020-23 provides guidance on the distribution of an individual custodial account in kind upon termination of a section 403(b) plan. Notice 2020-80 is related to Rev. Rul. 2020-23 and requests comments regarding the protection of annuity and spousal rights under section 205 of ERISA with respect to a terminating section 403(b) plan funded through custodial accounts.

Notice 2020-80 requests comments on the application of the annuity and spousal rights provisions of section 205 of the Employee Retirement Income Security Act of 1974, P.L. 93-406, 88 Stat. 829, as amended (ERISA), in connection with a distribution of an individual custodial account (ICA) in kind from a terminating section 403(b) plan.

Revenue Procedure 2020-48 prescribes discount factors for the 2020 accident year for insurance companies to compute discounted unpaid losses under section 846 of the Internal Revenue Code and discounted estimated salvage recoverable under section 832.

Revenue Procedure 2020-49 provides temporary guidance regarding the public approval requirement under section 147(f) of the Internal Revenue Code for tax-exempt qualified private activity bonds.  Specifically, in light of the continuing Coronavirus Disease 2019 (COVID-19) pandemic, this revenue procedure extends until September 30, 2021, the time period described in section 4.02 of Rev. Proc. 2020-21, 2020-22 I.R.B. 872, during which certain telephonic hearings are permitted.

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