e-News for Tax Professionals 2020-49

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Issue Number:  2020-49

Inside This Issue

1. National Tax Security Awareness Week opens with warnings to all taxpayers and tax professionals as holidays, 2021 tax season approach
2. IRS to increase focus on tax return preparers who haven’t filed their own tax returns
3. Reminder: Login into your e-Services Account now to avoid having to re-certify
4. IRS to employers: Remember Feb. 1 deadline for Form W-2, other wage statements
5. A Closer Look: Special tax deductions available this year for cash donations to charities; IRS works to raise awareness
6. A Closer Look: How the IRS prioritizes compliance work on high income non-filers through national and international efforts
7. Dec. 10 Webinar: Uploading Forms 2848/8821 with Electronic Signatures
8. Nationwide Tax Forums Online: Ethics Courses Available
9. News from the Justice Department’s Tax Division
10. Technical Guidance

During the fifth annual National Tax Security Awareness Week, the IRS and its Security Summit partners warned all taxpayers and tax professionals to beware of scams and identity theft schemes by criminals taking advantage of the combination of holiday shopping, the approaching tax season and coronavirus concerns.

"This is generally the hunting season for online thieves, but this year there's a dangerous combination of factors at play that should make people more alert," said IRS Commissioner Chuck Rettig. "The combination of online holiday shopping, the approaching filing season and more of us working remotely puts people more at risk. People can help avoid becoming victims of scams or identity thefts, by taking a few simple steps to help protect sensitive tax and financial information."

The special week includes special informational graphics and social media efforts on platforms including Twitter and Instagram.

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The IRS will step up revenue officer contacts focused on tax return preparers who in prior years have failed to timely file one or more of their own tax returns. The purpose of these contacts is to remind tax return preparers of their own tax filing and paying obligations and bring them into compliance. As noted in a recent report by the Treasury Inspector General for Tax Administration:

When preparers cannot manage their own tax affairs, or worse, if they intentionally claim credits and deductions to which they are not entitled, they could undermine the tax administration system.*

These contacts will generally be conducted by telephone because the safety of IRS employees and the public remains a top priority for the IRS. Unlike face-to-face contacts, which are generally unannounced, these tax preparers will receive a letter from the revenue officer scheduling the contact.  

IRS revenue officers will share information with tax return preparers about their tax filing and paying obligations and the consequences of failing to meet those obligations. For those tax return preparers who owe, revenue officers will identify appropriate ways to resolve their tax compliance issues.

These visits are part of an ongoing broader effort by the IRS to ensure compliance and fairness.

*Tax Return Preparers with Delinquent Tax Returns, Tax Liabilities, and Preparer Penalties Should Be More Effectively Prioritized (Audit # 201830039)

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Beginning Jan. 1, tax professionals with a Secure Access account will be required to recertify their account if it has been inactive for two years. Your account is considered inactive if you have not logged into an IRS online application protected by Secure Access (e-Services, Get Transcript, online account, etc.) in the last two years. Recertification requires all identity verification steps to be completed in order to reinstate your Secure Access account. Tax professionals who are unable to pass the online identity verification process may need to contact the e-help Desk for exception processing, which delays online access to e-Services until an activation code is received by mail.

To prevent having to recertify, log in to your account now to ensure you have access to e-Services products prior to the filing season.

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The IRS reminds employers that they must file Form W-2 and other wage statements by Feb. 1, 2021, to avoid penalties and help the IRS prevent fraud. A 2015 law made it a permanent requirement that employers file copies of their Form W-2, Wage and Tax Statements, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by Jan. 31. That is also the date the Forms W-2 are due to workers. This upcoming tax season, however, Jan. 31 falls on a Sunday, pushing the due dates to the next business day, which is Monday, Feb. 1.

Certain Forms 1099-MISC, Miscellaneous Income and Forms 1099-NEC, Nonemployee Compensation, are also normally due to taxpayers on Jan. 31, but this tax season they too will be due on the next business day, Feb. 1, 2021. Various other due dates related to Form 1099-MISC, including dates due to the IRS, can be found in the instructions on IRS.gov.

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The IRS published its latest post on “A Closer Look,” featuring Edward Killen, Acting Commissioner, Tax Exempt and Government Entities (TE/GE), discussing the special tax deduction available this year for cash donations to charities.

“A Closer Look” provides a detailed look at key issues affecting everything from IRS operations and employees to issues involving taxpayers and tax professionals. Check here for prior posts and new updates.

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The IRS published an additional post on "A Closer Look," featuring Eric Hylton, Commissioner of the IRS Small Business/Self-Employed division. This edition featured information about how the IRS continues to focus on ensuring integrity and fairness in our nation’s voluntary tax system despite the challenges  of COVID-19.

“Taxpayers who exercise their best efforts to file their tax returns and pay their taxes, or enter into agreements to pay their taxes, deserve to know that the IRS is pursuing others who have failed to satisfy their filing and payment obligations,” explains Eric Hylton, Commissioner, Small Business Self-Employed.

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The IRS will present the webinar, Uploading Forms 2848/8821 with Electronic Signatures, at 2 p.m. ET on Dec. 10. The 60-minute webinar will:

• Help attendees understand a new option for submitting third-party authorization forms/signatures electronically
• Review step-by-step processes for successfully uploading third-party authorization forms
• Explain which “electronic” signatures are acceptable

Tax pros can earn one continuing education credit.

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Are you a tax professional in need of ethics credit? Then check out Federal Ethics for Tax Professionals: Office of Professional Responsibility (OPR) and Circular 230. This ethics course, presented by IRS Office of Professional Responsibility Director Sharon Fisk at the 2020 IRS Nationwide Tax Forum, explains:

• OPR’s authority to regulate the practice of representatives before the IRS 
• Circular 230
• OPR’s responsibilities and the standards relating to OPR oversight

Altogether, the Nationwide Tax Forums Online feature 18 new self-study seminars recorded at the 2020 IRS Nationwide tax Forum. The seminars, which cost $29 each, provide continuing education credit to participants using interactive videos, PowerPoint slides and audio transcripts. Additionally, 60 recorded sessions from prior IRS Nationwide Tax Forum seasons are also available for credit or audit. For more information please visit irstaxforumsonline.com.

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Two Durham, NC, return preparers pleaded guilty to conspiring to defraud the United States. According to court documents, Karen Marie Jones owned Jones and Stone Taxes, a tax preparation business in Durham. From 2012 through 2016, Jones and another return preparer at Jones and Stone, Audrey Renetta Odom, conspired to falsify tax returns by fabricating education expenses, among other items, to inflate refunds paid to their clients by the IRS. The defendants caused a tax loss to the IRS of more than $1.2 million. Both Jones and Odom have pleaded guilty, and each face a maximum sentence of five years in prison for conspiracy and a period of supervised release, restitution, and monetary penalties.

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Revenue Ruling 2020-28 provides the interest rates for the first quarter of 2021. The rates for interest determined under Section 6621 of the code for the calendar quarter beginning Jan. 1, 2021, 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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