e-News for Tax Professionals 2021-04

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:  2021-04

Inside This Issue

1. EITC Awareness Day: Critical tax credit provides refund boost to millions
2. Guidance to taxpayers on identity theft involving unemployment benefits
3. New online tool simplifies third-party authorizations
4. IRS creates new Chief Taxpayer Experience Officer position
5. New law extends COVID tax credit for employers who keep workers on payroll
6. Feb. 2 Webinar: Highlights of Tax Changes from a Tax Forms Perspective
7. News from the Justice Department’s Tax Division

The IRS and its partners reminded individuals about the Earned Income Tax Credit today on "EITC Awareness Day" 2021and urged people to check to see if they qualify for this important credit.

"This year marks the 15th annual EITC Awareness Day," said IRS Commissioner Chuck Rettig. "For more than 45 years, this tax credit has been helping hard-working Americans and their families. We want to thank our partners around the country who help us reach out to those low- and moderate-income people who may qualify and not even know about it."

The IRS earlier announced that it will begin accepting 2020 tax returns on Feb. 12. Once filing season officially opens, the returns will be electronically submitted for processing.

Back to top

The IRS urged individuals who receive Forms 1099-G for unemployment benefits they did not actually get because of identity theft to contact their appropriate state agency for a corrected form. States issue Forms 1099-G to the taxpayer and to the IRS to report what taxable income, such as refunds or unemployment benefits, were issued by state agencies.

During 2020, millions of taxpayers were impacted by the COVID-19 pandemic through job loss or reduced work hours. Some taxpayers who faced unemployment or reduced work hours applied for and received unemployment compensation from their state. Under federal law, unemployment benefits are taxable income.

However, scammers also took advantage of the pandemic by filing fraudulent claims for unemployment compensation using stolen personal information of individuals who had not filed claims. Payments made as a result of these fraudulent claims went to the identity thieves, and the individuals whose names and personal information were taken did not receive any of the payments.

If you have clients who received unemployment benefits in 2020, remind them to visit the website of the agency paying unemployment benefits to get their Form 1099-G. Visit www.irs.gov/uc for more information.

Back to top

Tax professionals can now use a new online tool, Submit Forms 2848 and 8821 Online, to remotely obtain signatures from clients and submit authorization forms without meeting face-to-face. The tool is protected by Secure Access authentication, so tax professionals must have a Secure Access username and password or create an account.

For details about how to use “Submit Forms 2848 and 8821 Online,” tax professionals may review an IRS webinar or Fact Sheet 2021-01.

Back to top

As part of a larger effort related to the Taxpayer First Act, the IRS announced the creation of a new Chief Taxpayer Experience Officer position to unify and expand efforts across the agency to serve taxpayers. Ken Corbin, currently the IRS Wage and Investment Commissioner, will take on this new role reporting directly to IRS Commissioner Charles Rettig while continuing to serve in his position overseeing the agency’s largest operating division.

This announcement is the first senior leadership role created within the IRS under the Taxpayer First Act framework. The Taxpayer Experience Office, led by the Chief Taxpayer Experience Officer, reporting directly to the Commissioner, is one of the new roles envisioned in the multi-year plan.

“This position is designed to ensure the views and experiences of taxpayers and their professional representatives are factored into all aspects of IRS operations,” said IRS Commissioner Chuck Rettig. “While taxpayer service has always been a priority for the IRS, we can do more. Having Ken Corbin in this new position will provide a different way of ensuring the taxpayer component is factored into all aspects of global IRS operations and business decisions in a way that’s never been done before. Every taxpayer and every taxpayer interaction are important, and Ken will make a significant difference going forward.”

The position will work with business units and offices across the IRS, including Chief Counsel, the Independent Office of Appeals and the National Taxpayer Advocate. The role is envisioned as working in coordination with the National Taxpayer Advocate, which is an independent organization inside the agency that helps taxpayers with issues that can’t be resolved with the IRS.

Back to top

Employers are encouraged to take advantage of the newly-extended employee retention credit, designed to make it easier for businesses that, despite challenges posed by COVID-19, choose to keep their employees on the payroll. As a result of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, eligible employers can now claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees after Dec. 31, 2020, through June 30, 2021.

Retroactive to the March 27, 2020, enactment of the CARES Act, the law now allows employers who received Paycheck Protection Program (PPP) loans to claim the ERC for qualified wages that are not treated as payroll costs in obtaining forgiveness of the PPP loan. For more information, see COVID-19-Related Employee Retention Credits: How to Claim the Employee Retention Credit FAQs.

Back to top

The IRS will present the webinar, Highlights of Tax Changes from a Tax Forms Perspective, at 2 p.m. ET on Feb. 2. The 100-minute webinar will provide information on:

• Major income tax changes for tax year 2020
• Major tax form changes from 2019 to 2020
• New tax forms for tax year 2020

Tax pros can earn two continuing education credits.

Back to top

A federal grand jury in Durham, NC, returned an indictment charging a tax preparer with conspiring to defraud the United States, preparing false tax returns, filing a false personal tax return, and committing aggravated identity theft. According to the indictment, Andrea Marie Pasley worked at Jones and Stone Taxes, a tax preparation business in Durham. From 2012 through 2017, Pasley allegedly conspired to fraudulently inflate client, filed a false tax return and committed aggravated identity theft when she claimed a false dependent on her own 2015 personal return. If convicted, Pasley faces a maximum sentence of five years in prison on the conspiracy charge, a statutory mandatory sentence of two years on the aggravated identity theft charge, and a maximum sentence of three years in prison on each count of filing a false tax return and aiding and assisting in the preparation of a false tax return. The defendant also faces a period of supervised release, restitution, and monetary penalties.

The U.S. filed a complaint seeking to bar a Chicago-area tax return preparer from preparing federal income tax returns for others. A civil complaint filed against Lavon Boyd in the U.S. District Court for the Northern District of Illinois alleges that he prepared federal income tax returns for Chicago-area taxpayers that significantly understated his customers’ tax liabilities by fabricating business losses. The suit alleges that Boyd fabricated or exaggerated his customers’ business expenses and that he allegedly fabricated childcare expenses on at least one of his customers’ tax returns. The complaint further alleges that, by repeatedly understating his customers’ tax liabilities, Boyd has caused the United States to lose substantial tax revenue.

A federal court in the Southern District of Florida has permanently enjoined a West Palm Beach tax return preparer and her business from preparing federal income tax returns for others. In April 2017, the United States filed a complaint against Lena D. Cotton and Professional Accounting LDC LLC, that alleged the defendants prepared returns with improper education credits, manipulated filing statuses, and improper vehicle deductions, among other issues. According to the court’s order, the injunction was issued in response to violations of a prior order in the case that had allowed the preparer and her business to prepare returns subject to certain restrictions. On Jan. 27, 2021, the court issued an order holding defendants in contempt a second time. According to the order, defendants “have attempted to circumvent the terms of the injunction” and subsequent orders “and have, in some cases, violated the restrictions placed upon them by those [o]rders.” In particular, the court found that Cotton and Professional Accounting LDC “in effect . . . employ[ed] and overs[aw]” other individuals and entities who prepared prohibited returns out of Professional Accounting LDC’s West Palm Beach office, with Cotton and Professional Accounting LDC “retaining a great deal of the profits.”

The U.S. has filed a complaint in the U.S. District Court for the Southern District of Florida seeking to bar a Belle Glade, Fl., tax return preparer from owning or operating a tax return preparation business and preparing tax returns for others. The civil suit against Brandhi Shaw alleges that she prepares returns claiming false refundable fuel credits and American Opportunity tax credits. The complaint also alleges that Shaw prepares returns claiming fabricated businesses income and/or expenses, and related fictitious losses. As a result, the complaint alleges Shaw offset the amount of taxable income reported to make it appear that her customers were entitled to earned income tax credits when they were not. The complaint further alleges that, by repeatedly underreporting tax liabilities and claiming bogus refunds on behalf of her customers, Shaw has caused her customers to incorrectly report their federal tax liabilities and underpay their taxes, resulting in lost tax revenue to the United States that could exceed $6 million. The complaint alleges that Shaw is not an enrolled return preparer but files tax returns using another tax preparer’s personal identifying information, which makes it difficult to determine the full extent of the harm she has caused.

Back to top