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Issue Number: 2021-10

Inside This Issue

1. Guidance for 2021 on reporting qualified sick and family leave wages
2. IRS issues 2021-2022 special meal, incidental expenses per diem rates
3. IRS awards new contracts to three private collection agencies
4. IRS’s 2021 Small Business Week wrap up
5. New and draft forms, instructions and publications on IRS.gov

Notice 2021-53 provides guidance to employers about reporting on Form W-2 the amount of qualified sick and family leave wages paid to employees for leave taken in 2021. The notice provides guidance under recent legislation, including: The Families First Coronavirus Response Act (FFCRA), as amended by the COVID-Related Tax Relief Act of 2020, and the American Rescue Plan Act of 2021.

Employers will be required to report these amounts to employees either on Form W-2, Box 14, or in a separate statement provided with the Form W-2. The guidance provides employers with model language to use as part of the Instructions for Employee for the Form W-2 or on the separate statement provided with the Form W-2.

The wage amount that the notice requires employers to report on Form W-2 will provide employees who are also self-employed with the information necessary to determine the amount of any sick and family leave equivalent credits they may claim in their self-employed capacities.

In July 2020, the IRS issued Notice 2020-54, which provided guidance regarding W-2 reporting of qualified sick leave and family leave under FFCRA for wages paid to employees for leave taken in 2020.

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Notice 2021-52 provides the 2021-2022 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home, specifically the:

• Special transportation industry meal and incidental expenses (M&IE) rates
• Rate for the incidental expenses only deduction
• Rates and list of high-cost localities for purposes of the high-low substantiation method

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The IRS awarded new contracts to three private-sector collection agencies for collection of overdue tax debts. Taxpayers with unpaid tax bills may be contacted by one of the following three agencies:

1. CBE Group, Inc.
2. Coast Professional, Inc.
3. ConServe

The IRS will always notify a taxpayer before transferring their account to a private collection agency (PCA).

It will first send a letter to the taxpayer and their tax representative informing them that their account was assigned to a PCA and provide the name and contact information for the PCA.
 
Following the IRS notification, the PCA will send its own letter to the taxpayer and their representative confirming the account transfer. To protect the taxpayer's privacy and security, both the IRS letter and the PCA's letter will contain information that will help taxpayers identify the tax amount owed and assure taxpayers that future collection agency calls they may receive are legitimate.

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Find links to all of this year’s IRS Small Business Week’s (SBW) information and products, on this IRS.gov SBW webpage. The page features information on topics of interest to small business owners, employers and self-employed individuals.

The IRS’s key message for this year’s SBW was encouraging employers to help get the word out about the advance payments of the Child Tax Credit to their employees.

The SBW webpage also includes links to:

• News releases
• Tax Tips
• Ready-to-use articles
• e-Posters
• Small Business / Self-Employed toolkit
  Videos
• And more

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New publication

• Pub 4557, Safeguarding Taxpayer Data: A Guide for Your Business

Draft forms

• Form 941-X (PR), Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund (Puerto Rico Version)
• Form 943, Employer's Annual Federal Tax Return for Agricultural Employees

Draft instructions

• Inst 940, Instructions for Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return
• Inst 941-X, Instructions for Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund

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