Author Archives: c07890220


October 2019

  • Oct 10: Relief Procedures for Certain Former Citizens
  • Oct 17:
    • An Overview of the Foreign Tax Credit
    • Tax Obligations of U.S. Individuals Living and Working Abroad
  • Oct 22: Understanding the 2020 Form W-4 and How to Use it to Compute Withholding
  • Oct 24: Tax Security 2.0 – A “Taxes – Security – Together” Checklist

To register, see Webinars for Tax Practitioners.


Recently posted to the IRS Video Portal

  • IRS Civil Enforcement – Field Collection Enforcement and Employment Tax Compliance
    • Common causes of businesses accruing employment/payroll taxes
    • Mitigating risks when using a 3rd party to handle your employment/payroll tax
    • Tools the employer can use to monitor their own compliance and limit risks
    • Options offered by the IRS for a delinquent business to repay employment/payroll back taxes – without enforcement.
    • The IRS Revenue Officer’s enforcement authority (Liens, Levies, Summonses, Seizures, TFRP, Suits, and Criminal referrals)
  • The full transcript is provided and the PowerPoint is posted for downloading under the “Slides PDF” link.


Early reporting replaces Form W-2 Verification Code; IRS thanks all participants  

  • Because of new wage and income reporting requirements, the IRS announced it would discontinue the Form W-2 Verification Code pilot for the 2019 tax year. Federal law now requires employers to submit Forms W-2 by January 31 each year, which helps the IRS combat fraud and identity theft and superseded the need for a verification code.

Per Diem Rates Effective October 1, 2019

  • Notice 2019-55 announces the special per diem rates effective October 1, 2019, which taxpayers may use to substantiate the amount of expenses for lodging, meals, and incidental expenses when traveling away from home.

IRS announces new procedures to enable certain expatriated individuals a way to come into compliance with their U.S. tax and filing obligations

  • The IRS announced new procedures that will enable certain individuals who relinquished their U.S. citizenship to come into compliance with their U.S. tax and filing obligations and receive relief for back taxes.

Changes in accounting periods and in methods of accounting

  • See Revenue Procedure 2019-37, by which a taxpayer may obtain the automatic consent of the Commissioner of Internal Revenue under § 446 and § 1.446-1(e) of the Income Tax Regulations to change a method of accounting to comply with § 451 and the proposed regulations under §§ 1.451-3 and 1.451-8.

Treasury, IRS release final and proposed regulations on new 100% depreciation

  • The Treasury Department and the IRS released final regulations (PDF) and additional proposed regulations (PDF) under section 168(k) of the Internal Revenue Code on the new 100% additional first year depreciation deduction that allows businesses to write off most depreciable business assets in the year they are placed in service by the business.

IRS releases new Tax Gap estimates; compliance rates remain substantially unchanged from prior study

  • The IRS released a new set of tax gap estimates on tax years 2011, 2012 and 2013. The results show the nation’s tax compliance rate is substantially unchanged from prior years. The gross tax gap is the difference between true tax liability for a given period and the amount of tax that is paid on time.

►TAX TIPS to share with your clients

Taxpayers can go to for answers to questions about payments and penalties

  • Questions about tax payments and penalties come up all year long. Taxpayers can find most answers to these questions on They can head over to the Let Us Help You page, which features links that take users to information and resources on a wide range of topics related to penalties and payments.

Two education credits help taxpayers with college costs

  • With school back in session, parents and students should look into tax credits that can help with the cost of higher education. They do this by reducing the amount of tax someone owes on their tax return. If the credit reduces tax to less than zero, the taxpayer may get a refund.

Here are disaster resources taxpayers can check out now to help them later

  • Natural disasters can – and do – happen at any time. Whether it’s a hurricane, fire, flood, earthquake or tornado, there are things people can do to prepare in advance of a disaster.

Here’s what happens after a disaster that leads to relief for affected taxpayers

  • Disasters can strike without warning, causing damage and destruction. Before the IRS can authorize tax relief, the president must declare a federal disaster. Here’s a rundown of tax-related things that usually happen after a disaster.

New IRS Tax Withholding Estimator helps workers with self-employment income

  • The new Tax Withholding Estimator tool includes a feature designed to make it easier for employees who also receive self-employment income to accurately estimate the right amount of tax to have taken out of their pay.

Tax Withholding Estimator helps retirees; figures tax on Social Security benefits

  • The new tool offers retirees, as well as employees and self-employed individuals, a more user-friendly way to check their withholding. Whether they receive wages or pension payments, it helps taxpayers estimate if the right amount is being withheld from their income to cover their tax liability

Taxpayers can use 2018 tax return to estimate 2019 withholding amount

  • Millions of people have filed their 2018 tax return, making this a prime time to consider whether their tax situation came out as expected. If not, taxpayers can use their finished 2018 return and the Tax Withholding Estimator to do a Paycheck Checkup ASAP and, if needed, adjust their withholding. Having their 2018 return handy can make it easier for taxpayers to estimate deductions, credits and other amounts for 2019.


IRS finalizes safe harbor to allow rental real estate to qualify as a business for qualified business income deduction

  • The IRS issued Revenue Procedure 2019-38 that has a safe harbor allowing certain interests in rental real estate, including interests in mixed-use property, to be treated as a trade or business for purposes of the qualified business income deduction under section 199A of the Internal Revenue Code (section 199A deduction).


Employers: Keep employees informed about tax scams and how to report them


Help Your Clients Understand IRS Notices

  • Did your client receive a letter or notice from the IRS? The Understanding Your IRS Notice or Letter web page on explains in detail what certain IRS notices mean and how to respond. Key in the notice or letter number in the “Notices and Letters” search box to obtain a clear explanation of the notice or letter and obtain answers to common questions.


Taxpayers should beware of property lien scam

  • With scam artists hard at work all year, taxpayers should watch for new versions of tax-related scams. One such scam involves fake property liens. It threatens taxpayers with a tax bill from a fictional government agency. Here are some details about the property lien scam that will help taxpayers recognize it.


MeF Production Shutdown and Cutover for Individual and Business

  • The Individual and Business shutdown dates for 2019 have not been announced yet.  In general, the Individual shutdown is mid-November, and the Business shutdown is late December. Sign up for Quick Alerts (IRS e-file Service Center Messages) to get the latest news.

Here’s what tax pros can do so they aren’t taken on a phishing trip

  • Tax professionals should remember to educate everyone who works for them to be on the lookout for phishing emails. Sending scam emails is still the most common tactic used by cybercriminals to steal sensitive data. Learn more about:
  • Spear phishing
  • Keylogging
  • Pretending to be a client
  • Sending links
  • Ransomware

Tax preparers can follow these simple steps to protect client data

  • Tax professionals and their employees can take steps to help prevent thieves from stealing sensitive data. Cybercriminals use phishing emails and malware to gain control of computer systems or to steal usernames and passwords.
  • All tax professionals should remember they must have a written data security plan. This is required by the Federal Trade Commission and its Safeguards Rule.


Treasury and IRS issue proposed regulations and provide relief for certain tax-exempt organizations

  • The IRS issued proposed regulations clarifying the reporting requirements generally applicable to tax-exempt organizations.
  • Additionally, the IRS issued Notice 2019-47, providing penalty relief for certain exempt organizations that, consistent with the 2018 guidance from the IRS, do not report the names and addresses of contributors on annual returns for tax years ending on or after December 31, 2018, but on or before July 30, 2019.


From the U.S. Department of Labor


e-News Subscriptions

  • The IRS offers several e-News subscriptions on a variety of tax topics. Click above for information about subscribing.

IRS Social Media

  • The IRS uses social media tools to share the latest information on tax changes, scam alerts, initiatives, products and services. Connect with the IRS through social media tools.


When you find an article you want to share, click on the “Share” link. Like so:

  • Scroll to the bottom of any page on Look for “Share / Print”
  • Click on Share
  • You can share on Facebook, Twitter, or Linkedin.

First Thursday Minutes – July 11, 2019


Tax Professional Attendees

Darrel Beadle
Velma Bjorgum
Jacob Borash
Barbara Brown
Michael Calabrese
Carrie Christensen
Tracy Danzer
Jodi Eckhout
Pam Geiger
Craig Hanson
Cindy Hockenberry
James Hockenberry
Kelly Jaskowiak
Terry Johnson
Richard Kollauf
Ken Larsen
Judy Lashinski
Lief Mattila
Ruth Ann Michnay
Dan Ogard
Darian Panasuk
Michael Ringwelski
Wayne Salgren
Jo Ann Schoen
Paul Senger
Angela Siener
Scott Stuckmann
Carmen Van Der Leest
Will Wallace

Stakeholder Liaisons
Karen Brehmer
Kathleen Fox
Alan Gregerson
Mike Mudroncik

Departments of Revenue

IA John Fuller
IL Maribeth Oliver
MN Mark Krause
MO Norma Dearixon
WI Nate Weber


July 18, 2019:  Understanding an Offer in Compromise

 Register here: 

Check Webinars for Tax Practitioners regularly for upcoming webinars.

Videos recently added to the IRS Video Portal:

Foreign Earned Income Exclusion   This webinar provides an overview of and answers the questions: What is the Foreign Earned Incomer? Explain the concept of tax home and the foreign earned income exclusion and more.

Discussion items

  • Two new scams

 Taxpayers should be on the lookout for new versions of these two scams

  • IRS notices

Karen reported that some tax pros are saying that the IRS routinely sends out a collection notice before the IRS has responded to correspondence sent in by the taxpayer or representative. Have you seen this, too?

 Your comments:  Yes, this happens frequently.

Tax pros who are experienced representatives said:

  • They tell their clients that they will probably get one or two collection notices even though correspondence has been sent in. This reduces the client’s anxiety about getting an IRS collection notice.
  • They call PPS to ask for a collection hold. Sometimes they do this when the correspondence has been mailed. Sometimes they do this after the first or second collection notice.
  • Some tax pros have had success in calling PPS to get matters resolved so that they don’t have to send in correspondence.

Karen explained that the IRS does not stop collection notices until the correspondence has reached the correct department, and is being worked by someone.  Correspondence is worked “first in, first out”, so it may be 5 or more weeks before a person looks at it and will then stop future collection notices.

3)   Electronic Tax Administration Advisory Committee

Electronic Tax Administration Advisory Committee issues 2019 Annual Report; Recommendations target identity theft, refund fraud

ETAAC Annual Report to Congress – June 2019

4)   Tax professional retiring has an article on this topic:  Frequently Asked Questions: Deceased Tax Professionals

Tax pros have asked the IRS to create a page for a tax pro who is retiring. It would include what to do with your PTIN, CAF, EFIN, EIN. Would that be helpful to you?

The response was overwhelmingly in favor. In addition, a request was made for a page for tax pros who are just getting started in the business. We have shared your comments and have asked that this information be added to

5)   Comments on the re-designed Form 1040

 Send your comments to the IRS using this link:

 Your issues and questions:

  • Transcript process when the taxpayer has a new address.

 Transcripts will be mailed to the taxpayer at their address of record. What if their address has changed?

The taxpayer should complete Form 8822, Change of Address. Wait 6 weeks, then request the transcript and it will be mailed to their new address.

Use Form 8822-B, Change of Address or Responsible Party for a Business.

Even if the tax professional gets the transcript from e-Services TDS, the taxpayer’s address should be updated.

Tax professionals who are attorneys, Certified Public Accountants or Enrolled Agents (i.e., Circular 230 practitioners) and do not have an e-Services account may create one and, with proper authorization from clients, can access the e-Services’ Transcript Delivery System. Unenrolled tax practitioners must have an e-File application on file and be listed as delegated users to access TDS.

2)   DPAD and Social Security

Jodi Eckhout asked: We received two notices for farmers that are receiving social security – the IRS notice indicated we had incorrectly calculated the taxable SS. However, the notice was wrong – the IRS allowed DPAD as a reduction (according to the instructions, this is not allowed as a deduction). This resulted in the IRS sending refunds (a few hundred dollars each) Has anyone else run into this situation? Does the IRS know about this error — will they be sending new notices asking for the refund back?

We will work this issue and provide an update when we can.

State Departments of Revenue

 John Fuller – IA

  • The Department had noticed a decline in fraudulent activity, but now we are seeing an increase due to practitioner computer breaches.

Mark Krause – MN

  • On 7/9 we updated FAQs and near final forms posted for 2017 & 2018 due to conformity. Do not file 2018 returns on extension unless you need to. Updated software and final forms should be available late August/early Sept and we will then start accepting these returns. If you send in now, we will adjust.
  • HSA accounts DO get added into household income. When responding to letters regarding line 5 of M1PR, only input the amount of pre-tax medical and dental insurance premiums that were included in line 5, if any. If the total amount of pre-tax premiums is zero, no response is necessary.

Next Call

The next call will be on August 1.  We’ll send out the WebEx link closer to that date.

Meetings are one hour long. Come when you can, leave when you must.

Thank you to everyone who attended. We appreciate your time and input!

First Thursday Minutes – August 1, 2019

Tax Professional Attendees:

Gail Bates
Darrel Beadle
Velma Bjorgum
Carrie Christensen
Tracy Danzer
Brad Decker
Jodi Eckhout
Jessica Gatzke
Jacen Gondringer
Cindy Hockenberry
James Hockenberry
Carrie Houchins-Witt
Todd Koch
Rick Kollauf
Nathaniel Krautkramer
Ken Larsen
Lief Mattila
Ruth Ann Michnay
Sandra Newman
Christopher Olson
Darian Panasuk
Kathy Reiniger
Vincent Schamber
William Schmidt
Barbara Steponkus
Dianna Lynn Streed
Donna Tuke
Jill Wrensch

Stakeholder Liaisons
Doug Blade
Karen Brehmer
Kathleen Fox
Alan Gregerson
Eden Holsman
Mike Mudroncik

Stakeholder Liaison Managers
Kristen Hoiby, Area 6 manager

Departments of Revenue
IA – John Fuller
MN – Mark Krause
WI – Nate Weber


August 15, 2019: Understanding Form 2290 – Heavy Highway Vehicle Use Tax

Check Webinars for Tax Practitioners regularly for upcoming webinars.

Videos recently added to the IRS Video Portal:

  • Determining Tax Residency Status This webinar provides an overview of the impact of residency status on U.S. taxation, differentiate residency status under U.S. immigration law versus U.S. tax law, and more.


Discussion items

1) Is Modernized e-file up or down?

Modernized e-File (MeF) Operational Status.

Note the unique URL

For more information regarding MeF, please see Modernized e-File (MeF) Program Information.

2) Tax transcripts and FAFSA

Tax transcript tips for those filing a FAFSA for the 2019-2020 college semesters

3) Tax Security 2.0

“Opening Day Announcement”: Tax Security 2.0 The Taxes-Security-Together Checklist

Tax Security 2.0 – A “Taxes-Security-Together” Checklist – Step 1

IRS, states and industry outline ‘Security Six’ protections to help tax professionals and taxpayers be safer online

Tax Security 2.0 – A “Taxes-Security-Together” Checklist – Step 2

IRS, Security Summit partners remind practitioners that all “professional tax preparers” must create a written data security plan to protect clients

Tax Security 2.0 – A “Taxes-Security-Together” Checklist – Step 3

IRS, Security Summit partners alert tax professionals to the risks posed by phishing emails; education key to protecting taxpayer data

All messages will be here when all steps are released: Tax Security 2.0

4) NTA Report – EITC

National Taxpayer Advocate Nina Olson releases comprehensive report intended to improve EITC administration; publishes “subway map” of taxpayer’s journey through the tax system

Please see the report to view her recommendations to improve EITC.

5) NTA Report – Subway Map

TAS is releasing a “subway map” that illustrates, at a very high level, the stages of a taxpayer’s journey through the tax system – from getting answers to tax law questions through audits, appeals, collection and litigation. The map makes clear the complexity of tax administration, with its many connections, overlaps, and repetitions between stages. Notably, it shows why the road to tax compliance isn’t always easy to navigate.

Because of the complexity and number of steps at each stage, the original roadmaps simplified certain processes by omitting multiple sub-steps and detours that in some situations can be significant.

To provide a more complete picture, TAS will be working to develop a fully interactive version of the subway map in the coming year. When the interactive map is completed, a taxpayer or representative will be able to enter into it at any step and learn more about that step and the surrounding steps. TAS envisions that a taxpayer or representative will be able to input the number of an IRS letter or notice and generate a pop-up window that provides key relevant information, including where in the process the taxpayer is and what the next steps will be.


  1. Some tax pros use the Subway Map to show their clients the process, and to show where they are in the process.
  1. Tax pros asked if they could be involved in providing feedback on the interactive version of the Subway Map, and they want to be informed when the final product is available. We will keep you posted.

6) Comments on Forms and Pubs

Slight correction to what we told you last month:

If you want to make a comment on a CURRENT form, instruction or publication, use this link:

If you want to make a comment on a DRAFT form, instruction, or publication, go to DRAFT FORMS.

  • Select and open the draft form or instruction. The first page will tell you where to send your comments.
    • Sometimes you are directed to send in comments using the link provided above.
    • Other times you are given an email address and you send your comments to that email address.

Your issues and questions:

1) VPN issues

Brad Decker asked: One of the “Security Six” steps of the Tax Security 2.0 Checklist Step 1 is to “create and secure Virtual Private Networks”. When I turn on my VPN, I am unable to access certain critical sites – the Illinois Department of Revenue is a notable one – and also receive constant e-mails from my e-mail provider stating that I am logging in from an unrecognized computer, etc. Has anyone else experienced these problems? If so, does anyone have any suggestions to mitigate them?

We will work on this and see what we can find out.

2) DPAD and Social Security

Jodi Eckhout asked: We received two notices for farmers that are receiving social security – the IRS notice indicated we had incorrectly calculated the taxable SS. However, the notice was wrong – the IRS allowed DPAD as a reduction (according to the instructions, this is not allowed as a deduction). This resulted in the IRS sending refunds (a few hundred dollars each) Has anyone else run into this situation? Does the IRS know about this error — will they be sending new notices asking for the refund back?

Kathleen Fox is working on this issue. We will keep you updated.

State Departments of Revenue

Mark Krause – MN

  • Based on the tax bill signed into law in May, final draft forms have been released for 2017 & 2018 and near final draft forms have been released for 2019. To find these forms, go to Tax Law Changes on our website and click on draft forms and instructions under resources at the bottom of the page.
  • Individuals with questions can also call us directly as well, 7:30 am – 6 pm, M-F at 651-284-5075.

Next Call

The next call will be on September 5. We’ll send out the WebEx link closer to that date.

In the meantime, enjoy the STATE FAIR in your state! 😊

Meetings are one-hour long. Come when you can, leave when you must.

Thank you to everyone who attended. We appreciate your time and input!



Check Webinars for Tax Practitioners for upcoming webinars.

IRS Video Portal

Recently posted to the IRS Video Portal:

This webinar will give an extensive overview of tax relief for victims of disasters. Topics will include: Identifying types of relief available to taxpayers in a disaster area; Calculating disaster area casualty losses; Documenting disaster area casualty losses; Obtaining information about federally declared disaster areas; Learning about IRS Disaster Assistance and Emergency Relief Program.

This webinar will give an overview of what to do when you owe and can’t pay.

This webinar gives tax professionals updates and guidance on how the TCJA provisions will affect their due diligence requirements. It also addresses common errors, how to avoid them and applicable penalties if requirements are not met.

You’ll want to attend if: You made a mid-year change to your withholding in 2018; You were not satisfied with the amount you had withheld in 2018; Your circumstances changed in 2018 or you expect they will in 2019 We will cover; Why do a Paycheck Checkup?; Who should do a Paycheck Checkup?; How to do a Paycheck Checkup using the IRS Withholding Calculator; Plus a live Q & A.

This webinar highlights various limitations, exclusions and thresholds related to eligibility for the qualified business income deduction (199A), various calculations and the basics for tax reporting. This 20% deduction applies to non-C corporations, is in addition to the standard deduction or itemized deductions and is reported on Form 1040.


IRS, Treasury unveil proposed W-4 design for 2020

IRS takes additional steps to protect taxpayer data; plans to end faxing and third-party mailings of certain tax transcripts

  • As part of its ongoing efforts to protect taxpayers from identity thieves, the IRS announced it will stop its tax transcript faxing service in June and will amend the Form 4506 series to end third-party mailing of tax returns and transcripts in July.
  • Tax professionals who are attorneys, Certified Public Accountants or Enrolled Agents (i.e., Circular 230 practitioners) and do not have an e-Services account may create one and, with proper authorization from clients, can access the e-Services’ Transcript Delivery System. Unenrolled tax practitioners must have an e-File application on file and be listed as delegated users to access TDS.

IRS now billing those who filed for 2018 but didn’t pay; many payment options available

  • The IRS advises those now receiving tax bills because they filed on time but didn’t pay in full that there are many easy options for paying what they owe.

IRS explains CP2000 notices sent to taxpayers when their tax return doesn’t match information from 3rd parties

  • When a tax return’s information doesn’t match data reported to the IRS by employers, banks and other third parties, the IRS will send a letter to the taxpayer. The letter is called an IRS Notice CP2000, and it gives detailed information about issues the IRS identified and provides steps taxpayers should take to resolve those issues.
  • This isn’t a formal audit notification, but a notice to see if the taxpayer agrees or disagrees with the proposed tax changes. Taxpayers should respond to the CP2000, usually within 30 days from the date printed on the notice. If a timely response can’t be made, taxpayers need to call the toll-free number shown on the notice and request additional time to respond.

Final regulations on charitable contributions and state and local tax credits

  • The U.S. Department of the Treasury and the Internal Revenue Service issued final regulations that require taxpayers to reduce their charitable contribution deductions by the amount of any state or local tax credits they receive or expect to receive in return. In a notice, the IRS stated that taxpayers may treat payments they make in exchange for these credits as state or local tax payments. This allows some taxpayers to deduct certain of the payments as taxes.

Millions more ITINs set to expire in 2019; IRS says renew early to prevent refund delays

  • Nearly 2 million Individual Taxpayer Identification Numbers (ITINs) are set to expire at the end of 2019 as the IRS continues to urge affected taxpayers to submit their renewal applications early to avoid refund delays next year.
  • “We urge taxpayers with expiring ITINs to take action and renew the number as soon as possible. Renewing before the end of the year will avoid unnecessary delays related to their refunds,” said IRS Commissioner Chuck Rettig. “To help with this process, the IRS is sharing this material in multiple languages. We encourage partner groups to share this important information to reach as many people with ITINs as possible.”

Interest rates decrease for the third quarter of 2019

  • The IRS announced that interest rates will decrease for the calendar quarter beginning July 1, 2019. The rates will be:
    • five (5) percent for overpayments [four (4) percent in the case of a corporation];
    • two and one-half (2.5) percent for the portion of a corporate overpayment exceeding $10,000;
    • five (5) percent for underpayments; and
    • seven (7) percent for large corporate underpayments.

TAX TIPS (to share with your clients)

Taxpayers have the right to appeal an IRS decision

  • A taxpayer might at some point see the IRS make a decision about their taxes. If the taxpayer disagrees with this decision, they have the right to appeal it. The right to appeal an IRS decision in an independent forum is one of 10 basic rights known collectively as the Taxpayer Bill of Rights.

Taxpayers have the right to pay no more than what they owe

  • The IRS is committed to ensuring taxpayers pay no more than the correct amount of tax owed. Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly. This is one of 10 basic rights known collectively as the Taxpayer Bill of Rights.

Reminder: Private Debt Collection

All taxpayers should plan ahead for natural disasters

  • Floods, wildfires, hurricanes, tornados and other natural disasters happen quickly and often with little warning. No one can prevent these disasters from happening, but people can prepare for them.

Home office deduction benefits eligible small business owners

  • Small business owners may qualify for a home office deduction that will help them save money on their taxes, and benefit their bottom line. Taxpayers can take this deduction if they use a portion of their home exclusively, and on a regular basis.

Taxpayers should include tax plans in their wedding plans

  • Couples getting married this year know there are a lot of details in planning a wedding. Along with the cake and gift registry, their first tax return as a married couple should be on their checklist. The IRS has tips and tools to help newlyweds consider how marriage may affect their taxes.

Got tip income? Here are some tips about tips from the IRS

  • Aside from regular wages, many taxpayers have jobs where they get tips from their clients or customers. Generally, income received as a tip is taxable. Here’s some information to help taxpayers correctly report the income they receive as a tip.


IRS, Treasury issue guidance under Tax Cuts and Jobs Act and the Consolidated Appropriations Act of 2018 for cooperatives and patrons of cooperatives

  • The Treasury Department and IRS issued legal guidance under the 2017 Tax Cuts and Jobs Act (TCJA) and the Consolidated Appropriations Act of 2018 providing information on certain deductions to cooperatives and their patrons.
  • The proposed regulations provide guidance for cooperatives and their patrons on calculating the deduction for qualified business income – the QBI deduction – and the deduction for domestic production activities for agricultural or horticultural cooperatives and their patrons (the Section 199A(g) deduction). In addition, Notice 2019-27 (PDF) contains a proposed revenue procedure providing guidance on methods for calculating W-2 wages for purposes of section 199A(g).

Taxpayers have options for paying the tax they owe throughout the year

  • Taxpayers who need to pay more before tax time have a few different options on how they can do so. First, all employees should make sure their employers are withholding the correct amount of tax from their paychecks.
  • Here are three ways that taxpayers can adjust their withholding:
    • Changing the withholding allowances on Form W-4.
    • Having an extra flat-dollar amount withheld from each paycheck.
    • Making estimated tax payments throughout the year.


A-Z Index for Business

  • A-Z Business Topics
  • Business Types
  • By Subject


Common Penalties for Individuals

  • Penalties and interest stop accruing as soon as you pay your balance in full.
  • If you can’t pay your balance in full, pay what you can now. You can enter into an Installment Agreement to pay the remaining balance. Entering into an Installment Agreement may reduce future failure to pay penalties.
  • We charge some penalties, such as the failure to pay penalty, on a monthly basis, until the tax owed is paid in full.

Penalty Relief

  • You may qualify for relief from penalties if you made an effort to comply with the requirements of the law, but were unable to meet your tax obligations, due to circumstances beyond your control.


IRS reminder: Tax scams continue year-round

  • Although the April filing deadline has passed, scam artists remain hard at work, and the IRS urges taxpayers to be on the lookout for a spring surge of evolving phishing emails and telephone scams.


Practitioner Priority Service

  • As a tax pro, you may think that other tax pros know that the Practitioner Priority Service is their first point of contact for help with client-related issues. Many are not aware of it, even if they have been in the business for many years. So please tell other tax pros about this service. Thank you!


How to get help from the IRS on Exempt Organizations

  • For answers to questions about charities and other non-profit organizations, call IRS Tax Exempt and Government Entities Customer Account Services at (877) 829-5500 (toll-free number). If you prefer to write, use the address below.


e-News Subscriptions

  • The IRS offers several e-News subscriptions on a variety of tax topics. Click above for information about subscribing.

IRS Social Media

  • Connect with the IRS. The IRS uses social media tools to share the latest information on tax changes, scam alerts, initiatives, products and services. Connect with the IRS through social media tools.


From the SBA:

Webinars: 2019 National Small Business Week

  • In case you missed the 2019 National Small Business Week Virtual Conference, you are still in luck. The seven webinars are available to watch on demand. The topics include SBA funding programs, driving growth with customer obsession, online marketing and ads, mastering your cash flow, government contracting and disaster preparedness.

First Thursday Minutes June 6, 2019

Tax Professionals: Darrel Beadle, Jacob Borash, Barbara Brown, Carrie Christensen, Robin Clemmensen, Brad Decker, Jodi Eckhout, Maria Gaffney, Jacen Gondringer, Truman Hardy, Steffanie Haring, Marshall Heap, Cindy Hockenberry, James Hockenberry, Stephanie Jerge, Terry Johnson, Bill Kelly Judy Lashinski, Linda Martin, Ruth Ann Michnay, Kaye Nabo, Dan Ogard, Jodee Paape, Darian Panasuk, Joshua Prince, Kathy Reiniger, Diane Saeger, Jing Shan, Laura Swanson, Will Wallace, Angela Siener Williams

Stakeholder Liaisons:
Doug Blade, Karen Brehmer, Kathleen Fox, Eden Holsman, Alan Gregerson, Mike Mudroncik,
Stakeholder Liaison Managers:
Kristen Hoiby, Manager of Area 6 Shane Ferguson, Director
Departments of Revenue:
Halla Elrashidi – MN John Fuller – IA Dawn Holtmeier – NE Fran Krejci – NE

Four webinars planned for June. Check Webinars for Tax Practitioners.
Check out the archived webinars on the IRS Video Portal.

Discussion items
1) Sec 199A, DPAD, Form 1040 line 10
Form 1040 instructions for line 10:

“If you have a domestic production activities deduction passed through from an agricultural or horticultural cooperative under section 199A(g), attach a statement to your return titled “DPAD 199A(g).” Reduce the amount of taxable income you enter on line 10 by the amount of your deduction.”

In some instances, generally before March 1, the IRS appears to have missed this statement, and we sent CP11T telling the taxpayer that their tax was computed incorrectly. But it was not wrong – it was an IRS error. The tax preparer should get Form 2848 and call PPS. (FYI – You can call PPS if you checked the Third Party Checkbox.) Tell PPS that the statement was overlooked and the tax on line 10 is correct. You may have to send a letter to the IRS to get us to correct the tax.

2) The IRS Video Portal has archived webinars
Why this matters: You can view webinars you missed. You can get the PPT and a transcript
of the audio.
• IRS Video Portal at
• Tax Reform webinars on the home page.
• Click on Tax Practitioners tab for more webinars.
• Use search box to find topics of interest.
• The video portal shows the length of the video or webinar.
• The video portal shows the date it aired, or the date it was reviewed for accuracy.
• You can’t get CE, but it’s good to learn something new!

3) National Taxpayer Advocate Report
Why this matters: Find out what the National Taxpayer Advocate says about the issues the
IRS is facing. Find out what she says about taxpayer’s experiences with the IRS.
• National Taxpayer Advocate delivers annual report to Congress: Addresses impact of
shutdown; urges more funding for IT modernization
• Read the 17 page preface
• The full report is split into two volumes.
• The largest section of the report, which identifies at least 20 of the most serious problems
taxpayers face in their dealings with the IRS, is titled, “The Taxpayer’s Journey,” and is
organized sequentially to track a taxpayer’s interactions with the tax system from start to
finish. Among other issues, it addresses the ability of taxpayers to obtain answers to taxlaw
questions, return filing, notices, audits, collection actions and Tax Court litigation. The
report also contains “road maps” – pictorial representations of the process.

• “One of our goals in creating these roadmaps was to help readers understand the
complexity of the taxpayer journey,” Olson wrote. “It was challenging for us to create
these roadmaps and will probably be difficult for readers to follow them, which hints at the
extreme frustration many taxpayers experience when they have to interact with the IRS.”
o Ruth Ann Michnay commented that she has printed the 6 page “road map” and
shares it with clients to show where they are in the IRS process. She explained
that it’s a great visual.
• The Purple Book presents 58 legislative recommendations designed to strengthen
taxpayer rights and improve tax administration.
• Trivia question: Why is it called the Purple Book? Answer: The Office of the Taxpayer
Advocate is an independent organization within the IRS that advocates for the interests of
taxpayers. The office is non-partisan, and we have dubbed this the “Purple Book”
because the color purple, as a mix of red and blue, has come to symbolize a blending of
the parties.

4) If you are interested in becoming a CAA, now is a good time to do it.
Why this matters: The Service is actively recruiting Certifying Acceptance Agents. The goal
is to increase the availability of individual ITIN services nationwide, particularly in
communities with high ITIN usage.
• CAA stands for Certifying Acceptance Agent.
• Difference between Acceptance Agent and Certifying Acceptance Agent:
o An AA reviews supporting documentation, original or certified copies and
attaches it to Form W-7.
o A CAA reviews and validates the documents and prepares Form W-7 (COA)
Certificate of Acceptance.
• New ITIN Acceptance Agent Program Changes

5) Draft of the 2020 Form W-4, Employee’s Withholding Allowance Certificate
IRS, Treasury unveil proposed W-4 design for 2020
FAQs on the early release of the 2020 Form W-4
If you have comments about this draft of Form W-4, you can submit them to Comments should be submitted by July 1, 2019 to be
considered timely.
Publication 15-T, Federal Income Tax Withholding Methods
• Draft Pub 15-T here
• When Pub 15-T is finalized, it will be here

6) Tax Transcript faxing service ends June 28
Why this matters: This is a good time to get set up to access transcripts using Transcript
Delivery System (TDS).
• IRS takes additional steps to protect taxpayer data; plans to end faxing and thirdparty
mailings of certain tax transcripts
• Tax professionals who are attorneys, Certified Public Accountants or Enrolled Agents
(i.e., Circular 230 practitioners) and do not have an e-Services account may create
one and, with proper authorization from clients, can access the e-Services’ Transcript
Delivery System. Unenrolled tax practitioners must have an e-File application on file
and be listed as delegated users to access TDS.

7) Follow up on previous month’s IMRS issues
No POA Notices Received, IMRS issue 18-0002259.
Notice CP522 was not sent to practitioner who had a valid POA, but only to the taxpayer.
Collection indicates that the CP522 is only sent to the taxpayer or entity, even if there is a
POA on file. Practitioners say that they need to get copies of CP522.
Similarly, only the taxpayer gets a copy of the letter informing them they are switching from
being a monthly depositor to semi-weekly depositor. The POA or reporting agent needs to get
a copy of this notice, too.
This issue is still being worked.

Your issues and questions:
1) Filing season review
What went well? What didn’t? What can the IRS do to help you prepare for filing
season 2020?
Comments on the new 1040 form:
The new Form 1040 is like signing a blank check. The taxpayer signs under penalty of
perjury on page 1. There are no dollar figures on page 1 (no income, AGI, tax, etc). All of
that is on page 2. The taxpayer could sign page 1 and an unscrupulous person could
change everything on page 2. The taxpayer has no idea what he or she is signing.

  • Many tax pros agreed with the statement above: the comment that signing page one is
    like signing a “blank check” was excellent. Anything on page two could be added or
    changed without the taxpayer or preparer awareness.
  • The new Form 1040 serves no real purpose. It wastes paper. It’s time-consuming when
    trying to compare years because numbers are buried.
  • New forms are awful. They added wasted paper and confusion.
  • The new 1040 makes it more difficult to explain to taxpayers, having to switch between
    1040 and schedules.
  • The old 1040 was a good summary of income and deductions. They fixed something that
    did not need to be fixed.
  • Agree with everyone – need to scrap the whole thing and go back to the “old” form.
    Waste of paper, very confusing, lots of flipping back and forth when trying to review, etc.
  • The numbers don’t add up. An example would be the calculations on line 6 and line 7 of
    Form 1040.
  • Line 6 Total income. Add lines 1 through 5. Add any amount from Schedule 1,
    line 22
  • Line 7 Adjusted gross income. If you have no adjustments to income, enter the
    amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6
  • There is no place for the tax preparer to enter the date they signed the return.
  • One tax pro said the new 1040 design doesn’t go far enough. They should have changed
    Form 1040 to be more like Form 706. One line for income with a schedule attached. One
    line for deductions with a schedule attached, etc.

2) Another DPAD question
Marshall Heap asked: What about the deduction of the DPAD when calculating MAGI for
determining taxable social security benefits? IRC §86(b)(2)(A) was modified by the TCJA to
no longer make this adjustment but some taxpayers are receiving DPAD in 2018 from fiscal
year partnerships. Most tax preparation software no longer makes this adjustment for 2018
even though it was made in prior years. However, the IRS have been making this adjustment
and issuing refund checks. What should taxpayers do with these checks? The IRS recalculation
complies with the intent of the law but not the letter of the law.
This has been elevated to the TCJA cadre via the IMRS process.

3) VITA returns
Mike provided filing season statistics. This page shows the number of returns e-filed by tax
professionals, and the number of e-filed returns that are self-prepared. Someone asked if
returns prepared through the VITA/TCE program are included in those numbers. No, they are

4) Fax machines
Question: Are fax machines turned off on evenings and weekends? Tax pro sent a fax but it
did not go through.
Answer: The majority of IRS fax numbers are e-Fax numbers, which means the fax is
delivered to an email Inbox. We have very few, if any, traditional fax machines. The e-Fax
numbers were turned off during the government shutdown. Under normal circumstances, e-
Fax numbers remain available 24/7. If you send a fax to an IRS fax number and feel it did not
go through, please contact your local stakeholder liaison.

5) Form 8839
IRS did not accept F8839 adoption electronically last filing season. Why?
We will research this.

State Departments of Revenue:
John Fuller – IA
The Iowa Department of Revenue has partnered with the Center for Business Growth
and Innovation at the University of Northern Iowa to provide free tax webinars on
Geothermal Heat Pump Tax Credit

Mark Krause – MN
Our new website launched June 4th. The main website address remains the same.
However, many of the URLs have changed that take you to specific pages. You may
need to update any saved bookmarks in your browser to reflect the changes to our
website. We hope you enjoy using our new website. If you have any feedback or notice
anything missing, please contact me.
• The Governor signed the 2019 tax bill into law on May 29th. This bill address conformity
for tax years 2017 and 2018 and updates the tax code for tax year 2019. We have begun
reviewing and analyzing the bill and its impacts on our customers. It’s extremely
important that you do not file any amended returns that specifically address retroactive
provisions contained in the tax bill for any tax year affected. We will provide further
guidance and resources on our website once we have determined the full impacts of the
bill. Notice that the orange Tax Law Changes button has been replaced by a link on the
bottom of our website. In the meantime, you may sign up , verify or update your
subscription by entering your email address in the request field on the lower right hand
corner of our website and then clicking the Subscribe button.
• We began mailing letters this week to approximately 185,000 taxpayers that may have
included pre-tax medical and dental premiums on line 5 of the M1PR as household
income for 2018. Do not amend a 2018 M1PR to correct this specific issue. If there were
no pre-tax premiums included, the taxpayer doesn’t need to respond. If there were pretax
premiums included, they can either enter the total amount on the letter and mail it
back to us or they can use our new online Letter Response System which will ask for a
few simple pieces of data and then it will submit the information electronically. The
requested information cannot be phoned in by anyone. The good news is that refunds will not be delayed regardless of receiving a response or not. If we get new information after
the refund was processed, we will issue a separate additional refund. For any year other
than 2018 that needs to be corrected, an M1PRX will need to be filed.

Dawn Holtmeier and Fran Krejci – NE
Filing season went well.

Next Call:
The next call will be on the second Thursday in July: THURSDAY, JULY 11.
We’ll send out the WebEx link closer to that date.

Meetings are one hour long. Come when you can, leave when you must.
Thank you to everyone who attended. We appreciate your time and input!

IRS Communications Alert: June 2019 Withholding Outreach Campaign

This week, the IRS has communication to determine the proper amount withheld from employees and estimating accurate tax for the year. There are various links, social media, webinars, YouTube videos, Fact sheets, resources, and newsletters.  Let me know if you share with your members, employees, and others to assist with accurate withholding.  Information is attached above and also below with important information on withholding and estimating accurate tax for the year.            

The IRS continues to urge taxpayers to do a Paycheck Checkup as soon as possible to see if they’re having their employer withhold the right amount of tax. The IRS Withholding Calculator canhelp taxpayers check their current withholding, determine if they need to adjust it and avoid tax filing surprises next year.

 During the week of June 10, the IRS is focusing on helping taxpayers understand what actions they should take now – especially if their taxes turned out differently than they expected this year, and even if they adjusted their withholding last year. If their withholding won’t be enough, they can adjust it or make estimated tax payments to the IRS. The next payment deadline is coming soon: June 17.

 Please help us get the word out — the earlier people check and adjust their withholding, the more time there is for changes to take place evenly during the rest of the year.

 Information to share with your members, clients or employees through your website, emails, social media accounts, newsletters or other channels:

  • News releases, tax tips and drop-in articles: These products are attached to this message. They’ll also be posted in the Paycheck Checkup section of the Tax ReformResources page as they’re issued.
    • June 10
      • IRS continues campaign to encourage taxpayers to do a Paycheck Checkup; use Withholding Calculator to help get right amount for 2019 (news release)
      • Remember: All taxpayers should check their withholding ASAP (tax tip, drop-in)
    • June 11
      • IRS reminder: Get tax withholding right; do a Paycheck Checkup at least once every year (news release)
      • Here’s what taxpayers should know about doing a Paycheck Checkup (tax tip, drop-in)
    • June 12
      • IRS Withholding Calculator can help workers have right amount of tax withheld following tax law changes (news release)
      • There are two ways taxpayers can check their withholding on (tax tip, drop-in)
    • June 13
      • IRS reminds taxpayers to adjust tax withholding to pay the right tax amount (news release)
      • Taxpayers have options for paying the tax they owe throughout the year (tax tip, drop-in)
    • June 14
      • IRS reminder: Taxpayers can help determine the right amount of tax to withhold from their paychecks by doing a Paycheck Checkup now (news release)
  • Fact sheets: Learn the basics of withholding and estimated tax payments. The fact sheets attached to this message in English and Spanish are available on the Tax ReformResources page where they are also available in Korean, Vietnamese, Chinese and Russian.
    • FS-2019-4 – Tax withholding: How to get it right
    • FS-2019-6 – Basics of estimated taxes for individuals
  • Social media: Social media images and posts/tweets in English and Spanish are attached for use on your own social media accounts. You can also share #PaycheckCheckup info from the IRS Instagram account – IRSNews – and the IRS Facebook, LinkedIn and Twitter accounts:

·         @IRSnews – IRS news and tips for the public

·         @IRSsmallbiz – Information for small businesses – NEW!

·         @IRStaxpros – IRS information for tax professionals

·         @IRSenEspanol – IRS news and tips in Spanish

  • Paycheck Checkup: English | ASL
  • How to Use Withholding Calculator for Paycheck Checkup: English
  • IRS Withholding Calculator Tips: English | ASL
  • Do I Need to Fill Out a New W-4?: English | ASL

·         Other resources and general information:

·         Paycheck Checkup page on

·         Tax Reform Resources page

    • FAQs and additional drop-in articles

·         One-page flier: Paycheck Checkup (Pub. 5303), also attached here in English and Spanish

·         Subscribe now to get the IRS’s tax tips or news releases.

Thank you for your continued partnership!

Alan Gregerson

Victory! The Taxpayer First Act of 2019 passes!

It has taken five years, but Congress has finally passed the Taxpayer First Act of 2019, the first comprehensive IRS reform measure to pass in twenty years. NAEA worked closely with tax writers during the entire process and secured a number of provisions that will benefit enrolled agents and their clients. Most importantly, the bill directs the IRS to issue guidance on the use of commercially available electronic signatures applications so your clients can electronically sign powers of attorney and authorization disclosure forms. NAEA worked with tax writers to draft the language, pushed for its inclusion, and protected it through all of the various incarnations of the legislation. NAEA member advocates as recently as last month were on Capitol Hill pushing Congress for this much needed and long overdue customer service improvement. Think of the time this will save you and your clients! NAEA applauds Congress for passing these much needed taxpayer protection and customer service improvements and looks forward to the president signing this bill into law.

No Time to Rest on Our Laurels
Action is also heating up on NAEA’s two other advocacy priorities: increasing funding for IRS and minimum standards for paid tax return preparers.

  • IRS Budget. The House has begun its annual consideration of appropriations bills that fund government agencies, including the bill to fund IRS. The IRS funding bill passed the full Appropriations Committeethis week and will likely be grouped with other funding bills for floor consideration in the coming weeks. The House bill provides $12 billion in funding for IRS, including an additional $400 million for hiring auditors and collection personnel.
  • Minimum Standards for Return Preparers. Jeff Trinca, NAEA’s intrepid and oft-quoted legislative counsel, has gotten word that a minimum standards bill may be introduced in the House soon.

Extenders Outlook Still Murky
Ways and Means Chairman Neal has developed an extenders package that would retroactively extend expired provisions for three years while also expanding refundable credits such as EITC and CTC. However, the package would be paid for by increasing the corporate tax rate, a non-starter for both House and Senate Republicans. Neal has indicated the Ways and Means Committee could mark-up the bill as soon as next week. Meanwhile, Chairman Grassley and Ranking Member Wyden have created five task forces to examine which provisions should be saved and how to do so in a permanent way. Clearly, there is no consensus yet on how to move an extenders package.

Understanding Changes to Transcript Delivery Options
IRS will be hosting a webinar on alternatives to faxing tax transcripts on June 19. NAEA has and will continue to closely follow the rollout of the new program, including making sure all parts of the IRS are fully trained in the new policy.

IRS takes additional steps to protect taxpayer data on tax transcripts

IRS takes additional steps to protect taxpayer data; plans to end faxing and third-party mailings of certain tax transcripts


WASHINGTON — As part of its ongoing efforts to protect taxpayers from identity thieves, the Internal Revenue Service today announced it will stop its tax transcript faxing service in June and will amend the Form 4506 series to end third-party mailing of tax returns and transcripts in July.

Tax transcripts are summaries of tax return information. Transcripts have become increasingly vulnerable as criminals impersonate taxpayers or authorized third parties. Identity thieves use tax transcripts to file fraudulent returns for refunds that are difficult to detect because they mirror a legitimate tax return.

The halt to the faxing and third-party service this summer are two more steps the IRS is taking to protect taxpayer data. In September 2018, the IRS began to mask personally identifible information for every individual and entity listed on the transcript. See New Tax Transcript and Customer File Number. At that time, the IRS announced it intended to stop its faxing and third-party mailing service, and has since worked with tax professionals to assure they have what they need for tax preparation and representation.

Faxing service ends June 28

Starting June 28, 2019, the IRS will stop faxing tax transcripts to both taxpayers and third parties, including tax professionals. This action affects individual and business transcripts.

Individual taxpayers have several options to obtain a tax transcript. They may:

  • Use or the IRS2Go app to access Get Transcript Online; after verifying their identities, taxpayers may immediately download or print their transcript, or
  • Use or the IRS2Go app to access Get Transcript by Mail; transcript will be delivered within 10 days to the address of record, or
  • Call 800-908-9946 for an automated Get Transcript by Mail feature, or
  • Submit Form 4506-T or 4506T-EZ to have a transcript mailed to the address of record.

Tax professionals also have several options to obtain tax transcripts necessary for tax preparation or representation as follows:

  • Request that the IRS mail a transcript to the taxpayer’s address of record, or
  • Use e-Services’ Transcript Delivery System online to obtain masked individual transcripts and business transcripts, or
  • Obtain a masked individual transcript or a business transcript by calling the IRS, faxing authorization to the IRS assistor and the IRS assistor will place the document in the tax practitioner’s e-Services secure mailbox.
  • When needed for tax preparation purposes, tax practitioners may:
    • Obtain an unmasked wage and income transcript by calling the IRS, faxing authorization to the IRS assistor and the IRS assistor will place the document in the tax practitioner’s e-Services secure mailbox, or
    • Obtain an unmasked wage and income transcript if authorization is already on file by using e-Service’s Transcript Delivery System.

Certain third-party mailings stop July 1

Effective July 1, 2019, the IRS will no longer provide transcripts requested on Form 4506, Form 4506-T and Form 4506T-EZ to third parties, and the forms will be amended to remove the option for mailing to a third-party. These forms are often used by lenders and others to verify income for non-tax purposes. Among the largest users are colleges and universities verifying income for financial aid purposes. Tax professionals also are large volume users.

Taxpayers may continue to use these forms to obtain a copy of their tax return or obtain a copy of their tax transcripts. This change will NOT affect use of the IRS Data Retrieval Tool through the Free Application for Federal Student Aid (FAFSA) process.

Third parties who use these forms for income verification have other alternatives. The IRS offers an Income Verification Express Service (IVES) which has several hundred participants, who, with proper authorization, order transcripts. Lenders or higher education institutions can either contract with existing IVES participants or become IVES participants themselves. The tax transcript is an official IRS record. Taxpayers may choose to provide transcripts to requestors instead of authorizing the third party to request these transcrpts from the IRS on their behalf.

Tax professionals who are attorneys, Certified Public Accountants or Enrolled Agents (i.e., Circular 230 practitioners) and do not have an e-Services account may create one and, with proper authorization from clients, can access the e-Services’ Transcript Delivery System. Unenrolled tax practitioners must have an e-File application on file and be listed as delegated users to access TDS.

Customer File Number helps match transcripts

Because the taxpayer’s name and Social Security number are now partially masked, the IRS also created a Customer File Number space that can be used to help third parties match transcripts to taxpayers. Third parties can assign a Customer File Number, such as a loan application number or a student identification number. The number will populate on the transcript and help match it to the client/student.

Learn more about the Customer File Number at About the New Tax Transcript and the Customer File Number.


June 2019


Check Webinars for Tax Practitioners for upcoming webinars.

May 30 Qualified Business Income Deduction (199A) June 6 Foreign Earned Income Exclusion

June 13 U.S. Taxation of Employees of Foreign Governments & International Organizations June 19 U.S. Territories – Self Employment Tax

June 27 Tax Residency Status


The following IRS webinars are now archived and available for viewing in the IRS Video Portal: Topic: Understanding Tax Relief for Disasters

Aired: Thursday, March 21, 2019

Topic: Filing is The Thing to Do, Even if You Have a Balance Due

Aired: Thursday, April 4, 2019


  • The full transcript is provided as closed captioning
  • The Power Point is posted for downloading under the “Slides PDF”


Rules relating to S corporations, shareholders and corporate officers:

Small Business Week

  • National Small Business Week was May 5 – 11. The IRS highlighted several resources to help small business owners and self-employed individuals understand and meet their tax obligations.

It’s summertime… and these tips can help make livin’ easy for teens with jobs

  • With summer almost here, many students will turn their attention to making money from a summer job. Whether it’s flipping burgers or filing documents, the IRS wants student workers to know some facts about their summer jobs and
  • Not all the money they earn will make it to their pocket because employers must withhold taxes from their paycheck. Here are some tax tips young individuals should know when starting a summer

· See also: SBA article at the end of this newsletter.

IRS revises EIN application process; seeks to enhance security

  • As part of its ongoing security review, the IRS announced that starting May 13 only individuals with tax identification numbers may request an Employer Identification Number (EIN) as the “responsible party” on the
  • The change will prohibit entities from using their own EINs to obtain additional EINs. The requirement will apply to both the paper Form SS-4, Application for Employer Identification Number (PDF), and online EIN
  • There is no change for tax professionals who may act as third-party designees for entities and complete the paper or online applications on behalf of

Some taxpayers may need to amend their tax return

  • Taxpayers who discover an error after filing may need to amend their tax Taxpayers should file an amended return if there’s a change in filing status, income, deductions or credits.
  • The IRS may correct mathematical or clerical errors on a return. They also may accept returns without certain required forms or In these instances, there’s no need to file an amended return.

Taxpayer Advocate Tax Tip: Correcting tax returns, if you made a mistake or forgot to file

  • If you make a mistake on your taxes, do you know what to do and how to correct the mistake? There are many options on how to fix a mistake on your tax return, depending on whether you received a notice and the kind of mistake you made. If you simply forgot to file, and have a filing requirement, you should file right away as there are

It’s not too late to check IRS payment options

  • IRS offers taxpayers convenient, secure ways to pay their taxes throughout the year. Taxpayers can pay:
    • Online
    • By phone
    • With their mobile device using the IRS2Go app
  • Additionally, some taxpayers must make quarterly estimated tax payments throughout the year. These taxpayers may include sole proprietors, partners, and S-corporation shareholders who expect to owe $1,000 or more when they Individuals who participate in the sharing economy (aka gig economy) might also have to make estimated payments.

IRS promotes disaster readiness and Hurricane Preparedness Week

  • Disasters can happen at any time, and the IRS is encouraging taxpayers to be prepared for the
  • In the past 18 months, the IRS responded to presidentially declared disasters in 15 states and U.S. territories. The IRS offered tax relief and assistance to victims of hurricanes, typhoons, earthquakes, volcanos, fires, tornadoes, severe storms, high winds and
  • The 2019 hurricane season begins in June and the IRS joins the National Weather Service during Hurricane Preparedness Week by encouraging everyone to update or make an emergency

Disaster resources can help taxpayers weather the storm

  • As summer approaches, so do storm and other natural Whether it’s a hurricane, fire, flood or tornado, it’s important for people to be prepared. One way to get ready is for taxpayers to know what to do about important documents and paperwork that might be lost after a disaster.

Understand how to report foreign bank and financial accounts

  • In a global economy, many people in the United States have foreign financial accounts. The law requires U.S. persons with foreign financial accounts to report their accounts to the U.S. Treasury Department, even if the accounts don’t generate any taxable income. They need to report by April 15 of the following calendar
  • The U.S. government requires reporting of foreign financial accounts because foreign financial institutions may not be subject to the same reporting requirements as domestic financial

Here’s what people should know about reporting cash payments

  • Federal law requires a person to report cash transactions of more than $10,000 to the IRS. Here are some facts about reporting these payments, including:
  • Who’s covered
  • How to report
  • What’s cash
  • When to file

Here’s what historic building owners should know about the rehabilitation tax credit

  • Organizations around the country continue to promote historic buildings and other important heritage sites as May is National Historic Preservation Month. As part of this month, anyone who owns a historic building should remember that the rehabilitation tax credit offers an incentive to renovate and restore old or historic buildings. Tax reform legislation passed in December 2017 changed when the credit is claimed and provides a transition

IRS releases Data Book for 2018 showing range of tax data including audits, collection actions and taxpayer service

  • The IRS released the 2018 IRS Data Book, a snapshot of agency activities for the fiscal year.


A comparison for mid- to large businesses and international taxpayers


It pays for employers to file payroll taxes electronically

  • Business owners who file payroll and employment taxes using paper forms should consider filing these electronically. Here are some of the forms employers can e-file.


IRS Guidance

  • IRS Guidance in Plain English
  • Internal Revenue Bulletins
  • Advance Notices
  • Tax Regulations
  • Internal Revenue Code
  • IRS Written Determinations
  • FOIA Library


Identity Protection: Prevention, Detection and Victim Assistance

  • Identity theft places a burden on its victims and presents a challenge to businesses, organizations and government agencies, including the
  • The IRS combats tax-related identity theft with an aggressive strategy of prevention, detection and victim assistance. We’re making progress against this crime, as it remains one of our highest
  • Tax-related identity theft occurs when someone uses your Social Security number to file a tax return claiming a fraudulent If you become a victim, we’re committed to helping you resolve your case as quickly as possible.


Credit Elect Problems

  • Under specific circumstances, the IRS can reverse a credit elect
  • See IRM Credit Elect Problems and IRM Credit Elect Reversals

Register for 2019 IRS Nationwide Tax Forums

  • The IRS reminds tax professionals to sign up for this summer’s 2019 IRS Nationwide Tax Forums. Tax professionals attending can earn up to 19 continuing education
  • National Harbor, Maryland, near Washington, D.C. – July 9-11
  • Chicago – July 23-25
  • New Orleans – August 6-8
  • Orlando – August 13-15
  • San Diego – September 17-19


Exemption Requirements – 501(c)(3) Organizations

  • To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.


Subscribe to e-News for Tax Professionals

  • Preparers can register to get this electronic newsletter. It’s one of the best ways for tax professionals to get the latest national and local IRS news. (Editor’s note: most of the articles in this monthly newsletter come from e-News for Tax )

Subscribe to e-News for Small Businesses Subscribe to e-News for Payroll Professionals


From the SBA:

Hiring Teens for the Summer

  • In many industries, the summer season brings a sharp increase in teen employment. Unfortunately, for many business owners there remains a great deal of uncertainty about how federal child labor laws affect their teen workers. Brush up on the requirements and prevent child labor violations before they occur. Click here to learn more! And for more in-depth child labor information download your own copy of our Child Labor Bulletin 101.

FAQs on the Early Release of the 2020 Form W-4

  1. Why redesign Form W-4?

The new design reduces the form’s complexity and increases the transparency and accuracy of the withholding system. While it uses the same underlying information as the old design, it replaces complicated worksheets with more straightforward questions that make accurate withholding easier for employees.

  1. What happened to withholding allowances?

Allowances are no longer used for the redesigned Form W-4 to increase transparency, simplicity, and accuracy. In the past, the value of a withholding allowance was tied to the amount of the personal exemption. Due to changes in law, currently you cannot claim personal exemptions or dependency exemptions.

  1. Are all employees required to submit a new Form W-4?

No. Employees who have submitted Form W-4 in any year before 2020 are not required to submit a new form merely because of the redesign. Employers will continue to compute withholding based on the information from the employee’s most recently submitted Form W-4.

Employee FAQs

  1. My tax situation is simple. Are some questions optional?

Yes. The form is divided into 5 steps. The only two steps required for all employees are Step 1, where you enter personal information like your name and filing status, and Step 5, where you sign the form. If Steps 2 – 4 apply to you, your withholding will more accurately match your tax liability if you complete them.

  1. What happens if I only fill out step 1 and then sign the form? Your withholding will be computed based on your filing status’s standard deduction and tax rates, with no other adjustments.
  1. When should I increase my withholding?

You should increase your withholding if 1) you hold more than one job at a time or you and your spouse both have jobs (Step 2) or 2) you have income from sources other than jobs that is not subject to withholding (line 4a). If you do not make these adjustments, you will likely owe additional tax when filing your tax return, and you may owe interest and penalties. With regard to income from other sources, you can pay estimated tax instead of having extra withholding.

  1. When should I decrease my withholding?

If you are eligible for income tax credits such as the child tax credit or credit for other dependents, and/or you are eligible for deductions (other than the standard deduction), you can follow the instructions described in lines 3 and 4b to decrease your withholdings by the appropriate amount.

  1. I want a refund when I file my tax return. How should I complete the redesigned Form W-4?

The redesigned Form W-4 makes it easier for you to have your withholding match your tax liability. But some employees may prefer to have more of their money withheld from their paychecks throughout the year and then get that money back as a refund when they file their tax returns. The simplest way to increase your withholding is to enter on line 4c the additional amount you would like your employer to withhold from each paycheck after your Form W-4 takes effect. Whether you will be due a refund (and, if so, the amount of your refund) when you file your tax return depends on the details of your entire tax situation.

  1. Why do I need to account for multiple jobs (Step 2)? I have never done that before.

Tax rates increase as income rises, and only one standard deduction can be claimed on each tax return, regardless of the number of jobs in the household. Therefore, if you have more than one job at a time or are married filing jointly and both you and your spouse work, more money should usually be withheld from the combined pay for all the jobs than would be withheld if each job was considered by itself. Adjustments to your withholding usually should be made to avoid owing additional tax, and potentially penalties and interest, when you file your tax return. All of this has been true for many years; it did not change with the recent tax law changes. The old Form W-4 accounted for multiple jobs using detailed instructions and worksheets that many employees may have overlooked. Step 2 of the redesigned Form W-4 lists three different options you may choose from to make the necessary withholding adjustments.

  1. Which option in Step 2 should I use to account for my multiple jobs? Which is most accurate? What if I don’t want to reveal to my employer on my W-4 that I have a second job?

Step 2 allows you to choose one of three options, which involve tradeoffs between accuracy, privacy, and ease of use:

Option 1: For maximum accuracy and privacy (to avoid revealing to your employer on your W-4 that you have multiple jobs) use the calculator at You will be guided to enter an additional amount to withhold on line 4c. You will need to know the approximate amount of pay for each job, but you will need to enter the additional amount on the Form W-4 for only one of the jobs. If pay for any of the jobs changes significantly, you will need to furnish a new Form W-4 to have accurate withholding.

Option 2: If you do not have access to the online calculator but wish to have roughly accurate withholding while retaining privacy, you may use Worksheet 1 on page 3 and similarly be guided to enter an additional amount to withhold on line 4c. You will need to know the approximate amount of pay for each job, but you will need to enter the additional amount on the Form W-4 for only one of the jobs. If pay for any of the jobs changes the additional withholding amount in the lookup table, you will need to furnish a new Form W-4 to have accurate withholding.

Option 3: If there are only two jobs held at the same time in your household, you may check the box in Step 2 on the forms for both jobs. The standard deduction and tax brackets will be divided equally between the two jobs. You would not need to furnish a new Form W-4 to account for pay changes at either job. This option is less accurate—more tax than necessary may be withheld from your wages—but you generally won’t have too little tax withheld. (The more similar the earnings at the two jobs, the more accurate this option will be. To get an idea of how much overwithholding you can expect in your case, see the tables that will be provided in the 2020 Pub. 505.) This option reveals to your employer on your W-4 that you have multiple jobs in your household. But it also is the easiest option to use: just check the box.

  1. The instructions above Step 3 say that in multiple job households, adjustments in lines 3 through 4b are to be made on only one form, and that withholding will be most accurate if the adjustments are made on the W-4 for the highest paying job. But what happens if pay at two jobs is relatively similar or if the job that pays more changes over time?

In general, making these adjustments on the Form W-4 for the highest paying job increases accuracy. However, if the jobs in your household pay about the same or if the job that pays more changes over time, it is less important which Form W-4 is used to make the adjustment.

  1. What if I have a side gig where I’m not treated as an employee?

If you have self-employment income, you will generally owe both income tax and self-employment tax. Form W-4 is primarily intended to be used by employees who are not subject to self-employment tax. Thus, like the old Form W-4, the redesigned Form W-4 does not compute self-employment tax. If you would like to use Form W-4 to make an adjustment to your withholding to account for self-employment income that you will receive from another source, use the withholding calculator at or refer to IRS Publication 505.


  1. What if I don’t want to reveal my non-job income, such as income from earnings on investments or retirement income, to my employer (line 4a)?

You are not required to have tax on non-wage income withheld from your paycheck. Instead, you can pay estimated tax on this income using Form 1040-ES, Estimated Tax for Individuals. However, if you want to use Form W-4 to have tax for this income withheld from your paycheck, you have two options. You can report the income on line 4a. If you don’t want to report this income directly on line 4a, you can use the withholding calculator at The calculator will help you calculate the additional amount of tax that should be withheld from your paycheck. You will then enter that amount on line 4c, without reporting the income to your employer. If you expect to have dividend or capital gain income, your withholding will be more accurate if you have the calculator compute the withholding adjustment rather than reporting this income on line 4a.

  1. I have a more complex tax situation. Is there a computer program I can use to help me complete Form W-4?

Yes. To provide maximum accuracy, you are encouraged to use the withholding calculator available at Updates and improvements to the calculator are underway that will be compatible with the redesigned Form W-4 in 2020. You may wish to use the withholding calculator if you 1) expect to work only part of the year, 2) have dividend or capital gain income or are subject to additional taxes, such as the net investment income tax, 3) have self-employment income, 4) prefer the most accurate withholding for multiple job situations, or 5) prefer to limit information provided in Steps 2–4 but do not want to sacrifice accuracy.

Employer FAQs

  1. Does this mean our software will need two systems—one for forms submitted before 2020 and another for forms submitted after 2019?

Not necessarily. The same set of withholding tables will be used for both sets of forms. You can apply these tables separately to systems for new and old forms. Or, rather than having two separate systems, you may prefer to use a single system based on the redesigned form. To do this, you could enter zero or leave blank information for old forms for the data fields that capture the information on the redesigned form but was not provided to you under the old design. Additional guidance will be provided on the payroll calculations needed based on the data fields on the new and old forms.

  1. How do I treat employees hired after 2019 who do not submit a Form W-4?

New employees who fail to submit a Form W-4 after 2019 will be treated as a single filer with no other adjustments. This means that a single filer’s standard deduction with no other entries will be taken into account in determining withholding. The IRS and the Treasury Department anticipate issuing guidance consistent with this approach.

  1. Are employees hired after 2019 required to use the redesigned form?

Yes. Beginning in 2020, all new employees must use the redesigned form. Similarly, any employees hired prior to 2020 who wish to adjust their withholding must use the redesigned form.

  1. What about employees hired prior to 2020 who want to adjust withholding from their pay dated January 1, 2020, or later?

Employees must use the redesigned form.

  1. May I ask all of my employees hired before 2020 to submit new Forms W-4 using the redesigned version of the form?

Yes. You may ask, but as part of the request you should explain that (1) they are not required to submit new Form W-4 and (2) if they do not submit a new Form W-4, withholding will continue based on a valid form previously submitted. For those employees who furnished forms before 2020 and who do not furnish a new one after 2019, you must continue to withhold based on the forms previously submitted. You are not permitted to treat employees as failing to furnish Forms W-4 if they don’t furnish a new Form W-4. Note that special rules apply to Forms W-4 claiming exemption from withholding.

  1. Will there still be an adjustment for nonresident aliens?

Yes. The IRS will provide instructions in the 2020 Publication 15-T Federal Income Tax Withholding Methods on the additional amounts that should be added to wages to determine withholding for nonresident aliens. Additionally, nonresident alien employees should continue to follow the special instructions in Notice 1392 when completing their Forms W-4.