Author Archives: c07890220

Balance Due Notice Mailings: Due Dates Extended to Help Taxpayers

Due to the COVID-19 pandemic, the IRS was unable to mail some previously printed balance due notices as a result of office closures. As IRS operations continue to reopen, these notices will be delivered to taxpayers in the next few weeks. Given the time it would take to reprogram IRS systems, and generate updated notices, some of the notices taxpayers will receive have due dates that have already passed. However, each notice will include an insert confirming that the due dates printed on the notices have been extended.

 Extended Payment Due Dates: The payment due dates printed on the notices have been extended, as described in the insert. The new payment due date will be either July 10, 2020, or July 15, 2020, depending upon the type of tax return and original due date. Taxpayers should be sure to read the insert included with the notice that explains the delay and provides the correct payment due dates.

 Taxpayers who have questions about their balance due should visit the website listed or call the number provided on their notice; however, keep in mind that phone lines remain extremely busy as the IRS resumes operations.

IMPORTANT! YOU HAVE MORE TIME TO MAKE YOUR PAYMENT

Due to the challenges of the ongoing Coronavirus Disease 2019 (COVID-19) Pandemic, we were unable to mail the notice included in this envelope on the date listed on the notice.  In addition, the date on the notice by which you are asked to pay may have already passed by the time you receive it.  Do not be concerned about these dates. 

 You have additional time to pay the amounts shown on your notice to avoid incurring additional liabilities.

A.    If the amount due on your notice is for an income, gift, estate, or Form 990-PF or Form 4720 excise tax return that was due on or after April 1, 2020 and before July 15, 2020, (such as a Form 1040 normally due April 15, 2020), the Treasury Department and the IRS postponed the deadline for making your payment to July 15, 2020. If the amount due (as provided on your notice) is not paid by July 15, 2020, penalty and interest will begin to accrue after July 15, 2020. To avoid penalty and interest, pay the amount due by July 15, 2020.

B.     If the amount due on your notice is for a return that was due before April 1, 2020, or an employment or excise tax return due on or after April 1, 2020, you will not be charged additional penalty or interest if you pay the amount due (provided on your notice) by July 10, 2020.

If you have questions about the enclosed notice, visit the website listed there or contact us at the number listed there.

For more information, visit www.irs.gov/coronavirus or contact us at the number listed in the enclosed notice.

Here is a listing of each notice and its title involved with the mailing

CP101 Math Error, Balance Due of $5 or More on Form 940
CP102 Math Error, Balance Due of $5 or More on Forms 941, 941SS, 943, 944, 944SS, 945
CP103 Math Error, Balance Due – Form CT-1
CP104 Math Error, Balance Due of $5 or More – Form 720
CP105 Math Error, Balance Due of $5 or More – Forms 11C, 2290, 706, 709, 730
CP107 Math Error, Balance Due of $5 or More – Form 1042
CP11 Math Error on Return – Balance Due
CP126 Math Error, Balance Due or Overpayment Less Than $1 on Forms 990PF, 4720, 5227
CP132 Math Error, Balance Due on Forms 990C, 990T,1041, 1120, 8804
CP134B Federal Tax Deposit(s) (FTD) Discrepancy – Balance Due
CP14 Balance Due, No Math Error
CP141L We Charged a Penalty Under Internal Revenue Code Section 6652(c) – Form Filed Late
CP15 Civil Penalty Notice
CP15B Civil Penalty Notice for Trust Fund Recovery Penalty
CP15H Shared Responsibility Payment Due
CP161 No Math Error, Balance Due (Except Form 1065)
CP162 Untimely Filing Penalty – Partnership
CP165 Penalty Assessed for Dishonored Check
CP210 Examination (Audit) or Data Processing Tax Adjustment – Balance Due, Overpayment, or Even Balance
CP215 Civil Penalty – 500 and 600 Series
CP21A Data Processing Adjustment Notice, Balance Due of
CP220 Examination (Audit) or Data Processing Tax Adjustment – Balance Due, Overpayment, or Even Balance
CP220J Employer Shared Responsibility Payment (ESRP) 4980H Adjustment – Balance Due, Even Balance or Overpayment Notice
CP22A Data Processing Adjustment Notice, Balance Due of
CP23 Estimated Tax Credits Discrepancy – We Changed Your Return to Match Your Credits or Payments Posted to Your Account – Balance Due
CP230 Combined Annual Wage Reporting – CAWR/DP Tax Adjustment Amended Return Filed
CP233J 4980H Adjustment bal due, even bal or overpayment Notice (ESRP)
CP23T Estimated Tax Discrepancy, Balance Due of $5 or More
CP240 Combined Annual Wage Reporting – CAWR/DP Discrepancy Tax Adjustment
CP260 An Erroneous Payment Previously Applied to Your Account Has Been Reversed – Balance Due
CP283 Penalty Charged on Your Form 5500 – Late or Incomplete Form
CP47A Tax Assessed- Notification of the Requested Credit Elect/Refund Being Applied to Section 965 Tax Liability
CP47B Tax Assessed- Notification of a Credit Elect/Refund Being Applied to Section 965 Tax Liability
CP47C Tax Assessed- Including Section 965 Tax Liability
CP51A We’ve Calculated Your Income Tax For You – Balance Due
CP60 We Removed a payment Erroneously Applied to Your Account. – Balance Due
CP711 Spanish Math Error – Balance Due – Error en la Planilla – Saldo Adeudado
CP714 Spanish Balance Due – No Math Error – Planilla Radicada – Saldo Adeudado
CP721A Data Processing Adjustment Notice, Balance Due (Spanish) – Cambios a su Planilla – Saldo Adeudado
CP722A Spanish Data Processing Adjustment Notice, Balance Due of $5 or more – Cambios a su Planilla – Saldo Adeudado
CP802 Spanish BMF Math Error, Balance Due of $5 or More on Forms 941PR, 943PR – Hemos Hecho Cambios a su Planilla Porque Creemos que hay un Error de Cálculo
CP834B Federal Tax Deposit(s) (FTD) Discrepancy – Balance Due (Spanish)
CP865 Spanish Penalty for Dishonored Check on Forms 94XPR FTD
CP94 Criminal Restitution Final Demand Notice

 

 

First Thursday IMRS Call

Dear Tax Pro,

You are invited to join us on May 7 for our “First Thursday IMRS Call”. The purpose of the call is to share information with tax professionals, and to hear your questions and concerns.

9:00 to 10:00 a.m. Central time.  8:00 to 9:00 a.m. Mountain time. If you’re not able to attend, feel free to send someone else from your organization.

 We’ll continue to share what we know about Coronavirus Tax Relief, EIP, and other provisions in the CARES Act. BRING YOUR QUESTIONS that you can’t find answers to on IRS.govFeel free to submit questions in advance to help us prepare.

Join the web portion of the meeting FIRST. Click this link to join:

https://meetings-external.irs.gov/orion/joinmeeting.do?MTID=9266cf7a6d13940c8dbfe02ccd60c497

 Join the audio portion after you are on the web.  There are 3 audio options: 

  1. BEST METHOD: Connect by phone. Select “Call Me”.  Then enter your phone number. Your phone will ring LIKE MAGIC! If you are calling in, please use this method! This helps us AND you during the meeting.
  1. If you have speakers and a microphone on your computer (or a headset), and a good internet connection, you may select “Call Using Computer”
  1. Last choice (only if you cannot get 1 or 2 to work): Call the number below and enter the access code and then be sure to your attendee number.

855-865-6792 (IRS WebEx External)

304-579-6720 (Alternate Number)

Access Code 994 323 498

Not sure if your computer has the minimum system requirements? Join a test meeting or https://www.webex.com/test-meeting.html

If you experience problems accessing WebEx, it might be because of the browser you are using. Try another browser, such as Chrome or Internet Explorer. (Note: Microsoft Edge is not supported.)

Thank you for your interest in this meeting. If you have questions please let me know.

Alan Gregerson

Internal Revenue Service

Senior Stakeholder Liaison

Bloomington, MN 55425

Alan.J.Gregerson@irs.gov

Important Messages from the IRS on the Economic Stimulus Payments

These are important messages on the Economic Stimulus Payments, and especially number 5 and 6 issue attached above.  If they want to get the additional $500 payment if they have dependents, they need to act by April 22, 2020.  If you are able to share that number 5 and 6 issue above let Alan Gregerson know (contact information below).

Subject:

  1. Economic Income Payment: What you Need to Know link;
  2. .Get My Payment link;
  3. SSA/SSI payments
  4. Veteran payments
  5. SSA, RRB recipients with eligible children need to act by Wednesday to quickly add money to their automatic Economic Impact Payment; IRS asks for help in the “Plus $500 Push” which IR is 2020-76 which is attached above.
  6. Economic Stimulus Payments when receiving Social Security and Railroad Retirement Benefits and dependents.  This is the most important message of the group of links.

Alan Gregerson

Senior Stakeholder Liaison

Bloomington, MN 55425

Alan.J.Gregerson@irs.gov

 

IRS NEWS FOR EVERYONE – April 2020

►UPCOMING WEBINARS

We expect to have a webinar in April, but the date is not set yet. Please check Webinars for Tax Practitioners or Webinars for Small Businesses for updates.

►CORONAVIRUS TAX RELIEF

Coronavirus Tax Relief

  • This is the main page on IRS.gov with information about Coronavirus Tax Relief.
  • Check this page frequently for new information.
  • It has News Releases, Statements, Frequently Asked Questions, Guidance, Tax Help, Social Media and Other Resources.

FAQs for Filing and Payment Deadlines

  • What you’ll find here:
  • Filing and payment extended to 7-15-2020 for many types of tax returns.
  • Which types of tax returns do NOT get an extended deadline?
  • Information on Individual Retirement Accounts (IRAs), Health Savings Accounts (HSAs) and Archer Medical Savings Accounts (MSAs)

TWO FAQs to highlight

  • Estimated Tax Payments

Q16. The Notice postpones the deadline for first quarter 2020 estimated income tax payments due on April 15, 2020. What about second quarter estimated tax payments due on June 15? Have they been postponed as well?

A16. No, second quarter 2020 estimated income tax payments are still due on June 15, 2020. First quarter 2020 estimated income tax payments are postponed from April 15 to July 15, 2020.

  • File 2016 Form 1040 by 4-15-2020

Q22. I want to file a claim for a refund for 2016, which must be filed by April 15, 2020 to be timely. Does this relief give me more time to claim my 2016 refund?

A22. No, the relief provided for filing Federal income tax returns applies only to Federal income tax returns for the 2019 taxable year. The Notice does not extend relief to any filings or payments for taxable year 2016.

Taxpayer Assistance Centers Temporarily Closed

  • In response to the national emergency, the IRS has temporarily closed all Taxpayer Assistance Centers and discontinued face-to-face service throughout the country until further notice.
  • The IRS is continuing to process tax returns, issue refunds and help taxpayers to the greatest extent possible. Taxpayers are highly encouraged to go to IRS.gov for help and online tools.

What if I was planning to drop off a 2016 tax return at a TAC?

People First Initiative; IRS temporarily adjusts, suspends key compliance program

  • This page has information on existing and new installment agreements, Offers in Compromise, liens and levies. More details will be forthcoming.

IRS Mission-critical functions continue

  • As the COVID-19 (coronavirus) outbreak continues, the IRS is taking multiple steps to protect our employees, America’s taxpayers and our partners. Although we are curtailing some operations during this period, the IRS is continuing with mission-critical functions to support the nation, and that includes accepting tax returns and sending refunds.
  • Refund filers: File as soon you can
  • Don’t forget state tax returns; different deadlines may apply
  • Taxpayer correspondence. While able to receive mail, the IRS will be responding to paper correspondence only to a very limited degree during this period. Taxpayers who mail correspondence to the IRS during this period should expect to wait longer than usual for a response. Even after normal operations resume as it will take the IRS time to work through any correspondence backlog.
  • See page above for “Compliance activity” and “Statute of limitations issues.”
  • Taxpayer Advocate Service. Currently, TAS remains open to receive phone calls at the local phone numbers but has suspended walk-in services in their offices and their toll-free centralized number is unavailable until further notice. Please visit taxpayeradvocate.irs.gov to locate your local office phone number.

CARES ACT – ECONOMIC IMPACT PAYMENTS

SCAM ALERTS

  • If you get a call, text, or email saying they need information in order to send you the economic impact payment, it’s a scam!
  • The BBB has excellent info on SCAMS related to Coronavirus. Please check it out!
  • The SBA has programs to help small business owners. Scammers are taking advantage of this.
  • A business owner received a scam email after applying for an SBA Disaster Loan with a false loan number and asking for IRS tax info to complete the loan application.
  • Another small business owner received an email stating she needed to provide her credit card number and $97 to complete the loan application.
  • Social Security Scam related to Coronavirus
  • The Social Security Office of the Inspector General has received reports that Social Security beneficiaries have received letters stating their payments will be suspended or discontinued unless they call a phone number referenced in the letter. Scammers may then mislead beneficiaries into providing personal information or payment via retail gift cards, wire transfers, internet currency, or by mailing cash, to maintain regular benefit payments during this period of COVID-19 office closures. Social Security will not suspend or discontinue benefits because their offices are closed.

►EMPLOYEE RETENTION CREDIT

IRS: Employee Retention Credit available for many businesses financially impacted by COVID-19

  • The Treasury Department and the IRS launched the Employee Retention Credit, designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.

FAQs: Employee Retention Credit under the CARES Act

  • The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on March 27, 2020, is designed to encourage Eligible Employers to keep employees on their payroll, despite experiencing economic hardship related to COVID-19, with an employee retention tax credit (Employee Retention Credit).

FAMILIES FIRST CORONAVIRUS RESPONSE ACT

Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave

  • The Families First Coronavirus Relief Act (FFCRA) requires certain employers to pay sick or family leave wages to employees who are unable to work or telework due to certain circumstances related to COVID-19. Employers are entitled to a refundable tax credit for the required leave paid, up to specified limits. [See FAQs]. The same wages cannot be counted for both credits.
  • Two sets of FAQs:
  1. FAQs from the U.S. Department of Labor, Wage and Hour Division:

DOL Families First Coronavirus Response Act: Questions and Answers.

  1. FAQs from the IRS:

COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs

EMPLOYERS

See FAQ #6 on this page:

  • Does the relief provided in the Notice apply to payroll or excise taxes?
  • No, under the Notice, normal filing, payment, and deposit due dates continue to apply to both payroll and excise taxes. (See exception in Notice 2020-22.)

Relief from Penalty for Failure to Deposit Employment Taxes

  • Notice 2020-22 provides a waiver of additions to tax for failure to make a deposit of taxes for employers required to pay qualified sick leave wages and qualified family leave wages mandated by the Families First Coronavirus Response Act (Families First Act) and qualified health plan expenses allocable to these wages.
  • This notice also provides a waiver of additions to tax for failure to make a deposit of taxes for certain employers subject to a full or partial closure order due to the coronavirus disease 2019 (COVID-19) or experiencing a statutorily specified decline in business under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

►ASSISTANCE FOR BUSINESSES

The SBA can help!

Two SBA emergency capital programs are available today and more will be coming soon:

  1. Low interest, long term Economic Injury Disaster Loans for up to $2 million: The first payment is deferred for 12 months. The application has been simplified and can be completed 100% online through our improved web portal at sba.gov/disaster.
  1. Economic Injury Disaster Loan Advance for up to $10,000: The form to apply is part of the economic injury disaster loan application. If approved, these funds can be used for payroll and other operating expenses and will be forgiven.

Soon the SBA and Treasury Department will launch the new Paycheck Protection Program to help keep employees on payroll and small businesses operating. Additional information about this program will be shared in the coming days.

To get the most up-to-date information as things develop, visit www.sba.gov/disaster and subscribe to our e-newsletter via www.sba.gov/updates.

Also, follow us on Twitter at https://twitter.com/sbagov

For detailed information on SBA programs for the coronavirus, please visit www.sba.gov/coronavirus

Find your local SBA office here.

SMALL BUSINESS DEVELOPMENT CENTERS can help!

  • SBDC Business Advisors are available to help you sort through everything and make informed choices for your business. We cover the entire nation and our business consulting services are free and confidential. With nearly 1,000 centers across the nation, there is an SBDC near you. Find your local SBDC here.

SCORE can help!

  • For over 50 years, SCORE has served as America’s premier source of free business mentoring and education.
  • As a resource partner of the U.S. Small Business Administration (SBA), SCORE has helped more than 11 million entrepreneurs through mentoring, workshops and educational resources since 1964.
  • Find your local SCORE chapter here.

Also check with your local Chamber of Commerce or local business development organization. They are eager to help you!

►TAX PROFESSIONALS

Practitioner Priority Service

  • The Practitioner Priority Service line is closed. Expect delays for Centralized Authorization File (CAF) number authorizations. Please look for help on IRS.gov. Normal operations will resume as soon as possible.

Incorrect routing or account number for direct deposit of refund

  • The IRS assumes no responsibility for tax preparer or taxpayer error.
  • Depending on the type of error, the IRS will try to do a direct deposit. If it does not go through, the IRS will issue a paper check. Refunds will be delayed.
  • It says you can call 800-829-1040, but those lines aren’t fully staffed right now. Besides, calling doesn’t work when the return was e-filed. Calling only works when the return is mailed and hasn’t posted to our system yet.

”REGULAR” IDENTITY THEFT

  • The IRS continues to process tax returns. If we think the return might have come from a fraudster, we will send your client either Letter 4883C or Letter 5071C. Please reply to this letter!

►e-NEWS SUBSCRIPTIONS and SOCIAL MEDIA

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.

HOW TO SHARE IRS INFO ON SOCIAL MEDIA

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

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

First Thursday Minutes  – April 2, 2020

First Thursday Minutes  – April 2, 2020

Webinars

We expect to have webinars in April. Please check Webinars for Tax Practitioners every few days.

Discussion items

Coronavirus Tax Relief

  • This is the main page on IRS.gov with information about Coronavirus Tax Relief.
  • Check this page frequently for new information.
  • It has News Releases, Statements, Frequently Asked Questions, Guidance, Tax Help, Social Media and Other Resources.

FAQs for Filing and Payment Deadlines

What you’ll find here:

  • Filing and payment extended to 7-15-2020 for many types of tax returns.
  • Which types of tax returns do NOT get an extended deadline?
  • Information on Individual Retirement Accounts (IRAs), Health Savings Accounts (HSAs) and Archer Medical Savings Accounts (MSAs)

People First Initiative; IRS temporarily adjusts, suspends key compliance program

  • This page has information on existing and new installment agreements, Offers in Compromise, liens and levies.
  • Existing Installment Agreements payments between April 1 and July 15 are suspended.
  • Field Collection Activities of liens and levies are suspended from 4/1 to 7/15.
  • Earned Income Tax Credit and Wage Review have from 4/1 to 7/15 to respond to IRS.
  • IRS information sent to State Department on passports revocation will be suspended between April 1 and July 15.
  • PPS has closed at this time and will reopen when it can.

IRS Mission-critical functions continue

What you’ll find here:

  • Haven’t filed yet? If you normally file a tax return, speed up your tax return, economic impact payment: Use e-file with direct deposit. Updated April 1, 2020
  • The IRS strongly urges those who haven’t filed yet and would normally file to use e-file with direct deposit. Most people can file electronically at no cost with IRS Free File. This will speed up the delivery of your payment directly to your bank account. Due to limited IRS staff levels in IRS processing centers as a result of COVID-19, the economic impact payment for those who file paper tax returns may be delayed.
  • As a reminder, gov/coronavirus will soon provide information instructing people who typically do not file a tax return like low-income taxpayers, some veterans and individuals with disabilities who are otherwise not required to file a tax return on next steps to get a payment. But no action is needed at this time for these groups.

Digital Signatures

IRS to Accept Email, Digital Signatures

To help taxpayers and the tax professional community during this COVID-19 period, effective immediately, the IRS will begin temporarily accepting images of signatures (scanned or photographed) and digital signatures on documents related to the determination or collection of tax liability.

In addition, the IRS is allowing IRS employees to accept documents via email and to transmit documents to taxpayers using SecureZip or other established secured messaging systems.

“The IRS is continuing to monitor methods to lessen the burden on taxpayers and professionals during this period,” said Sunita Lough, IRS Deputy Commissioner for Services and Enforcement. “We greatly appreciate the patience, support and valuable comments we continue to receive from the tax professional community as we move forward.”

This effort, described in an internal IRS memo [not included here], is in response to the Coronavirus situation maximizing the ability of the IRS to execute on mission-critical duties where employees, taxpayers and their representatives are working from alternate, remote locations outside their office.

The taxpayer or representative must include a statement, either in the form of an attached cover letter or within the body of the email, saying to the effect: “The attached [name of document] includes [name of taxpayer]’s valid signature and the taxpayer intends to transmit the attached document to the IRS.” The choice to transmit documents electronically is solely that of the taxpayer.

The limited categories of documents included in the scope of this effort include extensions of statute of limitations on assessment or collection, waivers of statutory notices of deficiency and consents to assessment, agreements to specific tax matters or tax liabilities (closing agreements), and any other statement or form needing the signature of a taxpayer or representative traditionally collected by IRS personnel outside of standard filing procedures (for example, a case specific Power of Attorney).

The IRS is continuing to review standards for e-signing other documents and invites suggestions and comments as it pursues additional efforts designed to lessen the burden on taxpayers and professionals during this period.

Employee Retention Credit

IRS: Employee Retention Credit available for many businesses financially impacted by COVID-19

  • The Treasury Department and the IRS launched the Employee Retention Credit, designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.

FAQs: Employee Retention Credit under the CARES Act

  • The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on March 27, 2020, is designed to encourage Eligible Employers to keep employees on their payroll, despite experiencing economic hardship related to COVID-19, with an employee retention tax credit (Employee Retention Credit).

Families First Coronavirus Response Act (FFCRA)

Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave

  • The Families First Coronavirus Relief Act (FFCRA) requires certain employers to pay sick or family leave wages to employees who are unable to work or telework due to certain circumstances related to COVID-19. Employers are entitled to a refundable tax credit for the required leave paid, up to specified limits. [See FAQs]. The same wages cannot be counted for both credits.
  • Two sets of FAQs:
  1. FAQs from the U.S. Department of Labor, Wage and Hour Division:

DOL Families First Coronavirus Response Act: Questions and Answers.

  1. FAQs from the IRS:

COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs

Employers

See FAQ #6 on this page:

  • Does the relief provided in the Notice apply to payroll or excise taxes?
  • No, under the Notice, normal filing, payment, and deposit due dates continue to apply to both payroll and excise taxes. (See exception in Notice 2020-22.)

Taxpayer Assistance Centers Closed

  • In response to the national emergency, the IRS has temporarily closed all Taxpayer Assistance Centers and discontinued face-to-face service throughout the country until further notice.
  • The IRS is continuing to process tax returns, issue refunds and help taxpayers to the greatest extent possible.

Economic impact payments

  • The term we’re using is Economic Impact Payment. It’s also been called the stimulus payment. It’s called the Recovery Rebate in the legislation. It’s all the same thing.
  • The IRS and Treasury are working on FAQs. They should be out next week. We are using all the questions you have sent in to determine what to address in the FAQs.

State Departments of Revenue

This page provide the homepage for EVERY State Tax Agency. https://www.taxadmin.org/state-tax-agencies

Minnesota – Mark Krause

MN website:

https://www.revenue.state.mn.us/minnesota-department-revenue

https://www.revenue.state.mn.us/our-response-covid-19

https://www.revenue.state.mn.us/tax-professionals

  • Individual tax filing and payment due date is July 15th for tax year 2019. Penalties and interest are waived. This includes any estimated tax payments for tax year 2019.
  • The extension does not apply to estimated tax payments for tax year 2020. The due dates remain the same.
  • There was no change to business tax return due dates although these taxpayers can get an automatic extension.
  • If you have questions send to taxpro.outreach@state.mn.us or call 651-556-6606. If you have questions, I’m sure others have the same question and we are working on an FAQ for our website.

Iowa – Kurt Konek

IA website:

https://tax.iowa.gov/

https://tax.iowa.gov/COVID-19

https://tax.iowa.gov/tax-professionals

Questions? Contact Kurt Konek, Policy Director, Individual Income Tax, kurt.konek@iowa.gov.

North Dakota – Liliya Montgomery

ND website

https://www.nd.gov/tax/

https://www.nd.gov/tax/covid-19-tax-guidance/

https://www.nd.gov/tax/user/tax-professionals

Questions? Contact Liliya Montgomery, lmontgomery@nd.gov

Missouri – Laura Wallendorf

MO website

https://dor.mo.gov/

https://dor.mo.gov/news/newsitem/uuid/ad40f685-6b65-4df0-b376-c473bd50261e

Here are the highlights:

  • Individual and corporate income tax filing deadline extended to July 15, 2020.
  • Income tax payment deadlines for individual and corporate income returns with a due date of April 15, 2020 are extended until July 15, 2020.
    • This payment relief applies to all individual income tax returns, income tax returns filed by C Corporations, and income tax returns filed by trusts or estates. The is an automatic relief, no action needs to be taken by filers.
    • This relief also applies to individuals and corporations with estimated tax payments for tax year 2020 due on April 15, 2020.
    • Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. Individuals and corporations that file their return or request an extension of time to file by July 15, 2020 will automatically avoid interest and penalties on the tax paid by July 15.
  • Valid MO driver licenses (Class A, B, C, E, F and M), nondriver licenses and noncommercial instruction permits with original expiration dates of March 1, 2020 through April 30, 2020, have been granted an automatic 60-day extension.
    • The extension does not apply to document holders whose lawful status end date is the same as the expiration date.
    • The approved extension does not waive the mandatory retesting requirement for persons who have allowed their license to expire for more than 184 days.
    • Individuals who were provided notice to complete additional testing as part of a medical review program requirement may be granted an additional 60 days to comply with such requirements.
  • Vehicle owners with license plates expiring in the months of March and April have been granted an automatic 2 month extension and will be able to continue operating their vehicles on MO roadways without penalty.
  • The time frame in which a vehicle safety and emission inspection is valid for the March and April license plate expirations will also be extended an additional 60 days.
  • For waiver of late registration penalty and extension of the safety and emission inspection time frame, the vehicle owner must visit a license office.
  • Applicants for title will not be assessed a late title penalty when visiting a license office. This waiver continues through April 30, 2020

To get answers 24/7, go to the Department’s website and get help from DORA, the Department’s virtual assistant chatbot. DORA is programmed to respond to common tax, motor vehicle and driver license questions. To chat with DORA, click on DOR CHAT on the lower right hand corner of the home page.

Nebraska – Derek Forgey for Fran Krejci

NE website:

https://revenue.nebraska.gov/

https://governor.nebraska.gov/press/gov-ricketts-announces-extended-tax-deadline-overviews-state%E2%80%99s-continuity-plans

The March 23, 2020 media release from Governor Ricketts provided the information shared in the meeting today. We are working on frequently asked questions (FAQs) to post on our website and the FAQs should be available early next week on the Nebraska Department of Revenue website. Questions may be sent to me at fran.krejci@nebraska.gov. Fran Krejci, Revenue Tax Specialist Sr., Policy.

Kansas

KS website:

https://www.ksrevenue.org/

Information provided after the meeting:

The Department of Revenue has issued the following new tax notices:

Notice 20-02 Waiver of Penalty and Interest for Estimated Tax Payments for Individual and Corporate Income Taxes and Privilege Tax

Notice 20-01 Changes to Filing and Payment Due Dates for Homestead or Property Tax Relief Refund Claims and Individual, Fiduciary and Corporate Income Tax, and Privilege Tax

Illinois – Vicki Clark

IL website:

https://www2.illinois.gov/rev/Pages/default.aspx

https://www2.illinois.gov/rev/Pages/Taxpayer-Resources-during-COVID-19-(Coronavirus)-Outbreak.aspx

https://www2.illinois.gov/rev/taxprofessionals/Pages/default.aspx

Illinois Department of Illinois has extended the due date from April 15 to July 15 for individuals, trusts and corporations. Estimates are still due on 4/15 and 6/15.

If tax professionals have questions they can access the department’s website tax.illinois.gov and if they still have questions under contact us there is a list of email addresses based on tax type.

Questions for Illinois Department of Revenue:

  • How is Illinois going to treat extension payments – as paid on 4/15 or 7/15?
  • For IL, I heard that additional guidance was going to be posted regarding the estimates and the application of the July extension payment to estimated payments. Is that the case? Also that additional guidance regarding Q1 and Q2 calculation?
  • Has the IL Replacement Tax Payment also been extended under the automatic relief?
  • Similar question here, is the IL partnership replacement tax also extended to 7/15?
  • IL-1041 Replacement Tax also extended? Or just the income tax?

Wisconsin – Nate Weber

WI website:

https://www.revenue.wi.gov/Pages/home.aspx

https://www.revenue.wi.gov/Pages/News/2020/wi-covid-19.aspx

Your issues and questions

Stakeholder Liaison Local Contacts

Stakeholder Liaison establishes relationships with practitioner and industry organizations representing small business and self-employed taxpayers. We provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. We also elevate issues that affect tax administration. To establish a relationship with us or report an issue, use this list to find a contact in your state.

Highlighting this FAQ about ESTIMATED TAX PENALTY:

Q24. I failed to make the required installments of estimated tax in the required amounts during 2019 for my 2019 taxable year. Does this relief apply to an estimated tax penalty for 2019?

A24. No, the relief does not change the estimated tax requirements or estimated tax penalty for 2019. Relief from the penalty may be available under the normal rules. See Form 2210 (for individuals) or Form 2220 (for corporations) and the instructions for either form for details.

Here are the questions you raised today. These have been added to IMRS. The IRS is working on getting answers.

Do people with a SEP-IRA or SIMPLE-IRA have more time to contribute? FAQ 17 is not clear on this.

Husband and wife divorce in 2019. Neither taxpayer has filed a tax return for 2019 – so the IRS does not know about the divorce. Husband kept the bank account that was used for the 2018 direct deposit. Based on the facts – (assuming they were under the phase-out threshold in 2018) it would appear that the IRS will deposit $2,400 into the ex-husband’s bank account. What does the ex-wife need to do in order to receive her portion ($1,200) of the stimulus payment?

Divorced parents claim a child every-other-year as a dependent on their respective tax returns. Mom filed her 2019 tax return and claimed her daughter. Dad has not filed his 2019 tax return, but he did file his 2018 tax return – claiming his daughter for that tax year. Will the IRS pay the $500 to each parent?

How about college grads from spring 19, claimed on 2019 parent’s return, but now emancipated. Seems only fair that they will get it, but cannot imagine how the IRS would figure this out.

Would a recently widowed taxpayer who filed married joint in 2018 receive the $2400 or only the $1200?

If the dependent on the parents’ tax return is over 18 but a full-time student, is he/she going to get $1,200 or $500?

Questions regarding the payments: What about the children over the age of 17 or the college students that are being claimed as dependent on the parent’s returns but filed a return to get their federal withholding back?

Is it correct that all parents will receive the $500 per child regardless if the parents are over the limit for receiving a payment for themselves?

For the economic payment. SSA-1099 and RRB-1099 recipients now do not need to file. Is there any news for SSI, SSDI, non-taxable veterans pay recipients, or taxpayers who get other kinds of “welfare” benefits?

Will IRS have a way to know if a person died and not send refund out to them? i.e. person died in 2019 but no 2019 return filed yet. Or will a person who died in 2018 or 2019 get the economic impact payment anyway?

CUT OFF DATE TO FILE 2019 and have it count for EIP: Can we still file 2019 returns and have those be used for the payment instead of 2018?

Will the economic impact payments be taxable on the 2020 tax return?

How will the economic impact payments be reconciled on the 2020 return?

For stimulus payments, what happens if bank account on IRS records is no longer valid, i.e., money is deposited in wrong account?

FAQ 10 states that informational forms do not receive the extension to July 15. How does this impact Form 3520? Form 3520 is an international form related to foreign trusts and gifts or inheritances from foreign persons. It’s typically extended with Form 1040 (doesn’t have its own extension) but is a separate filing. It must be mailed in separate from the 1040. Late filing penalties are $10,000.

Do you know if elections are also extended? For example, if a client had a 1031 fall through do you know if they can get an extension.

Is the FBAR delayed to 7/15 or 10/15?

Questions regarding FAMILIES FIRST CORONAVIRUS RESPONSE ACT And EMPLOYEE RETENTION CREDIT. We have requested answers.

So, if they are out due to school or day care being shut down, are we required to pay the full 12 weeks as mandatory sick pay at the 2/3 pay?

Is it correct that you can only use the credit if you do NOT utilize the SBA loan? (I was told on another non-IRS webinar that you can only apply for the tax credit or the business loan, not both.)

The first two weeks is under the sick pay provisions, but there are an additional 10 weeks that may need to be provided under the Emergency Family and Medical Leave Expansion Act provisions (EFMLEA).

Are S-Corps with only one employee being the owner eligible for the Employee Retention Credit? Also would a Partnership that has one owner working (no one else on payroll) but the partner is receiving Guaranteed payments can they utilize the Employee Retention Credit?

Questions we have answers to now:

  1. How often during the day is the IRS Coronavirus Tax Relief updated?

A: It’s updated as needed, once a day is common.

  1. To confirm, if a taxpayer needs additional time to file and pay beyond July 15, 2020 and files Form 4868, the extension is to 10/15/2020 to file and pay? A: See FAQ 12.
  1. If you set up a direct debit for a taxpayer with an installment agreement, how can they defer the payment during the relief period? A: See Installment Agreement Direct Debit Frequently Asked Questions

Next Call

The next call will be on May 7, 2020. 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!

Taxpayer First Act Planning Placemat

These ideas came from Enrolled Agents who are members of the Minnesota Society of Enrolled Agents.

These ideas were discussed during a face-to-face meeting on January 2, 2020.

COMPREHENSIVE TAXPAYER EXPERIENCE STRATEGY

How do we think more holistically about our “customers” and their entire experience with the IRS (e.g. services, enforcement, other interactions)?

What are some key barriers to receiving service that taxpayers and/or taxpayers encounter? Please provide possible solutions / improvements for these problems.

What are some ways the IRS can improve the communications channels it uses to connect with tax practitioners / tax professionals?

The theme of the following suggestions is “how to make tax season more bearable for tax professionals and/or taxpayers who do their own returns”, which should improve accuracy and taxpayer compliance.

Go back to Form 1040 on one sheet, both sides. “Get rid of Schedules 1, 2, and 3. This was a gimmick to convince people that they can file their taxes on a postcard. No one is buying it. The new format is a nightmare and a waste of paper for tax professionals and taxpayers.”

Require all issuers of Form W-2 to use the same format. Tax professional software has the capacity to scan the W-2 and automatically “drop in” the information. Having a consistent format would make that more efficient.

Require the same format for 1099 statements issued by investment firms.  It’s difficult to read and understand the information on a statement that contains Form 1099 INT, DIV, and B, when every company does it differently.

Require partnerships and S-Corporations to have a fiscal year end of September 30. That way the returns would be due on December 15.  The partners and shareholders would have their K-1’s earlier.  Right now, the period between March 15 and April 15 is a nightmare for tax professionals.  Some partnerships and S-Corps actually do file by March 15, and some 1040 filers want or need to file by April 15. There’s too much pressure to get it a lot done between March 15 and April 15.

In many ways, the tax season is now all year round. Tax pros are crazy-busy from January to April. It does not slow down in the summer like it used to. It picks up in September and October because they are doing returns on extension.  In November and December, they are gearing up for next year and getting CE credits. There’s no break.  Maybe there’s no easy solution for this, but one idea is to extend the deadline to May 15 or May 30. This may give them time to do 1040’s that have K-1’s from 1065 or 1120-S.

Add a box or code on Form 1099-R for QCDs.  QCDs are a permanent part of the law now. The population is aging and looking for ways to give money away.  The number of QCDs will increase. Tax pros say that no matter what they do to get good info from the clients about QCDs (so they don’t fail to report them, or report an incorrect dollar amount), and no matter what they do to report QCDs correctly on the return, many of their clients inevitably get a CP-2000. A box or code for QCDs on Form 1099-R does require the IRS to spend time and money. Tax pros feel the time and money on the front end is worth it to all parties because time and money would be saved on the back end.

(End of “how to make tax season more bearable”)

Allow Form 1040-X to be e-filed.

Allow Direct Deposit for refunds on Form 1040-X.

Use PTIN renewal system to require PTIN holders to get e-News for Tax Professionals. The EAs feel that some tax pros take their profession seriously, and work very hard to stay up to date.  Other tax preparers do not.  The EAs realize that “you can lead a horse to water but you can’t make him drink”.  However, requiring tax pros to get e-News might make more of them read it, and learn from it.  PTIN holders should be automatically signed up to get it, and have to unsubscribe to not get it.  This is similar to what many companies do when they automatically sign up new employees to be in the 401(k) program, and they have to opt out to stop contributing. Once tax pros are getting e-News, they might find it’s helpful.

DRAFT FORMS: Allow tax pros to sign up to receive a notification when a draft form is released. This would allow them to comment on draft forms in time.

Attitude of IRS agents. Several EAs commented that IRS agents need to adopt a more cooperative attitude. Some EAs feel like the IRS agents assume the EA is working against the tax system, when really the EA is trying to fix a problem so the taxpayer pays the correct amount of tax, just like the IRS mission statement says.  They want IRS agents to remember that the IRS and the EAs/POAs are on the same team.  They should at least assume that’s the case until the EA/POA shows them otherwise.  “Innocent until proven guilty” in the courts.  For the IRS, it should be “assume the POA knows their stuff and is trying to get the right amount of tax paid” until the POA says something that makes the IRS agent think the POA is up to no good (as a small number are).

Attitude of IRS agents, part 2. Immediately after the comments stated above, another practitioner spoke up. She is from a country where the government can’t be trusted at all, and government agents are not helpful, or they are actually harmful. Sometimes physically harmful!  So this EA said “IRS agents are the kindest people!”  In comparison to where she came from, IRS agents are the best.  (It’s always good to have another perspective!)

Attitude of IRS agents, part 3:  POAs and taxpayers who call IRS agents should have the opportunity to leave feedback at the end of the call.  This is done in private industry, so why not the IRS? The IRS system should allow the caller to decide if they want to leave feedback when the call is done, not before the caller is connected to an IRS agent, because at that time they don’t know how the call is going to go.

Develop a system for practitioners where we can track the progress of an issue that is being worked.  We understand that it takes time to work issues (CP-2000’s, correspondence audits, etc), due to complexity of the tax law and lack of IRS staffing.  It’s the norm for it to take 6 to 12 months to get an issue resolved. Having a system where we can see that the IRS got our letter and is working on it would be helpful. Having an expected date where the IRS will contact the POA would be helpful. We could be certain that it’s being worked on, instead of wondering what’s happening, or being worried that nothing is happening. A system like this would reduce calls to PPS.

Hold collection letters until all returns and payments processed. If a taxpayer has many years of unfiled returns, would be it possible to notify the IRS that “tax years 2014 to 2019 are coming your way”.  The tax pro could tell the IRS what each year shows for refunds or balance due.  The IRS could hold refunds to apply to balance due years.  The IRS should NOT send out any collection letters until all returns are processed, especially when the available refunds (not affected by the Refund Statute Expiration Date) will full pay the balance due years.

IRS should stop collection when there are unresolved issues.  Tax pros say that this has been a problem for years. The right hand doesn’t know what the left hand is doing.  One part of the IRS is working on resolving an issue that will result in no tax due, or less tax due. For example, the IRS is working on an “audit reconsideration”.  But the IRS continues to send out collection notices or levies, even though everyone knows the balance due is going to go away, or be reduced to the point where an installment agreement would work.

Is there any way to get a list of which issues can be resolved by calling PPS or another IRS number, versus issues that require a letter?  Sometimes a tax pro will call PPS and ask for penalty abatement, and it’s done over the phone. Other times, the PPS assistor tells them to write a letter.  Is the policy always the same? Does it depend on the type of penalty or the type of tax?  Is there a dollar criteria?  This example of penalty abatement is just one example.  Tax pros would like a complete list of when they can call to get things done, or when they must write a letter.  They don’t want to spend 10 minutes to 2 hours waiting on hold (depending on what number they are calling) just to be told they have to send in a letter.

Tell callers the estimated wait time on all IRS customer service phone lines.

Give taxpayers and tax pros the opportunity to leave a message and get a call back. 

  • After this meeting, Karen found out that the IRS is doing a pilot project on this. More info:
  • Tax pros have asked the IRS to offer a callback service. When they call in, if their call can’t be answered quickly, they want to have the option of leaving a voice message with their name and phone number, and have the IRS call them back. The IRS has a pilot program to test this. The service is available only on certain lines. Approximately 300,000 callbacks have been offered and 86 percent of those users accepted the callback option. The number of callback offers will continue to increase during FY2020.
  • Karen will keep you posted as we continue this test.

How can the IRS better reach hard to serve taxpayer groups like Limited English Proficient (LEP), Low Income, and International for example?

(no suggestions provided)

IRS RESTRUCTURING

How might we modernize the IRS organizational structure to better serve taxpayers?

(no suggestions provided)

EXTERNAL COMMUNICATIONS

How best can the Taxpayer First Act Office provide ongoing Taxpayer First Act updates from the IRS?

(no suggestions provided

Author:  Karen Brehmer, karen.a.brehmer@irs.gov, 763-347-7375.  Submitted 2/14/2020.

 

 

IRS NEWS FOR TAX PROFESSIONALS

February 2020

►UPCOMING WEBINARS

There will be two webinars in February. Details to follow. Please check Webinars for Tax Practitioners for updates.

►NEWS

Get up-to-date information this tax filing season with redesigned IRS e-News Subscriptions

  • The IRS encourages taxpayers, businesses, tax professionals and others to take advantage of a variety of improved e-mail subscription services.

Refunds

  • The IRS issues most refunds in less than 21 days, although some require additional time. You should only call if it has been:
    • 21 days or more since you e-filed
    • 6 weeks or more since you mailed your return, or when
    • “Where’s My Refund” tells you to contact the IRS

IRS provides relief to financial institutions affected by tax law change raising the age for required minimum distributions

  • The IRS has provided relief to financial institutions that were expected to provide required minimum distribution (RMD) statements to IRA owners by January 31, 2020.
  • Notice 2020-6 clarifies that if an RMD statement is provided for 2020 to an IRA owner who will turn age 70½ in 2020, the IRS will not consider the statement to be incorrect, but only if the financial institution notifies the IRA owner no later than April 15, 2020, that no RMD is due for 2020.

IRS and Treasury issue guidance for students with discharged student loans and their creditors

  • The IRS and Department of the Treasury issued Revenue Procedure 2020-11 that establishes a safe harbor extending relief to additional taxpayers who took out federal or private student loans to finance attendance at a nonprofit or for-profit school.
  • Relief is also extended to any creditor that would otherwise be required to file information returns and furnish payee statements for the discharge of any indebtedness within the scope of this revenue procedure.

Improved Tax Withholding Estimator helps workers target the refund they want; shows how to fill out new 2020 W-4

  • The Tax Withholding Estimator incorporates the changes from the redesigned Form W-4, Employee’s Withholding Certificate, that employees can fill out and give to their employers this year.

National Taxpayer Advocate delivers Annual Report to Congress: focuses on Taxpayer First Act implementation, taxpayer service, and IRS funding

  • Acting National Taxpayer Advocate Bridget Roberts today released her 2019 Annual Report to Congress. Key challenges highlighted in the report include implementation of the Taxpayer First Act, inadequate taxpayer service and limited funding of the agency.
  • Roberts also released the third edition of the National Taxpayer Advocate’s “Purple Book,” which presents 58 legislative recommendations designed to strengthen taxpayer rights and improve tax administration.

IRS issues 2019 annual report; highlights program areas across the agency

  • The IRS released a new annual report highlighting accomplishments across the nation’s tax agency during Fiscal Year 2019.
  • “Internal Revenue Service Progress Update/Fiscal Year 2019 – Putting Taxpayers First” provides an overview of a variety of operations across taxpayer service, compliance and support areas. The 41-page document is built around the agency’s six strategic goals.

Opportunity Zones

►TAX TIPS to share with your clients

Gig economy work can affect a taxpayer’s bottom line

  • Taxpayers who work in the gig economy need to understand how their work affects their taxes. A little pre-planning can help make sure gig economy workers are prepared when it’s time to file their tax return.

EMPLOYERS AND BUSINESS OWNERS

What’s new for QBID/Sec 199A?

FTD’s for a fiscal year taxpayer

  • Q: When using EFTPS to make an FTD for a fiscal year taxpayer, what year do you use? Is it the year when the fiscal year starts, or the year when the fiscal year ends?
  • A: Use the year for when the fiscal year ends.
  • (88) TAX PERIOD – The month and year in which the length of liability ends for a particular return or payment transaction. For Form 2290, Heavy Highway Vehicle Use Tax Return, the tax period is the beginning month of liability. For Form 706, U.S. Estate Tax Return, the tax period is 000000. The tax period cannot be later than the current year/month plus one year.

►THE BEST OF IRS.GOV

IDENTITY THEFT / DATA THEFT / SCAM ALERTS

►YOUR PRACTICE

If you need to mail in a tax return or payment:

Clarification on Lockboxes

  • Per “e-News for Small Business Issue 2020-2”, lockboxes in Cincinnati and Hartford are closing on July 1.
  • The lockboxes that are closing do not relate to 1040 estimated tax payments. They relate to business payments.

IRS Guidance

  • Tax Code. Federal tax law begins with the Internal Revenue Code (IRC), enacted by Congress in Title 26 of the United States Code (26 U.S.C.). Note: The IRC materials in the link are provided as a public service by The Legal Information Institute of Cornell University Law School, not the IRS.
  • Treasury regulations (26 C.F.R.)–commonly referred to as Federal tax regulations– pick up where the Internal Revenue Code (IRC) leaves off by providing the official interpretation of the IRC by the U.S. Department of the Treasury.

TAX EXEMPT ORGANIZATIONS

►NEWS FROM OTHER AGENCIES

From the Federal Trade Commission:

Small Business Cybersecurity: Protect Your Small Business

  • Learn the basics for protecting your business from cyber-attacks. The business cybersecurity resources in this section were developed in partnership with the National Institute of Standards and Technology, the U.S. Small Business Administration, and the Department of Homeland Security.

►e-NEWS SUBSCRIPTIONS and SOCIAL MEDIA

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.

HOW TO SHARE IRS INFO ON SOCIAL MEDIA

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

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

First Thursday Minutes – December 5, 2019

Stakeholder Liaisons
Doug Blade
Karen Brehmer
Neki Cox
Kathleen Fox

Stakeholder Liaison Manager
Kristen Hoiby, Area 6 manager

Departments of Revenue
MO       Laura Wallendorf
NE        Dawn Holtmeier

Tax Professionals
Rita Barnard
Darrel Beadle
Velma Bjorgum
Jacob Borash
Frank Carnahan
Brad J Decker
Kelly Golish
Jacen Gondringer
Doug Gross
Steven Heeley
Cindy Hockenberry
Terry Johnson
Bill Kelly
Rick Kollauf
Ken Larsen
Judy Lashinski
Terri Lillesand
Laura Merschman
Ruth Ann Michnay
Holly Muehl-Pett
Paul Osterberg
Jodee Paape
Kathy Reiniger
JoAnn Schoen
Barbara A Steponkus
Brad Voght
Jill Wrensch

Webinars

No webinars scheduled at this time. Please check Webinars for Tax Practitioners for upcoming webinars.

Discussion items
 
1)   2019 Form 1040 and schedules

2019 Form 1040. There are three schedules for 2019, compared to six in 2018.

2)   Virtual Currency

3)   Discussion: Form W-4 for 2020, federal and state rules

NEBRASKA:

For 2020, if an employee changes withholding, they must use the new IRS Form W-4.  In Nebraska, the employee MUST ALSO fill out a new W-4 for the state of NE.

MINNESOTA:

Mark Krause provided this information: Beginning January 1, 2020 when a new employee fills out a W-4 or an existing employee changes their W-4, a new 2020 W-4MN will need to be completed since withholding allowances will no longer be calculated on the federal W-4. The rules for submitting a W-4MN to Revenue have not changed.

WISCONSIN: Changes to Form WT-4

  • The Internal Revenue Service has redesigned Form W-4 for the year 2020. As explained in the DRAFT posted on the IRS website, federal allowances have been removed. Prior to this change, an employee could use Form W-4 for Wisconsin purposes if the employee’s federal allowances equaled his or her Wisconsin exemptions. Since federal allowances have been removed, the redesigned Form W-4 cannot be used for Wisconsin purposes.
  • The following applies for Wisconsin withholding tax purposes beginning in 2020:
    • All newly-hired employees must provide Form WT-4 to their employer.
    • Existing employees that change the number of their Wisconsin withholding exemptions must provide Form WT-4 to their employer.
    • Existing employees are not required to provide Form WT-4 to their employer (unless the employer requests it) if the employee wishes to maintain the same number of Wisconsin withholding exemptions used in 2019.

MISSOURI:

Laura Wallendorf will look into this issue.

4)   National Tax Security Awareness Week

  • IR-2019-192, National Tax Security Awareness Week begins; IRS and Security Summit partner offer Cyber Monday shopping tips to protect computers, mobile phones
  • IR-2019-195, National Tax Security Awareness Week, Day 2: Don’t take the bait: Recognize, avoid phishing scams from identity thieves
  • IR-2019-196, National Tax Security Awareness Week, Day 3: Creating strong passwords can protect taxpayers from identity theft
  • IR-2019-198, National Tax Security Awareness Week, Day 4: IRS, Security Summit warns business owners about being targets for identity thieves
  • IR-2019-200, National Tax Security Awareness Week, Day 5: Tax professionals need data protection plans; must guard against identity theft

5)   IRS reminds tax professionals of tasks to get ready for 2020

  • Update e-Services information
  • Renew PTINs
  • Update POA/third-party authorization records
  • Review security safeguards
  • Review Practitioner Priority Service options
  • Register for e-News for Tax Professionals and subscribe for quick alerts

State Departments of Revenue

 Minnesota – Mark Krause

  • Each day we are mailing approximately 3,000 tax year 2017 conformity-related adjustment letters. Our goal is to be completed with 2017 adjustments by the end of this year.
  • Any questions can be directed to outreach@state.mn.us.

Your issues and questions:

1) Taxpayer First Act

 There are three issues that commonly come up and have been an issue for many years. Please use the Taxpayer First Act email to share these concerns with the IRS.

1) Letters or payments “cross in the mail”. Example: The taxpayer pays a balance due on Form 1040 by check or by Electronic Funds Withdrawal on 10-15-2019.  The taxpayer gets a balance due notice in early November. The IRS system does not show the payment.

2) The taxpayer gets a paper refund check as a result of an adjustment after their return has been processed. They already received the original refund as shown on the return, or they paid the balance due.  Or they get a refund check that is different from what they were expecting. The taxpayer is supposed to get a letter to explain the refund. Sometimes they get a letter up to three weeks after the refund check, or they don’t get a letter at all.

3) Form 2848’s are not processed by the CAF unit in one week, as the IRS states. It often takes three weeks. Sometimes they are not processed at all, and often there is no correspondence to the taxpayer to explain if there was a problem.  POAs can’t wait three weeks to contact the IRS, so they call PPS and fax in Form 2848. This works, but it would be better to have an electronic system for submitting Form 2848 where it’s recorded in day or two.

Next Call

The next call will be on January 2, 2020.
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 – November 7, 2019

Stakeholder Liaisons
Doug Blade
Kathleen Fox
Cathye Mason
Mike Mudroncik
Sherry Saucerman

Stakeholder Liaison Manager
Kristen Hoiby, Area 6

Departments of Revenue
IL          Maribeth Oliver
MN       Mark Krause

Tax Professionals
Gail Bates
Darrel Beadle
Ron Berman
Jacob Borash
Velma Bjorgum
Barbara Brown
Leslie Chambers
Carrie Christensen
Tracy Danzer
Laura Dawson
Brad Decker
Susan Du
Jodi Eckhout
Jessica Gatzke
Kelly Golish
Jacen Gondringer
Joel Guthmann
Steven Heeley
Cindy Hockenberry
Kelly Jaskowiak
Lourdes Jimenez
Terry Johnson
Mercean Lam
Judy Lashinski
Laura
Brian Murphy
Jodee Paape
Darian Panasuk
Kathy Reiniger
Jo Ann Schoen
Joan Scholl
Barbara Steponkus
Will Wallace
Jill Wrensch

 

Webinars

Currently, there are no webinars scheduled.  Information about future IRS webinars for tax professionals can be found at https://www.irs.gov/businesses/small-businesses-self-employed/webinars-for-tax-practitioners.

Discussion items
1)  Virtual Currency:  IRS Issues Additional Guidance & Reminds Taxpayers of Reporting Obligations
2)   IRS Urges Taxpayers to Get Ready to File their 2019 Taxes
3)   Online Option for Tax Pros to Earn CE Credits
4)   Tax Pros Need to Renew their PTINs
5)   Final and Proposed Regulations:  Additional First Year Depreciation Deduction
6)   Treasury Decision 9878 – Rules and Procedures for Electing Disaster Loss Claims
7)   New Payment Option Available to Taxpayers in Private Debt Collection Program

State Departments of Revenue Minnesota – Mark Krause

    • Based on feedback, we have updated the POA forms and mail appointees can receive. We separated Form REV184, Power of Attorney, and Form REV185, Authorization to Release Tax Information, into forms for individuals and businesses.
    • We will still accept Form REV184 with a revision date of 12/2014 or 01/2017. Customers will be able to remove a POA appointee using the new Form REV184r, Revocation of Power of Attorney.
    • Revenue will now send refund checks and correspondence about refunds directly to customers. We will send all other correspondence to the POA appointee if selected.  For more detailed information, see our POA web page.

Illinois – Maribeth Oliver
 

  • The Illinois Tax Delinquency Amnesty Act provides the opportunity for taxpayers to pay outstanding eligible tax liabilities and to have eligible penalties and interest forgiven on taxes paid in full during the amnesty period. Eligible liabilities are taxes due from periods ending after June 30, 2011, and prior to July 1, 2018.
  • If you have an existing tax liability, make full payments of your eligible tax liability between October 1, 2019, and November 15, 2019. If you failed to file a tax return or incorrectly reported the liability due on a previously filed return for these tax periods, now is the time to file returns, make corrections, and pay the tax. You must file an original return for non-filed periods or file an amended return to make corrections

Your issues and questions:

1) When will the IRS issue drafts of the 2019 Forms 1120?
Response: Drafts of the forms associated with the 2019 Form 1120 can be found at www.irs.gov/draftforms  and then using the search box by typing in Form 1120 (please see screenshot below).  The draft of the Form 1120 itself was published on August 21st.


2) Based upon the meeting’s discussion of Treasury Decision 9878 (Rules and Procedures for Electing Disaster Loss Claims), there was a question regarding the correct due date when a taxpayer files for an extension, resides in an area declared a federal disaster area and the IRS postpones filing and payment obligations for taxpayers in that area to a date beyond the original extension date?  The Q & A’s documented below can be found at https://www.irs.gov/businesses/small-businesses-self-employed/faqs-for-disaster-victims-extensions-of-time-to-file

Question: A taxpayer whose individual income tax return (Form 1040) is due to be filed on or before April 15, 2013, timely files an extension of time to file the return under section 6081 thereby extending the due date to October 15, 2013.  If the county in which the taxpayer resides is declared a federally declared disaster area and, pursuant to section 7508A of the Internal Revenue Code, the IRS postpones filing and payment obligations for the period September 1, through November 4, 2013, when is the taxpayer’s Form 1040 now due?

Answer:  The due date for filing the individual income tax return is the later of the end of the postponement period or the extended due date.  Here, the postponement period ends on November 4, 2013, which is later than the extended due date (October 15, 2013).  Therefore, the taxpayer’s individual income tax return is due November 4, 2013.

(06/09) Question:  What is the effect of filing an extension of time to file under section 6081, if, prior to the March 15, 2013, due date for filing a U.S. Return of Partnership Income (Form 1065), an event in the state and county in which the partnership was formed, results in the area being declared a federally declared disaster area and, pursuant to section 7508A of the Internal Revenue Code, the IRS postpones filing and payment obligations for the period March 1, 2013, through April 30, 2013?

 Answer: The due date for filing the partnership return is the later of the extended due date or the end of the postponement period.  If the partnership, which is an affected taxpayer with respect to the federally declared disaster, filed an extension of time to file prior to the end of the postponement period (April 30, 2013), the extension would relate back to the original due date, March 15, 2013.  The extension would run from March 15, 2013, to September 16, 2013.  Because the extended due date (September 16, 2013) is later than the end of the postponement period (April 30, 2013), the partnership’s Form 1065 is timely if filed on or before September 16, 2013.

(06/09) Question:  A corporate taxpayer whose U.S. Corporation Income Tax Return (Form 1120) is due to be filed on or before March 15, 2013, files an extension of time to file under section 6081 prior to the due date for filing the return thereby extending the due date to September 16, 2013.  If, as a result of a disaster, the county in which the corporate taxpayer’s principal place of business is located is declared a federally declared disaster, and pursuant to section 7508A of the Internal Revenue Code, the IRS postpones filing and payment obligations for the period July 1, 2013, through August 30, 2013, when is the corporate taxpayer’s Form 1120 now due?

 Answer: The postponement period under section 7508A runs concurrently with any extensions of time to file and pay under other sections of the Internal Revenue Code.  The return is due the later of the extended due date or the end of the postponement period.  If the extended due date occurs prior to the end of the postponement period, the return is due to be filed at the end of the postponement period.  If however, the postponement period ends prior to the extended due date, the return is due to be filed on the extended due date.  Here, the extended due date (September 16, 2013) is later than the end of the postponement period (August 30, 2013), therefore, the corporate taxpayer’s Form 1120 is due September 16, 2013.  Unless the corporate taxpayer also filed an extension of time to pay pursuant to section 6161, the corporate taxpayer’s payment would be due on August 30, 2013, the last day of the postponement period.

Next Call

The next call will be on December 5. 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 – October 3, 2019

Discussion items

 1)   Tax Withholding Estimator – new and improved!

Tax Withholding Estimator

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

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

2)   Tax-Exempt Organization Update

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

3)   Tax Security 2.0

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

It’s important for tax pros to know the signs they are a cyberthief’s victim

4)   National Work and Family Month

 The IRS is participating in National Work and Family Month by issuing a series of informative tips on work-life balance throughout the month of October. The agency plans a series of news releases, fact sheets and tax tips. Topics covered include family-owned businesses, family tax credits, military tax benefits and scams and security issues.

5)   Data security message to PTIN holders

Email sent to tax pros from the Return Preparer Office on September 24, 2019.

“When completing your PTIN renewal, a checkbox will be available to confirm your awareness of these data security responsibilities.”

Email was sent via “Gov Delivery” from irs@service.govdelivery.com.

FOIA Awareness for PTIN Holders” reminder:

Legitimate IRS emails regarding PTIN issues are sent from two email addresses: irs@service.govdelivery.com and Taxpros@ptin.irs.gov.

6)   QBI and rental real estate

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

State Departments of Revenue Minnesota – Mark Krause

  • We updated the withholding tax tables effective 9/4/19. The new tables are included in the Withholding Tax Instructions on our website.
  • Final drafts of 2019 forms and instructions have been posted to the Software Providers page on our website. 2019 Instructions for the M1 and M1PR will be posted later this year.

Your issues and questions:

1) Comments on the Tax Withholding Estimator and Form W-4

 Comment:  The “results page” should show the date it was prepared.

Response: It does. 😊  See the green box below.

Comment:  Tax pros made a request for changes to Form W-4 and W-4P for 2019. They said it would be better to allow taxpayers to state a percentage of income they want withheld from each paycheck, or a dollar amount they want withheld from each paycheck.

Response:  We put that suggestion in IMRS. The draft Form W-4 for 2020 changes how withholding is calculated. The time period for making comments on the draft closed on September 9th, so it seems doubtful that the IRS will be able to accommodate your request for changes to the 2020 Form W-4.

However, IRS is constantly seeking feedback from the tax community. Comments regarding forms and publication can be provided to IRS at https://www.irs.gov/forms-pubs/comment-on-tax-forms-and-publications .

In addition, the draft 2020 Form W-4 (Employee’s Withholding Certificate), Form W-4V (Voluntary Withholding Request (For unemployment compensation and certain Federal Government and other payments) and Form W-4P (Withholding Certificate for Pension or Annuity Payments) will and do offer the opportunity for a taxpayer to request specific dollar amounts or a percentage of each payment they want withheld as a federal income tax payment.

The draft 2020 Form W-4 includes Step 4(c) – Extra Withholding. The draft instructions state that the step can be used to enter “any additional tax you want withheld from your pay each pay period.”

The 2019 Form W-4V instructions identify that for any social security benefit received the filer of the form may choose to have the SSA withhold federal income tax of 7%, 10%, 12% or 22% from each payment, but no other percentage or amount.

The 2019 Form W-4P includes line 3 which allows the taxpayer to identify an additional amount they want withheld from each pension or annuity payment.  The IRS is scheduled to release a draft 2020 Form W-4P sometime this fall.

Please see:

2) Error in Tax Calculation in Schedule D Tax Worksheet

This page on IRS.gov says that some taxpayers will be receiving refunds. Tax pros state that some clients are receiving refunds. However, there are two problems:

1) The taxpayer gets a refund check but no letter of explanation. Tax pros state that the IRS should always send a letter at the same time as the refund. A refund check with no letter causes concern for the taxpayer, and they often believe their tax preparer must have made a mistake.

2) In some cases, the refund is not calculated correctly. The IRS is not calculating Section 1250 and the QBI Deduction correctly.

RESPONSE:  We entered this in IMRS and will keep you posted.

3) An issue with an amended return

What happened:

  • A dependent filed his tax return and stated that he cannot be claimed as a dependent.
  • He CAN be claimed as a dependent and he amended his return to say so.
  • The IRS has processed his amended return.
  • The parents are filing now and trying to claim him as a dependent.
  • They can’t e-file with him as a dependent. Why not?

RESPONSE: The IRS computer system is reporting how the dependent originally filed, claiming that he is not a dependent on someone else’s return. The computer system doesn’t get updated from his amended return which would allow the parents to e-file. The parents will have to paper file to claim their son as a dependent.

4) PTIN question

The Return Preparer Office told tax pros: “When completing your PTIN renewal, a checkbox will be available to confirm your awareness of these data security responsibilities.”

Question:  Will all PTIN holders be required to answer the question? Including supervised employees?

 Response: Yes, all PTIN holders will have to answer this question.

5) How do we get in touch with Wisconsin Department of Revenue to get a taxpayer in “uncollectable status”?

RESPONSE:

6) How do we get in touch with Illinois Department of Revenue for collection issues?

RESPONSE:

  • Illinois tax information can be found on https://mytax.illinois.gov.
  • Look for “Contact” at the top of the page.
  • Select “Contact IDOR”.
  • There are offices throughout the state where answers can be obtained from a DOR agent either in person or over the phone.
  • See also Payment Plan.

Next Call

The next call will be on November 7. 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!