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
- 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.
- NEW INFORMATION AS OF APRIL 3: Installment Agreement Direct Debit Frequently Asked Questions
- 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)
- 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:
- FAQs from the U.S. Department of Labor, Wage and Hour Division:
DOL Families First Coronavirus Response Act: Questions and Answers.
- 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.
- SCAM ALERT! IRS issues warning about Coronavirus-related scams; watch out for schemes tied to economic impact payments
- The BBB has excellent info on SCAMS related to Coronavirus.
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/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/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/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:
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:
Information provided after the meeting:
The Department of Revenue has issued the following new tax notices:
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:
- How often during the day is the IRS Coronavirus Tax Relief updated?
A: It’s updated as needed, once a day is common.
- 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.
- 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!
