Tax Updates Late September

Extension Deadline Approaching

The IRS is reminding those taxpayers who filed an extension for their 2020 tax returns that they have until October 15, 2021 to file . Electronic and FreeFile options are still available. Those who are in a federally declared disaster area may have more time to file, thanks to the disaster relief offered by the IRS. Additionally, those serving in a combat zone typically have 180 days after they leave the combat zone to file returns and pay taxes. There are many online resources available to file and pay, view information on one’s own tax history, and check Economic Impact Payment or advance Child Tax Credit status.

New Collection Agencies Contracted

The IRS has contracted with three new private-sector collection agencies (PCAs) for collection of tax debt . Those who have unpaid tax bills may be contacted by CBE Group, Inc based in Iowa, or Coast Professional, Inc. or ConServe, both in New York.The IRS will always notify a taxpayer in writing before transferring their account to a PCA. The PCAs may not take enforcement actions, but they are authorized to discuss payment options and set up payment agreements. Tax payments must still be made to the IRS or US Treasury.

Relief For Drought and Hurricane

Farmers and ranchers forced to sell livestock due to drought may take an additional year to replace the livestock and defer tax on any gains. To qualify, the dairy, draft, or breeding livestock must have been sold on account of drought conditions in an applicable region – this is a county or other area designated as eligible for federal assistance plus counties contiguous to it. Specific regions are listed in Notice 2021-55. The relief does not apply to livestock raised for slaughter or sporting purposes, or
poultry.
Due to shortages of undyed diesel fuel caused by recent hurricanes, the IRS is extending penalty relief to additional areas of Louisiana. The penalty relief is available to anyone who sells or uses dyed fuel for highway use, so long as the operator or seller pays the tax of 24.4¢ per gallon that normally applies to diesel fuel for highway use. Generally dyed fuel is not taxed, because it is only to be sold and used for exempt purposes, such as farming, bus transportation, and home heating.