Tax Updates Feb 12

Tax Help FAQs

Tax filing this year is a bit more complicated, with the American Rescue Plan Act (ARPA) of 2021 which expanded the Child Tax Credit for last year only. Advance payments mean more paperwork for those who received them, and potentially repaying excess amounts, or claiming credit for remaining unpaid amounts. The IRS urges recipients to save Letter 6419 so their 2021 tax return can be properly prepared. A qualified tax preparer can help with this process, and several FAQs on the topic are available.

Be Ready to File

The IRS reminds taxpayers to be prepared to file their tax return, and to that end are providing a roundup of relevant information. Readiness topics include their Tax Time Guide, dealing with advance Child Tax Credit payments or Recovery Rebate Credit, a tax document checklist, filing tips and how to find help if needed.

IRS Backtracks Third-Party Facial Recognition

In response to concerns, the IRS has announced it will transition away from using a third-party service for facial recognition. This was intended to help authenticate people creating new online accounts. The IRS pledges to find authentication processes that do not involve facial recognition and which protect taxpayer data. This is not expected to interfere with filing returns or paying taxes owed, and people should continue to file their tax returns as they normally would. 

IRS Suspends Automatic Notices

The IRS is suspending the mailing of several letters to individuals and businesses. These automated notices include Balance Due notices, Notices of Unfiled Tax Returns, and Withholding Compliance letters. This suspension is intended to allow the IRS to catch up with the backlog of several million original and amended tax returns that have not been processed due to the pandemic and pandemic response. Other letters are legally required to be issued within a certain timeframe and cannot be stopped by the authority of the IRS.