Tax Updates November 14

Beware of Text Scam

The IRS and Security Summit partners have alerted taxpayers that neither the IRS nor local agencies will ever text taxpayers asking for bank account information so that an economic impact payment may be made to them. Scam texts may read, “you have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment into your account. Continue here to accept this payment…” A link to a fake phishing web address is included, and can result in identity theft. If you’ve received such a text, the IRS asks that you contact them and share the details. As a reminder the IRS does not send unsolicited texts or emails, nor do they call people with threats of jail or lawsuits.

Some College Students May Still Qualify For EIP

The IRS is reminding non-filers to register for an economic impact payment (EIP) if they haven’t received one yet. This includes self-supporting college students who have little to no income – but are not listed as dependents on anyone else’s return. Those who do not file a tax return will only receive an EIP if they use the Non-Filers Tool to register. The tool is designed for married couples making less than $24,400 or individuals making less than $12,200. The deadline for such registrations is November 21, 2020. 

Terminating 403(b) Guidance Issued

The IRS and Treasury have issued guidance for employers and employees with terminating 403(b) plans that fund benefits through 403(b)(7) custodial accounts. Changes in the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) are reflected in the guidance. Revenue Ruling 2020-23 provides the details and Notice 2020-80 requests comments regarding the application of annuity and spousal rights provisions included in the guidance.

Taxpayer Relief For IRS Debtors

The IRS has announced changes aimed at helping taxpayers who owe the IRS and are affected by the Covid-19 crisis. The relief includes payment plans and installment agreements, as well as temporary collections delay, offers in compromise, and penalties relief.