Tag Archives: disaster relief

IRS Updates Aug 31

Security Summit Wraps Up

The IRS has finished its annual education effort regarding online security for tax professionals and taxpayers. This year includes a five-part “Protect Your Clients; Protect Yourself” series to help tax pros, especially smaller practices, protect against tax-related identity theft and fraud. The final installment of the series urges tax professionals to take critical steps to protect data and security:

  • Use caution around email attachments: Do not open links that arrive unexpectedly.
  • Do not commingle business and personal devices: do not conduct business on personal devices and do not web surf or download videos on business devices.
  • Do not share USB drives or external hard drives between personal and business devices.
  • Be careful with downloads.
  • Use strong passwords, always change default passwords, and change passwords often.

Educator Expense Deduction

The IRS reminds teachers and other educators that they’ll be able to deduct up to $300 of out-of-pocket classroom expenses for 2023 when they file their tax return next year. Even educators who take the standard deduction may claim this deduction, and if married to another educator, filing jointly, up to $600 may be claimed. Qualified costs include those incurred in the purchase of books, supplies, classroom materials, computer and software equipment and services, and COVID-19 protective items. Qualified expenses do not include costs associated with home education or nonathletic supplies for health or physical education. The IRS urges educators to keep good records and documentation.

Hawaii Wildfire Victim Tax Relief

The IRS has announced expansive tax relief for victims of Hawaii wildfires in Maui and Hawaii counties. These taxpayers now have until February 15, 2024 to file various federal individual and business tax returns and make tax payments. Any households or businesses located in Federal Emergency Management Agency (FEMA)-designated disaster areas qualify for this relief. This relief postpones various filing and payment deadlines that occur from August 8, 2023 through February 15, 2024. Any returns and taxes originally due during this period have until the February deadline. This is automatically provided, and taxpayers do not have to take action to get this relief. However, if a taxpayer does receive a late filing or payment penalty notice, they should call the number on the notice to have it abated. More information is always available at the IRS’ disaster relief page. 

Educational Assistance Reminder

The IRS reminds employers and employees that under federal law, employers who provide educational assistance programs can use them to help pay student loan obligations for their employees. In an effort to promote this benefit, the IRS has a free webinar on September 14 to help people better understand this provision. Traditionally such programs have been used to pay for books, equipment, supplies, fees, and tuition; under current law, this feature will be available until December 31, 2025. 

IRS Updates July 11, 2023

Design by Paul Davis

Refunds Deadline Approaching

The IRS reminds those who haven’t filed their 2019 tax return that the window for claiming potential refunds is closing. The deadline for filing and claiming any refund for 2019 is July 17, 2023. The law allows 3 years to file and claim refunds (although that deadline was extended for 2019 due to COVID-19), and requires taxpayers to properly address, mail, and ensure the tax return is postmarked by July 17, 2023. Over 18,000 South Carolina residents are presumed to be among those who haven’t filed. Unclaimed refunds become the property of the US Treasury. Refund checks may also be held if tax returns for 2020 and 2021 have not been filed. Prior year tax forms are available online, and key documents must be obtained from employers or the IRS. 

Disaster Victims Given Notice

The IRS is sending a “special follow-up mailing” to taxpayers in several states to let them know that they have additional time to pay their taxes. An initial mailing of a CP14 notice told taxpayers who have a balance due that they needed to pay within 21 days. These taxpayers actually have until later this year to pay, under the disaster declaration and relief. These new mailings, CP14CL, aim to mitigate confusion caused by the earlier CP14 notice and to help reassure people. The IRS Commissioner Danny Werfel says, “this mailing reflects how we’re trying to be more taxpayer-focused given the additional resources that we’ve been given under the Inflation Reduction Act.”

New Scam Warning Issued

The IRS is warning taxpayers to be on the lookout for a new scam mailing intended to mislead people into believing they are owed a tax refund. This new scheme involves a cardboard mailer from a delivery service and an enclosed letter with wording that the notice is “in relation to your unclaimed refund.” Naturally the contact information and phone number on the document do not belong to the IRS, but the notice seeks sensitive personal information from taxpayers – including detailed photos of drivers’ licenses – that can be used by identity thieves. The requests are often as follows: 

“A Clear Phone of Your Driver’s License That Clearly Displays All Four (4) Angles, Taken in a Place with Good Lighting.”

And: 

“You’ll Need to Get This to Get Your Refunds After Filing. These Must Be Given to a Filing Agent Who Will Help You Submit Your Unclaimed Property Claim. Once You Send All The Information Please Try to Be Checking Your Email for Response From The Agents Thanks”

The IRS urges taxpayers to note the multitude of warning signs, including odd punctuation, a mixture of fonts, and inaccuracies. Other known scams can be reviewed on the IRS Dirty Dozen list. 

 

 

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.

Tax Updates for the End of September

Tax Relief For Disaster Victims

The IRS has provided tax relief to victims of the Oregon wildfires that began on September 7, as well as those affected by Hurricane Sally on September 14. Taxpayers in these FEMA-designated areas now have until January 15, 2021 to file returns and make any payments that were due after the September 7 or 14 date. This means those who filed extensions to file their 2019 taxes by October 15 now have until the January deadline to file. Updated relief information can always be found at the IRS’ disaster relief page.

100% Depreciation Rules Finalized

The IRS has issued final guidelines regarding the implementation of the 100% additional first year depreciation deduction that allows businesses to write off the cost of most depreciable business assets in the year they are placed in service. This deduction was created by the Tax Cuts and Jobs Act (TCJA) in 2017 and applies to depreciable business assets with an expected recovery of 20 years or less, such as computers, machinery, furniture, and appliances. Rules for used equipment and self-constructed components were also included.

Non-Filers: Do You Qualify For Economic Impact Payments?

The IRS has released a state-by-state breakdown of the number of people they’re attempting to contact this month, to encourage them to see if they’re eligible to receive an Economic Impact Payment (EIP) , including more than 350,000 in the Carolinas. Those who do not usually have to file a tax return and haven’t received an EIP can check their eligibility and register to receive the payment. The due date for registration is October 15, 2020. The IRS is attempting to send letters to over 8 million potentially eligible individuals.

IRS Reminds Extension Filers: Due Date Approaches

Taxpayers who were granted an extension on filing their 2019 taxes have until October 15, 2020, to file their tax return. There are convenient electronic filing options available, as well as direct deposit for refunds and multiple options for scheduling and making electronic tax payments.