Tag Archives: tax relief

Tax Updates Beginning March

Business E-File Regulations Finalized

The IRS and Treasury have issued final regulations amending the rules for filing returns and other documents electronically. Filers of partnership returns, corporate income tax returns, unrelated business income tax returns, withholding tax returns, some information returns and other statements, notifications, and reports will be required to e-file beginning in 2024. A new online portal has been created to help businesses file form 1099 returns electronically.

May 15 Disaster Area Deadlines Extended

Disaster area taxpayers in much of California and parts of Alabama and Georgia now have until Oct 16, 2023 to file various federal tax returns and make payments, the IRS has announced. Previously, the deadline had been postponed to May 15 for these areas. This deadline includes individual and business returns normally due on March 15 and April 18; returns of tax-exempt organizations normally due on May 15. Those affected also have until October 16 to make 2022 contributions to IRAs and health savings accounts. The deadline also applies to various tax payments. Current tax-related disaster information can always be found on the IRS Disaster Tax Relief page.

AMT Guidance for Insurance Providers Issued

The Treasury and IRS have issued Notice 2023-20 which provides interim guidance for insurance companies and some other taxpayers for the new corporate alternative minimum tax (CAMT) until proposed regulations are issued. The Inflation Reduction Act of 2022 created the CAMT, imposing a 15% minimum tax on the adjusted financial statement income of large corporations for taxable years beginning in 2023. Large corporations, including insurance companies, with adjusted financial statement income exceeding $1 billion will be those generally affected by the CAMT. Comments on the rules are welcome and must be submitted by April 3, 2023. 

2022 Return Tax Time Guide

The IRS reminds taxpayers to gather their necessary information and visit IRS.gov or their trusted tax preparer for help with their 2022 tax return. Several changes have been implemented due to the Inflation Reduction Act and American Rescue Plan Act, including the reduction in Earned Income Tax Credit, Child Tax Credit, and Child and Dependent Care Credit amounts. Additionally, those that don’t itemize cannot deduct their charitable contributions this year. More in the Tax Time Guide series will be forthcoming.

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 March 2, 2021

Selecting Tax Return Preparers

The IRS is reminding taxpayers to choose a tax return preparer with care. While the vast majority of paid preparers provide quality service, others commit fraud, identity theft, and other scams. Credentials to look for in a professional with whom you’re trusting your personal and financial information include:

  • Year-round availability – being able to contact your preparer after tax season can be helpful if questions about your return arise.
  • Professional credentials – does your preparer belong to a professional organization, attend continuing education classes, and remain up-to-date on tax law?
  • Legitimate pricing – avoid preparers who base their fees on a percentage of a client’s refund.
    More information can be found in the new Tax Time Guide.

Tax Relief For Texas Storm Victims

The IRS has announced that taxpayers in FEMA-designated disaster areas will have until June 15, 2021 to file tax returns and make tax payments. This includes the entire state of Texas and areas of other states where FEMA disaster declarations have been made. Among other things, this also means that taxpayers will have until June 15 to make 2020 IRA contributions. Taxpayers do not need to contact the IRS to get this benefit; if their address of record is located in the disaster area, they will be provided the relief.

EIPs Issued; Recovery Rebate Credit Available

All legally permitted first and second round of Economic Impact Payments (EIPs) have been issued, the IRS has announced. Individuals who didn’t receive EIPs or didn’t receive the full amounts may be eligible to claim the Recovery Rebate Credit. To claim the credit, individuals will need to know the amounts of any EIPs they received. This information can be found online.

Health FSA Flexibility Increased

Due to the pandemic and the COVID-related Taxpayer Certainty and Disaster Tax Relief Act of 2020, the IRS has provided greater flexibility to employee benefit plans offering health flexible spending arrangements (FSAs) or dependent care assistance programs. These plans now have additional discretion to adjust their programs. Potential adjustments include carrying over unused amounts, extending the permissible period for incurring claims, allowing certain mid-year changes, and more. The decisions to adjust these programs is at the discretion of the employer that sponsors the plan.

Tax Updates for the End of June

It’s that time again, where we summarize all the goings on from the IRS. Here is your end of June tax updates.

Multiple Payments Due July 15

The IRS is reminding taxpayers that tax liabilities from 2019 are due July 15, 2020, as well as estimated tax payments from 2020 typically due April 15 and June 15. These extensions were part of the coronavirus tax relief. Additionally, taxpayers who live and work abroad have had their usual June 15 filing date extended to July 15. Payment options and instructions are available. All coronavirus affected payment and filing deadlines can be found here.

Tax Relief For Southern Storm Victims

The due date for filing tax returns and making estimated payments has been extended to October 15, 2020 for taxpayers and businesses affected by storms last April. These FEMA-designated disaster areas include parts of Mississippi, Tennessee, and South Carolina who experienced storms, flooding, and/or tornadoes. Affected taxpayers will also have until October 15 to make 2019 IRA contributions, and the same deadline also applies to estimated tax payments for the first two quarters of 2020 that were due on July 15, and the third quarter estimated tax payment normally due on September 15. More information can be found on the IRS’ disaster relief page. 

Economic Impact Payments Belong To Recipients

Following concerns that people and businesses may be taking advantage of vulnerable populations, the IRS has issued a reminder that economic impact payments belong to the recipients of the payments, and not a nursing home or other organization providing care to the recipients. Also, these payments generally do not count as a resource or income for purposes of determining eligibility for Medicaid and other federal programs. The Social Security Administration has further information on how these payments may be handled.

COVID-19 Tax Relief For Retirement Distributions

The IRS has expanded the definition of “qualified individuals” who may take advantage of CARES Act provisions regarding retirement plan distributions and loans. For instance, a coronavirus-related distribution is not subject to the 10% additional tax that otherwise generally applies to distributions made before an individual reaches age 59 ½. Qualified individuals are those affected by COVID-19, whether due to contracting the virus or its effect on their employment. Notice 2020-50 provides the details.

Tax Updates September 18

Third Quarter Tax Payments Due

The IRS reminds taxpayers that those owing estimated quarterly tax payments must
pay their third quarter installment by September 16 . This generally applies to small
business owners and the self-employed, including those participating in the sharing
economy as well as others whose earnings aren’t subject to withholding, such as
retirees, investors, landlords, and those receiving alimony.

Regulations For 100% Depreciation Released

The IRS and Treasury released final and proposed regulations regarding the 100% first-
year depreciation allowed on certain depreciable business assets. Machinery,
equipment, computers, appliances and furniture generally qualify. The final regulations
provide guidance on the depreciation of used property as well as qualified film,
television and live theatrical productions. The proposed regulations deal with new
provisions not addressed previously.

Reporting Relief For Some Tax-Exempt Organizations

The IRS has issued proposed regulations regarding the reporting requirements for
certain tax-exempt organizations which include, among other things, the existing
exception from having to file an annual return for certain organizations that have gross
receipts of $50,000 or less, and relief from the requirement to report contributor names
and addresses. In compliance with a recent court decision, the IRS and Treasury
welcome all public comments on the proposed regulations.

Former US Citizens Offered Tax Relief

New procedures have been announced that will enable certain individuals who
relinquished their U.S. citizenship to fulfill their tax and filing requirements and receive
some relief for back taxes. Those whose tax non-compliance was non-willful, who owe
less than $25,000 in back taxes, and whose net assets are less than $2 million may be
able to avoid interest and penalties, and come into compliance with their tax obligations.
The IRS will host a webinar in the near future with additional information and practical
tips for making a submission to the Relief Procedures for Certain Former Citizens .