Tax & Current Accounting Topics

IRS updates LB&I examination directive on credit for increasing research activities 

https://www.irs.gov/newsroom/irs-upda

https://accountinginstruction.info

The IRS has revised guidance for examiners in the Large Business & International division (LB&I) reviewing the amounts claimed for the tax credit for increasing research activities.  The guidance to auditors issued today modifies a directive issued in 2017. The credit for increasing research activities (Internal Revenue Code § 41) enables taxpayers to receive a tax credit for qualified research activities (QREs).

IRS reminds taxpayers and practitioners of expedited letter 

https://www.irs.gov/newsroom/irs-remi

https://accountinginstruction.info/

WASHINGTON — The Internal Revenue Service continues to look for ways to assist taxpayers affected by the COVID-19 pandemic. As part of that effort, the IRS reminds taxpayers and tax practitioners of the procedures for requesting expedited handling of requests for letter rulings under Rev. Proc. 2020-1, 2020-1 I.R.B. 1 (January 2, 2020).  As set forth in Rev. Proc. 2020-1, the IRS ordinarily processes requests for letter rulings in the order that they were received. A taxpayer with a compelling need to have a request processed more quickly may request expedited handling. The request for expedited handling must be made in writing, preferably in a separate letter submitted with the letter ruling request.

IRS reminds taxpayers who filed an extension that the Oct. 15 due date approaches 

https://www.irs.gov/newsroom/irs-rem

https://accountinginstruction.info/

File and pay electronically, request direct deposit for refunds IR-2020-213, September 16, 2020  WASHINGTON – The Internal Revenue Service today reminds taxpayers who filed an extension that the October 15 due date to file 2019 tax returns is approaching. Taxpayers should complete their tax returns and file on or before the October 15 deadline.

All taxpayers have the right to be informed 

https://www.irs.gov/newsroom/all-taxp

https://accountinginstruction.info

When something happens to a taxpayer's account, that taxpayer has the right to be informed about the activity. In fact, this right is one of ten outlined in the Taxpayer Bill of Rights.  The right to be informed is at the top of the list. This means taxpayers have the right to: Know what they need to do to comply with the tax laws.   Have clear explanations of the laws and IRS procedures in all forms, instructions, publications, notices and correspondence.

A tax checklist for newly married couples 

https://www.irs.gov/newsroom/a-tax-ch

https://accountinginstruction.info

Marriage changes a lot of things and taxes are on that list. Newlyweds should know how saying “I do” can affect their tax situation.  Here’s a checklist of items for newly married couples to review: Name and address changes Name. When a name changes through marriage, it is important to report that change to the Social Security Administration (SSA). The name on a person’s tax return must match what is on file at the SSA. If it doesn’t, it could delay any tax refund. To update information, taxpayers should file Form SS-5, Application for a Social Security Card. It is available on SSA.gov, by calling 800-772-1213 or at a local SSA office.

Third quarter estimated tax payments due Sept. 15 

https://www.irs.gov/newsroom/third-qu

https://accountinginstruction.info

WASHINGTON — The Internal Revenue Service today reminded the self-employed, investors, retirees and others with income not subject to withholding that third quarter estimated tax payments for 2020 are due September 15.  Taxes are paid as income is received during the year through withholding from pay, pension or certain government payments such as Social Security or unemployment; and/or making quarterly estimated tax payments.

IRS highlights higher penalties for some tax returns filed after Sept. 14 

https://www.irs.gov/newsroom/irs-high

https://accountinginstruction.info

WASHINGTON — The Internal Revenue Service today urged individuals who owe taxes but have not yet filed for 2019 to act now to avoid larger penalties that, by law, start after September 14.  The tax deadline was July 15 this year. Taxpayers who submitted an extension have until October 15 to file and do not face the failure to file penalty if they file their taxes by that deadline. But taxpayers need to remember that an extension to file is not an extension to pay. Any taxes they owed after the July 15 deadline are subject to the failure to pay penalty and interest.

IRS expands tax help into more languages; Form 1040 offered in Spanish and more services, information available in multiple languages WASHINGTON — As part of a larger effort to reach underserved communities, the Internal Revenue Service is taking a number of aggressive steps to expand information and assistance available to taxpayers in additional languages, including providing the Form 1040 in Spanish for the first time.  In addition to being available in English and Spanish, the 2020 Form 1040 will also give taxpayers the opportunity to indicate whether they wish to be contacted in a language other than English. This is a new feature available for the first time this coming filing season.

E-signatures temporarily allowed on some tax forms 

https://www.irs.gov/newsroom/e-signat 

https://accountinginstruction.info

Taxpayers are encouraged to e-file forms this year, whenever possible, because of COVID-19. To protect the health of taxpayers and tax professionals, the IRS is temporarily allowing the use of digital signatures on some tax forms that can't be filed electronically.  This will help reduce in-person contact and lessen the risk to taxpayers and tax professionals during the COVID-19 pandemic. It will also allow people to work remotely and file forms on time.

IRS to mail special letter to estimated 9 million non-filers, urging them to claim Economic Impact Payment by Oct. 15 at IRS.gov https://www.irs.gov/newsroom/irs

https://accountinginstruction.info

WASHINGTON — Later this month, the Internal Revenue Service will start mailing letters to roughly nine million Americans who typically don't file federal income tax returns who may be eligible for, but have not registered to claim, an Economic Impact Payment.  The letters will urge recipients to register at IRS.gov by October 15 in order to receive their payment by the end of the year. Individuals can receive up to $1,200, and married couples can receive up to $2,400. People with qualifying children under age 17 at the end of 2019 can get up to an additional $500 for each qualifying child.