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08/04/2022

TAX IRS sent incorrect balance due notices to couples (millions have been sent these errant notices).

The Internal Revenue Service admitted that some married couples received erroneous balance due notices for their 2021 tax returns.

The IRS added that no immediate response to the notice or phone call were necessary right now and it’s working on fixing the problem.

“The IRS is aware that some payments made for 2021 tax returns have not been correctly applied to joint taxpayer accounts, and these taxpayers are receiving erroneous balance due notices (CP-14 notices) or notices showing the incorrect amount,” the IRS said in a statement Wednesday.

02/16/2022

TAXIRS suspends many of its automated notices

The Internal Revenue Service said Wednesday it is suspending more than a dozen automated letters it sends out to taxpayers, including collection notices, balance due notices and unfiled tax return notices, after coming under pressure from lawmakers and tax professionals to first catch up on its backlog of unprocessed returns.

The IRS has been facing criticism from a coalition of tax professional groups, as well as members of Congress who have been hearing from their constituents. On Tuesday, lawmakers on the House Ways and Means Oversight Subcommittee convened a hearing to discuss concerns from National Taxpayer Advocate Erica Collins about the backlog of millions of unprocessed tax returns from last year amid IRS staffing shortages, as well as the flood of automated notices that have been generated by the IRS’s computer systems with little opportunity of contacting someone at the IRS for help with responding.

01/11/2022

The Internal Revenue Service announced it will begin accepting and processing tax returns on Monday, January 24, although it is opening its IRS Free File service on January 14.

More than 160 million individual returns are expected to be filed this tax season, with the vast majority coming before this year’s April 18 deadline for most Americans. The date is extended from the standard April 15 date as Washington, D.C., is celebrating the Emancipation Day holiday on that date. Residents of Maine and Massachusetts get one extra day to file due to the April 18 Patriots’ Day holiday in those states. The agency once again is encouraging taxpayers to file electronically with direct deposit information and said most will receive their refund within 21 days of their electronic filing.

The current year tax season opens as the agency is still processing returns from the 2021 tax season due to the backlog created by the ongoing COVID-19 pandemic. The agency said in a January 10 statement announcing the 2022 tax season commencement that it "continues to reduce the inventory of prior-year individual tax returns that have not been fully processed," adding that taxpayers generally do not need to wait for their 2020 tax return to be fully processed before filing their 2021 returns. The IRS said that all paper and electronic individual 2020 returns received prior to April 2021 have been processed if the return had no errors or did not require further review.

Because of the ongoing pandemic, the IRS also is encouraging taxpayers who have questions to utilize the agency’s website and online resources before calling. It noted that last year, it received 145 million calls between January 1 and May 17, more than four times the number of calls received in an average year for that time period.

Key 2022 Tax Season Dates
Here are the key dates for the upcoming tax season:

January 14: IRS Free File opens; tax returns will be transmitted to the IRS starting January 24.

January 18: Due date for 2021 fourth quarter estimated tax payment.

January 24: IRS begins 2022 tax season.

January 28: Earned Income Tax Credit Awareness Day to raise awareness of the tax credits available to many taxpayers.

Mid-February: IRS begins issuing refunds for returns claiming the Earned Income Tax Credit or Additional Child Tax Credit.

April 18: Due date to file 2021 tax return or request and extension for most of the nation.

April 19: Due state to file 2021 tax return or request and extenion for individuals living in Maine or Massachusetts due to the Patriots’ Day holiday.

October 17: Due date to file for those requesting an extension on their 2021 tax returns.

12/22/2021

Two categories of 2022 optional standard mileage rates, used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes, are rising slightly next year.

Beginning Jan. 1, standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

58.5 cents per mile for business use, up 2.5 cents from the 2021 rate;

18 cents per mile for medical purposes or moving purposes for qualified active-duty members of the Armed Forces, up 2 cents from this year; and,

14 cents per mile in service of charitable organizations, the same as this year.

12/06/2021

For those that filed their tax returns before the extension deadline (October 15) note it is taking the IRS 90 to 120 days to process refunds.

10/06/2021

Service levels hit new lows at swamped IRS

The Internal Revenue Service is inundated with the volume of returns yet to be processed and phone calls for assistance, and is working hard to remedy the situation. While there are many factors contributing to this, it is overwhelming to the agency, according to Stephen Mankowski, tax chair of the National Conference of CPA Practitioners, who attended a recent IRS meeting for stakeholders.

“The National Taxpayer Advocate reported they are working to remedy this in multiple ways. The level of service is at its lowest historically, with more calls coming in daily than ever,” he said.

“Hiring and training take time. The automated callback program has been successful, but the number of people in the queue is limited to the number of assistants available,” he said. “The number of calls coming in, particularly regarding the Child Tax Credit, are exacerbating the problem.”

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“Paper returns have piled up — there are 5.5 million Form 1040s and over 4 million business returns that have been opened but not processed. The goal is that by year-end, the paper returns will be processed. However, there are an additional 4 million returns anticipated by mid-October,” he said.

National Taxpayer Advocate Erin Collins is empathetic, Mankowski commented. “She truly feels our pain. She understands the taxpayer issues that exist, and the problems getting through to the IRS. She’s dealing with a lot of calls from practitioners and taxpayers trying to get resolution on issues. It’s just a matter of not having enough bodies to do the work.”

National Taxpayer Advocate Erin Collins testifying before a congressional committee in October 2020.Tasos Katopodis/Bloomberg
It’s not a static situation, Mankowski emphasized, noting that while the service is catching up on returns already filed, more returns are coming in.

And it’s more than just having the money to hire additional personnel, he suggested: “Even if they had the money and had the people willing to work, they couldn’t just snap their fingers and put 50, 100 or 500 people to work manning the phone lines. It takes at least 12 to 18 weeks to train someone to answer and assist callers. They have to understand the systems, and be able to understand and interpret what’s going on.”

In some cases they need to have people with better knowledge or information to help on practitioner lines, Mankowski observed. “But in a lot of cases, it’s easier to explain the issues to a practitioner than it is to taxpayers,” he said. “There’s a lot of training that is necessary to have someone able to assist all levels of taxpayers.”

The late December 2020 changes affected the 2021 filing season, he noted. “The reconciliation of the Economic Impact Payments is anticipated to be fixed within the computer system shortly, and they are hoping for the same with the Child Tax Credits. The IRS is looking to send out notices to taxpayers verifying their child tax payments, and the data is expected to also be available on the IRS portal.”

07/29/2021

On July, 28, 2021, the U.S. Small Business Administration (SBA) announced that it is launching a streamlined application portal to allow borrowers with Paycheck Protection Program (PPP) loans $150,000 or less through participating lenders to apply for forgiveness directly through the SBA. The new forgiveness platform will begin accepting applications from borrowers on August 4th, 2021.

In addition to the technology platform, the SBA is standing up a PPP customer service team to answer questions and directly assist borrowers with their forgiveness applications. Borrowers that need assistance or have questions should call (877) 552-2692, Monday to Friday, 8 a.m.-8 p.m. EST. More information on the PPP direct forgiveness portal is available here.

07/12/2021

IRS Upgrades Child Tax Credit Payment Tool
The IRS has upgraded a key online tool to enable families to update their bank account information to receive their monthly child tax credit payments. This feature was added to the Child Tax Credit Update Portal (the portal), and any updates made by August 2, will apply to August 14 payments and subsequent payments for the rest of 2021.

Further, the IRS announced that families will receive their July 15 payment via direct deposit or check. The IRS has further encouraged taxpayers who have not updated their current bank account information to use the tool to ensure they receive payments in a timely manner. In addition, the IRS provided information to taxpayers on the manner in which to update their direct deposit information. Taxpayers are recommended to use the portal to check their eligibility to receive child tax credit payments through direct deposit. Following which, the taxpayers would be directed to change the bank account information available on the Service’s file. In addition, the portal permits families to switch from receiving payments via paper checks to direct deposit, and also un-enroll from receiving monthly payments, to receive a lump sum when they file their 2021 income tax return.

Finally, the IRS reminded taxpayers that child tax credit payments will be up to $300 per month for each child under age six and up to $250 per month for each child ages six through 17. The IRS also reminded taxpayers that it will issue advance payments on July 15, August 13, September 15, October 15, November 15, and December 15.

IR-2021-143

06/15/2021

Today's Federal and State Tax News Highlights, I.1, IRS Unveils Online Tool for Child Tax Credit Payments (IR-2021-129), (Jun. 15, 2021)

The IRS and Treasury have unveiled an online Non-filer Sign-up tool designed to help families who do not normally file tax returns and register for monthly child tax credit (CTC) payments. The tool would be accessible from July 15 and is regarded as an update from last year. It helps individuals register for the third round of economic impact Payments (EIP) and claim recovery rebate credit for any amount of the first two rounds of EIPs missed.

In addition, the new tool has been created to provide a simple way for taxpayers who do not have an income tax return-filing obligation, to provide the IRS with information required to process advance CTC payments. Taxpayers can provide information on qualifying children ages 17 and under, other dependents and direct deposit bank information for payments sent to their checking or savings account directly.

Importantly, no action is needed by most families as taxpayers who have already filed or plan to file 2019 or 2020 returns are not to use this tool. Once the IRS has processed their returns, the information provided therein shall be used to determine eligibility to issue advance payments. Further, taxpayers need to be aware of scams related to both advance CTC payments and EIPs. The Service has emphasized that the only way to avail either of these benefits is by filing a tax return or registering online.

Finally, the IRS noted that advance CTC payments are calculated based on the taxpayer’s 2020 tax return or 2019 tax return if the former is unavailable to them. The payment will be up to $300 per month for each child under age 6 and up to $250 per month for each child ages 6 through 17. These payments will largely be made through direct deposit on July 15, August 13, September 15, October 15, November 15 and December 15.

IR-2021-129

04/30/2021

SMALL BUSINESSU.S. small biz is recovering after COVID-19 sucker punch

Small businesses in the United States are on the road to recovery, according to a new report from accounting software giant Intuit. As of March 31, 2021, most industries saw better revenue than they did the year before the pandemic.

Intuit pulled anonymized data from one million small businesses (out of approximately 29 million that use the company’s QuickBooks platforms) to produce the Intuit QuickBooks Small Business Recovery report. In recent years, Intuit has been realizing the benefits of having so many small businesses (approximately 29 million) plugged into its QuickBooks products, producing offerings like benchmarking and various industry reports.

The most recent report showed that COVID-19’s impact on business revenue was most severe in April 2020 when revenue dropped by 22 percent nationwide, equivalent to $4.6 billion during that month alone compared to before the pandemic.

In general, businesses in high-density, urban areas — especially on the East and West Coasts — experienced a greater negative financial impact than those in rural areas. Brooklyn and San Francisco were among the worst-hit cities, and some of the worst-hit businesses were in the recreation industry. Bowling alleys’ annual revenues are down by 33 percent, a drop of more than $250,000 per business, compared to before the pandemic.

Home improvement and real estate businesses have been among the top performers over the past 12 months. Employees forced to stay home turned to home improvement services to upgrade their environments and home offices, and individuals fleeing cities hard-hit by the pandemic drove up the real estate market in certain areas of the country. At the end of March 2021, mortgage bankers’ annual revenues were up by 30 percent compared to their pre-pandemic level, an increase of $147,000 per business.

The Intuit report used net bank deposits, which show how much money is going into business bank accounts, excluding government grants and loans, to provide a picture of small business revenues after the onset of the COVID-19 pandemic.

“From bowling alleys to dentists, and from coast to coast, no small business was immune to the challenging circumstances that COVID-19 presented this year,” said Alex Chriss, executive vice president and general manager of Intuit QuickBooks, in a statement. “Despite these challenges, our data shows that small businesses are on a path to recovery, demonstrating the resilience and tenacity that small businesses embody for all of us. The spirit of resilience and recovery is evident across the entire QuickBooks platform, and Intuit is committed to helping businesses learn new ways to grow and thrive in the future.”

04/14/2021

The Internal Revenue Service has announced that taxpayers with excess APTC for 2020 are not required to file Form 8962, Premium Tax Credit, or report an excess advance Premium Tax Credit repayment on their 2020 Form 1040 or Form 1040-SR, ...

04/14/2021

In a new Notice, the IRS has finally weighed in on the new 100 percent

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