Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of November 15, 2021 – November 19, 2021. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.
November 15, 2021: The IRS published a news release announcing the launch of a new online tool designed to help US withholding agents comply with their reporting and withholding responsibilities with respect to IRS Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding. The tool performs a quality review of data before submitting to the IRS. Use of the tool does not change a withholding agent’s obligations to file Form 1042-S with the IRS and furnish a copy to the payee.
November 15, 2021: The IRS published a news release announcing that victims of wildfires that began July 14, 2021, now have until January 3, 2022, to file various individual and business tax returns and make tax payments.
November 16, 2021: The IRS published a news release announcing that, effective November 15, 2021, tax professionals are able to order up to 30 Transcript Delivery System transcripts per client through the Practitioner Priority Service line. This is an increase from the previous 10 transcripts per client limit.
November 16, 2021: The IRS published a news release regarding Notice 2021-63, which details how the temporary 100% business deduction for food or beverages from restaurants applies to taxpayers properly applying the rules of Revenue Procedure 2019-48 when using per diem rates.
November 17, 2021: The IRS published a news release announcing that victims of Hurricane Ida throughout Mississippi now have additional time—until January 3, 2022—to file various individual and business tax returns and make tax payments.
November 17, 2021: The Internal Revenue Service Advisory Council (IRSAC) published a news release announcing its annual report for 2021, which includes recommendations to the IRS regarding new and continuing issues in tax administration. The 2021 report includes recommendations on 24 issues, covering a broad range of topics. The IRSAC is a federal advisory committee that provides an organized public forum for the discussion of relevant tax administration issues between IRS officials and representatives of the public. IRSAC members offer constructive observations regarding current or proposed IRS policies, programs and procedures.
November 17, 2021: The IRS published a news release announcing it unveiled a new how-to video series enabling taxpayers to avoid potential scams by considering and applying for an Offer in Compromise themselves and to avoid paying excessive fees to companies advertising outlandish claims.
November 17, 2021: The IRS published a news release announcing the launch of an improved identity verification and sign-in process that enables more people to securely access IRS online tools and applications.
November 17, 2021: The IRS’s National Taxpayer Advocate published a blog post indicating that US Congress should address minimum competency standards for return preparers. The National Taxpayer Advocate stated that Congress must provide the IRS with the statutory authority to establish minimum competency standards for federal tax return preparers.
November 17, 2021: The IRS published frequently asked questions for states and local governments regarding taxability and the reporting of payments from Coronavirus State and Local Fiscal Recovery Funds. These funds give eligible state and local governments a substantial infusion of resources to meet pandemic response needs. The answers in the FAQs detail the tax consequences for individual recipients and the reporting requirements for states, local governments and employers, as applicable.
November 17, 2021: The IRS published Revenue Procedure 2021-49, which provides guidance for partnerships and consolidated groups regarding amounts excluded from gross income (tax-exempt income) and deductions relating to the Paycheck Protection Program (PPP) and other certain COVID-19 relief programs.
November 17, 2021: The IRS Criminal Investigation Dividend (IRS-CI), the criminal investigative arm of the IRS, released an annual report concerning enforcement actions. The report details statistics, important partnerships and significant criminal enforcement actions from the IRS-CI for the past fiscal year, which began October 1, 2020, and ended September 30, 2021.
November 17, 2021: The IRS published Revenue Procedure 2021-48, which provides that taxpayers may treat amounts that are excluded from gross income (tax-exempt income) in connection with the forgiveness of PPP loans as received or accrued: (1) as eligible expenses are paid or incurred, (2) when an application for PPP loan forgiveness is filed or (3) when PPP loan forgiveness is granted.
November 17, 2021: The IRS published Revenue Procedure 2021-50, which allows eligible partnerships to file amended partnership returns for taxable years ending after March 27, 2020, to adopt the guidance set forth in Revenue Procedures 2021-48 and 2021-49 if certain requirements are met.
November 18, 2021: The IRS issued a statement informing taxpayers and their advisers of the disposition of protective claims for a refund filed by or on behalf of a taxpayer, pending the resolution of California v. Texas. As a result of the Supreme Court of the United States’ upcoming ruling in the case, the IRS will not allow any of the protective claims to be held in suspense nor take further action with respect to these claims. Taxpayers who filed these protective claims will not receive any notice from the IRS disallowing their claims for refund. Additionally, the IRS will not accept any future claims for refund that rely on the legal theories advanced by the plaintiffs in that litigation.
November 19, 2021: The IRS published a news release, kicking off National Tax Security Awareness Week. Working together as the Security Summit, the coalition of the IRS, the states and the nation’s tax community plan for the 6th Annual National Tax Security Awareness Week to take place from November 29 – December 3.
November 19, 2021: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).
Special thanks to Robbie Alipour in our Chicago office for this week’s roundup.