Year-end giving reminder: Special tax deduction helps most people give up to $600 to charity, even if they don’t itemize

Issue Number: 2021-16

Inside This Issue

1. IRS provides guidance on per diem rates and the temporary 100% deduction for food or beverages from restaurants##line

The IRS issued Notice 2021-63 to make clear how the temporary 100% business deduction for food or beverages from restaurants applies to taxpayers properly applying the rules of Revenue Procedure 2019-48 for using per diem rates.

The notice has a special rule about treating the full meal portion of a per diem rate or allowance as being attributable to food or beverages from a restaurant.

2. IRS relief: Hurricane Ida and California wildfires

The IRS announced additional time – until January 3, 2022 – to file various individual and business tax returns and make tax payments for victims of:

3. IRS provides how-to videos to help taxpayers apply for Offer in Compromise

The IRS unveiled a new how-to video series enabling taxpayers to avoid potential scams by considering and applying for an Offer in Compromise (OIC) themselves and avoid paying excessive fees to companies advertising outlandish claims.

The IRS periodically warns against hiring and paying needless fees to “Offer in Compromise mills” that contort the IRS program into something it’s not and mislead people who have no chance of meeting the requirements while charging excessive fees, often thousands of dollars.

4. Year-end giving reminder: Special tax deduction helps most people give up to $600 to charity, even if they don’t itemize

A temporary law change now permits taxpayers to claim a limited deduction on their 2021 federal income tax returns for cash contributions made to qualifying charitable organizations.

To receive a deduction, taxpayers must donate to a qualified charity. To check the status of a charity, they can use the IRS Tax Exempt Organization Search tool.

5. Reporting guidance for partnership interests held in connection with the performance of services

The IRS shared detailed reporting directions for certain passthrough entities and taxpayers reporting of partnership interests held in connection with the performance of services, often referred to as “carried interests,” in the form of frequently asked questions (FAQs).

The FAQs have worksheets and instructions. Their purpose is to provide guidance relating to both Passthrough Entity filing and reporting requirements and Owner Taxpayer filing requirements.

6. Other tax news

The following information may be of interest to individuals and groups in or related to small businesses:

Credits, deductions and refunds

Reports

Tax professionals