Issue Number: 2021-50
Inside This Issue
- IRS joins leading nonprofit groups to highlight special charitable tax benefit available through Dec. 31
- Families receiving December advance Child Tax Credit payment
- IRS issues standard mileage rates for 2022
- Tax relief for disaster victims in Kentucky
- A Closer Look: How the IRS encourages taxpayers to consider charitable contributions
- IRS makes Tax Exempt Organization Search primary source to get exempt organization data
- Ensure your small business clients use the right form when filing employment tax returns
- News from the Justice Department’s Tax Division
- Technical Guidance
1. IRS joins leading nonprofit groups to highlight special charitable tax benefit available through Dec. 31
The Independent Sector and National Council of Nonprofits joined with the IRS to highlight a pandemic-related provision where married couples filing jointly can deduct up to $600 in cash donations and individual taxpayers can deduct up to $300 in donations. Under the temporary law, taxpayers don’t need to itemize deductions on their tax returns to take advantage of this, which creates tax-favorable donation options not normally available to about 90 percent of tax filers. At a time when many charitable groups are struggling during the pandemic, the IRS highlights the new provision and urges people to make sure they donate to a qualifying charity. The special Tax Exempt Organization Search tool on IRS.gov can help people make sure they donate to a qualified charity. This article is also available in Spanish and Simplified Chinese.
Millions of American families are receiving their final advance Child Tax Credit (CTC) payment for the month of December. Eligible families who did not receive any advance Child Tax Credit payments can claim the full amount of the Child Tax Credit on their 2021 federal tax return, filed in 2022. This includes families who don’t normally need to file a return. This article is also available in Spanish and Simplified Chinese.
The IRS issued the 2022 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning Jan. 1, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 58.5 cents per mile driven for business use, up 2.5 cents from 2021,
- 18 cents per mile driven for medical, or moving purposes for qualified active-duty members of the Armed Forces, up 2 cents from 2021 and
- 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2021.
Kentucky victims of severe storms, straight-line winds, flooding and tornadoes beginning Dec. 10, 2021, now have until May 16, 2022, to file various individual and business tax returns and make tax payments. Individuals and households affected by these severe conditions that reside or have a business Caldwell, Christian, Fulton, Graves, Hart, Hickman, Hopkins, Logan, Lyon, Marshall, Muhlenberg, Ohio, Taylor, and Warren counties qualify for tax relief. This article is also available in Spanish and Simplified Chinese.
In the recent issue of “A Closer Look,” Sunita Lough, Commissioner, Tax Exempt and Government Entities Division, provides information for taxpayers on charitable giving. “We are committed to ensuring that taxpayers who generously make a difference through their charitable support are aware of the relief the government provides for them,” Lough said. This feature is also available in Spanish.
The publicly available data the IRS provides on electronically filed Forms 990 in a machine-readable format will be available solely on the Tax Exempt Organization Search webpage. Beginning Dec. 31, 2021, the IRS will no longer update the Form 990 Series data on Amazon Web Services. This change is to provide access to public data for organizations with tax-exempt status in one location on IRS.gov on the Charities and Nonprofits webpage.
Some small businesses pay employment tax quarterly while others may pay it just once a year. Remind your clients to review the rules for filing two commonly used employment tax returns. The two forms are:
Karl Burden-El Bey, a Hampton, Va., tax preparer, was sentenced to 38 months in prison for preparing false tax returns on behalf of clients, theft of government funds and failing to file his own federal income tax returns. In addition to the term of imprisonment, Burden-El Bey (aka Carl L. Burden) has been ordered to serve three years of supervised release and pay approximately $5,000 in restitution to the United States.
Announcement 2021-18 revokes Announcement 2001-33, 2001-17 IRB 1137. Announcement 2001-33 provided tax-exempt organizations with reasonable cause for purposes of relief from the penalty imposed under section 6652(c)(1)(A)(ii) of the Internal Revenue Code if they reported compensation on their annual information returns in the manner described in Announcement 2001-33 instead of in accordance with certain form instructions.
Notice 2021-66 provides guidance under the Infrastructure Investment and Jobs Act (IIJA), Public Law 117-58, 135 Stat. 429 (Nov. 15, 2021), which reinstates the excise taxes imposed by sections 4661 and 4671 (the Superfund chemical taxes), effective July 1, 2022.
Notice 2022-02 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for December 2021 used under section 417(e)(3)(D), the 24-month average segment rates applicable for December 2021, and the 30-year Treasury rates, as reflected by the application of section 430(h)(2)(C)(iv).
Notice 2022-03 contains the optional 2022 standard mileage rates, as well as the maximum automobile cost used to calculate the allowance under a fixed and variable rate (FAVR) plan.
Revenue Procedure 2021-54 prescribes discount factors for the 2021 accident year for insurance companies to compute discounted unpaid losses under section 846 of the Internal Revenue Code and discounted estimated salvage recoverable under section 832.
Revenue Ruling 2022-01 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, and the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by section 1274.
Revenue Procedure 2022-09, which modifies Rev. Proc. 2019-43, 2019-48 I.R.B. 1107, as modified by Rev. Proc. 2021-34, 2021-35 I.R.B. 337, to provide procedures under section 446 of the Internal Revenue Code (Code) and section 1.446-1(e) of the Income Tax Regulations to obtain automatic consent to change methods of accounting to comply with the final regulations under sections 263A, 448, 460 and 471 of the Code issued on Jan. 5, 2021 (T.D. 9942).
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