Issue Number: 2022-01
Inside This Issue
- IRS releases 2021 progress update, detailing challenging year; new ‘A Closer Look’ available
- Make final 2021 quarterly tax payment by Jan. 18
- Delays in employer credit advance payments
- Updates on early termination of the Employee Retention Credit and more
- IRS counts down top 10 investigation cases of 2021
- Report abusive tax promotions, schemes
- Tax relief for Colorado wildfire victims
- Register for upcoming IRS webinars in January, earn CE credits
- Small business tax workshop now available in seven languages
- IRS issues FAQs related to refund claims involving Credit for Increasing Research Activities
- IRS updates Topic G FAQs for 2020 Unemployment Compensation Exclusion
- Technical Guidance
The IRS released its 2021 annual report describing the agency’s work delivering taxpayer service and compliance efforts during the pandemic, while highlighting efforts taken by IRS employees to help taxpayers during the past year. A special edition of “A Closer Look” by IRS Commissioner Chuck Rettig about the progress update also touches on some of the ongoing challenges this year. “As the 2022 filing season approaches, more work remains for us to help taxpayers as well as tax professionals,” Rettig said.
Urge your clients to review their options to avoid being subject to estimated tax penalties. The deadline for making a payment for the fourth quarter of 2021 is Tuesday, Jan. 18. This article is also available in Spanish and Simplified Chinese.
Expect payment delays until late January for Form 7200, Advance Payment of Employer Credits Due to COVID-19. Taxpayers may continue to file Forms 7200 by fax until Jan. 31, and their applicable employment tax returns by the required due date. More information is available on the following IRS.gov webpages:
- Coronavirus Tax Relief for Businesses and Tax-Exempt Entities
- Employee Retention Credit
- Employer Tax Credits
The Infrastructure Investment and Jobs Act amends section 3134 of the Internal Revenue Code to limit the availability of the Employee Retention Credit in the fourth quarter of 2021 to taxpayers that are recovery startup businesses. Taxpayers that are not recovery startup businesses are not eligible for the Employee Retention Credit for wages paid after Sept. 30, 2021. Visit IRS.gov for more information about the early termination of the Employee Retention Credit for most employers. Also:
- The last day to file Form 7200, Advance Payment of Employer Credits Due to COVID-19, to request an advance payment for the fourth quarter of 2021 is the date on which your client files their employment tax return for the tax period or Jan. 31, 2022, whichever is earlier. The last date to file Form 7200 is the same whether your client files a quarterly Form 941, or an annual Form 943, 944 or CT‐1.
- The Form 7200 fax line will shutdown after Jan. 31, 2022, and the IRS will no longer be accepting Form 7200 submissions. Visit IRS.gov for Form 7200 helpful tips.
IRS Criminal Investigation counted down the top 10 cases for calendar year 2021 on its Twitter account, including the agency’s most prominent and high-profile cases.
Tax pros: The IRS needs your help in identifying promoters of “too good to be true” abusive tax scams. Use Form 14242, Report Suspected Abusive Tax Promotions or Preparers, to report a suspected abusive tax avoidance scheme and tax return preparers who promote such schemes. For more information, visit IRS.gov/scams.
Victims of the wildfires in Colorado will have until May 16, 2022, to file various individual and business tax returns and make tax payments. Currently, relief is available to affected taxpayers who live or have a business in Boulder County, but the IRS will provide the same relief to any other Colorado localities designated by FEMA. This article is also available in Spanish and Simplified Chinese.
The IRS hosts the following webinars in January:
- Tax Changes from a Forms Perspective – Tax Year 2021 on Jan. 13 at 2 p.m. EST. This 75-minute course is eligible for one continuing education (CE) credit.
- Updates from the National Taxpayer Advocate on Jan. 20 at 2 p.m. EST. This 100-minute webinar is eligible for two CE credits.
- Bankruptcy and the IRS on Jan. 25 at 2 p.m. EST. This 100-minute webinar is eligible for two CE credits.
Visit IRS.gov for the topics covered during each webinar and to register. If you have questions, email the web conference team.
IRS’s small business tax workshop is now available in seven languages: English, Spanish, Chinese, Russian, Haitian Creole, Vietnamese and Korean. This free workshop helps small business owners learn about their rights and tax responsibilities.
The IRS issued FAQs to assist taxpayers in filing valid research credit claims for a refund. The FAQs follow an October 2021 news release. As part of the announcement, the IRS modified the one-year transition period during which taxpayers will now have 45 days (instead of 30 days) to perfect a research credit claim for refund prior to the IRS’s final determination on the claim.
Send comments on claiming the Credit for Increasing Research Activities (IRC section 41) to email@example.com. The IRS will monitor the process and questions during the initial one-year transition period to determine if any modifications are necessary. Updates will be provided on IRS.gov.
The IRS updated its frequently asked questions about Topic G, Receiving a Refund, Letter or Notice, on 2020 Unemployment Compensation Exclusion.
Revenue Procedure 2022-08 modifies Rev. Proc. 2022-05 to allow for the new electronic submission process on Pay.gov of Form 1024, Application for Recognition of Exemption Under Section 501(a) or Section 521 of the Internal Revenue Code. Beginning Jan. 3, 2022, applications for recognition of exemption on Form 1024 must be submitted electronically online at Pay.gov. The IRS will provide a 90-day grace period during which it will continue to accept paper versions of Form 1024 and letter applications.
Revenue Ruling 2022-02 provides the covered compensation tables effective Jan. 1, 2022.
Thank you for subscribing to e-News for Tax Professionals an IRS e-mail service.
If you have a specific concern about your client’s tax situation, call the IRS Practitioner Priority Service 1-866-860-4259.
This message was distributed automatically from the mailing list e-News for Tax Professionals. Please Do Not Reply To This Message
To subscribe to or unsubscribe from another list, please go to the e-News Subscriptions page on the IRS Web site.