joseph castellano
  1. Form 1040-X e-file coming this summer; major milestone for electronic returns

Later this summer, tax professionals and taxpayers for the first time will be able to e-file Form 1040-X, Amended U.S Individual Income Tax Return, using available tax software products. Making the 1040-X an electronically filed form has been an ongoing request from the nation’s tax professional community and a continuing recommendation from the Internal Revenue Service Advisory Council (IRSAC) and Electronic Tax Administration Advisory Committee (ETAAC). The new electronic option allows the IRS to receive amended returns faster while minimizing errors normally associated with manually completing the form.

“This new process is a major milestone for the IRS, and it follows hard work by people across the agency,” said IRS Commissioner Chuck Rettig. “E-filing has been one of the great success stories of the IRS, and more than 90 percent of taxpayers use it routinely. But the big hurdle that’s been remaining for years is to convert amended returns into this electronic process. Our teams have worked diligently to overcome the unique challenges related to the 1040-X, and we look forward to offering this new service this summer.”

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  1. Nationwide Tax Forums course descriptions coming soon

Course titles and descriptions for the 2020 IRS Nationwide Tax Forums will be available within the next week at The IRS last week announced the cancellation of the in-person Tax Forums and the switch to a virtual format for 2020. Registrants will be able to attend 30 online webinars, which begin in late July.

Registration is now open. Attendees who previously registered to attend one of the in-person IRS Nationwide Tax Forums can transfer their registration to the virtual format. Visit the IRS Nationwide Tax Forums for dates and registration information.

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  1. Economic Impact Payments arrive in plain envelope; IRS.govanswers frequently asked questions

The IRS sent a reminder to taxpayers this week confirming that some Economic Impact Payments are being sent via prepaid debit card instead of paper check. The debit cards arrive in a plain envelope from “Money Network Cardholder Services.” Nearly 4 million people are being sent their Economic Impact Payment by prepaid debit card.

The prepaid cards provide consumer protections available to traditional bank account owners, including protection against fraud, loss and other errors.

The IRS has developed frequently asked questions to help Americans get answers about their Economic Impact Payments, including those arriving on prepaid debit card. These FAQs include answers to eligibility and other many common questions, including help to use two Economic Impact Payment tools.

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  1. IRS provides guidance on income tax withholding on certain periodic retirement and annuity payments

The Department of the Treasury and the IRS issued a proposed regulation updating the federal income tax withholding rules for periodic retirement and annuity payments made after December 31, 2020. In Notice 2020-03, the IRS provided that, for 2020 the default rate of withholding on periodic payments will continue to be based on treating the taxpayer as a married individual claiming three withholding allowances when no withholding certificate is in effect.

Under the proposed regulation for 2021 and future calendar years, the Treasury Department and the IRS will provide the rules and procedures for determining the default rate of withholding on periodic payments when a taxpayer has no withholding certificate in effect in applicable forms, instructions, publications and other guidance.

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  1. IRS accepting nominations for the Internal Revenue Service Advisory Council until June 12

The IRS is accepting applications for the Internal Revenue Service Advisory Council (IRSAC). The deadline to apply is June 12. The IRSAC serves as an advisory body to the Commissioner of the IRS and provides an organized public forum for discussion of relevant tax administration issues between IRS officials and representatives of the public.

More information, including the application form, is available on

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  1. IRS Fraud Enforcement Program adds National Fraud Counsel

The IRS has named attorney Carolyn Schenck as the National Fraud Counsel serving the agency’s new Fraud Enforcement Program. She will help provide advice on the Fraud Enforcement Program’s design, development, and delivery of major activities in support of Service-wide efforts to detect and deter fraud.

“We are very pleased with Carolyn’s selection as the Chief Counsel National Fraud Counsel, which could not have come at a more opportune time,” Chief Counsel Michael Desmond said. “With the critical role the IRS is playing in responding to the unprecedented challenges of the COVID pandemic, having someone with her talent and experience should send a strong signal that those who seek to take advantage of the situation will face dire consequences.”

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  1. June 4 Webinar: Circular 230 and Practicing Before the IRS

The IRS will present the webinar, The Office of Professional Responsibility: Circular 230 and Practicing Before the IRS, at 2 p.m. ET on June 4. The 120-minute webinar will consider:

  • What it means to “practice before the IRS” and the regulations governing such practice (Circular 230)
  • Due diligence obligations under Circular 230 and other key Circular 230 provisions
  • Best practices for all tax professionals with respect to clients and the tax administration system

Tax Pros can earn two continuing education credits by participating.

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  1. Technical Guidance

The Treasury Department and the IRS provided tax relief for taxpayers that develop renewable energy projects that produce electricity from sources such as wind, biomass, geothermal, landfill gas, trash, and hydropower, and use technologies such as solar panels, fuel cells, microturbines, and combined heat and power systems. Because COVID-19 has caused industry-wide delays in the supply chain for components needed to complete renewable energy projects otherwise eligible for important tax credits the IRS has issued Notice 2020-41 to provide tax relief to affected taxpayers.

The Department of the Treasury and the IRS issued final regulations clarifying the reporting requirements generally applicable to tax-exempt organizations. The final regulations reflect statutory amendments and certain grants of reporting relief announced by the Treasury Department and the IRS in prior guidance to help many tax-exempt organizations generally find the reporting requirements in one place. The final regulations allow tax-exempt organizations to choose to apply the regulations to returns filed after Sept. 6, 2019.

The Treasury Department and the IRS issued proposed regulations to help businesses understand how legislation passed in 2018 may benefit those claiming carbon capture credits. The proposed regulationsprovide guidance on two new credits for carbon oxide captured using equipment originally placed in service on or after February 9, 2018, allowing up to $50 per metric ton of qualified carbon oxide for permanent sequestration, and up to $35 for Enhanced Oil Recovery purposes.

The Department of the Treasury and the IRS issued guidance this week on how the reduction of the personal exemption deduction to zero under the Tax Cuts and Jobs Act (TCJA) of 2017 applies to certain rules relating to the Premium Tax Credit (PTC). These proposed regulations affect those who claim the PTC. Under provisions of the TCJA, the personal exemption deduction is zero for taxable years beginning after Dec. 31, 2017, and ending before Jan.1, 2026. Although the amount of the deduction for personal exemptions is reduced to zero for those years, taxpayers continue to include on their tax returns the names and taxpayer identification numbers of individuals for whom they are allowed a personal exemption deduction.

Revenue Procedure 2020-33 provides guidance with respect to the United States and area median gross income figures that are to be used by issuers of qualified mortgage bonds, as defined in section 143(a) of the Internal Revenue Code, and issuers of mortgage credit certificates, as defined in section 25(c), in computing the housing cost/income ratio described in section 143(f)(5).

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