IRS finalizes guidance for the #Section_199A_deduction for shareholders of Regulated Investment Companies

WASHINGTON — The Internal Revenue Service today issued final regulations permitting a regulated investment company (RIC) that receives qualified real estate investment trust (REIT) dividends to report dividends the RIC pays to its shareholders as section 199A dividends.

Section 199A, enacted as part the Tax Cuts and Jobs Act (TCJA), allows individual taxpayers and certain trusts and estates to deduct up to 20 percent of certain income (section 199A deduction).

The section 199A deduction is available to eligible taxpayers with qualified business income (QBI) from qualified trades or businesses operated as sole proprietorships or through partnerships, S corporations, trusts, or estates, as well as for qualified REIT dividends and income from publicly traded partnerships.  The section 199A deduction is not available for C corporations.

The regulations issued today provide that a shareholder in a RIC may, subject to limitations, treat a section 199A dividend received from a RIC as a qualified REIT dividend for purposes of determining the section 199A deduction.

The regulations also provide additional guidance on the treatment of previously disallowed losses that are included in QBI in subsequent years and provide guidance for taxpayers who hold interests in split-interest trusts or charitable remainder trusts.

For more information about this and other TCJA provisions, visit IRS.gov/taxreform.

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Senate approves House-passed Paycheck Protection Program (#ppp) reform bill.

The legislation would give small businesses more time to use emergency loans under the program by extending the eight-week period in which they must use the money to qualify for loan forgiveness to 24 weeks.The bill would also give small businesses more flexibility by changing the so-called 75/25 rule, which requires recipients of funds under the program to use three-quarters of the money for payroll costs and to limit other costs to no more than 25% in order to be eligible for loan forgiveness. The new ratio would be at least 60% on payroll and no more than 40% on other costs.

IRS People First Initiative provides relief to taxpayers

Due to COVID-19, the IRS is providing relief on a variety of issues as part of the People First Initiative. The IRS is modifying certain activities through the filing and payment deadline, Wednesday, July 15, 2020. Here’s what people need to know about relief related to IRS exams or audits

Field, office and correspondence audits – Generally, the IRS won’t start new field, office and correspondence audits. The agency will continue to work refund claims, where possible, without in-person contact.
However, the IRS may start new audits if needed to preserve the statute of limitations.

• In-person meetings – In-person meetings for current field and office audits are on hold. However, examiners will continue their work remotely, where possible. Taxpayers should respond to any requests for information during this period, if possible.

• Unique situations – Corporations and businesses may want to begin a previously scheduled audit while people and records are available. When it’s in the best interest of both parties and appropriate people are available, the IRS may move forward with an audit. COVID-19 developments could slow activities.

• General requests for information – Taxpayers should reply to all IRS correspondence, if requested. 

Earned income tax credit and wage verification reviews – Taxpayers have until July 15, 2020, to respond to the IRS and verify that they qualify for the earned income tax credit or to verify their income. These taxpayers should submit all requested information. If they can’t contact the agency and explain why the information is not available, the IRS won’t deny these credits for a failure to provide information until July 15, 2020.

Independent Office of Appeals – Appeals employees will continue to work their cases. They aren’t currently holding in-person meetings, but conferences may be held by phone or video. Taxpayers should respond to any requests for information form the Independent Office of Appeals.

Statute of limitations – The IRS will continue to protect all statutes of limitations. If statute expirations might be jeopardized during this period, taxpayers are encouraged to cooperate in extending these statutes. Otherwise, the IRS will issue Statutory Notices of Deficiency and pursue similar actions to protect the interests of the government.


Share this tip on social media — #IRSTaxTip: IRS People First Initiative provides relief to taxpayers. https://go.usa.gov/xvstn

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IRS People First Initiative provides relief to taxpayers facing COVID-19 issues


Due to COVID-19, the IRS’ People First Initiative provides relief to taxpayers on a variety of issues from easing payment guidelines to delaying compliance actions. This relief is effective through the filing and payment deadline, Wednesday, July 15, 2020.

• Existing Installment Agreements – Under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are delayed. Those currently unable to meet the terms of an Installment Payment Agreement or Direct Deposit Installment Agreement may cancel payments during this period with no default. By law, interest will continue to accumulate on any unpaid balances.

• New Installment Agreements – People who can’t pay all their federal taxes can establish a monthly payment agreement.

• Pending Offer in Compromise applications – Taxpayers have until July 15, 2020, to provide additional information for a pending OIC. The agency generally won’t close any pending OIC request before July 15 without the taxpayer’s consent.

• OIC payments – Taxpayers can delay all payments on accepted OICs until July 15, 2020. Interest may accrue, and missed payments are due when the suspension period ends. Taxpayers can call the number on their acceptance letter to address their needs.

• Delinquent return filings – The IRS will not default an OIC for taxpayers who are delinquent in filing their tax return for 2018. However, they should file any delinquent 2018 return and their 2019 return by July 15, 2020.

• Non-filers – More than 1 million households who haven’t filed tax returns in the last three years are owed refunds. The deadline to get refunds on 2016 tax returns is July 15, 2020.  Those who owe taxes on delinquent returns may visit IRS.gov for payment options. The longer the debt is owed, the more penalties and interest accrue.

• Field collection activities – IRS stopped field revenue officer enforcement actions, such as liens and levies. Revenue officers will continue to pursue high-income non-filers and perform other similar activities where necessary.

• Automated liens and levies – IRS delayed issuing new automated and systemic liens and levies. Taxpayers experiencing a hardship due to a levy should reach out to their assigned IRS contact or fax their information to (855) 796-4524.

• Certifications to the State Department – IRS has delayed new certifications of taxpayers who are considered seriously delinquent. This affects a person’s ability to receive a new or renewed passport. Existing certifications will remain in place unless their tax situation changes. 

• Private debt collection – IRS will not forward new delinquent accounts to private collection agencies during this period.


Share this tip on social media — #IRSTaxTip: IRS People First Initiative provides relief to taxpayers facing COVID-19 issues. https://go.usa.gov/xvstN

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Act by Wednesday for chance to get quicker #Economic_Impact_Payment; timeline for payments continues to accelerate

WASHINGTON – With a variety of steps underway to speed Economic Impact Payments, the Treasury Department and the Internal Revenue Service urged people to use Get My Payment by noon Wednesday, May 13, for a chance to get a quicker delivery.

The IRS, working in partnership with Treasury Department and the Bureau of Fiscal Services (BFS), continues to accelerate work to get Economic Impact Payments to even more people as soon as possible. Approximately 130 million individuals have already received payments worth more than $200 billion in the program’s first four weeks.

Starting later this month, the number of paper checks being delivered to taxpayers will sharply increase. For many taxpayers, the last chance to obtain a direct deposit of their Economic Impact Payment rather than receive a paper check is coming soon. People should visit Get My Payment on IRS.gov by noon Wednesday, May 13, to check on their payment status and, when available, provide their direct deposit information.

“We’re working hard to get more payments quickly to taxpayers,” said IRS Commissioner Chuck Rettig. “We want people to visit Get My Payment before the noon Wednesday deadline so they can provide their direct deposit information. Time is running out for a chance to get these payments several weeks earlier through direct deposit.”

After noon Wednesday, the IRS will begin preparing millions of files to send to BFS for paper checks that will begin arriving through late May and into June. Taxpayers who use Get My Payment before that cut-off can still take advantage of entering direct deposit information.

How Get My Payment works
The Get My Payment tool provides eligible taxpayers with a projected Economic Impact Payment deposit date. The information is updated once daily, usually overnight. There is no need to check more than once a day. Taxpayers who did not choose direct deposit on their last tax return can use this tool to input bank account information to receive their payment by direct deposit, expediting receipt.

Non-Filers portal remains available
For those not required to file a federal tax return, the Non-Filers: Enter Payment Info Here tool helps them submit basic information to receive an Economic Impact Payment quickly to their bank account. Developed in partnership between the IRS and the Free File Alliance, this tool provides a free and easy option for those who don’t receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) and VA Compensation and Pension (C&P) benefits. The Non-filers tool is also available in Spanish.

Eligible taxpayers who filed tax returns for 2019 or 2018 will receive the payments automatically. Automatic payments will also be sent to those receiving Social Security retirement, disability benefits, Railroad Retirement benefits, Veterans Affairs benefits or Supplemental Security Income soon.

Watch out for scams related to Economic Impact Payments
The IRS urges taxpayers to be on the lookout for scams related to the Economic Impact Payments. To use the new app or get information, taxpayers should visit IRS.gov. People should watch out for scams using email, phone calls or texts related to the payments. Be careful and cautious: The IRS will not send unsolicited electronic communications asking people to open attachments, visit a website or share personal or financial information.

Stay informed with Economic Impact Payment FAQs; Social Media platforms
Taxpayers should check the Frequently Asked Questions (FAQs) for more information.

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