The midyear report from National Taxpayer Advocate Erin Collins focuses on the effects of the
COVID-19 pandemic, including its impact on IRS service levels and how the reduced services have affected taxpayers.
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TOPICS
IRS Practice & Procedure
Resolving IRS hardships with the Taxpayer Advocate Service
The Taxpayer Advocate Service can help practitioners when clients are suffering.
PTIN user fees reinstated
The IRS said it would once again begin charging fees to issue preparer tax identification numbers to return preparers for 2021.
Timely filing from foreign countries
Taxpayers filing from a foreign country may find
complications in the postmark rule.
Procedural avenues for taxpayers with balances due to the IRS
Taxpayers have several forums available to address outstanding liabilities with the IRS.
Taxpayer allowed to challenge underlying liability in CDP hearing
A taxpayer did not have an opportunity to challenge a trust fund recovery penalty where he did not receive a letter that scheduled an Appeals conference.
The maze of real estate rentals
Taxpayers and practitioners must navigate special rules for rental real estate activities in a number of areas including the passive activity rules, the net investment income tax, the qualified business income deduction, the Sec. 179 deduction, corporate reorganization rules, and the self-employment tax.
TFRP: A possible second financial crisis for business owners
Employers should beware of the trust fund recovery penalty.
Capitalized IPO costs are nondeductible after take-private transaction
The treatment of stock issuance costs continues to be governed by legal precedent that requires such costs be offset against the proceeds of the stock sale.
Returns affected by e-filing outage will be timely if filed by Sept. 17
For tax returns with a Sept. 15 due date that were affected by an e-filing software outage, the IRS will treat a return and any elections that were filed with that return as timely filed if the taxpayer successfully e-filed the return and any elections by Sept. 17, 2020.
Lenders will not file Form 1099-C for forgiven PPP loans
The IRS issued guidance telling lenders they should not file Form 1099-C, Cancellation of Debt, or furnish a payee statement to the borrower when a Paycheck Protection Program loan is forgiven.
E-filing problems plague some Sept. 15 tax returns
Some practitioners who attempted to file returns on Sept. 15 ran into technical difficulties that prevented them from e-filing returns by the midnight deadline. The AICPA is talking to the IRS about relief for the problem.
Pandemic makes meeting Sept. 15 filing deadline difficult
Tax practitioners have expressed concerns that they will not be able to meet looming Sept. 15 tax filing deadlines for a variety of reasons related to the global pandemic.
6 more IRS forms can be filed with e-signatures
The IRS added 6 forms to its list temporarily permitting electronic signatures.
Treasury issues proposed regulations on Sec. 47 rehab credit
the IRS published proposed regulations regarding the Sec. 47 rehabilitation tax credit, including rules to coordinate the new five-year period over which the credit may be claimed with other special rules for investment credit property.
Court refuses to throw out unauthorized disclosure suit
Court complaint sufficiently states a claim for relief despite not including information the IRS had but refused to provide taxpayers.
IRS temporarily allows e-signatures on some forms
The IRS identified a dozen forms for which is will accept e-signatures for the rest of the year. The forms covered include Form 8879, IRS e-file Signature Authorization, used for e-filing individual income tax returns.
Tools to help nonfilers receive economic impact payments
The IRS provided information and tools that tax practitioners can use to inform individuals who are eligible to receive economic impact payments but did not receive one automatically.
IRS stops sending balance-due notices, corrects payroll tax penalties
The IRS has stopped sending balance-due notices to taxpayers as it works to process its backlog of unopened mail. It is also working to correct certain erroneous penalties for some employers who reduced their payroll tax deposits to claim COVID-19 relief-related credits.
IRS begins accepting e-filing of amended individual tax returns
The IRS said it had launched its eagerly awaited program to accept Forms 1040-X, Amended U.S. Individual Income Tax Return, electronically.
TAX PRACTICE MANAGEMENT
2025 tax software survey
AICPA members in tax practice assess how their return preparation software performed during tax season and offer insights into their procedures.
