Be sure to write the FEMA declaration number – 4601DR − on any return claiming a loss.
Victims of this spring's storms and tornadoes in Tennessee will have until August 2, 2021, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today.
Following The recent disaster declaration issued by the Federal Emergency Management Agency (FEMA), the IRS is providing this relief to taxpayers affected by storms, tornadoes, and flooding that took place between March 25 and April 3, 2021, in parts of Tennessee. Currently, relief is available to affected taxpayers who live or have a business in Campbell, Cannon, Cheatham, Claiborne, Clay, Davidson, Decatur, Fentress, Grainger, Hardeman, Henderson, Hickman, Jackson, Madison, Maury, McNairy, Moore, Overton, Scott, Smith, Wayne, Williamson and Wilson counties. The current list of eligible localities is always available on the disaster relief page on IRS.gov.
The tax relief postpones various tax filing and payment deadlines that occurred starting on March 25. As a result, affected individuals and businesses will have until August 2 to file returns and pay any taxes that were originally due during this period. This includes 2020 individual income tax returns due on May 17, as well as various 2020 business returns normally due on April 15. Among other things, this also means that affected taxpayers will have until August 2 to make 2020 IRA contributions.
The August 2 deadline also applies to quarterly estimated income tax payments due on April 15 and June 15, and the quarterly payroll and excise tax returns normally due on April 30. It also applies to tax-exempt organizations, operating on a calendar-year basis, that have a 2020 return due on May 17.
In addition, penalties on payroll and excise tax deposits due on or after March 25 and before April 9 will be abated as long as the deposits were made by April 9.
The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time.
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.
In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.
Individuals and businesses in a federally-declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2021 return normally filed next year), or the return for the prior year. This means that taxpayers can, if they choose, claim these losses on the 2020 return they are filling out this tax season.
The IRS Return Preparer Office has begun sending letters to enrolled agents (EA) with Social Security numbers (SSNs) ending in 7, 8, 9, or no SSN, who did not renew during this year’s renewal cycle. Those who did not renew during the 2018 and 2021 cycles will be moved to terminated status. Those who did not renew during the 2021 cycle will be moved to inactive status. Anyone in inactive status can still submit a late renewal for approval with proof of CE. Anyone in terminated status must re-take the Special Enrollment Examination (SEE) to apply for re-enrollment.
If an EA disagrees and has a record of previously renewing their EA status, they should contact the number on the letter, which is 855-472-5540.
Following are images of IRS Letter 5508 and IRS Letter 5507:
Attention EA exam candidates! The IRS has announced that EA exam-takers who take their EA exams before August 1, 2021, will NOT receive their test scores immediately upon completion of the examination. They will get their test scores e-mailed to them later (the IRS is using exam results to "analyze" candidate responses).
However, this is only temporary--beginning August 2, 2021, EA exam-takers will receive their exam scores immediately after completing their exams. See official details on the Prometric website: https://www.prometric.com/test-takers/search/irs.
You should decide if you don't mind waiting to receive your EA exam scores at a later date. For those that have already scheduled, I suggest going forward with your original exam date.
Unemployment fraud is rampant. The states as well as the IRS are aware that there is a huge problem with unemployment fraud, but the government's response has been lacking.
Taxpayers who received an incorrect Form 1099-G for unemployment benefits they did not receive should contact the issuing state agency to request a revised Form 1099-G showing they did not receive these benefits. They must report unemployment identity theft to the state where it occurred. Taxpayers can use the official State Directory for Reporting Unemployment Identity Theft on the U.S. Department of Labor website to report UI fraud to the state.
Taxpayers who are unable to obtain a timely, corrected form from their state should still file an accurate tax return, reporting only the income they received. A corrected Form 1099-G showing zero unemployment benefits in cases of identity theft will help taxpayers avoid an unexpected federal tax bill for unreported income.
Taxpayers who are victims of identity theft should fill out an IRS ID Theft Affidavit, Form 14039.
Additionally, if taxpayers are concerned that their personal information has been stolen and they want to protect their identity when filing their federal tax return, they can request an Identity Protection Pin (IP PIN) from the IRS.
Victims of winter storms in Texas will have until June 15, 2021, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced. Links to the official extension and IRS disaster declarations for all three states are listed below:
Texas disaster declaration: TX-2021-02
Louisiana disaster declaration: LA-2021-02
Oklahoma disaster declaration: OK-2021-01
Affected individuals and businesses will have until June 15, 2021, to file returns and pay any taxes that were originally due during this period. This includes 2020 individual and business returns normally due on April 15, as well as various 2020 business returns due on March 15. Among other things, this also means that affected taxpayers will have until June 15 to make 2020 IRA contributions.
The June 15 deadline also applies to quarterly estimated income tax payments due on April 15 and the quarterly payroll and excise tax returns normally due on April 30. It also applies to tax-exempt organizations, operating on a calendar-year basis, that have a 2020 return due on May 17.
Following the disaster declaration issued by the Federal Emergency Management Agency (FEMA), the IRS is providing this relief to the entire state of Texas. But taxpayers in other states impacted by these winter storms that receive similar FEMA disaster declarations will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.
The 2020 Form 1040 asks whether at any time during 2020, a person received, sold, sent, exchanged or otherwise acquired any financial interest in any virtual currency. If a taxpayer’s only transactions involving virtual currency during 2020 were purchases of virtual currency, they are not required to answer ‘yes’ to the question.
Cryptocurrency is a type of virtual currency that uses cryptography to secure transactions that are digitally recorded on a distributed ledger, such as a blockchain. A transaction involving cryptocurrency that is recorded on a distributed ledger is referred to as an “on-chain” transaction; a transaction that is not recorded on the distributed ledger is referred to as an “off-chain” transaction.
The IRS issued Notice 2014-21, 2014-16 I.R.B. 938, explaining that virtual currency is treated as property for Federal income tax purposes and providing examples of how longstanding tax principles applicable to transactions involving property apply to virtual currency. The frequently asked questions (“FAQs”) below expand upon the examples provided in Notice 2014-21 and apply those same longstanding tax principles to additional situations.
The Internal Revenue Code and regulations require taxpayers to maintain records that are sufficient to establish the positions taken on tax returns. You should therefore maintain, for example, records documenting receipts, sales, exchanges, or other dispositions of virtual currency and the fair market value of the virtual currency.
Date: December 10, 2020
Time: 2:00 p.m. (ET), 1:00 p.m. (CT), 12:00 p.m. (MT),11:00 a.m. (PT), 8:00 a.m. Hawaii
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