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Tax Developments: IRS

What's New:

Watch Your Mailbox for Letters from the IRS!

The IRS will be sending out letters to taxpayers for the Advance Child Tax Credit Payments (Letter 6419) and for the Economic Impact Payment (3rd Stimulus Check, Letter 6475).  Please retain these letters and send us copies with your tax information.  Entering the incorrect amounts for these items can cause delays in the processing of your tax return and with the issuance of refunds.

 

American Rescue Plan Act (ARPA) of 2021

Several ARPA provisions affect the 2020 tax return people are filing in 2021, including exempting up to $10,200 in unemployment compensation from tax and another benefiting people who purchased subsidized health coverage through federal or state Health Insurance Marketplaces. The law also includes the third round of Economic Impact Payments that are generally equal to $1,400 per person for most people and advance payments of the Child Tax Credit, paid monthly from July to December 2021. Keep up with tax law developments by regularly checking IRS.gov.

 2020 Unemployment Compensation

The Internal Revenue Service was issuing refunds throughout the summer to eligible taxpayers who paid taxes on 2020 unemployment compensation that the recently-enacted American Rescue Plan later excluded from taxable income.

Advanced child tax credit (CTC) payments in 2021

The first monthly payment of the expanded and newly-advanceable CTC was made on July 15. Eligible families should have received monthly payments without any further action required.

Normally, the IRS will calculate the payment based on a person's 2020 tax return. If that return is not available because it has not yet been filed or is still being processed, the IRS will instead determine the initial payment amounts using the 2019 return or the information entered using the Non-filers tool that was available in 2020.

For people who don’t normally file a tax return, the IRS offers the Non-filer Sign-up tool. It’s for people who did not file a tax return for 2019 or 2020 and who did not use the IRS Non-filers tool last year to register for Economic Impact Payments. The tool enables them to provide required information about themselves, their qualifying children age 17 and under, their other dependents, and their direct deposit bank information so the IRS can quickly and easily deposit the payments directly into their checking or savings account.

To help people understand and receive this benefit, the IRS has created a special Advance Child Tax Credit 2021 webpage to provide the most up-to-date information about the credit and the advance payments. The page features links to the Non-filer Sign-up Tool, the Child Tax Credit Eligibility Assistant, and the Child Tax Credit Update Portal.

Coronavirus Tax Relief

For the latest information about coronavirus tax relief, see the IRS Coronavirus Tax Relief and Economic Impact Payments page. 

Visit their Coronavirus and Economic Impact Payments: Resources and Guidance page for the latest content including news releases, Tax Tips, frequently asked questions, multilingual partner materials and more. 

To learn about IRS operations during COVID-19, visit their operations page for up-to-date status on affected IRS operations and services.

Taxpayer First Act

On July 1, 2019, The Taxpayer First Act of 2019 was signed into law, which aims to broadly redesign the Internal Revenue Service. Generally, the legislation aims to expand and strengthen taxpayer rights and to reform the IRS into a more taxpayer friendly agency by requiring it to develop a comprehensive customer service strategy, modernize its technology and enhance its cyber security.

See the Taxpayer First Act page for the latest updates.

Taxpayer Bill of Rights

All taxpayers have a set of fundamental rights they should be aware of when dealing with the IRS. Explore your rights and the IRS obligations to protect them.

Tax Reform

The Tax Cuts and Jobs Act included major tax legislation that affects both individuals and businesses. Check the IRS Tax Reform page for the latest updates.

 

Tax Scams/Consumer Alerts:

Articles - Scam Phone Calls Continue; IRS Identifies Five Easy Ways to Spot Suspicious Calls

IRS Identifies Five Easy Ways to Spot Suspicious Calls

IRS - How to know it's really the IRS calling or knocking on your door

IRS - Consummer Alert: Scammers Change Tactics

Article - Tax Scams

IRS - Tax Scams / Consumer Alerts

Information on Suspicious E-Mails & Identity Theft

IRS Newsroom - Suspicious Emails and Identity Theft

 

 
 

IRS News:

IRS Recent News Releases

​Tax Relief in Disaster Situations

Information for Same-Sex Couples & Certain Domestic Partners

www.irs.gov/uac/Answers-to-Frequently-Asked-Questions-for-Same-Sex-Married-Couples

www.irs.gov/uac/Answers-to-Frequently-Asked-Questions-for-Registered-Domestic-Partners-and-Individuals-in-Civil-Unions