Here you'll find items of current interest — new programs, recent guidance or timely reminders.
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, now going out to eligible Americans, 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 is 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 will be made on July 15. Eligible families are slated to begin receiving 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 Coronavirus Tax Relief and Economic Impact Payments page.
Visit our Coronavirus and Economic Impact Payments: Resources and Guidance page for our latest content including news releases, Tax Tips, frequently asked questions, multilingual partner materials and more.
To learn about IRS operations during COVID-19, visit our operations page for up-to-date status on affected IRS operations and services.
Outreach Connection
Get free tax content to share with your staff, clients, customers or colleagues that you can include in your:
- Website
- e-Newsletter
- Twitter, Instagram or other social media
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 our obligations to protect them.
- The Right to Be Informed
- The Right to Quality Service
- The Right to Pay No More than the Correct Amount of Tax
- The Right to Challenge the IRS’s Position and Be Heard
- The Right to Appeal an IRS Decision in an Independent Forum
- The Right to Finality
- The Right to Privacy
- The Right to Confidentiality
- The Right to Retain Representation
- The Right to a Fair and Just Tax System
Tax Reform
The Tax Cuts and Jobs Act included major tax legislation that affects both individuals and businesses. Check the Tax Reform page for the latest updates.
Tax Withholding
The Tax Cuts and Jobs Act changed the way tax is calculated. The IRS encourages taxpayers to perform a quick “paycheck checkup” by using the Withholding Estimator to check if they have the right amount of withholding for their personal situation.
Consumer Alerts on Tax Scams
Note that the IRS will never:
Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
- Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
- Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
- Ask for credit or debit card numbers over the phone.
For more information on tax scams, please see Tax Scams/Consumer Alerts. For more information on phishing scams, please see Suspicious emails and Identity Theft.
A Message from James C. Lee, Chief Criminal Investigation
IRS Criminal Investigation Marks International Fraud Awareness Week Highlighting Successes from FY20
In recognition of International Fraud Awareness Week, the IRS is highlighting the many successes in combating fraud and protecting taxpayers. This year was different as half of the year was spent under the new realities that COVID-19 has brought us. Through all the COVID challenges, the IRS was still able to attain many results. For example, we opened more investigations in FY20 than we did in FY19 in most of our program areas, our conviction rate is still the highest in federal law enforcement, and we are the go-to agency for complex financial investigations in the world.
A Message from Damon Rowe, Executive Director, IRS Office of Fraud Enforcement
Observing International Fraud Awareness Week
As part of a continuing focus on tax compliance issues, the IRS created the Office of Fraud Enforcement to support IRS efforts to detect and deter fraud while strengthening the national fraud program.
In observation of International Fraud Awareness Week, we will promote the incredible investment the IRS has made in the area of fraud enforcement. This week, we will take part in a global effort to minimize the impact of fraud, including tax fraud, by promoting fraud awareness and education. The IRS’s efforts to combat tax and other financial fraud help protect taxpayers around the world and highlight how important fraud prevention is to society.
Foreign Account Tax Compliance Act (FATCA)
FATCA refers to the Foreign Account Tax Compliance Act that requires reporting on specified foreign accounts by U.S. taxpayers and foreign financial institutions. In general, federal law requires U.S. citizens to report worldwide income, including income from foreign trusts and foreign bank and securities accounts.
Source : https://www.irs.gov/newsroom/whats-hot
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