TIGTA: IRS beset by processing backlogs, hiring lags in 2021
A review by the Treasury Inspector General for Tax Administration assessed the IRS’s 2021 performance, customer service issues and administration of tax law changes.
Advocacy & Tax Relief
PPP, ERC can lead to sustained business for CPA firms
Firms can turn the connections built doing work related to COVID-19 programs into long-term business opportunities.
Tax treatment of COVID-19 homeowner relief payments clarified
Payments are excluded from gross income; a safe harbor is provided for itemized deductions.
Single audit clarity provided related to pandemic relief programs
An addendum to the Office of Management and Budget Compliance Supplement that was issued in December provides clarity on single audit requirements related to two key federal pandemic relief programs.
Early sunset of the employee retention credit gets penalty relief
The IRS describes how employers may avoid failure-to-pay and failure-to-deposit penalties for ERC claimed or anticipated in the fourth quarter but eliminated by the Infrastructure Act.
Qualified sick and family leave wage reporting
The IRS provides guidelines to employers for showing these wages on Form W-2.
Tax treatment of COVID-19 homeowner relief payments clarified
A revenue procedure clarifies Homeowner Assistance Fund payments are excluded from gross income and gives a safe harbor for computing certain itemized deductions.
Safe harbor for ERC gross-receipts test
The IRS issued a safe harbor that allows an employer to exclude certain amounts received from other coronavirus economic relief programs in determining whether it qualifies for the employee retention credit based on a decline in gross receipts
IRS issues ERC guidance for second half of 2021
Majority owners' wages for the employee retention credit are among issues addressed.
Guidance issued on 2021 qualified sick and family leave wage reporting
Information reporting on Form W-2 or a separate statement allows self-employed taxpayers to claim qualified sick leave and qualified family leave equivalent credits.
Interruption of LIFO inventories due to COVID-19 and Sec. 473 relief
Global supply chain problems caused by the COVID-19 pandemic have made it difficult for US companies to replace inventories, potentially subjecting them to additional taxable income. The AICPA has requested relief under Sec. 473.
Certification deadline extended for work opportunity tax credit
Certain employers have until Nov. 8 to submit a required worker certification request to a designated local agency for purposes of the work opportunity credit.
New safe harbor for ERC gross receipts calculation
Under the safe harbor, an employer can exclude certain amounts received from other coronavirus economic relief programs in determining whether it qualifies for the employee retention credit based on a decline in gross receipts.
Guidance on claiming the ERC for third and fourth quarters of 2021
New guidance clarifies the application of the credit to “recovery startup businesses” and the treatment of wages paid to majority owners and their spouses.
COBRA premium assistance credit clarified further
The IRS has supplemented its guidance on COBRA premium payment assistance and the corresponding business tax credit under the American Rescue Plan Act.
When is food and drink ‘provided by a restaurant’?
The IRS explains which meals qualify for a temporary 100% expense deduction.
2021 child tax credit, EITC, and premium tax credit limits updated
ARPA temporary measures are quantified in a revenue procedure.
Draft employer’s payroll tax return incorporates ARPA changes
A proposed new version of Form 941, Employer’s Quarterly Federal Tax Return, reflects relief provisions of the American Rescue Plan Act.
COBRA premium assistance credit under ARPA clarified
The IRS answered questions concerning COBRA continuation coverage premium assistance and the corresponding tax credit that employers, plan administrators, and insurers may claim under the American Rescue Plan Act.
Taxpayers deserve pandemic penalty relief, AICPA says
In a letter to the IRS and Treasury, the AICPA recommended, in light of the ongoing COVID-19 pandemic, that the IRS implement fair, reasonable and practical penalty relief measures, including targeted relief from both the underpayment-of-estimated-tax penalty and the late-payment penalty for the 2020 tax year.
