Topics Include Current Filing Statistics, Improvements to The Taxpayer Experience, and COVID-related Retirement Plan Relief
As reported by Tax Chair, Stephen Mankowski, CPA, CGMA, who recently attended the monthly IRS Meeting.
Current Filing Statistics
- 66M returns have been received through 3/12; 58.4M returns have been processed
- More than 15M business returns have been process through 3/12
- 160M is the total expected number of returns to be received
- Free File participation is up 8.2%
- IRS.gov has experienced 660M hits this calendar year vs. 345M to date
- $90M payments have been issued so far for EIP3
- 1,500 calls per second: the number of IRS calls received related to the American Recovery Bill
IRS Taxpayer Experience Strategy
The Office is working to pull things together with subject matter experts for ‘the taxpayer experience’ strategies, both internally and externally. Looking at portfolio management structure, the IRS will be taking on multi-year projects, such as customer callback features. They will also be looking at connecting different structures together. Not every project will be IT based. IRS employees will be structuring meetings in areas without an IRS presence to meet with taxpayers. They will also be looking at expanding Volunteer Income Tax Assistance (VITA) in high schools.Appeals Update
Appeals requests dropped from 85K to 57.5K from 2019 to 2020. The case load remains consistent but giving the Officers more ability to resolve issues has resulted in fewer cases. This could also be due to the pandemic and fewer cases being worked.
Appeals is still a paper-based area; however, with most of the staff working from home, the IRS is working on adopting more of an electronic process to keep staff safe. There have been no in-person conferences permitted and they are continuing communications through Zoom, WebEx, and secure email. Nationwide Tax Forums Update
The IRS is planning to start forums on 7/20 with 2 seminars per day on Tuesday, Wednesday and Thursday and a virtual exhibit hall.Retirement Plan Update
April 15th is the normal due date to file tax returns and make your IRS deposit. Excess contributions into a 401(k) are NOT affected by the filing deadline – 402 (g) limit of $19,500 in 2020 and 2021. This includes both traditional and Roth 401(k) plans. The $19,500 limit is per person and has a catch-up of $6500 for those older than 50. The due date to distribute is April 15th and must include earnings.
If a date is missed:
- Employee is double taxed (when generated and distributed from plan)
- Employer plan is potentially disqualified
Issues arise when employees participate in multiple plans, in particular with multiple employers. Of course, when the due date is moved, so is the date to make contributions.
CARES Act: COVID-Related Retirement Plan Relief
IRS Notice 2020-50
- Increase in loan limits – normally up to $50K. Through 9/22, a taxpayer can take up to a $100K loan from workplace plans and a one year suspension for payback which can be added to the end of the loan.
- Freeing up of distribution rules and payback into a plan. A taxpayer can take a loan of up to $100K between 1/1/20 and 12/30/20 without being subject to a 10% penalty. The loan can be paid back over 3 years and paid back into a qualified account.
- Relief from Required Minimum Deduction (RMD) in 2020 – includes those with age 70 ½ distribution required by 4/15/20.
provides guidance on how to take relief and covers the above 3 rules. Congress has made this relief PERMANENT relief from any disaster going forward (rules 1 and 2)!
There are three lockbox units across the US. In 2020, 44.3M paper payments amounting to $403B were processed. The lockbox network has been streamlined to align with service center consolidation. The old locations will be forwarded to the new locations through September. Electronic payments are clearly the preferred method.
Look for my next IRS Update Report toward the end of April.
The National Conference of CPA Practitioners (NCCPAP) is a professional organization comprised of Certified Public Accountants practicing in the United States. In addition to serving as a forum for education, networking, and community impact, NCCPAP also advocates for its clients. NCCPAP influences tax administration and tax policy by regularly meeting with Internal Revenue Service representatives, state taxing authorities, and elected officials. NCCPAP members represent over one million businesses and individual clients. The organization is headquartered in Woodbury, NY. For more information visit, www.NCCPAP.org.