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Category: Professional Development

2022 PTIN Renewal Season

Posted on by Walter Moore

Preparer Tax Identification Number (PTIN) renewal season is underway for all return preparers for 2022, as is participation in the Annual Filing Season Program (AFSP) for 2022.

The IRS Return Preparer Office (RPO) is sending the message in the first attachment to all PTIN holders over the next few days. A general news release will also be issued this week.

To promote Annual Filing Season Program participation, RPO has sent the message in the second attachment to non-credentialed PTIN holders.

More information about PTINs can be found at www.irs.gov/ptin and more info about AFSP is at www.irs.gov/tax-professionals/annual-filing-season-program.

News for Your Week Ahead: October 22, 2021

Posted on by Walter Moore

This week, Janice Shih discussed the MSATP and MVLS partnership, as well as our upcoming events!

Watch on YouTube.

Coming Up: On Thursday, October 28, at 9 a.m., Roy Frick will give an update on the MSA Scholarship Foundation, including how you can help the future of the profession.

Be sure to Like/Follow us on Facebook so you can catch MSATP TV live every week.

MSATP Receives Maryland Volunteer Lawyers Services Partnership Award

MSATP is the proud recipient of the 2021 MVLS Partnership Award! Thanks to the continued generosity of our members who give back by taking on various pro bono tax cases!

To see pictures from the event, click here.

Here’s What Taxpayers Should Know About Backup Withholding | Tax Tip 2021-156

Backup withholding ensures that the government is paid the correct amount of taxes on specific types of payments reported on certain Forms 1099 and W-2G. Here are some facts about backup withholding. Backup withholding is required on certain non-payroll amounts when certain conditions apply. The payer making such payments to the payees does not generally withhold taxes, and the payees report and pay taxes on this income when they file their federal tax returns. There are, however, situations when the payer is required to withhold a certain percentage of tax to make sure the IRS receives the tax due on this income.

For more information, click here.

The Tax Responsibilities That Come With Shutting Down a Business | Tax Tip 2021-153

There are many reasons a business owner may choose to close their doors, and there are many things that must be done to go out of business. Two important steps all business owners must take are fulfilling their federal tax responsibilities and informing the IRS of their plans. The closing a business page of IRS.gov is designed to help owners navigate the process of shutting down.

For more information, click here.

IRS Joins International Organizations in Fighting Charity Fraud During Special Awareness Week | IR-2021-205

The Internal Revenue Service is joining international organizations and other regulators in highlighting Charity Fraud Awareness Week, Oct. 18-22.

The campaign is run by a partnership of charities, regulators, law enforcers and other not-for-profit stakeholders from across the world. The purpose of the week is to raise awareness of fraud and cybercrime affecting organizations and to create a safe space for charities and their supporters to talk about fraud and share good practice.

For more information, click here.

IRS Sets Forth Information For a Valid Research Credit Claim for Refund | IR-2021-203

The IRS has set forth the information that taxpayers will be required to include for a research credit claim for refund to be considered valid. Existing Treasury Regulations require that for a refund claim to be valid, it must set forth sufficient facts to apprise IRS of the basis of the claim. The Chief Counsel memorandum will be used to improve tax administration with clearer instructions for eligible taxpayers to claim the credit while reducing the number of disputes over such claims.

For more information, click here.

News For Your Week Ahead: October 8, 2021

Posted on by Walter Moore

This week, Jonathan Rivlin, CPA gave us a full rundown of his upcoming seminar/webinar on October 21, including some new and exciting updates to the course. If you have not thought about what your firm should look like given the new electronic payment thresholds like Venmo and PayPal, don’t miss this course! Check out the details below.

Watch on YouTube.

Coming Up: On Thursday, October 14, at 10 a.m., Allen Ayers, CPA, CFP will be joining us to discuss his upcoming seminar and webinar, Mergers & Contingency Planning on October 21, 2021.

Be sure to Like/Follow us on Facebook so you can catch MSATP TV live every week.

Farmers and Ranchers Affected by Drought Have Additional Time to Replace Livestock | Tax Tip 2021-146

Farmers and ranchers who were forced to sell livestock due to drought may get extra time to replace the livestock and defer tax on any gains from the forced sales. Here are some facts about this to help farmers understand how the deferral works and if they are eligible.

  • The one-year extension gives eligible farmers and ranchers until the end of the tax year after the first drought-free year to replace the sold livestock.
  • The farmer or rancher must be in an applicable region. An applicable region is a county designated as eligible for federal assistance, as well as counties contiguous to that county.

For more information, click here.

N-2021-58: Extension Timeframes for Elections and Payments of COBRA Premiums | N-2021-58

Notice 2021-58 clarifies the application of the extension of timeframes by the Joint Notice (85 FR 26351, May 4, 2020) and EBSA Disaster Notice 2021-01 (Feb. 26, 2021) (Emergency Relief Notices) to elections and payments of COBRA premiums during the COVID-19 National Emergency. This notice clarifies that the disregarded period for an individual to elect COBRA continuation coverage and the disregarded period for the individual to make initial and subsequent COBRA premium payments generally run concurrently. This notice also addresses the interaction of these rules with the ARP COBRA premium assistance and Notice 2021-31, 2021-23 IRB 1173 (June 7, 2021).

For more information, click here.

ABLE Accounts: A Valuable Financial Solution For People with Disabilities | Tax Tip 2021-148

Achieving a Better Life Experience or ABLE accounts are tax-advantaged savings accounts for individuals with disabilities and their families. These accounts help disabled people pay qualified disability-related expenses without affecting their eligibility for government assistance programs.

For more information, click here.

Here’s How A Taxpayer’s Custody Situation May Affect Their Advance Child Tax Credit Payments | COVID Tax Tip 2021-147

Parents who share custody of their children should be aware of how the advance child tax credit payments are distributed. It is important to remember that these are advance payments of a tax credit that taxpayers expect to claim on their 2021 tax return. Understanding how the payments work will parents to unenroll, if they choose, and possibly avoid a possible tax bill when they file next year.

For more information, click here.

McDaniel College: Accounting Interviewing Day 2021 saw 84 Interviews Over 3 Hours

Posted on by Walter Moore

Credit: McDaniel College

Nine accounting firms conducted over 84 virtual interviews with 26 Accounting majors during McDaniel College’s annual Interviewing Day on Sept. 30. Three hours. 26 Accounting majors. 84 virtual interviews.

Although not the traditional in-person Interviewing Day at McDaniel College, 26 Accounting majors had the opportunity to meet virtually with nine accounting firms for internships or jobs. Over 84 interviews were conducted in a three-hour time period.

Most of the students involved during the Sept. 30 event were juniors, although a few seniors and sophomores also participated.

Even if the students were not looking to gain immediate employment, this experience allows them to practice interview skills and make connections. Many of the companies that take part each year are represented by McDaniel alumni — and many of these alumni were hired after participating as a student in Interviewing Day.

Charess Thompson, an Accounting and Business Administration major from Randallstown, Md., who interviewed with CliftonLarsonAllen, Gross, Mendelsohn & Associates, and Withum, said, “I enjoyed speaking with the recruiters and some McDaniel alumni who work there now. I loved learning more about the company and I am excited to learn more and gain more experience.”

Other accounting firms represented were Bounds Accounting & Tax Services, E. Cohen & Company, Gorfine, Schiller & Gardyn P.A., KatzAbosch, RSM, and Sturgill.

News of Your Week Ahead: September 17, 2021

Posted on by Walter Moore

MSATP President Barbara Smith, CPA and Vice President Ana Barnabe, CPA joined us to discuss MSATP’s strategic leadership initiative and the steps the Society takes to best serves our members.

Watch on YouTube.

Coming Up: On Thursday, September 23, at 10 a.m., Past President Ellen Silverstein join us to tell us about the Mt. Vernon Tour on October 20. We look forward to seeing you there!

Be sure to Like/Follow us on Facebook so you can catch MSATP TV live every week.

Tax Relief Now Available to Ida Victims in Pennsylvania; October 15th Deadline, Other Dates Extended to January 3rd | IR-2021-183

Victims of Hurricane Ida in parts of Pennsylvania now have until Jan. 3, 2022, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today. The IRS has also provided relief to Ida victims in Louisiana, Mississippi, New Jersey and New York.

For more information, click here.

Renewed Tax Credit Can Help Employers Hire Workers; Key Certification Requirement Applies | IR-2021-184

With many businesses facing a tight job market, the Internal Revenue Service reminds employers to check out a valuable tax credit available to them for hiring long-term unemployment recipients and other groups of workers facing significant barriers to employment.

During National Small Business Week, the IRS is highlighting tax benefits and resources designed to help new and existing small businesses. For any business now hiring, the Work Opportunity Tax Credit (WOTC) may help.

For more information, click here.

Small Business Owners Should See if They Qualify For The Home Office Deduction | Tax Tip 2021-136

Many Americans have been working from home due to the pandemic, but only certain people will qualify to claim the home office deduction. This deduction allows qualifying taxpayers to deduct certain home expenses on their tax return when they file their 2021 tax return next year.

For more information, click here.

IRS Reminds Business Owners to Correctly Identify Workers as Employees or Independent Contractors | IR-2021-186

During National Small Business Week, the Internal Revenue Service reminds business owners that it’s critical to correctly determine whether the individuals providing services are employees or independent contractors.

An employee is generally considered to be anyone who performs services, if the business can control what will be done and how it will be done. What matters is that the business has the right to control the details of how the worker’s services are performed. Independent contractors are normally people in an independent trade, business or profession in which they offer their services to the public. Doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers or auctioneers are generally independent contractors.

For more information, click here.

Understanding The Tax Responsibilities That Come With Starting a Business | Tax Tip 2021-134

Small business owners have a variety of tax responsibilities. The IRS knows that understanding and meeting tax obligations is vital to the success of all businesses, especially a new one. IRS.gov has the resources and information to help people through the process of starting a new business.

For more information, click here.

The Cloud vs. A Large Hard Drive or Server?

Posted on by Walter Moore

by Walter Moore

Many folks often run into storage issues on their personal computers and eventually have to make a decision whether to get a larger internal hard drive, look into an external hard drive or storage server or make the move to cloud storage. There are several pros and cons you should consider when making this decision.

Upgrading your Hard Drive or using a storage server:

Pros:
When upgrading your hard drive you of course are in control of your own data. No one else can access it unless you send it, it is yours and in your control. Often times you can access your data faster as you do not need any sort of internet connection at all.

Cons:
The obvious downside to a larger hard drive are the backups of your data must be done by you or if it is lost, well you lose everything. Hard drives eventually do crash and will slow down as they age which is of course inevitable. If you upgrade your internal hard drive, you are also at the mercy of your processor so as you upgrade to a new computer you will need to transfer the data.

Cloud Storage:

Pros:
Utilizing cloud storage has a huge upside being that it is only limited to your subscription level, with many places such as GMAIL or Microsoft offering free cloud storage up to a certain size. If you are like me and do a lot of photography, one place that has excellent cloud storage is Amazon. Amazon offers free unlimited cloud storage on their photos platform that has no compression even for RAW image files. If you ever need to expand your cloud storage simply purchase a bigger subscription. All backups, security, and maintenance are completed by the service so if your hard drive crashes all your documents are there. You can access your cloud from anywhere in the world and if you upgrade your computer no need to transfer files. If you want to share large files you can of course send an access link.

Cons:
The only real downside to cloud storage is cost and the need for internet access to access your files.

So if you need more storage look into both cloud and a hard drive upgrade or even both (back up your files to the cloud). If you have more questions feel free to email me walter@msatp.org or call the office.

News for Your Week Ahead: August 19, 2021

Posted on by Walter Moore

Bob Jennings, CPA, EA provides a glimpse into TaxSpeaker’s offerings with MSATP this fall. Be sure to check out the upcoming Business Tax In-Depth seminar/webinar in Frederick, MD!

Watch on YouTube.

Coming Up: On Wednesday, August 25 at 10 a.m., Education Committee Chair Bob Medbery\will join us to give insight into our fall seminar season and upcoming events.

Be sure to Like/Follow us on Facebook so you can catch MSATP TV live every week.

Accounting for Cryptocurrency: A Challenge and Opportunity for CPA Firms and Protocols

Since its introduction in 2008, cryptocurrency has been gaining acceptance and use. That trend will continue as more people seek decentralized, private, and portable currency in a global economy.

This is good news for CPA professionals. The sheer number of cryptocurrency options is overwhelming, and there are aspects of fraud to consider, so people are likely to need advice from tax and accounting professionals.

CPAs who become cryptocurrency experts can take advantage of this opportunity. By offering cryptocurrency advice and auditing services to clients, firms can realize a new revenue source to offset the loss of other income from services such as traditional compliance work.

For more information, click here.

What People Should and Should Not Do If They Get Mails from the IRS | COVID Tax Tip 2021-119

Every year the IRS mails letters or notices to taxpayers for many different reasons. Typically, it’s about a specific issue with a taxpayer’s federal tax return or tax account. A notice may tell them about changes to their account or ask for more information. It could also tell them they need to make a payment. This year, people might have also received correspondence about Economic Impact Payments or an advance child tax credit outreach letter.

For more information, click here.

MSATP Members: Are you using the community forum on our website? You can introduce yourself, post your tax questions (and respond to questions other professionals have), and network with other members! To visit the community forum, click here.

Not a member? Join today by clicking here.

News for Your Week Ahead: August 5, 2021

Posted on by Walter Moore

First Vice President Ana Barnabe tells us all about the benefits of an MSATP membership including free ethics CPE, Talking With TaxSpeaker, and more.

Watch on YouTube.

Coming Up: On Wednesday, August 11 at 10 a.m., MSATP President Barbara Smith will join us to discuss her Payroll and 1099 Forms seminar/webinar in Ellicott City, MD on December 13.

Be sure to Like/Follow us on Facebook so you can catch MSATP TV live every week.

Agency Collection Activities to Resume August 16 | Comptroller of Maryland

Comptroller Peter Franchot announced that the Comptroller’s Office will resume collection activities beginning August 16, 2021.

Collection and licensing activities have been on hold as a result of Executive Orders issued by Governor Larry Hogan in response to COVID-19, but those activities were to resume no later than June 30, 2021.

At the Comptroller’s request, in recognition of the financial struggles of Maryland individuals and businesses resulting from the pandemic, as well as the role that his agency played in administrating and assisting in pandemic relief programs, Governor Hogan granted an additional extension through August 15, 2021.

For more information, click here.

IRS Reminds Heavy Vehicle Owners of August 31 Highway Use Tax Return Deadline | IR-2021-164

The IRS reminds those who have registered, or are required to register, large trucks and buses that it’s time to file Tax Year 2021 Form 2290, Heavy Highway Vehicle Use Tax Return. The deadline to file and pay is Aug. 31, 2021, for vehicles used on the road during July 2021.

The highway use tax applies to highway motor vehicles with a taxable gross weight of 55,000 pounds or more. Taxpayers unsure if they must file can use the IRS online tool, “Do I Need to Pay the Heavy Highway Vehicle Use Tax?” The question-and-answer format helps owners determine if they are required to pay the highway use tax. The “Understanding Form 2290 – Heavy Highway Vehicle Use Tax” recorded webinar is also available.

For more information, click here.

Security Summit: Tax Pros Can Help Clients Battle Identity Theft Risk Related to Unemployment | IR-2021-163

IRS Security Summit partners outlined for tax professionals how they can assist clients who were victims of unemployment compensation fraud schemes that targeted state workforce agencies in 2020 and 2021.

The IRS, state tax agencies, and the tax industry – working together as the Security Summit – reported that unemployment compensation fraud was one of the more common identity theft schemes that emerged in 2020 as criminals exploited the COVID-19 pandemic and the resulting economic impact.

For more information, click here.

Information for FIRE Users | Issue Number: 2021-11

The IRS will be making significant improvements to the Filing Information Returns Electronically (FIRE) application process for new users. The new online Information Returns (IR) Application for Transmitter Control Code (TCC) is scheduled to deploy on September 26, 2021. The new application will be available on IRS.gov and will replace both the current Form 4419 and the Fill-in Form 4419 on the FIRE System.

New users will be required to authenticate their identities and create a new account through IRS Secure Access Account to access the new online IR Application for TCC. Details on what users need to verify their identities can be found at www.IRS.gov/SecureAccess. Existing Secure Access (SA) users will be able to use their existing SA account.

For more information, click here.

News for Your Week Ahead: July 22, 2021

Posted on by Walter Moore

We’re excited to announce a new member benefit: MSATP members can now access Talking With TaxSpeaker, a tax expert Q&A video service, at a discounted rate! 

Subscribers will have access to 15-20 minute video segments in which TaxSpeaker’s experts answer hot topic tax-related questions. Subscribers will also be able to submit any of their questions so they can be answered in the next Talking With TaxSpeaker episode!

This discounted subscription is only available to MSATP members for $162* — that’s 20% off the original price! Click the button below to register for the service now.

Want to learn more about the subscription? Bob Jennings joined us on MSATP TV this week to discuss what members can expect when subscribing.

Watch on YouTube.

*If you are a current Talking With TaxSpeaker subscriber through TaxSpeaker, you must call (812) 288-1513 and cancel your current subscription. Then, sign up for the MSATP discounted subscription using our website, or call (800) 922-9672. You must be an MSATP member to enjoy this member benefit. To become an MSATP member please click here.

Coming Up: On Tuesday, July 27 at 10 a.m., Connie Hess of USB Payment Processing joins us to tell us about their new Merchant as Service cashflow management program that can help you and your clients. On Wednesday, July 28 at 10 a.m., Jonathan Rivlin will join us to tell us about his upcoming class, Firm of the Future on October 21. To register for the seminar, please click here.

Be sure to Like/Follow us on Facebook so you can catch MSATP TV live every week.

Fraudulent Unemployment Claims

Our Second Vice President Donya Oneto recently encountered an issue with a client regarding a fraudulent unemployment claim. The state provided the following statement and advice which she was kind enough to pass onto you

There has been no breach in our Unemployment System. Fraudsters are using identities and personal identifiable information stolen from prior data breaches that have taken place such as (EQUIFAX, TARGET, Office of Personnel Management) to file fraudulent Unemployment Insurance Claims. We are also working in conjunction with the Office of the Inspector General to investigate these fraudulent claims.

In an attempt to protect yourself from any future fraud attacks:

  • Request your free credit reports via www.annualcreditreport.com and review them for other fraudulent activities.
  • Notify all three credit bureaus that you have been a victim of identity theft: Experian, Equifax, and Transunion.
  • File a police report with the local authorities.
  • You may file a complaint with the Federal Trade Commission at:ftc.gov/complaint.
  • You may file a complaint with the National Center for Disaster Fraud (NCDF).

Updated IRS Correction Principles and Changes to VCP Outlined in EPCRS Revenue Procedure 2021-30

The IRS Employee Plans Compliance Resolution System (EPCRS) permits any plan sponsor of a retirement plan (including SEP and SIMPLE IRA plans) to correct plan failures. EPCRS offers three correction programs:

  • Self-Correction Program (SCP) – Correct certain plan failures without contacting the IRS or paying a user fee
  • Voluntary Correction Program (VCP) – Correct failures not eligible for SCP and to get the approval of the IRS that the failures were properly corrected
  • Audit CAP – Resolve failures discovered during an IRS audit that can’t be corrected using SCP

For more information, click here.

A Tip for Teachers: Some Educator Expenses may be Tax Deductible | Tax Tip 2021-104

The educator expense deduction allows eligible teachers and administrators to deduct part of the cost of technology, supplies, and training from their taxes. They can only claim this deduction for expenses that were not reimbursed by their employer, a grant, or other source.

Who is an eligible educator:

The taxpayer must be a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide. They must also work at least 900 hours a school year in a school that provides elementary or secondary education as determined under state law.

 For more information, click here.

Security Summit Partners Urge Tax Pros to Use Multi-Factor Authentication; Critical Step to Boost Protection Against Data Theft | IR-2021-155

With security incidents on the rise, the Internal Revenue Service, state tax agencies and the tax industry urged tax professionals and taxpayers to use a special feature – multi-factor authentication – available on tax software products to help protect against identity and data theft.

The Security Summit partners kicked off the annual 2021 “Protect Your Clients; Protect Yourself” summer campaign aimed at tax professionals. This year’s theme is “Boost Security Immunity: Fighting Against Identity Theft” to urge tax professionals to step up their efforts to protect client data amid the pandemic and its aftermath.

Multi-factor authentication, also known as two-factor authentication, provides more security. It allows the tax professional or taxpayer to use another feature such as a security code sent to a mobile device, a pin number, or a fingerprint in addition to the username and password. A thief may steal usernames and passwords but cannot access accounts without the additional multifactor feature.

For more information, please click here.

News for Your Week Ahead: July 2, 2021

Posted on by Walter Moore

Jonathan Pocius of Payroll Services joins Bill Feehley to talk about how Payroll Services, LLC can help you with your payroll needs, including claiming your employee retention credits.

Watch on YouTube.

Coming Up: On Thursday, July 7 at 10 a.m., Ellen Silverstein and Robert Medbery will join Executive Director Bill Feehley to tell us about our upcoming signature events!

Be sure to Like/Follow us on Facebook so you can catch MSATP TV live every week!

Comptroller Extends Filing, Payment Deadlines for Pass-Through Entities | Two New Laws Caused Extensive Changes to Tax Forms; Waiver of Interest and Penalty for Returns Filed by Sept. 15

Comptroller Peter Franchot extended the filing deadline for 2020 income tax returns from Pass-Through Entities (PTEs) to Sept. 15, 2021, due to new laws requiring extensive changes to PTE tax forms that can now be accessed on the Comptroller’s website.

PTE forms are expected to be available through software vendors soon, but the Comptroller’s Office cannot guarantee the date of availability of forms through any third-party vendor.

Taxpayers who file PTE returns and pay any outstanding liabilities by September 15 will not be charged interest or pay a penalty. No further action is required for PTEs to receive this waiver; it will be automatically granted.

For more information, click here.

SDAT Eliminates Burdensome Business Fees, Observes Growth in Maryland Entrepreneurship

The Maryland State Department of Assessments and Taxation (SDAT) announced that as of July 1, businesses will no longer be required to pay a $100 filing fee to close their business. The Department has been pursuing this fee elimination since 2017, and this year led a bipartisan effort to pass HB0647, which was signed into law by Governor Hogan.

“Thanks to Governor Hogan’s leadership and support during the COVID-19 pandemic, Maryland’s business community is stronger than ever, with more businesses registering in 2020 than any year prior,” said SDAT Director Michael Higgs. “For businesses that unfortunately need to close, SDAT is proud to have led the effort on this bi-partisan legislation that assists business owners in that process by removing the dissolution fee.”

For more information, click here.

National Taxpayer Advocate Assesses Tax Filing Season and Identifies Areas for IRS Improvement in Mid-Year Report to Congress | IR-2021-139

National Taxpayer Advocate Erin M. Collins today released her statutorily mandated mid-year report to Congress. The report presents an assessment of the 2021 filing season, identifies key objectives the Taxpayer Advocate Service (TAS) will pursue during the upcoming fiscal year, and contains the IRS’s responses to each of the 73 administrative recommendations the Advocate made in her 2020 Annual Report to Congress.

The Advocate’s report emphasizes that the difficulties the IRS faced in performing its traditional work due to the COVID-19 pandemic and the added responsibilities it was assigned to make three rounds of stimulus payments combined to create significant challenges for taxpayers.

For more information, please click here.

Revenue Procedure 2021-14 | RP-2021-14

Revenue Procedure 2021-14 provides guidance regarding elections and revocations related to § 2303(e) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Section 2303(e) of the CARES Act provides special rules for taxpayers with a net operating loss (NOL) for any taxable year beginning in 2018, 2019, or 2020, all or a portion of which consists of a “farming loss,” as defined by § 172(b)(1)(B)(ii) of the Internal Revenue Code (Code) (Farming Loss NOL).

Revenue Procedure 2021-14 will be in IRB: 2021-29, dated July 19, 2021.

For more information, please click here.

IRS: Families Receiving Monthly Child Tax Credit Payments Can Now Update Their Direct Deposit Information | IR-2021-143

The Internal Revenue Service upgraded a key online tool to enable families to quickly and easily update their bank account information so they can receive their monthly Child Tax Credit payment.

The bank account update feature was added to the Child Tax Credit Update Portal, available only on IRS.gov. Any updates made by Aug. 2 will apply to the Aug. 13 payment and all subsequent monthly payments for the rest of 2021.

For more information, please click here.

IRS Extends Tax Relief For Employer Leave-Based Donation Programs that Aid Victims of the COVID-19 Pandemic | IR-2021-142

The Internal Revenue Service extended the tax relief provided in Notice 2020-46 for calendar year 2021 for employers whose employees forgo sick, vacation or personal leave because of the COVID-19 pandemic.

Notice 2021-42 provides that cash payments employers make to charitable organizations that provide relief to victims of the COVID-19 pandemic in exchange for sick, vacation or personal leave which their employees forgo will not be treated as compensation. Similarly, the employees will not be treated as receiving the value of the leave as income and cannot claim a deduction for the leave that they donated to their employer.

For more information, please click here.

Draft Instructions for the Schedules K-2 and K-3 Released to Enhance Reporting of International Tax Matters By Pass-Through Entities | IR-2021-140

The Treasury and the IRS released today early draft instructions for the Schedules K-2 and K-3 for Forms 1065, 1120-S, and 8865 for tax year 2021 (filing season 2022). The early release drafts of the instructions provide a preview of the instructions before final versions are released. The new Schedules K-2 and K-3 were released on June 3 and 4, 2021.

The redesigned forms and instructions give useful guidance to partnerships, S corporations and U.S persons who are required to file Form 8865 with respect to controlled foreign partnerships on how to provide international tax information. The updated forms apply to any persons required to file Form 1065, 1120-S or 8865, but only if the entity for which the form is being filed has items of international tax relevance (generally foreign activities or foreign partners).

For more information, please click here.

Here’s What Taxpayers Need to Know About Paying Taxes on Their Hobby Activities | Tax Tip 2021-94

Many people are engaged in hobby activities that are also a source of income. For example, some people started selling handmade items during the pandemic. These people must report this income on their tax return.

A hobby is any activity that a person pursues because they enjoy it and with no intention of making a profit. This differs from those that perate a business with the intention of making a profit.

For more information, please click here.

Virginia Society Launches Career Center for Accountants | Accounting Today

The Virginia Society of CPAs has launched a new Career Center for firms seeking top talent, as well as for individuals pursuing career opportunities in accounting and finance.

The VSCPA Career Center offers job postings, résumé review services, and other career and talent management resources. The new site is part of the VSCPA’s career services strategy to connect CPAs with future-oriented resources to drive innovation in workplace trends, talent and leadership development. The center is powered by YM Careers, a job board software platform.

For more information, please click here.

IRS Announces “Dirty Dozen” Tax Scams for 2021 | IR-2021-135

The Internal Revenue Service began its “Dirty Dozen” list for 2021 with a warning for taxpayers, tax professionals and financial institutions to be on the lookout for these 12 nefarious schemes and scams.

This year’s “Dirty Dozen” will be separated into four separate categories: pandemic-related scams like Economic Impact Payment theft; personal information cons including phishing, ransomware and phone ‘vishing’; ruses focusing on unsuspecting victims like fake charities and senior/immigrant fraud; and schemes that persuade taxpayers into unscrupulous actions such as Offer In Compromise mills and syndicated conservation easements.

The agency compiled the list into these categories based on who perpetuates the schemes and who they impact. In addition to today’s scams the IRS will highlight the other schemes over the next three days.

For more information, please click here.

Errors Employers Should Avoid When Requesting Advance Payment of Employer Credits | COVID Tax Tip 2021-93

Employers who are filing Form 7200, Advance Payment of Employer Credits Due to COVID-19 should read the instructions carefully and take their time when completing this form to avoid mistakes.

Using a reputable tax preparer – including certified public accountants, enrolled agents or other knowledgeable tax professionals – can also help avoid errors. Mistakes can result in a processing delay, which means it may take longer to get the advanced payment.

For more information, please click here.

“A Closer Look” at Employee Tax Initiatives: Helping Small Business and Self-Employed Taxpayers| CL-2021-19

Today, the IRS published the latest executive column “A Closer Look,” which features Scott Irick, Director of Examination discussing how the IRS has a variety of compliance programs and outreach efforts to help employers meet their employment tax responsibilities. “The tax law can be complex for these taxpayers, and part of my role as director is to use a variety of tools to help people understand and meet their tax obligations,” said Irick.

“A Closer Look” is a column from IRS executives that covers a variety of timely issues of interest to taxpayers and the tax community. It also provides a detailed look at key issues affecting everything from IRS operations and employees to issues involving taxpayers and tax professionals.

For more information, please click here.

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