Tax News in a Nutshell - 01.22.21
What’s Up in Washington, D.C.?
Despite the House moving forward with Biden’s $1.9T COVID-19 relief plan, the next round of stimulus may wait longer than the new President hoped, if he follows through with the goal of a bipartisan effort. Several Republicans have voiced concerns with spending additional funds so quickly after just having passed the December relief bill, suggesting a review of the economy in a few months would be more prudent. Incoming Treasury Secretary Janet Yellen added her thoughts, noting that historically low interest rates could help offset major additions to the deficit. Even still, moderate Democrats are also leaning towards targeted spending, rather than another broad relief bill.
In her Senate Finance Committee confirmation hearing, Yellen also indicated her alignment with President Biden’s tax increases on the wealthy and corporations, and also showed interest in utilizing cryptocurrencies while increasing efforts to curtail their potential threats.
The IRS announced a delayed start to tax season for individual filers to allow proper programming updates and testing following the second stimulus payments and other tax law changes. Individual returns will be accepted starting on February 12, 2021, rather than a normal late-January kickoff.
IRS Commissioner Rettig reiterated his stance that the IRS will not issue blanket penalty relief for taxpayers having missed deadlines due to the coronavirus. In response, the AICPA has asked for a streamlined reasonable cause penalty abatement process. Rettig also announced the large IRS mail backlog has been resolved and *should not* cause issues with this filing season.
Notice 2021-10 further extends important due dates for Qualified Opportunity Funds and their investors in response to COVID-19.
Notice 2021-13 provides penalty relief for partnerships who honestly attempt to comply with new tax capital reporting requirements on 2020 Schedule K-1, but incorrectly figure the beginning balance.
New guidance implements the CAA’s extension of time to repay qualifying employee payroll tax deferrals from the first four months of 2021 to the entire year.
Rev. Rul. 2021-3 provides tables of covered compensation under §401(I)(5)(E) for the 2021 plan year.
Notice 2021-12 extends the temporary relief from certain requirements under §42 for qualified low-income housing projects and §§142(d) and 147(d) for qualified residential rental projects.
Notice 2021-8 provides estimated tax penalty relief for situations involving excess business loss limitation carryovers into 2020 that would have been allowed if not for the CARES Act. The waiver is for individual estimated tax payments due on or before July 15, 2020, with respect to any taxable year that began during 2019.
Notice 2021-9 provides guidance on the corporate bond monthly yield curve, spot segment rates, and the 24-month average segment rates.
Notice 2021-06 waives the requirement to file information returns for stimulus items not included into income, such as PPP forgiveness and EIDL grants. Taxpayers should not expect to see a Form 1099-C, Cancellation of Debt, for PPP forgiveness, or Form 1099-MISC for grants from these stimulus bills.
Busy times, no funny business in this one - will catch up next time. Have a great weekend!
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