IRS: Tax relief now available to victims of Hurricane Ida; Oct. 15 deadline, other dates extended to Jan. 3

 Victims of Hurricane Ida that began on Aug. 26 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 is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance. Currently this includes the entire state of Louisiana, but taxpayers in Ida-impacted localities designated by FEMA in neighboring states will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

“During this difficult time, the IRS stands ready to help victims of Hurricane Ida,” said IRS Commissioner Chuck Rettig. “We want people affected by this devastating hurricane focused on their safety and recovery for themselves and their families. To provide assistance now and in the weeks ahead, we have a variety of different types of relief available to help people and businesses affected by this disaster.”

The tax relief postpones various tax filing and payment deadlines that occurred starting on Aug. 26, 2021. As a result, affected individuals and businesses will have until Jan. 3, 2022, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return due to run out on Oct. 15, 2021, will now have until Jan. 3, 2022, to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief.

The Jan. 3, 2022 deadline also applies to quarterly estimated income tax payments due on Sept. 15, 2021, and the quarterly payroll and excise tax returns normally due on Nov. 1, 2021. It also applies to tax-exempt organizations, operating on a calendar-year basis, that had a valid extension due to run out on Nov. 15, 2021. Businesses with extensions also have the additional time including, among others, calendar-year corporations whose 2020 extensions run out on Oct. 15, 2021.    

In addition, penalties on payroll and excise tax deposits due on or after Aug. 26 and before Sept. 10, will be abated as long as the deposits are made by Sept. 10, 2021.

The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2021 return normally filed next year), or the return for the prior year (2020). Be sure to write the FEMA declaration number – 4611 − for Hurricane Ida in Louisiana on any return claiming a loss. See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by Hurricane Ida and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.

Low-income families still have time to sign up for advance child tax credit payments

 It's not too late for low-income families to sign up for advance child tax credit payments.

The IRS urges anyone who normally isn't required to file a tax return to explore the tools available on IRS.gov. The Eligibility Assistant can help determine eligibility for the advance child tax credit. The Non-filer Sign-up tool can help people file a simplified tax return to sign up for these payments. Some non-filers may also be eligible for the $1,400 per person Economic Impact Payments and the recovery rebate credit. People can get these benefits, even if they don't work, have no income or don’t have a permanent address.

For these families, each advance CTC payment is up to $300 per month for each qualifying child under age 6 and up to $250 per month for each child ages 6 through 17.

Payments are generally issued on the 15th of each month through December 2021.

Here are more details and information about how to get the payments:

• The IRS sends advance child tax credit payments to eligible families who filed a 2019 or 2020 income tax return. This includes people who successfully use the Non-filer Sign-up tool for advance CTC, available only on IRS.gov. People can access the Non-filer Sign-up tool or the step-by-step guide for using it on IRS.gov.

• Aside from filing a simplified return from the Non-filer Sign-up tool, families don't have to do anything else if they are eligible to receive monthly payments.

• The Non-filer Sign-up tool is available until October 15, 2021. Using the tool by 11:59 p.m. ET on any month’s deadline will apply to the next month’s payment.
 
• Families who receive their first monthly payment in any month after July will still receive their total advance payment for the year. This means that the total payment will be spread over fewer months, rather than six months, making each monthly payment larger.
 
• The IRS encourages people to request payments by direct deposit, which is faster and more secure than other payment methods. People who don't have a bank account should visit the Federal Deposit Insurance Corporation website for details on opening an account online. They can also use the FDIC's BankFind tool to locate an FDIC-insured bank.

• Finally, BankOn, American Bankers Association, Independent Community Bankers of America and National Credit Union Administration have lists of banks and credit unions that can open an account online. Veterans can see the Veterans Benefits Banking Program for financial services at participating banks.

Share this tip on social media -- #IRSTaxTip: Low-income families still have time to sign up for advance child tax credit payments https://go.usa.gov/xFzab

Tax pros: Beware of pandemic-related email schemes

All tax pros need to beware of evolving phishing scams that use various pandemic-related themes to steal client data. It is the tax preparer’s responsibility to secure their network to protect taxpayer data.

Tax pros, especially those who engage in remote transactions, remain vulnerable to identity thieves posing as potential clients. The criminals then trick practitioners into opening email links or attachments that infect computer systems.

The warning about these phishing scams comes as part of the IRS and its Security Summit partners annual summer campaign. This year's theme, Boost Security Immunity: Fight Against Identity Theft, urges tax pros to step up their efforts to protect client data.

Scams may differ in themes, but they generally have two traits:

• They appear to come from a known or trusted source, such as a colleague, bank, credit card company, cloud storage provider, tax software provider or even the IRS.
• They tell a story, often with an urgent tone, to trick the receiver into opening a link or attachment.

Fraudsters continue to impersonate pandemic-related government benefit programs to launch phishing campaigns. Pandemic-related scams may be delivered by email, social media, phone, or text, and may reference legitimate programs such as Economic Impact Payments. Instead of providing economic relief, these scams collect personal and financial information. Legitimate government programs will have corresponding information on their official government websites.

Phishing emails or SMS/texts - known as smishing - attempt to trick the person receiving the message into disclosing personal information such as passwords, bank account numbers, credit card numbers or Social Security numbers. Anyone with a smartphone is a potential target. Smishing scams may leverage the child tax credit or other pandemic-related tax-related programs to trick recipients into visiting phishing websites.

A specific kind of phishing email is called spear phishing. Rather than the scattershot nature of general phishing emails, scammers take time to identify their victim and craft a more enticing phishing email known as a lure. Scammers often use spear phishing to target tax pros.

In a reoccurring and very successful spear phishing scam, criminals pose as potential new clients, exchanging several emails with tax pros before following up with an attachment that they claimed was their tax information. Once the tax pro clicks on the URL or opens the attachment, malware secretly downloads onto their computer, giving thieves access to passwords to client accounts or remote access to the computer. Thieves then use this malware known as a remote access trojan to take over the tax professional's office computer system, identify pending tax returns, complete them and e-file them, changing only the bank account information to steal the refund. This scam remains popular as many tax pros continue to work remotely and communicate with clients over email versus in-person or over the phone because of COVID-19.

Tax pros should follow basic security steps to protect their accounts and client data. For example, using the two-factor or the multi-factor authentication option offered by tax preparation providers or storage providers would protect client accounts even if passwords were inadvertently disclosed. Keeping anti-virus software automatically updated helps prevent scams that target software vulnerabilities. Using drive encryption and regularly backing up files helps stop theft and ransomware attacks.

More information:
Publication 4557, Safeguarding Taxpayer Data 

Taxpayer can protect themselves from scammers by knowing how the IRS communicates

Please share this information with your clients.

If the IRS does call a taxpayer, it should not be a surprise because the agency will generally send a notice or letter first. Understanding how the IRS communicates can help taxpayers protect themselves from scammers who pretend to be from the IRS with the goal of stealing personal information.

Here are some facts about how the IRS communicates with taxpayers:

• The IRS doesn't normally initiate contact with taxpayers by email. Do not reply to an email from someone who claims to be from the IRS because the IRS email address could be spoofed or fake. Emails from IRS employees will end in irs.gov.
• The agency does not send text messages or contact people through social media. Fraudsters will impersonate legitimate government agents and agencies on social media and try to initiate contact with taxpayers.
• When the IRS needs to contact a taxpayer, the first contact is normally by letter delivered by the U.S. Postal Service. Debt relief firms send unsolicited tax debt relief offers through the mail. Fraudsters will often claim they already notified the taxpayer by U.S. mail.
• Depending on the situation, IRS employees may first call or visit with a taxpayer. In some instances, the IRS sends a letter or written notice to a taxpayer in advance, but not always. Taxpayers can search IRS notices by visiting Understanding Your IRS Notice or Letter. However, not all IRS notices are searchable on that site and just because someone references an IRS notice in email, phone call, text, or social media, does not mean the request is legitimate.
• IRS revenue agents or tax compliance officers may call a taxpayer or tax professional after mailing a notice to confirm an appointment or to discuss items for a scheduled audit. The IRS encourages taxpayers to review, How to Know it’s Really the IRS Calling or Knocking on Your Door: Collection.
• Private debt collectors can call taxpayers for the collection of certain outstanding inactive tax liabilities, but only after the taxpayer and their representative have received written notice. Private debt collection should not be confused with debt relief firms who will call, send lien notices via U.S. mail, or email taxpayers with debt relief offers. Taxpayers should contact the IRS regarding filing back taxes properly.
• IRS revenue officers and agents routinely make unannounced visits to a taxpayer’s home or place of business to discuss taxes owed, delinquent tax returns or a business falling behind on payroll tax deposits. IRS revenue officers will request payment of taxes owed by the taxpayer. However, taxpayers should remember that payment will never be requested to a source other than the U.S. Treasury.
• When visited by someone from the IRS, the taxpayers should always ask for credentials. IRS representatives can always provide two forms of official credentials: a pocket commission and a Personal Identity Verification Credential.

Upcoming Connecticut MeF Outage

The Connecticut Department of Revenue Services announced a planned outage starting around 11:30 AM on Thursday, September 2,2021 as they transition to a new system. The transition is expected to be completed and the MeF system back online by Monday, September 13, 2021.

No acknowledgments will be sent during this outage. This outage will only affect the business tax types (FID, CORP and PART). Individual Income Tax will not be affected.

Connecticut will be honoring the IRS postmark date, as well as the requested payment date of any payments sent during this outage.

Since CT will honor postmark and payment dates, our Electronic Filing Center (EFC) will continue to send submissions during the window.  Please transmit your returns as normal through your tax software.

Child Tax Credit: New update address feature available with IRS online portal

The Internal Revenue Service has launched a new feature allowing any family receiving monthly Child Tax Credit payments to quickly and easily update their mailing address using the Child Tax Credit Update Portal, found exclusively on IRS.gov. This feature will help any family that chooses to receive their payment by paper check avoid mailing delays or even having a check returned as undeliverable.

Any family can easily have their September check and all future checks sent to their new address by using the portal to make an address change request. To have the change take effect in September, people need to complete the request before midnight Eastern Time on Monday, Aug. 30. Families can still make changes after that date, but their request will not be effective until the next scheduled monthly payment.

If you change your mailing address using the Child Tax Credit Update Portal, the IRS will use this updated address for all future IRS correspondence so the address change feature can also be helpful to taxpayers that are receiving payments by direct deposit. For example, the IRS will mail a year-end summary statement (Letter 6419) to all taxpayers who have received advance Child Tax Credit payments during 2021, and having a current address on file with the IRS will ensure prompt delivery of this statement.

Families will need Letter 6419 to quickly and accurately fill out their 2021 federal income tax return next year. This is important because, for most families, the advance payments they are receiving during 2021 cover only half of the total credit. They will claim the remaining portion on their 2021 tax return.

The address change feature joins a growing set of services available through the Child Tax Credit Update Portal. Available only on IRS.gov, the portal already allows families to verify their eligibility for the payments and then, if they choose to:

• Switch from receiving a paper check to direct deposit;
• Change the account where their payment is direct deposited; or
• Stop monthly payments for the rest of 2021.

Any of these changes made before midnight ET on Aug. 30, will apply to the Sept. 15 payment and all subsequent monthly payments, scheduled for Oct. 15, Nov. 15, and Dec. 15.

Future enhancements are planned for the Child Tax Credit Portal

Later this year, families will also be able to use the Update Portal tool to:

• Add or remove children in most situations;
• Report a change in marital status; or
• Report a significant change in income.

Latest information for the Child Tax Credit payments on IRS.gov

The IRS has created a special Advance Child Tax Credit 2021 page designed to provide the most up-to-date information about the credit and the advance payments. It’s at IRS.gov/childtaxcredit2021.

The web page now features an updated set of frequently asked questions and a new user guide for the Child Tax Credit Update Portal (Publication 5549). It also provides direct links to the portal, as well as two other online tools-- the Non-Filer Sign Up Tool and the Child Tax Credit Eligibility Assistant -- and other useful resources.

Indiana Experiencing Ack Processing Delays due to scheduled maintenance

The Indiana Department of Revenue (DOR) will launch the third phase (Rollout 3) of its multi-year tax system modernization initiative, Project NextDOR, on Tuesday, Sept. 7, 2021. As DOR continues its transition to the new Indiana Tax System (ITS), there will be some outages for maintenance.

As a result, return submission acknowledgements will not be generated from 11:59 p.m. EST on Aug. 12, 2021, until 8 a.m. EST on Sept. 7, 2021. Tax return submissions received during this period will be processed when DOR’s system is back online.