IRS Releases Draft Form 1040: Here’s What’s New For 2020 – Kelly Phillips Erb, Forbes. “The Internal Revenue Service (IRS) has released a draft of Form 1040, U.S. Individual Income Tax Return.”
Some key components of the 2020 draft 1040 include virtual currency reporting in the top section of the form, $300 of charitable contributions being an above the line deduction per the CARES act, and stimulus check reporting on line 30.
A friendly reminder that this is just a draft at this point. Things can certainly change given the current environment.
Draft Form 1040 for 2020 Includes Line for Relief Payment Claims – William Hoffman, Tax Notes Federal. “Line 30 of the draft form, for “Recovery rebate credit,” would likely be used to claim EIP amounts still owed as a result of a decrease in income or additional dependents, according to a tweet by Tyler Evilsizer of the Committee for a Responsible Federal Budget after the August 20 release of the form.”
IRS Sending Tax Refund Interest Checks To 13.9 Million Taxpayers – Ashlea Ebeling, Forbes. “If you get a tiny surprise payment from the Internal Revenue Service and you’re wondering what it is, it’s probably an interest payment and not a mistake. The IRS announced it’s starting to send out interest payments this week to individual taxpayers whose tax refunds were delayed. It applies to folks who filed a 2019 income tax return by this year's July 15 deadline and either received a refund in the past three months or will receive a refund.”
As of July 24th, the IRS had issued $282 billion in refunds.
Chair of Ways and Means Requests IRS Cease Sending Notices of Payments Due Until Mail Backlog is Resolved – Ed Zollars, CPA, Current Federal Tax Developments. “The IRS’s backlog in processing some mailed in payments is something most tax professionals have dealt with in recent weeks. Now the Chairman of the House Ways and Means Committee, Representative Richard Neal (D-MA), has called on the IRS to halt sending out notices demanding payment until the backlog is cleared by the agency.”
Trump Must Release His Tax Returns to Manhattan Prosecutors, Judge Rules – Deanna Paul, WSJ($). “The Thursday ruling represents another blow to the high-profile case brought by Mr. Trump and which was ruled on by the U.S. Supreme Court earlier this year. U.S. District Judge Victor Marrero rejected the president’s arguments that the subpoena was overbroad and issued to harass Mr. Trump, calling the arguments made in the president’s most recent court filing “substantially the same” as his earlier ones.”
New York DA Gets Closer to Trump’s Tax Records - Jad Chamseddine, Tax Notes Federal ($).
Implementing the payroll tax executive order - Paul Bonner, Journal of Accountancy.
"In this podcast, we touch base with Ed Karl, the AICPA’s vice president–Tax Policy & Advocacy, to discuss questions the AICPA Tax Executive Committee has raised in official comments to Treasury and the IRS concerning President Donald Trump’s Aug. 8 memorandum ordering Treasury to defer the withholding, deposit, and payment of payroll taxes imposed by Sec. 3101(a) — better known as the employee portion of Social Security tax, currently 6.2% of covered wages and compensation — and a comparable rate of tax under Sec. 3201 — that’s the Railroad Retirement tax — for Sept. 1, 2020, through the end of the year."
Payroll Group Recommends Guidance for Tax Deferral – Tax Notes ($).
“The NPRC (National Payroll Reporting Consortium), whose member organizations provide payroll processing and related services to nearly two million U.S. employers, is concerned that sufficient time is not available to implement the tax deferrals for payrolls paid as of September 1. Employers process payrolls well in advance of payday, and some September payrolls began processing this week. The NPRC is also concerned that the ability to implement deferrals is being delayed by the lack of IRS guidance on fundamental questions about how the deferrals will work, that require answers before necessary programming changes can be made.”
Not only are logistics an issue, but also calculation of the deferral itself.
“Even if guidance were available today, the programming changes are substantial in scope. For example, most payroll systems currently recalculate Social Security taxes with each payment of wages, to ensure that the employee Social Security tax is equal to full-year wages times 6.2%. Payroll systems are designed to apply a single Social Security tax rate for the full year, and to all employees equally. Applying a different tax rate for part of the year, beginning in the middle of a quarter, and applying such a change to some employers but not others, and to some employees but not others, is quite complex. Not all employers and payroll systems will be able to make these complex changes by September 1.”
Mississippi blames 'typo' for including huge mosquito among new state flag designs – Brooke Seipel, A viral design being proposed as the new state flag for Mississippi originated as a joke and was only included in a list of finalists due to a typo, according to officials.”
“Mississippi resident Thomas Rosete told the Clarion Ledger that he designed and submitted the mosquito flag as a joke on a coworker who didn't want the flag changed. Rosete works as a deckhand on the Yazoo River and said he is familiar with the state's large mosquito population and thought they are fitting to represent the state.”
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