As a result of the pandemic, the IRS found itself behind a stack of approximately 10 million pieces of mail. Because of this, tax due notices were temporarily halted by the Service until they had a chance to catch up. The IRS has just announced that they have caught up sufficiently that they will resume sending Series 500 notices. These notices alert the taxpayer that they either have a balance due or that they have not yet responded to a previously sent notice.

Our professional organization, the American Institute of CPAs, is pushing hard for the IRS to grant automatic forgiveness, particularly for late interest and late payments that are a result of COVID-related difficulties; however, the IRS isn’t going along with this request. They are, however, willing to consider offering reasonable cause penalty abatement to taxpayers on a case by case basis. If you receive a letter from the IRS, please send it to us and we will continue to fight for abatement.

According to a recent notification in the Federal Register, new SBA Form 3509 (for-profit borrowers) and Form 3510 (non-profit borrowers) are forthcoming. These forms will require additional “loan necessity” disclosures from recipients of PPP loans in excess of $2 million. Ordinarily these disclosures would be obtained prior to loan issuance, but because of the pandemic and the urgency of disseminating the loans, a retroactive approach has been taken. Fortunately, these additional disclosures won’t be required from the majority of PPP loan recipients, though all recipients must be able to justify their need for a PPP loan should the SBA or Treasury decide to come calling.

The IRS has just announced the 2021 inflation adjusted numbers for individual taxpayers. Each year, various amounts are adjusted for inflation, including the following as we head into 2021: the standard deduction, marginal income limits in each tax bracket, HSA contribution limits, and the estate exclusion amount. The seven tax brackets and the annual gift tax exclusions will stay the same from 2020 into 2021. The IRS has posted specific amounts for these categories and a few others here. 

We believe this information is current as of 10/30/2020. Please feel free to reach out if you have questions.