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It doesn’t feel like it could be September already, but it is. And you know what that means: estimated payments are now due. The deadline for making your third quarter estimated tax payments for 2020 is September 15.

Who Needs To Make Estimated Payments?

Generally, you should make estimated tax payments if you are not subject to withholding. Realistically, this means that folks who rely on income reported on a Form 1099 (like self-employment income, interest, dividends, and retirement income) are most likely to be responsible for estimated tax. If you’re self-employed, a gig economy worker, a retiree with a pension or other income, or a partner in a partnership or LLC, this likely applies to you.

You will need to make estimated payments if you:

  1. You expect to owe at least $1000 in tax for the 2020 tax year after subtracting your withholding and credits.
  2. You expect your withholding and credits to be less than the smaller of 90% of the tax to be shown on your 2020 tax return or 100% of the tax shown on your 2019 tax return.

Who Might Get A Break?

Those are the general rules. However, special rules apply to some groups of taxpayers, like farmers, fishermen, and victims of natural disasters, those who recently became disabled, recent retirees and those who receive income unevenly during the year. You can find out more in Publication 505, Tax Withholding and Estimated Tax (downloads as a PDF).

How Can You Make a Payment?

To figure the amount of your estimated tax, you can use form Form 1040-ES, Estimated Tax for Individuals (downloads as a PDF).

You can write a check or IRS pay electronically. You can schedule tax payments up to 30 days in advance with Direct Pay or up to 365 days in advance with the Electronic Federal Tax Payment System (EFTPS).

What Happens If You Don’t Make Your Payment On Time?

Don’t be too casual about your payments. If you do not pay enough tax by the due date for each quarter, you may be charged a penalty even if you are due a refund when you file your income tax return (nice, huh?).

If you are subject to a penalty for not making enough estimated tax payments throughout the year, you can figure the penalty by using federal form 2210 (downloads as a PDF).

A good example of when a form 2210 comes in handy is when your income is uneven throughout the year; for example, instead of receiving a regular paycheck every other week, the bulk of your income comes in summer due to seasonal employment. When this happens, your estimated tax payment is figured at the end of each period based on a reasonable estimate of your income, deductions, and other items from the beginning of the tax year through the end of the period. While this method can save you from unwanted penalties, it can also be tricky.

You will not file form 2210 with your return unless the instructions on the form say as much. Typical situations that would require the filing of Form 2210 include a request for a waiver of part or the entire penalty. There is an exception to this rule for weather-related issues: if you lived in a federally declared disaster area and were granted a break on making estimated payments, you do not have to do anything special and you do not need to file form 2210. The IRS will automatically identify taxpayers located in a covered disaster area and will apply the appropriate penalty relief. If you still owe a penalty after the waiver is applied, the IRS will send you a bill.

What If You Screw Up?

If you miss a payment, there’s no need to panic. Just pay when you can. The penalty is worth, roughly, the unpaid interest on the estimated payment.

What’s Next?

Your fourth estimated tax payment for 2020 is due January 15, 2021.

James (Jim) Robnett has been selected as the next Deputy Chief of CI. Robnett will be responsible for overseeing a worldwide staff of nearly 2,900 CI employees, including approximately 2,000 special agents in 21 Field Offices and 11 foreign countries, who investigate crimes involving tax, money laundering, public corruption, cyber, ID theft, narcotics and terrorist-financing.

Robnett is currently the Director of Field Operations (DFO), Southern Area within IRS Criminal Investigation (CI). In this role, he was responsible for planning, developing, implementing, monitoring, and evaluating criminal investigation programs in the Southern Area, where he is responsible for overseeing all criminal investigations for five field offices, the IRS-CI’s national Treasury Tax and Trade Bureau program and the East Coast Cyber Crime Unit.

Robnett began his IRS career in 1986 as a Revenue Agent and quickly moved into the leadership ranks and held has held positions of increasing responsibility. He entered the Senior Executive Service in 2017, and shortly after he was appointed to serve as the Chicago Field Office Special Agent in Charge and subsequently Special Agent in Charge of the New York Field Office.

Jim Lee, Incoming Chief of CI, said, about the announcement, “Jim brings decades of experience to this new role and is the right person to fill this critical position for CI. He has a proven track record of leadership throughout his career with CI, is a mentor to many and will be a great partner to continue to advance the CI mission in the years to come. I look forward to working with him and the rest of the CI leadership team.”

(Lee was recently named to the position after Chief Fort announced that he was stepping down. You can read more about Lee here.)

Robnett responded to the news by stating, “I’m extremely humbled and energized by the opportunity to become the next Deputy Chief of IRS-CI.  While filling this new role was not in my sites when I started my career as a revenue agent years ago, it is certainly the byproduct of the many opportunities I have had to work with the best and brightest the IRS and CI has to offer throughout my career.”

He continued, “I’ve challenged myself in every job I have had to build a team that is successful and brings out the best in everyone—today is the culmination of the work of many. While I am coming to this new job during the final years of my career, the responsibility to mentor and lead the next generation of CI leaders energizes me like no other opportunity.  I look forward to working closely with the Chief and Commissioner and am grateful for the trust they have in me to succeed.”

To learn more about the work of IRS-CI, check out my interview with outgoing IRS-CI Chief Don Fort.

Got questions about Opportunity Zones? The Internal Revenue Service (IRS) is offering a free webinar designed to give an overview of Opportunity Zones and related tax benefits for investors.

As part of the Tax Cuts and Jobs Act (TCJA), new investments in some economically-distressed areas may be eligible for preferential tax treatment. To qualify, areas must be nominated by the state and certified by the Secretary of the U.S. Treasury. These areas – called Opportunity Zones – exist in all 50 states, the District of Columbia and five U.S. territories.

Capital gains are typically favorable for investors, but when it comes to certain investments related to Opportunity Zones, they’re really advantageous. And the longer that you can hold onto an investment, the better. But you have to meet all of the criteria to qualify for the benefits.

Unfortunately, taxpayers have found that the rules for Opportunity Zones can be complicated. As a result, the IRS continues to offer guidance, like this webinar.

The 75-minute webinar is free and will take place on Thursday, September 3 at 2 p.m. (Eastern Time)

The webinar is open to investors, tax professionals, government agencies and anyone else interested in the tax rules that affect Opportunity Zones. While the webinar is free for everyone, you still have to register in advance to attend.

Topics will include:

  • Investor reporting elections
  • Annual investor reporting requirements
  • Impact of disaster relief on Opportunity Zones
  • Live question and answer session

Hearing impaired? No problem. The IRS notes that the webinar will be closed captioned for viewers who are deaf or hearing impaired.

For more on opportunity zones, check out this article.

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Did you know that the Internal Revenue Service – Criminal Investigations (IRS-CI) is the only federal agency that devotes 100% of resources to investigating financial crimes? IRS-CI is also the only agency with jurisdiction over federal tax crimes.

You can test how much you know about the agency here:

How’d you do?

For more on IRS-CI, you can click here for the podcast episode listing, or listen to my interview with Chief Fort below:

Looking for your interest? The Internal Revenue Service (IRS) will begin sending interest payments to individual taxpayers who timely filed their 2019 federal income tax returns and are due refunds. The IRS pegs that number at about 13.9 million taxpayers.

In June, the IRS announced that if you were entitled to a 2019 tax refund, individual federal income tax refunds issued after April 15 would be paid with interest.

Now, the IRS says that the interest payments, which average about $18, will be made to individual taxpayers who filed a 2019 return by the July 15 deadline and either received a refund in the past three months or will receive a refund. Most interest payments will be issued separately from tax refunds.

In most cases, taxpayers who received their tax refund by direct deposit will have their interest payment direct deposited in the same account. About 12 million of these payments will be direct deposited.

If you don’t receive your interest by direct deposit, you will receive a check. The checks will be notated “INT Amount,” which will identify it as a refund interest payment.

And as I noted in June, these interest payments are taxable. It’s just like any other interest you receive: you must report it on your 2020 federal income tax return that you’ll file in 2021. To help you sort it out, in January 2021, the IRS will send you Form 1099-INT if you receive interest totaling at least $10.

But don’t get too comfortable since this isn’t the norm. Usually, the IRS isn’t required to add interest to refunds on timely-filed refund claims unless they are issued more than 45 days after the return due date. But the deadline was pushed off this year due to the COVID pandemic. Specifically, on March 13, 2020, the President of the United States issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. In other words, the entire country has been declared a disaster area. Where a disaster-related postponement exists, the IRS is required to pay interest as of the original April 15 filing deadline, as long as an individual files a 2019 federal income tax return by the new deadline (in this case, July 15, 2020). 

The interest provision only applies to individual income tax filers (sorry, businesses).

So how much is coming your way? Interest is paid at the legally prescribed rate that is adjusted quarterly. The rate for the second quarter ending June 30 was 5%, compounded daily. Effective July 1, the rate for the third quarter dropped to 3%, compounded daily. If your payment period spans quarters, a blended rate applies, consisting of the number of days falling in each calendar quarter. It’s not awesome, but better than what many banks are paying.

Break out those checkbooks: the Internal Revenue Service (IRS) has announced the annual Preparer Tax Identification Number (PTIN) fees for 2021. Fees are $21 fee per PTIN application or renewal, plus a $14.95 fee payable to a contractor. According to the IRS, the third-party contractor fee pays for several functions, including processing applications, renewals, and operating a call center.

All current PTINs will expire on December 31, 2020. If you don’t have a PTIN for the 2021 tax season, you may not prepare tax returns for compensation. If you don’t have a valid PTIN, you may be subject to section 6695 penalties, injunction, and disciplinary action by the IRS Office of Professional Responsibility.

Any tax professional who prepares or helps prepare any federal tax return, or claim for refund, for compensation must have a valid PTIN from the IRS. Some forms which are used for informational purposes, like forms SS-4 and 2848, are excluded, as well as specific information returns, like forms W-2 and 1099. You can see the entire list of excluded forms and returns here.

Taxpayers should avoid paid preparers who refuse to include a PTIN on a tax return. That might happen because the paid preparer isn’t eligible for a PTIN or because they don’t want to be responsible for the return. Either way, it’s bad news. Those who set up shop and refuse to get a PTIN are sometimes called ghost preparers or black market preparers (for more, click here). Seek out a competent tax preparer who will answer your questions and sign your tax return. You can also check the IRS public directory to find a listing of preparers in your area who currently hold professional credentials recognized by the IRS or who hold an Annual Filing Season Program Record of Completion.

The IRS estimates that more than 800,000 tax return preparers will apply for or renew a PTIN this year.

If you thought that the IRS had stopped charging PTIN fees, you’re right. There’s some history there. The IRS did try to regulate tax preparers, and the matter did go to court. In Loving v. IRS, 742 F.3d 1013 (D.C. Cir. 2014), the IRS’ efforts to license preparers were struck down, but the PTIN rules stuck. 

(You can find out more about Loving here.)

Shortly after the ruling, a class-action suit was filed on behalf of tax professionals who paid PTIN fees before the Loving verdict. Those tax professionals alleged that they should not have been required to pay the fees. The court agreed, ruling that the IRS could require the use of PTINs but could not charge fees for them “because this would be equivalent to imposing a regulatory licensing scheme and the IRS does not have such regulatory authority.” In the ruling, the IRS was barred from charging PTIN fees and ordered to provide a full refund of all PTIN fees paid – worth more than $175 million.

(You can read about the class action suit here.)

The IRS, of course, appealed, and the matter went back to court. It was argued in the United States Court of Appeals for the District of Columbia Circuit on May 11, 2018. While the case was pending, the IRS did not charge PTIN fees.

In 2019, the court ruled that the IRS does have the authority to charge PTIN fees (Montrois, No. 17-5204 (D.C. Cir. 3/1/19)). In the ruling, the court vacated the district court’s opinion, which means that the lower court’s judgment is no longer valid. That opens the door for the IRS to reinstate those PTIN fees – which they did. It also means, for now, no PTIN refunds. The case is ongoing.

(You can read the opinion as a PDF here.)

You can read the final regulations setting the fees – slated to be published on July 17 – here.

In May, the Internal Revenue Service (IRS) issued guidance about how to return an Economic Impact Payment (EIP) or stimulus check. They were targeting, among others, decedents and incarcerated persons, even though there is no clawback provision in the CARES Act.

Initially, IRS spokesman Eric Smith told the Washington Post in April that “the payments may not have to be returned depending on the circumstances. However, a week after Smith made his comments to the Washington Post, Treasury Steven Mnuchin told the Wall Street Journal that decedent’s checks should be returned. 

And on May 6, the IRS added the following FAQ answer on its website:

A Payment made to someone who died before receipt of the Payment should be returned to the IRS by following the instructions about repayments. Return the entire Payment unless the Payment was made to joint filers and one spouse had not died before receipt of the Payment, in which case, you only need to return the portion of the Payment made on account of the decedent. This amount will be $1,200 unless adjusted gross income exceeded $150,000. 

Apparently, those checks weren’t getting returned as quickly as the IRS wanted. On July 10, the IRS updated its FAQs to say:

A Payment made to someone who died before receipt of the Payment should be returned to the IRS by following the instructions in the Q&A about repayments. Return the entire Payment unless the Payment was made to joint filers and one spouse had not died before receipt of the Payment, in which case, you only need to return the portion of the Payment made to the decedent. This amount will be $1,200 unless adjusted gross income exceeded $150,000. If you cannot deposit the Payment because it was issued to both spouses and one spouse is deceased, return the check as described in Returning the Economic Impact Payment section on this page. Once the IRS receives and processes your returned Payment, an Economic Impact Payment will be reissued.

That sounds like what they offered before, except that they added this bit:

The Bureau of Fiscal Services has canceled outstanding Economic Impact Payment (EIP) checks issued to recipients who may not be eligible, including those who may be deceased. Recipients should still return these checks as described in Returning the Economic Impact Payment section on this page.

To be clear, the BFS is stopping Payment on those uncashed checks. Other taxpayers have reported to me that payments which have been deposited into existing bank accounts have also been reversed.

The message: Apparently, this really, really matters to the IRS. I would argue – from my email – that they’re not putting this kind of effort into getting checks into the hands of live taxpayers, but they are pursuing decedents. Be aware.

¿Su primer idioma es espanol?

The Internal Revenue Service (IRS) is reminding taxpayers for whom English may not be a first language that there are a variety of ways to get help and information in languages other than English.

“Providing additional materials in more languages to help taxpayers is a priority for the IRS,” said IRS Commissioner Chuck Rettig. “These resources are just a start for the IRS. In the months ahead, we will be working to add more material on IRS.gov. We also continue to work with our partners in the tax community to help translate and share more tax materials into different languages. For example, we are extremely proud to have material related to Economic Impact Payments translated into more than 30 different languages with the help of our partners.”

The IRS provides some tax information on its IRS.gov website in up to seven languages, including:

To get information in one of these languages, click on the language dropdown tab at the top of IRS.gov page:

The tab displays the current language selection and other languages a taxpayer can choose to view translated content. IRS.gov pages translated into one or more languages also have links to available translations on the right side of the page, just below the title.

A helpful page for people wanting to plan for the future is the Steps To Take Now To Get A Jump On Next Year’s Taxes page, available in seven languages.


The Internal Revenue Service (IRS) has announced that it will begin opening its Taxpayer Assistance Centers (TACs) to the public in phases beginning today, Monday, June 29, 2020.

Those taxpayers seeking in-person assistance at a TAC will need to make an appointment. To do so, you. must call 1.844.545.5640.

Appointments will be available if people need assistance for authentication of identity and document validation related to tax return filing or application for an Individual Taxpayer Identification Number (ITIN); Sailing Clearances required for foreign travel by resident and non-resident aliens leaving the United States; assistance with Economic Impact Payment Issues; and cash payments. 

For an up-to-date listing of TAC locations as they open, click over to Contact Your Local IRS Office.

If you have questions that you hope to have answered over the phone, keep in mind that IRS live phone assistance remains limited. For Economic Impact Payment (EIP, or stimulus questions), call 800.919.9835 (that’s an automated number followed by a live person).

For other issues, please visit Let Us Help You on the IRS web site to find the phone number for the office best equipped to address your specific concerns.