IRS eNews for Small Business

Issue Number: 2020-20

Inside This Issue

1. Common errors to avoid when claiming employer tax credits

2. Reminder: Work Opportunity Tax Credit extended

3. Delivering the CARES Act and Filing Season 2020; IRS offers electronic signature options

4. IRS to mask key business transcript details; protect taxpayers from identity theft

5. Here's who qualifies for the employee business expense deduction

6. IRS resources to help small business owners

7. November 21 deadline nears to register online for Economic Impact Payment; Some people can claim special credit next tax filing season

8. New COVID-related text scam; National Tax Security Awareness Week announced

1. Common errors to avoid when claiming employer tax credits

Employers who are filing Form 941, Employer's Quarterly Federal Tax Return and claiming an employer tax credit should read the instructions carefully and take their time when completing the form to avoid mistakes.

This IRS Tax Tip covers:

• Using a reputable tax preparer including certified public accountants, enrolled agents or other knowledgeable tax professionals

• Mistakes can result in a processing delay or a balance due notice, which could mean a delay or require filing an amended return

• Common mistakes to avoid when completing Form 941

• Reporting advances requested instead of the advance payments of credits received

• Incorrectly reconciling the advance payment of the credit requested and received

• Requirements when using third-party payers or reporting agents

• What third-party payers and reporting agents should also ask employers

2. Reminder: Work Opportunity Tax Credit extended

The Work Opportunity Tax Credit is a valuable tax credit available to employers who hire long-term unemployment recipients and others certified by their state workforce agency if the individual began or begins work for the employer after December 31, 2014, and before January 1, 2021.

3. Delivering the CARES Act and Filing Season 2020; IRS offers electronic signature options

The CARES Act and Filing Season 2020 Deputy Commissioner for Operations Support Jeff Tribiano gives a behind-the-scenes look into how the IRS was able to deliver Economic Impact Payments and other tax relief to help Americans during the COVID-19 outbreak while simultaneously executing a highly successful filing season.

Electronic signature options will simplify third-party authorizations Submitting Form 2848, Power of Attorney and Form 8821, Tax Information Authorization, are currently done on paper. By moving to a new online submission process, it gives tax professionals and taxpayers a safe option to electronically sign and upload these critical documents without an in-person meeting, explains Sharyn Fisk, Director, Office of Professional Responsibility.

"A Closer Look" These are part of the IRS "A Closer Look" feature. It will be updated frequently and will include articles from a variety of IRS leaders. The online publication will cover a variety of timely issues of interest to taxpayers and the tax community. It will also provide a detailed look at key issues affecting everything from IRS operations and employees to issues involving taxpayers and tax professionals.

4. IRS to mask key business transcript details; protect taxpayers from identity theft

Moving to protect business taxpayers from identity theft, the IRS announced that starting December 13, 2020, it will begin masking sensitive data on business tax transcripts.

The announcement provides 30 days for stakeholders to make any adjustments and additional information about:

• What a tax transcript is

• What they are used for

• What's visible on the new transcript

• How it would work for a taxpayer seeking to verify income for a lender

5. Here's who qualifies for the employee business expense deduction

People can no longer claim unreimbursed employee expenses as miscellaneous itemized deductions, unless they're a qualified employee or an eligible educator. See who qualifies in this IRS Tax Tip.

6. IRS resources to help small business owners

During National Veterans Small Business Week, the IRS shared a variety of resources to help small business owners, including veterans, understand their tax responsibilities. Best of all, most of these resources are available online at IRS.gov.

Here are a few webpages with helpful information for small business owners:

• Small Business and Self-Employed Tax Center

• Self-Employed Individuals Tax Center

• Sharing Economy Tax Center

7. November 21 deadline nears to register online for Economic Impact Payment; Some people can claim special credit next tax filing season

The Internal Revenue Service reminded anyone who doesn't normally file a tax return that they have until 3 p.m. EST this Saturday, November 21, to register with the IRS for an Economic Impact Payment.

The extended November 21 deadline also gives more time to federal beneficiaries who already received an EIP but didn't register to receive supplemental $500 payments for qualifying children.

Find out the details.

8. New COVID-related text scam; National Tax Security Awareness Week announced

Security Summit partners warn taxpayers of new COVID-related text scam The IRS, state tax agencies and the tax industry warned of a new text scam created by thieves that trick people into disclosing bank account information under the guise of receiving the $1,200 Economic Impact Payment.

National Tax Security Awareness Week The IRS, state tax agencies and the nation's tax industry announced that the 5th Annual National Tax Security Awareness Week will take place between November 30 and December 4, 2020.

This year, there's a heightened need for security as fraudsters seek to use COVID-19 to scam taxpayers and tax preparers. New protections being offered by Security Summit partners in January can help protect people against tax-related identity theft.