Inside This Issue
1. American Rescue Plan tax credits available to small employers to provide paid leave to employees receiving COVID-19 vaccines
The Internal Revenue Service and the Treasury Department announced further details of tax credits available under the American Rescue Plan to help small businesses, including providing paid leave for employees receiving COVID-19 vaccinations.
The additional details, provided in a fact sheet released today, spell out some basic facts about the employers eligible for the tax credits.
Self-employed individuals may claim comparable credits.
2. Safe harbor for small businesses to claim deductions relating to first-round Paycheck Protection Program loans
The Treasury Department and IRS issued Revenue Procedure 2021-20 for certain businesses that received first-round Paycheck Protection Program loans but did not deduct any of the original eligible expenses because they relied on guidance issued before the enactment of tax relief legislation in December of 2020.
3. Guidance: Businesses can temporarily deduct 100% of restaurant food or beverage expenses
The Treasury Department and the IRS issued Notice 2021-25, providing guidance under the Taxpayer Certainty and Disaster Relief Act of 2020.
Beginning January 1, 2021, through December 31, 2022, businesses can claim 100 percent of their food or beverage expenses paid to restaurants as long as the business owner (or an employee of the business) is present when food or beverages are provided and the expense is not lavish or extravagant under the circumstances.
See the IRS food and beverage deduction news release for details, including purchases from restaurants for off-premises consumption.
4. Filing season: Errors; Interest and penalties; Overlooked refunds; Premium Tax Credit; Recovery Rebate Credit
Find useful information about the following topics:
Steer clear of typical tax return errors that could delay refunds or otherwise affect normal processing as the May 17 filing deadline nears
Video offers tips on Avoiding Interest and Penalty Charges by filing and paying the amount due on time
IRS Free File can help people who have no filing requirement find overlooked tax credits and get a refund
IRS suspends requirement to repay excess advance payments of the 2020 Premium Tax Credit
IRS letters explain why some 2020 Recovery Rebate Credits are different than expected
5. Economic Impact Payments from the American Rescue Plan
Updates and more about Economic Impact Payments under the American Rescue Plan:
The IRS, Treasury, and Bureau of the Fiscal Service announced they are disbursing nearly two million payments in the sixth batch of Economic Impact Payments from the American Rescue Plan, bringing the total so far to approximately 161 million payments, with a total value of more than $379 billion, since these payments began rolling out to Americans in batches as announced on March 12
Those experiencing homelessness can get Economic Impact Payments and other tax benefits; permanent address not required
6. 20-year Exam veteran selected as new Office of Promoter Investigations acting director
As part of the continued and increased focus on compliance issues, the IRS announced Lois Deitrich, a 20-year veteran of the agency, will be the acting director for the new Office of Promoter Investigations.
"By establishing the Office of Promoter Investigations, we are continuing our increased focus on promoters of abusive tax avoidance transactions, which we have demonstrated over the last year," said IRS Commissioner Chuck Rettig.
Lois will serve as the principal advisor and consultant to IRS division commissioners and deputy commissioners on issues involving promoters of abusive transactions and the schemes they peddle.
The new office will further expand on the efforts of the Promoter Investigations Coordinator that began last summer. Prior to the creation of the new office, the IRS also realigned field examination employees who work on promoter investigations.
7. A Closer Look: Impacting the Tax Gap
In the latest issue of A Closer Look, Commissioner Chuck Retting discusses how the IRS is working to reduce the Tax Gap. The Tax Gap represents, in dollar terms, an estimate of the annual amount of noncompliance with tax law.
Additional Tax Resources for Small Business