IRS eNews for Small Business: Issue 13
Temporary suspension of limits on charitable contributions
Temporary increase in limits on contributions of food inventory
IRS tax help available for those who filed an extension
IRS advice for those who didn’t file an extension
Businesses filing cash transaction reports have e-file option
IRS Form 7200 fax line
IRS Freedom of Information Library
1. Temporary suspension of limits on charitable contributions
The CARES act suspended limits on charitable contributions for individuals and corporations. Individuals may deduct qualified charitable contributions up to 100 percent of their adjusted gross income. A corporation may deduct qualified charitable contributions up to 25 percent of its taxable income.
Both individuals and corporations can carry over to the next year's contributions that exceed the AGI limitation. To qualify, the contribution must be:
a cash contribution;
made to a qualifying organization;
made during the calendar year 2020
Additional information about tax relief for those affected by the COVID-19 pandemic is on IRS.gov.
2. Temporary increase in limits on contributions of food inventory
The CARES act created a special rule allowing greater deductions by businesses for contributions of food inventory for the care of the ill, needy or infants. Businesses that contribute food inventory in 2020 may deduct up to 25 percent of their net income or taxable income. Additional information is available on IRS.gov.
3. IRS tax help available for those who filed an extension
The deadline for taxpayers who requested an extension to file their 2019 federal tax returns is October 15, 2020. Those who have not yet filed can find many helpful resources on IRS.gov:
IRS Free File: Taxpayers who earned $69,000 or less in 2019 can file using free brand-name tax software.
Interactive Tax Assistant: This online tool provides answers to tax law questions.
Directory of Tax Return Preparers: For taxpayers who want help with their taxes, this tool can help them find a tax professional in their area.
Where's My Refund? Taxpayers can check the status of their refund within 24 hours after the IRS has received their e-filed return.##
4. IRS advice for those who didn’t file an extension
The IRS cautions taxpayers who missed the July 15 tax deadline and didn't request an extension, to file as soon as possible to reduce potential penalties. e-Filing returns can help expedite the process.
An extension to file is not an extension to pay; penalties and interest will apply to taxes owed after July 15. A taxpayer will usually qualify for relief if they have filed and paid timely for the past three years and meet other requirements. More information is on the first-time penalty abatement page on IRS.gov.
5. Businesses filing cash transaction reports have e-file option
The IRS reminds businesses required to file reports of large cash transactions that e-filing is a fast, easy, and secure option for filing their reports. Now, businesses can batch-file their reports, which is helpful when required to file many forms.
Although businesses have the option of filing Form 8300, Report of Cash Payments Over $10,000, on paper, many have found the free and secure e-filing system is a more convenient and cost-effective way to meet the reporting deadline. The form is due 15 days after a transaction and there’s no charge for the e-file option.
For more information, see the fact sheet on reporting cash transactions.
6. IRS Form 7200 fax line
Employers use Form 7200 to request an advance payment of the tax credits for qualified sick and qualified family leave wages and the employee retention credit. The employer tax credits for qualified sick leave wages and qualified family leave wages apply to those wages paid from April 1, 2020, to December 31, 2020.
Businesses should fax the completed form to 855-248-0552.
Due to scheduled maintenance, the 7200 fax line will be unavailable from August 7 at 10 p.m. to August 8 at 7 a.m. ET.
7. IRS Freedom of Information Library
The IRS Freedom of Information Act (FOIA) Library, provides a comprehensive list of documents and other information available electronically on IRS.gov. The library has links to many records that may be of interest to small business tax professionals and managers, such as:
Frequently Requested Documents like Active Enrolled Agents Listing, Return Preparer Tax Identification Number (PTIN) Listing, and External Customer Data Store (ECDS) Extracts.
Published Tax Guidance including Final, Temporary, and Proposed Regulations, as well as IRS Publications and Notices.
Admin Manuals and Instructions such as Chief Counsel Notices and Internal Revenue Manuals.