News

About sixty million stimulus payments were made this week. House Ways and Means Chair Richard Neal of Massachusetts laid out the expected timeline for Economic Stimulus Payments. The first wave was issued to tax filers who included personal direct deposit information on their return. A second wave of direct deposits will be attempted at the end of the month. The targeted group in the second wave is the non-filers whose direct deposit information is on record with the US Treasury, primarily Social Security benefits recipients.

The third phase is gradually released. IRS will begin to issue paper checks beginning in May at the rate of five million checks per week to what it assumes are the remaining 110 million taxpayers. The first round of checks will go to the lowest AGI taxpayers. The last issuance will ripple at the end of September. Included in this third segment are the 21 million rapid anticipation refund filers. These are taxpayers who buy a bank account or fixed amount debit card from the tax preparer to receive a portion of their annual refund. Economic Stimulus payments will not be made on a RAL account or debit card. (The Mef schematics include a RAL indicator.)

Not included in the automated stimulus give-away are non-filers who do not receive social security benefits by direct deposits and do not file tax returns. By mid-May, the IRS will post on its website a secure portal that will allow citizens to register, update direct deposit information and check on their stimulus status.

Carlton Smith, a retired partner from Robert & Holland in NYC and volunteer at the Harvard Low Income Tax clinic, points out in ProcedurallyTaxing.com that IRS Notice 2020-23 is an update to IRS Notice 2020-18 and allows an extension of the IRS 30 day, 90 day and three year time sensitive deadlines. The extended relief is automatic. This notice also clarifies that taxpayers wishing an extension of time until October 15th to file a 2019 tax returns may file form 4868 or other Application for Extension of Time forms by July 15th. 

Several of us have heard from clients who are not seeing the IRS withdrawing from their account as planned. Some have not had any money withdrawn and in one case, it took 10 days. As Milton Cooley (an NAEA colleague) pointed out, "People will spend the money if they see it in their account," so even the 10 day delay can be a problem. 

I am currently working with the IRS and NAEA to resolve the issue. It is not our professional tax software (it's affected users of at least 3 different softwares). The earliest date I know about is March 27.  I will keep everyone informed of what I learn. 

If you have this situation, please email me immediately. Send your name, email, software, form filed, date filed, date accepted, date of withdrawal, whether the state also had a withdrawal, and if the state withdrawal was successful. Please email them to KozLogTax@gmail.com

It's been a challenge to stay current with the radically different procedures for this one federal and state income tax season. MA DOR has published a one-stop comprehensive webpage of all the latest relevant changes. Imbedded in this information are links to pertinent federal sources. Consider bookmarking this important DOR COVID Update page as your primary online reference tool toward a successful, and extended, filing season.

Additionally, MA DOR takes email requests. Send your questions and issues that need clarification to TaxProFeedback@DOR.State.MA.US

The Governor announced Geoffrey Snyder as MA DOR Commissioner, succeeding Chris Harding. Snyder was appointed as a DOR Deputy Commissioner for a brief time by former DOR Commissioner and current Secretary of Administration and Finance, Mike Heffernan. Snyder most recently was employed as a business consultant. He has extensive experience with equity sales in the banking industry.

Carl Young, IRS Communications and Liaison Tax Specialist, offers these COVD Tax links to assist tax professionals, tax payers and business.

• Coronavirus Tax Relief and Economic Impact Payments landing page
• Economic Impact Payments Information Center
• Coronavirus Tax Relief and Economic Impact Payments for Individuals and Families
• Coronavirus Tax Relief for Businesses and Tax-Exempt Entities
• Coronavirus Tax Relief for Health Plans and Retirement Plans

Considering the COVID situation, also consider that working at home requires cyber security vigilance. John Torvi of Landy Insurance can be followed on twitter @landyinsurance and contacted by email johnt@landy.com. John reminds EA's that virtually all network breaches result from someone opening an infected email, link or attachment. He offers further preventative information, tips, webinars and a newsletter. Being cyber informed is one of those ingredients that make up that ounce of data protection.

Taxpayers who filed a balance due tax return and scheduled a direct debit payment for Wednesday, 4/15/20 have until 11:59pm on Monday, April 13th to defer the payment. Odette Turenne, IRS Senior Stakeholder Liaison, reminds practitioners that if a fund withdrawal payment was scheduled, the payment may be cancelled by contacting the U.S. Treasury, 888-353-4537. The cancellation request must be at least two business days before the scheduled payment date.

The Baker administration released guidance on Friday about the tax extensions that were issued in response to the coronavirus pandemic. Click here for a quick breakdown of that information.

As trusted financial professionals, you are among the people that your clients should look to for guidance. None of us has a crystal ball or can promise an outcome, but comforting words, support, and suggestions are helpful. 

Here are some things you can do:

1. For clients that have lost their jobs or their business is shut down, offer to defer their payment to you. Not every tax preparer can afford this, but many can. Many of us get most of our income for the year right now, so spreading it out isn't that big of a deal. 
2. Send emails to your clients with helpful information like:
   1. RMD's are waived for 2020.
   2. Tax returns and payments are now due on July 15th instead of April 15th, but you probably want your refund! You can file now and still delay payment until July. 
   3. June 15th estimated taxes are still due on June 15th.
   4. When the IRS releases information about providing bank accounts for stimulus checks, share with your clients.
3. Help your small business clients that need loans by providing documentation and support. Delay billing them for a while. 
4. Support your local businesses. 
5. Shut down any conversations from high income people looking for ways to "manipulate" the system and get the stimulus money. 
6. Contact friends and clients that you know live alone or are likely to be struggling financially or mentally. Just a hello and some kind words go a long way. Also, make sure they aren't in need of food or medicine. 

Those who shine during hard times are remembered. We are professionals and one great way to show why we are better than DIY tax software is to be a provider of information and support. 

Be Safe, Be Healthy, and Be Kind!

Beth Logan

MaSEA President