Help for taxpayers and tax pros: Tax season alerts and planning ahead for 2023

Taxpayers face a number of issues due to critical tax law changes that took place in 2021 and ongoing challenges related to the pandemic. The IRS continues to share updated information for people now filing their 2021 tax returns and those planning for the 2022 return they will file next year, as well as anyone who has previous year tax returns awaiting processing by the IRS.

This page will be updated with special alerts designed to help anyone whether they are now preparing their tax return or are awaiting processing of a return or refund and the latest updates on IRS letters, or notices. Newer updates will be placed at the top of this page; the IRS will also provide critical updates through social media.

Updates

September 21 update

Improperly forgiven Paycheck Protection Program loans are taxable

IRS issued guidancePDF addressing improper forgiveness of a Paycheck Protection Program loan (PPP loan). The guidance confirms that, when a taxpayer's loan is forgiven based upon misrepresentations or omissions, the taxpayer is not eligible to exclude the forgiveness from income and must include in income the portion of the loan proceeds that were forgiven based upon misrepresentations or omissions.

Taxpayers who inappropriately received forgiveness of their PPP loans are encouraged to take steps to come into compliance by, for example, filing amended returns that include forgiven loan proceed amounts in income.

Tax Relief for Hurricane Fiona victims in Puerto Rico

Hurricane Fiona victims in all 78 Puerto Rican municipalities qualify for tax relief and now have until February 15, 2023, to file various federal individual and business tax returns and make tax payments.

Updated information on Work Opportunity Tax Credit

IRS has updated information on the Work Opportunity Tax Credit (WOTC), available to employers that hire designated categories of workers who face significant barriers to employment. For employers facing a tight job market, the WOTC may be able to help.

September 13 update

IRS issues rules for Alternative Fuel credits

The IRS issued Notice 2022-39PDF, which provides rules to make a one-time claim for the credit and payment allowable for alternative fuels sold or used during the first, second, and third calendar quarters of 2022. It also provides instructions for how a taxpayer's liability for excise tax may be reduced by claiming the alternative fuel mixture credit allowable for the first and second quarters of 2022. The alternative fuel credits are part of the Inflation Reduction Act.

September 2 update

IRS Statement: The IRS takes immediate steps to address issue with a subset of Forms 990-T

The IRS recently discovered that some machine-readable (XML) Form 990-T data made available for bulk download section on the Tax Exempt Organization Search (TEOS) should not have been made public. This section is primarily used by those with the ability to use machine-readable data; other more widely used sections of TEOS are unaffected.

The IRS took immediate steps to address this issue. The files have been removed from IRS.gov and will be replaced with updated files in the near future. In addition, the IRS also will be working with groups that routinely use the files to remove the erroneous files and replace them with the correct versions as they become available. The IRS will contact all impacted filers in the coming weeks.

Form 990-T is the business tax return used by tax-exempt entities, including tax-exempt organizations, government entities and retirement accounts, to report and pay income tax on income that is generated from certain investments or income unrelated to their exempt purpose.

The IRS is required to publicly disclose this information for 501(c)(3) organizations; however, similar information was inadvertently published for a subset of non-501(c)(3)s, which are not subject to public disclosure. However, the data does not include Social Security numbers, detailed account-holder information or individual income tax returns (Forms 1040). In some instances, the data does include individual names or business contact information.

The IRS is continuing to review this situation.

August 24 update

Covid tax relief: Penalty relief for certain 2019 and 2020 returns due to the pandemic

To help struggling taxpayers affected by the COVID-19 pandemic, the IRS issued Notice 2022-36PDF, which provides penalty relief to most people and businesses who file certain 2019 or 2020 returns late.

The IRS is also taking an additional step to help those who paid these penalties already. Nearly 1.6 million taxpayers will automatically receive more than $1.2 billion in refunds or credits. Many of these payments will be completed by the end of September.

Besides providing relief to both individuals and businesses impacted by the pandemic, this step is designed to allow the IRS to focus its resources on processing backlogged tax returns and taxpayer correspondence to help return to normal operations for the 2023 filing season.

To qualify for this relief, any eligible income tax return must be filed on or before September 30, 2022.

August 19 update

Inflation Reduction Act

During the next 10 years, the funds from the Inflation Reduction Act will help IRS in many areas, including adding critical resources to not just close the tax gap but meaningfully improve taxpayer service and technology.

Tax provisions in the Inflation Reduction Act of 2022, cover a wide range of new and reinstated tax laws that will affect both individuals and businesses.

One provision, which became effective as soon as the law was signed, changes the eligibility rules to claim a tax credit for clean vehicles.

More details about clean vehicles and other tax provisions will be available in coming months.

2021 tax extension filers, don't overlook important tax benefits

Taxpayers who've yet to file their 2021 federal income tax return should make sure they take advantage of the deductions and credits for which they're entitled and to file electronically as soon as possible.

Those who qualify can prepare and file their return for free with IRS Free File. Electronically filing and choosing direct deposit can help taxpayers get their refund faster. If they owe, sending the tax return with full payment prevents additional interest and penalties. There's no penalty for failure to file if the taxpayer is due a refund.

Filing tips for taxpayers who haven't filed their 2021 tax return are available on IRS.gov.

August 11 update

Tax Relief for Disaster Victims in Kentucky, Missouri and St. Croix

Following the recent disaster declarations issued by the Federal Emergency Management Agency, the IRS has announced that affected taxpayers in certain areas will receive tax relief. Recent disaster declarations have been issued for Kentucky, Missouri and St. Croix. Taxpayers living in the affected areas may qualify for tax relief, including an extended filing deadline to November 15, 2022.

July 27 update

Balance Due Notices (CP-14)

Some payments made for 2021 tax returns have not been correctly applied to joint taxpayer accounts, and these taxpayers are receiving erroneous balance due notices (CP-14 notices) or notices showing the incorrect amount.

Generally, these are payments made by the spouse (second taxpayer listed) on a married filed joint return submitted through their Online Account. Some other taxpayers may also be affected outside of this group.

No immediate action or phone call needed: Taxpayers who receive a notice but paid the tax they owed in full and on time, electronically or by check, should not respond to the notice at this time. The IRS is researching the matter and will provide an update as soon as possible. Taxpayers who paid only part of the tax reported due on their 2021 joint return, should pay the remaining balance or follow instructions on the notice to enter into an installment agreement or request additional collection alternatives.

July 20 update

2021 tax extension filers don't need to wait until October 17

The IRS is reminding the estimated 19 million taxpayers who requested an extension to file their 2021 tax return that they don't have to wait until mid-October to file. If a taxpayer has all the necessary information to file an accurate return, they can file electronically at any time before the October deadline and avoid a last-minute rush to file.

Taxpayers who requested more time to file an accurate return have until October 17, 2022. Those who have what they need to file, however, should file as soon as possible to avoid delays in processing their return.

July 15 update

Extension filers: IRS encourages people to file soon and to file electronically before October to avoid delays

With millions of people still waiting to file their tax returns, the IRS reminds them to file as soon as possible and take advantage of special tools available on IRS.gov that can help them file.

Summer may be a busy time for many, but it's a great time to start tax planning - whether you still need to file a 2021 tax return or start planning for next year's tax season. The IRS website is the fastest and most convenient way to get tax-related information and help. The online tools are available any time, so taxpayers can use them at their convenience.

June 30 update

IRS expands voice bot options for faster service, less wait time

The IRS has expanded voice bot options to help eligible taxpayers easily verify their identity to set up or modify a payment plan while avoiding long wait times.

Eligible taxpayers who call the Automated Collection System (ACS) and Accounts Management toll-free lines and want to discuss payment plan options can authenticate or verify their identities through a personal identification number (PIN) creation process. Setting up a PIN is easy: Taxpayers will need their most recent IRS bill and some basic personal information to complete the process.

June 22 update

IRS statement on inventory

 The IRS is committed to having healthy inventories by the end of this year and continues to make strong progress handling unprocessed tax returns. This follows unprecedented actions taken by the agency, and these intensive efforts to help taxpayers will continue in the months ahead. The IRS announced yesterday that all processing on original, error-free individual tax returns filed in 2021 will be completed this week.

IRS continues work on inventory of tax returns

Following intensive work during the past several months, the IRS announced that processing on a key group of individual tax returns filed during 2021 will be completed by the end of this week. Due to issues related to the pandemic and staffing limitations, the IRS began 2022 with a larger than usual inventory of paper tax returns and correspondence filed during 2021. The IRS took a number of steps to address this, and the agency is on track to complete processing of originally filed Form 1040 (individual tax returns without errors) received in 2021 this week.

June 9 update

Increased mileage rate for remainder of 2022

The IRS announced an increase in the optional standard mileage rate for the final 6 months of 2022. Taxpayers may use the optional standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other purposes.

For the final 6 months of 2022, the standard mileage rate for business travel will be 62.5 cents per mile, up 4 cents from the rate effective at the start of the year. The new rate for deductible medical or moving expenses (available for active-duty members of the military) will be 22 cents for the remainder of 2022, up 4 cents from the rate effective at the start of 2022. These new rates become effective July 1, 2022. The IRS provided legal guidance on the new rates in Announcement 2022-13.

June 3 update

IRS Hiring

To boost its workforce and better help taxpayers and businesses, the IRS is hiring at several offices nationwide this summer.

The IRS is hosting numerous virtual and in-person recruitment events each month. These information sessions and job fairs provide insight about the positions that are available. For more information and to register for an event, see IRS Events.

May 13 update

Update on 2020 information returns

The IRS provided a statement about questions involving processing of 2020 information returns. Information returns are not tax returns, and they are documents submitted to the IRS by third-party payors, not taxpayers. Taxpayers or payers have not been -- and will not be -- subject to penalties resulting from this action.

May 6 update

IRS provides guidance for residents of Puerto Rico to claim the Child Tax Credit

The Internal Revenue Service has issued guidance for certain individuals in Puerto Rico on how to file and claim the Child Tax Credit payments that they are entitled to receive under the American Rescue Plan Act. Families who don't owe taxes to the IRS can file their 2021 tax return and claim the Child Tax Credit for the 2021 tax year at any point until April 15, 2025, without any penalty.

April 4 update

Temporary update to U.S. residency certification application process

The IRS is temporarily changing its procedures for Form 8802, application for U.S. residency certification, for a two-year period. More information can be found at Temporary change in policy with respect to applications for U.S. residency certifications for a two-year period.

March 22 update

Electronically filed return rejected for a missing Form 8962

Tax year 2021 electronically filed tax returns will be rejected if the taxpayer is required to reconcile advance payments of the premium tax credit on Form 8962, Premium Tax Credit, but does not attach the form to the tax return. See How to correct an electronically filed return rejected for a missing Form 8962 for more information.

February 16 update

IRS provides details on relief for Schedule K-2 and K-3 reporting: The IRS issued a news release and new frequently asked questions (FAQs) providing both general information and more details on the certain domestic partnerships and S corporations who qualify for the exception to 2021 reporting. For 2021, these qualifying domestic partnerships and S corporations will not have to file the new schedules. We are taking this step in response to feedback we received from the tax community and our stakeholders. The IRS will provide full details of this relief soon.

February 14 update

IRS suspends more than a dozen automated notices, including collection issues: As part of ongoing efforts to provide additional help for people during this period, the IRS has suspended automated collection notices normally issued when a taxpayer owes additional tax or has no record of filing a tax return. Note that many other IRS notices are statutorily required to be issued within a certain timeframe to be legally valid. The IRS encourages those who have a filing requirement and have yet to file a prior year tax return or to pay any tax due to promptly do so as interest and penalties will continue to accrue. Visit IRS.gov for payment options. For more information on suspended notices, see IR-2022-31, IRS continues work to help taxpayers; suspends mailing of additional letters.

General information for the 2022 tax season

April 18 tax deadline: Taxpayers who owe and missed the April 18 filing deadline should file now to limit penalties and interest. While taxpayers due a refund receive no penalty for filing late, those who owe and missed the deadline without requesting an extension should file quickly to limit penalties and interest.

Families who don't owe taxes to the IRS can still file their 2021 tax return and claim the Child Tax Credit for the 2021 tax year at any point until April 15, 2025, without any penalty. This year also marks the first time in history that many families with children in Puerto Rico will be eligible to claim the Child Tax Credit, which has been expanded to provide up to $3,600 per child.

Advance Child Tax Credit payments: People who received advance Child Tax Credit payments in 2021 need to ensure the amounts they've received are entered correctly on the 2021 tax return. Incorrect entries when reporting these payments mean the IRS will need to further review the tax return, creating an extensive delay. People can check the amount of their payments in their Online Account available on IRS.gov. The IRS also mailed letters to recipients about the advance Child Tax Credit payment amount. However, a limited group of taxpayers may receive a letter with the incorrect amount listed. More information about who might have received an incorrect letter can be found on our IRS Statement — Child Tax Credit Letters page.

Recovery Rebate Credit (also called stimulus payments or Economic Impact Payments):  All third-round Economic Impact Payments have been issued. People may claim any remaining stimulus payment they're entitled to on their 2021 tax return as part of the 2021 Recovery Rebate Credit. People who are filing to get any remaining payment should ensure the amounts they've received are entered correctly on the tax return. Incorrect entries when reporting these payments mean the IRS will need to further review the tax return, creating an extensive delay. The IRS is mailing letters to payment recipients about the stimulus payments amounts they received. People can also check the amount of their payments in their Online Account available on IRS.gov.

Filing if your 2020 tax return is still being processed: For people whose tax returns from 2020 have not yet been processed, they should still file their 2021 tax returns. Those filing electronically in this group need their Adjusted Gross Income, or AGI, from their most recent tax return when they file electronically. For those waiting on their 2020 tax return to be processed, make sure to enter $0 (zero dollars) for last year's AGI on the 2021 tax return. Visit Validating Your Electronically Filed Tax Return for more details.

Status of IRS tax return inventory from prior years: COVID-19 continues to cause delays in the processing of some prior year tax returns and amended returns. Please visit our IRS Operations During COVID-19: Mission-critical functions continue page to find out the current status of the IRS inventory from prior years.

Form 1099-INT: Taxpayers should report interest from unemployment refunds, other IRS payments as 2021 income. The IRS reminded taxpayers who received an interest payment for a tax-related issue in 2021 need to report it as income on their tax return.

Under the law, interest income is taxable, and that includes payments from the IRS. During 2021, several groups of people could fall into this category. This includes people who received interest payments related to IRS refunds of taxes paid on unemployment income or people who received interest on a tax refund. Normally, the IRS is required to pay interest on a refund if the refund is issued after a statutory 45-day period.

The IRS is sending a Form 1099-INT to anyone who receives interest totaling at least $10. The IRS reminds people to watch their mail for Forms 1099, not just from the IRS and other payers. Due to IRS mailing issues and other factors, taxpayers may continue to see these arrive in the mail through February.