Michigan Tax Exempt Forms Info

Common Sales and Use Tax Exemptions and Requirements

Information regarding Michigan Tax Exempt Forms via:

www.michigan.gov/taxes

Michigan Tax Exempt Forms

501(c)(3) and 501(c)(4) Organizations – 501(c)(3) and 501(c)(4) organizations must provide proof that they are exempt under these codes by the Internal Revenue Service. In addition to this they must provide a certificate of exemption stating that the property will be used or consumed in carrying out the operations of the organization. Revenue Administrative Bulletin 1995-3 and 2002-15 has more information on this topic.

Wholesalers purchasing for resale should provide the seller with a completed form 3372 Michigan Sales and Use Tax Certificate of Exemption and check the box for Resale at Wholesale. Sales tax licenses are not issued to wholesalers.

Retailers – Retailers purchasing for resale should provide a signed exemption certificate by completing form 3372 Michigan Sales and Use Tax Certificate of Exemption and check box 1. For Resale at Retail in Section 3, Basis for Exemption Claim. Their sales tax license number must be included in the blank provided on the exemption claim. However, a seller should not accept the sales tax license number alone as a claim of exemption. The department does not issue tax-exempt numbers.

Industrial Processors – An industrial processing exemption is allowed for property which is used or consumed in transforming, altering, or modifying tangible personal property by changing the form, composition, or character of the property for ultimate sale at retail or for sale to another processor for further processing and ultimate sale at retail. The industrial processing exemption does not include property which is or becomes affixed to real estate, office supplies, administrative office equipment, or vehicles licensed for public highway use, except when the vehicle is used to mix and agitate materials added at the plant or job site in the concrete manufacturing process. Industrial processing also does not include the receipt or storage of raw materials extracted by the user or consumer or the preparation of food or beverages by a retailer for retail sale. The exemption certificate is 3372 Michigan Sales and Use Tax Certificate of Exemption .

Churches – Sales to organized churches or houses of religious worship are exempt from sales tax. These exempt sales must not involve property used in commercial enterprises. Vans or buses may be purchased exempt if the manufacturer’s rated seating capacity is 10 or more and it is used primarily for transportation of persons for religious purposes. Churches may not purchase any other type of vehicle exempt. Anyone who is directly engaged in the business of constructing, altering, repairing, or improving real estate for a church or a house of religious worship is liable for the sales tax on the inventory value of the materials affixed to the property, even if the church purchases the materials. Revenue Administrative Bulletin 1995-3 and 2002-15 has more information on this topic.

Hospitals – Sales to hospitals are exempt from sales tax when the organization is not operated for profit. The income or benefit from the operation must not inure to any individual or private shareholder, directly or indirectly. Revenue Administrative Bulletin 1995-3 and 2002-15 has more information on this topic.

Schools – Sales to schools and parent cooperative preschools are exempt from sales tax when the organization is not operated for profit. The income or benefit from the operation must not inure to any individual or private shareholder, directly or indirectly. PTA, PTO, and all other groups and organizations must qualify separately for exemption when making purchases for their organizations. Sales to teachers are subject to tax. Revenue Administrative Bulletin 1995-3 and 2002-15 has more information on this topic.

Government – Sales to the United States government, the State of Michigan and its political subdivisions, departments and institutions are not subject to tax, if the sales are ordered on the government form or purchase order and are paid for directly to the seller by warrant on government funds. Sales to the American Red Cross, and its chapters and branches are exempt. All sales to other states or countries are subject to Michigan sales tax. Sales to employees of the government for their own use are subject to tax. The exemption certificate is 3372 Michigan Sales and Use Tax Certificate of Exemption

 

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IRS launches special tax season alerts page

IRS launches special tax season alerts page – IR-2022-32, February 14, 2022

WASHINGTON — To help taxpayers and tax professionals, the Internal Revenue Service today announced a special tax season alerts page on IRS.gov to provide the latest details and information affecting the 2022 filing season and ongoing efforts by the agency to address the inventory of previously filed tax returns.

During this tax season, taxpayers face a number of issues due to critical tax law changes that took place in 2021 and ongoing challenges related to the pandemic. To raise awareness about these issues and provide people with the latest timely information, the IRS has created a special tax season web page. This page will provide people with a quick overview of information to help people filing tax returns as well as those who have previous year tax returns awaiting processing by the IRS.

“The IRS is taking numerous steps to keep this tax season going smoothly while also taking additional action to address the inventory of tax returns filed last year,” said IRS Commissioner Chuck Rettig. “We’re off to a good start processing tax returns and issuing refunds. But we want people to have an easy way to see the latest information. This new page provides a one-stop shop for the latest key information people and the tax community may need.”

The “special tax season alerts” page will be available through the IRS.gov home page and shared through social media and other channels.

The page will include the latest filing season updates. The IRS began tax season on January 24, and in less than two weeks more than 4 million tax refunds have gone out worth nearly $10 billon. Millions more will go out in the weeks ahead as the IRS enters an important period of the tax season.

The page also includes links to important information related to ongoing efforts by the IRS to address the inventory of unprocessed tax returns filed before this year. This includes steps to stop more than a dozen common letters to taxpayers, and updates on IRS operations and the number of unprocessed tax returns.

“The combination of the pandemic, new tax laws and numerous other factors led to an unprecedented amount of unprocessed tax returns and correspondence remaining in the IRS inventory during 2021,” Rettig said. “We must continue pursuing innovative strategies while supporting the hard work and dedication of our employees to fulfill our commitment to return inventories to a healthy level before entering the 2023 filing season. These steps are making a difference. Refunds for tax returns and amended tax returns in the inventory continue to flow out to taxpayers.”

The IRS continues to urge taxpayers to carefully review their tax filings for accuracy and file electronically with direct deposit to speed refunds. Special tips are available in several places on IRS.gov, including these top 5 tipsbasics on the 2022 tax season and IRS Tax Time Guide.

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Your Tax Specialist Plymouth MI

Tax Specialist Plymouth MI

Tax Specialist Plymouth MI –

ATS Advisors is not just another CPA firm. As your partner we understand your desire to save time and money. We work with you, not just for you, to find effective solutions for your needs whether they are tax, accounting, finance, business or personal.

We build and maintain long-lasting relationships. Nearly 100% of our business was built on referrals and we take great pride in this fact. Your financial well-being is of paramount importance to us and we take that responsibility very seriously.

Our philosophy is simple: we only work with clients we respect and believe have the tools, and drive, to succeed. You will never receive an unexpected bill for services. We discuss all our fees up front and do not have any hidden costs.

Please take a look at our business and individual services to find more detailed information as to how we may serve you.

Tax advisory services go beyond just the preparation of a tax return. Our aim is to resolve tax issues before they become tax nightmares. Therefore, our comprehensive tax service begins long before returns are due or financial decisions are made. Our tax advisors rely on the combination of dedicated client involvement, vast technical knowledge, and extensive experience when helping clients achieve their financial goals. We focus on helping clients turn business strengths into tax saving advantages.

If it’s tax-related, we can help you with it.

Whether you want us to handle the filings or just give you some advice, we can help you with personal income tax returns, trusts and estate-planning, and retirement-planning.

We’ll probably never convince you that doing your taxes is fun, but at least we can make life easier when it’s time to file.

Give us a call today at (734) 454-4100

ATS Advisors – Tax Specialist Plymouth MI

IRS News Feed

 

Earned Income Tax Credit Michigan: IRS releases changes mean more people qualify for credit that helps millions of Americans

Earned Income Tax Credit Michigan – IR-2022-20, January 28, 2022
ATS Advisors

IRS YouTube Video:

WASHINGTON – More people without children now qualify for the Earned Income Tax Credit (EITC), the federal government’s largest refundable tax credit for low- to moderate-income families.

In addition, families can use pre-pandemic income levels to qualify if it results in a larger credit. The Internal Revenue Service and partners across the nation highlight those changes today as they mark the 16th annual EITC Awareness Day.

Enacted in 1975, EITC is regarded as one of the government’s largest antipoverty programs helping millions of American families every year. The IRS and partners nationwide urge people to check to see if they qualify for this important credit, and also urge people who don’t normally file a tax return to review whether they qualify for EITC and other valuable credits like the Child Tax Credit or the Recovery Rebate Credit, also referred to as stimulus payments.

“There are important changes to EITC that will help this credit reach more hard-working families this year,” said IRS Commissioner Chuck Rettig. “We urge people potentially eligible for this valuable credit to review the guidelines; many people each year overlook this and leave money on the table. On this EITC Awareness Day, we want to make sure everyone who qualifies for the credit knows about it and has the information they need to get it.”

The IRS began accepting 2021 tax returns on January 24, 2022. Taxpayers can ensure they’re getting all the credits and deductions for which they qualify, including EITC, by filing their taxes electronically, using a trusted tax professional or using an IRS Free File partner’s name-brand software. Taxpayers whose adjusted gross income (or AGI) is $73,000 or less qualify for Free File partner offers.

The IRS also reminds taxpayers that the quickest way to get a tax refund is by filing an accurate tax return electronically and choosing direct deposit for their refund. Tax software, tax professionals and other free options can help people see if they qualify for the EITC.

What’s new?

Childless EITC expanded for 2021

For 2021 only, more childless workers and couples can qualify for the EITC, and the maximum credit is nearly tripled for these taxpayers. For the first time, the credit is now available to both younger workers and senior citizens.

For 2021, the EITC is generally available to filers without qualifying children who are at least 19 years old with earned income below $21,430; $27,380 for spouses filing a joint return. The maximum EITC for filers with no qualifying children is $1,502, up from $538 in 2020. There are also special exceptions for people who are 18 years old and were formerly in foster care or are experiencing homelessness. Full-time students under age 24 don’t qualify. There is no upper age limit for claiming the credit if taxpayers have earned income. In the past, the EITC for those with no dependents was only available to people ages 25 to 64.

Income from 2019

Another change for 2021 allows individuals to figure the EITC using their 2019 earned income if it was higher than their 2021 earned income. To qualify for the EITC, people must have earned income through employment or other sources, so this option may help workers get a larger credit if they earned less in 2021 or received unemployment income instead of their regular wages. See the instructions for Form 1040 PDF, line 27 c.

Phase out and credit limits

For 2021, the amount of the credit has been increased and the phaseout income limits at which taxpayers can claim the credit have been expanded. For instance, the maximum EITC for a married couple filing jointly with three or more children is $6,728 and the upper-income level for that same family is $57,414. In 2020, the maximum EITC for a family in that situation was $6,660 and the upper-income level was $56,844.

Taxpayers should also note that any Economic Impact Payments or Child Tax Credit payments received are not taxable or counted as income for purposes of claiming the EITC. Eligible individuals who did not receive the full amounts of their Economic Impact Payments may claim the Recovery Rebate Credit on their 2021 tax return. See IRS.gov/rrc for more information.

2021 and beyond

New law changes expand the EITC for 2021 and future years. These changes include:

  • More workers and working families who also have investment income can get the credit. Starting in 2021, the amount of investment income they can receive and still be eligible for the EITC increases to $10,000. In 2020, the limit was $3,650. After 2021, the $10,000 limit is indexed for inflation.
  • Married but separated spouses can choose to be treated as not married for EITC purposes. To qualify, the spouse claiming the credit cannot file jointly with the other spouse, must have a qualifying child living with them for more than half the year and either:
    • Do not have the same principal residence as the other spouse for at least the last six months out of the year.
    • Are legally separated according to their state law under a written separation agreement or a decree of separate maintenance and not live in the same household as their spouse at the end of the tax year for which the EITC is being claimed.
      • Taxpayers should file Schedule EIC (Form 1040) and check the box showing them as married filing separately with a qualifying child.
      • In the past, married taxpayers had to file with their spouse to claim the EITC.
  • Single people and couples with children who have Social Security numbers can claim the credit, even if their children do not have SSNs. In this instance, they would get the smaller credit available to childless workers. In the past, these filers didn’t qualify for the credit.
    • Taxpayers should file Schedule EIC (Form 1040) if they have a qualifying child. If they have at least one child who meets the conditions to be their qualifying child for purposes of claiming the EITC, they should complete and attach Schedule EIC to their Form 1040 or 1040-SR even if that child doesn’t have a valid SSN. For more information, including how to complete Schedule EIC if your qualifying child doesn’t have a valid SSN, see the instructions for Form 1040 PDF, line 27a, and Schedule EIC.

Vital refund boost

The EITC is the federal government’s largest refundable federal income tax credit for low- to moderate-income workers. For those who qualify, and if the credit is larger than the amount of tax they owe, they will receive a refund for the difference. While the majority of those eligible claim the EITC every year, IRS estimates that one of five eligible taxpayers do not claim the credit.

Nationwide last year, almost 25 million eligible workers and families received over $60 billion in EITC allowing for the payment of necessities, housing, and educational training, with an average EITC nationwide of $2,411. For 2021, the EITC is worth as much as $6,728 for a family with three or more children or up to $1,502 for taxpayers who do not have a qualifying child.

Look for EITC Refunds by early March if no issues with tax return

By law, the IRS cannot issue refunds before mid-February for tax returns that claim the EITC or the Additional Child Tax Credit (ACTC). The IRS must hold the entire refund − even the portion not associated with the EITC or ACTC and the Recovery Rebate Credit if applicable. This helps ensure taxpayers receive the refund they deserve and gives the agency more time to detect and prevent errors and fraud.

Where’s My Refund? on IRS.gov and the IRS2Go app will be updated with projected deposit dates for most early EITC/ACTC refund filers by February 19. Therefore, EITC/ACTC filers will not see an update to their refund status for several days after February 15. Due to weekends and other factors, the IRS expects most EITC or ACTC related refunds to be available in taxpayer bank accounts or on debit cards by the first week of March, if they choose direct deposit and there are no other issues with their tax return.

Workers who can claim the EITC

Workers at risk for overlooking this important credit include taxpayers:

  • Without children, including those workers who are at least 19 years old and older than 64
  • Living in non-traditional families, such as a grandparent raising a grandchild
  • Whose earnings declined or whose marital or parental status changed
  • With limited English language skills
  • Who are members of the armed forces
  • Living in rural areas
  • Who are Native Americans
  • With disabilities or who provide care for a disabled dependent

How to claim the EITC

To get the EITC, workers must file a tax return and claim the credit. Eligible taxpayers should claim the credit even if their earnings were below the income requirement to file a tax return. Free tax preparation help is available online and through volunteer organizations.

Those eligible for the EITC have these options:

  • Find a trusted tax professional. The IRS also reminds taxpayers that a trusted tax professional can prepare their tax return and provide helpful information and advice. Tips for choosing a return preparer, including certified public accountants, enrolled agents, attorneys and many others who don’t have a professional credential, and details about national tax professional groups are available on IRS.gov. EITC recipients should be careful not to be duped by an unscrupulous return preparer.
  • Free File on IRS.gov. Free brand-name tax software is available that leads taxpayers through a question-and-answer format to help prepare the tax return and claim credits and deductions if they’re eligible. Free File also provides online versions of IRS paper forms, an option called Free File Fillable Forms, best suited for taxpayers comfortable preparing their own returns.
  • Free tax preparation sites. EITC-eligible workers can seek free tax preparation at thousands of Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites. To locate the nearest site, use the search tool on IRS.gov, the IRS2Go smartphone application, or call toll-free 800-906-9887. Taxpayers should bring all required documents and information.

The IRS reminds taxpayers to be sure they have valid Social Security numbers for themselves, their spouse if filing a joint return, and for each qualifying child claimed for the EITC. The SSNs must be issued before the due date of the return, including extensions. There are special rules for those in the military or those out of the country.

Avoid errors

Taxpayers are responsible for the accuracy of their tax return even if someone else prepares it for them. Since the rules for claiming the EITC can be complex, the IRS urges taxpayers to understand all of them. People can find help to make sure they’re eligible by visiting a free tax return preparation site, or using Free File software or by using a paid tax professional.

Beware of scams

Be sure to choose a tax preparer wisely. Beware of scams that claim to increase the EITC refund. Scams that create fictitious qualifying children or inflate income levels to get the maximum EITC could leave taxpayers with a penalty.

Visit IRS online

IRS.gov is a valuable first stop to help taxpayers get it right this filing season. Information on other tax credits, such as the Child Tax Credit, is also available.

Related items

 

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Top 5 things to remember when filing income tax returns in 2022 – Your Plymouth Accountants

Your Plymouth Accountants – ATS Advisors
IR-2022-16, January 20, 2022

ATS Advisors

WASHINGTON — With filing season beginning January 24, the Internal Revenue Service reminded taxpayers about several key items to keep in mind when filing their federal income tax returns this year.

Given the unprecedented circumstances around the pandemic and unique challenges for this tax season, the IRS offers a 5-point checklist that can help many people speed tax return processing and refund delivery while avoiding delays.

1. File an accurate return and use e-file and direct deposit to avoid delays. Taxpayers should electronically file and choose direct deposit as soon as they have everything they need to file an accurate return. Taxpayers have many choices, including using a trusted tax professional. For those using e-file, the software helps individuals avoid mistakes by doing the math. It guides people through each section of their tax return using a question-and-answer format.

2. For an accurate return, collect all documents before preparing a tax return; make sure stimulus payment and advance Child Tax Credit information is accurate. In addition to collecting W-2s, Form 1099s and other income-related statements, it is important people have their advance Child Tax Credit and Economic Impact Payment information on hand when filing.

  • Advance CTC letter 6419: In late December 2021, and continuing into January, the IRS started sending letters to people who received advance CTC payments. The letter says, “2021 Total Advance Child Tax Credit (AdvCTC) Payments” near the top and, “Letter 6419” on the bottom righthand side of the page. Here’s what people need to know:
    • The letter contains important information that can help ensure the tax return is accurate.
    • People who received advance CTC payments can also check the amount of the payments they received by using the CTC Update Portal available on IRS.gov.
    • Eligible taxpayers who received advance Child Tax Credit payments should file a 2021 tax return to receive the second half of the credit. Eligible taxpayers who did not receive advance Child Tax Credit payments can claim the full credit by filing a tax return.
  • Third Economic Impact Payment letter 6475: In late January 2022, the IRS will begin issuing letters to people who received a third payment in late January 2021. The letter says, “Your Third Economic Impact Payment” near the top and, “Letter 6475” on the bottom righthand side of the page. Here’s what people need to know:
    • Most eligible people already received their stimulus payments. This letter will help individuals determine if they are eligible to claim the Recovery Rebate Credit (RRC) for missing stimulus payments.
    • People who are eligible for RRC must file a 2021 tax return to claim their remaining stimulus amount.
    • People can also use IRS online account to view their Economic Impact Payment amounts.

Both letters – 6419 and 6475 – include important information that can help people file an accurate 2021 tax return. If a return includes errors or is incomplete, it may require further review while the IRS corrects the error, which may slow the tax refund. Using this information when preparing a tax return electronically can reduce errors and avoid delays in processing.

3. Avoid lengthy phone delays; use online resources before calling the IRS. Phone demand on IRS assistance lines remains at record highs. To avoid lengthy delays, the IRS urges people to use IRS.gov to get answers to tax questionscheck a refund status or pay taxes. There’s no wait time or appointment needed — online tools and resources are available 24 hours a day.

Additionally, the IRS has several ways for taxpayers to stay up to date on important tax information:

4. Waiting on a 2020 tax return to be processed? Special tip to help with e-filing a 2021 tax return: In order to validate and successfully submit an electronically filed tax return to the IRS, taxpayers need their Adjusted Gross Income, or AGI, from their most recent tax return. For those waiting on their 2020 tax return to be processed, here’s a special tip to ensure the tax return is accepted by the IRS for processing. Make sure to enter $0 (zero dollars) for last year’s AGI on the 2021 tax return. For those who used a Non-Filer tool in 2021 to register for an advance Child Tax Credit or third Economic Impact Payment in 2021, they should enter $1 as their prior year AGI. Everyone else should enter their prior year’s AGI from last year’s return. Remember, if using the same tax preparation software as last year, this field will auto-populate.

5. Free resources are available to help taxpayers file. During this challenging year, the IRS reminds taxpayers there are many options for free help, including many resources on IRS.gov. For those looking to avoid the delays with a paper tax return, IRS Free File is an option. With Free File, leading tax software providers make their online products available for free as part of a 20-year partnership with the Internal Revenue Service. This year, there are eight products in English and two in Spanish. IRS Free File is available to any person or family who earned $73,000 or less in 2021. Qualified taxpayers can also find free one-on-one tax preparation help around the nation through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs.

 

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IRS Free File Taxes available today; filers can claim important tax benefits

IR-2022-14, January 14, 2022

ATS Advisors

WASHINGTON — The IRS today announced the availability of Free File, providing taxpayers online tax preparation products available at no charge. Today’s launch of IRS Free File, available only through IRS.gov, provides people an early opportunity to file their taxes and claim the 2021 Recovery Rebate Credit, the enhanced Child Tax Credit, the Earned Income Tax Credit, and other important credits. Taxpayers can use Free File to claim the remaining amount of their Child Tax Credit and claim any advance payments of the Child Tax Credit they did not receive in 2021.

Leading tax software providers make their online products available for free as part of a 20-year partnership with the Internal Revenue Service. This year, there are eight products in English and two in Spanish. IRS Free File is available to any person or family who earned $73,000 or less in 2021.

“Free File is part of a wide selection of services available on IRS.gov to help people file taxes during this challenging period,” said IRS Commissioner Chuck Rettig. “IRS Free File offers taxpayers an easy, free way to do their taxes from the safety of their own home. Free File also provides electronic filing with direct deposit, which is the best way to avoid delays and receive refunds quickly and securely.”

Because the filing season starts on January 24, 2022, IRS Free File providers will accept completed tax returns and hold them until they can be filed electronically on that date. The Free File Fillable Forms, the electronic version of IRS paper forms, will be available on January 24, 2022. Free File Fillable Forms is available for use by everyone, regardless of income, but should be used only by people who are comfortable preparing their own taxes.

Other important information related to the January 24 start of tax season is available on IRS.gov, including important filing tips.

How IRS Free File works

Each IRS Free File provider sets its own eligibility rules for products based on age, income, and state residency. However, for those who make $73,000 or less, they will find at least one product that matches their needs, and usually more. Some providers also offer free state income tax return preparation. [Some state tax benefits, such as state Earned Income Tax Credits, are based on information contained on the taxpayer’s federal income tax return. Taxpayers are encouraged to check with their state tax agency about state tax benefits and requirements to file a state income tax return.] Active-duty military can use any IRS Free File product if their income was $73,000 or less.

Here’s a step-by-step overview of how to find the right Free File product:

  1. Go to IRS.gov/freefile.
  2. Use the “Choose an IRS Free File Offer” tool for help in finding the right product, or
  3. Review each offer by a provider using the “Browse All” tool.
  4. Select a product.
  5. Follow links to the provider’s website to begin a tax return.

No computer? No problem. Taxpayers can complete and file their tax return using IRS Free File products through smart phones or tablets.

Child Tax Credit, 2021 Recovery Rebate Credit and other tax benefits

IRS Free File is all taxpayers need to claim the Child Tax Credit (CTC), 2021 Recovery Rebate Credit, and other tax benefits such as the Earned Income Tax Credit (EITC).

The IRS also continues to urge people who received one or more advance Child Tax Credit payments in 2021 to carefully review their taxes before filing. Families who received advance payments will need to compare the advance Child Tax Credit payments they received in 2021 with the amount of the Child Tax Credit they can properly claim on their 2021 tax return. To help taxpayers who received an advance Child Tax Credit payment, the IRS started sending Letter 6419, 2021 Advance CTC, in late December 2021.

The letter contains important information on advance Child Tax Credit payments that can help ensure the tax return is accurate. People who received the advance CTC payments can also check the amount of their payments by using the CTC Update Portal available on IRS.gov.

In late January, the IRS will begin sending Letter 6475, Your Third Economic Impact Payment, to individuals who received a third stimulus payment in 2021, including initial and “plus-up” payments. While most eligible people already received their Economic Impact Payments, or stimulus payments, this letter will help them determine if they are eligible to claim the 2021 Recovery Rebate Credit for missing stimulus payments. If so, they must file a 2021 tax return to claim this credit. People can also use IRS online account to view both payment amounts.

IRS Free File also can be used by workers to claim the EITC, which provides a refundable tax credit based on a filer’s income and family size.

Please remember that unemployment benefits paid by states are taxable income. States should send Forms 1099-G to those who received jobless benefits.

IRS Free File participants

For 2022, these providers are participating in IRS Free File:

  • 1040Now.NET
  • ezTaxReturn.com (available in Spanish)
  • FreeTaxReturn.com INC
  • FileYourTaxes.com
  • On-Line Taxes at OLT.com
  • TaxAct
  • FreeTaxUSA ®
  • TaxSlayer (coming soon in Spanish)

IRS releases its 2021 Progress Update detailing challenging year

IR-2022-07, January 7, 2022

WASHINGTON — The Internal Revenue Service today released its 2021 annual report describing the agency’s work delivering taxpayer service and compliance efforts during the pandemic while highlighting efforts taken by IRS employees to help people during the year.

Internal Revenue Service Progress Update / Fiscal Year 2021 – Putting Taxpayers First PDF outlines how the agency continued to work through difficulties related to the pandemic while delivering two rounds of Economic Impact Payments and millions of advance Child Tax Credit payments, all in record time. Meanwhile, IRS employees continued to make adjustments to deliver the filing season despite office closures, social distancing mandates and an extended tax filing deadline.

“This has been an unprecedented period facing the IRS and the nation,” said IRS Commissioner Chuck Rettig. “IRS employees worked hard during the pandemic, repeatedly delivering for taxpayers under tight timeframes and difficult circumstances. As the 2022 filing season approaches, more work remains for us to help taxpayers as well as tax professionals. We will continue to make progress on critical areas thanks to the hard work of so many people. I’m incredibly proud of what our employees have been able to accomplish during this period, and we also appreciate the efforts taking place by our partners inside and outside the tax system to help people struggling during COVID-19.”

Since the pandemic began, the IRS has successfully delivered more than $1.5 trillion to people across the nation through Economic Impact Payments, tax refunds and advance Child Tax Credit payments.

A large portion of that amount was distributed during Fiscal Year 2021, which is the focal point of this year’s Progress Update. The 56-page report highlights accomplishments around the agency’s six strategic goals and identifies ongoing modernization efforts. This year’s edition also discusses work related to implementing the various new pieces of legislation related to the pandemic, including the American Rescue Plan.

In his opening comments in the Progress Update, Rettig explained that each year the IRS collects more than $3 trillion in taxes and generates approximately 96% of the funding that supports the federal government’s operations.

“The 2021 Progress Update is not just a report, it’s the story of a dedicated group of public servants who continued to deliver for the nation, as they do every year, even in challenging times and while overcoming concerns for themselves, their families and their communities during the pandemic,” he said.

The document gives numerous examples of how IRS employees helped taxpayers, including:

  • Expanded information and assistance available to taxpayers in additional languages and underserved communities to help deliver Economic Impact Payments, advance Child Tax Credit payments and other services.
  • Developed new online portals for individuals to check on their pandemic-related relief payments and make updates to their personal information.
  • Offered a new online option for tax professionals to obtain signatures from individual and business clients and submit authorization forms electronically. Tax pros also now have an online account option, with new features being added.
  • Served their communities outside official duties through charitable work and service projects.

The report also shows ways IRS employees worked to maintain the tax system through a strong, visible and robust tax enforcement presence.

“We’ve continued to develop innovative approaches to understanding, detecting and resolving potential noncompliance to maintain taxpayer confidence in the tax system. We have expanded use of data, analytics and artificial intelligence across all lanes from selection to examination,” Rettig said.

“A few of our recent notable accomplishments include the creation of an Office of Fraud Enforcement in 2020 as well as an Office of Promoter Investigations in 2021,” he said. “These and other steps will help us do a better job of rooting out tax fraud, especially shutting down abusive tax avoidance transactions, including syndicated conservation easements and micro-captive insurance arrangements, as well as abusive transactions involving virtual currencies.”

The new Progress Update also highlights IRS work partnering on landmark criminal investigative cases that brought down child pornography, drug and terrorist organizations. In 2021, IRS Criminal Investigation’s conviction rate remained the highest among federal law enforcement at nearly 93% overall, and 96% for tax cases in particular.

“I’m especially proud of our Criminal Investigation Division’s efforts overall and in conjunction with the dark web illicit marketplace known as Silk Road,” Rettig said.

In January 2021, the IRS delivered the Taxpayer First Act Report to Congress PDF, a comprehensive set of recommendations to re-imagine the taxpayer experience, enhance employee training and restructure the organization to increase collaboration and innovation. The report introduced three integrated sets of recommendations required by the law and recognized as major improvement strategies.

“We appointed the first-ever Chief Taxpayer Experience Officer,” Rettig explained. “And, while outlining the design for the new Taxpayer Experience Office, we initiated several activities toward implementing the Taxpayer Experience Strategy.”

The IRS will remain focused on making progress and serving the nation as the 2022 filing season begins later this month.

“We remain confident the IRS will continue to deliver for our country, just as we have during other times of national urgency,” Rettig said.

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IRS revises Form 1024, allowing for electronic filing for exempt organizations

IRS revises Form 1024, allowing for electronic filing for exempt organizations.
IR-2022-2, January 3, 2022

WASHINGTON — As part of ongoing efforts to improve service for the tax-exempt community, the IRS has revised Form 1024, Application for Recognition of Exemption Under Section 501(a) or Section 521 of the Internal Revenue Code, to allow electronic filing.

Beginning January 3, 2022, applications for recognition of exemption on Form 1024 must be submitted electronically online at Pay.gov. The IRS will provide a 90-day grace period during which it will continue to accept paper versions of Form 1024 (Rev. 01-2018) and letter applications.

“Electronic filing makes it easier to complete an application for tax-exempt status while reducing errors,” said Sunita Lough, Commissioner of the IRS Tax Exempt and Government Entities division. “Electronic filing also shortens IRS processing time so applicants won’t wait as long for a response.”

Organizations requesting determinations under Section 521 are now also able to use the electronic Form 1024 instead of Form 1028, Application for Recognition of Exemption Under Section 521 of the Internal Revenue Code.

The required user fee for Form 1024 will remain $600 for 2022. Applicants must pay the fee through Pay.gov when submitting the form. Payment can be made directly from a bank account or by credit or debit card.

Organizations are encouraged to subscribe to Exempt Organizations Update, a free IRS e-Newsletter, for form updates and other exempt organization news.

As part of the revision, applications for recognition of exemption under Sections 501(c)(11), (14), (16), (18), (21), (22), (23), (26), (27), (28), (29) and 501(d) can no longer be submitted as letter applications. Instead, these requests must be made on the electronic Form 1024. Accordingly, organizations that are described in Section 501(c) (other than 501(c)(3) and (c)(4)) and 501(d) applying for tax-exempt status must now use the electronic Form 1024. Section 501(c)(3) organizations must continue to use Form 1023 or Form 1023-EZ, and Section 501(c)(4) organizations must continue to use Form 1024-A. Those forms also must be filed electronically.

Additional information on how to apply for IRS recognition of tax-exempt status:

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IRS issues 2022 Standard Mileage Rates

2022 Standard Mileage Rates – IR-2021-251

WASHINGTON — The Internal Revenue Service today issued the 2022 optional standard mileage rates. These rates are used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on January 1, 2022, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 58.5 cents per mile driven for business use, up 2.5 cents from the rate for 2021,
  • 18 cents per mile driven for medical, or moving purposes for qualified active-duty members of the Armed Forces, up 2 cents from the rate for 2021 and
  • 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2021.

The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details see Moving Expenses for Members of the Armed Forces.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Taxpayers can use the standard mileage rate but must opt to use it in the first year the car is available for business use. Then, in later years, they can choose either the standard mileage rate or actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.

Notice 22-03 PDF, contains the optional 2022 standard mileage rates, as well as the maximum automobile cost used to calculate the allowance under a fixed and variable rate (FAVR) plan. In addition, the notice provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2022 for which employers may use the fleet-average valuation rule in or the vehicle cents-per-mile valuation rule.

Your Plymouth Tax Office – ATS Advisors

Your Plymouth Tax Office – ATS Advisors

Looking for help with your taxes this year? Look no further than ATS Advisors. ATS offers a wide variety of individual and business services to help you come out on top during tax season. ATS has 4 convenient locations in Plymouth, Royal Oak, Allen Park, & Grayling, MI.

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Please take a look at our business and individual services to find more detailed information as to how we may serve you. Visit your Plymouth Tax Office today at 875 S Main St. Plymouth, MI 48170.