IRS issues 2021 Filing Season frequently asked questions

WASHINGTON — These frequently asked questions (FAQs) are released to the public in Fact Sheet 2022-06 PDF, January 31, 2022.

The American Rescue Plan Act (ARPA) of 2021 expanded the Child Tax Credit (CTC) for tax year 2021 only. These Child Tax Credit FAQs focus on information helpful to taxpayers preparing their tax year 2021 tax returns.

Recipients of advance Child Tax Credit payments will need to compare the amount of payments received during 2021 with the amount of the Child Tax Credit that can be claimed on their 2021 tax return.

Those that received less than the amount they are eligible for can claim a credit for the remaining amount. Those that received more than they are eligible for may need to repay some or all of the excess amount.

The IRS has sent Letter 6419 in January 2022 to provide the total amount of advance Child Tax Credit payments that were received in 2021. The IRS urges taxpayers receiving these letters to make sure they hold onto them to assist them in preparing their 2021 federal tax returns in 2022.

These FAQs contain the following topics:

More information about reliance is available.

IRS-FAQ

Beware of “ghost” preparers who don’t sign tax returns

IR-2021-30, February 5, 2021

WASHINGTON — The Internal Revenue Service reminds taxpayers to avoid “ghost” tax return
preparers whose refusal to sign returns can cause a frightening array of problems. It is
important to file a valid, accurate tax return because the taxpayer is ultimately responsible for
it.
Ghost preparers get their scary name because they don’t sign tax returns they prepare. Like a
ghost, they try to be invisible to the fact they’ve prepared the return and will print the return and
get the taxpayer to sign and mail it. For e-filed returns, the ghost preparer will prepare but
refuse to digitally sign it as the paid preparer.
By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a
valid Preparer Tax Identification Number, or PTIN. Paid preparers must sign and include their
PTIN on the return. Not signing a return is a red flag that the paid preparer may be looking to
make a fast buck by promising a big refund or charging fees based on the size of the refund.
Unscrupulous tax return preparers may also:
• Require payment in cash only and not provide a receipt.
• Invent income to qualify their clients for tax credits.
• Claim fake deductions to boost the size of the refund.
• Direct refunds into their bank account, not the taxpayer’s account.
The IRS urges taxpayers to choose a tax return preparer wisely. The Choosing a Tax Professional
page on IRS.gov has information about tax preparer credentials and qualifications. The IRS
can help
identify many preparers by type of credential or qualification.
No matter who prepares the return, the IRS urges taxpayers to review it carefully and ask
questions about anything not clear before signing. Taxpayers should verify both their routing
and bank account number on the completed tax return for any direct deposit refund. And
taxpayers should watch out for preparers putting their bank account information onto the
returns.
Directory of Federal Tax Return Preparers with Credentials and Select Qualifications
Beware of “ghost” preparers who don’t sign tax returns | Internal Revenue Service Page 1 of 2
https://www.irs.gov/newsroom/beware-of-ghost-preparers-who-dont-sign-tax-returns 2/18/2021
Taxpayers can report preparer misconduct to the IRS using IRS Form 14157, Complaint: Tax
Return Preparer (PDF). If a taxpayer suspects a tax preparer filed or changed their tax return
without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct
Affidavit PDF .

IRS issues guidance relating to deferral of gains for investments in a Qualified Opportunity Fund

IR-2019-75, April 17, 2019

WASHINGTON –The Internal Revenue Service today issued guidance (PDF) providing additional details about investment in qualified opportunity zones.

The proposed regulations allow the deferral of all or part of a gain that is invested into a Qualified Opportunity Fund (QO Fund) that would otherwise be includible in income. The gain is deferred until the investment is sold or exchanged or Dec. 31, 2026, whichever is earlier. If the investment is held for at least 10 years, investors may be able to permanently exclude gain from the sale or exchange of an investment in a QO Fund.

Qualified opportunity zone business property is tangible property used in a trade or business of the QO Fund if the property was purchased after Dec. 31, 2017. The guidance permits tangible property acquired after Dec. 31, 2017, under a market rate lease to qualify as “qualified opportunity zone business property” if during substantially all of the holding period of the property, substantially all of the use of the property was in a qualified opportunity zone.

A key part of the newly released guidance clarifies the ”substantially all” requirements for the holding period and use of the tangible business property:

For use of the property, at least 70 percent of the property must be used in a qualified opportunity zone.
For the holding period of the property, tangible property must be qualified opportunity zone business property for at least 90 percent of the QO Fund’s or qualified opportunity zone business’s holding period.
The partnership or corporation must be a qualified opportunity zone business for at least 90 percent of the QO Fund’s holding period.
The guidance notes there are situations where deferred gains may become taxable if an investor transfers their interest in a QO Fund. For example, if the transfer is done by gift the deferred gain may become taxable. However, inheritance by a surviving spouse is not a taxable transfer, nor is a transfer, upon death, of an ownership interest in a QO Fund to an estate or a revocable trust that becomes irrevocable upon death.

The guidance (PDF) is posted on IRS.gov. These regulations relate to the Tax Cuts and Jobs Act (TCJA), the tax reform legislation enacted in December 2017.

For information about other TCJA provisions, visit IRS.gov/taxreform.

In memory of Mary H. Sweet

Our thoughts and prayers are with the family and friends of our long-term employee and friend, Mary Sweet, who passed away October 26, 2018 at the age of 73. We’re grateful for all of the years spent together and memories made during the 31 years that Mary worked with GRKB.

Full Obituary for Mary can be found here:
https://www.legacy.com/obituaries/telegram/obituary.aspx?n=mary-sweet&pid=190588498&fhid=20762

How to know it’s really the IRS calling or knocking on your door

Many taxpayers have encountered individuals impersonating IRS officials – in person, over the telephone and via email. Don’t get scammed. We want you to understand how and when the IRS contacts taxpayers and help you determine whether a contact you may have received is truly from an IRS employee.

The IRS initiates most contacts through regular mail delivered by the United States Postal Service.

However, there are special circumstances in which the IRS will call or come to a home or business, such as when a taxpayer has an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment, or to tour a business as part of an audit or during criminal investigations.

Even then, taxpayers will generally first receive several letters (called “notices”) from the IRS in the mail.

Read the complete IRS article at: https://www.irs.gov/newsroom/how-to-know-its-really-the-irs-calling-or-knocking-on-your-door

GRKB hosts the JHI 2016 Region of the Americas Conference and Annual General Meeting

GRKB was the host firm for the JHI 2016 Region of the Americas Conference and Annual General Meeting, which was held June 8-11 in Boston.  In attendance were JHI member firms from throughout the U.S. and Canada; as well as member firms from Argentina, Brazil, Ecuador, and Mexico.  Ireland was also represented as the JHI International Chair was also in attendance.  The conference focused on the Culture of Success, led by Jeremy Wortman, PhD, and the Culture of Appreciation, led by Jeff Birk.  Each session was a good mixture of information, entertainment and group participation.  The conference provided an opportunity for JHI members to meet and network with their counterparts from other parts of the world.  Social activities included visits to the Massachusetts State House, Freedom Trail, Cape Cod, Kennedy compound, and a Duck Boat tour.  One of the trip highlights was a State House group photo in the chamber of the House of Representatives, which included our tour guide, Senator Ryan Fattman (kneeling in front).

JHI is a worldwide association of independent CPA firms that possess substantial experience and understanding of the accounting and business practices in their jurisdiction, and of the socio-economic culture of their community and region. JHI members share uniformly high standards in the delivery of responsive, personalized accounting, tax and business advisory services. The combined JHI resources provide a powerful business asset for our clients by enabling us to serve their financial and business needs whenever and wherever they arise.

2016 June JHI State House

IRS Security Awareness Tax Tips

Tips to Keep Your Tax Records Secure; Protect Yourself from Identity Theft

IRS Security Awareness Tax Tip Number 8, January 11, 2016

If you’re still keeping old tax returns and receipts stuffed in a shoe box stuck in the back of the closet, you might want to rethink that approach.

The IRS has teamed up with state revenue departments and the tax industry to make sure you understand the dangers to your personal and financial data.

Read the IRS Security Awareness Tips at: https://www.irs.gov/uac/IRS-Security-Awareness-Tax-Tips

Rick Powell, CPA, serves as expert panelist at the Venture Forum program featuring former chief evangelist of Apple, Guy Kawasaki

June 2014 – Worcester, MA — Rick Powell, CPA, a Senior Vice President at Greenberg, Rosenblatt, Kull & Bitsoli, P.C., served on a Panel of Experts at The Venture Forum June program featuring Guy Kawasaki.  Serving on the panel with Rick were leading Intellectual Property Attorneys and Venture Capitalists.  The panel focused on matters relative to entrepreneurs getting their first investment and how to organize the venture and team for long-term growth and success. Guy Kawasaki spoke of his time as chief evangelist at Apple, as well as his experiences in a multitude of his other ventures including author, consultant and VC.  The Venture Forum is a not-for-profit organization providing education, advice and inspiration for entrepreneurs.