• Timothy E. Brown, CPA

The Internal Revenue Service is reopening the registration period for parents to list their kids so they can receive an extra $500 per child in economic impact payments under the CARES Act.

The $2.2 trillion stimulus package that Congress passed in March to help blunt the economic impact of the novel coronavirus pandemic included $1,200 in “Economic Impact Payments” for adults, plus an additional $500 per child. To rush the payments out, the IRS relied on tax filings for 2018 and 2019 from taxpayers, but many of those tax returns didn’t include information about the youngest children, especially after the IRS eliminated the dependent exemption with the 2017 tax reform, nor did the service have the information needed for people who don’t normally file tax returns, such as low-income taxpayers, and recipients of Social Security, veterans and railroad retirement benefits.

In response, the IRS created a Non-Filers tool so even people who didn’t file their taxes could still receive the stimulus payments, while also barring incarcerated and undocumented taxpayers from receiving the payments. However, the IRS also kept the Non-Filers tool available for only a few weeks in April and told taxpayers to hurry and register or else they would have to wait until next year to claim the payments. But after receiving many complaints that the stimulus payments were incorrect or never arrived, along with other problems, the IRS is now making the Non-Filers tool available again but only until the end of September.

The IRS is asking eligible federal benefit recipients to use the Non-Filers tool starting Aug. 15 through Sept. 30 to enter information on their qualifying children to receive the supplemental $500 payments. Those eligible to provide the information include people with qualifying children who receive Social Security retirement, survivor or disability benefits, Supplemental Security Income, railroad retirement benefits and Veterans Affairs compensation and pension benefits and did not file a tax return in 2018 or 2019.

The IRS expects the catch-up payments, equal to $500 per eligible child, will be sent by mid-October.

“IRS employees have been working non-stop to deliver more than 160 million Economic Impact Payments in record time. We have coordinated outreach efforts with thousands of community-based organizations and have provided materials in more than two dozen languages,” said IRS Commissioner Chuck Rettig in a statement Friday. “Given the extremely high demand for EIP assistance, we have continued to prioritize and increase resource allocations to eligible individuals, including those who may be waiting on some portion of their payment. To help with this, we are allocating additional IRS resources to ensure eligible recipients receive their full payments during this challenging time.”

For beneficiaries of Social Security, SSI, veterans' or railroad retirement benefits who already used the Non-Filers tool after May 5 to provide information about children, no further action is needed. The IRS will automatically make a payment in October.

Those who receive any of those benefits and haven’t used the Non-Filers tool to provide information on their child should register online by Sept. 30 using the Non-Filers tool. However, anyone who has already filed or plans to file either a 2018 or 2019 tax return should file the tax return and not use this tool.

People who can’t access the Non-Filers tool can still submit a simplified paper return following the procedures described in this FAQ on

This may be the final chance to submit the information this year. The IRS said any beneficiary who misses the Sept. 30 deadline will need to wait until next year and claim it as a credit on their 2020 federal income tax return.

Those who received their original EIP by direct deposit will also have any supplemental payment direct deposited to the same account, while others will receive a check.

Eligible recipients can check the status of their payments using the IRS’s online Get My Payment tool. A notice verifying the $500-per-child supplemental payment will be sent to each recipient and should be retained with other tax records.

The IRS noted that other non-filers can still receive a payment, but they have to act by Oct. 15. While most Americans have already received their EIPs, the IRS said people with little or no income and who aren’t required to file tax returns still remain eligible to receive stimulus payments. People in this group should also use the Non-Filers’ tool, but they need to act by Oct. 15 to receive their payment this year.

The Non-Filers tool is aimed at people with incomes generally below $24,400 for married couples, and $12,200 for singles. That includes couples and individuals who are experiencing homelessness. People can qualify, even if they don’t work or have no earned income. However, low- and moderate-income workers and working families who are eligible to receive special tax benefits, such as the Earned Income Tax Credit or Child Tax Credit, can’t use this tool. Instead, they need to file a regular tax return by using IRS Free File or some other method.

The IRS is still dealing with a number of other issues holding up the stimulus payments for some taxpayers.

Those include:

-Spouse’s past-due child support. The IRS said it’s actively working to resolve cases where part or all of an individual’s payment was taken and applied to their spouse’s past-due child support. People in this situation don’t need to take any action. The IRS said it will automatically issue the portion of the EIP that was applied to the other spouse’s debt.

-Spouses of deceased taxpayers. When the CARES Act passed in March, the IRS originally implemented the legislation in accordance with processes and procedures relating to the 2008 stimulus payments (which were sent to deceased individuals). After further review this spring, the Treasury decided that those who died before receipt of the payments should not receive the advance payment. As a result, the EIP procedures were modified to stop future payments to dead people. The cancellation of uncashed checks is part of this process. Some EIPs to spouses of deceased taxpayers were canceled. The IRS said it’s actively working on a systemic solution to reissue payments to surviving spouses of deceased taxpayers who were unable to deposit the initial EIPs paid to the deceased and surviving spouse. For EIPs that have been canceled or returned, the surviving spouse will automatically get their share of the EIP.

The IRS has come under fire from taxpayers and lawmakers in Congress over the delays and said it has taken steps to get payments to as many eligible individuals as possible. A recent oversight report said the IRS correctly figured the amount due for 98 percent of the payments issued. However, the IRS acknowledged the significance of the issue for those who haven’t yet received their full payment. The service is still looking at ways to help people get the right amount of the stimulus payment and will continue to provide updates on further improvements as they occur.

For more information on the EIP, including the latest answers to frequently asked questions and other matters, visit, which provides information about issues such as why the payment received is less than $1,200, why someone is considered ineligible to receive a payment, and why someone might not be eligible to receive the $500 per qualifying child payment.

Data Source: Michael Cohn


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  • Timothy E. Brown, CPA

This year’s IRS Dirty Dozen list includes rip-offs that preyed on many like a lion pursues its prey.

Here are 12 evil twists on established scammy ideas.

1. Playing on fear

IRS Criminal Investigation reports a tremendous increase in phishing schemes using keywords such as “coronavirus,” “COVID-19” and “Stimulus.” Most of these schemes are playing on the fear of the virus and the worries about stimulus payments, and are blasted to large numbers of people to net personal identity information or financial account details.

2. Give and it hurts

The pandemic is custom-built for crooks to set up fake charities to steal from the good-hearted. Fraudulent schemes normally start with unsolicited contact. Bogus websites use names resembling those of legitimate charities — and crooks might even claim to be working for the IRS to help victims file casualty loss claims and get tax refunds. (Remember: Legit charities won’t hesitate to give their Federal Employer Identification Number.)

3. A familiar voice

Phone scams (a.k.a. “vishing” or voice phishing) include those threatening arrest, deportation or license revocation. These calls, reported year-round, often take the form of a robocall. The IRS will never demand immediate payment, threaten a taxpayer, ask for financial information over the phone, or call about an unexpected refund or Economic Impact Payment.

4. Anti-social

Social media enables anyone to share information with anyone else on the internet — and scammers use that information as ammunition for a wide variety of scams especially in times of disaster like a pandemic. (Social media scams have also led to tax-related identity theft.) The basic element of social media scams is convincing a potential victim they’re dealing with a trusted person close to them.

5. Negative impact

The IRS has made great strides against refund fraud and theft but they remain an ongoing threat. Criminals this year also turned their attention to stealing Economic Impact Payments. The IRS recently warned nursing homes and other care facilities that EIPs generally belong to the recipients, not the organizations providing the care. These payments also don’t count as a resource for determining eligibility for Medicaid and other federal programs.

6. New avenue for scammers

Seniors are more likely to be targeted and victimized by scammers than other segments of society. Older Americans are becoming more comfortable with such evolving technologies as social media — but that’s just given crooks another means of taking advantage. Phishing scams linked to coronavirus were a special threat this season.

7. Language barriers

IRS impersonators and other scammers also target groups with limited English proficiency. Often threatening, these scams also target those potentially receiving an EIP and request personal or financial information from the taxpayer. These con artists may have some of the taxpayer’s information, and a common approach remains the IRS impersonation scam where a taxpayer receives a telephone call threatening jail time, deportation or revocation of a driver’s license from someone claiming to be with the IRS.

8. Boo!

Dishonest tax preparers pop up every filing season committing fraud, harming innocent taxpayers or talking taxpayers into doing illegal things they regret later. With many tax pros impacted by COVID-19 and their offices potentially closed, taxpayers should take particular care in selecting a credible preparer. Especially dangerous again this season: “ghost” preparers who don’t sign the returns. Unscrupulous preparers may also target those without a filing requirement and may or may not be due a refund, promising inflated refunds or charging a percentage of the refund.

9. Accept no compromise

Misleading tax-debt resolution companies often exaggerate chances to settle tax debts for “pennies on the dollar” through an offer in compromise. In FY19, there were 54,000 OICs submitted to the IRS; the agency accepted 18,000 of them. But unscrupulous OIC “mills” oversell the program, casting a wide net for taxpayers, charging them pricey fees and churning out applications for an offer that often hasn’t got a chance.

10. Card tricks

A con artist steals a taxpayer’s personal data, files a bogus return and has the refund deposited into the taxpayer’s bank account. Once the direct deposit hits the account, the fraudster calls the taxpayer posing as an IRS employee. The taxpayer is told there’s been a bank error not in their favor and that the IRS wants the money back immediately or penalties and interest will result. The taxpayer is told to buy specific gift cards for the amount of the refund.

11. Payroll payoffs

Tax professionals, employers and taxpayers need to be on guard against phishing designed to steal W-2s and other tax information (a.k.a. business email compromise or business email spoofing). This is particularly true with many businesses closed and their employees working from home. In one scam, a compromised email account is often used to send a request to purchase gift cards in various denominations. In another, the fraudster may have access to the victim’s email account (also known as an email account compromise, or EAC) to impersonate the victim to have the organization change the employee’s direct deposit information to reroute to an account the fraudster controls.

12. Ransomware

Ransomware to infect a potential victim’s computer, network or server is a growing cybercrime. This invasive software is often inadvertently downloaded by the user. Once downloaded, it tracks keystrokes and other computer activity, finding and locking critical or sensitive data with its own encryption. Victims generally aren’t aware of the attack until they try to access data or they receive a ransom request in a pop-up window. Cybercriminals might use a phishing email to trick a victim into opening a link or attachment containing the ransomware; these may include email solicitations for fake COVID-19 charities.

In summary, take these steps:

-Watch out for spam.

-Research charities before donating.

-Remember that the IRS will never demand immediate payment.

-Be careful with social media.

-Watch the status of Economic Impact Payments.

-Protect your senior loved ones.

-Know your rights.

-Only allow a tax preparer that you have researched provide tax preparation services.

-Research tax and debt reduction companies.

-Never pay someone you do not know over the phone with gift cards.

-Verify payroll providers with your employer before providing information.

-Beware of phony downloads and Ransomware

Data Source

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The Internal Revenue Service provided guidance last month to taxpayers who are taking advantage of some provisions in the CARES Act that allow them to take out money from their retirement accounts to deal with the economic fallout of the COVID-19 pandemic.

With the Labor Department reporting many people are turning to their retirement plans as a source of money to pay for current expenses. The CARES Act that Congress passed in late March includes provisions enabling people to take distributions or loans of up to $100,000 from an IRA, 401(k) or 403(b) plan and still get favorable tax treatment.

In Notice 2020-50, the IRS spelled out the details to help retirement plan participants affected by COVID-19 take advantage of these CARES Act provisions regarding retirement plan distributions and loans. That includes expanding the categories of individuals who are eligible and giving guidance and some examples of how that will reflect the tax treatment of the distributions and loans on qualified individuals’ federal income tax filings.


The CARES Act allows qualified individuals to treat as coronavirus-related distributions up to $100,000 in distributions from their eligible retirement plans (including IRAs) between Jan. 1 and Dec. 30, 2020. A coronavirus-related distribution isn’t subject to the 10 percent additional tax that would otherwise typically apply to distributions made before an individual reaches the age of 59-½. A coronavirus-related distribution can be included in income in equal installments over a three-year period. People have three years to repay a COVID-19-related distribution to a plan or IRA and undo the tax consequences of the distribution.

The CARES Act also says plans can implement certain relaxed rules for qualified individuals relating to plan loan amounts and repayment terms. Specifically, plans may suspend loan repayments that are due from March 27 through Dec. 31, 2020, and the dollar limit on loans made between March 27 and Sept. 22, 2020, is raised from $50,000 to $100,000.

As authorized under the CARES Act, Notice 2020-50 expands the definition of who is considered to be a qualified individual to take into account additional factors such as reductions in pay, rescissions of job offers, and delayed start dates, as well as adverse financial consequences to an individual arising from the impact of the coronavirus on their spouse or household member. As expanded under Notice 2020-50, a qualified individual is anyone who:

  • Is diagnosed, or whose spouse or dependent is diagnosed, with the virus SARS-CoV-2 or the coronavirus disease 2019 (collectively, “COVID-19”) by a test approved by the Centers for Disease Control and Prevention (including a test authorized under the Federal Food, Drug, and Cosmetic Act); or,

  • Experiences adverse financial consequences as a result of the individual, the individual’s spouse, or a member of the individual’s household (that is, someone who shares the individual’s principal residence) being quarantined, furloughed or laid off, or having work hours reduced due to COVID-19; being unable to work due to lack of childcare because of COVID-19; closing or reducing hours of a business that they own or operate due to COVID-19; having pay or self-employment income reduced due to COVID-19; or having a job offer rescinded or start date for a job delayed due to COVID-19.

Notice 2020-50 also clarifies that employers can decide whether to implement these COVID-related distribution and loan rules, and notes that qualified individuals can claim the tax benefits of coronavirus-related distribution rules even if plan provisions aren’t changed. The guidance clarifies that administrators can rely on an individual’s certification that they’re a qualified individual (and includes a sample certification), but also points out that an individual actually needs to be a qualified individual to get favorable tax treatment.


The notice also gives employers a safe harbor procedure for implementing the suspension of loan repayments otherwise due through the end of 2020, but notes that there may be other reasonable ways to administer these rules.

Employers, financial institutions and individuals can refer to the notice for more information about how the CARES Act rules for COVID-related distributions and loans from retirement plans would apply.

Data Source:Michael Cohn

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