IRS updates info on Recovery Rebate Credit and pandemic response

Accounting

The Internal Revenue Service has updated its guidance on claiming the Recovery Rebate Credit and issued a report Friday on how it responded last year to the COVID-19 pandemic.

The frequently asked questions document on the 2020 Recovery Rebate Credit explains how taxpayers who didn’t receive their Economic Impact Payments, or didn’t receive the full amount to which they were entitled, can still receive the stimulus payments. The updated FAQ now includes changes to the information for Topic F: Finding the First and Second Economic Impact Payment Amounts to Calculate the 2020 Recovery Rebate Credit:

  • Question 4, Topic F: updated
  • Questions 8, 9 & 10, Topic F: added

The FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible.

Tax professionals and taxpayers can generally rely on FAQ documents from the IRS, even though the guidance hasn’t gone through the full process of proposed regulations, a comment period and final regulations. The IRS is trying to be more transparent about the process now, and more information about reliance on FAQs and the Internal Revenue Bulletin is available here.

Separately on Friday, the IRS issued a progress update on how it responded to taxpayers during the pandemic this past year in terms of providing taxpayer service at a time when the IRS’s resources were stretched especially thin. Taxpayers and tax professionals have been complaining about declining service levels on phone lines and correspondence. The report explains how the IRS has been trying to respond to the increasing demands of providing its traditional services, along with new demands like monthly advance Child Tax Credit payments, multiple rounds of Economic Impact Payments, and guidance on ever-changing tax laws. Meanwhile, IRS employees had to keep making 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 in a statement. “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.”

IRS Commissioner Charles Rettig

The report noted that since the COVID-19 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.

The 56-page report also describes progress on the IRS’s six strategic goals and the agency’s technology modernization efforts.

“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,” Rettig wrote.

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