Ensuring Electronic Signature Lawfulness for Payroll Deduction Authorization in the United States

How to eSign a document: electronic signature lawfulness for Payroll Deduction Authorization in United States

this is the current federal tax developments for the week of april 26 2021. current federal tax developments are brought to you by your state society of cpas and by kaplan professional education i should say kaplan financial education got to remember the right names for things dollars and again broadcasting here from phoenix we're getting a little warmer you know we're getting a little bit more into the summary times we're going to get there or it'll be warmer right now it's not too bad at all we definitely get way higher than this we're going to look at what's gone on this week and a few things are going to be on our list first i'm going to do a brief discussion of the new proposals that have been rumored and we'll talk about what you do which is mainly nothing at this point in time when i'm recording right now with regard to these new proposals because acting at this point can almost always turn out badly i'll phrase it that way yes in retrospect you'll probably see something you should have done as of this date but it only makes total sense in retrospect so we'll talk a little bit about why don't worry so much about these proposals until we get something much closer to becoming law we're also going to discuss about the irs releasing some safe harbors returns that were filed on or before december 27th in the area of deducting pvp loan expenses to keep those people from having to go back and amend returns we have the irs pushing a fact sheet to promote paid family leave paid leave i should say sick leave and family leave payroll tax credit that subsidy for vaccination related issues we'll discuss that that's not really something new although the press covered it much like it was new this week and we'll still go over how it works what's there and you know some of the issues pro and con for working with it we also have the irs extending what they refer to as a deviation in allowing for electronic signatures either for forms where there was no electronic signature allowed before no signature allowed before electronically or allowing you to accept electronic signature that doesn't have the same level of backup shall we say kba knowledge based authentication to use non-kba methods to get some signatures that currently require kba so we'll discuss that and interesting decision this time this is our third try edit basically we had it issued once we had extended once before this now is the second extension and this time they dropped the word temporary when they talked about the deviation so don't know if that has a meaning if it's an accident or what it is but we'll discuss a little bit about what that might mean for the iris going forward and then we also had the irs finally admit to a problem that a lot of us had figured was an irs problem but now we have a little bit of confirmation and that is that certain modernized e-file payments those payments that requested via returns filed using the modernized e-file system that should have come out on april the 15th they didn't quite come out april 15th in fact they basically came out late last week i think most people that i know of have told me that they have gotten their money taken out of the account now we'll talk about what the irs told us about that situation and what we're going to do well let's start discussing with the tax bill which i want to remind you right now it's not really even a tax bill it is a rumor of a tax bill and yes we've been told that on the 28th of april the president will outline his program but that also probably means on 28th of april we still won't have actual text of a bill you know we'll have a proposal which will be nice broad big picture items uh without necessarily all the neat little details that we know are crucial when you deal with tax issues but nevertheless because of the press we're getting a lot of client discussion reports in the press this week told the big news story was that the maximum capital gain rate could rise to 39.6 percent and still have the net investment income tax involved that means that in certain places the effective tax rate on a capital gain if you're in certain states if you're on the high end of this would be over fifty percent we also have that somehow buried in this is a one million dollar test that supposedly this top rate somehow affects it appears i we're not sure what we're going to test 1 million against you get different reports when you read different stories whether it's 1 million of adjusted gross income 1 million of taxable income or 1 million of capital gains but nevertheless we're told there's going to be a 1 million dollar cap of some sort so there's going to be something along those lines we don't know what that is there also was discussion that also got people worked up about getting rid of the current c system where we have carryover basis or i should say not care of a basis but a step up in basis and either going to a carryover basis system or the one that got talked about a little bit more toward the end of the week would be a deemed sale on death with a potential apparently there for a hundred thousand dollars of gains you could ignore or maybe a million we're not sure which in that event so the deemed sale concept now i guess the good news about that is apparently we won't have a you know estate tax uh you know they're not looking at changing that at the moment but i don't know if that's good news if the gains are going to be taxed at the rates we're going to talk about here uh you know what it would end up doing since we end up at those those potential rates you know what about the capital gain on death when dad dies if dad has what's a potentially taxable estate or at least one that would be taxable if you know we went back to a three and a half million dollar exclusion or whatever level we're looking at getting a capital gain exclusion well you know capital gain tax immediately that could be a fun problem but the real thing to remember is all of this currently represents pure speculation and all we have are these reports now i know clients are going to tell you that they know this is going to happen that it's guaranteed and amazing how they know i know one thing i know about any legislative body is it's not guaranteed i don't care what you think don't believe me repeal and replace i keep going back to that if there was anything that appeared a slam dunk after the election in 2016 it was that repeal and replace was going to be passed almost immediately in fact members of congress believe that would happen and as we know it yeah it did not happen you also may remember in tax let's take it to a tax went a little closer if you remember also around that time we were talking about things like the border adjustable tax or border adjustment decks i forget what we called it but the bat you know the bat was backed by kevin brady chair of ways and means backed by the speaker of the house paul ryan at the time you know the republicans now had taken over the house senate and the white house it's like oh man we need to learn about the bat and the bat's going to be doing these awful things uh yeah it turned out the bat was not terribly popular that did become clear pretty quickly but any event we're not doing it so bills like this will change over time it is highly unlikely that we will get a bill dropped on us on wednesday and that it will clear the house and the senate in a week or something and be on the president's desk more likely it will take significant time to negotiate it will go through various changes and even if we assume we're going to do this only with votes on the democratic side of the aisle just like we did with only republican votes for the tcja remember how the tcga came and at the end and how many ways it changed the tax cuts and jobs act that was passed by the house was not the tax cuts and jobs act that we finally got don't believe me are you paying self-employment tax on your s-corporation flow through earnings your answer is no i will remind you the original tcga would have had that happen would have brought together equivalence between s-corporations and partnerships so it's really tough even when a party appears to be in control there's going to be disagreements about what to do and the real danger we have right now is taking any action that has consequences that we can't undo and that depends on certain things happening and presumably there are things we would not do if the law didn't change because we haven't done them yet right so presumably that's a bad thing and i am reminded of a situation i became aware of many years ago right around 20 into 2010 i got asked about a situation not a client i've got to ask about a situation uh where a you know individual had decided that if you remember 2010 that was when the estate tax went away for a year but in 2011 we were going to come back with an estate tax that was a million dollar cap period you know that was going to be the amount you could have passed tax-free you would go back to relatively high rates above a million dollars and for that one year in 2010 while gifts were still you know no estate tax so you could die and pass unlimited funds onto your kids but what happened in 2010 was gifting still had the million dollar cap now the rates were not nearly as high when she went up a million dollars in 2010 as it being 11. well of course some people were sure that barack obama would never sign a tax bill that you know continued the any sort of exclusion anywhere close to the 3.5 million that we had in 2009 and it in fact would be down at a million he just needs to do nothing that's what's going to happen in fact he was in a lot better position to do that right he just needed to veto it and as long as he couldn't they couldn't get two-thirds in both houses to override him it wasn't going to happen so you know well seemed like a sure thing so dad went decided you know had an estate about 4 million decided that okay he'd already given away a million previously to the kids so he maxed that out he'd give away another million that would get rid of a million dollars out of his estate and get the gift tax on out of the estate he was comfortable that he had enough to live on otherwise okay all well and good does that early in the year for reasons that yeah well you know it's a given right to sure things let's do it now turns out come december barack obama signed a bill that gave us the five million dollar lifetime exemption and gave us portability right and so we have never been near the one million dollar limitation and the problem was now in january dad would like to undo this gift well you can't really undo it you know and ask for the fix i said well the only real fix if you're going to talk about that as a fix short of tax fraud it seemed difficult to come up with a fix because you had already actually transferred all of this stuff to the kids and it's clear you transferred it and now you're going to go back and just pretend it never happened yeah that's kind of a problem so like i say keep your eye on it what i do think you want to do this week is obviously pay attention to what's announced on wednesday certainly if we get bill text you start looking at it but don't commit to it you know don't worry about that text being exactly what's going to happen you need to be aware you need to be aware there's a high likelihood of change and that change could be better or worse also be aware if people start saying do this right now this is the perfect way around this because then you run into the wall street journal rule as i refer to it that is if somebody writes up what a wonderful way there is to get around something in the journal uh we will guarantee you that if we're in the middle of writing a bill congress will patch that and if we're not in the middle of writing a bill the irs will by regulation undo it so it's not a good idea to you know go down that path uh the most recent wall street journal rule issue we had was when people talked about crack and pack options or getting around the getting around the 199 cap a restriction you know for those of us who had you know service businesses so the you know the service businesses that couldn't claim 199 cap a we did the whole the theory was oh they're going to crack and pack and break them up into pieces and so kick out our admin staff into an administration administrative services business owned by the partners of the law firm the accounting firm and then the law accounting firm will pay lots of money for those services and that will flow through to the owners and they'll get their one in cap a because we you know we're not gonna have that problem it's like yeah it didn't work shut down by the irs pretty quickly so be aware of that here so just fair warning once we get bill text i'll probably discuss some basics but i won't go into deep details and more importantly we'll probably look at it seriously if we get to a conference bill or at least something that it appears both the house and senate are going to pass then we'll start worrying about the bill but until then i'm not going to spend a lot of time worrying about it okay let's go to our first rate real development something that's actually we can put our hands around revenue procedure 2021-20 this came out on april the 22nd and the irs put together a safe harbor for those taxpayers who filed a tax return on or before december 27 2020 probably mainly fiscal year c corporations right you did that the c corporation had gotten a paycheck protection program loan right and you may remember we were told by former treasury secretary mnuchin that tax 101 said that if you got forgiven the debt and you got forgiveness if you use that money to you know pay expenses and the debt itself would be non-taxable the forgiveness be non-taxable well then tax 101 says you get no deduction for the expenses and the irs put out a series of what we'll call the tax 101 revenue rulings or notices other guidance that told us essentially yeah guys you can't get this now you may remember that certain members of congress were not happy in fact three of the four ranking members on the tap main tax writing committees in the house and senate penned a letter specifically stating they were unhappy with this and they'd worked override it and late in the year on december 27th we did finally get that reversal congress in the covid related tax relief act said you get full forgiveness that we already had in the cares act but that's non-taxable but any expenses paid with the loan are fully deductible irs keep your hands off this so now we have a problem though because that's a retroactive provision and the problem really was that obviously some people had already filed returns using the irs guidance they had already filed so let's say had a june 30 year in for your corporation you had gotten a ppp loan early on you had spent a number of those funds on things that could lead to forgiveness you were expecting to get full forgiveness per the irs eventual ruling that meant that you were supposed to go ahead and treat those expenses as non-deductible and let's say you you were you were somebody who followed the irs notices and you didn't deduct it well now your problem is your return's wrong and that's a bigger problem because the hitch is that you have to deduct things in the year in which the law allows the deduction so if i didn't deduct those expenses june 30 2020's return i can't just normally pick them up on the june 30 2021 return as a deduction when the irs changed their mind because they weren't incurred in that year however the irs has said because of this particular issue and because the returns were correct when filed the irs will now allow you to make an election to claim the deduction for those expenses in the following year the immediately immediate following year now to do this you do have to do a few things first thing is you have to be what's called a covered taxpayer and bottom line a covered taxpayer generally is going to be somebody who got a loan paid or incurred expenses during your 2020 taxable year and on or before december 27 2020 you timely filed including extensions if necessary a federal income tax return or information return that would be like a partnership return 1120s that's why we talk about information return because that's what those are as applicable for your 2020 tax year and on that tax return you basically did not claim a deduction for expenses that either led to pvp loan forgiveness because you got forgiveness before you know you you already knew you'd been forgiven by the time you filed your return or that you expected the lead to forgiveness and if you did that it works fine now the one problem is if you let's say some taxpayer did not keep up and didn't realize on december 27th let's say december 28th the next day that the law had changed and that on the 28th they should now claim that full deduction if they deduct if they left it off the return let's say for the 2020 december 31st 2020 return or even a november 30 2020 return or october whatever that you filed after december 27th that's not granted this relief and that's somewhat interesting because even though the law did pass we know it passed on december 27th the irs did not formally revoke their rulings that's you know that people were relying on previously until january 25th so the problem here is it appears the irs believes the taxpayers and their advisors have a responsibility to understand when a law change takes place that you have to follow the law change not previous irs guidance if that guidance is contrary to the law or as i phrase it you needed to recognize on the 28th that that 5500 page document that had been signed into law the day before contained this provision that invalidated what ended up being three different irs rulings regarding dealing with these loan expenses now the good news is if you're going to do this you know basically there are some things not covered and some of it makes sense first thing is and they feel they have to say this i guess for whatever reason if let's say you became aware that congress was going to allow that larger list of expenses you know because there are various expenses we were able to add to our items that would get us a forgiveness forgiveness like those you know supply expenses that could count you know other things that were involved that were allowable those you know coved protection personal protective equipment expenses etc they're saying if you didn't deduct those you're not covered by this because those did not become part of the pvp loan forgiveness until the same day you were told that you're gonna be allowed to deduct them so none of that works as well don't try to do this if you excluded things related to a pvp2 loan which seems kind of obvious because you couldn't get a pp2 loan until after december 27th until actually sometime in january so they do feel the need to say that i think that's kind of obvious and the irs can still challenge whether you qualify for the safe harbor and obviously challenge the expenses in question they're not giving that up and you can't say nope can't challenge them because they're really the prior year you're not gonna let you do that now if you want to make this election you make it with the return for the year following the year that ended in 2020 when you didn't claim the deduction so it's immediate following return uh you're going to attach a statement to the return that must be titled revenue procedure 2021-20 statement and if you're electronically filing it actually they give us a specific file name for the attachment rev proc 2021-20 dot pdf no spaces anywhere in that has to be the name of the attachment that particular statement is going to give the taxpayers name address and id number a statement they're applying the safe harbor found in revenue procedure 2020-21 founded section 3.01 of that the amount date of disbursements of your original ppp loan the first draw alone and a list including descriptions and amounts of the original expenses paid or incurred during the 2020 tax period can be reported on the following year's return so that goes on so again you would put this on let's say you did have a june 30 2020 return corporate return you're going to put this statement on the june 30 2021 return if you didn't deduct those expenses now the alternative is pretty obvious you can just go back and amend the 2020 return and you know you might not want to do that because it's going to be a hassle it's going to be a miss secondly though you're also going to need to worry a little bit about whether your state will allow this to happen anyway i i feel that most states that are conformity in most states are conforming states of some form and that have conformed on this treatment will probably follow this revenue procedure as well but do keep an eye on it and remember the client might want you to go back there because in theory in 2020 that could add to an nol that could go back to prior years in this case you know maybe not so we have to see how it goes now another big thing that kind of ended up happening this week is a new announcement it's not really anything new but suddenly the president gave a speech the irs posted a news release and a fact sheet and a lot of us i know attacks twitter is kind of funny the morning when this stuff first started all of us are like did we miss something you know is this it's like i thought we had this and you know so there's a lot of back and forth and we finally figured out that yeah nothing had really changed this is an iris fact sheet fs 2021-09 and as i say a news release and also a speech by the president the same day on april 21st that discussed this american rescue plan uh you know the the sick pay under this and if you remember sick pay and paid leave sick pay and paid family leave payroll tax credits were extended and modified by the american rescue plan act arpa right we had that in there and one of the key changes as we've discussed when it came out was that added to the list of conditions situations that would allow you to give an employee time off pay them for the time off and qualify for the payroll tax credit up to 511 dollars a day or the paid sick leave or up to 200 a day for the credit involved for paid family leave would be anything related to covid19 vaccinations anything related to reactions to the covid19 right and if somebody had let's say because a lot of people have reported that the second vaccination right that you know at the when they get the second vaccination of most of two vaccination series that they've been down for a half a day a day day and a half you know they had to just kind of like stop not do anything to stop doing it i've heard of that from a number of people it was not my experience my experience was i got my shot and i came back and continued working the full day that day the full day the next now i've kind of kind of joked that well maybe it's just because of tax season how could you tell if you were run down but nevertheless in any event so like i said my second shot that wasn't really a reaction of any sort and i've also talked with you know my my father had no reaction my brother had a headache you know a pretty nasty headache for about six hours and disappeared so you could pay for both the vaccines you know if two vaccines potentially if you're talking about the uh you know other than the single vaccine shot so he's talking about the mrna vaccines we're talking about two shots and you could also pay for the time that the employee might take off for reactions to the shot and the government would basically give you that money back through payroll taxes right remember that the good old thing where you offset your payroll tax deposit if it's greater than your payroll tax deposits you could go form 7200 and get your refund directly to you or you can just wait and get the money back when you file the 941. so we have three different ways to run it now couple of things to remember about this iris did put out a fact sheet which is good pretty decent discusses the basics of this i do want to remind you of a couple things the fact she does not state first thing is please remember that this version and this only goes from april 1st to september 30. so if you paid for employees to get vaccinated or you're self-employed and you got vaccinated prior to april 1st which i got vaccinated prior to april 1st you know i've i got both of them before then the second one just before the date uh no you can't go back and retroactively claim the credit or claim the you know claim the credit either for payroll that you paid people or for you know the self-employed version of this that you'll get on next year's return by the way as one person on tax twitter pointed out yes you probably have to ask clients next year or self-employed did you get vaccinated and if you did was it before or after april 1st because if it's after april 1st and before june 30 then you probably qualify for this tax credit and we'll have to compute it kind of interesting things but the thing to remember is though you can only get this credit if your plan does not discriminate in favor of the highly compensated employees cannot discriminate in favor of full-time employees versus non-full-time employees or on the basis of tenure with the employer so you can't say that you know you're going to pay for time off for vaccinations for employees who have been with the firm for at least six months you can't say that you're gonna pay time off for full-time but not part-time you can't do pick and choose with the highly compensated you know pay for the officers to get their vaccinations but not give the rank and file the time basically you have to have a relatively non-inspiratory program now as i read the law i see nothing there that says though that you cannot pick and choose as long as you don't discriminate by basis of those categories you could yes have a program that only paid for time off or vaccination and for the reactions and potentially not pay for time off or the other at least not go down the time off route for the other items that qualify for this so i think that choice is available and employers may want to do that obviously the key reason why they were doing it i think that makes everybody knows is this past week we saw we hit the peak and now the number of vaccines being administered per week is going down not because of lack of supply but because of reduction of demand there just aren't as many people going out to get it now and this is a way they're going to try to encourage people who weren't really motivated you know and i remember hearing uh former fda commissioner gottlieb uh discussing saying yeah what we had was initially had all these people that were willing to jump through hoops willing to you know spend time in line were willing to you know do whatever it took to get the vaccine they were highly motivated what's remaining now is you know the highly motivated people got vaccinated now we're looking at the not so highly motivated not necessarily against being vaccinated but just don't feel its priority right away you know it'll something they'll do when they get around to it and so the idea is at least in theory it appears that the government is thinking that this will be a way to uh help motivate those people if they're don't want to go do it because they're afraid of you know i just can't afford the time off from work that's the theory they're trying to get employers to do that so anyway it is kind of an interesting run if you've not looked at it you have it written up in the in my write up for the week the pdf you can download related to this program from our website current for tax current federal tax developments dot com you can go see there and find out about it and see what's exactly going on and take a look at how this works we have the full thing pretty much written up there but yeah that's part of what's happening there the not new new thing next up let's talk about something that is a continuation of something and this is uh basically a memorandum entitled temporary deviation from handwritten signature requirements for a limited list of tax forms nhq-10-0421-0002 it was actually issued on april the 15th you may remember we talked about last year the irs at a point said look because we understand that due to covet 19 some taxpayers and some advisors are concerned about meeting to get things physically signed well and in some cases it was just virtually impossible if you had a client let's say that was elderly that was living in a care facility you know that that really was you know that that is used to always meeting with the cpa and having the cpa you know there to help them sign stuff there were all kinds of reasons why or let's say they just don't have mobility i think i don't know they're going to help online help them much i guess but they have mobility problems then it would be an issue right there they they can't get out you know they're not really mobile they don't want to leave the facility but you couldn't go in and they you know they they really really you know you know you really need to kind of get that document signed by them and back well using electronic signature options you that's pretty clear there you know you kind of force where the signature goes you make sure all things are filled out it can take care of a lot of that stuff but the irs generally did not allow you to use things like for this purpose or similar products right signature for this unless you unless first only for a very limited number of things could you use products that were digital signatures and then number two you almost always had to do that using a knowledge-based authentication system to go with it which is not something any of those products provide by default and which they tend to charge a significant amount for to you know relatively more simple amount if you want that kind of thing before you clear up the signature so you know we had that background so what they did they published a short list last summer then came back a little bit later and published a longer list right in both cases they told us it was a temporary right december said this is a temporary deviation now they issue this new memorandum previously the temporary membrane the temporary deviation was to end at june 30 of this year now the memo no longer says temporary and but the memos does still have an expiration date on the memo of december 31st what's also somewhat important here is that they actually did add quite a few items to the list and so again if you get this go to our website take a look at the article or download the pdf with all of our articles for this week you're going to find out that we end up getting you know like the entire 706 series basically is in there now you know the 709s are in there a number of 1120 series forms not the regular 1120 120s but number of others that could not be done electronically uh you know various other things uh application to change your tax return year 3115 which was there before uh 3520s which i believe were there before uh but and one other thing to point out which was there before as well but you need to be aware of it is all of the form 8453 series 88 78 and 88 79 series forms now those are series which means any of those forms dash whatever or just that form by itself and those are the forms to authorize electronic filing now that's interesting inclusion for a couple of reasons number one for the 8879 the individual e-file form the irs already allowed digital signatures on that form but you were required to get you know basically knowledge based authentication where they ask people questions that is that's available publicly or comes from a credit bureau that you know they should be able to answer that other people would not be able to answer so they have that information right and then that they try to clear that the iris generally required that for authentication however in this case this memo says it has a footnote which is interesting it says electronic and digital signatures appear in many form when printed and may be created by many different technologies no specific technology is required for this purpose during this and they saw the word temporary in this footnote temporary deviation that appears to mean that you could get an 8879 filed with a non-kba based signature program secondly about those electronic filings programs the irs has effectively stated through non-binding guidance that those other forms cannot be signed except by pin and ink you couldn't do an electronic signature on them they weren't authorized and that much is probably correct the irs has the irs has the authority to authorize it but they hadn't authorized any of the others however at this point now it appears authorized so you can apparently send the client a you know 80 whatever that you need for a corporation s corporation a partnership right those sorts of things and have the client sign that using something like right signature uh you might use kba you might not kb gets some more complicated there because you know theoretically they probably want to kba the officer not kba the corporation so it'd be a little weirder but that's okay but apparently you can just skip that as well and as noted you know the irs is supposed to accept this in theory you know when you mail the return to them so let's say you could present a client with a 706 they could sign it electronically you can then print out that version it comes back to you with the electronic signature on it and the irs is supposed to accept that the lack of the word temporary suggests that the irs may be considering and they have said this before they first announced this they were going to look how things were going we may see the irs make some of this more permanent and put together a more permanent document so be aware of that that could be coming up so keep your eye on this we may see the irs allow a lot more digital signatures in the future post pandemic i suppose the big reason for that is the concern was obviously there'd be major fraud you know there'd be all this id theft etc etc well the irs now has been accepting these for the year and we haven't heard about any significant problems so it may be now the irs figures having run this long test that kind of got forced on them that hey okay we're okay we know this will work we go ahead and just accept it finally the irs admitted this week that there was a little problem with payments on april 15th this is a quick alert technical delay in processing forms 1040 1040x and 1040 es payments submitted via modernizee file and this was a statement on the irs's website in their quick alert section which decided to get this emailed you may never have seen it but it came up on april the 22nd that they had this come up a lot of us had clients that noticed that withdrawals that were supposed to take place on april the 15th did not why were they going to have money come out of the 15th well a it might have been they filed the return early in tax season and took the automatic withdrawal because you told them yeah you do this it'll come out april 15th and as we all know just like last year when congress kicked back the dates irs could not automatically move those dates back all you could do is cancel that and then pay going to the irs direct pay website or pay with a voucher through the mail which is really going to be risky but you can try it but they couldn't have any way to reschedule that payment so i think we probably all had a few clients who had filed returns early in the year had balances due and we're sitting there expecting the balances you know the amounts to be pulled out on april 15th and then they weren't other clients may have had you schedule their four quarter estimates and even if their payment for the 1040 was now scheduled to come out on may the 17th as we all know the estimated tax payment was due on april 15th well those payments didn't come out that caused a lot of concern i know i had a client that was very concerned that maybe she should go ahead and pay send more money at them i said no it's probably not a good idea this is clearly their glitch because they've been seeing it all across the country people running different tax software people doing different things so i would hold up and wait and see what comes of this a week later april the 22nd the irs finally posted this admission they have a problem right at that date they said yeah we got a problem what they say was that we identified a delay in processing form 2040 balanced due form 1040x amended and form 1040 es estimated taxpayer requests submitted via modernizee file the issue has been resolved and pending payments were being processed they also made clear that the clients will get credit for having paid on april 15th so clients who are concerned their payments would be late they'll be penalized no the irs are going to make that based on the requested date they also strongly suggest you do not send additional money in and in fact the reason they do that is because there's really no way to easily get the money back until the irs eventually processes it as an overpayment and if it was for the estimates for 2021 it won't be over an overpayment until the 2021 return so the best you could do in that case would be to reduce the second estimate if you end up paying two firsts and so yeah they're saying really really don't don't do that they did say if you had sk you know if you had to start another payment you could try to call to cancel but yeah that's like i i understand but i think it's going to be very rare most most cases people would have gone use direct pay and would have you know paid through that mechanism i guess theoretically this could have been restarted through the mef in some way i'm not sure how but apparently they're a little concerned if you did that they gave you a method where you could cancel as long as you did so two days before the mic supposed to come out of course clients all being worried that they were late and they're going to be charged you know this hefty penalty for every day they're late they probably weren't scheduling payments so it'd be two days out so on any event that should be taken care of now you are going to get credited on the original date and again do not have clients pay again my take is today i've heard from all the clients that i had talked to and they have all told me that each came out you know late this past week it came out so it's there make a note of it now i will tell you i have seen scattered reports of a problem with one particular tax vendor i will not mention the name simply because i haven't seen enough to confirm and what i'm seeing is a little different different sources but there may be a problem with one vendor and i believe they sent out an email at least some sort of notice to their customers about it where they apparently had their own follow-up and uh you may find that a payment scheduled for april 15th just now has never been scheduled it was scheduled in certain time frames and that money is not coming out that appears to be unrelated to this problem but it will look like this problem you know both of them as the money didn't come out so just be aware of that you might want to check with your tax vendor if the money has not come out i might check with the vendor now and make sure i have no any problem uh again and if you're with that vendor you probably know who you are i would just say in that case i'm just saying keep your eye on that though there is that report out there that's going on and again i don't know about how exactly how detailed it was i do know they saw some reports work it only mattered if you'd done it during a very narrow time frame requested the payments so yeah one of those odd things so this has been current federal tax developments for the week of april the 27th of 20 uh 2021 remember the right years these days again so we're heading into getting close it's going to be the last week of april and then we're going to go to our new tax day last year it was july this year may we get a different tax day every year uh but in the event we'll take a look we'll see what comes up uh if we get actual bill text i may mention whatever the president talks about on wednesday next week but i have a feeling i'm probably going to decide it's not worth digging into until we get a lot closer to being passed i think there's a lot of hurdles to clear and i'm not sure how easily they'll clear them so i don't i no traditionally i just don't get too excited about bills until we get to final bills sometimes they're not much choice sometimes we do it i did violate that rule on tcga so unfortunately i know way more about the not section 199 way they're going to try to do it in the house then i'd ever care to know because that's utterly useless knowledge just about as useful as knowing how the bat was going to work which i also got into because you know they were talking a lot about the bat so you know he started looking at it yeah it'll be worthless knowledge and it's tax season we don't really have time to build up worthless knowledge so you know i'll probably take a look at that sometime later preferably when we're further along and how it's going to go otherwise check back in here next week and we'll talk about whatever does come up in things that do count immediately in federal taxes and update you on any other sort of interesting developments that come up as we look at this world of federal taxes and work our way toward this year's end of tax season