Internal Revenue Service

IRS Updates Per Diem Rates for Travel Expenses for 2021-2022

The Internal Revenue Service recently issued new per diem rates which taxpayers can use to substantiate the amount of expenses they can deduct for lodging, meals and incidental expenses when they are traveling away from home. These rates are effective October 1, 2021 thru September 30, 2022. For the high-low substantiation method, the per diem rates are $296 (up from $292) for travel to any high-cost locale and $202 (up from $198) for travel to anywhere else within the continental United States. The amount of the $296 high rate and $202 low rate that is treated as paid for meals is $74 for travel to any high-cost locality and $64 for travel to any other locality within the continental United States. The per-diem rate for the incidental-expenses remains unchanged at $5 per day for any locality of travel. “Use of a per diem substantiation method is not mandatory, the IRS noted. “A taxpayer may substantiate actual allowable expenses if the taxpayer maintains adequate records or other sufficient evidence for proper substantiation.” Source: www.accountingtoday.com (09/03/21)

Churches With Employer Identification Numbers Must Keep Information Current

Calling it a key security issue, the Internal Revenue Service on July 30, 2021 urged those entities with Employer Identification Numbers (EINs) to update their applications if there has been a change in the responsible party or contact information.

IRS regulations require EIN holders to update responsible party information within 60 days of any change by filing Form 8822-B, Change of Address or Responsible Party - Business. It is critical that the IRS have accurate information in cases of identity theft or other fraud issues related to EINs or business accounts. The IRS defines the responsible party as the individual or entity who “controls, manages, or directs the applicant entity and the disposition of its funds and assets.”

The IRS intends to step up its awareness efforts aimed at businesses, partnerships, trusts and estates, charities and other entities that are EIN holders. Starting in August 2021, the IRS will begin sending letters to approximately 100,000 EIN holders where it appears the responsible party is outdated.

A church that fails to update its information regarding the responsible party “may not receive timely notices of deficiencies or demands for taxes from the IRS, which can lead to penalties and additional interest charges.” Source: www.irs.gov

By Suffragan Bishop Maxie Dobson

IRS Audits Fell Again in 2020

The IRS wrapped up 509,917 audits last fiscal year, recommending that people pay an additional $12.9 billion extra in taxes. That’s down from the more than 771,000 audits conducted in fiscal-year 2019 recommending more than $17 billion in additional taxes. It’s far from the 1.5 million audits concluded in 2010.

But within the total 2020 count, 10,890 concluded audits focused on tax returns worth at least $1 million. That’s far from the 24,744 audits which ended in tax year 2011 for well-heeled returns that were worth at least $1 million. Still, it’s up from the 889 audits for the rich that were wrapped up in tax year 2018.

The statistics are another data point in an ongoing story about the IRS’s shrinking audit rate and shrinking staff size.

During fiscal 2020, the IRS had nearly 76,000 “full-time equivalent” positions — that’s a 20% drop from 2010. The fiscal year began in October 2019 and stretched into the pandemic, ending in September 2020. Source: www.marketwatch.com (07/25/21)