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September 2019

August 2019

EFTPS System Password Update

Log-in changes are coming to the online Electronic Federal Tax Payment System (EFTPS) for enhanced security. Effective Sept. 19, 2019, the IRS is implementing new password requirements for those making federal tax payments electronically:

  • The IRS will require a 13-month password expiration policy – your password expires after 13 months from the time it was changed.
  • The password must be 12-30 characters and follow the EFTPS guidelines:
    • At least one uppercase letter (A, B, C, etc.)
    • At least one lowercase letter (a, b, c, etc.)
    • At least one number (1, 2, 3, etc.)
    • One of the following characters (!, @, #, $,*, +,-)
    • No double characters (no 2 consecutive characters can be the same)
    • Must not be the same as any of the five previous passwords used 

If you have not updated your password in the past 13 months or you have a system-generated password, your payment will be rejected until you update your password on the EFTPS website.

IRS Automatically Waives Estimated Tax Penalty for Eligible 2018 Filers

The IRS, in a news release on Aug. 14, 2019, announced an automatic waiver of the estimated tax penalty for certain taxpayers. The affected taxpayers are those who did not pay 90% of their 2018 tax liability through wage withholding, estimated tax payments or a combination of both.   This safe harbor from the estimated tax underpayment penalty was reduced to 85% in an announcement in January, then lowered to 80% in an announcement in March. 


This relief affects taxpayers who have filed their 2018 returns, paid at least 80% of their estimated tax, but failed to claim the relief for the reduced 80% requirement. The IRS estimates this to affect about 400,000 taxpayers.


The IRS will mail Notices CP21 to affected taxpayers notifying them of the relief. The press release states that the service will mail refund checks to these eligible taxpayers about three weeks after their CP21 notice is mailed. Eligible taxpayers do not have to contact the IRS or take any action to receive the refund.


Going forward, taxpayers may take advantage of this relief when filing their 2018 returns.


Section 501(c)(4) and Other Tax-Exempt Entities May Have to Report Names and Addresses of Contributors for 2018

By Renee Foshee, JD, LL.M., CPA


Tax-exempt entities are generally required to report contributions of more than $5,000 ($1,000 for certain organizations) on Schedule B of Form 990. Schedule B is not subject to public disclosure requirements.


Last summer, the IRS published Revenue Procedure 2018-38, which authorized tax-exempt organizations to omit the names and addresses of contributors from Schedule B for tax years ending on or after Dec. 31, 2018. The rule change does not, or did not, apply to 501(c)(3) charitable organizations and 527 groups that must continue to report names and addresses of contributors. 


A federal court has struck down Rev. Proc. 2018-38 because the IRS failed to follow proper notice and comment procedures that are required by the Administrative Procedure Act. (Order, Bullock v. IRS, CV-18-103-GF-BMM, D. Montana, July 30, 2019.)


Some organizations may have already filed Form 990 for tax year 2018. Rev. Proc. 2018-38 was effective for returns due on or after May 15, 2019. 


The IRS has not yet issued further guidance on this issue for organizations that were subject to the Rev. Proc.