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If the IRS does call a taxpayer, it should not be a surprise because the agency will generally send a notice or letter first. Understanding how the IRS communicates can help taxpayers protect themselves from scammers who pretend to be from the IRS with the goal of stealing personal information.   

The IRS recently issued further guidance on the employee retention credit. This includes guidance for employers who pay qualified wages after June 30, 2021, and before January 1, 2022, and guidance on miscellaneous issues that apply to the employee retention credit in both 2020 and 2021. Additionally, the IRS issued a safe harbor allowing employers to exclude certain items from their gross receipts solely for determining eligibility for the employee retention credit.

Notice 2021-49 addresses changes made by the American Rescue Plan Act of 2021 to the employee retention credit that apply to the third and fourth quarters of 2021.

Those changes include:

• Making the credit available to eligible employers who pay qualified wages after June 30, 2021, and before January 1, 2022.
• Expanding the definition of eligible employer to include recovery startup businesses.
• Modifying the definition of qualified wages for severely financially distressed employers.
• Providing that the employee retention credit does not apply to qualified wages considered as payroll costs in connection with a shuttered venue grant or a restaurant revitalization grant.

Every year the IRS mails letters or notices to taxpayers for many different reasons. Typically, it's about a specific issue with a taxpayer's federal tax return or tax account. A notice may tell them about changes to their account or ask for more information. It could also tell them they need to make a payment. This year, people might have also received correspondence about Economic Impact Payments or an advance child tax credit outreach letter.