News For Your Week Ahead: May 7, 2021

On this weeks’ episode of MSATP TV Ellen Silverstein joins Executive Director Bill Feehley for an update on MSATP’s Annual Convention & Banquet in Ocean City, MD!

Watch on YouTube.

Coming Up: On Thursday, May 13th at 10 a.m., Marc Reibman of USB Payment Procession will join Bill Feehley on MSATP TV to tell us more about USB Payment Processing services.Tune in on Facebook for this episode and more!

Enrolled Agent Inactivation/Termination Letters

Letters have begun going out to Enrolled Agents (EAs) with SSNs ending in 7, 8, 9, or no SSN, who did not renew during this year’s renewal cycle.

Those who did not renew during the 2018 and 2021 cycles will be moved to terminated status. (2,400+). Those who did not renew during the 2021 cycle will be moved to inactive status. (5,400+). Anyone in inactive status can still submit a late renewal for approval; with proof of CE. Anyone in terminated status must re-take the SEE to apply for re-enrollment.

If an EA disagrees and has a record of previously renewing their EA status, they should contact the number on the letter, which is 855-472-5540.

Maryland Chamber Foundation Releases Q1 Economic Report | Maryland Chamber Foundation

We continue to recover from the devastating losses brought about by the COVID-19 pandemic but see increased signs of Maryland’s economy steadily improving. In the first quarter of 2021, Maryland’s year-over-year growth in private sector average hourly earnings was 6.7%, in contrast to 3.6% growth at the national level and significantly above the 3.4% growth the state experienced a year earlier in March 2020. The state’s unemployment rate remains high at 6.0% but is slowly receding, indicating we are heading in the right direction.

For more information, click here.

Draft Schedules K-2 and K-3 Released to Enhance Reporting of International Tax Matters by Pass-Through Entities | IR-2021-998

The Treasury and the IRS released today updated early drafts of new Schedules K-2 and K-3 for Forms 1065, 1120-S, and 8865 for tax year 2021 (filing season 2022). The schedules are designed to provide greater clarity for partners and shareholders on how to compute their U.S. income tax liability with respect to items of international tax relevance, including claiming deductions and credits.

The early release drafts of the schedules are intended to give a preview of the changes before final versions are released.  The release of an early draft of the instructions for the schedules is planned for this summer.

The redesigned forms and instructions will also give useful guidance to partnerships, S corporations and U.S persons who are required to file Form 8865 with respect to controlled foreign partnerships on how to provide international tax information.  The updated forms will apply to any persons required to file Form 1065, 1120-S or 8865, but only if the entity for which the form is being filed has items of international tax relevance (generally foreign activities or foreign partners).

For more information, click here.

Annapolis Data Center Announcement | New Mainframe Password Rule Changes to be Implemented on May 10th

In response to an IRS audit finding, the Annapolis Data Center is implementing a more secure set of password rules to protect sensitive data.  The following 2 security rules will be operational on May 10, 2021:

Consecutive characters from your name: Using 4 or more consecutive characters from your name will generate an error when establishing a new password.

Consecutive characters from previous password:  Using 3 or more consecutive characters, in the same position in your last password, is considered too similar and will generate an error when establishing a new password.

While this change will go into production on May 10, 2021, it will not impact you until your next required password change.  In the meantime, your old password will still work.

If you encounter any issues, please open a Help Desk ticket (servicedesk@marylandtaxes.gov) or call 410-260-7400, and select option 4.