IRS Tax News

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  • 19 Feb 2020 3:58 PM | Anonymous

    WASHINGTON — The Internal Revenue Service today announced it is seeking civic-minded volunteers to serve on the Taxpayer Advocacy Panel (TAP).

    The TAP is a federal advisory committee that listens to taxpayers, identifies major taxpayer concerns, and makes recommendations for improving IRS service and customer satisfaction.

    Taxpayers interested in serving on the panel may apply through March 30.

    “To meet the needs of the taxpaying public, it is critical that the IRS listen to taxpayers to hear what their needs and preferences are,” said Bridget T. Roberts, the Acting National Taxpayer Advocate. “The citizen volunteers who serve on the TAP hear from taxpayers and then bring their collective voice and recommendations to the IRS.

    The TAP reports annually to the Secretary of the Treasury, the IRS Commissioner and the National Taxpayer Advocate. The Office of the Taxpayer Advocate is an independent organization within the IRS that provides support for and oversight of the TAP.

    To the extent possible, the TAP includes members from all 50 states, the District of Columbia, Puerto Rico and one member representing international taxpayers. Each member is appointed to represent the interests of taxpayers in their geographic location as well as taxpayers overall. For the TAP, “international taxpayers” are broadly defined to include U. S. citizens working, living, or doing business abroad or in U.S. territories.

    The TAP is seeking members in the following locations: Alabama, Alaska, Arizona, the District of Columbia, Georgia, Idaho, Illinois, Maryland, Nevada, New Hampshire, New Jersey, New York, North Dakota, Pennsylvania, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia and Wyoming.

    The panel is seeking alternates in the following locations: Alabama, Alaska, Arizona, California, Delaware, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

    Federal advisory committees are required to have a balanced membership in terms of points of view represented. As such, applicants from under-represented groups, such as Native Americans and non-tax professionals, are particularly encouraged to apply. All timely applications, however, will be given consideration.

    New TAP members will serve a three-year term starting in Dec. 2020. Applicants chosen as alternate members will be considered to fill any vacancies that open in their areas during the next three years.

    To be a member of the TAP, a person must be a U.S. citizen, be current with his or her federal tax obligations, be able to commit 200 to 300 volunteer hours during the year, and pass a Federal Bureau of Investigation criminal background check. Members cannot be federally registered lobbyists. Current Department of the Treasury or IRS employees cannot serve on the panel, and former Department of the Treasury or IRS employees and former TAP members must have a three-year separation from their service to be considered for appointment. Tax practitioner applicants must be in good standing with the IRS (meaning not currently under suspension or disbarment).

    For additional information about the TAP or the application process, visit www.improveirs.org or call 888-912-1227 (a toll-free call) and select prompt number five. Callers outside the U.S. may call 214-413-6523 (not a toll-free call) or email the TAP staff at taxpayeradvocacypanel@irs.gov.

    A video is available with more information about the TAP and how to contribute to this dynamic group of volunteers.

  • 19 Feb 2020 3:57 PM | Anonymous

    WASHINGTON — The Internal Revenue Service today issued guidance to help businesses understand how legislation passed in 2018 may benefit those claiming carbon capture credits. Today’s guidance addresses the definition of “beginning of construction” and provides a safe harbor for partnership allocations of the credit.

    After the enactment of the Bipartisan Budget Agreement in February 2018, the IRS issued Notice 2019-32 requesting comments from taxpayers regarding the changes to the carbon capture credit in the new law. After carefully considering the comments, the IRS is issuing guidance to provide clarity, especially regarding the definition of “beginning of construction.”

    In Notice 2020-12, the IRS provides guidance to help businesses determine when construction has begun on a qualified facility or on carbon capture equipment that may be eligible for the carbon capture credit. This notice provides broad guidance in lieu of taxpayers requesting private letter rulings in this area.

    In Revenue Procedure 2020-12, the IRS creates a safe harbor for the allocation rules for carbon capture partnerships similar to the safe harbors developed for partnerships receiving the wind energy production tax credit and the rehabilitation credit. The safe harbor simplifies the application of carbon capture credit rules to partnerships able to claim the credit.

    The IRS anticipates issuing further guidance in the near future on issues ranging from secure geological storage to utilization to recapture of the credit for those claiming credits for carbon capture.

  • 19 Feb 2020 3:56 PM | Anonymous

    Notice 2020-12 addresses the definition of “beginning of construction” for purposes of the carbon oxide sequestration credit under section 45Q. The Notice provides guidance to help businesses determine when construction has begun on a qualified facility or on carbon capture equipment that may be eligible for the section 45Q credit.

    Revenue Procedure 2020-12 provides a safe harbor for partnerships to make valid allocations of the carbon oxide sequestration credit under section 45Q. The safe harbor is similar to those developed for partnerships receiving the wind energy production tax credit and the rehabilitation credit. The safe harbor simplifies the application of section 45Q credit rules to partnerships able to claim the credit.

    Notice 2020-12 and Revenue Procedure 2020-12 will be published in Internal Revenue Bulletin 2020-11 on March 9, 2020.
  • 19 Feb 2020 1:30 PM | Anonymous

    WASHINGTON – As part of a larger effort to ensure compliance and fairness, the Internal Revenue Service today announced that it will step up efforts to visit high-income taxpayers who in prior years have failed to timely file one or more of their tax returns.

    Following the recent and ongoing hiring of additional enforcement personnel, IRS revenue officers across the country will increase face-to-face visits with high-income taxpayers who haven’t filed tax returns in 2018 or previous years. These visits are primarily aimed at informing these taxpayers of their tax filing and paying obligations and bringing these taxpayers into compliance.

    “The IRS is committed to fairness in the tax system, and we want to remind people across all income categories that they need to file their taxes,” said Paul Mamo, Director of Collection Operations, Small Business/Self Employed Division. “These visits focusing on high-income taxpayers will be taking place across the country.  We want to ensure taxpayers know their options to get right with their taxes and avoid bigger issues later.”

    For the current tax season, the IRS reminds taxpayers that everyone should file their 2019 tax return by the April 15 filing deadline regardless of whether they can pay in full. Six-month filing extensions are also available, although that does not extend the April deadline for paying any taxes owed.

    “Taxpayers having delinquent filing or payment obligations should consult a competent tax advisor before waiting to be contacted by an IRS revenue officer, Mamo said. “It is always worthwhile to take advantage of various methods of getting back into filing or payment compliance before being personally contacted by the IRS.”

    For the new visits taking place, high-income non-filers taxpayers are those who generally received income in excess of $100,000 during a tax year and did not file a tax return with the IRS. Taxpayers who exercise their best efforts in filing their tax returns and paying or entering into agreements to pay their taxes deserve to know that the IRS is aggressively pursuing others who have failed to satisfy their filing and payment obligations.

    During the visits, IRS revenue officers will share information and work with the taxpayer to hopefully resolve the tax issue.

    How to pay

    There are many payment options for people having trouble paying their tax bill. Payment plans can be set up quickly online.

    Once returns are filed or an assessment occurs, there are various online payment options available at IRS.gov, including direct pay through a bank account or using a debit or credit card. Other ways to pay include the Electronic Federal Tax Payment System (best option for businesses or large payments; enrollment required), Electronic Funds Withdrawal (using during e-filing), same-day wire (bank fees may apply), check or money order or cash (at a participating retail partner). Those who can’t pay immediately may be able to meet their tax obligation in monthly installments by applying for a payment plan (including installment agreements and those who owe less than $50,000), they can find out if they qualify for an offer in compromise  (a way to settle their tax debt for less than the full amount), or request that the IRS temporarily delay collection until their financial situation improves.

    For those who refuse to pay, the IRS has a number of options available under the law, ranging from a series of civil enforcement actions and, when appropriate, pursuing criminal cases against taxpayers. IRS compliance personnel are also now working more closely with IRS criminal investigators on priority compliance issues, including high-income cases.

     “These compliance visits underscore the importance of people filing their taxes this April, even if they can’t pay the full amount of tax due,” said Hank Kea, Director of Field Collection Operations, Small Business/Self Employed Division. “Not filing because you don’t believe you can pay at the time of filing makes the problem worse, as interest and penalties mount over time. We have many payment options available on IRS.gov to help taxpayers. It’s better to work on these issues up front rather than ignoring it and ultimately getting to the point of the IRS taking more serious action. Our continued use of ever-changing technologies, coupled with additional enforcement personnel, would suggest that waiting is not a viable option for delinquent taxpayers.”

    What’s a revenue officer’s job?
    Revenue officers are trained IRS civil enforcement employees who work to resolve compliance issues, such as missing returns or taxes owed. Revenue officers conduct interviews to gather financial information and provide taxpayers with the necessary steps to become and remain compliant with the law. When necessary, they will take the appropriate enforcement actions to collect the amount owed, following the law while respecting taxpayer rights and following the law.

    Don’t be confused: Visits are not a scam
    For this new initiative, these high-income taxpayers have typically received numerous letters from the IRS over an extended period of time, so they generally realize they have a tax issue.

    Revenue officer visits shouldn’t be confused with scams. Here’s what to look for:

    • While most IRS revenue officer visits to a taxpayer are unannounced, they will always provide two forms of official credentials, both include a serial number and photo of the IRS employee. Taxpayers have the right to see each of these credentials.
    • A legitimate revenue officer helps taxpayers understand and meet their tax obligations. The officer will explain the liability to the taxpayer, along with the consequences of failing to comply with the law. The IRS employee will not make threats nor demand an unusual form of payment for a nonexistent liability.
    • Visits by revenue officers generally occur after numerous contacts by mail about an existing tax issue; taxpayers should be aware they have a tax issue when these visits occur.
    • If someone has an outstanding federal tax debt, the visiting officer will request payment but will provide a range of options, including paying by check written to the U.S. Treasury.
    • More information on identifying legitimate IRS representatives and how to report scams can be found at IRS.gov.
  • 19 Feb 2020 1:29 PM | Anonymous

    WASHINGTON − Leaders from five international tax organizations came together in Sydney, Australia, this week to review the J5’s progress in their fight against transnational tax crime and set priorities for the year ahead.

    The Joint Chiefs of Global Tax Enforcement (J5) was formed in 2018 after a call to arms from the OECD Taskforce on Tax Crime and has been working together to gather information, share intelligence and conduct coordinated operations, making significant progress in each country’s fight against transnational tax crime.

    The J5 includes the Australian Taxation Office (ATO), Her Majesty’s Revenue and Customs (HMRC) from the UK, Internal Revenue Service (IRS) Criminal Investigations from the US, the Canadian Revenue Agency (CRA) and the Dutch Fiscal Information and Investigation Service (FIOD).

    Together, each country is better equipped in the fight against those who commit, promote and enable international tax crimes and money laundering.

    Last month, the group executed a globally coordinated day of action against an international financial institution suspected of facilitating money laundering and tax evasion. Evidence, intelligence and information collection activities such as search warrants, interviews and subpoenas were undertaken in each country and significant information was obtained and shared as a result.

    Australian Taxation Office (ATO) Deputy Commissioner and Australia’s J5 Chief, Will Day said the investigation into this financial institution and its clients is just one example of the work the ATO has been doing with the J5 to investigate Australians who are using offshore arrangements to evade their tax obligations.

    “Tackling the abuse of correspondent banking arrangements was at the heart of our day of action last month, and we are looking beyond just a single financial institution in Central America. We have fears there are many hundreds of Australians caught up in these arrangements and working with our J5 partner agencies we are continuing to tighten the net on those who are engaging in and enabling transnational tax crime.”

    “The effectiveness and success of the J5 is underpinned by a strong understanding of the common risks and threats we face. By working together to identify and understand these issues, we are able to shape and strengthen our operational, tactical and strategic response to focus on those areas that cause the most impact. We’re tackling tax crime together,” Day said.

    The group has shared expertise to identify the most common and impactful mechanisms, enablers and structures that are being exploited to commit transnational tax crime and will be focusing on those criminals who present the greatest threat to the J5 countries in 2020.

    Simon York, Chief and Director of Her Majesty’s Revenue and Customs (HMRC)’s Fraud Investigation Service said that the introduction of automatic exchange of financial information between countries, registers of beneficial ownership, information from worldwide data leaks and improved tax enforcement had made hiding wealth offshore increasingly difficult.

    “What this work shows is that tax evaders and organized criminals are resorting to ever more complex and obscure methods to hide their illicit gains and wealth. To stay one step ahead we have brought together world leading analysts to unpick their complex trails. Being a partner in the J5 means that we have five times the analytical capability, five times the data and five times the insight at our disposal. Harnessing this, we are now shining a light on evaders across the world, targeting our next wave of enforcement activity and ensuring no big-time tax criminal remains beyond our collective reach.”

    “Seeing the transformation of the J5 from a group of countries with similar challenges and similar goals to a fully integrated organization that is seeing operational successes is very exciting and should be a model for international collaboration at all levels,” said Don Fort, Chief of IRS Criminal Investigation.

    “The information shared, efficiencies gained, and investigations started based on the collaboration within this group have moved the needle by years in terms of results and successes. I expect 2020 will be a game changer for the J5 and criminals will not know what hit them.” Fort said.

    Hans van der Vlist, Chief and General Director Fiscal Information and Investigation Service (FIOD), the Netherlands said “The J5 challenge in the United States at the end of 2019 was important in our fight against crypto criminality. The operational cooperation within the J5 is beginning to pay off and we see that the cooperation also has an impact on local investigations. For instance, last Monday the FIOD had action days in the Netherlands in two crypto investigations."

    Canada Revenue Agency (CRA) Chief Eric Ferron said “To attack sophisticated criminal tax evasion, we need coordinated action and to be sharing best practices. This is why we value our partnership with the J5; it has allowed us to broaden our reach, better equipping all member countries to combat tax crimes. We look forward to continued collaboration and providing results as they become available.”

    For more information about J5, please visit www.irs.gov/J5.

  • 18 Feb 2020 2:16 PM | Anonymous

    Revenue Ruling 2020-06 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by § 1274. 

    The rates are published monthly for purposes of sections 42, 382, 412, 642, 1288, 1274, 7520, 7872, and various other sections of the Internal Revenue Code.

    Revenue Ruling 2020-06 will be in IRB:  2020-11, dated March 9, 2020.

  • 14 Feb 2020 1:09 PM | Anonymous

    WASHINGTON — The IRS and its Security Summit partners today called on tax professionals and taxpayers to use the free, multi-factor authentication feature being offered on tax preparation software products. 

    Already, nearly two dozen tax practitioner firms have reported data thefts to the IRS this year. Use of the multi-factor authentication feature is a free and easy way to protect clients and practitioners’ offices from data thefts. Tax software providers also offer free multi-factor authentication protections on their Do-It-Yourself products for taxpayers.

    “The IRS, state tax agencies and the private-sector tax industry have worked together as the Security Summit to make sure the multi-factor authentication feature is available to practitioners and taxpayers alike,” said Kenneth Corbin, Commissioner of the IRS Wage and Investment division. “The multi-factor authentication feature is simple to set up and easy to use. Using it may just save you from the financial pain and frustration of identity theft.”

    Multi-factor authentication means returning users must enter their username/password credentials plus another data point that only they know, such as a security code sent to their mobile phone. For example, thieves may steal passwords but will be unable to access the software accounts without the mobile phones to receive the security codes.

    Multi-factor authentication protections are now commonly offered by financial institutions, email providers and social media platforms to protect online accounts. Users should always opt for multi-factor authentication when it is offered but especially with tax software products because of the sensitive data held in the software or online accounts.

    The IRS reminded tax professionals to beware of phishing scams that are commonly used by thieves to gain control of their computers. Thieves may claim to be a potential client, a cloud storage provider, a tax software provider or even the IRS in their effort to trick tax professionals to download attachments or open links. These scams often have an urgent message, implying there are issues with the tax professionals’ accounts that need immediate attention.

    The IRS also reminds tax professionals that they can track the number of returns filed with their Electronic Filing Identification Number (EFIN) on a weekly basis. This helps ensure EFINS are not being misused. Simply go to e-Services, access the EFIN application and select EFIN status to see a weekly total of returns filed using the EFIN. If there are excessive returns, contact the IRS immediately.

    Taxpayers can learn more about identity theft and how to protect themselves at Identity Theft Central on IRS.gov.

    Tax professionals can learn more about protecting data, signs of theft or reporting data thefts Identity Theft Information for Tax Professionals. Also, Publication 4557, Safeguarding Taxpayer Data, provides a comprehensive overview of steps to protect computer systems and client data.

  • 14 Feb 2020 10:26 AM | Anonymous

    WASHINGTON — Offering time-saving alternatives to a telephone call, the Internal Revenue Service reminds taxpayers they can get fast answers to their refund questions by using the “Where’s My Refund?” tool available on IRS.gov and through the IRS2Go app. 

    The IRS issues nine out of 10 refunds in less than 21 days, and the fastest way to get a refund is to file electronically and choose direct deposit. The time around Presidents Day is a peak period for telephone calls to the IRS, resulting in longer than normal hold times for callers. 

    The question most frequently asked this time of year is, “Where’s my refund?”. The IRS reminds taxpayers that IRS customer service representatives can only research a refund’s status if it has been 21 days or more since the taxpayer filed electronically or six weeks since they mailed a paper return. 

    Taxpayers can avoid the Presidents Day rush and get a personalized answer by using the “Where’s My Refund?” tool. All that is needed is the taxpayer’s Social Security number, tax filing status (single, married, head of household) and exact amount of the tax refund claimed on the return. Alternatively, taxpayers may call 800-829-1954 for the automated phone line, which provides the same information. 

    Within 24 hours of filing a return electronically, the tool can tell taxpayers that their returns have been received. That time extends to four weeks if a paper return is mailed to the IRS, which is another reason to file electronically and choose direct deposit. 

    Once the tax return is processed, “Where’s My Refund?” will tell a taxpayer when their refund is approved and provide a date when they can expect to receive it. “Where’s My Refund?” is updated no more than once every 24 hours, usually overnight, so taxpayers don’t need to check the status more often. 

    Refunds held for certain returns

    As a reminder, by law, the IRS cannot release refunds for Earned Income Tax Credit or Additional Child Tax Credit tax returns before mid-February. “Where’s My Refund?” on IRS.gov and the IRS2Go app will be updated with projected deposit dates for most early Earned Income Tax Credit/Additional Child Tax Credit refund filers by Feb. 22.           

    The IRS expects most EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards by the first week of March, if they chose direct deposit and there are no other issues with their tax return. Taxpayers should check the “Where’s My Refund?” tool for their personalized refund date.

    Please note: Ordering a tax transcript will not speed delivery of tax refunds nor does the posting of a tax transcript to a taxpayer’s account determine the timing of refund delivery. Calls to request transcripts for this purpose are unnecessary. 

    While the IRS still expects to issue more than nine out of 10 refunds in less than 21 days, it’s possible a particular tax return may require additional review and a refund could take longer. Many different factors can affect the timing of a refund. And, remember to take into consideration that many banks do not process payments on weekends or holidays and it can take time for a financial institution to post the refund to a taxpayer’s account or to receive it by mail.

  • 13 Feb 2020 3:16 PM | Anonymous

    WASHINGTON — With a surge of tax returns expected the two weeks following the Feb. 17 Presidents Day holiday, the Internal Revenue Service is offering taxpayers several tips and various time-saving resources to get them the help they need quickly and easily.

    To help avoid this period of high telephone demand, the IRS encourages taxpayers and tax preparers to use online resources available at IRS.gov. And when it comes time to file, taxpayers are encouraged to file electronically and choose direct deposit for faster refunds. Filing electronically reduces tax return errors as the tax software does the calculations, flags common errors and prompts taxpayers for missing information.

    Here are a few featured tips to avoid the rush.

    • Use IRS.gov to track refunds. The IRS issues more than nine out of 10 refunds in less than 21 days. IRS customer service representatives cannot answer refund questions until it has been 21 days or more since the taxpayer filed electronically, or six weeks since they mailed a paper return. But taxpayers can track their refund anytime by using the “Where’s My Refund?” tool on IRS.gov and the IRS2Go app. Taxpayers can also call the IRS refund hotline at 800-829-1954.
    • Taxpayers claiming the Earned Income Tax Credit or the Additional Child Tax Credit can use the “Where’s My Refund?” tool to track refunds too. By law, the IRS cannot release refunds that include EITC or the ACTC before February 15. “Where’s My Refund?” on IRS.gov and the IRS2Go app will be updated with projected deposit dates for most early EITC/ACTC refund filers by Feb. 22. IRS expects most EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards by the first week of March, if they chose direct deposit and there are no other issues with their tax return.
    • Use IRS.gov to find answers to tax questions. IRS offers a variety of online tools to help taxpayers answer common tax questions. For example, taxpayers can search the Interactive Tax Assistant, Tax Topics, Frequently Asked Questions, and Tax Trails to get faster answers.
    • Let free tax software or free volunteer assistance do the work. Most taxpayers who want to prepare their own returns can file electronically for free with IRS Free File. Alternatively taxpayers who qualify can get free tax help from trained volunteers at community sites around the country.
    • Turn to a trusted tax professional. To find more information about choosing a tax return preparer, including understanding the differences in credentials and qualifications, visit www.irs.gov/chooseataxpro.
    • Use digital payment options if additional tax is owed. Some taxpayers may receive a smaller refund or even owe an unexpected tax bill when they file their 2019 tax return particularly if they didn’t do a Paycheck Checkup in 2019. Taxpayers should use the IRS Tax Withholding Estimator to make sure they are withholding enough tax in 2020.
    • Make an appointment before visiting an IRS Taxpayer Assistance Centers. Anyone who needs face-to-face service should make an appointment before showing up. Most TAC visits can be avoided by using online tools available on IRS.gov.
    • Call the employer first for that missing Form W-2. Those who have not received a Form W-2, Wage and Tax Statement, from one or more employers should first contact the issuer to inform them of the missing form. Those who do not get a response must still file on time and may need to use Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans and IRA's Insurance Contracts.
    • Use the IRS Services Guide and the Let Us Help You page on IRS.gov to find additional ways to get help.  
    • Use the Tax Information for Members of the Military page on IRS.gov for details on tax benefits for military members and veterans, filing options and more.
  • 12 Feb 2020 11:17 AM | Anonymous

    WASHINGTON — The Internal Revenue Service is holding a free webinar designed to help gig workers, employers, contractors and other businesses understand their tax reporting responsibilities.

    This free 60-minute webinar will take place on Thursday, Feb. 20 at 2 p.m. Eastern Time. It is open to gig workers, businesses, tax professionals and anyone else interested in the tax rules that affect the gig economy. Tax pros can earn one continuing education credit.

    Topics to be covered include:

    • What is the gig economy?
    • How does a gig worker know whether they are an employee or self-employed?
    • Business expenses and recordkeeping.
    • Rules for home rentals.
    • Tax payment options.

    The webinar will feature a live question and answer session and will be closed captioned for viewers who are deaf or hearing impaired. Anyone interested in attending can register online.

    For more information on the gig economy, visit Understanding the Gig Economy and the Gig Economy Tax Center on IRS.gov.

    Archived versions of past IRS webinars are available at www.irsvideos.gov.

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