WASHINGTON — The Treasury Department and the Internal Revenue Service today issued Notice 2023-20, which provides interim guidance for insurance companies and certain other taxpayers for the new corporate alternative minimum tax (CAMT) until the issuance of proposed regulations.

The Inflation Reduction Act of 2022 created the CAMT, which imposes a 15% minimum tax on the adjusted financial statement income of large corporations for taxable years beginning in 2023. Large corporations, including insurance companies, with average annual adjusted financial statement income exceeding $1 billion are the taxpayers generally affected by the CAMT. The Treasury Department and the IRS have issued Notice 2023-20 to provide certainty to insurance companies and certain other taxpayers.

In particular, Notice 2023-20 provides interim guidance for the determination of adjusted financial statement income as it relates to (1) variable contracts and similar contracts, (2) funds withheld reinsurance and modified coinsurance agreements, and (3) the basis of certain assets held by certain previously tax-exempt entities that received a “fresh start” basis adjustment.

Notice 2023-20 also solicits comments on the rules contained in the notice and certain other issues under consideration. The Treasury Department and the IRS recommend that such comments be submitted by April 3, 2023.

More information may be found on the Inflation Reduction Act of 2022 page on IRS.gov.

WASHINGTON — The Internal Revenue Service announced today that taxpayers who receive certain notices requiring them to send information to the IRS now have the option of submitting their documentation online through IRS.gov.

This new secure step will allow taxpayers or their tax professional to electronically upload documents rather than mailing them in, helping reduce time and effort resolving tax issues.

In this stage of the ongoing effort, nine notices will be available for this feature. This potentially can help more than 500,000 taxpayers each year who receive these notices, which include military personnel serving in combat zone areas and recipients of important credits like the Earned Income Tax Credit and Child Tax Credit.

“This capability is another step forward by the IRS to help taxpayers and improve service,” said IRS Acting Commissioner Doug O’Donnell. “This provides immediate benefits to taxpayers, who have nearly instant confirmation that documents were received by the IRS. In turn, this will dramatically speed up the resolution of issues by removing a time-consuming step in the process. This means people can have their issues resolved much faster, including getting refunds to affected taxpayers faster. We will continue to look at improvements like this as we work to transform the IRS following passage of the Inflation Reduction Act last year.”

Initially, the online correspondence feature will be available to taxpayers who receive one of nine IRS notices. For the most part, the IRS sends these notices to individual tax filers claiming various tax benefits, such as the Earned Income Tax Credit for low- and moderate-income workers, the Child Tax Credit for families with dependents, the Premium Tax Credit for those who obtain health coverage through the Health Insurance Marketplace and members of the military claiming combat zone tax benefits.

Taxpayers receiving these notices can respond securely to IRS online, regardless of whether they have an IRS Online Account.

IRS created the Document Upload Tool

IRS information technology specialists developed a prototype for the Document Upload Tool  in 2021. Since then, the IRS has been testing this feature on a limited number of exam-related notices, and 38% of the responses to these notices have used the agency’s secure electronic communications rather than traditional mail.

How it works

Language on the notice informs the taxpayer to, “Send us your documents using the Documentation Upload Tool within 30 days from the date of this notice.” It includes the link and a unique access code.

• The taxpayer can open the link in any browser and then input their unique code, their first and last name and their Social Security, Individual Taxpayer Identification or Employee Identification number.
• The taxpayer can then securely upload scans, photos or digital copies of documents (maximum of 15MB per file, up to 40 files).
• The taxpayer receives a confirmation that the IRS received their documents, and the IRS employee assigned the case can manage the transmitted documents.

What notices qualify?

Taxpayers who receive one of the following notices with the link and access code can choose to upload their documents:

• CP04, relating to combat zone status.
• CP05A, information request related to a refund.
• CP06 and CP06A, relating to the Premium Tax Credit.
• CP08, relating to the Child Tax Credit.
• CP09, relating to claiming the Earned Income Tax Credit.
• CP75, relating to the EITC.
• CP75a, relating to the EITC.
• CP75d, relating to the EITC and other credits.

Future expansion planned

In the coming months and years, the IRS plans to expand this capability to dozens of other notices. In addition, the IRS will offer digital correspondence on a variety of other taxpayer interactions. During live interactions such as phone calls with taxpayers, IRS employees will be able to grant upload access by providing the link and unique access code.

With secure digital correspondence, everybody wins

For taxpayers and tax professionals working with the IRS, this new capability reduces the correspondence burden, ensures tax compliance and improves the customer experience. For IRS employees, this reduces paper correspondence, decreases processing time and speeds case resolution.

For more information, see the fact sheet Resolving cases with secure digital correspondence for taxpayers on IRS.gov.

WASHINGTON — With the nation entering a peak period for filing taxes, the Internal Revenue Service urges taxpayers to use online tools to get answers quickly and avoid phone delays during a traditional peak period for IRS phone lines around Presidents Day. 

Presidents Day weekend, when many people prepare their taxes, historically marks a peak period for IRS phone lines. During the two week February period following Presidents Day, the IRS recommends turning first to the self-help tools available online on IRS.gov to avoid delays.

“The IRS continues to see improvements this tax season compared to previous years, including better phone service,” said IRS Acting Commissioner Doug O’Donnell. “But we always see a significant surge in phone traffic around Presidents Day. With the calendar advancing, millions of people turn their attention to taxes during this period. To avoid potential delays, we encourage people to check IRS.gov first, which can provide much of the same information instantly to taxpayers.”

Easy-to-use and available anytime, the IRS website can help taxpayers file and pay taxes, find information about their accounts, determine eligibility for tax credits and get answers to tax questions.

And when it comes time to file, taxpayers are encouraged to e-file and choose direct deposit to get their refunds as quickly as possible.

Available IRS tools to help taxpayers through tax filing season
The IRS recommends trying the following self-help resources available to taxpayers 24/7 for a smooth and easy tax filing experience.

• IRS.gov offers a variety of online tools to help taxpayers answer common tax questions. For example, taxpayers can search the Interactive Tax Assistant, Tax Topics and Frequently Asked Questions to find answers.
• The Earned Income Tax Credit Assistant allows taxpayers to check eligiblity for this valuable credit. Taxpayers can also calculate how much EITC they may get and find answers to EITC questions.
• IRS Online Account gives taxpayers secure access to personal tax account information including balance, payments and tax records with previous year’s adjusted gross income information.
• The IRS offers basic tax information in several languages to help taxpayers get the information they need to file a federal tax return and pay any tax owed.
• IRS Free File provides eligible taxpayers who want to prepare their own returns free tax preparation and the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs offer free tax help from certified volunteers at thousands of sites across the country.
• The “Where’s My Refund?” tool on IRS.gov and the IRS2Go app allow taxpayers to check the status of their refund within 24 hours after the IRS accepts their e-filed tax return. Where's My Refund? updates once every 24 hours, usually overnight, so taxpayers don’t need to check more than once a day. Tax law prevents the IRS from issuing refunds that include the EITC and/or the Additional Child Tax Credit before Feb. 15. But not to worry, “Where’s My Refund?” should provide an updated refund status for most early filers by Feb. 18 and EITC/ACTC related refunds should be available in taxpayer bank accounts or on debit cards by Feb. 28 if they chose direct deposit and there are no other issues with their tax return.
• The Tax Withholding Estimator can help taxpayers determine the right amount of tax to have withheld from a paycheck. Taxpayers should submit a new Form W-4 to their employer if an adjustment is needed.
• The IRS Services Guide and the Let Us Help You page on IRS.gov can help taxpayers find additional ways to get help.

For those who need to talk to someone, the IRS has hired an additional 5,000 customer service representatives to help staff its toll-free customer service line. IRS Taxpayer Assistance Centers or TACs are another resource for individuals who need more than online tools or the IRS toll-free customer service line to solve a tax matter. Anyone who needs face-to-face service should make an appointment or check for special Saturday hours before visiting.  

Missing information?
Taxpayers should call employers for missing Forms W-2. Those who did not receive a Form W-2, Wage and Tax Statement, from one or more employers by Jan. 31 should contact the issuer to inform them of the missing form.

Those who do not get a response from an issuer 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, IRA's Insurance Contracts, Etc.
 
For a copy of Form 1099 or 1042 to report Social Security income, visit the Social Security Administration website. These forms can be downloaded through my Social Security account. It’s fast and secure.

IR-2023-23, Feb. 10, 2023

WASHINGTON – The Internal Revenue Service provided details today clarifying the federal tax status involving special payments made by 21 states in 2022.

The IRS has determined that in the interest of sound tax administration and other factors, taxpayers in many states will not need to report these payments on their 2022 tax returns.

During a review, the IRS determined it will not challenge the taxability of payments related to general welfare and disaster relief. This means that people in the following states do not need to report these state payments on their 2022 tax return: California, Colorado, Connecticut, Delaware, Florida, Hawaii,
Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island. Alaska is in this group as well, but please see below for more nuanced information.

In addition, many people in Georgia, Massachusetts, South Carolina and Virginia also will not include state payments in income for federal tax purposes if they meet certain requirements. For these individuals, state payments will not be included for federal tax purposes if the payment is a refund of state taxes paid and either the recipient claimed the standard deduction or itemized their deductions but did not receive a tax benefit.

The IRS appreciates the patience of taxpayers, tax professionals, software companies and state tax administrators as the IRS and Treasury worked to resolve this unique and complex situation. The IRS is aware of questions involving special tax refunds or payments made by certain states related to the pandemic and its associated consequences in 2022. A variety of state programs distributed these payments in 2022 and the rules surrounding their treatment for federal income tax purposes are complex. While in general payments made by states are includable in income for federal tax purposes, there are exceptions that would apply to many of the payments made by states in 2022.

To assist taxpayers who have received these payments file their returns in a timely fashion, the IRS is providing the additional information below.

Refund of state taxes paid
If the payment is a refund of state taxes paid and either the recipient claimed the standard deduction or itemized their deductions but did not receive a tax benefit (for example, because the $10,000 tax deduction limit applied) the payment is not included in income for federal tax purposes. Payments from the following states in 2022 fall in this category and will be excluded from income for
federal tax purposes unless the recipient received a tax benefit in the year the taxes were deducted.
•Georgia
•Massachusetts
•South Carolina
•Virginia

General welfare and disaster relief payments
If a payment is made for the promotion of the general welfare or as a disaster relief payment, for example related to the outgoing pandemic, it may be excludable from income for federal tax purposes under the General Welfare Doctrine or as a Qualified Disaster Relief Payment. Determining whether payments qualify for these exceptions is a complex fact intensive inquiry that depends on a number of considerations.

The IRS has reviewed the types of payments made by various states in 2022 that may fall in these categories and given the complicated fact-specific nature of determining the treatment of these payments for federal tax purposes balanced against the need to provide certainty and clarity for individuals who are now attempting to file their federal income tax returns, the IRS has determined that in the best interest of sound tax administration and given the fact that the pandemic emergency declaration is ending in May, 2023 making this an issue only for the 2022 tax year, if a taxpayer does not include the amount of one of these payments in its 2022 income for federal income tax purposes, the IRS will not challenge the treatment of the 2022 payment as excludable for income on an original or amended return.

Payments from the following states fall in this category and the IRS will not challenge the treatment of  these payments as excludable for federal income tax purposes in 2022.
•Alaska1
•California
•Colorado
•Connecticut
•Delaware
•Florida
•Hawaii
•Idaho
•Illinois2
•Indiana
•Maine
•New Jersey
•New Mexico
•New York2
•Oregon
•Pennsylvania
•Rhode Island

For a list of the specific payments to which this applies, please see this chart.

Other payments
Other payments that may have been made by states are generally includable in income for federal income tax purposes. This includes the annual payment of Alaska’s Permanent Fund Dividend and any payments from states provided as compensation to workers. 

When people get married their tax situation often changes. A taxpayer's marital status as of December 31 determines their tax filing options for the entire year, but that's not all newlyweds need to know.

Here's a tax checklist for newly married couples:

Name and address changes

• Name – When a name changes through marriage, it's important to report that change to the Social Security Administration. The name on a person's tax return must match what is on file at the SSA. If it doesn't, it could delay any tax refund. To update information, taxpayers should file Form SS-5, Application for a Social Security Card. It is available on SSA.gov, by phone at 800-772-1213 or at a local SSA office.

• Address – If marriage means a change of address, the IRS and U.S. Postal Service need to know. To do that, people should complete and send the IRS Form 8822, Change of Address. Taxpayers should also notify the postal service to forward their mail by going online at USPS.com or visiting their local post office.

Withholding

• After getting married, couples should consider changing their withholding. Newly married couples must give their employers a new Form W-4, Employee's Withholding Allowance within 10 days. If both spouses work, they may move into a higher tax bracket or be affected by the additional Medicare tax. They can use the Tax Withholding Estimator on IRS.gov to help complete a new Form W-4. Taxpayers should review Publication 505, Tax Withholding and Estimated Tax, for more information.

Filing status

• Married people can choose to file their federal income taxes jointly or separately each year. While filing jointly is usually more beneficial, it's best to figure the tax both ways to find out which makes the most sense. Taxpayers should remember, if a couple is married as of December 31, the law says they're married for the whole year for tax purposes.

Scams

• All taxpayers should be aware of and avoid tax scams. The IRS will never initiate contact using email, phone calls, social media or text messages. First contact generally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out.

More Information:

• Topic 157, Change Your Address – How to Notify the IRS

WASHINGTON — The Internal Revenue Service today reminded employers and self-employed individuals that chose to defer paying part of their 2020 Social Security tax liability that their second annual installment of the deferred amount is due on Dec. 31, 2022.

As part of the COVID relief provided during 2020, employers could choose to put off paying the employer’s share of their Social Security tax liability, which is 6.2% of wages. Self-employed individuals could also choose to defer a similar amount of their self-employment tax. Generally, half of that deferral was due on Dec. 31, 2021. The other half is due on Dec. 31, 2022.

Earlier this fall, the IRS sent reminder notices to affected employers and self-employed individuals. The agency noted, however, that those affected are still required to make the payment on time, even if they did not receive a notice.

How to repay the deferred taxes
Employers and individuals have several options for making this payment. Deferral payments can made through the Electronic Federal Tax Payment System (EFTPS), Direct Pay, by debit card, credit card or digital wallet, or with a check or money order. No matter which payment option is chosen, it must be made separately from other tax payments and deposits. This will ensure that it is credited properly and will help avoid follow-up bills or notices.

EFTPS
Employers and individuals can make the deferral payments through enrollment in the Electronic Federal Tax Payment System, a free service available from the Treasury Department. On the Tax Type Selection screen, choose Deferred Social Security Tax and then change the date to the applicable tax period (the calendar quarter in 2020 for which tax was deferred). Visit EFTPS.gov, or call 800-555-4477 or 800-733-4829 for details.

Direct Pay
Alternatively, self-employed individual taxpayers can choose Direct Pay to pay directly from a checking or savings account. This service is available free only on IRS.gov/payments/direct-pay. Select the "Balance Due” reason for payment and apply the payment to the 2020 tax year where the payment was deferred. Direct Pay is not available to pay employment taxes.

Debit card, credit card or digital wallet
If paying with a credit card, debit card or digital wallet, select "installment agreement." Apply the payment to the 2020 tax year where the payment was deferred. Note that the IRS does not charge a fee for this service, but the authorized third-party payment processors do. Visit IRS.gov/Payments for details.

Check or money order
Make any check or money order payable to United States Treasury, not IRS. For more information on where to mail payments see Instructions for Form 941. 

National Tax Security Awareness Week, Day 4: Choosing a unique Identity Protection PIN adds extra safety for taxpayers

IRS YouTube Video:
New Security Measures Help Protect Against Tax-Related Identity Theft - English

WASHINGTON – As part of a broader effort to increase security, the Internal Revenue Service and the Security Summit partners today reminded taxpayers they could get extra protection starting in January by joining the agency’s Identity Protection Personal Identification Number (IP PIN) program.

Anyone who has a Social Security number (SSN) or an Individual Taxpayer Identification Number (ITIN) and is able to verify their identity is eligible to enroll in the IP PIN program. More than 6.6 million taxpayers are now protecting themselves against tax-related identity theft by participating in the IP PIN program. Last year, the IRS made changes to the program to make it easier for more taxpayers to join. The fastest and easiest way to receive an IP PIN is by using the Get an IP PIN tool, which will be available in January.

Today’s reminder marks the fourth day of National Tax Security Awareness Week, which runs through Dec. 2. The Security Summit sponsors this annual observance as part of a larger effort between the IRS, the state tax agencies as well as the nation’s tax software and tax professional industries.

The Security Summit was established in 2015 to protect taxpayers and the nation’s tax system against tax-related identity theft. This unique collaboration between the public and private sectors has increased mutual defenses against criminals trying to file fraudulent tax returns and steal refunds.

One of the critical features of the IRS system involves an IP PIN, which is a six-digit number assigned to eligible taxpayers to help prevent the misuse of their Social Security number or Individual Taxpayer Identification Number on fraudulent federal income tax returns.

An IP PIN is known only to the taxpayer and the IRS. Initially designed for confirmed victims of tax-related identity theft, the IP PIN program was expanded in 2021 to include any taxpayer nationwide who wants the additional protection and security of using an IP PIN to file tax returns with the IRS.

“Preventing someone from filing a tax return under another person’s name is the main reason we want people to have this special code,” said IRS Acting Commissioner Doug O’Donnell. “We encourage people to apply for the code when the system opens up in January. This step provides an extra line of protection for taxpayers – and their tax return.”

An IP PIN helps the IRS verify a taxpayer’s identity and accept their federal income tax returns, regardless of whether they are filing electronically or on paper. The online Get an IP PIN tool at IRS.gov/IPPIN displays the taxpayer’s IP PIN. Any participating taxpayer will use the tool in each subsequent year to obtain a new number.

The IRS urges any IP PIN applicant previously rejected during the identity authentication process to try applying again in 2023. The authentication process has been refined and improved, enabling many taxpayers screened out in the past to have a better chance of passing the authentication process.

The Electronic Tax Administration Advisory Committee, or ETAAC, earlier this year highlighted the importance of the IP PIN to taxpayers and tax professionals.

"The IP PIN is the number one security tool currently available to taxpayers from the IRS," the independent advisory group said in its annual report to Congress. "This tool is the key to making it more difficult for criminals to file false tax returns in the name of the taxpayer. In our view, the benefits of increased IP PIN use are many."

The ETAAC also recommended the IRS continue to highlight and promote the IP PIN through a public awareness effort. As part of this effort, the IRS is highlighting the IP PIN as part of National Tax Security Awareness Week. The IRS also continues to raise awareness of special items including Publication 5367, IP PIN Opt-In Program for Taxpayers, in English and Spanish, so that tax professionals can print and share the IP PIN information with clients. Special posters are also available in English and Spanish.

Key points about the IP PIN program
Before applying, keep these key points in mind about the IP PIN program:

• For 2023, the Get an IP PIN tool is scheduled to launch on Jan. 09, 2023. It’s the fastest and easiest way to get an IP PIN. It is also the only option that immediately reveals the IP PIN to the taxpayer. Therefore, the IRS urges everyone to try the Get an IP PIN tool before pursuing other options.
• No identity theft affidavit is required for taxpayers opting in. Anyone who voluntarily applies for an IP PIN does not need to file Form 14039, Identity Theft Affidavit, with the IRS.
• The IP PIN is valid for one year. This means that each January, any participating taxpayer must obtain a newly generated IP PIN.
• Be sure to enter the IP PIN on any return, whether it is filed electronically or on paper. This includes any amended returns or returns for prior years. Doing so will help avoid processing delays or having the return rejected by the IRS.
• Anyone with a Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN) who can verify their identity is eligible for the IP PIN opt-in program.
• Any eligible family member can get an IP PIN. This includes the primary taxpayer (the person listed first on a tax return), the secondary taxpayer (on a joint return, the person listed second on the return), or any of their dependents.
• Never reveal an IP PIN to anyone. The only exception is a taxpayer who uses a trusted tax professional to file their return. Even then, only share the IP PIN with the trusted tax pro when it is time to sign and submit the return. The IRS will never ask for an IP PIN. Remember to watch out: Phone calls, emails and texts requesting an IP PIN are scams. Third parties offering to assist taxpayers to establish or re-gain access to IRS online accounts and asking for the taxpayer’s personal information including address, Social Security number or Individual Taxpayer Identification number (ITIN) and photo identification use this information to sell to others, or file fraudulent tax returns, open credit accounts and more.
• Identity theft victims should still fill out an ID theft affidavit. Any confirmed tax-related identity theft victim still needs to file Form 14039 with the IRS if the agency rejects their e-filed tax return due to a duplicate SSN filing. The IRS will then investigate their case. Once the fraudulent tax return is removed from their account, the IRS will automatically mail an IP PIN to the confirmed victim at the start of the following calendar year. Because of security risks, confirmed identity theft victims cannot opt-out of the IP PIN program.

Options for people who can’t pass the online authentication process
Two options are available for people who cannot pass the IRS online identity authentication process. One involves filing Form 15227, and the other requires a visit to an IRS Taxpayer Assistance Center (TAC). Unlike the online option, both of these options involve, for security reasons, a delay in receiving an IP PIN.

Form 15227: For processing year 2023, individuals with an adjusted gross income of $73,000 or less and those filing jointly with an adjusted gross income (AGI) of $146,000 or less with access to a telephone can complete Form 15227 and either mail or fax it to the IRS. An IRS representative will then call them to verify their identity with a series of questions. Taxpayers choosing this option who pass the identity authentication process will generally receive their IP PIN in about a month.

IRS Taxpayer Assistance Centers: Any taxpayer who is ineligible to file Form 15227 may make an appointment to visit an IRS Taxpayer Assistance Center (TAC). Anyone using this option must bring two forms of picture identification. Because this is in-person identity verification, an IP PIN will be mailed to the taxpayer after their visit. Usually, allow three weeks for delivery. To find the nearest TAC, use the IRS Local Office Locator online tool or call 844-545-5640.

As tax professionals begin preparing for the upcoming filing season, reviewing their security measures should be at the top of their to-do list. The Taxes-Security-Together Checklist can help tax them identify the basic steps they should take to safeguard their clients and their business.

Here are some of the recommended safety measures.

Have security and data theft plans
The IRS and Security Summit partners remind tax professionals that federal law requires them to have a written information security plan. In addition to the required information security plan, tax pros also should consider an emergency response plan should they experience a breach and data theft. This time-saving step should include contact information for the IRS Stakeholder Liaisons, who are the first point of contact for data theft reporting to the IRS and to the states.

Use multi-factor authentication to protect tax accounts
Practitioners can download to their mobile phones readily available authentication apps offered through Google Play or the Apple Store. These apps will generate a security code. Codes may also go to a preparer's email or text, but the IRS notes those are not as secure as the authentication apps. Tax professionals can search for "authentication apps" in a search engine to learn more. For more information on multi-factor authentication, taxpayers should visit the Cybersecurity and Infrastructure Security Agency website

Use virtual private networks to protect remote sites
A VPN provides a secure, encrypted way to transmit data between a remote user via the internet and the company network. As teleworking or working from home continues, VPNs are critical to protecting and securing internet connections.

Failure to use a VPN for remote communication can allow an attacker to eavesdrop on network communications. 

Tax professionals should consult cybersecurity experts whenever possible. Practitioners can also search for "best VPNs" to find a legitimate vendor, or major technology sites often provide lists of top services. They should never click on a "pop-up" advertisement for a security product. Those generally are scams.

Avoid phishing scams and attempts to steal EFINs
Phishing emails generally have an urgent message, such as "account password expired." They direct users to an official-looking link or attachment. However, the link may take users to a fake site made to appear like a trusted source, where it requests a username and password. The attachment may contain malware, which secretly downloads software that tracks keystrokes and allows thieves to eventually steal all the tax pro's passwords.

Scam emails can target tax pros by seeking EFIN information. One scam example says it's from "IRS Tax E-Filing" and has the subject line "Verifying EFIN before e-filing."

Tax pros should not take any of the steps outlined in these types of email, especially responding to the email.

Those who receive a scam email should save it as a file and then send it as an attachment to phishing@irs.gov. They also should notify the Treasury Inspector General for Tax Administration to report the IRS impersonation scam. Both TIGTA and the IRS Criminal Investigation division are aware of spear phishing scams targeting tax preparers.

WASHINGTON – The Internal Revenue Service, along with state tax agencies and the nation's tax industry, today announced a special week focusing attention on empowering taxpayers to protect sensitive financial information against identity thieves as the holidays and the 2023 tax season get closer.
 
Now in its seventh year, the annual National Tax Security Awareness Week takes place from Nov. 28-Dec. 2. The event is part of a larger effort that continues by the Security Summit, the coalition of the IRS, the states and the nation’s tax software and tax professional community. The group formed in 2015 to combat tax-related identity theft by strengthening protections against fraud and raising security awareness.
 
With the holidays and tax season approaching, the Summit partners warned taxpayers and tax professionals to take extra steps to protect their financial and tax information. People face a heightened risk in coming months as fraudsters take advantage of the holiday season to trick people into sharing sensitive personal information by email, text message and online. Identity thieves use that information to try to file tax returns and steal refunds.
 
To help combat this, the Summit partner’s National Tax Security Awareness Week will feature a week-long series of educational materials to help protect individuals, businesses and tax professionals from identity theft. The effort will include a Nov. 29 webinar titled Deeper Dive Into Emerging Cyber Crimes and Crypto Tax Compliance, special informational graphics and a social media effort on Twitter and Instagram through @IRSnews and #TaxSecurity.

“Taxpayers and tax professionals need to remain vigilant for increasingly sophisticated scams that look to steal sensitive financial information,” said IRS Acting Commissioner Doug O’Donnell. “The Security Summit effort focuses on highlighting simple steps that small businesses and people in all walks of life can take to protect their information, helping them avoid problems at tax time.”
 
The IRS and Summit partners continue to see constantly evolving threats and scams. They mimic IRS and others in the tax community through fake emails, texts and online scams. These schemes frequently use recent tragedies or charitable groups to coax people into sharing sensitive financial data.
 
“The heightened risk to taxpayers poses a real threat. The criminals continue to evolve and are always looking for opportunities to fraudulently obtain this information,” said Neena Savage, President of the Board of Trustees for the Federation of Tax Administrators and Tax Administrator for Rhode Island. “We urge everyone to take the steps necessary to protect their sensitive information, which simultaneously helps strengthen the joint work conducted by the states, the IRS and the tax industry through the Security Summit partnership.”
 
As Security Summit partners increased their joint defenses against identity theft in recent years, including through the Identity Theft Information Sharing and Analysis Center (ISAC), fraudsters have increasingly looked for ways to obtain sensitive personal financial information to help slip past common defenses. That has made tax professionals – who hold valuable tax information for their clients – a tempting target for scam artists.
 
“The innovative Summit partnership between the public and private sectors has created important protections against tax-related identity theft,’ said Julie Magee, Tax Regulatory Lead at Cash App Taxes and an original member of the Security Summit who currently serves as the group’s communications co-chair. “This collaborative effort continues to thwart identity thieves, helping protect taxpayers and tax professionals while also safeguarding the federal and state tax systems essential to running our nation.”
 
With International Fraud Awareness Week underway through Nov. 19 this year, the Security Summit offers a preview of the upcoming National Tax Security Awareness Week that begins Nov. 28.
 
National Tax Security Awareness Week 2022 highlights
 
Cyber Monday: Protect personal and financial information online
The IRS and the Security Summit partners remind people to take these basic steps when shopping online:

• Use security software for computers and mobile phones – and keep it updated.
• Make sure anti-virus software for computers has a feature to stop malware, and that there is a firewall enabled that can prevent intrusions.
• Use strong and unique passwords for all accounts.
• Use multi-factor authentication whenever possible.
• Shop only secure websites; look for the "https" in web addresses and the padlock icon; avoid shopping on unsecured and public Wi-Fi in places like coffee shops, malls or restaurants. 

Tax professionals should review their security protocols
As identity thieves continue targeting tax professionals, the IRS and the Summit partners urge practitioners to review the “Taxes-Security-Together” Checklist, including:

• Deploy basic security measures.
• Use multi-factor authentication to protect tax software accounts.
• Create a Virtual Private Network if working remotely.
• Create a written data security plan as required by federal law.
• Know about phishing and phone scams.
• Create data security and data theft recovery plans. 
  

Get an Identity Protection PIN
Taxpayers who can verify their identities online may opt into the IRS IP PIN program – a tool taxpayers can use to protect themselves – and their tax refund. Here’s what taxpayers need to know:

• The Identity Protection PIN or IP PIN is a six-digit code known only to the individual and the IRS. It provides another layer of protection for taxpayers’ Social Security numbers on tax returns.
• Use the Get an Identity Protection PIN (IP PIN) tool at IRS.gov/IPPIN to immediately get an IP PIN.
• Never share the IP PIN with anyone but a trusted tax provider.

Businesses should watch out for tax-related scams and implement safeguards
Most cyberattacks are aimed at small businesses with fewer than 100 employees. Some details from this segment include:

• Learn about best security practices for small businesses.
• IRS continues protective masking of sensitive information on business transcripts.
• A Business Identity Theft Affidavit, Form 14039-B, is available for businesses to report theft to the IRS.
• Beware of various scams, especially the W-2 scam that attempts to steal employee income information.
• Check out the “Business” section on IRS’s Identity Theft Central at IRS.gov/identify theft.  

Earlier this year, the Protect Your Clients; Protect Yourself campaign encouraged tax professionals to focus on fundamentals and to watch out for emerging vulnerabilities for those practitioners using cloud-based services for their practice.
 
Additional resources
In addition to reviewing IRS Publication 4557, Safeguarding Taxpayer Data, tax professionals can also get help with security recommendations by reviewing Small Business Information Security: The Fundamentals by the National Institute of Standards and Technology. The IRS Identity Theft Central pages for tax pros, individuals and businesses have important details as well.
 
The IRS and Security Summit partners also share YouTube videos on security steps for taxpayers. The videos can be viewed or downloaded at Easy Steps to Protect Your Computer and Phone and Security Measures Help Protect Against Tax-Related Identity Theft.
 
Employers can share Publication 4524, Security Awareness for Taxpayers, with their employees and customers and tax professionals can share with clients.

A second attorney and two tax professionals have been indicted in the $1 billion Garza tax shelter scheme. Attorney and CPA Kevin McDonnell and CPA James Richardson, co-owners of tax preparation and accounting firm McDonnell Richardson, P.C., were added to the case in a superseding indictment recently filed. The pair are charged with one count of conspiracy to defraud the United States, one count of conspiracy to commit wire fraud, and five counts of assisting in the preparations of fraudulent tax returns. Craig Fenton, a tax manager at McDonnell Richardson, was indicted on the same charges. The alleged mastermind of the scheme, attorney Joseph Garza, was previously indicted on 18 counts of wire fraud, one count of conspiracy to commit wire fraud, and 22 counts of aiding and assisting in the preparation of fraudulent income tax returns. The superseding indictment added a charge of conspiracy to defraud the United States.