IRS News for Business - July 2018IRS NEWS FOR BUSINESS PROFESSIONALS
Early July 2018
►UPCOMING EVENTS for Tax Professionals
IRS Missouri Tax Symposium
Thursday August 23, 2018 –
Will be held in St. Charles, MO
IRS presenters from various business units
Earn 7 hours IRS CE credit at this all day event
IRS Southern Illinois Tax Symposium
Wednesday September 19, 2018 –
Will be held in Edwardsville, IL
IRS presenters from various business units
Still working on the Agenda
Earn 7 hours IRS CE credit at this all day event
Link to register: - https://commerce.cashnet.com/
None scheduled at this time.
►Recent IRS Videos
Here is a video tax tip from the IRS: Part-Time and Summer Jobs English
Subscribe today: The IRS YouTube channels provide short, informative videos on various tax related topics in English, Spanish and ASL. Español | Inglés | ASL
Suscríbase hoy: Los canales del IRS en YouTube brindan videos cortos e informativos en una variedad de temas tributarios en español, inglés y ASL. IRS Video Portal contains video and audio presentations on topics of interest to small businesses, individuals and tax professionals. You will find video clips of tax topics, archived versions of live panel discussions and webinars.
Atlanta IRS Tax Forum Opens Next Week with Focus on Tax Reform
The first of the 2018 IRS Nationwide Tax Forums opens next Tuesday in Atlanta with a slate of seminars focused on tax reform.
IRS experts will present the following seminars:
• Highlights of Tax Changes from a Tax Forms Perspective
• Tax Reform Highlights for Employers
• Tax Reform Highlights for Small Businesses and Pass Through Entities
• Get Ready for the Tax Cuts and Jobs Act New Due Diligence Requirements
IRS association partners will also lead Tax Reform-themed seminars on topics such as Section 199A Qualified Business Income Deduction Allowance, S Corporations and Expensing/Section 179.
The Forum agenda also includes several sessions on cybersecurity and data theft prevention. Altogether, attendees can choose from 40 seminars and workshops and earn up to 18 continuing education credits.
It’s not too late to register. To sign up for Atlanta or one of the other IRS Tax Forums, visitIRSTaxForum.com.
The 2018 Nationwide Tax Forums take place around the country. Other Forums are scheduled for: Atlanta, July 10-12; San Diego, Aug. 7-9; Chicago, Aug. 21-23; and Orlando, Sept. 11-13. Visit the IRS Nationwide Tax Forum website
New Form 1040 for 2019 Tax Season
The IRS today announced plans to streamline the Form 1040 into a shorter, simpler form for the 2019 tax season. The new Form 1040 consolidates the current 1040, the 1040A and the 1040EZ into one form. The IRS will work with the tax community to finalize the streamlined Form 1040 over the summer to ensure a smooth transition.
Tax professionals can review a draft copy of the new Form 1040 and submit comments regarding the draft to WI.1040.Comments@IRS.gov.
IRS Letter CP2000
Learn about the IRS CP2000 letter and how to respond to it on behalf of your clients by reviewing this new YouTube video https://youtu.be/3R0POvqL3Ko.
You can watch this video and others on the IRS YouTube Channel.
IRS Letter CP3219A: Statutory Notice of Deficiency
What to do when your client receives a CP3219A statutory notice of deficiency from the IRS? Find out in this new YouTube video.
For this and other videos, visit the IRS YouTube Channel.
ETAAC Issues Annual Report to Congress
The Electronic Tax Administration Advisory Committee (ETAAC) this week released its annual reportto Congress with numerous recommendations on electronic tax administration. ETAAC works with the Security Summit, a joint effort of the IRS, state tax administrators, tax software providers, tax professionals and financial services firms to fight fraud.
Taxpayer Advocate Report Focuses on Customer Service
The National Taxpayer Advocate this week identified priority areas in a mid-year report to Congress. The report focuses on customer service challenges and also presents a review of the 2018 filing season.
Protect Your Clients; Protect Yourself
Cybersecurity is a hot topic for tax professionals these days. Stay up to date. Bookmark Protect Your Clients, Protect Yourself.
Notice 2018-59 provides two methods for taxpayers to establish the beginning of construction (Physical Work Test and Five Percent Safe Harbor), a Continuity Requirement for both methods, rules for transferring energy property, and additional rules applicable to the beginning of construction requirement of section 48 of the Internal Revenue Code.
What taxpayers can do when a letter arrives this summerIRS Tax Tip 2018-101
July 2, 2018
Some taxpayers will receive a letter from the IRS this summer. Taxpayers should not panic and remember that they have fundamental rights when interacting with the agency.
These rights are in the Taxpayer Bill of Rights. Among other things, these rights dictate that letters from the IRS must include:
- Details about what the taxpayer owes, such as tax, interest and penalties.
- An explanation about why the taxpayer owes the taxes.
- Specific reasons about why the IRS may have denied a refund claim.
- Read the entire letter carefully. Most letters deal with a specific issue and provide specific instructions on what to do.
- Compare it with the tax return. If a letter indicates a changed or corrected tax return, taxpayer should review the information and compare it with their original return.
- Respond. Taxpayers should:
- Respond to a letter with which they do not agree.
- Mail a letter explaining why they disagree.
- Mail their response to the address listed at the bottom of the letter.
- Include information and documents for the IRS to consider.
- Allow at least 30 days for a response.
- Reply timely if necessary. If a taxpayer agrees with the information, there’s no need to contact the IRS. However, when a specific response date is in the letter, there are two main reasons a taxpayer should respond by that date:
- To minimize additional interest and penalty charges.
- To preserve appeal rights if the taxpayer doesn’t agree.
- Pay. Taxpayers should pay as much as they can, even if they can’t pay the full amount they owe. They can pay online or apply for an Online Payment Agreement or Offer in Compromise.
- Contact the IRS if necessary. For most letters, there’s no need to call the IRS or make an appointment at a taxpayer assistance center. If a call seems necessary, the taxpayer can call the phone number in the upper right-hand corner of the letter. They should have a copy of the tax return and letter on hand when calling.
- Keep the letter. A taxpayer should keep copies of any IRS letters or notices received with their tax records.
2) Here’s how taxpayers can protect themselves from scammers
Tax Tip Number 2018-102
July 3, 2018
Knowledge is power, especially when it comes to avoiding tax scams. Here’s what taxpayers need to know to determine whether an encounter — in person, over the phone or by email — is an imposter or an actual IRS employee:
The IRS Does Not:
- Call to demand immediate payment using a specific payment method, such as a prepaid debit card, gift card or wire transfer.
- Demand taxpayers pay taxes without the opportunity to question or appeal the amount owed.
- Threaten to bring in local police, immigration officers or other law enforcement to have someone arrested for not paying.
- Threaten to revoke someone’s driver’s license, business licenses or immigration status.
The IRS Does:
- In general, first mail a bill to any taxpayer who owes taxes.
- Normally initiate contact with taxpayers through mail delivered by the United States Postal Service.
- Present official identification when visiting a taxpayer. Taxpayers have the right to see these credentials, and – if they would like – the representative will provide them with a dedicated IRS phone number for verifying the information and confirming their identity.
- Call or visit a home or business under certain circumstances. This includes when a taxpayer has an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment, or to tour a business as part of an audit or criminal investigation. Even then, taxpayers will generally receive several letters from the IRS in the mail first.
- Assign certain cases to private debt collectors, but only after written notice is given to the taxpayer and their appointed representative.
- Offer several payment options. Payment by check should be payable to the U.S. Treasury and sent directly to the IRS, not a private collection agency.
- Private Debt Collection
- Security Summit
- IRS Taxpayers Bill of Rights
- Secure tax payment options
- Consumer Alerts
- Report Phishing
- Phone Scams
IRS Tax Tip 2018-100
June 28, 2018
Taxpayers who make an effort to comply with the law, but are unable to meet their tax obligations due to circumstances beyond their control may qualify for relief from penalties.
After receiving a notice stating the IRS assessed a penalty, taxpayers should check that the information in the notice is correct. Those who can resolve an issue in their notice may get relief from certain penalties, which include failing to:
- File a tax return
- Pay on time
- Deposit certain taxes as required
This relief is based on all the facts and circumstances in a taxpayer’s situation. The IRS will consider this relief when the taxpayer can show they tried to meet their obligations, but were unable to do so. Situations when this could happen include a house fire, natural disaster and a death in the immediate family.
Administrative Waiver and First Time Penalty Abatement
A taxpayer may qualify for relief from certain penalties if he or she:
- Didn’t previously have to file a return or had no penalties for the three tax years prior to the tax year in which the IRS assessed a penalty.
- Filed all currently required returns or filed an extension of time to file.
- Paid, or arranged to pay, any tax due.
In certain situations, legislation may provide an exception to a penalty. Taxpayers who received incorrect written advice from the IRS may qualify for a statutory exception.
Taxpayers who received a notice or letter saying the IRS didn’t grant the request for penalty relief may use the Penalty Appeal Online Self-help Tool.
Common Penalties for Individuals
The Right to Pay No More than the Correct Amount of Tax
The Right to Challenge the IRS’s Position and Be Heard
The Right to Appeal an IRS Decision in an Independent Forum
4) Taxpayers who owed tax this year should check their withholding soon
IRS Tax Reform Tax Tip 2018-103
July 5, 2018
Taxpayers who owed additional tax when they filed their federal return earlier this year should do a “paycheck checkup” as soon as possible. The IRS Withholding Calculator and Publication 505, Tax Withholding and Estimated Tax, can help these taxpayers do a checkup and avoid another possibly bigger tax bill next year.
Following the Tax Cuts and Jobs Act, which was passed last year, there are many changes to the tax law that could affect these taxpayers. Doing a checkup now will help them make sure their current tax withholding is in line with their 2018 tax situation.
Here are some things for these taxpayers to keep in mind.
- These taxpayers may not have had enough taxes withheld from their pay throughout 2017, causing them to owe in 2018.
- If they continue to have too little withheld from their paychecks the rest of this year, they could find themselves in the same situation again next year.
- They might even end up with a larger tax bill when they file their 2018 return next year.
- It’s important to remember that if a taxpayer underpays their tax too much, penalties and interest can apply.
- The Withholding Calculator can help taxpayers apply the new law to their situation. The results from the calculator can help them make an informed decision about whether to change their withholding this year.
- These taxpayers need to adjust their withholding as soon as possible for an even withholding amount throughout the rest of the year.
- Waiting means there are fewer pay periods to withhold the necessary federal tax, which could have a bigger effect on each paycheck.
- Taxpayers with more complex situations might find that using Publication 505 is a better option for figuring their withholding than using the Withholding Calculator. Publication 505 works better for employees who owe self-employment tax, the alternative minimum tax, or tax on unearned income from dependents. It can also help those who receive non-wage income such as dividends, capital gains, rents and royalties.
Withholding Calculator Frequently Asked Questions
Tax Reform page on IRS.gov
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