With the April 17 tax deadline approaching, the Internal Revenue Service and Security Summit partners urge taxpayers and tax professionals to be alert to identity theft scams, especially a new email version currently pretending to be from “IRS Refunds.” The “IRS Refunds” scam is a common tactic used by cybercriminals to trick people into opening a link or attachment associated with the email. This link takes people to a fake page where thieves try to steal personally identifiable information, such as Social Security numbers. Often these links or attachments also secretly download malware that can perform many functions, such as giving the thief control of the computer or tracking keystrokes to determine other sensitive passwords or critical data. The IRS does not randomly contact taxpayers or tax professionals via email, including asking people to confirm their tax refund information. The IRS initiates most contacts through regular mail delivered by the United States Postal Service. However, there are special circumstances in which the IRS will call or come to a home or business, such as 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 … Read More
The IRS now will now allow consumers to electronically report identity theft through the Federal Trade Commission’s IdentityTheft.gov website. Under the new FTC-IRS initiative, IdentityTheft.gov is the first and the only place where consumers can submit an IRS Form 14039, Identity Theft Affidavit, electronically. This new e-effort should make it easier for consumers to report tax-related identity theft and to receive help in recovering. Previously, to report a stolen identity that could be used to file a fake tax return and claim a fraudulent refund, a victim had to file a paper Form 14039. The IRS does offer a fillable version on the IRS website, that taxpayers can complete online, print and then mail to the tax agency. Unfortunately, however, while potential tax identity theft victims are filing paper forms by mail, the crooks are already/still online doing their damage electronically. Now, however, the IRS-FTC partnership means that identity theft victims can fight back on the same e-field to report identity theft. e-Reporting advantages: Once the Form 14039 is submitted electronically on the FTC site, that federal agency then will electronically transfer the identity theft form, but not the taxpayer’s return which is affected, to the IRS. Here’s how it works: IdentityTheft.gov will ask … Read More
As the April 17 tax-filing deadline nears, many taxpayers rush to finish their tax returns or find that extra time is needed to get them done. The IRS recommends that taxpayers request a filing extension if they need one. Despite popular beliefs, an extension is not an automatic invitation for an audit. And while it does keep open the statute for the IRS to audit the return, it also extends the period of time that a taxpayer can amend their return if a change is needed. Mistakes can happen when hurrying to file a tax return by the due date. This can mean longer processing times and possible tax refund delays. Electronic filing is the best way to avoid common mistakes; it is also the most accurate way to file a tax return. While an original return for tax years 2015, 2016, and 2017 can be electronically filed, an amended individual return must be paper-filed. Individual returns for calendar years prior to 2015 must be paper-filed as the IRS can only accept electronically filed individual income tax returns for the most current year and two years prior. Steer clear of common tax-filing mistakes, as identified by the IRS, by following … Read More
The Internal Revenue Service has created a page on its website to answer questions about the 2017 tax act, Pub. L. No. 115-97, which affected many areas of tax law. The website provides updated forms, the updated withholding calculator, and frequently asked questions related to the agency’s efforts to implement the tax reform law. Check the webpage regularly as the IRS is constantly updating the information as new forms, instructions, guidance, etc. becomes available. The webpage is available here.
As people are filing their taxes, the IRS reminds taxpayers to hang onto their tax records. Generally, the IRS recommends keeping copies of tax returns and supporting documents at least three years. Taxpayers should keep some documents — such as those related to real estate sales — for three years after filing the return on which they reported the transaction. Use a Tax Return to Validate Identity Taxpayers using a tax filing software product for the first time may need their adjusted gross income amount from their prior year’s tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return. Those who need a copy of their tax return should check with their software provider or tax preparer first, as prior-year tax returns are available from the IRS for a fee. Order a Transcript Taxpayers who cannot get a copy of a prior-year return may order a tax transcript from the IRS. A transcript summarizes return information and includes AGI. They’re free and available for the most current tax year after the IRS has processed the return. People can also get them for the … Read More
The Treasury Department and the Internal Revenue Service (IRS) today issued Notice 2018-28, which provides guidance for computing the business interest expense limitation under recent tax legislation enacted on December. 22, 2017. In general, newly amended section 163(j) of the Internal Revenue Code imposes a limitation on deductions for business interest incurred by certain large businesses. For most large businesses, business interest expense is limited to any business interest income plus 30 percent of the business’ adjusted taxable income. The notice describes aspects of the regulations that the Treasury Department and the IRS intend to issue, including rules addressing the calculation of the business interest expense limitation at the level of a consolidated group of corporations and other rules to clarify certain aspects of the law as it applies to corporations. It also clarifies the treatment of interest disallowed and carried forward under section 163(j) prior to enactment of the recent tax legislation. Finally, the notice makes it clear that partners in partnerships and S corporation shareholders cannot interpret newly amended section 163(j) to inappropriately “double count” the business interest income of a partnership or S corporation.