IRS, SECURITY SUMMIT PARTNERS EXPAND IDENTITY THEFT SAFEGUARDS FOR 2017 FILING SEASON, BUILD ON 2016 SUCCESSES

NSTPInternal Revenue Service (IRS), Security Summit

The Internal Revenue Service, state tax agencies and industry partners finalized plans for 2017 to improve identity theft protections for individual and business taxpayers after making significant inroads this year against fraudulent returns. Public and private sector leaders announced today that their collective efforts through the Security Summit initiative have led to a marked improvement in the battle against identity theft during 2016. This is highlighted by the number of new people reporting stolen identities on federal tax returns falling by more than 50 percent, with nearly 275,000 fewer victims compared to a year ago. At a Washington press conference, Summit leaders also detailed new and expanded safeguards for taxpayers in the upcoming 2017 tax season. The 2017 focus revolves around “trusted customer” features that will help ensure the authenticity of the taxpayer and the tax return – before, during and after a tax return is filed. The additional protections will build on the 2016 successes that prevented fraudulent returns and protected tax refunds. We’ve made remarkable progress this year in our efforts to protect taxpayers following the unprecedented coordination with the states, the tax industry and the financial sector,” said IRS Commissioner John Koskinen. “Working together, this coalition has … Read More

W-2 AND 1099 FILING DEADLINES CHANGED FOR FILING YEAR 2017

NSTP1099-MISC, W-2

The deadlines for filing the Form W-2 with the Social Security Administration and the Form 1099-MISC with the Internal Revenue Service are changing next year. Starting in 2017, for the 2016 reporting year, both the W-2 and 1099-MISC recipient copies must be submitted by January 31, 2017 whether by paper or electronic filing. And just to make it more interesting, the new filing deadline, as it relates to Form 1099-MISC, only affects filers that report nonemployee compensation payments in box 7. Historically, filers have been required to provide both W-2 and 1099-MISC forms to their recipients by January 31. However, in the past they were not required to submit the forms to the Social Security Administration or the IRS until February 28for paper forms or March 31 for e-filing. Before the deadline change, businesses would be able to file W-2 and 1099-MISC recipient copies first and then wait to learn if any changes are needed before filing with the Social Security Administration or the IRS, which reduced the risk for possible corrections. Unfortunately, due to the change in due dates, businesses might need to abandon that strategy and consider filing with the recipients and the SSA and IRS at the same time. In addition, the IRS … Read More

IRS WARNS TAX PROFESSIONALS OF NEW E-SERVICES EMAIL SCAM

NSTPIdentity Theft, Internal Revenue Service (IRS), Online Scams

IR-2016-145, Nov. 4, 2016 WASHINGTON – The Internal Revenue Service today issued an urgent alert to tax professionals who use IRS e-services to beware of an email asking them to update their accounts and directing them to a fake website. The subject line for the fraudulent email is “Security Awareness for Tax Professionals.” The “From” line is “Your e-Services Team.” It has both an IRS logo and an e-services logo that hyperlinks to a URL verified as a phishing site. The spoofing site poses as an e-services registration page. The scammers are attempting to exploit current IRS efforts to strengthen the e-services authentication process and its ongoing communications with tax professionals about their accounts. Scammers are attempting to steal e-services usernames and passwords or additional personal data through a registration page. If e-services users have already clicked on the fake logo and provided their username and password, they should contact the e-services help desk to reset their accounts. If the same password is used for other accounts, these should be changed as well. As an extra precaution, users should perform a deep security scan on their computers, re-evaluate their security controls and be alert to any other signs of identity … Read More

IRS REGULATIONS MODIFY ELECTION TO CLAIM PRIOR-YEAR DISASTER LOSSES

NSTPInternal Revenue Service (IRS), Natural Diaster

The IRS has issued final and temporary regulations extending the due date for the election to deduct in the prior tax year a loss attributable to a federally-declared disaster, and for revoking such an election, as well as a revenue procedure explaining how to make or revoke the election. Casualty losses are generally allowed as a deduction only for the tax year in which the loss is sustained (disaster year). However, a taxpayer may elect to treat a loss occurring in a federally-declared disaster area as sustained in the tax year immediately prior to the disaster year. Taxpayers make the election on the original return, amended return, or refund claim that must be filed on or before the later of: (1) the due date (without extension) of the tax return for the disaster year; or (2) the due date (without extension) of the tax return for the preceding year. The final and temporary regulations issued on October 13 generally provide that the due date for electing to deduct in the prior tax year a loss attributable to a federally-declared disaster is six months after the due date (without extension) for filing the taxpayer’s federal income tax return for the disaster … Read More

OFFSHORE VOLUNTARY COMPLIANCE EFFORTS TOP $10 BILLION; MORE THAN 100,000 TAXPAYERS COME BACK INTO COMPLIANCE

NSTPInternal Revenue Service (IRS), Offshore Accounts

As international compliance efforts pass several new milestones, the Internal Revenue Service reminds U.S. taxpayers with undisclosed offshore accounts that they should use existing paths to come into full compliance with their federal tax obligations. Updated data shows 55,800 taxpayers have come into the Offshore Voluntary Disclosure Program (OVDP) to resolve their tax obligations, paying more than $9.9 billion in taxes, interest and penalties since 2009. In addition, another 48,000 taxpayers have made use of separate streamlined procedures to correct prior non-willful omissions and meet their federal tax obligations, paying approximately $450 million in taxes, interest and penalties. “The IRS has passed several major milestones in our offshore efforts, collecting a combined $10 billion with 100,000 taxpayers coming back into compliance,” said IRS Commissioner John Koskinen. “As we continue to receive more information on foreign accounts, people’s ability to avoid detection becomes harder and harder. The IRS continues to urge those people with international tax issues to come forward to meet their tax obligations. Under the Foreign Account Tax Compliance Act (FATCA) and the network of inter-governmental agreements (IGAs) between the U.S. and partner jurisdictions, automatic third-party account reporting has entered its second year. More information also continues to come … Read More

RETIREMENT PLANS CAN MAKE LOANS, HARDSHIP DISTRIBUTIONS TO VICTIMS OF HURRICANE MATTHEW

NSTPHurricane Matthew, Internal Revenue Service (IRS)

The Internal Revenue Service has announced that 401(k)’s and similar employer-sponsored retirement plans can make loans and hardship distributions to victims of Hurricane Matthew and members of their families. This is similar to relief provided this summer to Louisiana flood victims. Participants in 401(k) plans, employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, as well as state and local government employees with 457(b) deferred-compensation plans may be eligible to take advantage of these streamlined loan procedures and liberalized hardship distribution rules. Though IRA participants are barred from taking out loans, they may be eligible to receive distributions under liberalized procedures. The IRS is also relaxing procedural and administrative rules that normally apply to retirement plan loans and hardship distributions. As a result, eligible retirement plan participants will be able to access their money more quickly with a minimum of red tape. In addition, the six-month ban on 401(k) and 403(b) contributions that normally affects employees who take hardship distributions will not apply. This broad-based relief means that a retirement plan can allow a victim of Hurricane Matthew to take a hardship distribution or borrow up to the specified statutory limits from the victim’s retirement plan. It also … Read More