The IRS is sending due diligence letters to paid preparers who may be noncompliant in meeting their Earned Income Tax Credit due-diligence requirements. These letters are sent to raise awareness of questionable returns and remind paid preparers of their due-diligence requirements. The IRS will continue to monitor the EITC returns prepared in the upcoming filing season to see if the quality of the preparers’ returns improves, the agency said. The letters are being sent to help preparers complete accurate EITC claims in the future. The IRS does not assess penalties against preparers at the time they send the letters, but they do monitor EITC returns filed by these preparers to ensure accuracy improves. If there is no improvement, the IRS may follow-up with phone calls, additional letters, educational visits, or due diligence compliance audits. The letters, in both English and Spanish, can be seen on EITC Central. Preparers who completed highly questionable EITC claims may receive one of the following: Letter 5025: You may not have met your due-diligence requirements on returns with questionable qualifying children and self-employment income. Letter 5025C: You may not have met your due-diligence requirements on returns with self-employment income. Letter 5025Q: You may not have met your … Read More
To ensure a smooth transition, the IRS has decided to delay the October 24 date for requiring e-services users to re-register and validate their identities through Secure Access authentication. In the next few weeks, the IRS plans to have discussions with key stakeholders affected by the e-services changes to discuss security protocols and next steps in this process. A new implementation date has not been set. When a new date is set, the IRS will share the information widely with e-Services users. The IRS is strengthening the e-Services registration process as part of a wider effort to ensure the protection of taxpayer data and IRS systems.
The following email is being sent out to tax professionals regarding the renewal of their tax PTIN. All tax professionals must renew their PTIN in order to file tax returns in 2017. Dear Tax Professional, It is now Preparer Tax Identification Number (PTIN) renewal season. All PTINs expire on Dec. 31 and must be renewed annually. You must have a valid PTIN if you plan to prepare any federal tax returns for compensation or you are an enrolled agent. The renewal fee is $50. Get started at www.IRS.gov/ptin. If you can’t remember your User ID or password, use the “Forgot User ID” or “Forgot Password” links on the PTIN system login page. You will be asked to enter the email address associated with your account and the answer to your secret question. NOTE: The email address we sent this message to is your email address of record in the PTIN system. If you aren’t sure of your User ID, try this email address as your User ID. Keep up to date by following the IRS Return Preparer Office on Facebook. For the latest news and tools to stay connected, visit www.irs.gov/for-Tax-Pros.
The IRS provides further information on its plans to expand the W-2 Verification Code (VC) pilot program. During the 2016 filing season (2015 W-2 forms) the program was implemented as a way to combat tax-related identity theft and refund fraud. IRS partnered with four major payroll service providers who added a 16-digit verification code to a box on Form W-2, copies B (to be filed with employee’s federal tax return) and C (for employee’s records) on approximately 1.5 million W-2 forms. Each verification code number was calculated based on a formula and key provided by IRS, using data from the Form W-2 itself, so that each number generated was known only to IRS, the payroll service provider (PSP), and the individual who received the Form W-2. Since this identifier was unique, any changes to the Form W-2 information provided were detected by IRS when filed. Individuals whose W-2 forms were affected by the pilot program, and who used tax software to prepare their personal income tax returns (Form 1040), entered the code when prompted to do so by their Form 1040 software program. The code is not included on W-2 forms or W-2 data submitted by the PSPs to the … Read More
IR-2016-135, Oct. 17, 2016 WASHINGTON –– Hurricane Matthew victims in much of North Carolina and parts of South Carolina, Georgia and Florida have until March 15, 2017, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today. This includes an additional filing extension for those with valid extensions that run out at midnight tonight, Oct. 17. The IRS is now offering this expanded relief to any area designated by the Federal Emergency Management Agency (FEMA), as qualifying for either individual assistance or public assistance. Moreover, taxpayers in counties added later to the disaster area will automatically receive the same filing and payment relief. The IRS is taking this step due to the unusual factors involving Hurricane Matthew and the interaction with the Oct. 17 extension deadline. The tax relief postpones various tax filing and payment deadlines that occurred starting on Oct. 4, 2016. As a result, affected individuals and businesses will have until March 15, 2017, to file returns and pay any taxes that were originally due during this period. This includes the Jan. 17 deadline for making quarterly estimated tax payments. For individual tax filers, it also includes 2015 income … Read More
The IRS is testing expanded criteria for streamlined processing of taxpayer requests for installment agreements. The test is scheduled to run through September 30, 2017. During this test, more taxpayers will qualify to have their installment agreement request processed in a streamlined manner. Based on test results, the expanded criteria for streamlined processing of installment agreement requests may be made permanent. During the test period, expanded criteria for streamlined processing will be applied to installment agreement requests submitted to SB/SE Campus Collection Operations, this includes the Automated Collection System (ACS). Expanded criteria will not be applied to installment agreement requests submitted to W&I Accounts Management, SB/SE Field Collection or through the Online Payment Agreement application. The program will streamline payment plan set-up for more taxpayers, by: Increasing the dollar threshold for expedited processing from $50,000 to $100,000, if taxpayers agree to pay by direct debit from a financial account or payroll deduction. Increasing payment terms from 72 months to 84 months (subject to collection statute limitation). Removing the requirement to submit financial condition documentation that’s normally required for all installment agreements on balances of more than $50,000. However, an important distinction of the test program is that the IRS will … Read More