IRS CONTINUING TO EXPAND W-2 VERIFICATION CODE PROGRAM

NSTPInternal Revenue Service (IRS)

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

IRS Gives Expanded Tax Relief to Victims of Hurricane Matthew; Parts of Four States Eligible; Extension Filers Have Until March 15 to File

NSTPInternal Revenue Service (IRS), Natural Diaster

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

STREAMLINED PROCESSING OF INSTALLMENT AGREEMENTS

NSTPInstallment Agreements, online payment agreement

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

IRS NOW ACCEPTING ITIN RENEWAL APPLICATIONS; TAXPAYERS ENCOURAGED TO ACT SOON TO AVOID PROCESSING DELAYS IN 2017

NSTPIndividual Taxpayer Identification Number (ITIN)

The Internal Revenue Service reminds taxpayers affected by recent changes involving the Individual Taxpayer Identification Number (ITIN) program that they can now begin submitting their ITIN renewal applications to the IRS. Under the Protecting Americans from Tax Hikes (PATH) Act of 2015 passed by Congress and signed into law last year, any ITIN not used on a federal tax return at least once in the last three years will no longer be valid for use on a tax return as of January 1, 2017. If a taxpayer has an ITIN that is scheduled to expire and needs to file a tax return, it’s important not to delay. By submitting the application package in the next few weeks ITIN taxpayers may avoid unnecessary delays and allow for smoother and faster processing. As part of this effort, the IRS has embarked on a wider education effort to share information with ITIN holders. To help taxpayers, the IRS has prepared a variety of informational materials, including flyers and fact sheets, available in several languages on IRS.gov. In addition to English and Spanish, materials are available in Chinese, Korean, Haitian Creole, Russian and Vietnamese. ITINs are used by people who have tax filing or … Read More

INSTRUCTIONS FOR REQUESTING COPY OF FRAUDULENT RETURNS

NSTPData Theft, Fraudulent Return, Identity Theft, Internal Revenue Service (IRS)

A victim of identity theft or a person authorized to obtain the identity theft victim’s tax information may request a redacted copy (one with some information blacked-out) of a fraudulent return that was filed and accepted by the IRS using the identity theft victim’s name and SSN. Due to federal privacy laws, the victim’s name and SSN must be listed as either the primary or secondary taxpayer on the fraudulent return; otherwise the IRS cannot disclose the return information. For this reason, the IRS cannot disclose return information to any person listed only as a dependent. Partial or full redaction will protect additional possible victims on the return. However, there will be enough data for you to determine how your personal information was used. To make the request, you will need to complete a Form 4506-F, Request for a Copy of a Fraudulent Tax Return, and mail along the required documentation to the following address: IRS Fresno, CA 93888-0025 The IRS may return your request if it is missing the required information and/or documentation, or is made in a manner other than described in these instructions. Required information and documentation for a request by the identity theft victim If you are the … Read More

TAX TOPICS FROM THE NSTP FEDERAL TAX ALERT

NSTPFederal Tax Alert

Looking for additional information on specific tax topics, court cases or IRS actions? Start with the NSTP Federal Tax Alert. The articles are indexed on the Member Page and is searchable by date or by article title. The full text of all editions of the Federal Tax Alert (FTA) as well as the client newsletter are archived for your use at any time. If you are putting together a client newsletter, many of the items included in the newsletter prepared by NSTP can be easily updated to fit the needs of your practice. The articles in the FTA are designed to provide you with the interpretation of the tax issues, IRS regulations and publications, as well as other source documents to help you in your tax practice. As a member of NSTP these articles are available to you at any time. The items contained in the client newsletter are not copyrighted and you can include these in any correspondence or publications you send to your clients. The NSTP website is your resource for education, information, and member updates.