GAO Releases Report on IRS Cybersecurity Oversight

NSTPInternal Revenue Service (IRS), Security

GAO Releases Report on IRS Cybersecurity Oversight

GAO Releases Report on IRS Cybersecurity Oversight The Government Accountability Office (GAO) released a report, produced for the IRS, regarding safety concerns over third-party tools used to file taxes, as well as a series of recommendations. It is estimated that 90% of people use commercial software, like TurboTax, free file options like CreditKarma, or paid preparers to file their taxes. In the event of a cybersecurity event involving any of these platforms (or tax and accounting professionals) an individual's personal information could be accessed and stolen. In the report highlights, the GAO summarizes the concern: "IRS seeks to help safeguard electronic tax return filing for various types of third-party providers through requirements under its Authorized e-file Provider program. However, IRS's efforts do not provide assurance that taxpayers' information is being adequately protected." Federal law requires that the IRS protect the integrity and confidentiality of a taxpayer's information within its databases. However, the IRS does not currently have a consistent set of security requirements for software, preparer, or online, return preparation, that requires the same protections. GAO's report, Taxpayer Information: IRS Needs to Improve Oversight of Third-Party Cybersecurity Practices addresses the issue in greater depth and proposes steps that the IRS … Read More

Introduction to Taxpayer Representation

NSTPInternal Revenue Service (IRS), Tax Professionals

Introduction to Taxpayer Representation

Introduction to Taxpayer Representation NSTP is offering a new course to help you prepare to represent your clients effectively, taught by Isaac R. McRae, III, MST, EA, and NTPI Fellow. To register today or for more information about Introduction to Taxpayer Representation, to be held on June 24-25, 2019, at the DoubleTree Hilton Hotel, Williamsburg, VA, click here. Tax professionals who can represent a taxpayer before the IRS have a leg up on those who aren’t prepared. Attorneys, Enrolled Agents, and CPAs have unlimited representation rights, and can represent a taxpayer on any tax matter, regardless of who prepared the return. All other tax professionals have limited representation rights with the appropriate credentials. The Introduction to Taxpayer Representation course will help you effectively represent your client before the IRS whether in a full or limited representation capacity, and is taught by Isaac R. McRae III, a highly respected Enrolled Agent who also holds an MST and is an NTPI Fellow. REGISTER TODAY for Introduction to Taxpayer Representation, to be held on June 24-25, 2019, at the DoubleTree Hilton Hotel, Williamsburg, VA. A credentialed taxpayer representative can competently represent their clients if they are prepared in the following areas: Audit selection … Read More

Inheriting an IRA? Here’s What You Need to Know

NSTPInheritance, Internal Revenue Service (IRS)

Inheriting an IRA? Here's what you need to know.

Inheriting An IRA? Here’s What You Need to Know Inheriting from someone is a wonderful gift, but when it comes to securities assets such as traditional IRAs, different rules apply to non-spouse beneficiaries. IRS rules designate what the beneficiary can do with the IRA and how distributions must be taken. The laws on inherited IRAs depend on the relationship to the IRA owner and the type of IRA. Here’s what you need to know as a non-spouse beneficiary: Traditional IRA Required Minimum Distributions- If you are a non-spouse beneficiary, you must start taking Required Minimum Distributions (RMD) by December 31st after the year of death of the original IRA account owner. Each year you will have RMDs based on your age and life expectancy if you choose to take distributions over your life or your other option is to use the ‘5-year rule.’ The 5 Year Rule allows you to take distributions over five years so that all of the assets liquidate from the IRA by the 5th anniversary of the IRA owner’s death. With both distribution options, the 10% early liquidation penalty from the IRS doesn’t apply if you are not 59 ½ years of age or older. If … Read More

IRS Updates 2018 Schedule D Instructions

NSTPInternal Revenue Service (IRS)

IRS Updates 2018 Schedule D Instructions

IRS Updates 2018 Schedule D Instructions to Correct Error in Original Worksheet The IRS posted updated instructions for 2018 Schedule D (Form 1040), Capital Gains and Losses, that include a corrected worksheet. The revised worksheet corrects a rate error that may have calculated an incorrect tax liability for some investors. Anyone who downloaded the Schedule D instructions before May 16, 2019, should download the new instructions now. The IRS already provided the new worksheet to tax software providers, so returns filed after May 15 should properly reflect the corrected worksheet. The IRS is reviewing returns filed before May 16 that may have been affected by the error. The updated instructions are available here. Error in Original 2018 Schedule D Worksheet The original Schedule D worksheet included a calculation that did not work correctly with the new Tax Cuts and Jobs Act regular tax rates and brackets. The error affected only taxpayers who reported: 28%-rate gain on line 18, and/or 25%-rate gain on unrecaptured 1250 gain on line 19. The corrected worksheet lowers regular tax liability for most affected taxpayers. However, it increases regular tax for a small number of taxpayers. Taxpayers Affected by the Error The worksheet calculation error may … Read More

IRS Releases 2018 Data Book

NSTPInternal Revenue Service (IRS)

IRS Releases Data Book for 2018

IRS Releases 2018 Data Book The Internal Revenue Service has released the 2018 IRS Data Book, a snapshot of agency activities for the fiscal year. The 2018 IRS Data Book describes activities conducted by the IRS from October 1, 2017, to September 30, 2018, and includes information about tax returns, refunds, examinations and appeals. The annual publication is illustrated with charts showing changes in IRS enforcement activities, taxpayer assistance levels, tax-exempt activities, legal support workload and IRS budget and workforce levels when compared to fiscal year 2017 and prior years. Included this year is a section on taxpayer attitudes from a long-running opinion survey. “Underlying the numbers in this year’s edition of the Data Book is the hard work of IRS employees,” said IRS Commissioner Chuck Rettig. “Our employees are the backbone of this agency, delivering our mission efficiently and effectively. They work hard to help taxpayers, and the numbers outlined in the Data Book reflect their commitment.” Revenue collection, returns processing, taxpayer service and enforcement actions During fiscal year 2018, the IRS collected nearly $3.5 trillion, processed more than 250 million tax returns and other forms, and issued over 120 million individual income tax refunds totaling almost $395 billion. … Read More

Strict Substantiation Requirements for Charitable Contributions

NSTPCharitable Contribution Deductions, Internal Revenue Service (IRS)

Strict Substantiation Requirements for Charitable Contributions

In case you thought this issue was no longer being audited by the IRS … Strict Substantiation Requirements for Charitable Contributions Simpson, T.C. Summary Opinion 2019-9, May 2, 2019 Under strict substantiation requirements for cash charitable contributions of less than $250, a taxpayer must have one of the following: A bank record such as a canceled check, bank statement, or credit card statement, A receipt with date, contribution amount, and organization name, or Payroll records and a pledge card, if made by payroll deduction. For cash charitable contributions of $250 or more, a taxpayer must obtain written acknowledgement from the charitable organization that shows the following: Date and amount of contribution, Whether any goods or services other than intangible religious benefits were provided by the organization (including a good faith estimate of the value), and A statement that the only benefit the taxpayer received was an intangible religious benefit (if applicable). The taxpayers in this case deducted $2,125 for cash charitable contributions they made to their church for 2013. The taxpayers credibly testified during their tax court trial that they contributed tithes and offerings to their church by check and in cash during the year. They said they received a … Read More