The Internal Revenue Service plans to stop notifying taxpayers by telephone when they are subject to an in-person field examination, in an effort to avoid confusion with phone scammers. Instead, all such notifications will come by mail. The policy shift follows reports in Tax Analysts’ Tax Notes Today that attendees of a public forum held last week by the Taxpayer Advocate Service complained that they had received phone calls from IRS employees trying to set up audits. The comments caught Nina Olson, National Taxpayer Advocate, by surprise and she responded that she was not aware of audits being initiated by phone. Later, she said that she was told that the Internal Revenue Manual did instruct revenue agents that the preferred method for initiating taxpayer contact for audit was by phone. Those claims contradict repeated pledges by IRS Commissioner John Koskinen’s to taxpayers that the IRS never calls first. The IRS added that the vast majority of its initial audit contacts are handled by sending a letter first, but in some of the in-person field audits, the IRS may contact the taxpayer or their representative by phone to schedule an appointment to begin the audit. “This phone contact is followed up … Read More
The Internal Revenue Service’s computer systems miscalculated the allowable Premium Tax Credits for more than 27,000 taxpayers who received subsidies for health insurance under the Affordable Care Act, according to a new report. The report, from the Treasury Inspector General for Tax Administration, evaluated the effectiveness of the IRS’s verification of health care tax credit claims during the 2015 filing season. According to the IRS, almost $11 billion in Advance Premium Tax Credits were paid to insurers in fiscal year 2014. As of June 11, 2015, the IRS processed more than 2.9 million tax returns involving the Premium Tax Credit, and taxpayers received approximately $9.8 billion in PTCs that were either received in advance or claimed at filing. The ACA requires health insurance exchanges to provide the IRS with information regarding individuals who are enrolled by the exchange on a monthly basis. The data is referred to as Exchange Periodic Data, or EPD. TIGTA’s analysis of more than 2.6 million tax returns with a PTC claim that were filed between January 20, 2015, and May 28, 2015, for which the IRS had EPD, found that the IRS accurately determined the allowable PTC on more than 2.4 million (93 percent) returns. … Read More
IRS has released the final version of new Form 8971 in response to legislation enacted in 2015, The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015. The form must be used to report the final estate tax value of property distributed or to be distributed from an estate, if the estate filed a Federal estate tax return after July 2015. IRS has also released the final instructions to the form, which, pending the issue of regulations, fill in several details with respect to the new reporting requirements. If the executor or administrator is unable to make a complete return with respect to any part of the gross estate, they must include in the return all the information available, including a description of such part and the name and address of every person holding a legal or beneficial interest in such part. If they are notified by IRS, such legal or beneficial owners must then file returns as to their parts of the estate. The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 imposed a new basis consistency standard — in general, the basis of property received by reason of death under Code Sec. 1014 … Read More
Expanded Outreach Effort Announced to Prevent More Losses to IRS Impersonators WASHINGTON — The Treasury Inspector General for Tax Administration (TIGTA) urged taxpayers to remain on “High Alert” and announced additional outreach efforts to prevent them from falling victim to criminals who impersonate Internal Revenue Service and Treasury employees this filing season. “The phone fraud scam has become an epidemic, robbing taxpayers of millions of dollars of their money,” said J. Russell George, the Treasury Inspector General for Tax Administration. “We are making progress in our investigation of this scam, resulting in the successful prosecution of some individuals associated with it over the past year,” he said, adding that over the summer, a ringleader was sentenced to more than 14 years in federal prison. “However, this is still a matter of high investigative priority.” TIGTA continues to receive reports of thousands of contacts every month in which individuals fraudulently claiming to be IRS officials make unsolicited calls and “robocalls” to taxpayers and demanding that they send them cash, he said. “As the tax filing season begins, it is critical that all taxpayers continue to be wary of unsolicited telephone calls and e-mails from individuals claiming to be IRS and Treasury … Read More
The Affordable Care Act contains specific responsibilities for employers. The size and structure of your workforce – small, large, or part of a group – helps determine what applies to you. Employers with 50 or more full-time equivalent employees will need to file an annual information return reporting whether and what health insurance they offered employees. In addition, they are subject to the Employer Shared Responsibility provisions. All employers that are applicable large employers are subject to the Employer Shared Responsibility provisions, including federal, state, local, and Indian tribal government employers. An employer’s size is determined by the number of its employees. Generally, if your organization has 50 or more full-time or full-time equivalent employees, you will be considered a large employer. For purposes of this provision, a full-time employee is an individual employed on average at least 30 hours of service per week. Under the Employer Shared Responsibility provisions, if an applicable large employer does not offer affordable health coverage that provides a minimum level of coverage to their full-time employees and their dependents, the employer may be subject to an Employer Shared Responsibility payment. They must make this payment if at least one of its full-time employees receives a premium tax … Read More
Sahil Patel, a scammer who organized a scheme in which taxpayers were threatened with calls purporting to come from the Internal Revenue Service and the FBI demanding payment has been sentenced to 14 years in prison. Throughout the course of the fraud, telephone call centers located in India hired English-speaking employees to place telephone calls to individuals living in the U.S. Armed with long lists of potential victims, referred to by Patel and his co-conspirators as “lead sheets,” those India-based callers systematically placed thousands of calls to individuals in the U.S. in the hopes of intimidating the call recipients into providing a payment to the co-conspirators. To extort these victims, the India-based callers impersonated law enforcement officials of the FBI and IRS and threatened their victims with financial penalties and arrest in connection with fabricated financial crimes. The scam has been continuing and is on the rise this year despite Patel’s arrest. Taxpayers who have been targeted by the scam can report the incident to the Treasury Inspector General for Tax Administration at www.tigta.gov and clicking on the IRS Impersonation Scam Reporting tab in the upper right corner, or call the TIGTA hotline at 1-800-366-4484.