IRS and Security Summit Partners Warn of Fake Tax Bill Emails

NSTPFraud, Internal Revenue Service (IRS), Online Scams

The Internal Revenue Service and its Security Summit partners today issued an alert to taxpayers and tax professionals to be on guard against fake emails purporting to contain an IRS tax bill related to the Affordable Care Act.   The IRS has received numerous reports around the country of scammers sending a fraudulent version of CP2000 notices for tax year 2015. Generally, the scam involves an email that includes the fake CP2000 as an attachment. The issue has been reported to the Treasury Inspector General for Tax Administration for investigation.   The CP2000 is a notice commonly mailed to taxpayers through the United States Postal Service. It is never sent as part of an email to taxpayers. The indicators are: These notices are being sent electronically, even though the IRS does not initiate contact with taxpayers by email or through social media platforms; The CP 2000 notices appear to be issued from an Austin, Texas, address; The underreported issue is related to the Affordable Care Act (ACA) requesting information regarding 2014 coverage; The payment voucher lists the letter number as 105C.   The fraudulent CP2000 notice included a payment request that taxpayers mail a check made out to “I.R.S.” to … Read More

Notice 2016-55

NSTPDonation Programs, Natural Diaster

Notice 2016-55 provides guidance on the treatment of leave-based donation programs to aid victims of the severe storms and flooding in Louisiana that began on August 11, 2016 (Louisiana storms).   TREATMENT OF LEAVE-BASED DONATION PAYMENTS In response to the extreme need for charitable relief for victims of the Louisiana storms, employers may have adopted or may be considering adopting leave-based donation programs.   Under leave-based donation programs, employees can elect to forgo vacation, sick, or personal leave in exchange for cash payments that the employer makes to charitable organizations described in § 170(c) of the Internal Revenue Code (§ 170(c) organizations). This notice provides guidance for income and employment tax purposes on the treatment of cash payments made by employers under leave-based donation programs for the relief of victims of the Louisiana storms.   The Service will not assert that cash payments an employer makes to § 170(c) organizations in exchange for vacation, sick, or personal leave that its employees elect to forgo constitute gross income or wages of the employees if the payments are: (1) made to the § 170(c) organizations for the relief of victims of the Louisiana storms; and (2) paid to the § 170(c) organizations … Read More

TO MAINTAIN ELIGIBILITY FOR ADVANCE PAYMENTS OF THE PREMIUM TAX CREDIT, FILE ASAP

NSTPAdvance Payments of the Premium Tax Credit

The IRS is sending letters to taxpayers who received advance payments of the premium tax credit in 2015, but who have not yet filed their tax return. You must file a tax return to reconcile any advance credit payments you received in 2015 and to maintain your eligibility for future premium assistance. If you do not file, you will not be eligible for advance payments of the premium tax credit in 2017. If you receive Letter 5858 or 5862, you are being reminded to file your 2015 federal tax return along with Form 8962, Premium Tax Credit.  The letter encourages you to file within 30 days of the date of the letter to substantially increase your chances of avoiding a gap in receiving assistance with paying Marketplace health insurance coverage in 2017. > Here’s what you need to do if you received a 5858 Read your letter carefully. Review the situation to see if you agree with the information in the letter. Use the Form 1095-A that you received from your Marketplace to complete your return. If you need a copy of your Form 1095-A, log in to your HealthCare.gov or state Marketplace account or call your Marketplace call center. File your 2015 … Read More

HOME ENERGY TAX CREDITS CAN SAVE MONEY AT TAX TIME

NSTPEnergy Tax Credit

Certain energy-efficient home improvements can cut energy bills and save money at tax time. Here are some key facts that taxpayers should know about home energy tax credits:   Non-Business Energy Property Credit   Part of this credit is worth 10 percent of the cost of certain qualified energy-saving items added to a main home last year. This may include items such as insulation, windows, doors and roofs. The other part of the credit is not a percentage of the cost. This part of the credit is for the actual cost of certain property. This may include items such as water heaters and heating and air conditioning systems. The credit amount for each type of property has a different dollar limit. This credit has a maximum lifetime limit of $500. Taxpayers may only use $200 of this limit for windows. The main home must be located in the U.S. to qualify for the credit. Be sure to obtain written certification from the manufacturer that their product qualifies for this tax credit. They usually post it on their website or include it with the product’s packaging. Their documentation can be relied uponto claim the credit, but do not attach it to … Read More

THIRD QUARTER ESTIMATED TAX PAYMENTS DUE

NSTP505, Internal Revenue Service (IRS)

Taxes must be paid as income is earned or received during the year, either through withholding or estimated tax payments. If the amount of income tax withheld from payroll or pension is not enough, or if income such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards is received, taxpayers may have to make estimated tax payments. Self-employed individuals generally need to make estimated tax payments. Estimated tax is used to pay not only income tax, but other taxes such as self-employment tax and alternative minimum tax. The next estimated payment, for calendar year taxpayers, is due on or before Thursday, September 15, 2016. If not enough tax is paid through withholding and estimated tax payments, taxpayers may be charged a penalty. They may also be charged a penalty if estimated tax payments are late, even if the taxpayer is due a refund when the tax return is filed. Estimated tax requirements are different for farmers and fishermen. Publication 505, Tax Withholding and Estimated Tax, provides more information about these special estimated tax rules. Penalty for Underpayment of Estimated Tax If not enough tax is paid throughout the year, either through withholding or by making estimated tax payments, … Read More

AICPA APPEALS DECISION TO PRESERVE IRS PROGRAM FOR TAX PREPARERS

NSTPAmerican Institute of Certified Public Accountants (AICPA), Annual Filing Season Program (AFSP), Internal Revenue Service (IRS), RTRP, Taxpayer

In early August, the DC District Court ruled in favor of the IRS in the lawsuit filed by the AICPA to discontinue the Annual Filing Season Program –  AICPA v IRS. As you may recall, the Annual Filing Season Program (AFSP) is the IRS program that now allows preparers to opt in, with the benefit that those who sign on appear in an online searchable database of preparers. The AFSP also imposes a cost to those who do not opt in; they are not permitted to engage in limited representation of the clients whose returns the IRS audits.   The American Institute of CPAs is now appealing the court decision that upheld the Internal Revenue Service’s voluntary program for tax preparer education and testing.   The IRS introduced the Annual Filing Season Program in 2014 after the federal courts invalidated a mandatory program it had instituted requiring all tax preparers to be tested and undergo continuing education. The AICPA filed suit to challenge the voluntary program, but the lawsuit was dismissed by the same federal judge, James Boasberg, who had invalidated the IRS’s earlier Registered Tax Return Preparer program in 2013 in the case of Loving v. IRS. He said … Read More