Tax-related Property Lien Scam

NSTPInternal Revenue Service (IRS)

Tax-related Property Lien Scams

Tax-related Property Lien Scam With scam artists hard at work all year, taxpayers should watch for new versions of tax-related scams. One such scam involves fake property liens. It threatens taxpayers with a tax bill from a fictional government agency. Here are some details about the tax-related property lien scam that will help taxpayers recognize it: This scheme involves a letter threatening an IRS lien or levy. The scammer mails the letter to a taxpayer. The lien or levy is based on bogus overdue taxes owed to a non-existent agency. The non-existent agencies might have a legitimate-sounding name like the “Bureau of Tax Enforcement.” There is no such agency. This scam may also reference the IRS to confuse potential victims into thinking the letter is from a real agency. Anyone who doesn’t owe taxes and has no reason to think they do should: Contact the Treasury Inspector General for Tax Administration to report the letter. The taxpayer should use their IRS Impersonation Scam Reporting web page. When reporting the scam, they should include the key words “IRS Lien.” Scan a document received as a letter or fax, and send it to phishing@irs.gov. Report it to the Federal Trade Commission using … Read More

EA Rules/Procedures Updated by IRS

NSTPInternal Revenue Service (IRS)

EA Rules and Procedures Updated

EA Rules/Procedures Updated by IRS The IRS has updated its enrolled agent (EA) news webpage with information about such things as the new EA logo, enrollment renewal, and the revised test specifications for the EA exam. New EA logo available for download. The new EA logo is available for download at www.irs.gov/tax-professionals/enrolled-agent-logo. With the new logo now available, EAs may not use the obsolete logo in any publications, advertising, websites, business cards, or any communication with clients or prospective clients. Enrollment renewal application period. Generally, the EA renewal period begins on November 1 each year. EAs must renew their enrollment every three years, and when they renew depends on the last digit of their Social Security Number. For example, the 2019 renewal period for EAs with SSNs ending in 0, 1, 2 or 3 ran from November 1, 2018 to January 31, 2019. The renewal period for EAs with SSNs ending in 4, 5, or 6 will begin around November 1, 2019. Form 8554, Enrolled Agent Renewal, may be submitted, and the $30 renewal fee paid, through Pay.gov. To renew their status EAs generally must Have an active preparer tax identification number (PTIN); and Have completed a minimum of 72 … Read More

PTIN Renewal Opens October 16th

NSTPInternal Revenue Service (IRS)

PTIN Renewal Opens October 16th

PTIN Renewal Opens October 16th The IRS Return Preparer Office sent the following message to all registered PTIN holders this week: Dear Tax Professional, Summer is over, and it won’t be long until you’re sitting down at your computer to renew your preparer tax identification number (PTIN) for 2020. PTIN renewal opens October 16th. When renewal season begins, you will notice a data security responsibilities statement has been added to the PTIN renewal process. It serves as a reminder of your legal responsibility to have a data security plan and to provide data and system security protections for all taxpayer information. When completing your PTIN renewal, a checkbox will be available to confirm your awareness of these data security responsibilities. Data security continues to be a hot topic. That’s because tax professionals remain a top target of identity thieves and data breaches continue to affect tax professionals at an alarming rate. Cybercriminals use sophisticated and ever evolving techniques to gain access to your systems. These criminals steal sensitive taxpayer data to file fraudulent tax returns and create financial havoc for your clients. There are simple steps you can incorporate in your daily operations to minimize your vulnerability and protect client … Read More

Car Awarded to Teenager for Good Grades and Attendance was Taxable According to Court

NSTPInternal Revenue Service (IRS)

Car Awarded to Teenager for Good Grades and Attendance was Taxable according to Court

Court Finds Car Awarded to Teenager for Good Grades and Attendance was Taxable Conyers v IRS, Tax Court docket no. 13969-18 According to the Tax Court, a car awarded to a high school senior for good grades and attendance was a prize. Therefore, the value of the car was includible in her taxable income. Background. Generally, prizes and awards are taxable to the recipient as gross income. (Code Sec. 74(a)) However, prizes and awards made primarily in recognition of religious, charitable, scientific, educational, artistic, literary, or civic achievement, that meet the following criteria, are excluded from gross income: The recipient was selected without any action on his part to enter the contest or proceeding; The recipient is not required to render substantial future services as a condition to receiving the prize or award; Upon the recipient’s request, the prize donor must immediately transfer the prize or award to a governmental unit or a qualified tax-exempt organization. (Code Sec. 74(b)) Facts. In 2016, Ms. Conyers was a high school senior. That year, Ms. Conyers was awarded a car by a local car dealership during its annual "Strive to Drive" competition. Ms. Conyers accepted the car and registered it in her name. … Read More

401(K) Hardship Distribution Rules Final Regs Modified, Clarified

NSTPInternal Revenue Service (IRS)

401(K) Hardship Distribution Rules Final Regs Modified, Clarified

401(K) Hardship Distribution Rules Final Regs Modified, Clarified The IRS has issued final regs that amend the rules for hardship distributions from a Code Sec. 401(k) hardship distribution plan. The final regs are substantially similar to the proposed regs issued in November 2018 and plans that complied with the proposed regs will satisfy the final regs. Background. 401(k) plans may provide that an employee can receive a distribution of elective contributions from the plan on account of hardship. (Reg. § 1.401(k)-1(d)(3)) In general, a retirement plan can make a hardship distribution only: if the plan permits such distributions; because of an immediate and heavy financial need of the employee; and in an amount necessary to meet the financial need. In general, the question of whether an employee had an immediate and heavy financial need was based on all relevant facts and circumstances. A financial need could be immediate and heavy even if it was reasonably foreseeable or voluntarily incurred by the employee. (Reg. § 1.401(k)-1(d)(3)(iii)(A) before amendment by TD 9875) Under a safe harbor, a distribution was made on account of an immediate and heavy financial need if made for one of a number of specified expenses, including those to … Read More

ICYMI: Holiday Office Party Still A 100% Deduction

NSTPInternal Revenue Service (IRS)

ICYMI: Holiday Office Party Still a 100% Deduction

ICYMI: Holiday Office Party Still A 100% Deduction As we enter into the ‘holiday season’ you and/or your clients may be considering holiday parties for the employees. For tax purposes, it is important to consider what expenses can and cannot be fully deducted under such circumstances. Rule 1: Holiday Office Party Deductions: Must be for Employees & Their Spouses 100% of the costs associated with throwing a party for employees and their spouses or significant others is tax deductible. A party hosted for the sole benefit of employees and their families is 100% tax deductible. However, if the party also includes the business owner’s friends, customers, independent contractors, vendors or any other business related associates, it is subject to the “Meals & Entertainment” limitation of 50%. The party must have a substantial business element to it. For example, there must be a business related discussion, reveal of a new product or service or any other matters relating to the business. 50% of costs related to the holiday party may be deducted by the business owner. Where a holiday party includes both employees and other non-employee business associates, things become a little more complicated. 100% of the cost allocated to the … Read More