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Archive for Internal Revenue Service

U.S. Citizenship And Immigration Services To Close All But Seven Of Its Overseas Offices

Helen Burggraf

The U.S. Citizenship and Immigration Services has announced that it plans to close all but seven of its 23 overseas offices, including those in London, Frankfurt, Rome and Bangkok.

This represents a change from its earlier plan, announced in March, that it would close all 23 of the outposts.

In a statement, the USCIS said the “organizational changes” would “allow more effective allocation of USCIS resources to support, in part, backlog reduction efforts.”

It said the offices it plans to keep open would be those in Beijing and Guangzhou, China; Nairobi, Kenya; New Delhi, India; Guatemala City, Guatamala; Mexico City, Mexico; and San Salvador, El Salvador.

“The first planned closures are the field offices in Monterrey, Mexico, and Seoul, South Korea, at the end of September,” the USCIS statement said.

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A Reprieve From Revocation Of Passport When You Owe Taxes!

Manasa Nadig

I have been fortunate the past couple of years to have been able to travel. I find that as I check off places on my bucket list, I keep adding on to it! I have been bitten by the travel bug! We recently went to Munich, Germany and climbed 14 stories to the top of The Kirche of St. Peter. The climb through the narrow stairway was somewhat crowded and tight at times but it was absolutely worth it! The views at the top were breath-taking.

Of course when you travel, you need your passport. What happens when you owe taxes to the Government, can they revoke your passport? If you remember, back in 2015, there was a Law passed called the FAST Act. The Act was mostly about transportation but they got in a clause that if you owed more than $50,000 in taxes, the Government could revoke your existing passport or deny you a new passport.

Under Section 32101 of the FAST Act, if the IRS certifies a taxpayer as having a ‘seriously delinquent tax debt”, which is: (1) Owing $52,000 or more in taxes and (2) Meeting certain other requirements under IRC §7345(b), the State Department must deny the taxpayer’s original or renewal passport application and may revoke or limit an existing passport.

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Dealing With IRS Collections During A Financial Hardship

Venar Ayar On IRS Financial Hardship

If you’re already having financial problems, IRS collection actions can make your situation even more difficult. Fortunately, the IRS will consider your financial issues if you ask for a collection alternative.

Request A CDP Hearing

The IRS won’t know about your financial hardship unless you tell them. If your assets are about to be seized, you should make sure you request a Collection Due Process (CDP) hearing to explain your situation.

The IRS is usually required to send a Notice of Intent to Levy in the mail before your assets can be seized. You have 30 days to respond to this notice and request a CDP hearing. At the hearing, you can propose collection alternatives, and the IRS won’t levy your assets until the CDP process is complete.

Make sure you read every IRS notice you get and pay careful attention to any deadlines mentioned in the notice.

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IRS Trends And Challenges

IRS LOGO May

According to the IRS Strategic Plan FY 2018 to 2020, these are the major Trends and Challenges going forward:

SERVING AN INCREASINGLY COMPLEX TAX BASE

The U.S. tax base is becoming more complex. Economic and demographic changes in our society have fundamentally changed the way citizens earn money and the way we live. U.S. workers earning income through contracting or freelancing is projected to increase as more workers pursue flexible arrangements or earn income through digital platforms and app-based businesses (the “gig economy”).

This shift in income sources requires the IRS to adapt its outreach and enforcement efforts. According to one assessment, in the gig economy, nearly one-third of those earning money through app-based platforms were unaware of their tax status as small business owners. This likely affects the rate of voluntary tax compliance. In addition to changes in employment trends, family structures and living habits are shifting. A record number of Americans live in multigenerational households, a dynamic that could affect a taxpayer’s ability to claim deductions and credits accurately. This highlights the growing need for IRS to communicate eligibility requirements and verify compliance.

MANAGING GLOBAL TAX COOPERATION

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Information Under The Freedom Of Information Act (FOIA)

The Freedom of Information Act, 5 U.S.C. 552, provides any person the right to request access of federal agency records or information.  The FOIA applies to records either created or obtained by an agency and under agency control at the time of the FOIA request. Agencies within the executive branch of the federal government, including the Executive Office of the President and independent regulatory agencies are subject to the FOIA. State governments, municipal corporations, the courts, Congress and private citizens are not subject to the FOIA.

All IRS records are subject to FOIA requests. However, FOIA does not require the IRS to release all documents that are subject to FOIA requests. The IRS may withhold information pursuant to nine exemptions and three exclusions contained in the FOIA statute.

While the Freedom of Information Act is an option in some cases, records that can be processed routinely in accordance with procedures identified in 26 CFR 601.702(d) are specifically excluded from the processing requirements of the FOIA.  Many FOIA requests for IRS information can be obtained more efficiently using routine established agency procedures.

The FOIA established an effective statutory right that records of the Executive Branch of the United States Government are accessible to the people. This was not always the policy regarding disclosure of Federal information. Before the FOIA was enacted in 1966, the Administrative Procedure Act governed the disclosure of agency records to the public and was viewed as a withholding statute rather than a disclosure statute.

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Tax Cuts and Jobs Act: What Is New For Small And Medium Sized Businesses

IRS - What Is New In Tax Cuts And Jobs Act For Small And Medium Sized Businesses

Congress approved major tax reform in the Tax Cuts and Jobs Act, signed into law on December 22, 2017. This legislation, which affects both individuals and businesses, is commonly referred to as TCJA or the 2017 tax reform legislation. This electronic publication covers many of the TCJA provisions that are important for small and medium-sized businesses, their owners and tax professionals to understand. Businesses affected by TCJA include corporations, S corporations, partnerships (including limited liability companies or LLCs) and sole proprietorships. Changes to deductions, depreciation, expensing, credits, fringe benefits and other items may affect your business tax liability and your bottom line.

It’s important to consider your business structure and accounting methods when applying tax reform to your situation. The official IRS.gov website includes a Tax Reform page that highlights what you need to know about the tax law changes. This page also provides links to news releases, publications, notices, legal guidance and other resources. There’s also a dedicated tax reform page for businesses. We update these resources regularly. Some provisions of TCJA that affect individual taxpayers can also affect business taxes. As a business owner or self-employed individual, you should review tax reform changes for individuals and determine how these provisions affect your business tax situation.

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Tax Professionals Now Able To Obtain Wage And Income Transcripts Needed For Tax Preparation

IRS - Request Wage Statements From IRS

The Internal Revenue Service, in partnership with the tax preparation community, has devised a new process that will allow tax practitioners to access employer information needed for return preparation and electronic filing while also protecting taxpayer data.

The new process is part of a series of steps planned by the IRS to enhance safeguards around the tax transcript format and distribution to better protect taxpayers from identity theft. A transcript is a summary of tax return entries on the Form 1040 series.

In September 2018, the IRS began partially masking the personally identifiable information for all individuals and entities listed on an individual tax return. The redesigned transcript will fully display all financial entries. See New Tax Transcript and Customer File Number for details.

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IRS 2019 Standard Mileage Rates Announced

Charles Woodson - TaxConnections

The Internal Revenue Service (IRS) computes standard mileage rates for business, medical and moving each year, based on a number of factors, to determine the standard mileage rates for the following year.

As it does annually around the end of the year, the IRS has announced the 2019 optional standard mileage rates. Thus, beginning on Jan. 1, 2019, the standard mileage rates for the use of a car (or a van, pickup or panel truck) are:

  • 58 cents per mile for business miles driven (including a 26-cent-per-mile allocation for depreciation). This is up from 54.5 cents in 2018;
  • 20 cents per mile driven for medical or moving* purposes. This is up from 18 cents in 2018; and
  • 14 cents per mile driven in service of charitable organizations.* For years 2018 through 2025, the deduction for moving is only allowed for members of the armed forces on active duty who move pursuant to a military order. 

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IRS Issues Guidance On Section 179 Expenses And Section 168(g) Depreciation Under Tax Cuts And Jobs Act

IRS - Section 179 Expenses

The Internal Revenue Service issued Revenue Procedure 2019-08 to provide guidance on deducting expenses under Section 179(a) and on deducting depreciation under Section 168(g).  These rules, as amended by the Tax Cuts and Jobs Act (TCJA) in December 2017, generally apply to tax years beginning after 2017.

Section 179 allows taxpayers to deduct the cost of certain property as an expense when the property is placed in service.  For tax years beginning after 2017, the TCJA increased the maximum Section 179 expense deduction from $500,000 to $1 million. The phase-out limit increased from $2 million to $2.5 million. These amounts are indexed for inflation for tax years beginning after 2018.

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IRS Large Business And International Report On The Examination Process

IRS Logo Nov
ISSUE ONE: LB&I EXAMINATION PROCESS

The Internal Revenue Service introduced the Large Business & International Examination Process (LEP) in 2016. Designed to provide an organizational approach for conducting efficient examinations from the first contact with the taxpayer through the final stages of issue resolution, LEP is described in IRS Publication 5125 (2-2016). See also IRM 4.46 LB&I Examination Process. Many aspects of LEP are working well; in particular, LEP has resulted in closer collaboration on the formulation and issuance of Information Document Requests (IDRs). The LB&I subgroup understands that the IRM is in the process of being revised to reflect the new issue-based “campaign” initiative  and that additional changes will likely be made to LEP as LB&I gains experience with the campaign process.

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What To Know About The IRS 1099-K Form

Venar Ayar- What To Know About The 1099-K

IRS Form 1099-K is a form used by the Internal Revenue Service to report certain transactions to improve voluntary tax payments and compliance. The form originated in 2008 as part of the Housing Assistance Tax Act, even though the document has nothing to do with housing at all. A 1099-K is required for those who received payments:

  • From payment card transactions (e.g., debit, credit or stored-value cards), and/or
  • In settlement of third-party payment network transactions above the minimum reporting thresholds of –
    • gross payments that exceed $20,000, and
    • more than 200 such transactions

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Treasury, IRS Issue Proposed Regulations On New Opportunity Zone Tax Incentive

Tax Opportunity Zones

The Treasury Department and the Internal Revenue Service today issued proposed regulations and other published guidance for the new Opportunity Zone tax incentive.

Opportunity Zones, created by the 2017 Tax Cuts and Jobs Act, were designed to spur investment in distressed communities throughout the country through tax benefits. Under a nomination process completed in June, 8,761 communities in all 50 states, the District of Columbia and five U.S. territories were designated as qualified Opportunity Zones. Opportunity Zones retain their designation for 10 years. Investors may defer tax on almost any capital gain up to Dec. 31, 2026 by making an appropriate investment in a zone, making an election after December 21, 2017, and meeting other requirements. Read more