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Tag Archive for IRS Notice

IRS Selects Nine New Members For The Electronic Tax Administration Advisory Committee

IRS Notice

The Internal Revenue Service has selected nine new members for the Electronic Tax Administration Advisory Committee (ETAAC).

Established in 1998, the ETAAC is a public forum for the discussion of issues in electronic tax administration. Its aim is to prevent identity theft and refund fraud in support of paperless filing of tax and information returns. ETAAC members work closely with the Security Summit, a joint effort of the IRS, state tax administrators and the nation’s tax industry to fight identity theft and refund fraud.

Committee members include state tax officials, consumer advocates, cybersecurity and information security specialists, tax preparers, tax software developers and representatives of the payroll and financial communities.

The following individuals have been appointed to serve three-year terms on the committee beginning in September 2019:

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IRS Interest Rates On Overpayment And Underpayment

IRS Notice

The Internal Revenue Service announced that interest rates will remain the same for the calendar quarter beginning October 1, 2019, as they were in the prior quarter.

The rates will be:

  • five (5) percent for overpayments [four (4) percent in the case of a corporation];
  • two and one-half (2.5) percent for the portion of a corporate overpayment exceeding $10,000;
  • five (5) percent for underpayments; and
  • seven (7) percent for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

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How To Spot Signs Of Tax Client Data Theft

IRS _ How To Spot Client Data Theft

The Internal Revenue Service and its Security Summit partners  urged tax professionals to learn the tell-tale signs that their office may have experienced a data theft that resulted in fraudulent tax returns being filed in their clients’ names.

The IRS, state tax agencies and the private-sector tax industry, working together as the Security Summit, warned practitioners that global criminal syndicates remain active, and they are well financed, high skilled and tax savvy in their attempts to gain sensitive tax data.

The reminder came as the IRS and the Summit partners encouraged tax professionals to take time this summer to review their data security protection. To help the tax community, the Summit partners offered a new “Taxes-Security-Together” Checklist as a starting point.

“Learning the signs of identity theft is critical for anyone handling taxpayer data,” said IRS Commissioner Chuck Rettig. “It can be as subtle as an unusually slow computer system or as obvious as multiple clients unexpectedly receiving the same IRS notice. Paying attention to these details is critical, and fast action alerting the IRS and calling in a security expert can help protect taxpayers and your business.”

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New Rules And Limitations For Depreciation And Expensing Under The Tax Cuts And Jobs Act

IRS Rules And Limitations For Expensing
Businesses Can Expense More Under The New Law

A taxpayer may elect to expense the cost of any section 179 property and deduct it in the year the property is placed in service. The new law increased the maximum deduction from $500,000 to $1 million. It also increased the phase-out threshold from $2 million to $2.5 million. For taxable years beginning after 2018, these amounts of $1 million and $2.5 million will be adjusted for inflation.

The new law also expands the definition of section 179 property to allow the taxpayer to elect to include the following improvements made to nonresidential real property after the date when the property was first placed in service:

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LB&I Announces Large Corporate Compliance Program

IRS Announcement On Large Business

The Internal Revenue Service announced a key advancement in how it identifies its biggest and most complex large corporations.
On May 15, the IRS’s Large Business and International Division (LB&I) began a new application of data analytics for determining the population of its largest and most complex corporate taxpayers. This new Large Corporate Compliance (LCC) program replaces the Coordinated Industry Case (CIC) program and covers compliance oversight for LB&I’s largest corporate taxpayers. LCC is one of LB&I’s portfolio of compliance programs.

LCC employs automatic application of the large case pointing criteria to determine the LCC population. For example, pointing criteria include such items as gross assets and gross receipts. In the past, this was done on a manual, localized basis. Automated pointing allows a more objective determination of the taxpayers that should be part of the population.

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Understanding Your IRS Notice Or Letter

IRS Notices

Your IRS notice or letter will explain the reason for the contact and give you instructions on how to handle the issue.

If you agree with the information, there is no need to contact us.

Enter your notice or letter number above to get more information on IRS notices and letters, along with answers to many notice-related questions. If your notice or letter doesn’t return a result using the Notices & Letters Search on this page, contact us at the toll-free number 800-829-1040.

Why Was I Notified By The IRS?

The IRS sends notices and letters for the following reasons:

  • You have a balance due.
  • You are due a larger or smaller refund.
  • We have a question about your tax return.
  • We need to verify your identity.
  • We need additional information.
  • We changed your return.
  • We need to notify you of delays in processing your return.

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Get Ready For Taxes: Tax Reform Changes Likely To Reduce Number Of Taxpayers Who Itemize

IRS - Itemized Deductions

The Internal Revenue Service advised taxpayers that the doubling of the standard deduction due to tax law changes is likely to reduce the number of taxpayers who normally itemize.

This is the sixth in a series of reminders to help taxpayers Get Ready for the upcoming tax filing season. The IRS has recently updated  its Get Ready page with steps to take now for the 2019 tax filing season.

In previous years, about one out of three taxpayers itemized. The IRS expects that number to be less for tax year 2018. The Tax Cuts and Jobs Act (TCJA) passed in December 2017, significantly affects deductions in several ways, impacting those taxpayers who normally itemize.

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How To Turn IRS Notices Into A Marketing Opportunity

Well, last week Nina Olson, who’s the National Taxpayer Advocate at IRS, came out and stated that the real audit rate in the United States is 6.2%, not 7/10 of 1%. Just to put that in perspective, 7/10 of 1% equates to just over a million audits, and 6.2% equates to nearly 7 million audits. So who’s right? Who’s wrong?

How do you turn that into a marketing opportunity? Here is what the IRS is doing. Their headcount has been decimated over the last 3 or 4 years. It’s down by 23%. So more and more, the IRS is relying on technology, and their computers are generating automatic notices. 70% of the time they’re incorrect. Read more

Get Ready To File Taxes

With the tax filing season right around the corner, the IRS encourages taxpayers to visit IRS.gov for tax tools and resources. Taxpayers can resolve nearly every tax issue on the IRS website.

IRS.gov provides many self-service tools and features, including these six: Read more

Don’t Panic If You Receive An IRS Notice

Complications If it is not your refund check in the mailbox, that letter from the IRS will probably increase your heart rate a little. Don’t panic; many of these letters can be dealt with simply and painlessly.

Each year, the IRS sends millions of letters and notices to taxpayers to request payment of taxes, notify them of a change to their account, or to request additional information. The notice you receive normally covers a very specific issue about your account or tax return. Each letter and notice offers specific instructions on what needs to be done to satisfy the inquiry.

However, the letters also must advise you of your rights and other information required Read more

How The IRS Selects Returns For Examination

I must say that the overwhelming majority of taxpayers file returns and make tax payments timely and accurately. As such taxpayers have a right to expect fair and efficient tax administration from the IRS, including verification that taxes are correctly reported and paid with enforcement actions against those who fail to comply voluntarily.

Four Ways That Returns Are Selected for Examination

1. Potential participants in abusive tax avoidance transactions — Some returns are selected based on information obtained by the IRS through efforts to identify promoters and participants of abusive tax avoidance transactions. Examples include information received from “John Doe” summonses issued to foreign and domestic banks, credit card companies, businesses and participant lists from promoters ordered by the courts to be Read more