On Jan. 22, 2018, the IRS began implementation of the passport certification program. IRC § 7345 authorizes the IRS to certify a taxpayer’s seriously delinquent tax debt to the Department of State for the purposes of passport denial, limitation, or revocation. A seriously delinquent tax debt is an assessed, individual tax liability exceeding $51,000 for which either a notice of federal tax lien has been filed or a levy has been made. IRC § 7345(b)(2) provides exceptions for current installment agreements (IAs), offers in compromise (OICs), and Collection Due Process (CDP) hearings. In addition, the IRS has created certification exclusions, such as for taxpayers in currently not collectible (CNC) hardship status and those with pending IAs and OICs. IRM 184.108.40.206.19.4 includes the full list of current discretionary exclusions. Read more
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IRS Rolls Out Passport Certification Program, Refusing To Adopt Taxpayer Protections And Exclude Taxpayers Working With TAS
Cryptocurrencies such as Bitcoin are becoming more popular as a form of payment and as investment. However, there has been little attention paid to how this virtual currency will be treated by the IRS until now. In fact, the IRS is taking a much closer look and has established some tax guidelines.
According to an article published in accountingtoday.com, “For federal tax purposes, virtual currency is treated as property and not currency.” They add, “The fair market value of the virtual currency on the date of receipt determines the taxpayer’s basis.”
Some Businesses Are Actually Paying Employee Wages In Virtual Currency Instead Of U.S. Dollars Read more
Starting this month, the IRS will start implementing new procedures required under a 2015 law to crack down on individuals with “seriously delinquent tax debts.”
The IRS issued Notice 2018-1 on January 16, 2018, which provides guidance for implementation of the new IRC 7345, added by Section 32101 of the FAST Act. Upon receipt of section 7345 certification, the State Department is generally required to deny a passport application for individuals with seriously delinquent tax debts and may also revoke or limit passports previously issued to those individuals. The notice also describes some exceptions to certification and taxpayer remedies. Read more
Imagine how you would feel if you were expecting your tax refund to arrive imminently, and checked the mailbox or your bank account day after day, only to be disappointed. Finally, you receive the hoped-for letter from the IRS, which you open eagerly. Disappointed to find no refund check enclosed, you read a letter that in part says, “We’re holding the portion of your refund that relates to the withholding credit you claimed…while we review it. Our review can take up to 6 months from the date we received your return or the due date of the return, whichever is later.” Read more
WASHINGTON – The Internal Revenue Service, state tax agencies and the tax industry today warned tax professionals of early signs that cybercriminals already are at work as the nation’s tax season approaches. Fraudsters are using a new round of emails posing as potential clients or even the IRS to trick tax practitioners into disclosing sensitive information.
The Security Summit partners encourage tax practitioners to be wary of communicating solely by email with potential or even existing clients, especially if unusual requests are made. Data breach thefts have given thieves millions of identity data points including names, addresses, Social Security numbers and email addresses. If in doubt, tax practitioners should call to confirm a client’s identity. Read more
IRS Urges Travelers Requiring Passports To Pay Their Back Taxes Or Enter Into Payment Agreements; People Owing $51,000 Or More Covered
WASHINGTON ─ The Internal Revenue Service today strongly encouraged taxpayers who are seriously behind on their taxes to pay what they owe or enter into a payment agreement with the IRS to avoid putting their passports in jeopardy.
This month, the IRS will begin implementation of new procedures affecting individuals with “seriously delinquent tax debts.” These new procedures implement provisions of the Fixing America’s Surface Transportation (FAST) Act, signed into law in December 2015. Read more
Taxpayer Advocate Criticizes Hardships Faced By Nonresident Aliens Trying To Obtain Refunds Of Withheld Tax
In a scathing blog published this past week, National Taxpayer Advocate Nina Olson criticized the significant roadblocks that meet nonresident aliens (“NRAs”) trying to rightfully obtain refunds of withheld tax from the IRS. The roadblocks stem from a recent general freeze by the IRS on credits claimed on Forms 1040NR, U.S. Nonresident Alien Income Tax Return, which do not match with the information provided on Forms 1042-S filed by withholding agents.
The Taxpayer Advocate is an independent office within the IRS tasked with helping people resolve tax issues with the IRS and recommending changes that will prevent future problems. It’s always interesting to hear the point of view of the office responsible for taking the IRS to task for its missteps in handling taxpayer issues. Read more
All Forms 8809, Application for Extension of Time to File Information Returns, filed on paper are now processed by the Internal Revenue Service Center in Ogden, Utah. These paper forms must be mailed. Faxes will not be accepted.
The Department Of The Treasury Mailing Address Is:
Department Of The Treasury
Internal Revenue Service Center
Ogden, UT 84201-0209
Telephone Service In An Omnichannel Environment – Communicating With The IRS Over The Phone Must Be Made Easier For Taxpayers (Part 2)
In last week’s blog, Telephone Service in an Omnichannel Environment – The IRS Must Make Communicating with the IRS Over the Phone Easier for Taxpayers, I discussed some of the struggles taxpayers will face during filing season while trying to get help from the IRS over the phone. Given the challenges of increased call volume and confusion over the tax law changes, along with the uncertainty of the IRS’s final funding level for Fiscal Years 2018 and 2019, the IRS has projected its “level of service” (LOS) on its Accounts Management lines will be anywhere from 40 percent to 80 percent for Filing Season (FS) 2018. In a later blog, I will discuss my concerns about how the IRS calculates LOS and whether that measure provides accurate information about callers’ experience with the phones. Read more
WASHINGTON – The Treasury Department and the Internal Revenue Service (IRS) announced modifications to the procedures for changing the accounting period of foreign corporations owned by U.S. shareholders that are subject to the transition tax under the Tax Cuts and Jobs Act.
On Dec. 29, 2017, the Treasury Department and the IRS provided initial guidance on computing the transition tax in Notice 2018-07. On Jan. 19, 2018, the Treasury Department and the IRS provided additional guidance in Notice 2018-13. Read more
Telephone Service In An Omnichannel Environment – Communicating With The IRS Over The Phone Must Be Made Easier For Taxpayers (Part 1)
Jan. 29th marked the start of the 2018 tax filing season, as the IRS began accepting and processing an estimated 155 million individual tax returns for Tax Year 2017. Taxpayers have between now and April 17, 2018 to file their individual tax returns with the IRS, either online or through the mail, or obtain a filing extension until Oct. 15th. Filing season can be stressful for taxpayers in the best of times, as many have questions about how to properly report their earnings, claim deductions, and comply with their tax obligations. Read more
We’ve written previously about the newly-enacted Code Section 7345 of the Internal Revenue Code, which authorizes the denial, revocation, or limiting of a delinquent taxpayer’s U.S. passport. We’ve noted that the statutory language contained in the new law offers few details about how exactly the penalty will be administered and to what extent exceptions would apply.
The IRS has since provided some additional details relating to the passport revocation rule on its website, but more formal guidance was expected to further flesh out the revocation penalty. Read more