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Tag Archive for IRS

Know The IRS Collection Statue Expiration Date

Keith Jones:The IRS Collection Statue Expiration Date

IRS Collection Statue Expiration Date (CSED)
“It is a basic concept of law that once a statute of limitation has passed, no action barred by the statute may take place.”

–Procedurally Taxing

The IRS collections statute expiration date (CSED) is the date after which the IRS can no longer collect a tax debt.

When things are simple, the CSED is easily calculated as 10 years from the date of assessment.

This means that no matter how little the IRS has been able to collect on a tax debt assessed in April of 2007, they must cease collection on that debt in April of 2017.

However, when you’re working with the IRS, things are rarely as simple as you’d like. There are a handful of events that can result in extending the CSED date (sometimes called “tolling events”).
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IRS Reminds Businesses Filing Cash Transactions

IRS Reminds Businesses Filing Cash Transactions

IRS reminds businesses filing cash transaction reports about e-file option; batch filing now available

The Internal Revenue Service reminds businesses required to file reports of large cash transactions that e-filing is a fast, easy and secure option for filing their reports. Now, businesses can batch file their reports, which is especially helpful to those required to file many forms.

Although businesses have the option of filing Form 8300, Report of Cash Payments Over $10,000, on paper, many have already found the free and secure e-filing system is a more convenient and cost-effective way to meet the reporting deadline. The form is due 15 days after a transaction and there’s no charge for the e-file option.

Although many cash transactions are legitimate, information reported on this form can help stop those who evade taxes, profit from the drug trade, engage in terrorist financing and conduct other criminal activities. The government can often trace money from these illegal activities through the payments reported on Form 8300 and other cash reporting forms.
Businesses that file Form 8300 electronically get free, automatic acknowledgment of receipt when they file. In addition, electronic filing is more accurate, reducing the need for follow-up correspondence with the IRS.
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Working Virtually: Protect Tax Data At Home And At Work

Working Virtually: Protect Tax Data At Home And At Work

With cyberthieves active during COVID-19, the Internal Revenue Service and the Security Summit partners today urged tax professionals to review critical security steps to ensure they are fully protecting client data whether working in the office or a remote location.

Many tax professionals have expanded telework options this year as firms, like other businesses, work to keep personnel safe, practice recommended safety guidelines and use technology to virtually serve their clients.

During this period, the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) have urged organizations to maintain a heightened state of alert as cybercriminals seek to exploit Covid-19 concerns.

To assist tax professionals with the security basics, the IRS, state tax agencies and nation’s tax industry are launching a five-part series called Working Virtually: Protecting Tax Data at Home and at Work. The special series is designed to help practitioners assess their home and office data security. The first recommendation today covers the “Security Six” – basic steps that should be taken for every work location. The series will continue each Tuesday through August 18.

“The Security Summit partners urge tax professionals to take time this summer to give their data safeguards a thorough review and ensure that these protections are in place whether they work from home or the office,” said IRS Commissioner Chuck Rettig.
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IRS Unveils ‘Dirty Dozen’ List Of Tax Scams For 2020

IRS unveils ‘Dirty Dozen’ list of tax scams for 2020; Americans urged to be vigilant to these threats during the pandemic and its aftermath The Internal Revenue Service announced its annual "Dirty Dozen" list of tax scams with a special emphasis on aggressive and evolving schemes related to coronavirus tax relief, including Economic Impact Payments.

IRS unveils ‘Dirty Dozen’ list of tax scams for 2020; Americans urged to be vigilant to these threats during the pandemic and its aftermath

The Internal Revenue Service announced its annual “Dirty Dozen” list of tax scams with a special emphasis on aggressive and evolving schemes related to coronavirus tax relief, including Economic Impact Payments.

This year, the Dirty Dozen focuses on scams that target taxpayers. The criminals behind these bogus schemes view everyone as potentially easy prey. The IRS urges everyone to be on guard all the time and look out for others in their lives.

“Tax scams tend to rise during tax season or during times of crisis, and scam artists are using pandemic to try stealing money and information from honest taxpayers,” said IRS Commissioner Chuck Rettig. “The IRS provides the Dirty Dozen list to help raise awareness about common scams that fraudsters use to target people. We urge people to watch out for these scams. The IRS is doing its part to protect Americans. We will relentlessly pursue criminals trying to steal your money or sensitive personal financial information.”

Taxpayers are encouraged to review the list in a special section on IRS.gov and be on the lookout for these scams throughout the year. Taxpayers should also remember that they are legally responsible for what is on their tax return even if it is prepared by someone else. Consumers can help protect themselves by choosing a reputable tax preparer.

The IRS urges taxpayers to refrain from engaging potential scammers online or on the phone. The IRS plans to unveil a similar list of enforcement and compliance priorities this year as well.
An upcoming series of press releases will emphasize the illegal schemes and techniques businesses and individuals use to avoid paying their lawful tax liability. Topics will include such scams as abusive micro captives and fraudulent conservation easements.

Here are this year’s ‘Dirty Dozen’ scams:
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J5 Reflects On Two-Years Pursuing Global Tax Cheats

J5 Reflects On Two-Years Pursuing Global Tax Cheats

Leaders from five international tax organizations are marking the two-year anniversary of the formation of the Joint Chiefs of Global Tax Enforcement (J5) this week.
The J5 includes the Australian Taxation Office (ATO, the Canadian Revenue Agency (CRA), the Dutch Fiscal Information and Investigation Service (FIOD), Her Majesty’s Revenue and Customs (HMRC) from the UK and the Internal Revenue Service Criminal Investigation Division (IRS-CI) from the US.

Taking advantage of each country’s strengths, the J5’s initial focus was on enablers of tax crime, virtual currency and platforms that enable each country to share information in a more efficient manner. Within the framework of each country’s laws, J5 countries shared information and were able to open new cases, more completely develop existing cases, and find efficiencies to reduce the time it takes to work cases. Operational results have always been the goal of the organization and they have started to materialize.

“While operational results matter, I’ve been most excited at the other benefits that this group’s existence has provided,” said Don Fort, Chief, IRS Criminal Investigation. “In speaking with law enforcement partners domestically and abroad as well as stakeholders in various public and private tax organizations, there is real support for this organization and tangible results we have all seen due to the cooperation and global leadership of the J5.”
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IRS Outlines Changes To Health Care Spending Available Under CARES Act

IRS: TaxConnections: Care Act

The Internal Revenue Service has advised that new rules under the CARES Act provide flexibility for health care spending that may be helpful in the current environment where more people may need at-home services due to measures to fight the coronavirus.

Telehealth And High Deductible Health Plans

Under the CARES Act, a high deductible health plan (HDHP) temporarily can cover telehealth and other remote care services without a deductible, or with a deductible below the minimum annual deductible otherwise required by law. Telehealth and other remote care services also are temporarily included as categories of coverage that are disregarded for the purpose of determining whether an individual who has other health plan coverage in addition to an HDHP is an eligible individual who may make tax-favored contributions to his or her HSA. Thus, an otherwise eligible individual with coverage under an HDHP may still contribute to an HSA despite receiving coverage for telehealth and other remote care services before satisfying the HDHP deductible, or despite receiving coverage for these services outside the HDHP. The temporary rules under the CARES Act, as extended by IRS Notice 2020-29, apply to services provided on or after Jan. 1, 2020, with respect to plan years beginning on or before Dec. 31, 2021.

Expansion Of Qualified Medical Expenses

The CARES Act also modifies the rules that apply to various tax-advantaged accounts (HSAs, Archer MSAs, Health FSAs, and HRAs) so that additional items are “qualified medical expenses” that may be reimbursed from those accounts. Specifically, the cost of menstrual care products is now reimbursable. These products are defined as tampons, pads, liners, cups, sponges or other similar products. In addition, over-the-counter products and medications are now reimbursable without a prescription. The new rules apply to amounts paid after Dec. 31, 2019. Taxpayers should save receipts of their purchases for their records and so that they are able to submit claims for reimbursements.
More information

The IRS will provide any further updates as soon as they are available on its webpage at IRS.gov/coronavirus

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IRS’ People First Initiative Provides Compliance Relief

IRS’ People First Initiative Provides Compliance Relief

The Internal Revenue Service unveiled the People First Initiative on March 25, 2020. It is an unprecedented effort to temporarily scale back many collection and enforcement activities by the IRS during the COVID-19 global pandemic.

The purpose of the People First Initiative is to immediately ease the burden on people facing tax issues as much as possible, to enable them to better focus on the well-being of themselves and others during this unprecedented situation for the nation. It is not permanent, but it will stay in effect until it is deemed to no longer be needed.

In consultation with its partners, the IRS will continue to review the People First Initiative and modify or expand it as needed during this situation.

Main Elements of People First Initiative
The initiative modifies numerous IRS compliance programs, providing taxpayer relief for the following programs:
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IRS Provides Answers About Tax Relief For Qualified Opportunity Funds And Investors

IRS Provides Answers About Tax Relief For Qualified Opportunity Funds And Investors

The Internal Revenue Service today provided guidance for Qualified Opportunity Funds (QOFs) and their investors in response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic.

Notice 2020-39 (PDF) answers questions regarding relief from certain requirements under section 1400Z-2 of the Internal Revenue Code (Code) and the implementing regulations. Additionally, the IRS has updated the Qualified Opportunity Zones frequently asked questions.

Taxpayers who sold property for an eligible gain and who would have had 180 days to invest in a QOF to defer that gain, may have additional time. Notice 2020-39 provides that if a taxpayer’s 180th day to invest in a QOF would have fallen on or after April 1, 2020, and before December 31, 2020, the taxpayer now has until December 31, 2020 to invest that gain into a QOF. (The 180th day for some of these taxpayers was already postponed through July 15, 2020, under Notice 2020-23.) In addition, the notice provides that the period between April 1, 2020, and December 31, 2020, is suspended for purposes of the 30-month period during which property may be substantially improved.
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Treasury, IRS Provide Safe Harbor For Taxpayers That Develop Renewable Energy Projects

The Treasury Department and the Internal Revenue Service is providing relief for taxpayers developing renewable energy projects and producing electricity from sources such as wind, biomass, geothermal, landfill gas, trash, and hydropower. Safe harbor is also available for taxpayers using technologies such as solar panels, fuel cells, microturbines, and combined heat and power systems.

The IRS recognizes that COVID-19 has caused industry-wide delays in the supply chain for components needed to complete renewable energy projects otherwise eligible for important tax credits. The IRS has issued Notice 2020-41 to provide tax relief to affected taxpayers.

For certain projects that began construction in 2016 or 2017, Notice 2020-41 adds an extra year to the four year “Continuity Safe Harbor” provided in existing guidance. If these projects are placed in service in five years construction will be deemed continuous.

Notice 2020-41 also provides assurance for taxpayers who started construction by incurring 5 percent of project costs, and made payments for services or property and reasonably expected to receive such services or property within 3 ½ months. These taxpayers are considered incurred under economic performance rules. The Notice provides that if such services or property are received by October 15, 2020, the taxpayer’s expectations at the time of the 2019 payment are deemed reasonable.
Extending the Continuity Safe Harbor and providing a 3½ Month Safe Harbor will provide flexibility for taxpayers to satisfy the beginning of construction requirements and limit the impact of COVID-19-related delays on the ability to claim tax credits.

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IRS People First Initiative Limits Certain Enforcement Actions

IRS People First Initiative Limits Certain Enforcement Actions

The IRS postponed certain compliance actions under a new program entitled “IRS People First Initiative,” effective April 1, and running through July 15 initially, in an effort to help taxpayers facing tax challenges in light of the Coronavirus (COVID-19) pandemic. The changes include issues ranging from postponing certain payments related to Installment Agreements and Offers in Compromise to collection procedures and limiting certain enforcement actions.

The new IRS People First Initiative outlines the IRS’s temporary policies in the following key tax areas:

-Earned Income Tax Credit and Wage Verification Reviews
-Non-Filers
-Audits
-Appeals
-Field Collection Actions
-Liens and Levies
-Passport Certifications to the State Department
-Private Debt Collection
-Statute of Limitations
-Practitioner Priority Service
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IRS Provides Tax Relief Through Increased Flexibility For Taxpayers In Section 125 Cafeteria Plans

IRS Provides Tax Relief Through Increased Flexibility For Taxpayers In Section 125 Cafeteria Plans

The Internal Revenue Service today released guidance to allow temporary changes to section 125 cafeteria plans. These changes extend the claims period for health flexible spending arrangements (FSAs) and dependent care assistance programs and allow taxpayers to make mid-year changes.

The guidance issued today addresses unanticipated changes in expenses because of the 2019 Novel Coronavirus (COVID-19) pandemic and provides that previously provided temporary relief for high deductible health plans may be applied retroactively to January 1, 2020, and it also increases for inflation the $500 permitted carryover amount for health FSAs to $550.

Notice 2020-29 (PDF) provides greater flexibility for taxpayers by:

-extending claims periods for taxpayers to apply unused amounts remaining in a health FSA or dependent care assistance program for expenses incurred for those same qualified benefits through December 31, 2020.
-expanding the ability of taxpayers to make mid-year elections for health coverage, health FSAs, and dependent care assistance programs, allowing them to respond to changes in needs as a result of the COVID-19 pandemic.
-applying earlier relief for high deductible health plans to cover expenses related to COVID-19, and a temporary exemption for telehealth services retroactively to January 1, 2020.
Notice 2020-33 (PDF) responds to Executive Order 13877, which directs the Secretary of the Treasury to “issue guidance to increase the amount of funds that can carry over without penalty at the end of the year for flexible spending arrangements.” The notice increases the limit for unused health FSA carryover amounts from $500, to a maximum of $550, as adjusted annually for inflation.

IRS

IRS Adds Phone Operators To Answer Economic Impact Payment Questions

IRS Adds Phone Operators To Answer Economic Impact Payment Questions

The Internal Revenue Service is starting to add 3,500 telephone representatives to answer some of the most common questions about Economic Impact Payments.IRS telephone assistance and other services will remain limited, and answers for most of the common questions related to Economic Impact Payments are available on IRS.gov. The IRS anticipates bringing back additional assistors as state and local advisories permit.

Answers for most Economic Impact Payment questions are available on the automated message for people who call the phone number provided in the letter (Notice 1444). Those who need additional assistance at the conclusion of the message will have the option of talking to a telephone representative.
Americans are encouraged to use IRS.gov.

The IRS regularly posts new and updated answers to the most frequently asked questions about Economic Impact Payments and the Get My Payment tool. Those who wish to know the status of their Economic Impact Payment are reminded to check Get My Payment regularly; the information is frequently updated as the IRS continues to process the remaining payments for delivery.
For those who are eligible for an Economic Impact Payment but aren’t required to file a tax return, the IRS reminds them the Non-Filers tool also remains available in English or Spanish for them to register for a payment.

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