Posts Tagged ‘Internal Revenue Service’

IRS Reiterates Warning of Pervasive Telephone Scam

Tuesday, April 15th, 2014

Sent In the IRS Newswire

WASHINGTON – As the 2014 filing season nears an end, the Internal Revenue Service today issued another strong warning for consumers to guard against sophisticated and aggressive phone scams targeting taxpayers, including recent immigrants, as reported incidents of this crime continue to rise nationwide. These scams won’t likely end with the filing season so the IRS urges everyone to remain on guard.

The IRS will always send taxpayers a written notification of any tax due via the U.S. mail. The IRS never asks for credit card, debit card or prepaid card information over the telephone. For more information or to report a scam, go to and type “scam” in the search box.

People have reported a particularly aggressive phone scam in the last several months. Immigrants are frequently targeted. Potential victims are threatened with deportation, arrest, having their utilities shut off, or having their driver’s licenses revoked. Callers are frequently insulting or hostile – apparently to scare their potential victims.

Potential victims may be told they are entitled to big refunds, or that they owe money that must be paid immediately to the IRS. When unsuccessful the first time, sometimes phone scammers call back trying a new strategy.

Other characteristics of this scam include:

• Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves.

• Scammers may be able to recite the last four digits of a victim’s Social Security number.

• Scammers spoof the IRS toll-free number on caller ID to make it appear that it’s the IRS calling.

• Scammers sometimes send bogus IRS emails to some victims to support their bogus calls.

• Victims hear background noise of other calls being conducted to mimic a call site.

• After threatening victims with jail time or driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.

If you get a phone call from someone claiming to be from the IRS, here’s what you should do:

• If you know you owe taxes or you think you might owe taxes, call the IRS at 1.800.829.1040. The IRS employees at that line can help you with a payment issue – if there really is such an issue.

• If you know you don’t owe taxes or have no reason to think that you owe any taxes (for example, you’ve never received a bill or the caller made some bogus threats as described above), then call and report the incident to the Treasury Inspector General for Tax Administration at 1.800.366.4484.

• If you’ve been targeted by this scam, you should also contact the Federal Trade Commission and use their “FTC Complaint Assistant” at Please add “IRS Telephone Scam” to the comments of your complaint.

Taxpayers should be aware that there are other unrelated scams (such as a lottery sweepstakes) and solicitations (such as debt relief) that fraudulently claim to be from the IRS.

The IRS encourages taxpayers to be vigilant against phone and email scams that use the IRS as a lure. The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS also does not ask for PINs, passwords or similar confidential access information for credit card, bank or other financial accounts. Recipients should not open any attachments or click on any links contained in the message. Instead, forward the e-mail to

More information on how to report phishing scams involving the IRS is available on the genuine IRS website,

You can reblog the IRS tax scam alert via Tumblr.

What do I need to know about the Health Care Law for my 2013 Tax Return?

Tuesday, March 18th, 2014

Originally shared via the IRS Tax Tips Mailing List

For most people, the Affordable Care Act has no effect on their 2013 federal income tax return. For example, you will not report health care coverage under the individual shared responsibility provision or claim the premium tax credit until you file your 2014 return in 2015.

However, for some people, a few provisions may affect your 2013 tax return, such as increases in the itemized medical deduction threshold, the additional Medicare tax and the net investment income tax.

Here are some additional tips:

Filing Requirement: If you do not have a tax filing requirement, you do not need to file a 2013 federal tax return to establish eligibility or qualify for financial assistance, including advance payments of the premium tax credit to purchase health insurance coverage through a Health Insurance Marketplace. Learn more at

W-2 Reporting of Employer Coverage: The value of health care coverage reported by your employer in box 12 and identified by Code DD on your Form W-2 is not taxable. Learn more.

Information available about other tax provisions in the health care law: More information is available on regarding the following tax provisions: Premium Rebate for Medical Loss Ratio, Health Flexible Spending Arrangements, and Health Saving Accounts.

More Information

Find out more tax-related provisions of the health care law at

Find out more about the Health Insurance Marketplace at

Taxpayers Plan to Use Tax Refunds for Necessary Expenses

Thursday, February 27th, 2014

Originally Published in Accounting Today

About 52 percent of Americans intend to spend their annual tax refund on necessary expenses such as loans, credit cards and other household expenses, while another 30 percent plan to put the money into savings and only 8 percent plan to invest the tax refund money, according to a new survey.

The survey, released Tuesday by the financial services firm Edward Jones, contrasts with a similar survey released Monday by TD Ameritrade, which found greater interest in investing tax refunds, at least among the investors who were polled (see Many Plan to Invest Their Tax Refunds).

The Edward Jones survey polled over 1,000 taxpayers in general. It found that the respondents between the ages of 55 and 64 are most likely to save their refund (43 percent). Respondents who are just a few years younger had a much different opinion, with only 25 percent of those between 45 and 54 years of age planning to save their tax refunds. The survey’s youngest respondents, those between the ages of 18 and 34, are most likely to spend their refund checks on “fun” things such as clothes, entertainment and restaurants (12 percent). This compares to just 5 percent of those 65 and older who would do the same.

Household income has the most influence on the decision to save, spend or invest a tax refund in 2014. Survey respondents with the lowest household income (those making less than $35,000 a year) are the most likely to spend their tax refund on necessary expenses (61 percent). This compares to just over one-third (37 percent) of those with the highest household income ($100,000 or more). The wealthiest respondents are not the most likely to invest their refunds, the survey found. Instead, those with household incomes between $50,000 and $75,000 were the most likely to invest the tax refund money.

In general, households with children are the most likely to spend their tax refunds on everyday expenses, and those with older children are even more likely. Following that point, Americans with no children are the most likely (10 percent) to spend their tax refund on something “fun,” whereas only 1 percent of those with children ages 13 to 17 are willing to splurge.

Americans living in the Northeast are the most likely to invest their tax refunds (11 percent). Those who live in the West are the most likely simply to save their tax refunds (35 percent).

IRS to Begin Accepting Business Tax Returns on Jan. 13

Thursday, December 26th, 2013

orignially posted to on December 24, 2013

The Internal Revenue Service plans to begin accepting business tax returns on January 13, more than two weeks ahead of the start date for accepting individual tax returns.

The IRS announced last Wednesday that it would begin accepting individual 1040 tax returns on January 31, blaming the 16-day federal government shutdown in October for delaying its annual programming, updating and testing its tax-processing systems (see IRS Sets the Date: Tax Season Starts Jan. 31). However, the IRS posted on its Web site last Thursday that it will also begin accepting 2013 business tax returns on Monday, Jan. 13, 2014. This start date applies to both electronically filed and paper-filed returns.

The business tax returns include any return that posts on the IRS’s Business Master File system. BMF tax returns include a variety of income tax and information returns such as Form 1120 filed by corporations, Form 1120S filed by S corporations, Form 1065 filed by partnerships and Form 1041, the return filed by estates and trusts. It also includes various excise and payroll tax returns, such as Form 720, Form 940, Form 941 and Form 2290. The IRS expects to be able to begin processing any of these business returns on January 13.

The IRS noted that the January 13 start date does not apply to unincorporated small businesses that report their income on Form 1040. The start date for all 1040 filers is Jan. 31, 2014. While the IRS is encouraging these small businesses to begin preparing their returns now, it will not be able to accept these or any other individual returns or begin processing them until January 31. This includes sole proprietors who file a Schedule C, landlords who file a Schedule E and farmers who file a Schedule F.

Further details are available on

Shutdown Causes IRS to Delay Tax Filing Season

Tuesday, October 22nd, 2013

originally posted on on October 22, 2013

WASHINGTON (AP) – Here’s more fallout from the government’s partial shutdown: Early tax filers will have to wait an extra week or two to get tax refunds next year.

The Internal Revenue Service said Tuesday it will delay the start of next year’s filing season by up to two weeks to give programmers time to finish updating the agency’s computers. The 16-day shutdown interrupted their work.

The filing season had been set to start Jan. 21. Acting IRS commissioner Danny Werfel said the agency is working to shorten the delay and will announce the exact start date in December.

The delay will affect early filers, many of whom rush their returns to the IRS so they can quickly get refunds.

The April 15 deadline for filing individual tax returns remains unchanged.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

IRS Halts Tax Liens and Levies During Shutdown

Sunday, October 13th, 2013

originally posted on on October 10, 2013

The Internal Revenue Service is putting the brakes on tax liens and levies during the federal government shutdown.

The IRS said in a Web page about the shutdown that it is not sending out levies or liens, either those generated systemically or those manually generated by employees. In a previous Web posting last week, the IRS had suggested that it would continue to send out automated notices of various kinds (see IRS Suspends Tax Refunds and Tax Court Closes during Government Shutdown).

In an effort to clarify the previous information, the IRS noted that taxpayers might still receive levy or lien correspondence with October mailing dates, but those notices were printed before IRS shutdown operations were fully complete. The IRS explained that it is standard practice for such notices to be printed with a future date to allow for mailing time to reach taxpayers.

In addition, the IRS pointed out that other letters related to liens and levies—such as notifications that a taxpayer could potentially be subject to a lien or a levy at a future date—continue to be automatically generated by IRS systems during the appropriations lapse. “However, the IRS emphasizes that these notices are not actual levies or liens; just a notification of potential future action,” said the IRS. For more information on the IRS collection process, see Publication 594.

The IRS also clarified whether its personnel are continuing to take enforcement actions during this period.

“In non-criminal cases, the only enforcement actions the IRS is taking during the appropriations lapse involve isolated instances where we need to take immediate action to protect the government’s interest,” said the IRS. “So any enforcement action in this category—such as seizures—would be extremely limited. For example, where the expiration of the statute of limitations on collection action is imminent. For criminal issues, most IRS Criminal Investigation employees continue to work during this period, similar to other federal law-enforcement agencies.”

Tax Return Processing
The IRS also clarified its procedures for tax return processing. Last week, it noted that individuals and businesses should keep filing their tax returns and making deposits with the IRS, as they are required to do so by law. It urged taxpayers to file electronically because most e-filed returns will be processed automatically. Payments accompanying electronic tax returns will be accepted as the IRS receives them, although the IRS said it would be unable to issue refunds during the shutdown.

The processing of paper returns will be delayed until full government operations resume. Payments accompanying paper tax returns will still be accepted as the IRS receives them, though the IRS will be unable to issue refunds during this time. Paper tax returns will be considered to be timely filed even though the IRS is not processing paper returns, the IRS clarified. Since the U.S. Postal Service is continuing to operate during the shutdown, and they will postmark and deliver mail to the IRS. “Any return postmarked by the due date will be considered timely filed by the IRS even though processing of the return may not occur until after the return due date depending on the length of the lapse in appropriations,” said the IRS.

Tax Transcripts
The IRS also noted that individual taxpayers are able to obtain tax transcripts during the shutdown. “This is an automated process,” said the IRS. “Taxpayers can still use automated tools, including, to request that a transcript of their personal tax records be sent to their address of record; the taxpayer will typically receive transcripts in the mail within five to 10 calendar days.”

However, a third party cannot obtain a tax transcript during the shutdown. The IRS explained that transcript requests from third parties require actions by IRS employees, who are not available due to the current lapse in government appropriations. “During this period, transcript requests by third parties, such as financial institutions, cannot be processed through the Return and Income Verification Services and Income Verification Express Service,” said the IRS. “These processes are not automated. However, individuals requesting their own transcripts can use the automated process, which remains available.” The IRS did not specify whether the transcripts are available to tax practitioners.

Oct. 15 Deadline Still in Effect, IRS Warns

Saturday, October 12th, 2013

originally posted on on October 8, 2013

The Internal Revenue Service reminded taxpayers that the October 15 deadline remains in effect for people who requested a six-month extension to file their tax return.

While the current government shutdown has shuttered many offices and turned off many services, it “does not affect the federal tax law, and all taxpayers should continue to meet their tax obligations as normal,” the IRS said in a statement.

Over 12 million people filed for automatic six-month extensions earlier in 2013, most of whom will have to file by the October 15 deadline. Some groups do have more time, the IRS noted, including members of the military and others serving in Afghanistan or other combat zones, as well as people in parts of Colorado affected by severe weather, flooding, landslides and mudslides.

The service encouraged taxpayers to e-file their returns, but said that it would accept returns both electronically or on paper, and accept and process payments accompanying either type of return. It will not be able to issue refunds, however, until normal government operations resume.

IRS Streamlines Innocent Spouse Relief

Thursday, September 19th, 2013

originally posted on – September 17, 2013

The Internal Revenue Service has issued new guidance and streamlined procedures for spouses who are seeking equitable relief from joint income tax liability.

Revenue Procedure 2013-34 supersedes the earlier Revenue Procedure 2003-61. It provides the threshold requirements for any request for equitable relief and sets forth conditions under which the IRS will make streamlined relief determinations granting equitable relief from an understatement of income tax or an underpayment of income tax reported on a joint return, or the operation of community property law.

The revenue procedure also provides a nonexclusive list of factors for consideration in determining whether relief should be granted because it would be inequitable to hold a requesting spouse jointly and severally liable when the original conditions under the Tax Code are not met.

The factors also will apply in determining whether to relieve a spouse from income tax liability resulting from the operation of community property law under the equitable relief provisions.

The revenue procedure applies to spouses who request either equitable relief from joint and several liability under Section 6015(f) of the Tax Code, or equitable relief under Section 66(c) from income tax liability resulting from the operation of community property law.

In 2011, the IRS eliminated the two-year statute of limitations on requests for innocent spouse relief (see IRS Eliminates 2-Year Limit on Innocent Spouse Requests). The new revenue procedure notes that if the requesting spouse is applying for relief from a liability or a portion of a liability that remains unpaid, the request for relief must be made on or before the Collection Statute Expiration Date, or the date the period of limitation on collection of the income tax liability expires, as provided in section 6502. “Generally, that period expires 10 years after the assessment of tax, but it may be extended by other provisions of the Internal Revenue Code.”

The new revenue procedure also provides that if the nonrequesting spouse abused the spouse who is requesting relief from the IRS, or maintained control over the household finances by restricting the requesting spouse’s access to financial information, and because of the abuse or financial control, the requesting spouse was not able to challenge the treatment of any items on the joint return, or to question the payment of the taxes reported as due on the joint return or challenge the nonrequesting spouse’s assurance regarding payment of the taxes, for fear of the nonrequesting spouse’s retaliation, then the abuse or financial control will result in satisfying the factor needed for a streamlined determination even if the requesting spouse knew or had reason to know of the items giving rise to the understatement or deficiency, or knew or had reason to know that the nonrequesting spouse would not pay the tax liability.

Revenue Procedure 2013-34 will be published in Internal Revenue Bulletin 2013-42 on Oct. 7, 2013.

Treasury and IRS Propose Rules for Affordable Care Act Information Reporting

Tuesday, September 10th, 2013

content originally posted to on September 9, 2013

The Treasury Department and the Internal Revenue Service have issued proposed regulations to implement the information reporting requirements for insurers and certain employers under the Affordable Care Act.

The ACA provides for information reporting by insurers, self-insuring employers and other parties that provide health coverage. It also provides for information reporting by employers that are large enough to be subject to the employer shared responsibility provisions regarding the health coverage they offer their full-time employees.

The regulatory proposals come amid an ongoing dialogue that the Treasury and the IRS say they have been engaging in with representatives of employers, insurers, other reporting entities and individual taxpayers. Other stakeholders who have been providing input include plan sponsors, many of whom already offer their full-time workforce coverage far exceeding the minimum employer shared responsibility requirements. Nearly 95 percent of employers with more than 50 full-time employees already offer coverage to their employees, the Treasury and the IRS noted.

“Today’s proposed rules enable us to continue engaging on how best to implement the ACA reporting requirements in a more streamlined and focused manner,” said Assistant Treasury Secretary for Tax Policy Mark J. Mazur in a statement. “We will continue to consider ways, consistent with the law, to simplify the new information reporting process and bring about a smooth implementation of those new rules. Doing so will help ensure that the ACA effectively and efficiently delivers its historic tax benefits that promote health security for all Americans.”

The proposed rules, which were issued last Thursday, describe a variety of options to potentially reduce or streamline information reporting, such as replacing Section 6056 employee statements with Form W-2 reporting on offers of employer-sponsored coverage to employees, spouses, and dependents. The proposals would also eliminate the need to determine whether particular employees are full-time if adequate coverage is offered to all potentially full-time employees.

They would also allow employers to report the specific cost to an employee of purchasing employer-sponsored coverage only if the cost is above a specified dollar amount.

In addition, the proposed regulations would allow self-insured group health plans to avoid furnishing employee statements under both Section 6055 and Section 6056 of the Tax Code by instead providing a single substitute statement. They would also limit reporting for certain self-insured employers offering no-cost coverage to employees and their families.

In addition, the proposed rules would permit health insurance issuers to forgo reporting under Section 6055 on individual coverage offered through a health insurance marketplace, also known as an health insurance exchange, because that information will be provided by the marketplace.

In addition, the proposed rules would permit health insurance issuers, employers and other reporting entities under Section 6055 to forgo reporting the specific dates of coverage (instead reporting only the months of coverage), the amount of any cost-sharing reductions, or the portion of the premium paid by an employer.

The statute calls for employers, insurers and other reporting entities to report, among other things:

•  For Section 6055:
o    Information about the entity providing coverage, including contact information.
o    A list of individuals with identifying information and the months they were covered.

• For Section 6056:
o    Information about the applicable large employer offering coverage (including contact information for the employer and the number of full-time employees).
o    A list of full-time employees and information about the coverage offered to each, by month, including the cost of self-only coverage.

The Treasury and the IRS are inviting stakeholders to submit comments on the Section 6055 and 6056 proposed rules through early November. They said the public comments will be taken into account in developing final reporting rules.

Once the final rules have been published, reporting entities will be encouraged to voluntarily implement information reporting in 2014 (when reporting will be optional), in preparation for the full application of the reporting provisions in 2015.  Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015.

The proposed regulations for insurance providers under Section 6055 can be viewed here. The proposed regulations for employers under Section 6056 can be viewed here.

IRS Pressed to Explain Audits of Veterans’ Organizations

Wednesday, September 4th, 2013

originally posted to on September 3, 2013

The American Legion and other veterans’ organizations are expressing concern over reports that the Internal Revenue Service is requiring them to maintain military service records for their members or face stiff penalties.

The conservative news site, the Daily Caller, reported last week that the IRS is now requiring American Legion posts to maintain dates of service and character of service records for all their members, with a penalty of $1,000 per day if they don’t comply. The American Legion only recently learned about a section of the 2011 Internal Revenue Manual pertaining to audits of veterans’ organizations.

However, according to a report by a local Georgia news outlet, the Dalton Daily Citizen, leaders of two American Legion posts say they hadn’t ever heard about the issue before, nor been approached by the IRS to provide documentation of their members’ service records.

A Republican senator has written a letter to the IRS asking for details about the reports, which have also been reported by the Fox News Channel. Sen. Jerry Moran, R-Kan., demanded answers in a letter addressed last Tuesday to IRS acting commissioner Daniel Werfel about IRS efforts to audit veteran service organizations in Kansas and across the country. He asked that the IRS cease carrying out the audits until the mandate is reviewed to be certain the privacy of veterans is respected.

“Even after they return home from war, veterans in America continue to fight battles,” Moran wrote. “Many struggle to find a job, face difficulties accessing quality health care services, or wait senselessly long periods of time for their benefits claims to be processed by the federal government. The last thing veterans should have to worry about is their privacy within veteran service organizations, or the ability of those organizations to endure seemingly arbitrary IRS audits and the severe financial penalties that could ensue. This news is deeply concerning to me and the thousands of veterans I represent in Kansas.”

Moran asked that the following questions be addressed by the agency: What legal authority does the IRS have in carrying out a mandate for personal, military service records? Was this mandate reviewed by IRS general counsel?

He asked Werfel to provide documentation that gives the IRS the authority to collect this information. Moran also asked under whose leadership was the mandate initiated, for what direct purpose, and who had the approving authority for the mandate. He also wanted to know if veteran service organizations were ever specifically notified of the requirement. If so, he asked Werfel to provide the documentation that was issued to these organizations, and if not, to explain why organizations were not notified. “Is it true that an organization unable or unwilling to provide this information could be charged penalty fees of $1,000 per day?” Moran also asked. “Please provide clarification regarding the penalty for noncompliance.”

Accounting Today also asked the IRS for an explanation and received the following statement from an IRS spokesperson. “By law, the IRS cannot comment on individual taxpayers or organizations,” said the IRS. “Given the unique role of veterans’ organizations in our country, there are special rules in the nation’s tax law to provide tax-exempt status. In fact, there are specific criteria set by Congress that these groups must meet to qualify and operate under Internal Revenue Section 501(c)(19), ranging from membership guidelines to fund-raising efforts.

“For example, tax laws require that qualifying veterans groups must have at least 75 percent of their members who are past or present members of the Armed Forces and 97.5 percent of the total membership must be from the Armed Forces, cadets or have other close relationships to members of the military,” the IRS added. “The IRS conducts exams of veterans’ organizations to ensure adherence to such details of the tax code. Given the important role these charities play in the nation, exams help protect the integrity of the tax-exempt sector and the important groups operating under the special provisions of the tax law. There is no special enforcement effort underway regarding 501(c)(19) organizations, just regular compliance activity. The IRS also has a variety of special publications and other outreach to assist these groups in meeting the criteria outlined under the federal tax law.”