News from the IRS

Public Announcements:

Taxpayers should watch for new versions of two tax-related scams. One involves Social Security numbers related to tax issues. The other threatens taxpayers with a tax bill from a fictional government agency. Here are some details about these scams to help taxpayers recognize them:

The SSN scheme

• The latest twist includes scammers claiming to be able to suspend or cancel the victim’s Social Security number. This scam is similar to and often associated with the IRS impersonation scam.
• It is yet another attempt by con artists to frighten taxpayers into returning robocall voicemails.
• Scammers may mention overdue taxes in addition to threatening to cancel the taxpayer’s SSN.

Fake tax agency

• This scheme involves a letter threatening an IRS lien or levy. 
• The scammer mails the letter to the taxpayer.
• The lien or levy is based on bogus overdue taxes owed to a non-existent agency.
• The fake agency is called the “Bureau of Tax Enforcement.” There is no such agency.
   
• The lien notification scam also likely references the IRS to confuse potential victims into thinking the letter is from a legitimate agency.

Both these schemes show classic signs of being scams. The IRS and its Security Summit partners – the state tax agencies and the tax industry – remind everyone to stay alert to scams that use the IRS or reference taxes. Being alert is especially important in late spring and early summer as tax bills and refunds arrive.

Share this tip on social media -- #IRSTaxTip: Taxpayers should be on the lookout for new versions of these two scams. https://go.usa.gov/xyYHB

June 20, 2019

Millions more ITINs set to expire in 2019; IRS says renew early to prevent refund delays

IRS YouTube Videos:
Individual Taxpayer Identification Number (ITIN) – English | Spanish

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WASHINGTON — Nearly 2 million Individual Taxpayer Identification Numbers (ITINs) are set to expire at the end of 2019 as the Internal Revenue Service continues to urge affected taxpayers to submit their renewal applications early to avoid refund delays next year.

“We urge taxpayers with expiring ITINs to take action and renew the number as soon as possible. Renewing before the end of the year will avoid unnecessary delays related to their refunds,” said IRS Commissioner Chuck Rettig. “To help with this process, the IRS is sharing this material in multiple languages. We encourage partner groups to share this important information to reach as many people with ITINs as possible.”   

Under the Protecting Americans from Tax Hikes (PATH) Act, ITINs that have not been used on a federal tax return at least once in the last three consecutive years will expire Dec. 31, 2019. In addition, ITINs with middle digits 83, 84, 85, 86 or 87 that have not already been renewed will also expire at the end of the year. These affected taxpayers who expect to file a tax return in 2020 must submit a renewal application as soon as possible. 

ITINs are used by people who have tax filing or payment obligations under U.S. law but who are not eligible for a Social Security number. ITIN holders who have questions should visit the ITIN information page on IRS.gov and take a few minutes to understand the guidelines.

The IRS continues a nationwide education effort to share information with ITIN holders. To help taxpayers, the IRS offers a variety of informational materials, including flyers and fact sheets, available in several languages, including English, Spanish, Traditional Chinese, Russian, Vietnamese, Korean and Haitian/Creole on IRS.gov.

Who should renew an ITIN

• Taxpayers whose ITIN is expiring and who expect to have a filing requirement in 2020 must submit a renewal application. Others do not need to take any action. ITINs with the middle digits 83, 84, 85 or 86, 87 (For example: 9NN-83-NNNN) need to be renewed even if the taxpayer has used it in the last three years. The IRS will begin sending the CP-48 Notice, You must renew your Individual Taxpayer Identification Number (ITIN) to file your U.S. tax return, in early summer to affected taxpayers. The notice explains the steps to take to renew the ITIN if it will be included on a U.S. tax return filed in 2020. Taxpayers who receive the notice after acting to renew their ITIN do not need to take further action unless another family member is affected. 

• ITINs with middle digits of 70 through 82 have previously expired. Taxpayers with these ITINs can still renew at any time, if they have not renewed already.

Family option remains available

Taxpayers with an ITIN that has middle digits 83, 84, 85, 86 or 87, as well as all previously expired ITINs, have the option to renew ITINs for their entire family at the same time. Those who have received a renewal letter from the IRS can choose to renew the family’s ITINs together, even if family members have an ITIN with middle digits that have not been identified for expiration. Family members include the tax filer, spouse and any dependents claimed on the tax return.

How to renew an ITIN

To renew an ITIN, a taxpayer must complete a Form W-7 and submit all required documentation. Taxpayers submitting a Form W-7 to renew their ITIN are not required to attach a federal tax return. However, taxpayers must still note a reason for needing an ITIN on the Form W-7. See the Form W-7 instructions for detailed information.

Spouses and dependents residing outside of the U.S. only need to renew their ITIN if filing an individual tax return, or if they qualify for an allowable tax benefit (e.g., a dependent parent who qualifies the primary taxpayer to claim head of household filing status.) In these instances, a federal return must be attached to the Form W-7 renewal application.

There are three ways to submit the Form W-7 application package. Taxpayers can:

• Mail the form, along with original identification documents or copies certified by the agency that issued them, to the IRS address listed on the Form W-7 instructions. The IRS will review the identification documents and return them within 60 days.
• Work with Certified Acceptance Agents (CAAs) authorized by the IRS to help taxpayers apply for an ITIN. CAAs can authenticate all identification documents for primary and secondary taxpayers, verify that an ITIN application is correct before submitting it to the IRS for processing and authenticate the passports and birth certificates for dependents. This saves taxpayers from mailing original documents to the IRS.
• In advance, call and make an appointment at a designated IRS Taxpayer Assistance Center to have each applicant’s identity authenticated in person instead of mailing original identification documents to the IRS. Each family member applying for an ITIN or renewal must be present at the appointment and must have a completed Form W-7 and required identification documents. See the TAC ITIN authentication page for more details.

Avoid common errors now and prevent delays next year

Federal tax returns that are submitted in 2020 with an expired ITIN will be processed. However, certain tax credits and any exemptions will be disallowed. Taxpayers will receive a notice in the mail advising them of the change to their tax return and their need to renew their ITIN. Once the ITIN is renewed, applicable credits and exemptions will be restored, and any refunds will be issued.

Additionally, several common errors can slow down some ITIN renewal applications. These mistakes generally center on:

• mailing identification documentation without a Form W-7,
• missing information on the Form W-7, or
• insufficient supporting documentation, such as U.S. residency documentation or official documentation to support name changes.

The IRS urges any applicant to check over their form carefully before sending it to the IRS.

As a reminder, the IRS no longer accepts passports that do not have a date of entry into the U.S. as a stand-alone identification document for dependents from a country other than Canada or Mexico, or dependents of U.S. military personnel overseas. The dependent’s passport must have a date of entry stamp, otherwise the following additional documents to prove U.S. residency are required:

• U.S. medical records for dependents under age 6,
• U.S. school records for dependents under age 18, and
• U.S. school records (if a student), rental statements, bank statements or utility bills listing the applicant’s name and U.S. address, if over age 18.

To expand ITIN services, the IRS continues to encourage more individuals to apply for the Acceptance Agent Program

To increase the availability of ITIN services nationwide, particularly in communities with high ITIN usage, the IRS is actively recruiting Certified Acceptance Agents and accepting applications year-round. Interested individuals are encouraged to review all CAA program changes and requirements and submit an application to become a Certified Acceptance Agent.

For more information, visit the ITIN information page on IRS.gov.

June 4, 2019

IRS takes additional steps to protect taxpayer data; plans to end faxing and third-party mailings of certain tax transcripts
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WASHINGTON — As part of its ongoing efforts to protect taxpayers from identity thieves, the Internal Revenue Service today announced it will stop its tax transcript faxing service in June and will amend the Form 4506 series to end third-party mailing of tax returns and transcripts in July. 

Tax transcripts are summaries of tax return information. Transcripts have become increasingly vulnerable as criminals impersonate taxpayers or authorized third parties. Identity thieves use tax transcripts to file fraudulent returns for refunds that are difficult to detect because they mirror a legitimate tax return.

The halt to the faxing and third-party service this summer are two more steps the IRS is taking to protect taxpayer data. In September 2018, the IRS began to mask personally identifible information for every individual and entity listed on the transcript. See New Tax Transcript and Customer File Number. At that time, the IRS announced it intended to stop its faxing and third-party mailing service, and has since worked with tax professionals to assure they have what they need for tax preparation and representation.

Faxing service ends June 28

Starting June 28, 2019, the IRS will stop faxing tax transcripts to both taxpayers and third parties, including tax professionals. This action affects individual and business transcripts.

Individual taxpayers have several options to obtain a tax transcript. They may: 

• Use IRS.gov or the IRS2Go app to access Get Transcript Online; after verifying their identities, taxpayers may immediately download or print their transcript, or
• Use IRS.gov or the IRS2Go app to access Get Transcript by Mail; transcript will be delivered within 10 days to the address of record, or
• Call 800-908-9946 for an automated Get Transcript by Mail feature, or
• Submit Form 4506-T or 4506T-EZ to have a transcript mailed to the address of record. 

Tax professionals also have several options to obtain tax transcripts necessary for tax preparation or representation as follows: 

• Request that the IRS mail a transcript to the taxpayer’s address of record, or
• Use e-Services’ Transcript Delivery System online to obtain masked individual transcripts and business transcripts, or
• Obtain a masked individual transcript or a business transcript by calling the IRS, faxing authorization to the IRS assistor and the IRS assistor will place the document in the tax practitioner’s e-Services secure mailbox.
• When needed for tax preparation purposes, tax practitioners may:
  • Obtain an unmasked wage and income transcript by calling the IRS, faxing authorization to the IRS assistor and the IRS assistor will place the document in the tax practitioner’s e-Services secure mailbox, or
  • Obtain an unmasked wage and income transcript if authorization is already on file by using e-Service’s Transcript Delivery System.

Certain third-party mailings stop July 1 

Effective July 1, 2019, the IRS will no longer provide transcripts requested on Form 4506, Form 4506-T and Form 4506T-EZ to third parties, and the forms will be amended to remove the option for mailing to a third-party. These forms are often used by lenders and others to verify income for non-tax purposes. Among the largest users are colleges and universities verifying income for financial aid purposes. Tax professionals also are large volume users.

Taxpayers may continue to use these forms to obtain a copy of their tax return or obtain a copy of their tax transcripts. This change will NOT affect use of the IRS Data Retrieval Tool through the Free Application for Federal Student Aid (FAFSA) process. 

Third parties who use these forms for income verification have other alternatives. The IRS offers an Income Verification Express Service (IVES) which has several hundred participants, who, with proper authorization, order transcripts. Lenders or higher education institutions can either contract with existing IVES participants or become IVES participants themselves. The tax transcript is an official IRS record. Taxpayers may choose to provide transcripts to requestors instead of authorizing the third party to request these transcrpts from the IRS on their behalf.

Tax professionals who are attorneys, Certified Public Accountants or Enrolled Agents (i.e., Circular 230 practitioners) and do not have an e-Services account may create one and, with proper authorization from clients, can access the e-Services’ Transcript Delivery System. Unenrolled tax practitioners must have an e-File application on file and be listed as delegated users to access TDS.

Customer File Number helps match transcripts

Because the taxpayer’s name and Social Security number are now partially masked, the IRS also created a Customer File Number space that can be used to help third parties match transcripts to taxpayers. Third parties can assign a Customer File Number, such as a loan application number or a student identification number. The number will populate on the transcript and help match it to the client/student. 

Learn more about the Customer File Number at About the New Tax Transcript and the Customer File Number.

May 8, 2019

New requirement applies to any business seeking a tax ID number; IRS offers data security tips during National Small Business Week

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WASHINGTON — During National Small Business Week, the Internal Revenue Service wants small business taxpayers and the self-employed to know that, starting May 13, an important change will affect the way it issues employer identification numbers, or EINs. 

With identity theft on the rise in the business community, the agency also offered business taxpayers tips and resources for protecting their data from theft.  

National Small Business Week is May 5-11. For more than 50 years, the week has recognized the important contributions of America’s entrepreneurs and small business owners. 

EINs and responsible parties

Beginning May 13, only individuals with tax identification numbers – either a Social Security number (SSN) or an individual taxpayer identification number (ITIN) – may request an employer identification number. This new requirement, which was first announced by the IRS in March, will provide greater security to the EIN process by requiring an individual to be the responsible party and will also improve transparency.

An EIN is a nine-digit tax identification number assigned to sole proprietors, corporations, partnerships, estates, trusts, employee retirement plans and other entities for tax-filing and reporting purposes.

The change prohibits entities from using their own EINs to obtain additional EINs. The new requirement applies to both the paper Form SS-4, Application for Employer Identification Number, and online EIN applications.

Data security

Individuals are not the only ones who need to protect their identities. Businesses and other organizations, especially trusts, estates and partnerships, can also be victims of identity theft. For example, criminals may file Forms 1120 (corporations), 1120S (S corporations) or Schedules K-1 in their names. Last year, 2,450 businesses reported that they were victims of tax-related identity theft, a 10-percent increase over 2017.

Businesses and other organizations can help combat identity theft by educating their employees, clients and customers. They can share Publication 4524, Taxes. Security. Together: Security Awareness for Taxpayers, or create their own messages urging employees, clients or customers to protect their data and beware of phishing emails, the most common tactic used by criminals to steal data.

Businesses should also educate their payroll and human resources employees about a dangerous phishing scam. The Form W-2 scam tricks payroll and human resources employees into sharing employee wage and income information by posing as a company executive. See Form W-2/SSN Data Theft: Information for Businesses and Payroll Service Providers.

Businesses that retain sensitive financial data should review and update their security plan. Publication 4557, Safeguarding Taxpayer Data, provides a good starting point and includes helpful recommendations.

May 7, 2019

Many tax-exempt organizations have until May 15 to file information returns; IRS warns against including personal data

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WASHINGTON — The Internal Revenue Service reminded certain tax-exempt organizations that Wednesday, May 15, 2019, is the filing deadline for Form 990-series information returns.

These types of information returns are normally due on the 15th day of the fifth month after the end of an organization’s accounting period. For organizations operating on a calendar year, the deadline is May 15, 2019. 

No Social Security numbers on Forms 990

The IRS generally does not ask organizations for Social Security numbers (SSNs) and cautions filers against providing them on the form. By law, the IRS and most tax-exempt organizations are required to publicly disclose most parts of Form 990 filings, including schedules and attachments. Public release of SSNs and other personally identifiable information about donors, clients or benefactors could give rise to identity theft. More information on this can be found in the “general instructions” section of theInstructions for Form 990, Return of Organization Exempt from Income Tax.

The IRS also urges tax-exempt organizations to file forms electronically, noting the error rate for electronically-filed returns is only 1 percent.Electronic filing also provides acknowledgement that the IRS has received the return and reduces normal processing time, making compliance with reporting and disclosure requirements easier.

Tax-exempt forms that must be made public by the IRS are clearly marked “Open to Public Inspection” on the top right corner of the first page. These include Form 990, Form 990-EZ, Form 990-PF and others.

Forms to file

Small tax-exempt organizations with average annual gross receipts of $50,000 or less may file an electronic notice called a Form 990-N (e-Postcard). This form requires only a few basic pieces of information. Tax-exempt organizations with average annual gross receipts above $50,000 must file a Form 990 or 990-EZ, depending on their receipts and assets. Private foundations must file Form 990-PF.

Organizations that need additional time to file a Form 990, 990-EZ or 990-PF may obtain an automatic six-month extension. Use Form 8868, Application for Extension of Time to File an Exempt Organization Return, to request an extension. The request must be filed by the due date of the return. Note that no extension is available for filing the Form 990-N (e-Postcard).

Many organizations risk loss of tax-exempt status

By law, organizations that fail to file annual reports for three consecutive years will see their federal tax exemptions automatically revoked as of the due date of the third year for which they are required to file. The Pension Protection Act of 2006 mandates that most tax-exempt organizations file annual Form 990-series information returns or notices with the IRS. The law, which went into effect at the beginning of 2007, also imposed a new annual filing requirement for small organizations. Churches and church-related organizations are not required to file annual reports.

Check tax-exempt status online

The IRS publishes a list of organizations identified as having automatically lost tax-exempt status for failing to file information returns for three consecutive years. Organizations that have had their exemptions automatically revoked can apply for reinstatement of their tax-exempt status and pay the appropriate user fee.

The IRS now offers an enhanced, mobile friendly search tool, called Tax Exempt Organization Search (TEOS). TEOS provides easy access to publicly available information about exempt organizations. Users can find key information about the federal tax status and filings of certain tax-exempt organizations, including whether organizations have had their federal tax exemptions automatically revoked and if an organization is eligible to receive tax-deductible contributions.

March 28, 2019

IRS revises EIN application process; seeks to enhance security

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WASHINGTON — As part of its ongoing security review, the Internal Revenue Service announced today that starting May 13 only individuals with tax identification numbers may request an Employer Identification Number (EIN) as the “responsible party” on the application. 

An EIN is a nine-digit tax identification number assigned to sole proprietors, corporations, partnerships, estates, trusts, employee retirement plans and other entities for tax filing and reporting purposes.

The change will prohibit entities from using their own EINs to obtain additional EINs. The requirement will apply to both the paper Form SS-4, Application for Employer Identification Number, and online EIN application.

Individuals named as responsible party must have either a Social Security number (SSN) or an individual taxpayer identification number (ITIN). By making the announcement weeks in advance, entities and their representatives will have time to identify the proper responsible official and comply with the new policy.

The Form SS-4 Instructions provide a detailed explanation of who should be the responsible party for various types of entities. Generally, the responsible party is the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. In cases where more than one person meets that definition, the entity may decide which individual should be the responsible party. 

Only governmental entities (federal, state, local and tribal) are exempt from the responsible party requirement as well as the military, including state national guards.

There is no change for tax professionals who may act as third-party designees for entities and complete the paper or online applications on behalf of clients. 

The new requirement will provide greater security to the EIN process by requiring an individual to be the responsible party and improve transparency. If there are changes to the responsible party, the entity can change the responsible official designation by completing Form 8822-B, Change of Address or Responsible Party. A Form 8822-B must be filed within 60 days of a change.

March 25, 2019

IRS expands penalty waiver for those whose tax withholding and estimated tax payments fell short in 2018; key threshold lowered to 80 percent 

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WASHINGTON — The Internal Revenue Service today provided additional expanded penalty relief to taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.

The IRS is lowering to 80 percent the threshold required to qualify for this relief. Under the relief originally announced Jan. 16, the threshold was 85 percent. The usual percentage threshold is 90 percent to avoid a penalty.

“We heard the concerns from taxpayers and others in the tax community, and we made this adjustment in an effort to be responsive to a unique scenario this year,” said IRS Commissioner Chuck Rettig. “The expanded penalty waiver will help many taxpayers who didn’t have enough tax withheld. We continue to urge people to check their withholding again this year to make sure they are having the right amount of tax withheld for 2019.”

This means that the IRS is now waiving the estimated tax penalty for any taxpayer who paid at least 80 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two.

Today’s revised waiver computation will be integrated into commercially-available tax software and reflected in the forthcoming revision of the instructions for Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts.

Taxpayers who have already filed for tax year 2018 but qualify for this expanded relief may claim a refund by filing Form 843, Claim for Refund and Request for Abatement and include the statement “80% Waiver of estimated tax penalty” on Line 7.  This form cannot be filed electronically.

Today’s expanded relief will help many taxpayers who owe tax when they file, including taxpayers who did not properly adjust their withholding and estimated tax payments to reflect an array of changes under the Tax Cuts and Jobs Act (TCJA), the far-reaching tax reform law enacted in December 2017. 

The IRS and partner groups conducted an extensive outreach and education campaign throughout 2018 to encourage taxpayers to do a “Paycheck Checkup” to avoid a situation where some might have had too much or too little tax withheld when they file their tax returns. If a taxpayer did not submit a revised W-4 withholding form to their employer or increase their estimated tax payments, they may have not had enough tax withheld during the tax year. 

Additional information

Because the U.S. tax system is pay-as-you-go, taxpayers are required, by law, to pay most of their tax obligation during the year, rather than at the end of the year. This can be done by either having tax withheld from paychecks or pension payments, or by making estimated tax payments.

Usually, a penalty applies at tax filing if too little is paid during the year. This penalty is an interest based amount approximately equivalent to the federal interest on the amount not paid in a timely manner. Normally, the penalty would not apply for 2018 if tax payments during the year met one of the following tests: 

• The person’s tax payments were at least 90 percent of the tax liability for 2018 or
• The person’s tax payments were at least 100 percent of the prior year’s tax liability, in this case from 2017. However, the 100 percent threshold is increased to 110 percent if a taxpayer’s adjusted gross income is more than $150,000, or $75,000 if married and filing a separate return. 

For waiver purposes only, today’s relief lowers the 90 percent threshold to 80 percent. This means that a taxpayer will not owe a penalty if they paid at least 80 percent of their total 2018 tax liability. If the taxpayer paid less than 80 percent, then they are not eligible for the waiver and the penalty will be calculated as it normally would be, using the 90 percent threshold. For further details, see Notice 2019-25, posted today on IRS.gov.

Like last year, the IRS urges everyone to take a Paycheck Checkup and review their withholding for 2019. This is especially important for anyone now facing an unexpected tax bill when they file. This is also an important step for those who made withholding adjustments in 2018 or had a major life change to ensure the right tax is still being withheld. Those most at risk of having too little tax withheld from their pay include taxpayers who itemized in the past but now take the increased standard deduction, as well as two-wage-earner households, employees with nonwage sources of income and those with complex tax situations.

To help taxpayers get their withholding right in 2019, the updated Withholding Calculator is now available on IRS.gov.

The IRS has many useful resources for anyone interested in learning more about tax reform, including Publication 5307, Tax Reform: Basics for Individuals and Families, and Publication 5318, Tax Reform What’s New for Your Business. For other tips and resources, visit IRS.gov/taxreform or check out the Get Ready page on IRS.gov .

March 20, 2019

IRS concludes "Dirty Dozen" list of tax scams for 2019: Agency encourages taxpayers to remain vigilant year-round

March 19, 2019

IRS 2019 Dirty Dozen #7, #8, #9

• IRS’ 2019 "Dirty Dozen" tax scams list highlights inflating deductions, credits – See IR-2019-36
• IRS cautions taxpayers on scams involving disasters, charitable causes — 2019 "Dirty Dozen" list continues – See IR-2019-39
• Avoid improper claims for business credits; topic makes this year’s IRS ‘Dirty Dozen’ list – See IR-2019-42

March 19, 2019
IRS warns of new phone scam using Taxpayer Advocate Service numbers

IRS YouTube Videos:

Tax Scams – English | Spanish | ASL
Dirty Dozen – English | Spanish | ASL 

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WASHINGTON — The Internal Revenue Service today warned the public about a new twist on the IRS impersonation phone scam whereby criminals fake calls from the Taxpayer Advocate Service (TAS), an independent organization within the IRS. 

Similar to other IRS impersonation scams, thieves make unsolicited phone calls to their intended victims fraudulently claiming to be from the IRS. In this most recent scam variation, callers “spoof” the telephone number of the IRS Taxpayer Advocate Service office in Houston or Brooklyn. Calls may be ‘robo-calls’ that request a call back. Once the taxpayer returns the call, the con artist requests personal information, including Social Security number or individual taxpayer identification number (ITIN).

TAS can help protect your taxpayer rights. TAS can help if you need assistance resolving an IRS problem, if your problem is causing financial difficulty, or if you believe an IRS system or procedure isn’t working as it should. TAS does not initiate calls to taxpayers “out of the blue.” Typically, a taxpayer would contact TAS for help first, and only then would TAS reach out to the taxpayer. 

In other variations of the IRS impersonation phone scam, fraudsters demand immediate payment of taxes by a prepaid debit card or wire transfer. The callers are often hostile and abusive. 

Alternately, scammers may tell would-be victims that they are entitled to a large refund but must first provide personal information. Other characteristics of these scams include:

• Scammers use fake names and IRS badge numbers to identify themselves.
• Scammers may know the last four digits of the taxpayer’s Social Security number.
• Scammers spoof caller ID to make the phone number appear as if the IRS or another local law enforcement agency is calling.
• Scammers may send bogus IRS emails to victims to support their bogus calls.
• Victims hear background noise of other calls to mimic a call site.
• After threatening victims with jail time or with, driver’s license or other professional license revocation, scammers hang up. Others soon call back pretending to be from local law enforcement agencies or the Department of Motor Vehicles, and caller ID again supports their claim.

Here are some things the scammers often do, but the IRS will not do. Taxpayers should remember that any one of these is a tell-tale sign of a scam.

The IRS will never:

• Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
• Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
• Demand that taxes be paid without giving taxpayers the opportunity to question or appeal the amount owed.
• Ask for credit or debit card numbers over the phone.
• Call about an unexpected refund. 

For taxpayers who don’t owe taxes or don’t think they do:

• Please report IRS or Treasury-related fraudulent calls to [email protected] (Subject: IRS Phone Scam).
• Do not give out any information. Hang up immediately. The longer the con artist is engaged; the more opportunity he/she believes exists, potentially prompting more calls.
• Contact TIGTA to report the call. Use their IRS Impersonation Scam Reporting web page. Alternatively, call 800-366-4484.
• Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.

For those who owe taxes or think they do:

• Call the IRS at 800-829-1040. IRS workers can help.
• View tax account online. Taxpayers can see their past 24 months of payment history, payoff amount and balance of each tax year owed.

Stay alert to scams that use the IRS or other legitimate companies and agencies as a lure. Tax scams can happen any time of year, not just at tax time. For more information visit Tax Scams and Consumer Alerts on IRS.gov.

March 12, 2019
The Dirty Dozen represents the worst of the worst tax scams.

WASHINGTON — Kicking off the annual “Dirty Dozen” list of tax scams, the Internal Revenue Service today warned taxpayers of the ongoing threat of internet phishing scams that lead to tax-related fraud and identity theft.

The IRS warns taxpayers, businesses and tax professionals to be alert for a continuing surge of fake emails, text messages, websites and social media attempts to steal personal information. These attacks tend to increase during tax season and remain a major danger of identity theft.

To help protect taxpayers against these and other threats, the IRS highlights one scam on 12 consecutive week days to help raise awareness. Phishing schemes are the first of the 2019 “Dirty Dozen” scams.

“Taxpayers should be on constant guard for these phishing schemes, which can be tricky and cleverly disguised to look like it’s the IRS,” said IRS Commissioner Chuck Rettig. “Watch out for emails and other scams posing as the IRS, promising a big refund or personally threatening people. Don’t open attachments and click on links in emails. Don’t fall victim to phishing or other common scams.”

The IRS also urges taxpayers to learn how to protect themselves by reviewing safety tips prepared by the Security Summit, a collaborative effort between the IRS, state revenue departments and the private-sector tax community.

“Taking some basic security steps and being cautious can help protect people and their sensitive tax and financial data,” Rettig said.

New variations on phishing schemes

The IRS continues to see a steady stream of new and evolving phishing schemes as criminals work to victimize taxpayers throughout the year. Whether through legitimate-looking emails with fake, but convincing website landing pages, or social media approaches, perhaps using a shortened URL, the end goal is the same for these con artists: stealing personal information.

In one variation, taxpayers are victimized by a creative scheme that involves their own bank account. After stealing personal data and filing fraudulent tax returns, criminals use taxpayers' bank accounts to direct deposit tax refunds. Thieves then use various tactics to reclaim the refund from the taxpayer, including falsely claiming to be from a collection agency or the IRS. The IRS encourages taxpayers to review some basic tips if they see an unexpected deposit in their bank account.

Schemes aimed at tax pros, payroll offices, human resources personnel

The IRS has also seen more advanced phishing schemes targeting the personal or financial information available in the files of tax professionals, payroll professionals, human resources personnel, schools and organizations such as Form W-2 information. These targeted scams are known as business email compromise (BEC) or business email spoofing (BES) scams.

Depending on the variation of the scam (and there are several), criminals will pose as:

• a business asking the recipient to pay a fake invoice
• as an employee seeking to re-route a direct deposit
• or as someone the taxpayer trusts or recognizes, such as an executive, to initiate a wire transfer.

The IRS warned of the direct deposit variation of the BEC/BES scam in December 2018, and continues to receive reports of direct deposit scams reported to [email protected]. The Direct Deposit and other BEC/BES variations should be forwarded to the Internet Crime Complaint Center (IC3). The IRS requests that Form W-2 scams be reported to:[email protected] (Subject: W-2 Scam). 

Criminals may use the email credentials from a successful phishing attack, known as an email account compromise, to send phishing emails to the victim’s email contacts. Tax preparers should be wary of unsolicited email from personal or business contacts especially the more commonly observed scams, like new client solicitations.

Malicious emails and websites can infect a taxpayer’s computer with malware without the user knowing it. The malware downloads in the background, giving the criminal access to the device, enabling them to access any sensitive files or even track keyboard strokes, exposing login victim’s information.

For those participating in these schemes, such activity can lead to significant penalties and possible criminal prosecution. Both the Treasury Inspector General for Tax Administration (TIGTA), which handles scams involving IRS impersonation, and the IRS Criminal Investigation Division work closely with the Department of Justice to shut down scams and prosecute the criminals behind them.

Tax professional alert

Numerous data breaches across the country mean the tax preparation community must be on high alert to unusual activity, particularly during the tax filing season. Criminals increasingly target tax professionals, deploying various types of phishing emails in an attempt to access client data. Thieves may use this data to impersonate taxpayers and file fraudulent tax returns for refunds.

As part of the Security Summit initiative, the IRS has joined with representatives of the software industry, tax preparation firms, payroll and tax financial product processors and state tax administrators to combat identity theft refund fraud to protect the nation's taxpayers.

The Security Summit partners encourage tax practitioners to be wary of communicating solely by email with potential or 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.

Reporting phishing attempts

If a taxpayer receives an unsolicited email or social media attempt that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), they should report it by sending it to [email protected]. Learn more by going to the Report Phishing and Online Scams page on IRS.gov.

Tax professionals who receive unsolicited and suspicious emails that appear to be from the IRS and/or are tax-related (like those related to the e-Services program) also should report it to: [email protected].

The IRS generally 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

Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter anytime but many of these schemes peak during filing season as people prepare their returns or hire someone to help with their taxes. Don’t fall prey.

For a detailed description of each scam, please refer to the list below:

• IRS’ 2019 "Dirty Dozen" tax scams list highlights inflating deductions, credits – See IR-2019-36
• Schemes involving falsifying income, creating bogus documents make IRS’ "Dirty Dozen" list for 2019 – See IR-2019-35
• IRS: Be on the lookout for promises of inflated tax refunds — 2019 IRS "Dirty Dozen" list continues – See IR-2019-33
• IRS: Choose tax preparers carefully; Tax return preparer fraud makes IRS’ 2019 "Dirty Dozen" list of tax scams – See IR-2019-32
• Identity theft remains on IRS’ "Dirty Dozen" list despite progress – See IR-2019-30
• IRS: Be vigilant against phone scams; Annual "Dirty Dozen" list continues –  See IR-2019-28
• IRS kicks off annual list of most prevalent tax scams: Agency warns taxpayers of  pervasive phishing schemes in its "Dirty Dozen" campaign –  See IR-2019-26

February 28, 2019
IRS waives estimated tax penalty for farmers, fishermen who file returns and pay tax by April 15

IR-2019-28

WASHINGTON — The Internal Revenue Service will waive the estimated tax penalty for any qualifying farmer or fisherman who files his or her 2018 federal income tax return and pays any tax due by Monday, April 15, 2019. The deadline is Wednesday, April 17, 2019, for taxpayers residing in Maine or Massachusetts. 

The IRS is providing this relief because, due to certain rule changes, many farmers and fishermen may have difficulty accurately determining their tax liability by the March 1 deadline that usually applies to them. For tax year 2018, an individual who received at least two-thirds of his or her total gross income from farming or fishing during either 2017 or 2018 qualifies as a farmer or fisherman.

To be eligible for the waiver, qualifying taxpayers must attach Form 2210-F, available on IRS.gov, to their 2018 income tax return. This form can be submitted either electronically or on paper. The taxpayer’s name and identifying number, usually a Social Security number, must be entered at the top of the form. The waiver box—Part I, Box A—should be checked. The rest of the form should be left blank. 

Click here for Notice 2019-17, which announces a waiver of the addition to tax under section 6654 for underpayment of estimated income tax by qualifying farmers and fishermen for the 2018 tax year.  This addition to tax is waived for any qualifying farmer or fisherman who, by the normal deadline for filing the 2018 federal income tax return (April 15, 2019 for most taxpayers), files his or her 2018 federal income tax return, attaches a specified waiver form to the return, and pays in full any tax reported on the return as payable.

Further details can be found in Notice 2019-17, posted today on IRS.gov. 

February 26, 2019 - Publication 1/2

Tax Time Guide: Most people affected by major tax reform changes; Special publication, other online resources can help     

IRS YouTube Videos:

Message to Taxpayers -- English
Mortgage Interest Deduction -- English | Spanish
Itemized Deductions Changes – English 

IR-2019-22

WASHINGTON –– With major tax law changes impacting every taxpayer, the Internal Revenue Service has developed a special electronic publication and other online resources designed to help people understand how tax reform affects them this year and the years ahead.

This news release is part of a series called the Tax Time Guide, a resource to help taxpayers file an accurate tax return. Additional help is available in Publication 17, Your Federal Income Tax, and the tax reform information page.

Last fall, the IRS released an online publication, called Tax Reform: Basics for Individuals and Families. Available at IRS.gov/getready, Publication 5307  provides an overview of these and other key changes affecting tax returns:

• Tax rates lowered. Starting in 2018, there are seven income tax brackets, ranging from 10 percent to 37 percent.
• Standard deduction nearly doubled over last year. For 2018, the basic standard deduction is $12,000 for singles, $18,000 for heads of household and $24,000 for married couples filing a joint tax return. Higher amounts apply to people who are blind or filers who are at least age 65. The increased standard deduction, coupled with other changes, mean that more than half of those who itemized their deductions – for mortgage interest, charitable contributions and state and local taxes – in tax year 2017 may instead take the higher standard deduction in 2018, according to IRS projections.
• Various deductions limited or discontinued. For example, the state and local tax deduction is limited to $10,000, $5,000 if married and filing a separate return, and new limits apply to mortgage interest. In addition, the miscellaneous itemized deduction for job-related costs and certain other expenses is not available.
• Child Tax Credit doubled, and more people now qualify. The maximum credit is now $2,000 for each qualifying child under age 17. In addition, the income limit for getting the full credit is $400,000 for joint filers and $200,000 for other taxpayers.
• New credit for other dependents. A $500 credit is available for each dependent who does not qualify for the Child Tax Credit. This includes older children and qualifying relatives, such as a parent.
• Personal and dependency exemptions suspended. This means that an exemption can no longer be claimed for a tax filer, spouse and dependents.

Another helpful resource is the newly-revised edition of Publication 17, Your Federal Income Tax, the agency’s comprehensive tax guide for individual taxpayers. Besides providing further details on each of these changes, this publication is also packed with tax-filing information and tips on a wide variety of topics, ranging from what income needs to be reported and how to report it, to claiming dependents and using IRAs to save for retirement.

Publications 17 and 5307 are just two of many helpful resources available at no charge on IRS.gov. Among other things, people can find answers to their tax questions and ways to resolve tax issues online. The Let Us Help You page helps answer most questions, and the IRS Services Guide links to these and other IRS services. The IRS TaxMap can also be used to find answers to tax questions. IRS.gov/TaxMap searches Publication 17 and all other publications, instructions, and web pages on IRS.gov for content on the searched topic.

Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov. They can use these resources to get help when it’s needed from the convenience of home or office.

More resources:

• FS-2019-2; Be Tax Ready – understanding tax reform changes affecting individuals and families

  ---

February 26, 2019 - Publication 2/2
Be Tax Ready – understanding tax reform changes affecting individuals and families

FS-2019-2, February 2019

The Tax Cuts and Jobs Act (TCJA), enacted in late 2017, produced the most sweeping tax law change in more than 30 years. The TCJA, often referred to as tax reform, affects nearly every taxpayer — and the 2018 federal return they’ll file in 2019.

For taxpayers preparing to file their 2018 tax return or getting ready to meet with their tax professional, understanding the changes from the Tax Cuts and Jobs Act can help them “Be Tax Ready.” More information is available in IRS Publication 5307, Tax Reform Basics for Individuals and Families.

Federal income tax withholding changes

The Tax Cuts and Jobs Act changed the way taxable income is calculated and reduced the tax rates on that income. The IRS issued new 2018 withholding tables last year to reflect these changes. Since taxpayers need to pay most of their tax during the year, as income is earned or received, the tables show payroll service providers and employers how much tax to withhold from employee paychecks.

Most taxpayers probably started seeing withholding changes in their paychecks early in 2018. IRS encouraged taxpayers throughout 2018 to use the IRS Withholding Calculator to perform a Paycheck Checkup and adjust their tax withholding by filing Form W-4, Employee’s Withholding Allowance Certificate, with their employer if too much or too little tax was being withheld for the year. Taxpayers can also make estimated or additional tax payments to avoid an unexpected tax bill and possibly a penalty.

Taxpayers who pay too much tax during the year will claim a credit or refund for the overpayment while those who have too little tax, either through withholding or paid through estimated payments, may owe tax.

Taxpayers should review their tax withholding in 2019 and make any adjustments with their employer as early in the year as possible. This can help protect against having too little tax withheld and facing a lower refund or unexpected tax bill and even a penalty next year.

In addition to lowering the tax rates, other changes in the law that affect taxpayers and their families include suspending personal exemptions, increasing the standard deduction, increasing the child tax credit, and limiting or discontinuing certain deductions.

Deduction for personal exemptions suspended

For 2018, taxpayers can’t claim a personal exemption deduction for themselves, their spouse or dependents. This means that taxpayers will not be able to reduce income subject to tax by an exemption amount for each person included on their tax return as they have in previous years. However, changes to the standard deduction amount and child tax credit may offset at least part of this change for most families and, in some cases, may result in a larger refund.

Standard deduction nearly doubled

The standard deduction is a dollar amount that reduces the income on which a taxpayer is taxed. It varies by filing status. The Tax Cuts and Jobs Act nearly doubled standard deductions.

Starting in 2018, the standard deduction for each filing status is:

Single......................................................................$12,000........(up from $6,350 in 2017)

Married filing jointly. Qualifying widow(er).............$24,000........(up from $12,700 in 2017)

Married filing separately..........................................$12,000........(up from $6,350 in 2017)

Head of household..................................................$18,000........(up from $9,350 in 2017)

The amounts are higher for taxpayers who are blind or over age 65.

More than nine out of 10 taxpayers use tax software or a paid preparer to file their taxes. Generally, taxpayers answer a series of questions in an interview format and the software or preparer chooses the best option (standard deduction or itemized deductions) for them. The new tax law hasn’t changed this process and the IRS has worked extensively with software developers and tax preparers to ensure that they are prepared to help.

Itemized deductions modified or discontinued

Almost everyone who usually itemizes deductions filing Schedule A, Itemized Deductions, is affected by changes from the Tax Cuts and Jobs Act. Many individuals who itemized last year may now find it more beneficial to take the now higher standard deduction - and may have a simpler time filing their taxes.

Deduction for state and local income, sales and property taxes modified. A taxpayer’s deduction for state and local income, sales and property taxes is limited to a combined, total deduction of $10,000 ($5,000 if married filing separately). Anything above this amount is not deductible.

Deduction for home equity interest modified. Interest paid on most home equity loans is not deductible unless the interest is paid on loan proceeds used to buy, build or substantially improve a main home or second home. For example, interest on a home equity loan used to build an addition to an existing home is typically deductible, while interest on the same loan used to pay personal living expenses, such as credit card debts, is not.

Deduction for casualty and theft losses modified. A taxpayer’s net personal casualty and theft losses must now be attributable to a federally declared disaster to be deductible.

Miscellaneous itemized deductions suspended. Previously, when a taxpayer itemized, they could deduct the amount of their miscellaneous itemized deductions that exceeded 2 percent of their adjusted gross income. These expenses are no longer deductible. This includes unreimbursed employee expenses such as uniforms, union dues and the deduction for business-related meals, entertainment and travel. It also includes deductions for tax preparation fees and investment expenses.

See the 2018 Instructions for Schedule A, Itemized Deductions, and Publication 5307 for other itemized deduction changes not listed here.

Benefits for dependents expanded or changed

Child tax credit and additional child tax credit. More families with children under 17 now qualify for a larger child tax credit. For 2018, the maximum credit increased to $2,000 per qualifying child. Up to $1,400 of the credit can be refundable for each qualifying child as the additional child tax credit. In addition, the income threshold at which the child tax credit begins to phase out is increased to $200,000 ($400,000 if married filing jointly).

Beginning with tax year 2018, a child must have a Social Security number issued by the Social Security Administration before the due date of the tax return (including extensions) to be claimed as a qualifying child for the child tax credit or additional child tax credit. Children with an ITIN can’t be claimed for either credit.

Credit for other dependents. A new credit of up to $500 is available for qualifying dependents other than children who can be claimed for the child tax credit. This means that a taxpayer may be able to claim this credit for children age 17 or over, including college students, children with ITINs, or other older relatives in the household. The qualifying dependent must be a U.S. citizen, U.S. national, or U.S. resident alien. The credit is calculated with the child tax credit in the form instructions. The total of both credits is subject to a single phase-out when adjusted gross income exceeds $200,000 ($400,000 if married filing jointly).

See 2018 Publication 972, Child Tax Credit, for more information. 

Deduction and exclusion for moving expenses suspended

The deduction for moving expenses is suspended. During the suspension, no deduction is allowed for use of an automobile as part of a move. Also, employers will include moving expense reimbursements as taxable income in the employees’ wages because the new law suspends the former exclusion from income for qualified moving expense reimbursements from an employer. These changes do not apply to members of the U.S. Armed Forces on active duty.

Alternative minimum tax (AMT) exemption amount increased

The AMT exemption amount is increased to $70,300 ($109,400 if married filing jointly or qualifying widow(er); $54,700 if married filing separately). The income level at which the AMT exemption begins to phase out has increased to $500,000 ($1 million if married filing jointly). See the 2018 Instructions for Form 6251, Alternative Minimum Tax – Individuals for more information.

Reporting 2018 health care coverage

Taxpayers must continue to report coverage, qualify for an exemption, or report an individual shared responsibility payment for tax year 2018. Most taxpayers have qualifying health coverage or a coverage exemption for all 12 months in the year and will check the box on the front of their tax return. For tax year 2018, the IRS will not consider a return complete and accurate if a taxpayer does not report full-year coverage, claim a coverage exemption, or report a shared responsibility payment on the tax return. Taxpayers remain obligated to follow the law and pay what they may owe at the point of filing.

The shared responsibility payment is reduced to zero under the Tax Cuts and Jobs Act for tax year 2019 and all subsequent years. See IRS.gov/aca for more information.

Retirement plans

Recharacterization of a Roth conversion. Individuals can no longer recharacterize a conversion from a traditional IRA, SEP or SIMPLE to a Roth IRA. The new law also prohibits recharacterizing amounts rolled over to a Roth IRA from other retirement plans, such as 401(k) or 403(b) plans. A regular contribution made to a Roth IRA or to a traditional IRA is still treated as having been made to the other type of IRA. See IRA FAQS – Recharacterization of IRA Contributions and IRS.gov/taxreform for more information.

Plan loans to an employee that leaves employment. If a taxpayer terminates employment (or if the plan is terminated) with an outstanding plan loan, a plan sponsor may offset that person’s account balance with the outstanding balance of the loan. If a plan loan is offset, a taxpayer has until the due date, including extensions, to rollover the loan balance to an IRA or eligible retirement plan. See Retirement Plans FAQs regarding Loans and IRS.gov/taxreform for more information.

Disaster relief. Laws enacted in 2017 and 2018 make it easier for retirement plan participants to access their retirement plan funds to recover from disaster losses incurred in federally declared disaster areas in 2016, 2017 and 2018. See the Disaster Relief for Retirement Plans and IRAs page for more information.

529 plans and ABLE accounts

ABLE accounts and rollovers from a 529 plan. The TCJA increases the amount of contributions allowed to an ABLE account and adds special rules for the increased contribution limit. It also allows an ABLE account’s designated beneficiary to claim the Saver's Credit for contributions to the account. Rollovers in limited amounts are now allowed from a 529 qualified tuition program account of the designated beneficiary to the ABLE account of the designated beneficiary or his or her family member. For more information on ABLE accounts, see Publication 907, Tax Highlights for Persons with Disabilities.

529 plans and K-12 education. TCJA expands the type of education for which a taxpayer can use 529 plan funds. The new law allows distributions from 529 plans to be used to pay up to a total of $10,000 of tuition per beneficiary (regardless of the number of contributing plans) each year at an elementary or secondary (K-12) public, private or religious school of the beneficiary’s choosing. For more information, see Publication 970, Tax Benefits for Education.

Changes affecting small business taxpayers

Qualified business income deduction

Many owners of sole proprietorships, partnerships, trusts and S corporations may deduct 20 percent of their qualified business income. The new deduction -- referred to as the Section 199A deduction or the qualified business income deduction -- is available for tax years beginning after Dec. 31, 2017. Eligible taxpayers can claim it for the first time on the 2018 tax return they file in 2019. A set of FAQs provides more information on the deduction, income and other limitations.

Changes to depreciation and expensing for businesses

The Tax Cuts and Job Act changed some laws regarding depreciation and expensing that can affect a business’s tax situation. Businesses can immediately expense more under the new law. There is a temporary 100 percent expensing for certain business assets. There are also changes to depreciation limitations on luxury automobiles and personal use property. More details are in FS-2018-9, New rules and limitations for depreciation and expensing under the Tax Cuts and Jobs Act.

Publication 5318, Tax Reform: What’s New for Your Business, provides information about changes to deductions, depreciation, expensing, credits, fringe benefits and other items that may affect businesses.

February 25, 2019
IRS Resources for Taxpayers for the 2019 Filing Season, IRS Resources for Tax Professionals

Click here to view the IRS Resources for Taxpayers
Click here to view the IRS Resources for Tax Professionals

February 7, 2019
IRS: Don’t be victim to a ‘ghost’ tax return preparer

IR-2019-09

WASHINGTON – Today, towards the end of the second full week of the 2019 tax filing season, the Internal Revenue Service warned taxpayers to avoid unethical tax return preparers, known as ghost preparers.

By law, anyone who is paid to prepare or assist in preparing federal tax returns must have a valid 2019 Preparer Tax Identification Number, or PTIN. Paid preparers must sign the return and include their PTIN.

But ‘ghost’ preparers do not sign the return. Instead, they print the return and tell the taxpayer to sign and mail it to the IRS. Or, for e-filed returns, they prepare but refuse to digitally sign it as the paid preparer.          

According to the IRS, similar to other tax preparation schemes, dishonest and unscrupulous ghost tax return preparers look to make a fast buck by promising a big refund or charging fees based on a percentage of the refund. These scammers hurt honest taxpayers who are simply trying to do the right thing and file a legitimate tax return.

Ghost tax return preparers may also:

• Require payment in cash only and not provide a receipt.
• Invent income to erroneously qualify their clients for tax credits or claim fake deductions to boost their refunds.
• Direct refunds into their own bank account rather than the taxpayer’s account. 

The IRS urges taxpayers to review their tax return carefully before signing and ask questions if something is not clear. And for any direct deposit refund, taxpayers should make sure both the routing and bank account number on the completed tax return are correct. 

The IRS offers tips to help taxpayers choose a tax return preparer wisely. The Choosing a Tax Professional page has information about tax preparer credentials and qualifications. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification.

Taxpayers can report abusive tax preparers to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a tax preparer filed or changed their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit.

January 28, 2019
IRS kicks off 2019 tax-filing season as tax agency reopens; Use IRS.gov to avoid phone delays
View this message on the IRS website by click here.

IR-2019-07

WASHINGTON ― The Internal Revenue Service successfully opened the 2019 tax-filing season today as the agency started accepting and processing federal tax returns for tax year 2018. Despite the major tax law changes made by the Tax Cuts and Jobs Act, the IRS was able to open this year’s tax-filing season one day earlier than the 2018 tax-filing season.

More than 150 million individual tax returns for the 2018 tax year are expected to be filed, with the vast majority of those coming before the April tax deadline. Through mid-day Monday, the IRS had already received several million tax returns during the busy opening hours.

"I am extremely proud of the entire IRS workforce. The dedicated IRS employees have worked tirelessly to successfully implement the biggest tax law changes in 30 years and launch tax season for the nation," said IRS Commissioner Chuck Rettig. “Although we face various near- and longer-term challenges, our employees are committed to doing everything we can to help taxpayers and get refunds out quickly."

Following the government shutdown, the IRS is working to promptly resume normal operations.

“The IRS will be doing everything it can to have a smooth filing season,” Rettig said. “Taxpayers can minimize errors and speed refunds by using e-file and IRS Free File along with direct deposit.”

The IRS expects the first refunds to go out in the first week of February and many refunds to be paid by mid- to late February like previous years. The IRS reminds taxpayers to check “Where’s My Refund?" for updates. Demand on IRS phones during the early weeks of tax season is traditionally heavy, so taxpayers are encouraged to use IRS.gov to find answers before they call.

April deadline; help for taxpayers through e-file, Free File

The filing deadline to submit 2018 tax returns is Monday, April 15, 2019, for most taxpayers. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17 to file their returns.

With major changes made by the Tax Cuts and Jobs Act, the IRS encouraged taxpayers seeking more information on tax reform to consult two online resources: Publication 5307, Tax Reform: Basics for Individuals and Families, and Publication 5318; Tax Reform What’s New for Your Business. For other tips and resources, visit IRS.gov/taxreform or check out the Get Ready page on IRS.gov.

The IRS expects about 90 percent of returns to be filed electronically. Choosing e-file and direct deposit remains the fastest and safest way to file an accurate income tax return and receive a refund. 

The IRS Free File program, available at IRS.gov, gives eligible taxpayers a dozen options for filing and preparing their tax returns using brand-name products. IRS Free File is a partnership with commercial partners offering free brand-name software to about 100 million individuals and families with incomes of $66,000 or less. About 70 percent of the nation’s taxpayers are eligible for IRS Free File. People who earned more than $66,000 may use Free File Fillable Forms, the electronic version of IRS paper forms.

 Most refunds sent in less than 21 days; EITC/ACTC refunds starting Feb. 27

The IRS expects to issue more than nine out of 10 refunds in less than 21 days. However, it’s possible a tax return may require additional review and take longer. “Where’s My Refund?” has the most up to date information available about refunds. The tool is updated only once a day, so taxpayers don’t need to check more often.

The IRS also notes that refunds, by law, cannot be issued before Feb. 15 for tax returns that claim the Earned Income Tax Credit or the Additional Child Tax Credit. This applies to the entire refund — even the portion not associated with the EITC and ACTC. While the IRS will process the EITC and ACTC returns when received, these refunds cannot be issued before Feb. 15. Similar to last year, the IRS expects the earliest EITC/ACTC related refunds to actually be available in taxpayer bank accounts or on debit cards starting on Feb. 27, 2019, if they chose direct deposit and there are no other issues with the tax return.

“Where’s My Refund?” ‎on IRS.gov and the IRS2Go mobile app remain the best way to check the status of a refund. “Where’s My Refund?” will be updated with projected deposit dates for most early EITC and ACTC refund filers on Feb. 17, so those filers will not see a refund date on “Where's My Refund?” ‎or through their software packages until then. The IRS, tax preparers and tax software will not have additional information on refund dates, so these filers should not contact or call about refunds before the end of February.

This law was changed to give the IRS more time to detect and prevent fraud. Even with the EITC and ACTC refunds and the additional security safeguards, the IRS still expects to issue more than nine out of 10 refunds in less than 21 days. However, it’s possible a particular tax return may require additional review and a refund could take longer. Even so, taxpayers and tax return preparers should file when they’re ready. For those who usually file early in the year and are ready to file a complete and accurate return, there is no need to wait to file.

New Form 1040

Form 1040 has been redesigned for tax year 2018. The revised form consolidates Forms 1040, 1040A and 1040-EZ into one form that all individual taxpayers will use to file their 2018 federal income tax return.

The new form uses a “building block” approach that can be supplemented with additional schedules as needed. Taxpayers with straightforward tax situations will only need to file the Form 1040 with no additional schedules. People who use tax software will still follow the steps they’re familiar with from previous years. Since nearly 90 percent of taxpayers now use tax software, the IRS expects the change to Form 1040 and its schedules to be seamless for those who e-file.

Free tax help
Low- and moderate-income taxpayers can get help filing their tax returns for free. Tens of thousands of volunteers around the country can help people correctly complete their returns.

To get this help, taxpayers can visit one of the more than 12,000 community-based tax help sites that participate in the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs. To find the nearest site, use the VITA/TCE Site Locator on IRS.gov or the IRS2Go mobile app.

Filing assistance
No matter who prepares a federal tax return, by signing the return, the taxpayer becomes legally responsible for the accuracy of all information included. IRS.gov offers a number of tips about selecting a preparer and information about national tax professional groups.

The IRS urges all taxpayers to make sure they have all their year-end statements in hand before filing. This includes Forms W-2 from employers and Forms 1099 from banks and other payers. Doing so will help avoid refund delays and the need to file an amended return.

Online tools
The IRS reminds taxpayers they have a variety of options to get help filing and preparing their tax returns on IRS.gov, the official IRS website. Taxpayers can find answers to their tax questions and resolve tax issues online. The Let Us Help You page helps answer most tax questions, and the IRS Services Guide links to these and other IRS services.

Taxpayers can go to IRS.gov/account to securely access information about their federal tax account. They can view the amount they owe, pay online or set up an online payment agreement; access their tax records online; review the past 18 months of payment history; and view key tax return information for the current year as filed. Visit IRS.gov/secureaccess to review the required identity authentication process.

The IRS urges taxpayers to take advantage of the many tools and other resources available on IRS.gov.

The IRS continues to work with state tax agencies and the private-sector tax industry to address tax-related identity theft and refund fraud. As part of the Security Summit effort, stronger protections for taxpayers and the nation’s tax system are in effect for the 2019 tax filing season.

The new measures attack tax-related identity theft from multiple sides. Many changes will be invisible to taxpayers but will help the IRS, states and the tax industry provide additional protections, and tighter security requirements will better protect tax software accounts and personal information.

Renew ITIN to avoid refund delays
Many Individual Taxpayer Identification Numbers (ITINs) expired on Dec. 31, 2018. This includes any ITIN not used on a tax return at least once in the past three years. Also, any ITIN with middle digits of 73, 74, 75, 76, 77, 81 and 82 (Example: 9NN-73-NNNN) is now expired. ITINs that have middle digits 70, 71, 72 or 80 expired Dec. 31, 2017, but taxpayers can still renew them. Affected taxpayers should act soon to avoid refund delays and possible loss of eligibility for some key tax benefits until the ITIN is renewed. An ITIN is used by anyone who has tax-filing or payment obligations under U.S. tax law but is not eligible for a Social Security number.

It can take up to 11 weeks to process a complete and accurate ITIN renewal application. For that reason, the IRS urges anyone with an expired ITIN needing to file a tax return this tax season to submit their ITIN renewal application soon.

Sign and validate electronically filed tax returns
All taxpayers should keep a copy of their tax return. Some taxpayers using a tax filing software product for the first time may need their adjusted gross income (AGI) amount from their prior-year tax return to verify their identity.

Taxpayers using the same tax software they used last year will not need to enter their prior year information to electronically sign their 2017 tax return. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

Marc J. Zine
Senior Stakehold Liaison - IRS
Tax Professional & Industry Organizations 
Phone 916-974-5281
Fax 877-477-8639
[email protected]
www.irs.gov/newsroom

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Franchise Tax Board: February 2018 Newsletter

This Just In!
2018 Dirty Dozen

1. Phishing Schemes Make IRS ‘Dirty Dozen’ List of Tax Scams for 2018; Individuals, Businesses, Tax Pros Urged to Remain Vigilant
   IR-2018-39, March 5, 2018 — Following continuing threats to taxpayers, the Internal Revenue Service today listed email “phishing” schemes as a top filing season concern and part of the annual listing of the “Dirty Dozen” tax scams for 2018.

2. Phone Scams Pose Serious Threat; Remain on IRS ‘Dirty Dozen’ List of Tax Scams
   IR-2018-40, March 6, 2018 — The IRS reminded taxpayers to be careful with continuing aggressive phone scams as criminals pose as IRS agents in hopes of stealing money.

3. Despite Major Progress, Identity Theft Still on IRS ‘Dirty Dozen’ Tax Scams List
   IR-2018-42, Mar. 7, 2018 — Even though reports of tax-related identity theft have declined markedly in recent years, the Internal Revenue Service warns that this practice is still widespread and remains serious enough to earn a spot on the agency’s annual “Dirty Dozen” list of tax scams.

4. Tax Return Preparer Fraud Ranks on 2018 ‘Dirty Dozen’: Taxpayers Urged to Choose Reputable Tax Preparers
   IR-2018-45, March 8, 2018 — With more than half of the nation's taxpayers relying on someone else to prepare their tax return, the IRS reminded consumers to be on the lookout for unscrupulous tax preparers looking to make a fast buck from honest people seeking tax assistance.

5. Fake charities make 2018 ‘Dirty Dozen’ list; taxpayers should be alert to scams involving disasters, worthwhile causes
   IR-2018-47, March 9, 2018 — The IRS today warned taxpayers against scam groups masquerading as charitable organizations, luring people to make donations to groups or causes that don't actually qualify for a tax deduction.

6. Taxpayers alerted against falsely inflated refunds in ‘Dirty Dozen’ list; Seniors, many others at risk

7. IRS ‘Dirty Dozen’ list of tax scams for 2018 contains warning to avoid improper claims for business credits
   IR-2018-49, March 13, 2018 — The IRS today warned that taxpayers should avoid making improper claims for business credits, a common scam used by unscrupulous tax preparers.

8. Falsely padding deductions highlighted in IRS 2018 ‘Dirty Dozen’ tax scams
   IR-2018-54, March 14, 2018 — As part of the “Dirty Dozen” list of tax scams, the IRS today warned taxpayers to avoid falsely inflating deductions or expenses on tax returns.

9. Falsified income, fake Forms 1099 part of IRS ‘Dirty Dozen’
   IR-2018-55, March 15, 2018  — As part of this year’s “Dirty Dozen” list of tax scams, the IRS warned taxpayers to be on the lookout for schemes that falsify income, including elaborate ruses involving bogus Forms 1099.

10. IRS warns against frivolous tax arguments; Part of ‘Dirty Dozen’ scams list
    IR-2018-58, March 16, 2018 — The IRS today continued releasing the 2018 list of “Dirty Dozen” tax scams with a warning to taxpayers about using frivolous tax arguments to avoid paying taxes.

11. IRS 2018 ‘Dirty Dozen’ tax scams: Abusive tax shelters make the list
    IR-2018-62, March 19, 2018 — The IRS today warned taxpayers to be wary of abusive tax shelters, which remain on the "Dirty Dozen” tax scams.

12. “Offshore Avoidance” news release has not yet been posted to the IRS Newsroom at this time, but can be downloaded here.

Posted 2.23.2018

Three Popular Tax Benefits Retroactively Renewed for 2017; IRS Ready to Accept Returns Claiming These Benefits; e-file for Fastest Refunds

Posted 2.8.2018
Key IRS Identity Theft Indicators Continue Dramatic Decline in 2017; Security Summit Marks 2017 Progress Against Identify Theft ~ HOWEVER: