Just One Benefit of Our Affiliation With NCCPAP...
IRS National Public Liaison
Steve Mankowski, NCCPAP President, represented all of us at the
September 2017 NPL meeting. Highlights below:
|Private Debt Collection
|This topic came out of the Fixing America’s Surface Transportation (FAST) Act, whereby once the account reaches a specific threshold for debt collection, the IRS is required to send the account to one of four pre-approved private debt collection companies. The concern regarding this topic is that even though those four companies may be trained on the fair debt collection act, there are different rules for government collection vs. those of a corporation. We don’t know the success of this program yet; however, the IRS will be presenting a report to Congress in December.
|Taxpayer Digital Communication
|As you may already be aware, the Taxpayer Digital Communication Program is in its infancy with the Philadelphia branch piloting a secure messaging system. The system consists of a secure platform where you can upload documents as well as receive messages sent by the IRS. Currently the system is just for correspondence. Audits involving Schedule A and/or education credits are under exam. The system is organized via a secure electronic mailbox per individual taxpayer; the tax preparer can also participate if their client grants approval. Security remains the #1 concern and they are still working out the bugs. This is an invitation-only pilot and the IRS is looking to expand it in 2018.
|The most imperative takeaway from this discussion was that the IRS filters, already put into place via the Security Summit, have mitigated fraudulent returns being processed. Unless an individual is a confirmed victim of tax identity theft, they do not need to file form 14039 for a stolen identity. While we don’t know what those filters are and frankly don’t want to know, they likely include ‘where’ (the city where the return is being filed) or a switch to the return being self-prepared. Because these filters are in effect and have been successful this year, the likelihood of the Equifax situation becoming an IRS issue is minimal.
In addition, you’ll be surprised to know that the breach occurred because Equifax did not have latest software patches installed on their systems. The caution to all of us at NCCPAP is that we must be vigilant and constantly update our systems, as well as all antivirus/anti-malware software. Simply stated: if you have old software, you are at risk.
|The new e-Services platform and launch pad is underway. For all NCCPAP members: do not wait—re-authenticate now! Please make sure that you are able to access e-services at any time. You are required to re-authenticate regardless of any previous authentication. Moving to this platform with higher security protection will prevent breaches. 50% of authentications fail for a variety of reasons, detailed below.
The IRS has put major revisions into the e-services pages within the IRS website, featuring NIST multi-factor authentication—including a password, questions, and phone verification. If you are married, your phone number may be registered to your spouse, in which case you would fail the verification test. A second line of verification is your credit card—no debit cards are acceptable as proof of identity. All CPAs should start the registration process now, especially if they need to have their PINs mailed out to them. Once you are set up, you are good with that device—and that device only. You can, however, be recognized on more than one device; just make sure you get everything registered correctly. A new user agreement is forthcoming. Review it carefully!
|Return Preparer Strategy Update
|This department works to identify any schemes or criminal activity relative to refunds. They use a ‘secret shopper’ approach and they are very good at it—look at the Conviction Rates!
RPO Investigations: 252 in 2016; 266 in 2015; 306 in 2014
Convictions: 216; 210; 193
Conviction Rate: 96.8%; 96.8%; 96%
|The next meeting is October 19, 2017. Commissioner Koskinen will be in attendance before he leaves office; there is no replacement named at this time.
IRS Gives Tax Relief to Victims of Hurricane Harvey
Aug. 28, 2017
Hurricane Harvey victims in parts of Texas have until Jan. 31, 2018, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today.
This includes an additional filing extension for taxpayers with valid extensions that run out on Oct. 16, and businesses with extensions that run out on Sept. 15.
"This has been a devastating storm, and the IRS will move quickly to provide tax relief to hurricane victims," said IRS Commissioner John Koskinen. "The IRS will continue to closely monitor the storm's aftermath, and we anticipate providing additional relief for other affected areas in the near future."
The IRS is now offering this expanded relief to any area designated by the Federal Emergency Management Agency (FEMA), as qualifying for individual assistance. Currently, 18 counties are eligible, but taxpayers in localities added later to the disaster area will automatically receive the same filing and payment relief.
The tax relief postpones various tax filing and payment deadlines that occurred starting on Aug. 23, 2017. As a result, affected individuals and businesses will have until Jan. 31, 2018, to file returns and pay any taxes that were originally due during this period. This includes the Sept. 15, 2017 and Jan. 16, 2018 deadlines for making quarterly estimated tax payments. For individual tax filers, it also includes 2016 income tax returns that received a tax-filing extension until Oct. 16, 2017. The IRS noted, however, that because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.
Declared Natural Disasters and Emergencies Tax Help
From the Texas Comptroller
The Governor of Texas, by way of proclamation, has exempted evacuees and relief workers from state and local hotel taxes. Existing tax exemptions will become effective as the Governor designates areas of the state to be natural disaster areas. The Governor's website will have specific information related to each declared natural disaster.
Some taxpayers may be unable to file taxes timely due to damage caused by a declared natural disaster. The Comptroller can grant an extension of up to 90 days to file tax returns to a business affected by a declared disaster.
An affected business must request the extension. These types of extension requests are handled on a case-by-case basis. For more information or to request a tax filing extension, call the Comptroller's tax assistance line at 800-252-5555.
Retirement Plans Can Make Harvey Loans
August 30, 2017 WASHINGTON --
The Internal Revenue Service today announced that 401(k)s and similar employer-sponsored retirement plans can make loans and hardship distributions to victims of Hurricane Harvey and members of their families. This is similar to relief provided last year to Louisiana flood victims and victims of Hurricane Matthew.
Participants in 401(k) plans, employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, as well as state and local government employees with 457(b) deferred-compensation plans may be eligible to take advantage of these streamlined loan procedures and liberalized hardship distribution rules. Though IRA participants are barred from taking out loans, they may be eligible to receive distributions under liberalized procedures.
Retirement plans can provide this relief to employees and certain members of their families who live or work in disaster area localities affected by Hurricane Harvey and designated for individual assistance by the Federal Emergency Management Agency (FEMA). Currently, parts of Texas qualify for individual assistance. For a complete list of eligible counties, visit https://www.fema.gov/disasters. To qualify for this relief, hardship withdrawals must be made by Jan. 31, 2018.
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