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News & Press: Federal Tax News

IRS NEWS FOR TAX PROFESSIONALS - May 2019

Monday, May 6, 2019  
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submitted by Brian Wozniak
IRS Stakeholder Liaison C&L: SL: Area 6
Brian.Wozniak@irs.gov

►LATE-BREAKING

  • On May 13, the IRS officially will change the application for an EIN to require that a “responsible party” be an individual with an SSN or ITIN (no EINs). This requirement will apply to both the paper application (Form SS-4) and the online EIN application.  Foreign or domestic entities where the responsible party may be ineligible for an SSN/ITIN are instructed to leave that line blank.  Further guidance to be issued.
  • I haven’t received official IRS guidance (yet) but here is some disaster information from FEMA: IRS NOTICE OF DISASTER DECLARATION FROM THE FEDERAL EMERGENCY MANAGEMENT AGENCY [FEMA-4432-DR]
    INCIDENT:  Severe Winter Storms, Flooding, Landslides and Mudslides
    INCIDENT PERIOD:    February 23-26, 2019
    Coos, Curry, Douglas, Jefferson, and Lane Counties
    Additional designations may be made at a later date after further evaluation

 

►UPCOMING WEBINARS

Check Webinars for Tax Practitioners for upcoming webinars. (None scheduled at this time.)

 

►NEWS

IRS announces multi-year plan to update, modernize IT systems; Effort focused on improved taxpayer services, expanded cybersecurity and taxpayer data protections

  • The IRS released a six-year plan to modernize the agency’s Information Technology systems and improve a variety of taxpayer services critical to the nation’s tax system.
  • The plan outlines a bold strategy to enable business transformation focused on improving services for taxpayers and the tax community while protecting taxpayer data.
  • “Modernized systems are the key component to delivering quality service to taxpayers, providing efficient and robust enforcement activities and keeping taxpayer data secure,” said IRS Commissioner Chuck Rettig. “Our modernization plan includes multiple milestones and levels of accountability to ensure it is implemented efficiently and effectively. The integrity of our nation’s tax system depends on modernizing IRS operations and the supporting technical pieces. We look forward to working with Congress to implement this plan.”

IRS seeks applications for the Electronic Tax Administration Advisory Committee through May 29

  • The IRS is seeking qualified applicants for nomination to the Electronic Tax Administration Advisory Committee (ETAAC).
  • The ETAAC provides an organized public forum for discussion of issues in electronic tax administration, such as prevention of identity theft and refund fraud. ETAAC supports the overriding goal that paperless filing is the preferred and most convenient method of filing tax and information returns. ETAAC members work closely with the Security Summit, a joint effort of the IRS, state tax administrators and the tax industry to fight electronic fraud.
  • The IRS is looking for up to 10 qualified individuals who will serve three-year terms beginning in September 2019. Applicants should have experience in such areas as state tax administration, cybersecurity and information security, tax software development, tax preparation, payroll and tax financial product processing, systems management and improvement and implementation of customer service initiatives. The IRS also encourages representatives from consumer groups with an interest in tax issues to apply.

OPR's FY 2018 Annual Report

  • The Office of Professional Responsibility (OPR) has released their Fiscal Year 2018 Annual Report, formerly titled "Accomplishment Report." In this report, the OPR shares information about its communication and outreach activities, press releases, monetary penalties, operational results, and future goals for FY 2019. The report also summarizes the actions taken on cases involving violations of the Circular 230.

Updated publication helps taxpayers understand an offer in compromise

  • The IRS just issued an updated publication with information for individual taxpayers and business owners unable to pay their taxes. This electronic pub, Offer in Compromise Booklet (PDF), helps people understand how an offer in compromise works.

Disaster Assistance and Emergency Relief for Individuals and Businesses

  • Around the Nation provides IRS news specific to local areas, primarily disaster relief or tax provisions that affect certain states.

Six things taxpayers should know about the sharing economy and their taxes

  • From renting spare rooms and vacation homes to car rides or using a bike…name a service and it’s probably available through the sharing economy. Taxpayers who participate in the sharing economy can find helpful resources in the IRS Sharing Economy Tax Center on IRS.gov. It  helps taxpayers understand how this activity affects their taxes. It also gives these taxpayers information to help them meet their tax obligations.
  • Here are six things taxpayers should know about how the sharing economy might affect their taxes:

1. The activity is taxable.

2. Some expenses are deductible.

3. There are special rules for rentals.

4. Participants may need to make estimated tax payments.

5. There are different ways to pay.

6. Taxpayers should check their withholding.

 

 

►TAX REFORM

Facts About the Qualified Business Income Deduction

  • Many individuals, including owners of businesses operated through sole proprietorships, partnerships, S corporations, trusts and estates may be eligible for a qualified business income deduction, also called the section 199A deduction. Some trusts and estates may also claim the deduction directly.

IRS issues guidance relating to deferral of gains for investments in a qualified opportunity fund

  • The IRS issued guidance (PDF) providing additional details about investment in qualified opportunity zones.
  • The proposed regulations allow the deferral of all or part of a gain that is invested into a Qualified Opportunity Fund (QO Fund) that would otherwise be includible in income. The gain is deferred until the investment is sold or exchanged or Dec. 31, 2026, whichever is earlier. If the investment is held for at least 10 years, investors may be able to permanently exclude gain from the sale or exchange of an investment in a QO Fund.

EMPLOYERS AND BUSINESS OWNERS

Correcting Employment Taxes

  • There are several ways to address adjustments to the employment taxes you reported on your return.

 

►THE BEST OF IRS.GOV

Practitioner Priority Service — Your First Point of Contact

  • Tax practitioners have long served an important role in our nation's tax collection system as a conduit between taxpayers and the IRS. The Practitioner Priority Service® (PPS) is your first point of contact for account-related issues. Our Practitioner Priority Service® is a professional support line that staffed by IRS customer service representatives specially trained to handle practitioners' accounts questions. You may contact PPS at (866-860-4259). PPS is available to all tax professionals with valid third-party authorizations, i.e., Forms 2848, 8821 and/or 8655.

 

IDENTITY THEFT / DATA THEFT / SCAM ALERTS

IRS, Security Summit partners mark significant progress against identity theft; key taxpayer protection trends continue

  • The IRS and the Security Summit partners announced new results from 2018 that show major progress in the fight against tax-related identity theft and added protection for thousands of taxpayers and billions of dollars.
    • Between 2015 and 2018, the number of taxpayers reporting they were identity theft victims fell 71 percent.
    • Between 2015 and 2018, the number of confirmed identity theft returns stopped by the IRS declined by 54 percent.
    • Between 2015 and 2018, the IRS protected a combined $24 billion in fraudulent refunds by stopping the confirmed identity theft returns.
    • Between 2015 and 2018, financial industry partners recovered an additional $1.4 billion in fraudulent refunds.

►YOUR PRACTICE

Cybersecurity, new tax law, top agenda at Nationwide Tax Forums; Tax Pros: Earn up to 19 Continuing Education Credits

  • The IRS announced the schedule of this summer’s Nationwide Tax Forums, held in five cities across the country.
  • The IRS encourages tax professionals to earn up to 19 continuing education credits at the forums this summer. Each forum offers 43 seminars and workshops presented by experts from the IRS and association partners on cybersecurity, changes to the tax law, ethics and other topics.

Revision of Special Enrollment Exam Delayed; Revised Test Specifications Now Available

  • The government shutdown has delayed the annual revision of the Special Enrollment Examination (SEE). The examination to be administered starting on May 1, 2019, has not yet been updated and reflects tax law for the calendar year 2017. A revised examination will be released on July 1, 2019, and will be based on tax law for the calendar year 2018.
  • To ensure that the SEE accurately incorporates the changes resulting from the Tax Cuts and Jobs Act and continues to reflect the skills and knowledge necessary to be an enrolled agent, the IRS commissioned a review and update of the SEE test specifications. Enrolled agents from the private sector and subject matter experts from the IRS participated in updating the test content. As a result, there were changes to the test specifications affecting test content topics for the SEE to be administered beginning July 1, 2019.  
  • To review the revised test specifications, visit www.prometric.com/see and choose Step 3, Review Exam Content Outlines.

 

TAX EXEMPT ORGANIZATIONS

Exempt Organizations Annual Reporting Requirements - Filing Procedures: Incomplete Returns

  • What happens if my Form 990 is missing information or a schedule, or is the wrong return?

If an organization’s return is incomplete or the wrong return for the organization, the IRS will send it back with one of the following letters:

    • Letter 2694C Returning Form 990 due to Missing Information
    • Letter 2695C Returning Form 990-EZ due to Missing Information
    • Letter 2696C Missing Information Request to Process EO Return

 

►SUBSCRIPTIONS

 

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  • Preparers can register to get this electronic newsletter. It’s one of the best ways for tax professionals to get the latest national and local IRS news. (Editor’s note: most of the articles in this monthly newsletter come from e-News for Tax Professionals.)

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►NEWS FROM OTHER AGENCIES

From the SBA:

Top 10 Business Credit Terms Small Business Owners Should Know

  • As a small business owner, it is important to have an understanding of business credit terms. Similar to personal credit, business credit determines whether your company can be trusted by the way it manages money.

more Calendar

5/28/2019
Mid-Columbia Chapter Roundtable: Social Security Income, Retirement Planning, OR Revenue Online

5/29/2019
Jackson Co. Chapter Education: Military Pay Issues After TCJA (2 hrs CE)

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