Category Archives: IRS

New IRS “Tax Transcript” Email Scam

From the IRS, November 27th 2018:

The IRS and Security Summit partners recently warned the public of a problematic scam affecting businesses. A surge of fraudulent emails impersonating the IRS and using tax transcripts as bait to entice users to open documents containing malware are on the rise. If a business’s employees open the malware, it can spread throughout the network and potentially take months to successfully remove.

This well-known malicious code, known as Emotet, generally poses as specific banks and financial institutions in its effort to trick people into opening infected documents. However, in the past few weeks, the scam masqueraded as the IRS, pretending to be from “IRS Online.” The scam email carries an attachment labeled “Tax Account Transcript” or something similar, and the subject line uses some variation of the phrase “tax transcript.”

Businesses should instruct employees to not open the email or the attachment, and to instead delete or forward the scam email to phishing@irs.gov.

Source: Tax Scams/Consumer Alerts | Internal Revenue Service

Censured Tax Professionals Can Now Be Looked Up Online

When looking for a tax professional, you want to make sure they’re in good standing with the IRS. However, until recently, the public could only learn that a practitioner was sanctioned by reviewing each of the announcements of discipline published in the Internal Revenue Bulletin (IRB) on irs.gov, or by using a commercial subscription service that reports instances of “Circular 230” discipline (Circular 230 is the document that describes who is covered by the standards we must follow, and what those are).

The Office of Professional Responsibility’s (OPR, the organization responsible for making sure tax professionals follow the standards of their practice) solution was to compile the information into a searchable Excel document file; their disciplinary look-up contains searchable information regarding censures of practitioners for Circular 230 misconduct and suspensions and disbarments of individuals from practice before the IRS.

The list contains basic information on over 3,000 OPR censures, suspensions, disbarments, and miscellaneous restrictions on practice, such as permanent injunctions and denials of limited practice to unenrolled tax return preparers due to misconduct; it covers the last 25 years. The spreadsheet is searchable using the “Sort & Filter” and “Find & Select” features, and will be updated to add new entries when a disciplinary announcement is published in the IRB.

Hopefully this new tool will make folks more inclined to report unprofessional behavior to the OPR, knowing that it will be made public and others could be prevented from similar experiences. To report issues, concerns or any problems, contact the OPR at Internal Revenue Service, Office of Professional Responsibility, SE:OPR, Room 7238/IR, 1111 Constitution Avenue NW., Washington, DC 20224 or fax to (202) 317-6338.

Source: Search for Disciplined Tax Professionals | Internal Revenue Service

Tax Year 2017 E-filing Ends Nov 17

An important announcement from the IRS today:

Do you still need to file a 2017 tax return? If you intend to file electronically, do so by Saturday, Nov. 17. E-File closes for 2017 tax returns on that date, even if the taxpayer is in a presidentially declared disaster area. Paper filing will remain available.

Preparers and taxpayers — make sure you get those final lagging returns e-filed asap, or you just bought yourselves a bunch of extra processing time, as well as unnecessary administrative effort.

In case you’re wondering why the cut-off, the IRS explains:

IRS Modernized e-file, the system that processes electronically-filed individual returns, will shut down after Nov. 17, enabling the IRS to perform annual maintenance and to reprogram the system for the upcoming 2019 tax-filing season.

Source: For Tax Year 2017, e-file closes on Nov. 17; After that, disaster victims, others need to file on paper | Internal Revenue Service

IRS Side-By-Side Comparison For Businesses Of Tax Cuts & Jobs Act

I found the recent IRS release on the new tax law — a side-by-side comparison for businesses showing “before-and-after” rules — to be well-written and clear, and it does a good job of highlighting the key changes in order of relative importance to most companies. As such, I’m reprinting the recent IRS newsletter to small businesses in its entirety below.

From the IRS e-News for Small Business, Issue #36:

The Tax Cuts and Jobs Act (TCJA) changed deductions, depreciation, expensing, tax credits and other tax items affecting businesses. This side-by-side comparison can help businesses understand the changes and plan accordingly.

Some provisions of the TCJA affecting individual taxpayers can also affect business taxes. Businesses and self-employed individuals should review tax reform changes for individuals and determine if and how these provisions may concern their business situation.

Visit IRS.gov/taxreform regularly for tax reform updates. Businesses can find details and the latest resources at Tax Reform Provisions that Affect Businesses.

IRS Releases New Publication 5307 on Tax Reform

Big news from today’s CPA Practice Advisor — the IRS has finally released their new Publication 5307 on Tax Reform.

Publication 5307 focuses on the changes affecting 2018 federal income tax returns that must be filed in 2019. It includes valuable information about the following:

  1. Increases in the standard deduction;
  2. Changes to itemized deductions, including state and local tax (SALT) payments, mortgage interest, charitable contributions, casualty and theft losses and miscellaneous expense deductions;
  3. Suspension of personal exemptions;
  4. Removal of moving expense deduction and reimbursement exclusion;
  5. Changes for Child Tax Credit (CTC) and other family-based credits;
  6. Increase in alternative minimum tax (AMT) exemption amounts;
  7. Repeal of deduction for alimony payments;
  8. Reporting on health care coverage;Rules for recharacterizing a Roth conversion;
  9. Rules for retirement plan loans for employees leaving employment;Changes for ABLE plans; and
  10. Expansion of use of Section 529 accounts.

Taxpayers can access Publication 5307 at the IRS website in their “get ready” section.

Source: IRS Releases New Publication 5307 on Tax Reform | CPA Practice Advisor

Upcoming NSAC Webinars Nov 6 & 27

There are a couple upcoming NSAC webinars I really encourage you to consider taking!

Should I or Shouldn’t I – The Basics of Business Ethics for Co-op Personnel
https://nsacoop.org/webcast_details.php?id=238
Tuesday, November 06, 2018
11:00 AM EST / 10:00 AM CST / 09:00 AM MST / 08:00 AM PST

This session, presented by Steve Dawson of Dawson Forensics, focuses on business ethics: how do we determine between should and shouldn’t. This session focuses on the “why’s and how-to’s” regarding the establishment of a business ethics policy.

1099: Increased Reporting Pressure
https://nsacoop.org/webcast_details.php?id=244
Tuesday, November 27, 2018
02:00 PM EST / 01:00 PM CST / 12:00 PM MST / 11:00 AM PST

The IRS has been increasing its identification number matching for 1099 reporting. This has caused an increase in notices and penalties issued to taxpayers. In this session, Tara Guler and Jared Kempel, both of Baker Tilly, will discuss the new 1099 penalties, how to deal with a notice and steps that can be taken to obtain proper 1099 reporting information.

Please add https://nsacoop.org/cooperative_learning_network.php to your regular list of upcoming educational opportunities — no, they don’t pay me anything or even ask for me to post these. I just think they’re great.

Biggest Tax Law Changes for Small Business Owners – Upcoming IRS Webinar

I’d like to promote two important, related resources I came across recently:

CPA Practice Advisor released an article summarizing the biggest tax law changes for small business owners:

With just a few months left in the year, the IRS is highlighting important information for small businesses and self-employed individuals to help them understand and meet their tax obligations. Here are several changes that could affect the bottom line of many small businesses.

They outline a few key issues in particular:

  1. Qualified Business Income Deduction
  2. Temporary 100 percent expensing for certain business assets
  3. Fringe Benefits
  4. Estimated Taxes

Meanwhile, the IRS is trying to help educate taxpayers and their accountants on these topics. They are offering a free one-hour webinar on Thursday, November 1, 2018 (2 pm Central-time) called, “Tax Reform Basics for Small Businesses and Pass-Through Entities”. It will provide an overview of the following:

  1. Estimated Taxes
  2. New Rules for Depreciation
  3. Business Deductions
  4. Live Q & A session

If you run your own business or work with taxpayers who do, this resources are for you! Please do not wait until January to dip your toes into the whirling cesspool that is the new tax law. The regulations may only be in the proposed stage, but there’s no indication they’ll be finalized before year-end.

IRS Extends Deadlines for Victims of Hurricane Michael

From the IRS Newsroom today:

IRS Extends Deadlines for Victims of Hurricane Michael 


Hurricane Michael victims in parts of Florida and elsewhere have until Feb. 28, 2019, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today.

The IRS is offering this relief to any Major Disaster Declaration area designated by the Federal Emergency Management Agency (FEMA) as qualifying for either individual or public assistance. Currently, this only includes parts of Florida, but taxpayers in localities added later to the disaster area, including those in other states, will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

“The IRS has moved swiftly to announce this relief for taxpayers affected by Hurricane Michael in advance of the Oct. 15 extension filing deadline,” said IRS Commissioner Chuck Rettig.” We recognize the devastation this historic storm caused for many taxpayers, and IRS employees stand ready to support the disaster recovery effort as they have done many times in the past.”

Source: Help for Victims of Hurricane Michael | Internal Revenue Service

Short-Term Rental Clients Need To Navigate Tax Concerns

Rob Stephens of The Progressive Accountant recently shared his top four recommendations when advising clients to make sure they avoid costly mistakes when working with short-term vacation rentals:

1. Listing quality and rental rates.
2. Hotel occupancy taxes.
3. Get organized and find the right tools.
4. Administrative risk around taxes and regulations.

And I’d like to add that there’s an additional concern folded into the above, which is whether this is truly a Schedule C hotel operation business or a Schedule E rental property — a entire topic on its own.

He points out that:

More and more people are renting their homes, which triggers new and unique tax requirements. Being on the alert for these pitfalls can protect your client (or you) from hidden tax liability and operational problems.

He is recommending Avalara’s MyLodgeTax as a hotel occupancy tax solution. (Though, full disclosure, he sold his compliance software to them and it is currently being rebranded. Still, as Avalara is a trusted name in sales taxes, I feel confident sharing the recommendation.)

Source: Helping Your Short-Term Rental Market Clients Navigate Tax Concerns and Avoid Costly Mistakes | Sales Tax & Compliance