Monday, November 30, 2015

Don’t take the Bait; Avoid Phishing and Malware to Protect Your Personal Data

“Update your account now.” “You just won a cruise!” “The IRS has a refund waiting for you.”
In the cyber world of phishing, the sentences are “bait” – lures from emails, telephone calls and texts all designed to separate you from your cash, your passwords, your social security number or your very identity.

The IRS has teamed up with state revenue departments and the tax industry to make sure you understand the dangers to your personal and financial data. Taxes. Security. Together. Working in partnership with you, we can make a difference.

No doubt you’ve heard that warning to beware of phishing many times. But, phishing remains a problem because it works. Cybercriminals on a daily basis concoct new ways to trick people into turning over cash or sensitive data that can affect your taxes.

When it comes to this type of crime, the main line of defense is not technology, it is you.
Criminals pose as a person or organization you trust and/or recognize. They may hack a friend’s email account and send mass emails under their name. They may pose as your bank, credit card company or tax software provider. Or, they may pose as a state, local or federal agency such as the Internal Revenue Service or a state agency. Criminals go to great lengths to create websites that appear legitimate but contain phony log-in pages

Just remember: No legitimate organization – not your bank, not your tax software company, not the IRS – will ever ask for sensitive information through unsecured methods such as emails. And the IRS never sends unsolicited emails or makes calls with threats of lawsuits or jail.

Scam emails and websites also can infect your computer with malware without you even knowing it. The malware can give the criminal access to your device, enabling them to access all your sensitive files or track your keyboard strokes, exposing login information.

Here are a few simple steps you can take to protect yourself:

·         Avoid suspicious phishing emails that appear to be from the IRS or other companies; do not click on the links- go directly to their websites instead.
·         Beware of phishing scams asking you to update or verify your accounts.
·         To avoid malware, don’t open attachments in emails unless you know who sent it and what it contains.
·         Download and install software only from websites you know and trust.
·         Use security software to block pop-up ads, which can contain viruses.
·         Ensure your family understands safe online and computer habits.

To learn additional steps you can take to protect your personal and financial data, visit Taxes. Security. Together. You also can read Publication 4524, Security Awareness for Taxpayers.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on

Additional IRS Resources:

-         IR-2015-129, IRS, States and Tax Industry Announce New Steps to Help Public to Protect Personal Tax Data
-         Fact Sheet 2015-23, IRS, States and Industry Partners Provide Update on Collaborative Fight Against Tax-Related Identity Theft

Wednesday, November 25, 2015

Tips from IRS for Year-End Gifts to Charity

WASHINGTON — The Internal Revenue Service today reminded individuals and businesses making year-end gifts to charity that several important tax law provisions have taken effect in recent years.

Some of the changes taxpayers should keep in mind include:

Rules for Charitable Contributions of Clothing and Household Items

Household items include furniture, furnishings, electronics, appliances and linens. Clothing and household items donated to charity generally must be in good used condition or better to be tax-deductible. A clothing or household item for which a taxpayer claims a deduction of over $500 does not have to meet this standard if the taxpayer includes a qualified appraisal of the item with the return.

Donors must get a written acknowledgement from the charity for all gifts worth $250 or more. It must include, among other things, a description of the items contributed.

Guidelines for Monetary Donations

A taxpayer must have a bank record or a written statement from the charity in order to deduct any donation of money, regardless of amount. The record must show the name of the charity and the date and amount of the contribution. Bank records include canceled checks, and bank, credit union and credit card statements. Bank or credit union statements should show the name of the charity, the date, and the amount paid. Credit card statements should show the name of the charity, the date, and the transaction posting date.

Donations of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction. For payroll deductions, the taxpayer should retain a pay stub, a Form W-2 wage statement or other document furnished by the employer showing the total amount withheld for charity, along with the pledge card showing the name of the charity.

These requirements for the deduction of monetary donations do not change the long-standing requirement that a taxpayer obtain an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. However, one statement containing all of the required information may meet both requirements.


The IRS offers the following additional reminders to help taxpayers plan their holiday and year-end gifts to charity:
  • Qualified charities. Check that the charity is eligible. Only donations to eligible organizations are tax-deductible. Select Check, a searchable online tool available on, lists most organizations that are eligible to receive deductible contributions. In addition, churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations. That is true even if they are not listed in the tool’s database.
  • Year-end gifts. Contributions are deductible in the year made. Thus, donations charged to a credit card before the end of 2015 count for 2015, even if the credit card bill isn’t paid until 2016. Also, checks count for 2015 as long as they are mailed in 2015.
  • Itemize deductions. For individuals, only taxpayers who itemize their deductions on Form 1040 Schedule A can claim deductions for charitable contributions. This deduction is not available to individuals who choose the standard deduction. This includes anyone who files a short form (Form 1040A or 1040EZ). A taxpayer will have a tax savings only if the total itemized deductions (mortgage interest, charitable contributions, state and local taxes, etc.) exceed the standard deduction. Use the 2015 Form 1040 Schedule A to determine whether itemizing is better than claiming the standard deduction.
  • Record donations. For all donations of property, including clothing and household items, get from the charity, if possible, a receipt that includes the name of the charity, date of the contribution, and a reasonably-detailed description of the donated property. If a donation is left at a charity’s unattended drop site, keep a written record of the donation that includes this information, as well as the fair market value of the property at the time of the donation and the method used to determine that value. Additional rules apply for a contribution of $250 or more.
  • Special Rules. The deduction for a car, boat or airplane donated to charity is usually limited to the gross proceeds from its sale. This rule applies if the claimed value is more than $500. Form 1098-C or a similar statement, must be provided to the donor by the organization and attached to the donor’s tax return.
If the amount of a taxpayer’s deduction for all noncash contributions is over $500, a properly-completed Form 8283 must be submitted with the tax return. has additional information on charitable giving, including:

Tuesday, November 24, 2015

Understanding the Different Types of 2015 Transition Relief under the Employer Shared Responsibility Provisions

Under the Affordable Care Act, certain employers – called applicable large employers – are subject to the employer shared responsibility provisions.  If you are an ALE, you may choose to offer affordable minimum essential coverage that provides minimum value to your full-time employees – and minimum essential coverage to your full-time employees’ dependents – or, alternatively, to potentially owe an employer shared responsibility payment to the IRS.  The vast majority of employers fall below the workforce size threshold on which ALE status is based and therefore are not subject to the employer shared responsibility provisions.

The employer shared responsibility provisions were first effective on January 1, 2015, but transition relief from certain requirements is available for 2015, including the following:
  • ALEs with fewer than 100 full-time employees, including full-time equivalent employees, won’t be assessed an employer shared responsibility payment for 2015, provided that certain conditions are met regarding the employer’s maintenance of workforce and pre-existing health coverage.  ALEs that are eligible for this relief must provide a certification of eligibility as part of the related information reporting that is required of all ALEs for 2015.
  • ALEs are not required to offer coverage to full-time employees’ dependents for the 2015 plan year, provided that they meet certain conditions, including that they take steps to arrange for such coverage to begin in the 2016 plan year and they do not drop current dependent coverage.
  • In general, if an ALE does not offer minimum essential coverage to at least 95 percent of its full-time employees and their dependents, it may owe an employer shared responsibility payment based on its total number of full-time employees.  For 2015, 70 percent is substituted for 95 percent.  However, even if an employer offers minimum essential coverage to at least 70 percent of its full-time employees and their dependents for 2015, it may still owe the separate - generally smaller in the aggregate - employer shared responsibility payment that applies for each full-time employee who receives the premium tax credit for purchasing coverage through the Health Insurance Marketplace.
  • If an ALE is subject to the employer shared responsibility payment because it doesn’t offer minimum essential coverage to its full-time employees and their dependents, the annual payment is generally $2,000 for each full-time employee - adjusted for inflation - after excluding the first 30 full-time employees from the calculation.  For 2015, if an ALE with 100 or more full-time employees, including full-time equivalent employees, is subject to this employer shared responsibility payment, the payment will be calculated by reducing the ALE’s full-time employees by 80, rather than 30. 
  • Transition relief is available for certain employers sponsoring non-calendar year plans for the months in 2015 prior to the beginning of the 2015 plan year with respect to certain employees, if the employer and plan meet various conditions. 
  • Rather than being required to measure its ALE status based on the number of full-time employees, including full-time equivalent employees, for all twelve months of 2014, employers may instead base their 2015 ALE status on any consecutive six-month period – as chosen by the employer – during 2014.
For an employer with a non-calendar plan year, the first four types of transition relief listed above also apply for the months in 2016 that are part of the 2015 plan year.

For more information on transition relief see the transition relief Questions and Answers on and the preamble to the ESRP regulations.

For Small Businesses: IRS Raises Tangible Property Expensing Threshold to $2,500; Simplifies Filing and Recordkeeping

WASHINGTON —The Internal Revenue Service today simplified the paperwork and recordkeeping requirements for small businesses by raising from $500 to $2,500 the safe harbor threshold for deducting certain capital items.

The change affects businesses that do not maintain an applicable financial statement (audited financial statement). It applies to amounts spent to acquire, produce or improve tangible property that would normally qualify as a capital item.

The new $2,500 threshold applies to any such item substantiated by an invoice. As a result, small businesses will be able to immediately deduct many expenditures that would otherwise need to be spread over a period of years through annual depreciation deductions.

“We received many thoughtful comments from taxpayers, their representatives and the professional tax community, said IRS Commissioner John Koskinen. “This important step simplifies taxes for small businesses, easing the recordkeeping and paperwork burden on small business owners and their tax preparers.“

Responding to a February comment request, the IRS received more than 150 letters from businesses and their representatives suggesting an increase in the threshold. Commenters noted that the existing $500 threshold was too low to effectively reduce administrative burden on small business. Moreover, the cost of many commonly expensed items such as tablet-style personal computers, smart phones, and machinery and equipment parts typically surpass the $500 threshold.

As before, businesses can still claim otherwise deductible repair and maintenance costs, even if they exceed the $2,500 threshold.

The new $2,500 threshold takes effect starting with tax year 2016. In addition, the IRS will provide audit protection to eligible businesses by not challenging use of the new $2,500 threshold in tax years prior to 2016.

For taxpayers with an applicable financial statement, the de minimis or small-dollar threshold remains $5,000.

Further details on this change can be found in Notice 2015-82, posted today on