Thursday, December 28, 2017

What to do if you haven’t filed your tax return

Did you file your federal income tax return this year or in previous years? If not, let the IRS help you get back on track. You can find online tax tools, such as the Interactive Tax Assistant, Earned Income Tax Assistant, and View Your Tax Account, on

Not sure if you’re required to file a return? Find out using Do I Need to File a Tax Return or refer to Publication 17, Your Federal Income Tax for Individuals. You can download and view Publication 17 on most e-Readers and other mobile devices as an eBook from

It’s important to file an accurate return for several reasons:
  • Loan approvals may be delayed if you haven’t filed your return. For example, financial institutions and mortgage lenders may require income verification that includes copies of filed tax returns submitted when you buy or refinance a home, get a loan for a business, or apply for federal aid for higher education.
  • If you owe taxes and have not filed a timely return, you may be subject to the failure tofile penalty, unless you can show reasonable cause for failing to file timely.
  • If you did not pay your taxes in full by the due date of the return, you may also be subject to the failure to pay penalty, unless you have reasonable cause for your failure to pay timely, or the IRS has approved your Form 1127, Application for Extension of Time for Payment of Tax Due to Undue Hardship. Interest is charged on taxes and penalties not paid by the due date, even if you have an extension of time to file.
  • If you are required to file a return and you owe, you can apply for an online paymentagreement. Go to for additional information on payment options.
Regardless of your reason for not filing, you should file your federal tax return as soon as possible. Take advantage of all the available tools found on

Wednesday, December 27, 2017

IRS Advisory: Prepaid Real Property Taxes May Be Deductible in 2017 if Assessed and Paid in 2017

The Internal Revenue Service advised tax professionals and taxpayers today that pre-paying 2018 state and local real property taxes in 2017 may be tax deductible under certain circumstances.

The IRS has received a number of questions from the tax community concerning the deductibility of prepaid real property taxes. In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed. 

The following examples illustrate these points.

Example 1: Assume County A assesses property tax on July 1, 2017 for the period July 1, 2017 – June 30, 2018. On July 31, 2017, County A sends notices to residents notifying them of the assessment and billing the property tax in two installments with the first installment due Sept. 30, 2017 and the second installment due Jan. 31, 2018. Assuming taxpayer has paid the first installment in 2017, the taxpayer may choose to pay the second installment on Dec. 31, 2017, and may claim a deduction for this prepayment on the taxpayer’s 2017 return.  

Example 2: County B also assesses and bills its residents for property taxes on July 1, 2017, for the period July 1, 2017 – June 30, 2018.  County B intends to make the usual assessment in July 2018 for the period July 1, 2018 – June 30, 2019. However, because county residents wish to prepay their 2018-2019 property taxes in 2017, County B has revised its computer systems to accept prepayment of property taxes for the 2018-2019 property tax year. Taxpayers who prepay their 2018-2019 property taxes in 2017 will not be allowed to deduct the prepayment on their federal tax returns because the county will not assess the property tax for the 2018-2019 tax year until July 1, 2018.

The IRS reminds taxpayers that a number of provisions remain available this week that could affect 2017 tax bills. Time remains to make charitable donations. See IR-17-191 for more information. The deadline to make contributions for individual retirement accounts - which can be used by some taxpayers on 2017 tax returns - is the April 2018 tax deadline. has more information on these and other provisions to help taxpayers prepare for the upcoming filing season.

Tuesday, December 26, 2017

Federal Tax Reform Has Been Enacted: What it Means for You

The information below applies to ALL employers and employees, however, this post is written specifically with our payroll clients in mind.

H.R. 1, the Tax Cuts and Jobs Act (the Act) was enacted on December 22, 2017 and generally goes into effect on January 1, 2018. The Act includes several significant changes that will impact your payroll, employment tax and employee benefits.

These are two important changes that will impact employers and employees:

•   Income Tax Withholding Tables: Although new federal income tax tables and rates will take effect on January 1, there may be a delay in release of withholding tax guidance from the U.S. Treasury Department. We will continue using the 2017 tables to determine how much income tax to withhold from your employees until the revised 2018 tables are issued. We will update any new income tax withholding tables in your payroll platform and reach out to you if any action is needed on your part.

•   Federal Forms W-4: Some employees may ask questions about the effect of the Act or may submit updated Forms W-4 to modify their withholding allowances for 2018. You should be prepared to accept updated Forms W-4 from employees, but may wish to advise employees that a revised Form W-4 will likely be issued by the IRS later in 2018, and that the employee may need to complete the revised form at that time.

Friday, December 22, 2017

IRS Extends Due Date for Employers and Providers to Issue Health Coverage Forms to Individuals in 2018

The IRS announced today that it has extended the 2018 due date for certain entities to provide 2017 health coverage information forms to individuals. Insurers, self-insuring employers, other coverage providers, and applicable large employers now have until March 2, 2018, to provide Forms 1095-B or 1095-C to individuals, which is a 30-day extension from the original due date of Jan. 31. Insurers, self-insuring employers, other coverage providers, and applicable large employers must furnish statements to employees or covered individuals regarding the health care coverage offered to them. Individuals may use this information to determine whether, for each month of the calendar year, they may claim the premium tax credit on their individual income tax returns.

This 30-day extension is automatic. Employers and providers don’t have to request it. The due dates for filing 2017 information returns with the IRS are not extended. For 2018, the due dates to file information returns with the IRS are:
  • Feb. 28 for paper filers
  • April 2 for electronic filers
Because of these extensions, individuals may not receive their Forms 1095-B or 1095-C by the time they are ready to file their 2017 individual income tax return. While information on these forms may assist in preparing a return, the forms are not required to file. Taxpayers can prepare and file their returns using other information about their health coverage. They do not have to wait for Forms 1095-B or 1095-C to file.

More information is contained in Notice 2018-06. Also visit for more.

Filing Forms 1099-MISC With NEC in Box 7

The Protecting Americans from Tax Hikes (PATH) Act of 2015 requires Forms 1099-MISC reporting non-employee compensation (NEC) in box 7 to be filed by January 31 for both paper filing and electronic filing.

If any of your Forms 1099-MISC reporting NEC will be filed after the January 31, 2018 due date, the IRS recommends you separate the submission of those Forms 1099-MISC from the submission of any Forms 1099-MISC that do not report NEC.

The IRS may inadvertently treat all Forms 1099-MISC in a combined submission as subject to the Section 6721 penalty for failure to file by January 31, even though many of the forms might not be due until February 28 or March 31.

Additional guidance on how to file 2017 Forms 1099 MISC:

Reminder: January 31 Filing Deadline Applies to Wage Statements and Independent Contractor Forms

Wage statements and independent contractor forms must be filed with the government by January 31.

The Protecting Americans from Tax Hikes (PATH) Act includes a requirement for employers to file their copies of Form W-2  and Form W-3  with the Social Security Administration by the end of January. This deadline also applies to certain Forms 1099-MISC  filed with IRS to report non-employee compensation to independent contractors.

An extension of time to file is no longer automatic. The IRS will only grant extensions for very specific reasons.

Failure to file these forms correctly and timely may result in penalties.

Payroll Withholding for 2018 - New legislation to affect most tables

The IRS is closely monitoring the pending legislation on 2018 tax withholding and preparing guidance. ‎The IRS anticipates issuing the initial withholding guidance (Notice 1036) in January to reflect the new legislation, which would allow taxpayers to see changes on their paychecks as early as February 2018. 

2018 Standard Mileage Released - Rates increase slightly

Notice 2018-03 provides the optional 2018 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes. The 2018 mileage rates are as follows:
  • The standard rate for business travel is 54.5 cents per mile.
  • The standard rate for charitable purposes is 14 cents per mile.
  • The standard rate for medical care or a deductible moving expense is 18 cents per mile.
  • The depreciation factor for automobiles used for business is 25 cents per mile.

Tuesday, December 19, 2017

Get Ready for Taxes: Filing Electronically a Safe, Easy Way to File

This is the seventh in a series of reminders to help taxpayers prepare for the upcoming tax filing season.

The Internal Revenue Service said today that it expects more than 90 percent of all 2017 individual tax returns to be prepared using tax software. The majority of those will be e-filed. Since 1986 when the IRS started accepting electronically filed tax returns, more than 1.8 billion have been securely processed.

The IRS urges taxpayers to wait until they have all the forms and documents needed before preparing a tax return. Most documents arrive before the end of January. This includes Forms W-2 from employers and Forms 1099 from banks and other payers. Those claiming the Premium Tax Credit need Form 1095-A from the Marketplace. Not having all required documents may cause a return to have an error that delays processing and therefore, delays the refund.

Taxpayers have options to prepare and e-file a return:
The IRS2Go Mobile App can help find free tax preparation assistance, check a refund status and more.

Taxpayers should keep copies of their most recent tax returns. Taxpayers using a software product for the first time may need their Adjusted Gross Income amount from their prior-year return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

Taxpayers concerned about identify theft should know the IRS continues to work with state tax authorities and the tax industry to increase security protections as part of the Security Summit‎. Summit efforts have led to a nearly 50 percent decline in the number of new reports of stolen identities on federal tax returns. While working to stop fraudulent refunds, the IRS remains focused on releasing legitimate refunds as quickly as possible in 2018.

Faster Refunds with Direct Deposit

Choosing e-file remains the safest way to file an accurate income tax return and combining it with direct deposit is the fastest way to receive a refund. In 2017, more than 88 million tax refunds worth over $260 billion were directly deposited into taxpayer’s bank accounts.

In 2018, the IRS again expects to issue more than nine out of 10 refunds in less than 21 days. However, by law the IRS cannot issue refunds if the return claims the Earned Income Tax Credit or Additional Child Tax Credit before mid-February. The change applies to the entire refund and helps ensure that taxpayers get the refund they are owed by giving the IRS more time to help detect and prevent tax fraud.

The IRS has a special page on with steps to take now for the 2018 tax filing season.

Monday, December 18, 2017

Strong Passwords Help Keep Tax Data Safe

Passwords are often the key to guarding access to personal information and data stored on computers or sent over email. Because most taxpayers file their returns electronically and access account information online, it is critical for taxpayers to not only create strong passwords for all tax-related accounts, but to do everything in their power to protect those passwords.

Here are seven things taxpayers should consider when creating and protecting passwords:
  • Longer passwords are safer and more difficult to guess. A strong password should be a minimum of eight characters. It should include a combination of letters, numbers, symbols and special characters.
  • A password should include at least one uppercase letter, one lowercase letter, one number, and one symbol or character.
  • Taxpayers should not include personal information in passwords. A criminal can find names of siblings, friends, children and pets on social media sites. This makes it easier for cybercriminals to figure out a person’s password that includes these names.
  • Avoid using the same password for all information systems, accounts and devices. If someone does guess one password, they will not have access to all the other accounts.
  • Taxpayers can substitute numbers and symbols for letters in words or phrases to make it more difficult for a thief to guess a password.
  • People should never share passwords.
  • Taxpayers should be careful of attempts to trick you into revealing your password.
More information:

Early Due Dates for W-2, W-3 and Form 1099-MISC

Employers face a January 31, 2018, due date for filing 2017 Forms W-2 and W-3 with the Social Security Administration. This date applies to both electronic and paper filers. 
Form 1099-MISC is due to the IRS and individuals by January 31 when reporting non-employee compensation payments in box 7. 
Penalties for failure to file correct information returns or furnish correct payee statements have increased and are now subject to inflationary adjustments. These increased penalties are effective for information returns required to be filed after December 31, 2015. 

Form 1098-T Reporting Changes and Limited Penalty Relief for 2017 Returns

Eligible educational institutions are required to report the total amount of payments received for qualified tuition and related expenses from all sources during the calendar year on Form 1098-T, Tuition Statement. 
Announcement 2016-42 provides relief from penalties under Section 6721 and 6722 to 2017 Forms 1098-T. The IRS will not impose penalties on eligible education institutions that report the aggregate amount billed (instead of amount received) for qualified tuition and related expenses on 2017 Form 1098-T.

New presentations

Review these informative StayExempt videos:

Reasonable Cause - Focuses on reasonable cause for abating first-tier excise taxes imposed on private foundations. Examples included. 

  • Self-Dealing Exemption - Discusses self-dealing under Code Section 4941 and the exception for compensation to disqualified persons.  
  • Disqualified Persons: Private Foundations - Covers Section 4946, which addresses disqualified persons with respect to a private foundation.  
  • Disaster Relief: Existing Organizations - Discusses requirements for established disaster-relief organizations.

Thursday, December 14, 2017

Standard Mileage Rates for 2018 Up from Rates for 2017

The Internal Revenue Service today issued the 2018 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2018, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
  • 54.5 cents for every mile of business travel driven, up 1 cent from the rate for 2017.
  • 18 cents per mile driven for medical or moving purposes, up 1 cent from the rate for 2017.
  • 14 cents per mile driven in service of charitable organizations.
The business mileage rate and the medical and moving expense rates each increased 1 cent per mile from the rates for 2017. The charitable rate is set by statute and remains unchanged.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.  These and other requirements are described in Rev. Proc. 2010-51.

Notice 2018-03, posted today on, contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan. 

Wednesday, December 13, 2017

Consumer Alert: IRS Warns Taxpayers, Tax Pros of New Email Scam Targeting Hotmail Users

The Internal Revenue Service today warned taxpayers and tax professionals of a new email scam targeting Hotmail users that is being used to steal personal and financial information.

The phishing email subject line reads: “Internal Revenue Service Email No. XXXX | We’re processing your request soon | TXXXXXX-XXXXXXXX”. The email leads taxpayers to sign in to a fake Microsoft page and then asks for personal and financial information.

The IRS has received over 900 complaints about this new phishing scheme that seems to exclusively target Hotmail users. The suspect websites associated with this scam have been shut down, but taxpayers should be on the lookout for similar schemes.

Individuals who receive unsolicited emails claiming to be from the IRS should forward it to and then delete it. It is important to keep in mind the IRS generally does not initiate contact with taxpayers by email to request personal or financial information. For more information, visit the “Tax Scams and Consumer Alerts” page on

The IRS reminds tax professionals to be aware of phishing emails, free offers and other common tricks by scammers. Tax professionals who have data breaches should contact the IRS immediately through their Stakeholder Liaison. See Data Theft Information for Tax Professionals

IRS Provides Safe Harbors to Help Taxpayers Suffering Property Losses, Including Losses from Hurricanes

As part of a wider effort to help victims of natural disasters, the Internal Revenue Service today issued guidance providing safe harbor methods that individuals may use in determining the amount of their casualty and theft losses for their homes and personal belongings, including losses from recent hurricanes.

Revenue Procedure 2018-08 provides safe harbor methods that individual taxpayers may use in determining the amount of their casualty and theft losses for their homes and personal belongings.  Four of the safe harbor methods may be used for any qualifying casualty or theft loss, and three are specifically applicable only to losses occurring as a result of a Federally declared disaster. 

For instance, one of the safe harbor methods allows a homeowner to determine the amount of loss, up to $20,000, by obtaining a contractor estimate of repair costs.  Another safe harbor method allows a homeowner to determine the amount of loss resulting from a Federally declared disaster using the repair costs on a signed contract prepared by a licensed contractor.  The guidance also provides a handy table for determining the value of personal belongings damaged, destroyed or stolen as a result of a Federally declared disaster.

Revenue Procedure 2018-09 provides a safe harbor method under which individuals may use one or more cost indexes to determine the amount of loss to their homes as a result of Hurricane and Tropical Storm Harvey, Hurricane Irma and Hurricane Maria (2017 Hurricanes).  The cost indexes provide tables with cost per square foot for Texas, Louisiana, Florida, Georgia, South Carolina, Puerto Rico and the U.S. Virgin Islands (2017 Disaster Area).

The safe harbor methods detailed in Revenue Procedure 2018-08 are effective on Dec. 13, 2017; the safe harbor method detailed in Revenue Procedure 2018-09 is effective for losses that are attributable to the 2017 Hurricanes and that arose in the 2017 Disaster Area after August 22, 2017. IRS Publication 547 provides more information on casualty and theft losses. If people want to explore claiming these losses by filing an original or amended return for Tax Year 2016, the IRS has also issued a new revision of the 2016 Form 4684 and 2016 Instructions for Form 4684. The 2017 revision of Form 4684, its instructions and any additional information will be available before the start of the filing season at

To help taxpayers navigate casualty loss issues, the IRS has created a special web page: Tax Law Provisions for Disaster Areas, with additional information for disaster victims. 

Resources on Help Taxpayers Get Ready to File Taxes

With the tax filing season right around the corner, the IRS encourages taxpayers to visit for tax tools and resources. Taxpayers can resolve nearly every tax issue on the IRS website. provides many self-service tools and features, including these six:

Share this tip on social media -- #IRSTaxTip: Resources on Help Taxpayers Get Ready to File Taxes

Tuesday, December 12, 2017

Get Ready for Taxes: What to Do Before the Tax Year Ends Dec. 31

This is the sixth in a series of reminders to help taxpayers prepare for the upcoming tax filing season.

As tax filing season approaches, the Internal Revenue Service reminds taxpayers there are things they should do now to get ready for filing season.

For most taxpayers, Dec. 31 is the last day to take actions that will impact their 2017 tax returns. For example, charitable contributions are deductible in the year made. Donations charged to a credit card before the end of 2017 count for the 2017 tax year, even if the bill isn’t paid until 2018. Checks to a charity count for 2017 as long as they are mailed by the last day of the year.

Taxpayers who are over age 70 ½ are generally required to receive payments from their individual retirement accounts and workplace retirement plans by the end of 2017, though a special rule allows those who reached 70 ½ in 2017 to wait until April 1, 2018, to receive them.

Most workplace retirement account contributions should be made by the end of the year, but taxpayers can make 2017 IRA contributions until April 18, 2018. For 2018, the limit for a 401(k) is $18,500. For traditional and Roth IRAs, the limit is $6,500 if age 50 or older and up to $15,500 for a Simple IRA for age 50 or older. Check for more information about cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2018.

Taxpayers should be careful not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations. Taxpayers can take steps now to make sure the IRS can process their return next year.

Taxpayers who have moved should tell the US Postal Service, employers and the IRS. To notify the IRS, mail IRS Form 8822, Change of Address, to the address listed on the form’s instructions. For taxpayers who purchase health insurance through the Health Insurance Marketplace, they should also notify the Marketplace when they move out of the area covered by their current Marketplace plan.

For name changes due to marriage or divorce, notify the Social Security Administration so the new name will match IRS and SSA records. Also notify the SSA if a dependent’s name changed.  A mismatch between the name shown on your tax return and the SSA records can cause problems in the processing of a return and may even delay a refund.

Some refunds cannot be issued before mid-February. By law, the IRS cannot issue refunds before mid-February for tax returns that claim the Earned Income Tax Credit or the Additional Child Tax Credit. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards starting on Feb 27, 2018, if they chose direct deposit and there are no other issues with the tax return.

Some Individual Taxpayer Identification Numbers must be renewed. Any Individual Taxpayer Identification Number not used on a tax return at least once in the past three years will expire on December 31, 2017. Additionally, all ITINs issued before 2013 with middle digits of 70, 71, 72 or 80 (Example: 9XX-70-XXXX) will also expire at the end of the year. As a reminder, ITINs with middle digits 78 and 79 that expired in 2016 can also be renewed. Only taxpayers who need to file a U.S. federal tax return or are claiming a refund in 2018 must renew their expired ITINs. Affected ITIN holders can avoid delays by starting the renewal process now.

Those who fail to renew before filing a return could face a delayed refund and may be ineligible for some important tax credits. More information, including answers to frequently asked questions is available on

Keeping copies of tax returns is important. Taxpayers may need a copy of their 2016 tax return to make it easier to fill out a 2017 tax return. Some taxpayers using a software product for the first time may need to provide their 2016 Adjusted Gross Income, or AGI, to e-file their 2017 tax return.

Taxpayers who do not have a copy of their 2016 return and are existing users can log in to if they need their AGI. Otherwise the IRS will mail a Tax Return Transcript if requested online or by calling 800-908-9946. Plan ahead. Allow five to 10 days for delivery. Learn more about identification verification and electronically signing tax returns.

The IRS has a special page on with steps to take now for the 2018 tax filing season.

Monday, December 11, 2017

Taxpayers Should Protect Data All Year Round

With the online holiday shopping season in full swing, it’s the perfect time for all taxpayers to take steps to protect their identities and personal data. This year, the IRS kicked off this annual event with National Tax Security Awareness Week. The IRS partnered with state tax agencies, the tax industry and other groups across the country to encourage all taxpayers to think about data protection.

While the week is over, information on these five topics remains relevant year-round:

Anyone with an online presence can do a few simple things to protect their identity and personal information. Following these eight steps can also help taxpayers protect their tax return and refund in 2018:
  • Shop at familiar online retailers.
  • Avoid unprotected Wi-Fi.
  • Learn to recognize and avoid phishing emails that pose as a trusted source.
  • Keep a secure machine.
  • Use passwords that are strong, long and unique.
  • Use multi-factor authentication when available.
  • Sign up for account alerts.
  • Encrypt sensitive data and protect it with a password.

The IRS reminds people to be on the lookout for new, sophisticated email phishing scams. These scams not only endanger someone’s personal information, but they can also affect a taxpayer’s refund in 2018. Even if an email is from a known source, people should use caution because cybercrooks are very good at mimicking trusted businesses, friends and family.

People who are the victim of a data breach should consider these five steps to help protect their sensitive information that can be used on a tax return:
  • Determine what information the thieves compromised.
  • Consider taking advantage of credit monitoring services offered to victims.
  • Place a freeze on credit accounts to prevent access to credit records.
  • Reset passwords on online accounts.
  • Use multi-factor authentication when available.

The IRS warns the nation’s business, payroll and human resource communities about a growing W-2 email scam. Criminals use this scheme to gain access to W-2 and other sensitive tax information that employers have about their employees. The IRS recommends that all employers educate employees about this scheme, especially those in human resources and payroll departments.

Business filers should be alert for signs of identity theft. They should contact the IRS if they experience any of these issues:
  • The IRS rejects an e-filed return saying it already has one with that identification number.
  • The IRS rejects an extension to file request saying it already has a return with that identification number.
  • The filer receives an unexpected tax transcript.
  • The filer receives an IRS notice that doesn’t relate to anything they submitted.
  • The filer doesn’t receive expected or routine mailings from the IRS.
More information

Wednesday, December 6, 2017

Get to Know the Taxpayer Bill of Rights – Part 1

This is the first tip in a two-part summary of the rights granted to all taxpayers.

Every taxpayer has rights. The Taxpayer Bill of Rights takes these rights from the tax code and groups them into 10 categories. Taxpayers interacting with the IRS should know their rights, which are highlighted in Publication 1, Your Rights as a Taxpayer.

The Right to Be Informed. Taxpayers have the right to know how to comply with tax laws. They are entitled to clear explanations of the laws and IRS procedures. Taxpayers have the right to know about IRS decisions affecting their accounts with clear explanations of the outcomes.

The Right to Quality Service. Taxpayers have the right to receive prompt, courteous and professional assistance when dealing with the IRS. They also have the right to speak with a supervisor about inadequate service. Communications from the IRS should be clear and easy to understand.

The Right to Pay No More Than the Correct Amount of Tax. Taxpayers must pay only the amount of tax legally due. This includes interest and penalties. The IRS must apply all tax payments properly.

The Right to Challenge the IRS’s Position and Be Heard. Taxpayers have the right to object to formal IRS actions or proposed actions. They can also provide justification with additional documentation. Taxpayers can expect the IRS to consider timely objections and documentation promptly and fairly. Taxpayers can expect a response when the IRS disagrees with the taxpayer’s position.

The Right to Appeal an IRS Decision in an Independent Forum. Taxpayers are entitled to a fair and impartial appeal of most IRS decisions. This includes appealing certain penalties. Taxpayers have the right to receive a written response regarding a decision from the IRS. Taxpayers generally have the right to take their case to court.

The IRS will include Publication 1 when sending a notice on a range of issues, such as an audit or collection matter. Publication 1 is available in English and Spanish. All IRS facilities publicly display the rights for taxpayers.

More Information:

Tuesday, December 5, 2017

Get Ready for Taxes: Plan Ahead to Avoid Refund Delays

Taxpayers can take steps to ensure smooth processing of their 2017 tax return next year. Here are three things taxpayers should know about the tax returns they will file next year.

1) It’s important to gather documents

The IRS urges all taxpayers to file a complete and accurate tax return by making sure they have all the needed documents before they file. This includes:
  • Forms W-2 from employers.
  • Forms 1099 from banks and other payers.
  • Forms 1095-A from the Marketplace for those claiming the Premium Tax Credit.
Typically, these forms start arriving by mail in January. Taxpayers should check them over carefully, and if any of the information shown is wrong, contact the payer right away for a correction.

2) Taxpayers with expiring ITINs should renew promptly

Some people with an Individual Taxpayer Identification Number may need to renew it before the end of the year to avoid a refund delay and possible loss of key tax benefits. These ITINs expire Dec. 31, 2017:
  • ITINs not used on a tax return in the past three years.
  • ITINs with middle digits 70, 71, 72 or 80.
Anyone who needs to renew an ITIN should submit a completed Form W-7, Application for IRS Individual Taxpayer Identification Number. They should mail the Form W-7, along with original identification documents or copies certified by the issuing agency. Once an individual files a completed form, it typically takes about seven weeks to receive an ITIN assignment letter from the IRS.

3) Choose e-file and direct deposit for a faster refund

Electronically filing a tax return is the most accurate way to prepare and file. Errors delay refunds and the easiest way to avoid them is to e-file. Combining direct deposit with electronic filing is the fastest way for a taxpayer to get their refund. With direct deposit, a refund goes directly into a taxpayer’s bank account.

There are several e-file options:
Taxpayers should note that the IRS cannot by law issue refunds for people claiming the Earned Income Tax Credit or Additional Child Tax Credit before mid-February. This law helps make sure that taxpayers receive the refund they’re due by giving the IRS more time to detect and prevent fraud.

The IRS expects the earliest refunds related to EITC and ACTC to be available in taxpayer bank accounts or debit cards starting on Feb. 27, 2018, if the taxpayer uses direct deposit and there are no other issues with their tax return. This additional period is due to several factors, including the Presidents Day holiday and banking and financial systems needing time to process deposits.

More Information: