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The Senate Finance Committee on Wednesday, April 20, approved two bills that would require the IRS to increase security measures and enforce new policies, but rejected a provision to regulate tax return preparers. The so-called Prevent Identity Theft and Tax Refund Fraud Act would reinstate the Internal Revenue Service's streamlined critical pay authority, which allows the agency to hire cybersecurity employees at a higher pay grade and on expedited timetables. IRS Commissioner John Koskinen has said this is one of his top requests of lawmakers. Among other things, the Act would also: Expand the identity protection personal identification...
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If you are a self-insured employer, applicable large employer or health coverage provider, remember that the deadlines to file information returns with the IRS are approaching. The deadline to provide information returns to employees or responsible individuals was March 31 but for some the deadline to file them with the IRS just over one month away. This chart provides a reminder about the upcoming filing requirements and the 2016 deadlines. Action Reporting Due Dates in 2016 for… ...
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Things to Know about Filing Late Returns and Paying Penalties April 18 was this year’s deadline for most people to file their federal tax return and pay any tax they owe. If you are due a refund there is no penalty if you file a late tax return. If you owe tax, and you failed to file and pay on time, you will most likely owe interest and penalties on the tax you pay late. To keep interest and penalties to a minimum, you should file your tax return and pay the tax as soon as possible. Here are some facts that you should know. 1. Two penalties may apply. One penalty is for filing late and one is for paying late. They can add up fast....
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The percentage of callers with a tax issue who will receive live assistance is expected to increase to 47 percent for fiscal year 2016, from 38 percent in FY 2015, the Government Accountability Office said in a new report. Furthermore, during the current tax filing season, the IRS predicts the level of service will be 65 percent for those calling with questions. The GAO Report, "Internal Revenue Service: Preliminary Observations on the Fiscal Year 2017 Budget Request and 2016 Filing Season Performance," was released April 7. Unsurprisingly, the report states that the service-level improvements are due, in part, to additional funding. The agency's...
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In advance of the tax deadline, the Internal Revenue Service today warned tax professionals of a new emerging scam in which cybercriminals obtain remote control of preparers’ computer systems, complete and file client tax returns and redirect refunds to thieves’ accounts. Although the IRS knows of a handful of cases to date, this scam has potential to impact the filing of fraudulent returns in advance of the April tax deadline and is yet another example of tax professionals being targeted by identity theft criminals. The IRS urges all tax preparers to take the following steps: Run a security “deep scan” to search for viruses and malware; ...
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All agreed at the Senate Finance Committee’s (SFC’s) cybersecurity hearing on April 12 that taxpayers are becoming more vulnerable to increasingly sophisticated criminal tactics designed to steal personal identity information. "Taxpayers have been failed by the agencies, the companies, and the policymakers here in Congress they rely on to protect them," ranking member Ron Wyden, D-Ore., stated in his remarks aimed at sharing blame among all stakeholders. Nevertheless, the majority of testimony focused on IRS shortcomings. IRS Commissioner John Koskinen's testimony revealed that securing taxpayer data is a top priority at the IRS, but that the Service...
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The Internal Revenue Service is seeking civic-minded volunteers to serve on the Taxpayer Advocacy Panel (TAP), a federal advisory committee that listens to taxpayers, identifies major taxpayer concerns, as well as making recommendations for improving IRS service and customer satisfaction. The TAP provides a forum for taxpayers to raise concerns about IRS service and offer suggestions for improvement. The TAP reports annually to the Secretary of the Treasury, the IRS Commissioner and the National Taxpayer Advocate. The Office of the Taxpayer Advocate is an independent organization within the IRS that provides support for and oversight of the TAP. “In...
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You usually will have taxes withheld from your pay if you are an employee. However, if you don’t have taxes withheld , or you don’t have enough tax withheld, you may need to make estimated tax payments. If you are self-employed you normally have to pay your taxes this way. Here are five tips about making estimated tax payments: 1. When the tax applies. You should pay estimated taxes in 2015 if you expect to owe at least $1,000 in tax for 2016 after subtracting your withholding and refundable credits. Special rules apply to farmers and fishermen. 2. How to figure the tax. Estimate the amount of income you expect to receive for the year. Also...
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If you gave money or property to someone as a gift, you may wonder about the federal gift tax. Many gifts are not subject to the gift tax. Here are seven tax tips for gifts and the gift tax. Nontaxable Gifts. The general rule is that any gift is a taxable gift. However, there are exceptions to this rule. The following are nontaxable gifts: Gifts that do not exceed the annual exclusion for the calendar year, Tuition or medical expenses you paid directly to a medical or educational institution for someone, Gifts to your spouse Gifts to a political organization for its use, and Gifts to charities. ...
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The Internal Revenue Service has announced a new payment option for individual taxpayers who need to pay their taxes with cash. In partnership with ACI Worldwide’s OfficialPayments.com and the PayNearMe Company, individuals can now make a payment without the need of a bank account or credit card at over 7,000 7-Eleven stores nationwide. “We continue to look for new ways to provide services for our taxpayers. Taxpayers have many options to pay their tax bills by direct debit, a check or a credit card, but this provides a new way for people who can only pay their taxes in cash without having to travel to an IRS Taxpayer Assistance Center," said IRS Commissioner...
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If you get income from tips, you should know some things about tips and taxes. Here are a few tips from the IRS to help you file and report your tip income correctly: Show all tips on your return. You must report tip income. This includes the value of non-cash tips such as tickets, passes or other items. All tips are taxable. You must pay tax on all tips you received during the year. This includes tips directly from customers and tips added to credit cards. This also includes your share of tips received from a tip-splitting agreement with other employees. Report tips to your employer. If you receive $20 or more in any one month, you...
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If you use your home for business, you may be able to deduct expenses for the business use of your home. If you qualify, you can claim the deduction whether you rent or own your home. You may use either the simplified method or the regular method to claim your deduction. Here are six tips that you should know about the home office deduction: Regular and Exclusive Use. As a general rule , you must use a part of your home regularly and exclusively for business purposes. The part of your home used for business must also be: Your principal place of business, or A place where you meet clients or customers in the normal course of...
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As you’re wrapping up your tax return, the IRS wants to help you understand the differences among forms and documents related to the Affordable Care Act . Here are five tips for individuals navigating the filing requirements related to the health care law. Don’t send health care information forms or proof of coverage to the IRS when you file your tax return You may receive one or more forms providing information about the health care coverage that you had or that your employer offered in 2015. These forms provide information you may need when you prepare your individual income tax return. However, you should not attach any of these forms...
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The Internal Revenue Service has some advice for taxpayers this April Fool’s Day that may prevent them from being the victim of a tax scam: don’t be fooled by scammers. Stay safe and be informed. Here are some of the most recent IRS-related scams to be on the lookout for: Telephone Scams. Aggressive and threatening phone calls by criminals impersonating IRS agents remain an ongoing threat. The IRS has seen a surge of these phone scams in recent years as scam artists threaten taxpayers with police arrest, deportation, license revocation and more. These con artists often demand payment of back taxes on a prepaid debit card or by immediate wire transfer....
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Special tax rules may apply to some children who receive investment income. The rules may affect the amount of tax and how to report the income. Here are five important points to keep in mind if your child has investment income: 1. Investment Income. Investment income generally includes interest, dividends and capital gains. It also includes other unearned income, such as from a trust. 2. Parent’s Tax Rate. If your child's total investment income is more than $2,100 then your tax rate may apply to part of that income instead of your child's tax rate. See the instructions for Form 8615 , Tax for Certain Children Who Have Unearned Income. 3. Parent’s...
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Public Invited to Imagine the Taxpayer Experience of the Future The Internal Revenue Service announced the upcoming start of its first Tax Design Challenge crowdsourcing competition to encourage innovative ideas for the taxpayer experience of the future. The effort, being done in coordination with the Mortgage Bankers Association (MBA), is a crowdsourcing competition open to the public. The competition will engage teams of designers, developers, and innovative thinkers across the U.S. to envision options for taxpayer interactions. “Crowdsourcing is a new activity for the IRS, but we believe working with citizens and the private sector will help support...
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The Internal Revenue Service released the 2015 IRS Data Book today, a snapshot of agency activities for the fiscal year. The 2015 Data Book describes activities conducted by the IRS from Oct. 1, 2014, to Sept. 30, 2015 and includes information about returns filed, taxes collected, enforcement, taxpayer assistance and the IRS budget and workforce, among others. This edition also contains charts that show trends, such as the decline in the number of audits and the reduction in telephone and in-person tax assistance, but increases in the use of online resources and volunteer tax assistance. During fiscal year 2015, the IRS collected more than $3.3 trillion,...
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Taxpayers can quickly check the status of their tax return and refund through “ Where’s My Refund? on IRS.gov. This is the sixth in a series of 10 IRS tips called the Tax Time Guide. These tips are designed to help taxpayers navigate common tax issues as this year’s April 18 deadline approaches. Taxpayers who have not yet received their refunds can use “ Where’s My Refund? on IRS.gov or on the smartphone application IRS2Go to find out about the status of their income tax refunds. Initial information will normally be available within 24 hours after the IRS receives the taxpayer’s e-filed return or four weeks after the taxpayer mails a paper return...
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Did you receive income from a foreign source in 2015? Are you a U.S. citizen or resident who worked abroad last year? If you answered ‘yes’ to either of those questions, here are eight tips to keep in mind about foreign income: 1. Report Worldwide Income. By law, U.S. citizens and residents must report their worldwide income. This includes income from foreign trusts and foreign bank and securities accounts. 2. File Required Tax Forms. You may need to file Schedule B , Interest and Ordinary Dividends, with your U.S. tax return. You may also need to file Form 8938 , Statement of Specified Foreign Financial Assets. In some cases, you may need to file...
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The IRS urges you to file on time even if you can’t pay what you owe. This saves you from potentially paying a penalty for a late filed return. Here is what to do if you can’t pay all your taxes by the due date. 1. File on time and pay as much as you can. You can pay online, by phone, or by check or money order. Visit IRS.gov for electronic payment options . 2. Get a loan or use a credit card to pay your tax. The interest and fees charged by a bank or credit card company may be less than IRS interest and penalties. For credit card options , see IRS.gov. 3. Use the Online Payment Agreement tool. You don’t need to wait for IRS to send you...
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