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IRS Archives

IRS Announces 2018 Tax Rate Schedules and Retirement Plan Limitations

The Internal Revenue Service (IRS) released its annual inflation adjustments for many tax benefits applicable for tax year 2018 (returns filed in 2019). The standard deduction for taxpayers who are married filing jointly will increase slightly to $13,000; for single and separately filing married taxpayers, the standard deduction will also increase slightly, to $6,500. For tax year 2018, the foreign earned income exclusion is $104,100, up from $102,100 for tax year 2017. The annual exclusion for gifts increased to $15,000, an increase of $1,000 from the exclusion for tax year 2017.

IRS Resumes Issuing Private-Letter Rulings Concerning Tax-Free Spin-Offs

Pursuant to IRS Revenue Procedure 2017-52, the IRS has introduced a pilot program to resume offering private letter rulings on the tax consequences of certain distributions of stock or securities of a controlled corporation under I.R.C. Sec. 355. From September 21, 2017, through March 21, 2019, taxpayers may request a transactional ruling concerning plans to create tax-free spin-offs. For more information, click here.

President Trump Proposes Federal Tax Reforms

President Trump and several key members of Congress have released their proposal for federal tax reform. Their main goals are to simplify the tax code, lower tax rates, increase the competitiveness of American businesses in the international arena, and repatriate dollars currently held in offshore accounts.

Unfiled Returns? Possibly Good News as the IRS Suspends the Automated Substitute for Return (SFR) Program

Sometimes when a taxpayer does not file a tax return, the IRS will estimate the amount owed and prepare a Substitute for Return (SFR). More specifically, IRS computers prepare the SFRs based on information the IRS receives from third parties, such as Forms W-2 and 1099. The IRS would then issue a letter to the taxpayer regarding the proposed deficiency with penalties added for late filing and late payment. Taxpayers could respond with information about deductions, credits, or errors and discuss the proposed deficiency with an IRS employee.

Nearly Two-Thirds of IRS Hardware is Too Old

The Treasury Inspector General for Tax Administration (TIGTA) recently audited the Sustaining Infrastructure Program of the Internal Revenue Service (IRS) and found that, since 2013, the percentage of information technology hardware the IRS is using that is beyond its useful life has increased from 40% to its current rate of 64%. Aged hardware is more likely to fail, negatively impacting employee productivity, information security, and customer service.

IRS Provides Guidance Concerning Late-Filed 2016 Partnership Returns

Certain partnerships that failed to file their required federal tax returns by the new, April 15th due date for tax years beginning with 2016 may be provided penalty relief, according to Internal Revenue Service Notice 2017-47. The calendar-year partnership due date was moved up from April 18th by the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015. If your partnership filed its returns with the IRS and provided appropriate copies to receipients by the historical due date, or requested an extension by that time, you may qualify for penalty relief. For more information, click here.

Fake Scams Already Surfacing While Hurricane Harvey Hits Houston

The Internal Revenue Service (IRS) has issued a warning about possible fake charity scams related to the effects of Hurricane Harvey. Taxpayers should be sure the charities they want to support are recognized by the government to accept donations. Don't let your compassion get the best of you - be careful who you send your money and information. The IRS offers the following tips to help you protect your interests while also supporting causes you care about:

Bitcoin Users Beware - The IRS May Know Your Identity

The Internal Revenue Service (IRS) has just obtained specialized software for identifying users of bitcoins and other virtual currency. According to a work contract obtained through a Freedom of Information Act request by The Daily Beast, the IRS hopes to use this software "to identify and obtain evidence on individuals using bitcoin to either laundry money or conceal income as part of tax fraud or other Federal crimes."

Applicants Sought for IRS Advisory Committee

The Internal Revenue Service (IRS) is seeking applicants for places on its Advisory Committee on Tax Exempt and Government Entities (ACT), specifically to assist with the employee plans, exempt organizations, and tax exempt bonds segments. The Department of the Treasury appoints members for three-year terms. Applications are accepted through September 18, 2017.

New Scam Targets Professionals' Tax Software Passwords, Security Summit Warns

The Internal Revenue Service (IRS) recently issued a warning to tax professionals to be alert to a new e-mail scam that impersonates tax software providers and attempts to steal usernames and passwords.  Recipients of these e-mails are told that, due to a recent software upgrade, the tax preparer must revalidate their login credentials. It provides a link to a fictitious website that mirrors the software provider's actual login page. However, instead of upgrading software, the tax professionals are providing their information to cybercriminals who use the stolen credentials to access the preparers' accounts and steal client information.

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