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January 2018 Archives

Reality TV Star Pleads Guilty to Federal Tax Crimes

Mike "The Situation" Sorrentino, who formerly appeared on the reality TV series "The Jersey Shore," pleaded guilty to a charge of tax evasion for years in which he concealed a portion of his income to avoid paying the full amount of taxes owed. Sorrentino's brother, Marc, also pleaded guilty to a charge of aiding in the preparation of a fraudulent tax return for underreporting income and providing his tax return preparers with false information.

National Taxpayer Advocate Releases 2017 Annual Report to Congress

Nina E. Olson, the National Taxpayer Advocate, recently released her 2017 Annual Report to Congress concerning tax administration issues and the challenges facing the Internal Revenue Service (IRS) in the wake of the current tax reform legislation. One significant issue is how the IRS will be able to perform the basic tasks of tax administration given the 20-percent cut to its funding since FY 2010.

IRS and FTB Power of Attorney Forms Have Changed

If you are a tax professional, take note of recent changes that the Internal Revenue Service (IRS) and California Franchise Tax Board (FTB) have made to their power of attorney forms that may affect your ability to access client information.  The IRS form, found here, has expanded section 5a to include a box you must check if you have intermediaries access client transcripts for you.  The FTB has completely rehauled its power of attorney form system --- there is a new form to use for individuals, a separate form for business entities, and a third form to use when you want to revoke your power of attorney. To learn more about the various the changes to the FTB forms, click here.

Proposed California Bill Attempts to Mitigate Effects of State Tax Deduction Limit

Efforts are already underway to reduce the slap many Californians are feeling from the $10,000 limit on federal deductions for state property or income taxes paid. Senators De Leon, Allen, and Hill have introduced SB 227, the "Protect California Taxpayers Act," which would effectively eliminate the cap on these federal deductions by providing a dollar-for-dollar tax credit against the state income tax liabilities of taxpayers who make a charitable donation to the California Excellence Fund. Donations would be used to fund California government programs typically funded through state tax revenues. Any credit that exceeds the taxpayer's income tax liability would be carried over to the next year, and would not be refundable.

2018 Federal Tax Filing Season Opens January 29

The Internal Revenue Service (IRS) announced that the federal tax filing season will begin on Monday, January 29, 2018.  The deadline for individual tax returns will be Tuesday, April 17, 2018. 

California Office of Tax Appeals Releases Draft Emergency Regulations

The new state Office of Tax Appeals (OTA) began hearing appeals cases as of January 1, 2018. California taxpayers may file an appeal with the OTA after receiving a Notice of Action or Notice of Determination from the Franchise Tax Board (FTB) or the new California Department of Tax and Fee Administration (CDTFA) with an appeal deadline. Appeals will be heard by three-member panels of Administrative Law Judges in Sacramento, Fresno, and Los Angeles. Draft emergency regulations governing the appeals process are available here: https://ota.ca.gov/draft-emergency-regulations/

New Year, New IRS Impersonation Scams

The Internal Revenue Service (IRS) and the Treasury Inspector General for Tax Administration (TIGTA) have already issued warnings for the new tax filing season regarding individuals who impersonate IRS employees and demand money from taxpayers.  Since October 2013, TIGTA has received reports of threatening phone calls made by scammers in every U.S. state.  California taxpayers have been most affected by this type of scam, losing over $10 million to this crime.

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