If you regularly claim deductions for donations, you may need to update your tax record keeping practices --- the Internal Revenue Service (IRS) issued final regulations this summer concerning the correct way to substantiate any charitable contributions you wish to deduct. Under Section 170(f)(8), for contributions of $250 or more, the recipient organization should provide you a receipt at the time of the contribution that shows:
The Treasury Inspector General for Tax Administration (TIGTA) recently reviewed the Internal Revenue Serivce's (IRS's) program on Collection Due Process requests, and found it to have similar room for improvement as compared to TIGTA's last review. For instance, the program could be more accurate in classifying requests and providing the correct type of hearing to taxpayers. The IRS also needs to improve how it handles taxpayer requests initially sent to the wrong location, as well as how it calculates statute expiration dates. For more information on the results of this review, click here.
Federal and California state tax agencies have offered relief to certain taxpayers affected by the 2018 wildfires in Northern California. The Internal Revenue Service will postpone specific deadlines, waive penalties, and provide other relief as detailed here. The California Franchise Tax Board's list of qualified disasters and instructions for claiming relief can be found at this link. The California Department of Tax and Fee Administration (formerly the BOE) is also offering relief for businesses impacted by the fires, including extensions to file returns and relief from certain penalties or interest. Details on the specific CDTFA programs offering relief, and instructions for requesting relief, are available here.
The Internal Revenue Service (IRS) and its Security Summit partners have released a warning about a new variation on phone scams by which criminals prey on taxpayers. Scammers are now using telephone numbers that mimic IRS Taxpayer Assistance Centers to try to trick victims into paying non-existent tax bills. Remember that IRS employees at these centers do not make calls to taxpayers to demand payment; such requests are typically initiated through regular mail delivered by the U.S. Postal Service.
The Franchise Tax Board (FTB) recently published its updated list of California's top 500 tax debtors, comprising both individuals and businesses that now collectively owe the state more than $505 million in income tax. Since October 2007, this list is updated twice annually. Taxpayers who receive notice of the FTB's intent to include them on the list and then make arrangements to pay their tax debt are removed from the publication.
The Treasury Inspector General for Tax Administration (TIGTA) released a report providing interim results for the 2018 federal tax filing season. As of March 2, 2018, the Internal Revenue Service (IRS) had received approximately 61 million tax returns and issued over 48 million refunds totaling almost $148 billion.
The new California Office of Tax Appeals (OTA) just released its first seven opinions. All seven opinions were decided in the favor of the Franchise Tax Board (FTB); none of the taxpayer-appellants opted for representation by an attorney, although three appellants were represented by an Enrolled Agent or Certified Public Accountant. The first appeals heard by the OTA covered a variety of issues, including penalty and interest assessments, filing status, and ridesharing credits. Six of the opinions are confirmed as "nonprecedential," and one opinion is pending precedential status. To read the opinions in full, click here: https://ota.ca.gov/opinions/
The Internal Revenue Service (IRS) has updated its online withholding calculator to account for the changes to tax calculations caused by the Tax Cuts and Jobs Act. Taxpayers are encouraged to use the updated calculator tool to ensure the correct amount is withheld from their paychecks. To access the tool and additional information from the IRS, click here.
Virtual currency transactions, such as the purchase or sale of Bitcoin, are reportable transactions on your federal income tax returns, as a recent Internal Revenue Service (IRS) press release states. Failure to report digital currency transactions can lead to audit and possible penalty or interest assessments. The IRS has issued Notice 2014-21 (here) to provide guidance for taxpayers and tax return preparers regarding such transactions. To read the full IRS press release on this topic, click here.
The Internal Revenue Service (IRS) recently released its top-12 list of tax scams to watch for in the current tax year, an annual list called the "Dirty Dozen." Topping the list in 2018 are the perennial telephone and phishing scams, identity theft, and return preparer fraud. Also included are acts such as falsely padding deductions, making improper claims for business credits, and falsifying income. For the complete list and information from the IRS on how to protect yourself from tax scams, click here.