Here’s how the IRS contacts taxpayers

IRS Tax Tip 2018-111, July 19, 2018

Everyone should know how the IRS contacts taxpayers. This will help people avoid becoming a victim of scammers who pretend to be from the IRS with a goal of stealing personal information.

Here are some facts about how the IRS communicates with taxpayers:

• The IRS doesn't normally initiate contact with taxpayers by email.
• The agency does not send text messages or contact people through social media.
• When the IRS needs to contact a taxpayer, the first contact is normally by letter delivered by the U.S. Postal Service.  Fraudsters will send fake documents through the mail, and in some cases will claim they already notified a taxpayer by U.S. mail.
• Depending on the situation, IRS employees may first call or visit with a taxpayer. In some instances, the IRS sends a letter or written notice to a taxpayer in advance, but not always.
• IRS revenue agents or tax compliance officers may call a taxpayer or tax professional after mailing a notice to confirm an appointment or to discuss items for a scheduled audit.
• Private debt collectors can call taxpayers for the collection of certain outstanding inactive tax liabilities, but only after the taxpayer and their representative have received written notice.
• IRS revenue officers and agents routinely make unannounced visits to a taxpayer’s home or place of business to discuss taxes owed, delinquent tax returns or a business falling behind on payroll tax deposits. IRS revenue officers will request payment of taxes owed by the taxpayer. However, taxpayers should remember that payment will never be requested to a source other than the U.S. Treasury.
• When visited by someone from the IRS, the taxpayers should always ask for credentials. IRS representatives can always provide two forms of official credentials: a pocket commission and a Personal Identity Verification Credential.

More Information:

• IRS Taxpayers Bill of Rights
• Secure tax payment options
• Consumer alerts
• Report phishing and online scams
• Phone scams 

Taxpayers now have more time to challenge a levy

Tax Reform Tax Tip 2018-123, August 9, 2018

The IRS reminds individuals and businesses that they have additional time to file an administrative claim or bring a civil action for wrongful levy or seizure. Tax reform legislation enacted in December extended the time limit from nine months to two years.

Here are some facts about levies and the extension of time to file a claim or civil action:

• An IRS levy permits the legal seizure and sale of property to satisfy a tax debt. For purposes of a levy, the term “property” includes wages, money in bank or other financial accounts, vehicles and real estate.
   
• The timeframes apply when the IRS has already sold the property it levied. Taxpayers can make an administrative claim for return of their property within two years of the date of the levy.
   
• If an administrative claim is made within the extended two-year period, the two-year period for bringing suit is extended for one of two periods, whichever is shorter:
  • Twelve months from the date the person filed the claim.
  • Six months from the date the IRS disallowed the claim.
     
• The change in law applies to levies made before, on or after December 22, 2017, as long as the previous nine-month period hadn’t yet expired.
   
• Anyone who receives an IRS bill titled, Final Notice of Intent to Levy and Notice of Your Right to A Hearing, should immediately contact the IRS. By doing so, a taxpayer may be able to make arrangements to pay the liability, instead of having the IRS proceed with the levy.

More Information:

• What if I get a levy against one of my employees, vendors, customers or other third parties
• What is a Levy?
• Publication 4235, Collection Advisory Group Numbers and Addresses
• Publication 4528, Making an Administrative Wrongful Levy Claim Under Internal Revenue Code Section 6343(b)
• Publication 1660, Collection Appeal Rights
• Publication 1, Your Rights as a Taxpayer

Tips for extension filers

IRS Tax Tip 2018-122, August 8, 2018

The IRS reminds taxpayers who requested an extra six months to file their 2017 tax return that Monday, October 15, 2018, is the extension deadline for most taxpayers.

For taxpayers who have not yet filed, here are a few tips to keep in mind about the extension deadline and taxes:

• Taxpayers can still e-file returns for free using IRS Free File. The program is available only on IRS.gov. Filing electronically is the easiest, safest and most accurate way to file taxes.
•  For taxpayers owed a refund, the fastest way to get it is to combine direct deposit and e-file.
•  Taxpayers who owe taxes should consider using IRS Direct Pay. It’s a simple, quick and free way to pay from a checking or savings account using a computer or mobile device. There are also other online payment options.
• Members of the military and those serving in a combat zone generally get more time to file. Military members typically have until at least 180 days after leaving a combat zone to both file returns and pay any tax due.
• The IRS recommends that taxpayers always keep a copy of tax returns for their records. Keeping copies of tax returns can help taxpayers prepare future tax returns or assist with amending a prior year’s return.

More information:

• Get Transcript
• Tax return transcript types and ways to order them
• EITC assistant
• Interactive tax assistant

Taxpayers can monitor their IRS information online

IRS Tax Tip 2018-121, August 7, 2018

Taxpayers can access their federal tax information through a secure login at IRS.gov/account. After logging in, the user can view:

• The amount they owe
• Their payment history
• Tax records
• Key information from their most recent tax return as originally filed

A taxpayer can monitor their personal tax account by keeping track of payments and taxes owed. This online information is the same as what’s provided by IRS representatives.

Taxpayers who owe can pay from their bank account or with a debit or credit card. Taxpayers who need more time to pay can also apply for a payment plan, including an installment agreement. Other payment options are available at IRS.gov/payments.

First-time users must authenticate their identity through the Secure Access process. Additional information about secure access can be found at IRS.gov/secureaccess. Returning users can log in with their user name and password.

The account balance will update no more than once every 24 hours, usually overnight. After making a payment, users should allow up to three weeks for it to appear in the payment history.

The IRS continues to add features to help individual taxpayers conveniently monitor their account information online.

What taxpayers should know about amending a tax return

IRS Tax Tip 2018-118, August 1, 2018

Taxpayers who discover they made a mistake on their tax returns after filing can file an amended tax return to correct it. This includes things like changing the filing status, and correcting income, credits or deductions.

Here are some tips for taxpayers who need to amend a tax return.

• Complete and mail the paper Form 1040X, Amended U.S. Individual Income Tax Return. Taxpayers must file an amended return on paper whether they filed the original return on paper or electronically. Filers should mail the Form 1040X to the address listed in the form’s instructions. However, taxpayers filing Form 1040X in response to a notice received from the IRS, should mail it to the address shown on the notice.
• If taxpayers used other IRS forms or schedules to make changes, they should attach those schedules to their Form 1040X.
• Taxpayers should not amend a tax return to correct math errors; the IRS will make the math corrections for the taxpayers.
• Taxpayers should also not amend if they forgot to include a required form or schedule. The IRS will mail a request about the missing item.
• Anyone amending tax returns for more than one year will need a separate 1040X for each tax year. They should mail each tax year’s Form 1040X in separate envelopes.
• Taxpayers should wait for the refund from their original tax return before filing an amended return. They can cash the refund check from the original return before receiving any additional refund.
• Taxpayers filing an amended return because they owe more tax should file Form 1040X and pay the tax as soon as possible. This will limit interest and penalty charges.
• Generally, to claim a refund, taxpayers must file a Form 1040X within three years from the date they timely filed their original tax return or within two years from the date the person pays the tax – usually April 15 – whichever is later.
• Taxpayers can track the status of an amended return three weeks after mailing using “Where’s My Amended Return?” Processing can take up to 16 weeks.

More Information:

• Tax Topic 308 – Amended Returns
• Amended Tax Returns – Frequently Asked Questions
• Interactive Tax Assistant - Should I File an Amended Return?

IRS YouTube Videos:

Amending My Return – English | Spanish | ASL

Need to check your federal withholding

From the IRS:

Issue Number:    IRS Media Advisory

Inside This Issue

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IRS urges taxpayers to check withholding now to avoid tax surprises later; Spotlights special tools during week of Aug. 13 to help people overlooking major changes

With the year more than halfway over, the Internal Revenue Service urges taxpayers who haven’t yet done a “Paycheck Checkup” to take a few minutes to see if they are having the right amount of tax withholding following major changes in the tax law.

A summertime check on tax withholding is critical for millions of taxpayers who haven't reviewed their tax situation. Recent reports note that many taxpayers could see their refund amounts change when they file their 2018 taxes in early 2019.  

To help raise awareness for these taxpayers, the IRS is conducting a second “Paycheck Checkup” effort beginning the week of Aug. 13. During this week, the IRS is spotlighting a variety of tools – including the online Withholding Calculator – to help taxpayers learn if they need to make changes soon to avoid an unwelcome surprise come tax time.

The IRS is also encouraging partner groups inside and outside the tax community to share this important information with their members and employees. The IRS will also be holding special sessions on withholding for tax professionals and industry partners Aug. 15-16 in English and Spanish.

The Tax Cuts and Jobs Act, passed in December 2017, made significant changes, which will affect 2018 tax returns that people file in 2019. These changes make checking withholding amounts even more important. These tax law changes include:

• Increased standard deduction
• Eliminated personal exemptions
• Increased Child Tax Credit
• Limited or discontinued certain deductions
• Changed the tax rates and brackets

Checking and adjusting withholding now can prevent an unexpected tax bill and penalties next year at tax time. It can also help taxpayers avoid a large refund if they’d prefer to have their money in their paychecks throughout the year. The IRS Withholding Calculator and Publication 505, Tax Withholding and Estimated Tax, can help.

Special Alert: Taxpayers who should check their withholding include those who:

• Are a two-income family.
• Have two or more jobs at the same time or only work part of the year.
• Claim credits like the Child Tax Credit.
• Have dependents age 17 or older.
• Itemized deductions in 2017.
• Have high income or a complex tax return.
• Had a large tax refund or tax bill for 2017.

What:  IRS promotes mid-year “Paycheck Checkup” initiative with news releases, tax tips, YouTube videos and other products.

When:   Aug. 13-17, 2018

Where:  Via email distribution for those who subscribe and online at the IRS Newsroom

U.S. Tax Court Case

Thank you all for being part of my blog, and I will continue to keep this going.

Also, starting the month of August, I will analyze one Tax Court case

Have a wonderful day!