The Scoop. Agenda. Get A Transcript 7/5/2016. Kristy Maitre Tax Specialist Center for Agricultural Law and Taxation July 6, 2016

Transcription

1 The Scoop Kristy Maitre Tax Specialist Center for Agricultural Law and Taxation July 6, 2016 Agenda Get A Transcript ACA Return stats for 2014 House Committee Testimony on Agents Training IP Pin Breach againnnnnnnnnn! Updated seizure policy/letters Disregarded entity EIN requirement Refund Holds in 2017 Until Feb 15 Borrowing SSN Victims New Partnership Audit Provisions Amish Correspondence NIIT Issue Centers for Medicare and Medicaid Services Shared Responsibility Payment Disable online account Iowa Issue Get A Transcript 1

2 Get A Transcript General Instructions 2

3 Information Needed Financial Account Mobile Phone In the Taxpayer s Name 3

4 Start Enter the E Mail Confirmation Code My E Mail Your confirmation code is: This code will expire in 15 minutes. Enter it into the Confirmation Code field as soon as possible to access your requested service. This is an automated . Please do not reply. 4

5 Verification of Identity Verification of Identity Verify Phone Number 5

6 My Phone is Under Son s Contract Unable to Verify Identity Gave Information on How to Obtain a Transcript 6

7 First ACA Returns Stats 2014 First Year Difficulties included: Calculation of the Premium Tax Credit Calculation of the advanced portion for which taxpayers qualified Over $ 500 million repaid in advance PTC Income qualification was the chief reason Taxpayers are failing to account for income as the year moves forward or are not understanding the income calculation to start the process Data Preliminary based on a sample of 260,591 returns Testimony on IRS Agents Training House Small Business subcommittee hearing Inconsistent quality in IRS personnel Some auditors lack knowledge of tax law (just basic) Older agents have better understand if law Some agents ignore or deny protocols in the IRM including audit reconsideration procedures IP PIN Tool Breach June 23, 2017 The IP PIN tool is unavailable until further notice The Internal Revenue Service is reviewing this tool and looking at further strengthening its security features Taxpayers who have been issued an IP PIN through a CP01A Notice should continue to file their tax returns with an IP PIN as they normally would 7

8 IP PIN Tool Breach Increased attempts to access the IP PIN program Investigation underway to determine if any IP PIN s were accessed The tool was used by about 20 million taxpayer annually Other Security Information 48% drop in Form ID Theft Affidavit filings Expand the test of W 2 verification codes to about 50 million in 2017 New data elements will be used by the states and IRS to assist in identifying a fraudulent tax return GAO report estimated the IRS in 2014 paid out $ 3.1 billion in fraudulent returns IRS Updates Seizure Policies Special procedure for requesting the return of property or funds whose assets were forfeited because they were involved in legal structuring of regular cash transactions below the $10,000 threshold est. by the Bank Secrecy Act October 2014 changes in policy concerning structuring cases Letters will be mailed to property owners identified, cases date back to October 1, 2009 All cash transactions fell below the $10,000 figure 8

9 Disregarded Entity Issue Possible Future Requirement Can the IRS under existing regulations change tax return forms and instructions to require a sole owner of a disregarded entity to provide the disregarded entities Employer Identification Number (EIN) on the owner s tax return? Yes, per 6011(a) and Treas. Reg (a) Refund Holds in 2017 Until Feb 15 Earned Income Tax Credit Additional Child Tax Credit Entire refund will be held, PATH does not allow a partial refund release Borrowing SSN Victims Beginning in 2017 IRS will notify taxpayers whose SSN has been used fro employment purposes 9

10 New Partnership Audit Provisions IRS is developing a new schedule to enable it to verify the tax paid Gap in time between the reviewed year and the adjustment year Want to make sure the adjustment is picked up on a future return if tax is to be paid at the partner level No word yet on form number or structure AMISH The IRS continues to send letters to the AMISH about SE tax, just keep responding with a copy of the Form 4029 This is an IRS systemic that they have refused to fix Sorry, but it has been elevated many times in the past, and IRS has stated that the number of individuals effected is not large enough to fix, so it will be handled by correspondence The Letter is a 12C CORRESPONDENCE Notices and letters are crossing in the mail It appears that IRS continues to be behind with working correspondence Continue to respond accordingly But remember, that IRS can print notices 2 3 weeks in advance and then mail them out even though correspondence has been received It does not hurt to respond again, maybe this time someone will note the account that correspondence has been received 10

11 Great Southern Bank Sent out previously I had a client that received a CP 2000 notice regarding an underreporting of a distribution from an IRA for the 2014 tax year from Great Southern Bank In reviewing the notice and the tax return and contacting the bank it was determined that the bank issued correct 1099 R s to the recipients of the distributions in 2014 but when they uploaded their information the up load included 2013 and 2014 distributions The bank is working with IRS to resolve and are going to correct the info with IRS thru another upload but that does not appear it will stop the notices from going out According to the CD/IRA Department they have drafted a letter that IRS has approved and customers that are affected can get this letter from the bank to submit in response to the CP 2000 notice NIIT Tax and Possible Issue Unconfirmed but Letting You Know Practitioner had a meeting with a Revenue Agent to discuss a 4883C letter a client received indicating that their identity had to be verified Strangely enough, both the taxpayer and spouse received PIN numbers due to identity theft issues for the same tax year The Agent indicated that he met with a number of taxpayers who received the same letter and noticed that many filed a Form 8959 "Additional Medicare Tax which calculated a total additional Medicare tax withholding on line 24 In this case, the taxpayer s employer withheld additional Medicare tax because his wages exceeded $200,000, when Form 8959 was prepared the additional Medicare tax withheld was credit back to the taxpayer on Form 1040, line 64, because the couples total wages did not exceed $250,000 This ended up being a computer issue, and not an identity theft issue Centers for Medicare and Medicaid Services This is a legitimate government website that sends out a verification letter Data Match Here is the site in case you get the letter of Benefits and Recovery/EmployerServices/IRS SSA CMS Data Match.html A practitioner received a letter requesting a data match The website address did not appear to be correct But, I cannot confirm Also when I tried to access the website it continued to timeout This may be a new scam If you get this kind of request you can call the number under Contacts at the bottom of the website noted above, to confirm it is a legitimate request Benefits Coordination & Recovery Center (BCRC) BCRC Customer Service Representatives are available to assist you Monday through Friday, from 8:00 a.m. to 8:00 p.m., Eastern Time, except holidays, at tollfree lines: (TTY/TDD: for the hearing and speech impaired) 11

12 IRS SSA CMS Data Match Congress enacted a law (Section 6202 of the Omnibus Budget Reconciliation Act of 1989) to provide CMS with better information about Medicare beneficiaries' group health plan (GHP) coverage The law requires the Internal Revenue Service (IRS), the Social Security Administration (SSA), and CMS to share information that each agency has about whether Medicare beneficiaries or their spouses are working The process for sharing this information is called the IRS SSA CMS Data Match The purpose of the Data Match is to identify situations where another payer may be primary to Medicare Employers are required to complete a questionnaire that requests GHP information on identified workers who are either entitled to Medicare or married to a Medicare beneficiary This information is used to identify the primary and secondary payers for medical services provided to a Medicare beneficiary This process helps Medicare identify claims on an ongoing basis for which Medicare should not be the primary payer The Data Match Project has saved the Medicare Trust Funds more than 3.5 billion dollars to date Notices on the Individual Shared Responsibility Penalty Heads up I have a client that just received a notice that they owe over $2,100 in shared responsibility payment, even though they have 1095 C showing coverage I'm just wondering how many of these I'm going to have to deal with If your client gets the notice respond with proof of insurance Remember the matching process has not been perfected, so we will have to reply to get any penalty removed POWER of ATTORNEY Needed to Assist Client with Disable Online Account Scenario: Your client receives a letter concerning opening an IRS online account or they go into their account and can see the last date accessed and they never accessed You can assist with the termination of the online account using a POA that states "disable online account" 12

13 Iowa Continuing Audit Program Something that IOWA is doing starting this week is mailing out letters to just about anyone who had large health insurance deductions on page 1 of their 2013 returns And IOWA has specific documentation that they want, all of which takes time to pull together and respond Iowa Form 100 Team The new Iowa Form 100 team is working hard to improve the form and instructions for the 2016 tax year A fist draft has been issued to the team with the IDR changes for their review As we move forward I will try to keep you up to date on what we know Thanks to all who are taking the time to generate input New Publication IRS has updated Publication 3402 on the Taxation of Limited Liability Companies 13

14 H.R 3209 Recovering Missing Children Act Signed into law IRS is allowed to disclose tax return information to state and local law enforcement who have court orders and are working with Federal agencies to recover missing children Will have an impact on children abducted by parents and families IRS Funding Bill Scheduled for the week of July 4 Reduce funding by $ 286 million from current level Proposed Legislation 14

15 H. R Small Business Care Relief Act of 2016 Health Reimbursement Arrangements Still in Committee 6/23/2016 Read the second time Placed on Senate Legislative Calendar under General Orders Calendar No. 526 Update on H. R Wine Excise Tax Modernization Act of 2016 Still in Committee H. R Facilitating Farmers Access to Resources and Machinery Act Expand exceptions to the private activity bond rules for first time farmers and other purposes 15

16 H. R College Preparation Tax Act of 2016 Tax Credit for certain expenses related to preparing for college Limited to three taxable years Maximum Credit $500 S Graduate Student Savings Act of 2016 Permit fellowship and stipend compensation to be saved in an IRA H. R Student Loan Employment Benefits Act of 2016 Exclude from gross income amounts employer s pay on employee s student loans 16

17 H. R Middle Class College Tuition Tax Credit Expansion Act of 2016 Expand American Opportunity Tax Credit Inflationary adjustments Lifetime dollar limitations H.R Bring Small Business Back Tax Reform Act of 2016 Lower rate of tax on a portion of pass through business income 10% on the first $150,000 20% on remaining Qualified business 1 million of less Partnership, S Corporation Expand the availability of cash accounting for certain small business CALT Website 17

18 Tour of the CALT Website Changes to the Iowa Farm and Urban Tax Schools It has been a season of change this is good Our Fall and Winter Tax Schools are changing this is good September 9, 2016 Farm Tax Seminar All Farm issues All day For the winter tax schools, farm issues may come up but we will center on other issues important to your practice, including ethics for early bird attendees at some sessions Please Welcome Phil Harris Professor, Agricultural and Applied Economics University of Wisconsin Madison J.D., University of Chicago, 1977 M.A., Economics, University of Chicago, 1975 B.S., Economics, Iowa State University, 1973 His research program focuses on business and tax planning for agricultural producers The program includes information on the choice of entity for organizing a farm business and for transferring a farm business to the next generation Income, estate and gift tax consequences as well as non tax issues 18

19 Phil Harris Phil Harris CALT Speaker September 9, 2016 Farm Tax Seminar The session will also be available via webinar Instructor Farm and Urban Tax School November Waterloo December Ames Fall Tax Schools Though they are named the Farm and Urban Tax Schools the schools cover more than farm issues Common return issues for all kinds of returns are covered All kinds of business entities Problematic issues Sometimes we even get into to issues that you many encounter only once or twice a year or tax season The Tax Schools are a blend of diverse topics of interest to all tax professionals This year: New instructors with diverse backgrounds Your adventure awaits at Iowa State s Center for Agricultural Law and Taxation Farm and Urban Tax Schools 2016 November 2, 2016 to December 13, Locations in Iowa and Online Webinar Save the Date for the 2016 Annual Farm and Urban Income Tax Schools The program is intended for tax professionals and is designed to provide up to date training on current tax law and regulations November 2 3: Maquoketa November 7 8: Red Oak November 9 10: Sheldon November 14 15: Mason City November 17 18: Ottumwa November 21 22: Waterloo December 5 6: Denison December 12 13: Ames and Live Webinar 19

20 September Farm Tax School Navigating Changing Times September 8, 2016 to September 9, 2016, Ames, Iowa and Online Attend any one day or both days, either in person or online! Company discount for 3 or more individuals from the same employer! Ag Law Seminar, September 8 Our Thursday seminar will offer practical, interesting information you can immediately apply in your practice or ag related business. You ll leave with forms and other tools to help you more efficiently serve your ag clients. Farm Tax Workshop, September 9 Our Friday seminar will be a comprehensive one day farm tax workshop designed to equip tax practitioners with the tools they need to prepare farm income tax returns, from the simple to the complex. Online Registration: Registration Fees Early Rate Registered on/by August 31 Attend in person or watch from your computer Any one day: $200 Both days: $350 Company Discount: $10 discount per individual if 3 or more are registered from the same employer this is available for either on site or online attendance Late Rate Registered after August 31 Attend in person or watch from your computer Any one day: $220 Both days: $370 Company Discount: $10 discount per individual if 3 or more are registered from the same employer this is available for either on site or online attendance Continuing Education Ag Law Seminar (September 8) Continuing Legal Education (CLEs) 7 hours (including one hour of ethics) Others Professional Education (CPEs) 7 8 hours (including one hour of ethics) Farm Tax Workshop (September 9) Continuing Legal Education (CLEs) 7 hours (including one hour of ethics) Others Professional Education (CPEs) 7 8 hours (including one hour of ethics) 20

21 Speakers Ag Law Seminar Shannon Ferrell, Associate Professor, Agricultural Economics, Oklahoma State University Eldon McAfee, Shareholder, Brick Gentry P.C. Erin Herbold Swalwell, Shareholder, Brick Gentry P.C. Julia Vyskocil, Shareholder, Brick Gentry P.C. Pat Dillon, Dillon Law P.C. Professor Neil Hamilton, Director of Drake Law School Agricultural Law Center John Baker, Iowa State s Beginning Farmer Center Administrator Jennifer Zwagerman, Associate Director of Drake Law School Agricultural Law Center Kristine Tidgren, Assistant Director for the Center for Agricultural Law & Taxation Farm Tax Workshop Philip E. Harris, JD, University of Wisconsin professor Kristy Maitre, Tax Specialist with the Center for Agricultural Law & Taxation Farm Tax Seminar Topics Legislative Update: The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) and the Consolidated Appropriations Act, 2016 (CAA of 2016) Income Issues Constructive Receipt Installment Sales of Livestock Hedging and Other Marketing Transactions Farm Income Averaging Farm vs. Nonfarm Income Easements Sale vs. Lease of Equipment by a Retiring Farmer Conservation Reserve Program Payments Income in Respect of a Decedent Reporting Property as Self rental on Schedule E (Form 1040) Deduction Issues Tangible Property Regulations Lease vs. Purchase of Farm Equipment Segregating Fertilizer Costs Domestic Production Activity Deduction Start Up Expenses Farm Tax Seminar Topics Entity Issues Partnership Formation and Contributed Assets with Debt in Excess of Tax Basis Guaranteed Payments Qualified Joint Ventures Issues for Farmers with Multiple Entities Miscellaneous Farm Issues Material Participation Capitalization of Preproduction Expenses Farm Inventory Hobby Losses Gift of Commodities Valuation of growing crops Cases and Rulings: A summary of rulings and cases from the past year that affect farmers 21

22 Accommodations Quality Inn & Suites Starlite Village Conference Center 2601 East 13th Street, Ames, Iowa Discounted overnight rooms are available for $89.00 per night (for the dates of September 7, 8 and 9) Call the hotel at and mention you are attending the Iowa State University September Seminars Summer Webinars Preparing for a Gambling Audit Your Client Dies, What s Next? Innocent Spouse Above the Line Deductions Roth IRA s Net Operating Losses The Portability Election IRS Return Preparer Penalties Overview Miscellaneous Income New Developments Summer Webinars Tax Research with Limited Resources Injured Spouse IRS Representation Inventory Issues Preparing for an IRS Audit Appeals How to Write Your Appeals Request Start Up Costs Hobby Losses 22

23 Beginning Tax Preparers Class CALT is working on offering a basic class for NEW tax preparers this fall in October The week long webinar will cover the basics an individual needs to know such as: Requirement to file Dependents Filing Status Itemized deductions Education Credits Other issues a first or second year preparer needs to know as well as a refresher for others who need to brush up on issues The class will be a week long or more and will be offered at a special rate The Scoop Throughout the filing season two Scoops will be held on Scoop Dates 8:00 8:30 am Central time 12:00 12:30 Central time This assists with accommodating our west coast practitioners The same information will be shared at both sessions You have the option of registering for whatever session suits your schedule node fieldseminar date/month Future Scoop Dates July 6, 2016 July 20, 2016 August 24, 2016 September 7, 2016 October 5, 2016 October 19, 2016 November 16, 2016 December 14, node fieldseminar date/month 23

24 The CALT Staff John D. Lawrence Interim Director Associate Dean, College of Agriculture & Life Sciences Extension Programs and Outreach Director, Agriculture & Natural Resources Extension 132 Curtiss Hall Iowa State University Ames, Iowa Kristine A. Tidgren Assistant Director E mail: ktidgren@iastate.edu Phone: (515) Fax: (515) The CALT Staff Kristy S. Maitre Tax Specialist E mail: ksmaitre@iastate.edu Phone: (515) Fax: (515) Tiffany L. Kayser Program Administrator E mail: tlkayser@iastate.edu Phone: (515) Fax: (515)