Do a Paycheck Checkup

Transcription

1 Do a Paycheck Checkup Alan Gregerson October 25, 2018 Why a Paycheck Checkup? Some law changes in the Tax Cuts and Jobs Act may affect your withholding. Protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year. Avoid too much withholding; you can receive more in your paychecks. IRS.gov/withholding 1

2 What Do I Need? Most recent pay stubs. Most recent income tax return. General Information General Information (cont.) 2

3 Credits Income and Withholding Other Income and Adjustments 3

4 Itemized Deductions Results Your Recap 4

5 What if I Don t Have Enough Withheld? Submit a new Form W-4 to your employer What If I Have Too Much Withheld? File a new Form W-4 to: Avoid having too much withheld. Put more in your regular paycheck. Will I Need to Do Another Checkup? Recheck your withholding: If your circumstances change. In early

6 Tax Cut and Jobs Act Alan Gregerson October 25, 2018 ISRP & ESRP Alan Gregerson October 25, 2018 ESRP/ISRP ISRP ESRP 6

7 ESRP Assessment and Payment Employer will not make a payment with a return IRS will determine amount and notify employer Employer will have opportunity to respond before assessment IRS will send a notice and demand after assessment 19 Data Theft/Scams Alan Gregerson October 25, Review Pub 4557 Publication 4557, Safeguarding Taxpayer Data Checklist to review current security practices Identify your risks Create a security plan Review your plan annually 7

8 2. Use Best Security Practices Learn to recognize and avoid phishing s and phishing scams Use strong security software to protect against malware and viruses Use security functions on your tax prep software Encrypt taxpayer data Use strong, unique passwords 6. Spread the Word on W2 Scam Poses as company executive, asks payroll employee for list of all employees W2s 50 victims last year; 200 this year Hundreds of thousands of new IDT victims Targets: businesses, public schools, universities, tribes Employer/victims should and provide POC ITIN & the PATH Act Alan Gregerson October 25,

9 ITIN Program & the PATH Act Under the PATH Act: ITINs not used on federal returns at least once in the last three consecutive years expire December 31, 2017 ITINs with middle digits of 70, 71, 72 or 80 expire end of 2017 Affected taxpayers filing a tax return in 2018 must renew ITINs with middle digits 78 & 79 expired; renew any time 25 ITIN Program & the PATH Act IRS will process federal returns in 2018 with expired ITINs; however: Exemptions & certain credits will be disallowed Notices in the mails will advise to renew ITINs Once ITINs renewed, applicable exemptions & credits restored and refunds issued 26 Who has to an ITIN? ITINs with middle digits of 70, 71, 72 or 80 (example: 9XX-72-XXXX) must renew even if ITIN used in the last three years CP-48 Notice Includes steps to renew ITIN If taxpayer getting notice has already renewed ITIN; no action necessary unless another family member affected 27 9

10 Family renewal option remains available Taxpayers needing to renew their ITINs can renew ITINs for their entire family at the same time Family members include tax filer, spouse and dependents claimed on the tax return 28 How to renew an ITIN Complete Form W-7, Application of IRS Individual Taxpayer Identification Number Submit all required documentation No requirement to attach a tax return to W-7s Note reason for needing ITIN on form 29 Ways to submit W-7 package Mail Form W-7 to address in the instructions Include original identification documents or certified copies by the issuing agency IRS will review and returns documents within 60 days 30 10

11 Ways to submit W-7 package Use Certified Acceptance Agents authorized by the IRS CCAs: Keep taxpayers from having to mail original documents Certify all ID documents and application is complete Certify passports and birth certificates for dependents 31 Ways to submit W-7 package Call and make an appointment at a designated IRS Taxpayer Assistance Center Taxpayers using this method won t have to mail original or certified ID documents to the IRS 32 Documentation for dependents Dependents passports lacking a date of entry not accepted as stand-alone ID documents Exceptions for this requirement include dependents from Canada, Mexico and U.S. military members overseas 33 11

12 Documentation for dependents Additional documents needed to prove U.S. residency for dependents passports lacking date of entry stamp: U.S. medical records for dependents under age 6 U.S. school records for dependents under age 18 U.S. school records, rental & bank statements or utility bills listing applicant s name and U.S. address if age 18 or over 34 Processing time for new ITINs Qualified applicants submitting completed applications usually get ITINs in about seven weeks IRS will notify taxpayers of their ITINs by U.S. standard mail 35 Who to call for help To check on the status of an ITIN application after seven weeks of submitting Form W-7, call the IRS: Toll-free at inside the U.S. Non toll-free at outside the U.S

13 Private Debt Collection Alan Gregerson October 25, 2018 Taxpayer Rights Taxpayers working with agencies will have same rights as taxpayers working with IRS. Agencies will be able to identify themselves as contractors of the IRS collecting taxes. Private debt collectors will be expected to be courteous and respect taxpayers rights. Efforts to Mitigate Scams IRS will send taxpayer and rep written notice that it s transferring their accounts. Agency will send separate letter to taxpayer and rep confirming transfer. Agency employees must follow Fair Debt Collection Practices Act. Visit IRS.gov, Tax Scams and Consumer Alerts page 13

14 Scams (cont.) - Payments Agencies won t ask for payment on prepaid debit card. Electronic payment options are on IRS.gov, Pay Your Tax Bill. Checks payable to U.S. Treasury and sent directly to IRS, not private collection agency. More Information Percentage of amount collected for program to hire/train IRS collection personnel Revenue collected will be in addition to revenue coming in through IRS operations Search "private debt collection on IRS.gov Private Collection Agencies CBE Group Conserve Performant Pioneer 14

15 Private Collection Agencies Assign initial cases to agencies in the spring of Covers tax debts owed that are currently not being worked by the IRS. Agencies will work with the taxpayer and the representative to resolve the unpaid account. Taxpayer Rights Taxpayers working with agencies will have same rights as taxpayers working with IRS. Agencies will be able to identify themselves as contractors of the IRS collecting taxes. Private debt collectors will be expected to be courteous and respect taxpayers rights. Efforts to Mitigate Scams IRS will send taxpayer and rep written notice that it s transferring their accounts. Agency will send separate letter to taxpayer and rep confirming transfer. Agency employees must follow Fair Debt Collection Practices Act. Visit IRS.gov, Tax Scams and Consumer Alerts page 15

16 Scams (cont.) - Payments Agencies won t ask for payment on prepaid debit card. Electronic payment options are on IRS.gov, Pay Your Tax Bill. Checks payable to U.S. Treasury and sent directly to IRS, not private collection agency. More Information Percentage of amount collected for program to hire/train IRS collection personnel Revenue collected will be in addition to revenue coming in through IRS operations Search "private debt collection on IRS.gov Passport Revocation Alan Gregerson October 25,

17 Passport Revocation The FAST Act signed into law December 4, 2015 IRC 7345 authorizes the IRS to notify the State Department (DOS) that an individual is certified as owing a seriously delinquent tax debt. The certification procedures are for taxpayers identified January 2017 or later. Passport Revocation Seriously Delinquent Tax Debt is defined as: An unpaid legally enforceable tax debt where the aggregate balance of assessed taxes, penalties and interest is greater the $50,000. A Notice of Federal Tax Lien (NFTL) has been filed and all administrative remedies under IRC 6320 have lapsed or been exhausted, or. Passport Revocation Seriously Delinquent Tax Debt (cont.) A levy has been issued NOTE: Once certified, paying the account below $50,000 will NOT result in decertification 17

18 Passport Revocation Codes are systemically loaded on qualifying cases Certified Notice (CP 508C) will be generated If levy action certifies the debt, input is delayed 8 weeks to allow post levy CDP time Statutory Certification Exclusions IRC 7345 excludes the following tax debt from certification: Debt that is being paid in a timely manner as part of an Installment Agreement Debt that is being paid in a timely manner as part of an Offer In Compromise Statutory Certification Exclusions (cont.) Debt that is being paid in a timely manner as part of a settlement agreement with Department of Justice (DOJ) Debt on which collection is suspended for a timely CDP Hearing Debt on which collection has been suspended due to a claim for Innocent Spouse 18

19 Combat Zone Certification is postponed for taxpayers serving in a Combat Zone Discretionary Certification Exclusions IRC 7345 provides the IRS the discretion to exclude categories of tax debt from certification. Included are: Debt that is determined to be currently not collectible due to hardship Debt that resulted from identity theft Debt the is the result of criminal restitution Discretionary Certification Exclusions (cont.) Debt of a taxpayer in bankruptcy Debt of a deceased taxpayer Debt that is included in a pending Offer-in- Compromise (OIC) Debt that is included in a pending Installment Agreement (IA) 19

20 Certification Process The IRS will systemically inform the DOS, weekly, of newly certified taxpayers The DOS will hold the application open for 90 days to allow the taxpayer to resolve, pay or make alternative payment arrangements with the IRS The DOS is not required to revoke a previously issued passport Taxpayer Notification The IRS is required to notify the taxpayer in writing when the certification is made to the DOS A Notice CP 508C, Notice of certification of your seriously delinquent federal tax debt to the State Department is sent to the taxpayer Taxpayer Notification The IRS is also required to notify the taxpayer of decertification A Notice CP 508R, Reversal of notice of certification of your seriously delinquent federal tax debt to the State Department is sent to the taxpayer Note: These notices are systemically generated 20

21 Reversal of Certification The IRS will systemically notify DOS if the previously certified tax debt is: Fully satisfied Becomes legally unenforceable Ceased to be seriously delinquent tax debt (meets statutory or discretionary exclusions) Found to be erroneous The IRS will notify the DOS within 30 days of the above criteria. This will be systemically done on a weekly basis. Appeal Rights There is NO administrative appeal, claim process or administrative hearing that can be filed with the IRS if the taxpayer believers that a certification is erroneous or inaccurate. Appeal Rights (cont.) Passport certification is not a collection action, taxpayers are afforded their rights on these periods for CAP and CDP for associated collection actions A certification can only happen after a lien was filed and taxpayer was afforded their rights under CDP or A levy was issued and taxpayer was given their CDP rights 21

22 Judicial Review of Certification A taxpayer whose debt is certified to the DOS can file suit in the Tax Court or a District Court of the United States If the court determines the certification is erroneous or if the IRS failed to timely decertify, the court can order the IRS to decertify. Counsel will determine when decertification is required as related to a suit. Additional Info Additional information can be found at: Thank you Alan Gregerson Alan.J.Gregerson@irs.gov 22