South Jersey Working Together Conference

Transcription

1 South Jersey Working Together Conference June 1, 2017 RICHARD G. FURLONG, JR. Senior Stakeholder Liaison Mid-Atlantic Area Stakeholder Liaison IRS Communications & Liaison Division

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4 Filing Season Statistics for Week Ending May 12, 2017 Page Last Reviewed or Updated: 18-May FILING SEASON STATISTICS Cumulative statistics comparing 05/13/2016 and 05/12/2017 Individual Income Tax Returns: % Change Total Returns Received 140,258, ,586, Total Returns Processed 134,438, ,127, E-filing Receipts: TOTAL 123,737, ,634, Tax Professionals 71,740,000 71,463, Self-prepared 51,997,000 52,171, Web Usage: Visits to IRS.gov 348,401, ,315, Total Refunds: Number 102,424, ,863, Amount $ Billion $ Billion 1.8 Average refund $2,732 $2, Direct Deposit Refunds: Number 84,273,000 85,067, Amount $ Billion $ Billion 2.1 Average refund $2,905 $2,

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14 IRS Hot Issues Richard Furlong, Jr. Senior Stakeholder Liaison South Jersey Working Together Conference June 1, 2017

15 2017 Filing Season: Refundable Credits Some refunds were held until Feb. 15 No credit or refund for an overpayment shall be made to a taxpayer before Feb. 15 if the taxpayer claimed the Earned Income Tax Credit or Additional Child Tax Credit on the return. IRC 6402(m) ) 2

16 ACA Update Individual Shared Responsibility Payment increases Health Insurance Marketplace Open Season November 1, 2016 to January 31, 2017 IRS.gov/ACA or HealthCare.gov 3

17 Form 1095-A 4

18 Form 1095-B 5

19 Form 1095-C 6

20 Form 8965 Health Coverage Exemptions Claim most exemptions at time of filing Report Marketplace granted exemptions 7

21 Making an Individual Shared Responsibility Payment Taxpayers will owe an ISRP for anyone on the return who did not have: MEC for every month of the year or Coverage exemption for any month without MEC Use Form 8965, Health Coverage Exemptions, worksheet to calculate ISRP 8

22 ACA: Small Employers & HRAs Changes 21 st Century Cures Act: signed by President on December 13, 2016 Exempts Qualified Employer HRAs from ACA group health plan arrangements QEHRAs must be funded solely by employer contributions QEHRAs must provide coverage on same terms to all eligible employees Transition Relief for Pre-2017 Tax Years 9

23 Get Transcript Secure Access Authentication confirmation code Same as before; code sent to address; taxpayer re-enters in order to continue to next step Identity proofing Similar as before Two new steps: Financial Verification Activation code text sent to mobile phone 10

24 Form W-2 Verification Code Initiative Verification Code: 16 alphanumeric characters A unique code on each W-2, calculated using data on that form In a separate box, labeled Verification Code, on copies B ("To be filed with employee's federal tax return ) C ("For employee's records") W-2 Instructions: Verification Code: If this field is populated, enter this code when it is requested by your tax return preparation software. It is possible your software or preparer will not request the code. The code is not entered on paper-filed returns. 11

25 Form W-2 Verification Code Initiative Filing Season 2016: We tested the capability of a 16-digit verification code to validate Form W-2 data submitted with e-filed Forms We worked with four payroll service providers (PSPs) and many 1040 software products. The data from 1.5M Forms W-2 from pilot EINs were included with e-filed Forms After the return processed, IRS independently calculated the VC for these W-2s, using the data on the form and compared it with the code the taxpayer entered. When the taxpayer/preparer input the VC, the validation success rate was over 94 percent. 12

26 Form W-2 Verification Code Initiative Filing Season 2017: We are expanding that test to 50 million W-2s involving multiple payroll service providers and software products. Increasing the number and types of W-2 issuers Increase the number of payroll service providers to include smaller issuers Include large federal organization (National Finance Center) While returns without VCs will not reject, we ask payroll professionals associated with PSPs/employers participating in the initiative to encourage employees to enter the VC at the prompt in 1040 software. IRS will test using the validated VC results in such a way that, if the VC is a match, we ll accept the W-2 data submitted with a 1040 to be valid and reduce false positives. The IRS will be determining the future use of the VC during FS Help us get it right. 13

27 Qualified Small Business Research Credit against Payroll Taxes Protecting Americans from Tax Hikes (PATH) Act of 2015 Qualified Small Business (QSB) Gross Receipts < $5 million; No Gross Receipts Prior to 2012 Apply up to $250,000 against Payroll Tax Form 6765 Form

28 Waiver of 60 Day Rollover Requirement - Rev Proc Provides guidance concerning waivers of the 60-day rollover requirement Provides for a self-certification procedure that may be used by a taxpayer claiming eligibility for a waiver Provides a self-certification model letter in the appendix of Rev Proc Taxpayers will submit the self-certification to a plan administrator or an IRA trustee (Do NOT send self self-certification waiver to the IRS.) 15

29 Payment Options: Pay Online, Installment Plans and More

30 EFTPS.gov

31 Sharing Economy Resources IRS worked in conjunction with the National Taxpayer Advocate Created the Sharing Economy Resource Center on IRS.gov Web page designed to help taxpayers involved in sharing economy meet tax obligations 18

32 IRS Future State Initiative Taxpayer Component A more complete online experience Freeing up resources for those who need 1- on-1 assistance More up-front issue identification when the return is filed Improved authentication to prevent fraudulent returns using stolen identities 19

33 Taxpayer Assistance Center Appointment-Service All Taxpayer Assistance Centers will provide service by appointment by the end of Many questions can be resolved online without visiting a TAC. TACs offer personal tax help when a taxpayer s tax issue cannot be handled online or by phone. Use the office locator on IRS.gov to see if your local TAC is participating in the appointment process. Call

34 Avoid duplicate Freedom of Information Act (FOIA) requests Richard Furlong, Jr. Senior Stakeholder Liaison South Jersey Working Together Conference June 1, 2017

35 FOIA requests avoiding delays Send one request. Avoid sending the same request to multiple mailing addresses or fax numbers to ensure efficiency. See the IRS Disclosure Offices and FOIA Service Centers page on IRS.gov.

36 Before you submit a FOIA request Determine whether the information you seek can be obtained through routine agency procedures. See the IRS FOIA Guidelines for information and instructions if you need to request information under FOIA.

37 Contact Information Richard Furlong, Jr. Senior Stakeholder Liaison

38 Private Debt Collection Richard Furlong, Jr.. Senior Stakeholder Liaison June 1, 2017 South Jersey Working Together Conference

39 Private Collection Agencies CBE Group Conserve Performant Pioneer 2

40 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. 3

41 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. 4

42 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 5

43 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. 6

44 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 7

45 Contact Information Richard Furlong, Jr. Senior Stakeholder Liaison

46 Taxpayer Digital Communications (TDC) Secure Messaging Correspondence Examination Pilot Program Richard Furlong, Jr. Senior Stakeholder Liaison South Jersey Working Together Conference June 1, 2017

47 SB/SE TDC Pilot Program Correspondence Examinations SB/SE Schedule A audits by mail Philadelphia Correspondence Examination Operation Secure Messaging Interaction using secure online environment Invitation only Taxpayers and POA clients receive marketing insert

48 Power of Attorney Participation Taxpayers signed up for Secure Messaging Taxpayer and their POA must pass the IRS Secure Access POA already in the CAF database POAs authenticate under their SSN

49 TDC Secure Messaging TDC Secure Messaging pilot launched FY 17 Last about 12 months. Weekly mail-outs/invitations rest of FY 17 4,200 taxpayer invites

50 SB/SE Abusive Transactions Promoter/Preparer Investigations Richard Furlong, Jr. Senior Stakeholder Liaison South Jersey Working Together Conference June 1, 2017

51 What is a tax scheme/scam? Abusive transactions, schemes or scams produce tax benefits not allowed by the IRC.

52 How do I recognize a scheme? Typical schemes include promises to "eliminate" or "substantially reduce" tax liability, or promises free money in the form of tax credits or refunds. Overviews and examples of abusive tax schemes can be found on irs.gov. Publication Recognizing Illegal Tax Avoidance Schemes

53 Publication 3995

54 2017 Dirty Dozen Tax Schemes 1. Return Preparer Fraud 2. Fake Charities 3. Inflated Refund Claims 4. Excessive Claims for Business Credits 5. Falsely Padding Deductions on Returns 6. Falsifying Income to Claim Credits 7. Abusive Tax Shelters

55 Goal of Promoter and Preparer Investigations Abusive Promotions and Tax Return Preparation

56 2016 Top Five Issues Abusive Schedule A Deductions False or inflated business income/deductions Sham Businesses - Individual Other - Refunds Earned Income Tax Credit

57 Who are the Promoters? Tax Return Preparers Salespersons Representatives Appraisers Sellers of Legal Opinions

58 Form 14242, Report Suspected Abusive Tax Promotions or Preparers

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61 Program to shut down schemes and scams

62 DOJ Website

63 Penalty and Injunction Provisions Penalty IRC 6700 IRC 6701 Injunction IRC 7402 IRC 7407 IRC 7408

64 Investigations - Potential Outcomes No Action Civil Penalties Suspension or Termination of EFIN Injunction Criminal Action

65 Contact information Internal Revenue Service Lead Development Center M/S Avila Road Laguna Niguel, California Fax: (877)

66 Am I really talking to the IRS?

67 Am I really talking to the IRS? If the IRS wants to examine your return, they will send you a letter first. If you owe the IRS money, you will get notices in the mail before the IRS ever calls or comes to see you. Any IRS employee will have two forms of government issued ID to show you. An IRS employee will never demand you pay them cash, or debit cards, or threaten arrest.

68 Questions

69 Edward P. Portice Principal Contact: Phone: x123 Fax: Ed joined Bedard, Kurowicki & Co., CPA's, PC in 2007 and brings over 30 years of accounting experience. Ed is often asked to lecture for numerous organizations such as the New Jersey Association of Professional Accountants (NJAPA) and County College of Morris regarding topics such as compilation and review of financial statements, Valuation of Closely Held Businesses, recordkeeping for small businesses and much more. Ed has also served as a panelist on the New Jersey Working Together Tax Symposium since Professional Certifications: Certified Public Accountant Certified QuickBooks ProAdvisor in QuickBooks 2012 & 2013, 2014, QuickBooks Enterprise Solutions, QuickBooks Online & Point of Sale Education: Rochester Business Institute Bloomfield College: Bachelor of Science in Accounting Memberships: American Institute of Certified Public Accountants New Jersey Society of Certified Public Accountants New Jersey Association of Public Accountants Board Appointments: Ed has many years of experience working with Boards of Directors of various corporations and nonprofit organizations. Ed is also the past President of New Jersey Association of Professional Accountants (NJAPA) as well as a past President of both the Essex/Hudson/Union and Morris/Sussex/Warren Chapters of NJAPA. 114 Broad Street, Flemington, NJ (908) Fax (908) info@bkc-cpa.com

70 BIOGRAPHY HOWARD J. BOOKBINDER Howard J. Bookbinder, a resident of Glen Rock, New Jersey, is a Certified Public Accountant practicing in Fair Lawn, New Jersey. He is a past president of the Bergen Chapter of the New Jersey Society of Certified Public Accountants, and a past trustee of the New Jersey State Society of Certified Public Accountants. Recipient of the 2003 Service Award for his involvement in furthering the profession. He is a contributing author for the Bergen Record's Tax Mailbag column, and has appeared on the Cable T. V. program of the same name. He is the author of "Write-up Services For Small Businesses", a book published by the American Institute of Certified Public Accountants. He is a former instructor of accounting and taxation at Rutgers University. Howard has addressed many professional, civic and community groups in New Jersey, Ohio, New York, Alabama and Georgia, including the American Society of Women Accountants, Mended Hearts, Bergen County Bar Association, Rotary Clubs, Lions Clubs, AARP, and the Telephone Pioneers, NCCPAP. He is a frequent lecturer at many tax seminars sponsored by the New Jersey Society of Certified Public Accountants and AICPA. He is past chairman of the Cooperation with the Internal Revenue Service and a member of the New Jersey State Tax Committee. He has been involved with the Internal Revenue Service s Symposium for IRS employees and tax practitioners for the past several years. He has lectured on NJ Ethics and various Tax courses for the AICPA. Howard is the Past-President of the Fair Lawn Lions Club and a former councilman in Glen Rock. He also participated as a volunteer at the World Cup '94. He is a Master Mason and treasurer of his Lodge. Awarded the 2002 Accountant Advocate Award from the Small Business Administration. Appointed to the NJ-Israel Commission by Governor McGreevey, and presently serving Governor Christie. Howard is a graduate of Pace University and has attended the American Institute of Banking.

71 RICHARD G. FURLONG, JR. Senior Stakeholder Liaison Communications and Stakeholder Outreach IRS Small Business/Self-Employed Division Mr. Furlong is a Senior Stakeholder Liaison in the Mid-Atlantic Area Stakeholder Liaison office of the Internal Revenue Service Small Business/Self-Employed Division. Stakeholder Liaison serves as the primary IRS liaison office to tax practitioner organizations throughout the country. For the past two years he has been a member of the IRS Affordable Care Act outreach speaker cadre and has conducted numerous ACA presentations, including IRS sponsored national webinars. Mr. Furlong coordinates the annual IRS Eastern Pennsylvania Working Together Conference. Working Together is a joint effort of public and private tax professionals to enhance the level of communication, education, and trust between these organizations and individuals. Mr. Furlong is also a member of the PA IRS/Practitioner Liaison Council which provides a structured forum for Pennsylvania accounting and tax professional organizations to meet periodically with IRS managers and employees to discuss current IRS program issues. Each year, Mr. Furlong represents IRS at practitioner CPE sessions throughout Pennsylvania where he discusses IRS policies and procedures, tax law updates, Affordable Care Act tax issues, and IRS electronic tax administration. Mr. Furlong is a graduate of the University of Pennsylvania Wharton School with a Bachelor of Science degree in Economics.