The Scoop. Liens. New Scam 6/22/2016. Don t Forget to Report Certain Foreign Accounts to Treasury by the June 30 Deadline

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The Scoop Kristy Maitre Tax Specialist Center for Agricultural Law and Taxation June 22, 2016 Don t Forget to Report Certain Foreign Accounts to Treasury by the June 30 Deadline Taxpayers who have one or more bank or financial accounts located outside the United States, or signature authority over such accounts need to file an FBAR by Thursday, June 30 In 2015, FinCen received a record high 1,163,229 FBARs, up more than 8 % from the prior year FBAR filings have grown on average by 17 % per year during the last five years, according to FinCen data Liens This notice is to advise you of an address change As of June 13, 2016, all lien certificate applications (Requests for Discharge, Subordination, Withdrawals Open liens and Non attachments) for the states of IL, WI, IN, AR, TN, MN, ND, SD,NE, IA, KS and MO, should be sent to the Advisory office located at the address listed below Publication 4235 will soon be updated to reflect this change. Below, is the contact information for the Advisory Unit that will process your request: Internal Revenue Service Advisory Unit, Stop 5012 230 S Dearborn St. Rm 2630 Chicago, IL 60604 1505 Phone: 312 292 2892 Fax: 877 477 8752 We encourage you to submit all requests using the fax number listed above Please allow time for this office to receive your request and to assign it to an Advisor Once the case is assigned, the advisor will make contact with you for any additional information or questions New Scam As of June 13, 2016, TIGTA has received additional information that callers impersonating Internal Revenue Service (IRS) or Treasury Department employees are demanding payments not only on itunes Gift Cards but on other gift cards as well Scam callers may also request payment of taxes on Green Dot Prepaid Cards, MoneyPak Prepaid Cards, Reloadit Prepaid Debit Cards, and other prepaid credit cards These are fraudulent calls 1

State of Georgia Longer processing refund delays Blocked $17 million in fraudulently filed returns Using upfront verification Encourages Georgia residents to register with the Georgia s Agency Tax center at: https://qtc.dor.ga/gov Is it Time to verify your e file Application Information? As you are transitioning into the next filing season, remember to take time to review your e file application information through e services Your e file application information should be updated within 30 days of any changes, such as individuals involved, addresses or telephone numbers Failure to do so may result in the inactivation of your EFIN Your application should only include individuals as Principals who are authorized to act for the entity in legal and/or tax matters. For example: Sole Proprietor is the Principal Partnership should list each partner who has 5% or more interest in the partnership Corporation should list the President, Vice President, Secretary and Treasurer Your application should also include a Responsible Official Responsible Official A Responsible Official is an individual with authority over the Provider s IRS e file operation at a location They are the first point of contact with the IRS and have authority to sign revised IRS e file applications The Responsible Official may oversee IRS e file operations at one or more offices Must be able to fulfill identified responsibilities for each of the offices If one individual cannot fulfill these responsibilities, add Responsible Officials to the e file application Only individuals involved in the operation of the business can be on the e file application Issues with Foreign Students Obtaining Tax Refunds Tax reported on Form 1042 S Issues with IRS verification processes = false positives Some withholding was denied resulting in balance due Hold on refunds will be released 2

Exempt Organization Audits Increased audits Penalties more likely than in the past Focus on specific noncompliance issues 90% change rate upon audit New Publications Publication 4163 May 2016 revision released for E file Returns processed in 2016 Publication 1546 New Taxpayer Advocate listing of all offices and contact numbers Get A Transcript FE 2016 20, June 2016 June 7 general access to Get A transcript online and IP PIN, Online Payment Agreement and e postcard services New Multi factor authentication process Receive a confirmation code landlines, skype, google voice or pay as you go phones cannot be used Name, birthdate, mailing address and filing status from the most recent tax return Account number from a credit card, auto loan, mortgage, home equity loan or home equity line of credit A mobile phone number with the taxpayers name on the account Get A Transcript Allows taxpayers to view when the Get A Transcript was last accessed date and time feature Must suspend any credit freeze to use Forget user name? Submit email address and last four digets of SSN to receive an email with the user name 3

What if I don t receive the email confirmation code? Be sure the email address provided is correct Click on email provider s send/receive or sync button Check junk/spam folder If the taxpayer didn t receive a confirmation code, they need to cancel and re enter thier email address to request another confirmation code How do I get a transcript online? Upon successful registration, IRS will give the taxpayer the option to continue and use Get Transcript Online They will ask the reason the taxpayer needs a transcript to help the taxpayer determine which type may be best Get Transcript Online provides access to all transcript types and available years for the taxpayer to view, print, or download from their browser If IRS does not list the transcript and tax year needed, the taxpayer must use Form 4506 T They may also log in with their username and password any time after they have registered by clicking on the Get Transcript Online button If the taxpayer verified an account number and the mobile phone number before, IRS will simply text a security code to enter and the taxpayer can immediately proceed to get a transcript Can I use Get Transcript Online as a guest user? No, each taxpayer must register and verify their identity to use Get Transcript Online Once registered, the taxpayer will need their username, password and the security code IRS texted you each time to log in and get a transcript online What if I can t verify my identity and use Get Transcript Online? The taxpayer may also call the IRS automated phone transcript service at 800 908 9946 to order a tax return or tax account transcript be sent by mail Allow 5 to 10 calendar days from the time IRS receives the request for the transcript to arrive Note: If the taxpayer requested a credit security freeze with Equifax, they may request a temporary freeze lift so they can continue to register This won t guarantee a successful registration so the taxpayer may want to try another way to order the transcript needed Be sure to contact Equifax to resume the freeze unless it has been scheduled it to resume automatically 4

I got a message that says the information I provided does not match what s in the IRS systems. What should I do now? Verify all the information entered is correct The information must match what s in the IRS system Be sure to use the exact address and filing status from the latest tax return If the taxpayer is still receiving the message, they will need to use the Get Transcript by Mail option or submit a Form 4506 T to the IRS at the address or fax number provided in the instructions I forgot my username, how do I retrieve it? If the taxpayer has forgotten their username, click the Forgot Username link on the login page Then enter the email address used when they registered before along with the last four digits of the SSN IRS will email the username If the taxpayer can't remember or access the email address originally provided, they must re register What do I do if my password doesn t work or I forgot it? If the taxpayer can t remember their password, click the Forgot Password link on the login page They will need to provide their birthdate Then IRS will send a temporary password to the email address so the taxpayer can log in IRS will require the taxpayer to choose a new password If the taxpayer entered the wrong password and is locked out, they must wait at least 24 hours before trying again The passwords are case sensitive What should I do if I receive a Technical Difficulties or Application Unavailable message? These messages usually mean IRS is having temporary connectivity issues If the taxpayer receives one of these messages, please wait a few minutes and try again IRS will place an alert on the Get Transcript home page if the application is unavailable for an extended time period 5

How should I respond to the letter I received notifying me that an online account I didn t initiate was created in my name? If the taxpayer knows they didn t open the account or are unsure whether they did, contact IRS Monday through Friday from 6:30 a.m. to 6:00 p.m. (Central time) at the toll free number provided in the letter An IRS assistor will be available to help you The Notice CP301 Notice will be issued to all who register What do I do if I m unable to view my transcript when I click on an available tax year? Make sure the pop up blockers are turned off in the browser s settings If the taxpayer is still unable to view or print the transcript, they may need to use Get Transcript by Mail or Form 4506 T Can a taxpayer or practitioner with a Power of Attorney use Get Transcript Online to request a transcript for another taxpayer? No They must submit Form 4506 T by following the instructions on the form Practitioners can use e Services Transcript Delivery System if their power of attorney already exists in the IRS Centralized Authorization File Can I use Get Transcript if I m a victim of Identity Theft? Yes, the taxpayer can still access Get Transcript online or by mail If IRS is unable to process the request due to identity theft, the taxpayer will receive an online message or a letter if using the mail option that provides specific instructions to request a transcript 6

Get A Transcript Get a Transcript by mail Requires only an SSN or TIN Date of birth Mailing address of record Work Opportunity Tax Credit Notice 2016 40 Additional transition relief for employers claim the WOTC Three additional months beyond what was provided in Notice 2016 22 Applies to employers that: Hire members of targeted groups, other than the qualified long term employed, on or after January 1, 2016 and on or before August 31, 2016 Hire members of a new targeted group of qualified longterm unemployed recipients on or after January 1, 2016 and on or before August 31, 2016 Tax Reform Blueprint Created by a task force Tax proposals will be presented to several congressional sponsors over the course of the next few months Tax Reform Depreciation Revamp the complex depreciation rules Use of depreciation pools six different pools Set percentage for each of the six pools Once the pool becomes negative depreciation recapture will be required 7

Estimated Tax Deadlines Legislation is being pursue to set estimated tax installment payments at more regular intervals Easier for self employed and small business owners to follow May included payroll tax issues unknown at this time Proposed Legislation H.R. 5485 Appropriation bill $11.2 billion for the IRS (same as 2016) $290 million dedicated to customer service, identity theft and cybersecurity Prohibits funds for bonuses or to rehire former employees unless employee conduct and tax compliance is given consideration Prohibits funds for videos and conferences Prohibits funds for IRS to target groups for regulatory scrutiny based on ideological beliefs and those exercising first amendment rights H.R. 5186 Help All Americans Save for College Act of 2016 Excludes employer contributions to a 529 plan from gross income and employment taxes Allow a deduction for individual contributions to the plan 8

H.R. 5297 Credit for Kids Act of 2016 Would require a social security number to claim the refundable portion of the child tax credit H. R. 5254 Senior Assessable Housing Act Provides for age 60 and older a tax credit up to $30,000 lifetime maximum Specific home improvements such as widening doorways, installing ramps, handrails or nonslip flooring H.R. 5324 and S. 2980 Expand and Improve Health Savings Account Increase contribution limits Remove restrictions on the purchase of over the counter products Use the funds to pay for premiums Terminating the requirement that forces HSA owners to purchase high deductible health care plans Also, H.R. 5445 addresses the catch up contributions issues age 55 and older H. R. 5345 Justice for Victims of IRS Scams and Identity Theft Act of 2016 Expedited review requirements 9

H.R. 5366 Alzheimer s Break Through Sunshine Act Exclude from gross income for seven years amounts earned from the sale of drugs that demonstrate breakthrough therapies for treating Alzheimer s disease H.R. 5053 Preventing IRS Abuse and Protecting Free Speech Act of 2016 Eliminate Schedule B of Form 990 Lists the names and addresses of donors who donated at least $5,000 annually Passed the House H.R. 5204 Stop Taxing Death and Disability Act Exclusion from income for student loan forgiveness for student who have died or become disabled H.R. 5238 Family Act of 2016 Income tax credit for certain fertility treatments 10

H.R. 5240 Biodiesel Tax Incentive Reform and Extension Act H.R. 3832 Update! Stolen Identity Refund Fraud Prevention Act of 2016 Passed the House on to Senate Centralized point of contact Taxpayer notification of suspected identity theft Criminal penalty for using a false identity in connection with tax fraud Election to prevent processing of a fraudulent return Local law enforcement liaison Providing identity theft information while on hold with the Internal Revenue Service 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 11

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 21 22 Waterloo December 12 13 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, 2016 8 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 Summer Webinars S Corporation Reasonable Compensation Travel, Meals and Entertainment 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 12

Summer Webinars Cancellation of Debt Tax Research with Limited Resources Injured Spouse IRS Representation Let s Talk Dependents Inventory Issues Preparing for an IRS Audit Getting your Client Right with IRS Appeals How to Write Your Appeals Request Start Up Costs Hobby Losses 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 https://www.calt.iastate.edu/calendar 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, 2016 http://www.calt.iastate.edu/calendar nodefield seminar date/month 13

The CALT Staff 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 50011 1050 Kristine A. Tidgren Assistant Director E mail: ktidgren@iastate.edu Phone: (515) 294 6365 Fax: (515) 294 0700 Kristy S. Maitre Tax Specialist E mail: ksmaitre@iastate.edu Phone: (515) 296 3810 Fax: (515) 294 0700 Tiffany L. Kayser Program Administrator E mail: tlkayser@iastate.edu Phone: (515) 294 5217 Fax: (515) 294 0700 14