On April 25, 2019, the Governor of California approved Assembly Bill No. 147, which sets the economic nexus threshold at $500,000 in sales or deliveries to California, cumulative over 12 months. This will come as some relief to many out-of-state retailers affected by last year's U.S. Supreme Court case, South Dakota v. Wayfair, Inc., the case that overturned the long-standing principle set in Quill Corp. v. North Dakota requiring physical presence for a retailer to be subject to state sales and use taxes.
The IRS is doing more than protecting taxpayer data and detecting cyber fraud. It is educating tax professionals on cybersecurity at its annual Nationwide Tax Forums. Certain education seminars at this year's Forums will focus on addressing "basic cyber hygiene" and how to manage and prevent cyber threats to businesses, as well as the foundations of information security programs. Forum dates across the country and registration details are available here.
The IRS has established a plan to modernize its systems with an eye toward better service to taxpayers. Cybersecurity is a top priority for the IRS in 2019, as is protecting taxpayer data. The newly released plan outlines a six-year strategy to expand taxpayers' access to their own information and customer support options, to increase secure systems available for tax practitioners' use, and to streamline implementation of new tax provisions.
The Internal Revenue Service (IRS) Large Business and International division (LB&I) recently announced three new compliance campaigns focused on offshore private banking, captive services providers, and information returns filed by individuals concerning foreign corporations (Forms 5471), with plans to first use audits and letters to address these compliance issues. According to its press release, the IRS has records that identify taxpayers with transactions or accounts at foreign private banks, which it will use to address compliance issues within that campaign.
The Internal Revenue Service (IRS) and its Security Summit partners recently announced the results from their last 3 years of fighting tax-related identity theft. The summit first met in 2015, and the first initiatives were enacted in 2016. Since 2015, the number of taxpayers reporting they were victims of identity theft has decreased 71 percent. The number of confirmed identity theft returns stopped by the IRS declined by 54 percent in the same period.
The Internal Revenue Service (IRS) recently announced that, starting May 13, 2019, only natural persons with a Social Security number or an individual taxpayer identification number may request an EIN as the "responsible party" on the application. Entities will no longer be able to use their own EINs to obtain additional EINs.
The Treasury Inspector General of Tax Administration (TIGTA) recently released its interim report on the 2019 federal tax filing season. As of March 1, 2019, the Internal Revenue Service (IRS) had received over 59 million tax returns and issued approximately $142 billion in refunds on over 46 million of those returns. A vast majority - 95 percent - of filers e-filed their returns this season.
The House Way and Mean Committee is working on a bill that would overhaul Internal Revenue Service (IRS) operations, appeals, and taxpayer services. The Taxpayer First Act faltered in the Senate Finance Committee last April, but a bipartisan group of lawmakers reintroduced the bill for consideration last month. A major focus is improving customer service, from codifying the IRS Free File program and expanding and improving services for low-income taxpayers to strengthening cybersecurity and identity protection. The bill also seeks to create an independent appeals process for IRS matters.