The Internal Revenue Service (IRS) recently posted its contingency plan for managing operations during the federal government shutdown, which includes reducing its available workforce for IRS functions by over 87 percent. Employees may be kept on for half a day to ensure an orderly close-down of operations. After the half-day period, most IRS activities will cease, including the issuing of refunds, processing amended returns, responding to taxpayer phone calls, and providing legal counsel. All audit functions will also stop during the shutdown period.
The Internal Revenue Service (IRS) recently announced the annual inflation adjustments for tax rate schedules and other tax provisions for 2019. Due to the Tax Cuts and Jobs Act, there are important changes to review concerning the standard deduction, rate tiers, minimum essential health coverage penalty, and other items. For the detailed announcement, click here.
A California real estate professional was recently sentenced to 2 years in prison for filing false income tax returns that failed to report over $1 million in cash earned through marijuana sales made between 2012 and 2014. In addition, he was ordered to serve one year of supervised release and pay $466,707 in restitution to the IRS.
The Internal Revenue Service (IRS) has issued additional guidance for taxpayers regarding how the Tax Cuts and Jobs Act will affect filing your 2018 tax returns. The website www.IRS.gov/getready provides information and advice for individuals and families, such as an updated IRS Withholding Calculator, details about refunds, and the new Form 1040.
The Internal Revenue Service's (IRS's) 2014 Offshore Voluntary Disclosure Program (OVDP) officially ends on Friday, September 28, 2018. This program was offered to help taxpayers get into compliance with their foreign account reporting requirements. The end of the OVDP does not mean the IRS is less interested in offshore compliance --- to the contrary, "The IRS remains actively engaged in ferreting out the identities of those with undisclosed foreign accounts with the use of information resources and increased data analytics," said Don Fort, Chief, IRS Criminal Investigation, in the IRS' initial announcement about the program's end. "Stopping offshore tax noncompliance remains a top priority of the IRS."
The Treasury Inspector General for Tax Administration (TIGTA) recently audited the Internal Revenue Service's (IRS's) SS-8 Program, which addresses worker classification issues. The standard options have been either employee or independent contractor. However, in recent years, classification has become more complicated with the emergence of the "gig economy," defined by its reliance on short-term contracts and freelance work.
If you regularly claim deductions for donations, you may need to update your tax record keeping practices --- the Internal Revenue Service (IRS) issued final regulations this summer concerning the correct way to substantiate any charitable contributions you wish to deduct. Under Section 170(f)(8), for contributions of $250 or more, the recipient organization should provide you a receipt at the time of the contribution that shows:
The Treasury Inspector General for Tax Administration (TIGTA) recently reviewed the Internal Revenue Serivce's (IRS's) program on Collection Due Process requests, and found it to have similar room for improvement as compared to TIGTA's last review. For instance, the program could be more accurate in classifying requests and providing the correct type of hearing to taxpayers. The IRS also needs to improve how it handles taxpayer requests initially sent to the wrong location, as well as how it calculates statute expiration dates. For more information on the results of this review, click here.
The Internal Revenue Service (IRS) announced this week that business payments to charities that result in state or local tax credits will be deductible expenses in most cases. This is unlike the manner in which the IRS has said it will treat payments that individuals make to charities (details here). For more information on SALT deductions available to businesses, click here.
Federal and California state tax agencies have offered relief to certain taxpayers affected by the 2018 wildfires in Northern California. The Internal Revenue Service will postpone specific deadlines, waive penalties, and provide other relief as detailed here. The California Franchise Tax Board's list of qualified disasters and instructions for claiming relief can be found at this link. The California Department of Tax and Fee Administration (formerly the BOE) is also offering relief for businesses impacted by the fires, including extensions to file returns and relief from certain penalties or interest. Details on the specific CDTFA programs offering relief, and instructions for requesting relief, are available here.