IRS "Beefs Up" Identify Theft Resources for Tax Professionals and Clients

The IRS has announced the launch of "Identity Theft Central", a resource designed to improve online access to information on identity theft and data security protection for taxpayers, tax professionals and businesses. The resource provides information on how to report identity theft, how taxpayers can protect themselves against phishing, online scams and more. It is located on the IRS website and is available 24/7.

The IRS, state tax agencies and the nation’s tax industry, all working in partnership under the Security Summit banner, have made substantial progress in the fight against tax-related identity theft since 2015. However, thieves are still constantly looking for ways to steal the identities of individuals, tax professionals and businesses in order to file fraudulent tax returns for refunds. As a part of the effort to help educate and improve protections for taxpayers, tax professionals and businesses, the IRS has redesigned the information into a new, streamlined page- Identity Theft Central. The following information is available to taxpayers on the page:

• 
  

  Taxpayer Guide to Identity Theft, including what to do if someone becomes a victim of identity theft.

  
  


• 
  

  Identity Theft Information for Tax Professionals, including knowing responsibilities under the law.

  
  


• 
  

  Identity Theft Information for Businesses, including how to recognize the signs of identity theft.

  
  

Moreover, the IRS has advised tax professionals and others to bookmark Identity Theft Central and check their specific guidance periodically for updates. Finally, the page features videos on key topics that can be used by taxpayers or partner groups, including a video message from the IRS Commissioner on warning signs for phishing email scams.

If you are the subject of identity theft and/or have questions or concerns regarding your tax filings, the professionals at Wilson Tax Law Group are available to assist and can be reached at 949-397-2292.

 

 

Did your business recently receive Summary of Account Notice from the FTB? Not to Worry

In late January/early February 2020, we began mailing FTB 3713 Summary of Account Payments, Transfers, and Credits to business entities who made an Estimated Tax Payment(s) or Estimated LLC Fee payment during the 2019 tax year.

This account summary provides:

• Payment

• Transfer

• Credit information

• Payment amounts and effective dates

The notification letter provides the same data available internally to FTB call center agents and proactively addresses the most common reason tax professionals contact the Tax Practitioner Hotline: calling to verify payments.

For 2020, the FTB added “This is Not a Bill” to the top of the letter for added clarity and to discourage recipients from remitting payment with the notice. Finally, payment information is also available online to businesses and their tax representatives who register for a MyFTB account.

Contact Wilson Tax Law Group at 949-397-2292 if you have IRS or FTB tax concerns.

Tax Flash- Special Tax Return now Available for Seniors

Please note the availability of a new tax form, Form 1040-SR, featuring larger print and a standard deduction chart making it easier for older Americans to read and use. All lines and checkboxes on Form 1040-SR mirror the Form 1040, and both forms use all the same attached schedules and forms. The revised 2019 instructions cover both Forms 1040 and 1040-SR. Taxpayers born before January 2, 1955, have the option to file Form 1040-SR whether they are working, not working or retired. The form allows income reporting from other sources common to seniors including investment income, Social Security and distributions from qualified retirement plans. Moreover, married taxpayers filing a joint return can use the Form 1040-SR regardless of whether one or both spouses are aged 65 or older or retired. Finally, the form can be used to file the 2019 federal income tax returns, which is due April 15, 2020.



Contact Wilson Tax Law Group at 949-397-2292, if need assistance.

Reminder to Employers: Deadline for Submission of Wage Statements and Independent Contractor Forms

Just a reminder to all employers and other businesses. This Friday, January 31, 2020, is the deadline for submitting wage statements and forms for independent contractors with the government. Employers also need to file their copies of Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by said deadline. The deadline also applies to certain Forms 1099-MISC, Miscellaneous Income, filed with the IRS to report non-employee compensation to independent contractors. If an employee does not receive their W-2 by the end of February, as a first step, they should contact their employer.

Contact Wilson Tax Law Group if you require assistance or have questions regarding your legal filing requirements at 949.397-2292.

Take Advantage of Free Tax Return Preparation

Many people with less complex returns can do both their federal and state tax returns for free online through Free File offered either by the IRS or by states that have a similar public-private partnership. Inidivuals whose prior-year adjusted gross income was $69,000 or less can use IRS Free File. Generally, individuals must complete their federal tax return before they can begin their state taxes. More than 20 states also have a state Free File program patterned after federal partnership, which means many taxpayers are eligible for free federal and free state online tax preparation. Moreover, for residents of Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming, IRS Free File may be the only tax product required. Those states do not have an income tax.  To take use of Free File:

• 
  

  go to IRS.gov/FreeFile to see all Free File options;

  
  


• 
  

  browse each of the 10 offers or use a "look up" tool to find the right product;

  
  


• 
  

  select a provider and follow the links to their web page to begin the tax return; and

  
  


• 
  

  complete and e-File the tax return only if the taxpayer has all the income and deduction records needed.

  
  

Free File partners charge a fee for state tax return preparation unless their offer outlines upfront that the taxpayer can file both federal and state returns for free. Finally, if an individual wishes to use one of the state Free File program products, they can visit their state tax agency’s Free File page.

Of course if you have more complex issues and do not meet the free file requirements you should consult a tax professional to do your tax return.   Contact Wilson Tax Law Group if you require assistance with tax filings or issues before the IRS or FTB at 949.397-2292.

New Provisions Provide Some Help to Captive Insurance

Treasury issued new proposed (Reg-112607-19) and final (T.D. 9885) regulations on the base erosion anti-abuse tax (BEAT) on December 12, 2019. The BEAT is a minimum tax on modified taxable income, determined by adding back base erosion payments to US taxable income. The BEAT only applies to "applicable taxpayers" that have an annual average of $500 million or more in gross receipts, calculated over 3 years, and a base erosion percentage of 3 percent (2 percent for certain financial companies) (i.e., the ratio of deductible payments made to non-US related parties' overall deductible payments).

These new provisions provide some helpful news to captive insurance companies. The proposed regulations provide an election to forego deductions in order to stay under the 3 percent base erosion percentage cliff, and the final regulations provide that certain loss payments made on behalf of unrelated underlying insureds are not base erosion payments and are not included in either the numerator or denominator for purposes of calculating a taxpayer's base erosion percentage.

Contact Wilson Tax Law Group at 949-397-2292 if you have IRS or captive insurance tax concerns.

IRS opens 2020 filing season for individual filers on Jan. 27

The Internal Revenue Service confirmed that the nation's tax season will start for individual tax return filers on Monday, January 27, 2020, when the tax agency will begin accepting and processing 2019 tax year returns.

The deadline to file 2019 tax returns and pay any tax owed is Wednesday, April 15, 2020. Remember you can extend the return due date, but not the payment date. More than 150 million individual tax returns for the 2019 tax year are expected to be filed, with the vast majority of those coming before the traditional April tax deadline.