IRS Tips

2014 FILING SEASON STATISTICS
Cumulative statistics comparing 3/15/13 and 3/14/14
Individual Income Tax Returns:20132014% Change
Total Receipts 74,882,00075,100,0000.3
Total Processed 69,153,00073,157,0005.8

E-filing Receipts:
TOTAL           68,029,00068,966,0001.4
Tax Professionals40,117,00039,413,000-1.8
Self-prepared 27,912,00029,553,0005.9

Web Usage:
Visits to IRS.gov218,469,657195,637,190-10.4

Total Refunds:
Number60,243,00061,645,0002.3
Amount$172.494Billion$179.793Billion4.2
Average refund$2,863$2,9171.9

Direct Deposit Refunds:
Number52,414,00052,770,0000.7
Amount$157.786Billion$158.983Billion0.8
Average refund$3,010$3,0130.08

Claim to be with real charities to gain public trust.
Use names similar to legitimate charities.
Use email to steer people to bogus websites that often look like real charity sites.
Contact people by phone or email to get them to ‘donate’ money or give their financial information.

The IRS offers the following tips to help taxpayers who wish to donate to victims:

Donate to qualified charities. Use the Exempt Organizations Select Check tool at IRS.gov to find qualified charities. Only donations to qualified organizations are tax-deductible. You can also find legitimate charities at the Federal Emergency Management Agency website, fema.gov. For more information about the kinds of charities that can receive deductible contributions, see Publication 526, Charitable Contributions.
Don’t give out information. Don’t give your Social Security number, credit card and bank account numbers or passwords to anyone. Scam artists use this information to steal your identity and money.
Don’t give or send cash. For security and tax record purposes, don’t give or send cash. Contribute by check, credit card or another way that provides documentation of the donation.
Report suspected fraud. If you suspect tax or charity-related fraud, visit IRS.gov and click on ‘Reporting Phishing’ at the bottom of the home page.

Get more information about tax scams and schemes at IRS.gov. Click on ‘Tax Fraud & Abuse’ at the bottom of the home page. You can also get Publication 526 at IRS.gov or call 800-TAX-FORM (800-829-3676).

Additional IRS Resources:

EO Select Check
IRS Wants You to Know About Schemes, Scams and Cons
Tax Scams - How to Report Them
Reporting Phishing
Identity Protection Tips
Publication 526, Charitable Contributions

IRS YouTube Videos:

Phishing-Malware - English | Spanish | ASL
Protect Yourself from Identity Theft - English |Spanish | ASL

IRS Podcasts

Protect Yourself from Identity Theft - English |Spanish

Use common names and fake IRS badge numbers.
Know the last four digits of the victim’s Social Security number.
Make caller ID appear as if the IRS is calling.
Send bogus IRS emails to support their scam.
Call a second time claiming to be the police or DMV, and caller ID again
supports their claim.

The truth is the IRS usually first contacts people by mail – not by phone – about unpaid taxes. And the IRS won’t ask for payment using a pre-paid debit card or wire transfer. The agency also won’t ask for a credit card number over the phone.

If you get a call from someone claiming to be with the IRS asking for a payment, here’s what to do:

If you owe federal taxes, or think you might owe taxes, hang up and call the IRS at 800-829-1040. IRS workers can help you with your payment questions. If you don’t owe taxes, call and report the incident to the Treasury Inspector General for Tax Administration at 800-366-4484.

You can also file a complaint with the Federal Trade Commission at FTC.gov. Add "IRS Telephone Scam" to the comments in your complaint.

Be alert for phone and email scams that use the IRS name. The IRS will never request personal or financial information by email, texting or any social media. You should forward scam emails to [email protected]. Don’t open any attachments or click on any links in those emails.

Read more about tax scams on the genuine IRS website, IRS.gov.

.Affordable Care Act - Tax Provisions for
Employers

WASHINGTON, DC (September
20, 2013)—Beginning
January 1, 2014, individuals and employees of small businesses will have access
to affordable coverage through a new competitive private health insurance
market – the Health Insurance Marketplace. The Marketplace offers “one-stop
shopping” to find and compare private health insurance options.

Open
enrollment for health insurance coverage through the Marketplace begins October
1, 2013. Section 1512 of the Affordable Care Act creates a new Fair Labor
Standards Act (FLSA) section 18B requiring a notice to employees of
coverage options available through the Marketplace.

Employers
Subject to the Notice Requirement

The
requirement to provide a notice to employees of coverage options applies to
employers that employ one or more employees who are engaged in, or produce goods
for, interstate commerce. For most businesses, a test of not less than $500,000
in annual dollar volume of business applies. The Department’s Wage and Hour
Division provides guidance relating to the applicability of the FLSA in general,
including an Internet compliance assistance tool to determine applicability of
the FLSA. (See www.dol.gov/elaws/esa/flsa/scope/screen24.asp)

Providing
Notice to Employees

Employers
must provide a notice of coverage options to each employee, regardless of plan
enrollment status (if applicable) or of part-time or full-time status. Employers
are not required to provide a separate notice to dependents or other individuals
who are or may become eligible for coverage under the plan but who are not
employees.

Form
and Content of the Notice

The
notice should inform employees:

About the Health
Insurance Marketplace;

That,     depending
on their income and what coverage may be offered by the     employer, they may
be able to get lower cost private insurance in the     Marketplace;

That if they buy
insurance through the Marketplace, they may lose the employer contribution
(if any) to their health benefits; and

That     the
employee may be eligible for a premium tax credit under section 36B of     the
Code if the employee purchases a qualified health plan through the
Marketplace.

The
U.S. Department of Labor has two model notices to help employers comply. There
is one model for employers who do not offer a health plan and another model for
employers who offer a health plan to some or all employees. The model notices
are also available in Spanish and MS Word format and may be found on the Department
of Labor website or by
calling 1.866.444.3272.

Timing
and Delivery of Notice

Employers
are required to provide the notice to each new employee at the time of hiring
beginning October 1, 2013. For 2014, the Department will consider a notice to be
provided at the time of hiring if the notice is provided within 14 days of an
employee’s start date. With respect to employees who are current employees
before October 1, 2013, employers are required to provide the notice not later
than October 1, 2013. The notice is required to be provided automatically, free
of charge.

Employer
Penalties for Failure to Provide Notice

If
your company is covered by the Fair Labor Standards Act, it should provide a
written notice to its employees about the Health Insurance Marketplace by
October 1, 2013. However, on September 11, 2013 the Department of Labor
announced that there will be no fine or penalty imposed on employers for failure
to provide such notice.

For help with tax issues, consult an enrolled agent. EAs provide
tax preparation; tax advice and tax planning services in addition to helping
taxpayers resolve problems with the IRS.
Enrolled agents are “America’s Tax Experts!” To find an enrolled agent in
your area, visit the National Association of Enrolled Agents’ website at
www.naea.org and click on
the “Find an EA” link.

Phillip Conte Tax Service NOTE: The content of this blog is intended for informational purposes only. It is not intended to provide legal advice. Laws differ by jurisdiction, and the information on this blog may not apply to every reader. You should not take, or refrain from taking, any legal action based upon the information contained on this blog without first seeking professional counsel

Dear Client:

In March 2010, President Obama signed the Patient Protection and Affordable Care Act (the “Affordable Care Act”) into law. While some provisions of the ACA have already gone into effect, a number of new provisions are scheduled to take effect January 1, 2014. Although we do not intend this newsletter to be the answer-all to the ACA, we thought this would be a good time to look at some of the provisions that might affect you.

The Affordable Care Act – an Overview

Under the Affordable Care Act, all individuals will be required to have health insurance. There will be incentives for those who enroll and penalties for those who do not. While the majority of US citizens and legal residents will be subject to the penalties, certain groups will be exempt such as undocumented immigrants, incarcerated individuals, American Indians and members of certain faiths. Large employers (those with 50 or more full-time employees) will be required to offer coverage to employees and will be penalized for noncompliance. Small employers who provide coverage for their employees may qualify for tax credits in 2014 and 2015 and will pay no penalties for failure to participate.

As a result of this legislation, Health Insurance “Marketplaces” (formerly known as exchanges) will be established to assist low and moderate-income individuals, families and small businesses in purchasing health insurance plans that are eligible to receive federal subsidies.

Under the ACA, several aspects of health insurance plans will be regulated. All health insurance plans must have no lifetime or annual limits, no potential rescission of coverage, no pre-existing conditions exclusions, no excessive waiting periods for eligibility to become covered by the plan and no cost sharing for preventive care. The insurance market must limit deductibles for certain plans and new insurance plans must cover your children until they reach age 26 while older plans must only cover children who cannot get insurance from their place of employment until they are 26.

The plan provider must provide a summary of benefits and coverage to participants. Plan enrollees must be allowed to select any available participating primary care provider. Premiums can be based only on limited factors, and there must be an effective process for appeals from claims determinations.

Each of these requirements is designed to improve the experience of the insured individuals and to ensure greater coverage than was previously provided by health insurance companies.

As you can see, the impact of this legislation is far-reaching. We are providing this information so that you are informed. Our goal is to make you aware of these provisions in order that we may discuss them in more detail and determine exactly how they may apply to your particular situation. If you have any questions about the Affordable Care Act or any other tax matter, please give us a call.

Tax Credits to Offset Insurance Premiums

A Kaiser Family Foundation study predicts that nearly half of all Americans who buy their own health insurance through the Affordable Care Act’s Marketplaces will be eligible for tax credits or subsidies. Researchers estimate tax credits averaging $2,672 for individuals will cover approximately 32% of the insurance cost, and tax credits averaging $5,548 will cover 66% of the cost for families.

The federal tax credits will be available for people who have incomes from 100% up to 400% of the poverty level (between $11,500 and $46,000 for a single person, and about $24,000 to $94,000 per year for a family of four in 2014). The tax credit will be refundable so taxpayers who have little or no income tax liability can still benefit, or the credit can be paid in advance to the taxpayer’s insurance company to help cover the cost of premiums.

The amount of the tax credit used in the study is based on a benchmark premium, which is the cost of the second-lowest-cost silver plan in the area where a person lives. The tax credit equals that benchmark premium minus what the individual is expected to pay based on their family income (which is calculated on a sliding scale from 2% to 9.5% of income). Researchers cautioned that it is difficult to determine exactly what Americans will be paying for coverage through the Marketplace because subsidy amounts will be based on factors including age, income, place of residence and type of policy chosen.

The new analysis comes as states begin to release information about the cost of insurance premiums purchased through the state exchanges or Marketplaces, starting in 2014.

IRS Releases Health Care Disclosure Rules

The IRS has issued the final regulations explaining how it will release tax return information to the Department of Health and Human Services, and in turn, the Marketplace and state agencies, to determine a taxpayer’s eligibility for various health insurance programs and credits. The IRS noted Section 6103(l)(21) of the tax code allows the disclosure of income, filing status, number of dependents and taxpayer identity to determine eligibility in Medicaid, CHIP or BHP programs. Income verification will also be required to determine eligibility and affordability in the insurance exchanges, or Marketplaces, as they are now known.

The same tax code section also authorizes the disclosure of other information that would indicate if an individual is eligible for the premium tax credit or any cost-sharing reductions. In addition to income, filing status and identity, Social Security benefits were also added to the list of information that can be disclosed to enable insurance exchanges to determine a taxpayer’s modified adjusted gross income. Providing the amount of Social Security benefits will also help the exchanges determine if a taxpayer is eligible for the premium tax credit or any cost-sharing reductions.

Nothing in the ACA allows the IRS to access an individual’s health information, including information about the individual’s health status or health services received.

2013: Watch Out for These Two New Taxes!

Two new taxes were included in the Affordable Care Act enacted in 2010, but didn’t go into effect until 2013: the 3.8% tax on net investment income and the 0.9% Medicare surtax on earned income. Both new taxes are designated as Medicare taxes, but none of the funds generated by these provisions are earmarked for Medicare or health care purposes. While the type of income subject to these new taxes is different, there is some overlap in the definition of taxpayers subject to these new taxes.

The 3.8% Tax on Net Investment Income

Don’t let 2013 zip by without checking with us to see if some tax planning may reduce the impact of this tax. The 3.8% surtax will be imposed on the lesser of your net investment income for the tax year, or the amount by which your modified adjusted gross income (MAGI) exceeds the “threshold amount” for the year. The threshold for married filing jointly is $250,000, $125,000 if you are married filing separately, and $200,000 for everyone else.

Although the IRS issued more than 100 pages of regulations to define “net investment income,” the term basically includes interest, dividends, annuities, rents, royalties and capital gains. Interest on tax-exempt bonds and distributions from qualified retirement plans are not included, nor is any gain excludable from income on the sale of your primary residence.

Planning related to this tax focuses on reducing net investment income. Rebalancing portfolios, maximizing deductions and/or non-income producing real estate may be options. If gain on the sale of property will be subject to the tax, it might be worthwhile to consider an installment sale or a like-kind, tax-deferred exchange of investment real estate instead of a sale.

Bottom line: Give us a call now so we can examine possible tax strategies before the year is over. Although your investment choices and long-term objectives should come first, tax implications are also a consideration.

The 0.9% Medicare Surtax on Earned Income

Unlike the 3.8% tax on net investment income, this tax applies to wages and self-employment income. The income thresholds are the same as the tax on net investment income above: $250,000 for couples filing jointly, $125,000 for those married filing separately and $200,000 for other filers. The surtax applies only to the employee’s portion of the Medicare tax. There is no increase to the employer-paid portion, but employers are required to withhold the surtax once an employee’s wages exceed $200,000 in a calendar year.

Caution: If filing jointly, each spouse could earn less than the $200,000 threshold and have no extra withholding on their wages during the year, however, if their combined wages exceed the $250,000 threshold on their tax return, they will pay the surtax owed at tax time. On the other hand, if one spouse’s wages are over $200,000 and the employer withholds the additional tax, but the other spouse earns less than $50,000, then any extra surtax withheld would be credited on their tax return.

Summary of the Affordable Care Act Provisions Effective January 1, 2014

-       Most Americans who can afford coverage will be required to purchase health insurance or pay a tax penalty that starts at $95 ($285 per family) or up to 1% of income, whichever is greater.

-       Up to 17 million Americans under age 65 could be eligible for Medicaid. States that choose to expand their program will receive federal financial aid for the increased payment rates.

-       Depending on which state you live in, you will have access to an Exchange administered by your state. Health insurance exchanges will be known as “Marketplaces” where consumers can compare and purchase health insurance. Four different options, called “Metal Plans” (Bronze, Silver, Gold, and Platinum), will be offered through these Marketplaces. Subsidies and tax credits will be available based on age, income, and geographic location.

-       Starting in 2014, the law makes it illegal for any health insurance plan to use pre-existing conditions to exclude, limit or set unrealistic premium rates on coverage for adults. The requirement to cover children under age 19 for pre-existing conditions began in 2010.

-       The provision that required employers with 50 or more workers to provide health care coverage or face fines has been postponed until 2015.

IRS’ Affordable Care Act Tax Tips

Confused about the Affordable Care Act? Have questions and need more information? The IRS has launched a new Affordable Care Act Tax Provisions website at IRS.gov/aca to educate individuals and businesses on how the health care law may affect them. The new home page has three sections that explain the tax benefits and responsibilities for individuals, families, employers, and other organizations, with links and information for each group. The site provides information about tax provisions that are in effect now and those that will go into effect in 2014 and beyond.

Topics include tax credits for individuals, new benefits and responsibilities for employers, and tax provisions for insurers, tax-exempt organizations and certain other business types.

Visitors to the new site will find information about the law and its provisions, legal guidance, the latest news, frequently asked questions and links to additional resources.

Several other federal agencies have a role in implementing the health care law, including the Department of Health and Human Services, which has primary responsibility. To help locate additional online resources from the Department of Health and Human Services, the Department of Labor and the Small Business Administration, the IRS has issued a new Web-based flyer - Healthcare Law Online Resources (Publication 5093).

Visit IRS.gov/aca for more information regarding the tax provisions of the Affordable Care Act and stay in touch with your enrolled agent!

Remember: Enrolled Agents (EAs) are America’s Tax Experts!

IRS Pressed to Explain Audits of Veterans’ Organizations Washington, D.C. (September 3, 2013)

By Michael Cohn

The American Legion and other veterans’ organizations are expressing concern over reports that the Internal Revenue Service is requiring them to maintain military service records for their members or face stiff penalties.

Jerry Moran

The conservative news site, the Daily Caller, reported last week that the IRS is now requiring American Legion posts to maintain dates of service and character of service records for all their members, with a penalty of $1,000 per day if they don’t comply. The American Legion only recently learned about a section of the 2011 Internal Revenue Manual pertaining to audits of veterans’ organizations.

However, according to a report by a local Georgia news outlet, the Dalton Daily Citizen, leaders of two American Legion posts say they hadn’t ever heard about the issue before, nor been approached by the IRS to provide documentation of their members’ service records.

A Republican senator has written a letter to the IRS asking for details about the reports, which have also been reported by the Fox News Channel. Sen. Jerry Moran, R-Kan., demanded answers in a letter addressed last Tuesday to IRS acting commissioner Daniel Werfel about IRS efforts to audit veteran service organizations in Kansas and across the country. He asked that the IRS cease carrying out the audits until the mandate is reviewed to be certain the privacy of veterans is respected.

“Even after they return home from war, veterans in America continue to fight battles,” Moran wrote. “Many struggle to find a job, face difficulties accessing quality health care services, or wait senselessly long periods of time for their benefits claims to be processed by the federal government. The last thing veterans should have to worry about is their privacy within veteran service organizations, or the ability of those organizations to endure seemingly arbitrary IRS audits and the severe financial penalties that could ensue. This news is deeply concerning to me and the thousands of veterans I represent in Kansas.”

Moran asked that the following questions be addressed by the agency: What legal authority does the IRS have in carrying out a mandate for personal, military service records? Was this mandate reviewed by IRS general counsel?

He asked Werfel to provide documentation that gives the IRS the authority to collect this information. Moran also asked under whose leadership was the mandate initiated, for what direct purpose, and who had the approving authority for the mandate. He also wanted to know if veteran service organizations were ever specifically notified of the requirement. If so, he asked Werfel to provide the documentation that was issued to these organizations, and if not, to explain why organizations were not notified. “Is it true that an organization unable or unwilling to provide this information could be charged penalty fees of $1,000 per day?” Moran also asked. “Please provide clarification regarding the penalty for noncompliance.”

Accounting Today also asked the IRS for an explanation and received the following statement from an IRS spokesperson. “By law, the IRS cannot comment on individual taxpayers or organizations,” said the IRS. “Given the unique role of veterans’ organizations in our country, there are special rules in the nation’s tax law to provide tax-exempt status. In fact, there are specific criteria set by Congress that these groups must meet to qualify and operate under Internal Revenue Section 501(c)(19), ranging from membership guidelines to fund-raising efforts.

“For example, tax laws require that qualifying veterans groups must have at least 75 percent of their members who are past or present members of the Armed Forces and 97.5 percent of the total membership must be from the Armed Forces, cadets or have other close relationships to members of the military,” the IRS added. “The IRS conducts exams of veterans’ organizations to ensure adherence to such details of the tax code. Given the important role these charities play in the nation, exams help protect the integrity of the tax-exempt sector and the important groups operating under the special provisions of the tax law. There is no special enforcement effort underway regarding 501(c)(19) organizations, just regular compliance activity. The IRS also has a variety of special publications and other outreach to assist these groups in meeting the criteria outlined under the federal tax law.”

Issue Number: IRS Summertime Tax Tip 2013-14
Inside This Issue

Eight Tips for Taxpayers Who Owe Taxes

While most taxpayers get a refund from the IRS when they file their taxes, some do not. The IRS offers several payment options for those who owe taxes.

Here are eight tips for those who owe federal taxes.

1. Tax bill payments. If you get a bill from the IRS this summer, you should pay it as soon as possible to save money. You can pay by check, money order, cashier’s check or cash. If you cannot pay it all, consider getting a loan to pay the bill in full. The interest rate for a loan may be less than the interest and penalties the IRS must charge by law.

2. Electronic Funds Transfer. It’s easy to pay your tax bill by electronic funds transfer. Just visit IRS.gov and use the Electronic Federal Tax Payment System. You may also use EFTPS to pay your taxes by phone at 800-555-4477 .

3. Credit or debit card payments. You can also pay your tax bill with a credit or debit card. Even though the card company may charge an extra fee for a tax payment, the costs of using a credit or debit card may be less than the cost of an IRS payment plan. To pay by credit or debit card, contact one of the processing companies listed at IRS.gov.

4. More time to pay. You may qualify for a short-term agreement to pay your taxes. This may apply if you can fully pay your taxes in 120 days or less. You can request it through the
Online Payment Agreement application at IRS.gov. You may also call the IRS at the number listed on the last notice you received. If you can’t find the notice, call 800-829-1040 for
help. There is generally no set-up fee for a short-term agreement.

5. Installment Agreement. If you can’t pay in full at one time and can’t get a loan, you may want to apply for a monthly payment plan. If you owe $50,000 or less, you can apply using the IRS Online Payment Agreement application. It’s quick and easy. If approved, IRS will notify you immediately. You can arrange to make your payments by direct debit. This type of payment plan helps avoid missed payments and may help avoid a tax lien that would damage your credit.

Taxpayers may also apply using IRS Form 9465, Installment Agreement Request. If you owe more than $50,000, you must also complete Form 433F, Collection Information Statement. For approved payment plans the one-time user fee is $105 for standard and payroll deduction agreements. The direct debit agreement fee is $52. The fee is $43 if your income is below a certain level.

6. Offer in Compromise. The IRS Offer-in-Compromise program allows you to settle your tax debt for less than the full amount you owe. An OIC may be an option if you can't fully pay your taxes through an installment agreement or other payment alternative. The IRS may accept an OIC if the amount offered represents the most IRS can expect to collect within a reasonable time. Use the OIC Pre-Qualifier tool to see if you may be eligible before you apply. The tool will also direct you to other options if an OIC is not right for you.

7. Fresh Start. If you’re struggling to pay your taxes, the IRS Fresh Start initiative may help you. Fresh Start makes it easier for individual and small business taxpayers to pay back taxes and avoid tax liens.

8. Check withholding. You may be able to avoid owing taxes in future years by increasing the taxes your employer withholds from your pay. To do this, file a revised Form W-4, Employee’s Withholding Allowance Certificate, with your employer. The IRS Withholding Calculator tool at IRS.gov can help you fill out a new W-4.

Issue Number: IRS Summertime Tax Tip 2013-13
Inside This Issue

The Taxpayer Advocate Service: Helping You Resolve Tax Problems

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that helps taxpayers who are experiencing unresolved federal tax problems. Here are 10 things every taxpayer should know about TAS:

1. The Taxpayer Advocate Service is your voice at the IRS.

2. You may be eligible for our help if you’ve tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn't working as it should.

3. We help taxpayers whose problems are causing financial difficulty. This includes businesses, organizations and individuals.

4. We’ll do everything we can to resolve your problem. And our service is always free.

5. If you qualify for our help, you’ll be assigned to one advocate who will be with you at every turn.

6. We have at least one local taxpayer advocate office in every state, the District of Columbia and Puerto Rico. To find your advocate:

Visit www.irs.gov/advocate

Call us toll-free at 1-877-777-4778

Check your local directory

Look at Pub. 1546, Taxpayer Advocate Service – Your Voice at the IRS, which lists our offices nationwide

7. Our tax toolkit at www.TaxpayerAdvocate.irs.gov has basic tax information, details
about tax credits, and more.

8. TAS also handles broader problems that affect many taxpayers. If you know of one of these systemic issues, please report it to us at www.irs.gov/sams.

9. You can get updates at:

www.facebook.com/YourVoiceAtIRS

Twitter.com/YourVoiceatIRS

www.youtube.com/TASNTA

10. TAS is here to help you because when you’re dealing with a tax problem, the worst thing you can do is to do nothing at all!

Issue Number: IRS Summertime Tax Tip 2013-11
Inside This Issue

Get Free Tax Help Using IRS Social Media Tools

You can get free tax help from the Internal Revenue Service through various
forms of social media. Here are some ways the IRS uses social media to share information on tax law changes, programs and services.

1. IRS2Go. Use this free Smartphone app to check your refund status, get tax updates and follow the IRS via Twitter. If you have an Apple iPhone or iTouch, download it from the iTunes app store. If you use an Android device, visit the Google Play Store to download IRS2Go for free.

2. YouTube. Tune in to IRS YouTube Channels for short, instructional videos
on a variety of tax subjects. Videos are available in English, American Sign
Language and other languages, such as Spanish.

3. Twitter. Follow IRS tweets for tax-related tips, news for tax professionals and job announcements. Follow us @IRSnews, @IRStaxpros and @IRSenEspanol.

4. Tumblr. Follow the IRS Tumblr blog for the most up-to-date tax news.

5. Facebook. Check the IRS Return Preparer Facebook page for useful posts
for tax professionals.

6. Podcasts. Listen to short IRS podcasts to get useful facts on many tax
topics. The audio files (along with transcripts) are available on iTunes or from
the Multimedia Center page on IRS.gov.

Protecting your privacy is a top priority at the IRS. The IRS uses social media tools to share public information, not to answer personal tax or account questions. You should never
post your Social Security number or any other confidential information on social
media sites.

Get connected and stay connected to the IRS with social media. For more about IRS social media tools, visit IRS.gov and click on “Social Media.”

Issue Number: IRS Summertime Tax Tip 2013-10 Inside This Issue

How to Get a Transcript or Copy of a Prior Year Tax Return

There are many reasons why you should keep a copy of your federal tax return.
For example, you may need it to answer an IRS inquiry. You may also need it to apply for a student loan or a home mortgage. If you can’t find your tax return, the IRS can provide a copy
or give you a transcript of the tax information you need.

Here’s how to get your federal tax return information from the IRS:

1. Transcripts are free and you can get them for the current year and the past three years. In most cases, a transcript includes all the information you need.

2. A tax return transcript shows most line items from the tax return you originally filed. It also includes items from any accompanying forms and schedules you filed. It does not reflect any
changes made after you filed your original return.

3. A tax account transcript shows any changes either you or the IRS made to your tax
return after you filed it. This transcript includes your marital status, the type of return you filed, your adjusted gross income and taxable income.

4. You can get transcripts on the web, by phone or by mail. To request transcripts online, go to IRS.gov and use the Order a Transcript tool. To order by phone, call 800-908-9946 and
follow the prompts.

5. To request a 1040, 1040A or 1040EZ tax return transcript by mail or fax, complete Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript. Businesses and individuals who need a tax account transcript should use Form 4506-T, Request for Transcript of Tax
Return.

6. If you order online or by phone, you should receive your tax return transcript within five to 10 calendar days. You should allow 30 calendar days for delivery of a tax account transcript if you
order by mail.

7. If you need an actual copy of a filed and processed tax return, it will cost $57 for each tax year. Complete Form 4506, Request for Copy of Tax Return, and mail it to the IRS address listed on the form for your area. Copies are generally available for the current year and past six years. Please allow 60 days for delivery.

8. If you live in a Presidentially declared disaster area, the IRS may waive the fee to obtain
copies of your tax returns. Visit IRS.gov and select the ‘Disaster Relief’ link in the lower left corner of the page for more about IRS disaster assistance.

Issue Number: IRS Summertime Tax Tip 2013-09
Inside This Issue

Six Tips on Gambling Income and Losses

Whether you roll the dice, play cards or bet on the ponies, all your winnings
are taxable. The IRS offers these six tax tips
for the casual gambler.

1. Gambling income includes winnings from lotteries, raffles, horse races and casinos. It also includes cash and the fair market value of prizes you receive, such as cars and trips.

2. If you win, you may receive a Form W-2G, Certain Gambling Winnings, from the payer. The form reports the amount of your winnings to you and the IRS. The payer issues the form
depending on the type of gambling, the amount of winnings, and other factors. You’ll also receive a Form W-2G if the payer withholds federal income tax from your winnings.

3. You must report all your gambling winnings as income on your federal income tax return. This is true even if you do not receive a Form W-2G.

4. If you’re a casual gambler, report your winnings on the “Other Income” line of your Form 1040, U. S. Individual Income Tax Return.

5. You may deduct your gambling losses on Schedule A, Itemized Deductions. The deduction is limited to the amount of your winnings. You must report your winnings as income and claim your allowable losses separately. You cannot reduce your winnings by your losses and report the
difference.

6. You must keep accurate records of your gambling activity. This includes items such as receipts, tickets or other documentation. You should also keep a diary or similar record of your activity. Your records should show your winnings separately from your losses.

To learn more about this topic, see Publication 525, Taxable and Nontaxable
Income. Also, see Publication 529, Miscellaneous Deductions. Both are available
at IRS.gov or by calling 800-TAX-FORM (800-829-3676 ).

Issue Number: IRS
Summertime Tax Tip 2013-08
Inside This Issue

Renting Your Vacation Home

A vacation home can be a house, apartment, condominium, mobile home or boat. If you own a vacation home that you rent to others, you generally must report the rental income on your federal income tax return. But you may not have to report that income if the rental period is short.

In most cases, you can deduct expenses of renting your property. Your deduction may be limited if you also use the home as a residence.

Here are some tips from the IRS about this type of rental property.

• You usually report rental income and deductible rental expenses on Schedule E, Supplemental Income and Loss.

You may also be subject to paying Net Investment Income Tax on your rental income.

• If you personally use your property and sometimes rent it to others, special rules apply. You must divide your expenses between the rental use and the personal use. The number of days used for each purpose determines how to divide your costs.

Report deductible expenses for personal use on Schedule A, Itemized Deductions. These may include costs such as mortgage interest, property taxes and casualty losses.

• If the property is “used as a home,” your rental expense deduction is limited. This means your deduction for rental expenses can’t be more than the rent you received. For more about this rule, see Publication 527, Residential Rental Property (Including Rental of Vacation Homes).

• If the property is “used as a home” and you rent it out fewer than 15 days per year, you do not have to report the rental income.

Issue Number: IRS
Summertime Tax Tip 2013-07
Inside This Issue

Visit IRS.gov this Summer for All Your Tax Needs

The IRS.gov website is a great resource for free tax help 24 hours a day,
seven days a week. Our many online tools can help make it easier to file and pay
your federal taxes. You can also learn about filing options, check the status of
a refund, print tax forms and find out how to contact the IRS.

Here are twelve good reasons to visit IRS.gov this summer.

1. Use the Interactive Tax Assistant. This tool is a tax law resource that covers a number of topics. The ITA is easy to use as it leads you through a series of questions and provides responses to your tax law inquiries.

2. Check your withholding. Use the IRS Withholding Calculator tool to check if you’re
on target with the amount withheld from your pay. This tool can help you decide
if you need to give your employer a new Form W-4, Employee's Withholding
Allowance Certificate.

3. Check your refund status. The Where’s My Refund? tool is a fast and easy
way to check the status of your tax refund. Use the IRS2Go mobile app or click
on the ‘Refund’ tab on IRS.gov.

4. Order a transcript. Order your tax return transcript or tax account transcript online. You’ll receive it within 5 to 10 days.

5. Pay your taxes electronically. Use the Electronic Federal Tax Payment System to
pay your taxes online or by phone. EFTPS is a free service.

6. Apply for a payment agreement. The Online Payment Agreement tool allows you to apply
for a payment agreement online if you owe $50,000 or less in taxes, interest and penalties.

7. Check out a charity. Search for qualified charities using Exempt Organizations’ Select Check. This tool will tell you if an organization is eligible to receive tax-deductible donations.

8. Check your homebuyer credit repayments. Use the First Time Homebuyer Credit Lookup tool to get account information such as the total amount of your credit or your repayment amount.

9. Get forms and publications. View, download and order federal tax forms and
publications anytime, day or night.

10. Check your eligibility for an offer in compromise. An OIC allows you to settle your tax debt for less than the full amount you owe. It’s an option if you can't fully pay your taxes, or doing so creates a financial hardship. Use the OIC Pre-Qualifier tool to see if you may be eligible before you apply for one.

11. Get up-to-date tax news. Get the latest tax information in the IRS Newsroom.

12. Explore career opportunities. Learn about careers at the IRS. The IRS is seeking students, recent college graduates and experienced professionals for full-time career and seasonal positions.

The official IRS website address is IRS.gov. Don’t be fooled by sites that end in .com, .net, .org or other designations other than .gov.

NOTE: The content of this blog is intended for informational purposes only.
It is not intended to provide legal advice. Laws differ by jurisdiction, and the
information on this blog may not apply to every reader. You should not take, or
refrain from taking, any legal action based upon the information contained on
this blog without first seeking professional counsel

IRS Modifies Policy for First-Time Penalty Relief

Washington, D.C. (May 31, 2013)
By Michael Cohn; The Internal Revenue Service has modified its “first time abate” policy, which provides a one-time consideration of penalty relief, based on the taxpayer’s compliance history, for taxpayers who have been subjected to a first-time penalty charge.

The recently updated policy modifies the IRS first time abate policy for penalty relief, the IRS said in an email to tax professionals Friday. This type of penalty removal is a one-time consideration available only for a first-time penalty charge and based on taxpayers’ compliance history.

According to the policy, the FTA penalty relief option for failure to file, failure to pay and failure to deposit penalties, under certain conditions, does not apply if the taxpayer has not filed all returns and paid, or arranged to pay, all tax currently due. For example, the taxpayer is considered current if they have an open installment agreement and are current with their installment payments.

The FTA relief only applies to a single tax period for a taxpayer, the IRS noted. For example, if a request for penalty relief is being considered for two or more periods of a taxpayer, and the earliest period meets the FTA criteria, FTA would apply only to the earliest period, and not for all periods.

Penalty relief under the first time abatement provision does not apply to returns with an event-based filing requirement, such as Form 706, U.S. Estate Tax Return; Form 709, U.S. Gift (and Generation-Skipping Transfer) Tax Return; Form 1120, U.S. Corporation Income Tax Return; and Form 1120S, U.S. Income Tax Return for an S Corporation if, in the prior three years, at least one Form 1120S was filed late but not penalized. This list is not all-inclusive, the IRS cautioned.

The IRS said it would base decisions on removing any future failure to file, failure to pay or failure to deposit penalties on any information taxpayers provide that meets reasonable cause criteria.

Taxpayers who have been billed for penalty charges who feel they have reasonable cause, should send their explanations with their bill to their service center or call the IRS at (800) 829-1040 for assistance. Taxpayers may also use Form 843, Claim for Refund and Request for Abatement

NOTE: The content of this blog is intended for informational purposes only.
It is not intended to provide legal advice. Laws differ by jurisdiction, and the
information on this blog may not apply to every reader. You should not take, or
refrain from taking, any legal action based upon the information contained on
this blog without first seeking professional counsel

Issue Number: IRS Special Edition Tax Tip 2013-10

Inside This Issue

Summer Job Tax Information for Students

When summer vacation begins, classroom learning ends for most students. Even
so, summer doesn’t have to mean a complete break from learning. Students
starting summer jobs have the opportunity to learn some important life lessons.
Summer jobs offer students the opportunity to learn about the working world –
and taxes.

Here are six things about summer jobs that the IRS wants students to
know.

1. As a new employee, you’ll need to fill out a Form W-4, Employee’s
Withholding Allowance Certificate. Employers use this form to figure how much
federal income tax to withhold from workers’ paychecks. It is important to
complete your W-4 form correctly so your employer withholds the right amount of
taxes. You can use the IRS Withholding Calculator tool at IRS.gov to help you
fill out the form.

2. If you’ll receive tips as part of your income, remember that all tips you
receive are taxable. Keep a daily log to record your tips. If you receive $20 or
more in cash tips in any one month, you must report your tips for that month to
your employer.

3. Maybe you’ll earn money doing odd jobs this summer. If so, keep in mind
that earnings you receive from self-employment are subject to income tax.
Self-employment can include pay you get from jobs like baby-sitting and lawn
mowing.

4. You may not earn enough money from your summer job to owe income tax, but
you will probably have to pay Social Security and Medicare taxes. Your employer
usually must withhold these taxes from your paycheck. Or, if you’re
self-employed, you may have to pay self-employment taxes. Your payment of these taxes contributes to your coverage under the Social Security system.

5. If you’re in ROTC, your active duty pay, such as pay received during
summer camp, is taxable. However, the food and lodging allowances you receive in advanced training are not.

6. If you’re a newspaper carrier or distributor, special rules apply to your
income. Whatever your age, you are treated as self-employed for federal tax
purposes if:

•You are in the business of delivering newspapers.
•Substantially all your pay for these services directly relates to sales rather than to the number of hours worked.
•You work under a written contract that states the employer
will not treat you as an employee for federal tax purposes.

If you do not meet these conditions and you are under age 18, then you are
usually exempt from Social Security and Medicare tax.

Visit IRS.gov, the official IRS website, for more information about income
tax withholding and employment taxes.

Issue Number: IRS Tax Tip 2013-58

Inside This Issue

Eight Facts on Late Filing and Late Payment Penalties

April 15 is the annual deadline for most people to file their federal income tax return and pay any taxes they owe. By law, the IRS may assess penalties to taxpayers for both failing to file a tax return and for failing to pay taxes they owe by the deadline.

Here are eight important points about penalties for filing or paying late.

1. A failure-to-file penalty may apply if you did not file by the tax filing deadline. A failure-to-pay penalty may apply if you did not pay all of the taxes you owe by the tax filing deadline.

2. The failure-to-file penalty is generally more than the failure-to-pay penalty. You should file your tax return on time each year, even if you’re not able to pay all the taxes you owe by the due date. You can reduce additional interest and penalties by paying as much as you can with your tax return. You should explore other payment options such as getting a loan or making an installment agreement to make payments. The IRS will work with you.

3. The penalty for filing late is normally 5 percent of the unpaid taxes for each month or part of a month that a tax return is late. That penalty starts accruing the day after the tax filing due date and will not exceed 25 percent of your unpaid taxes.

4. If you do not pay your taxes by the tax deadline, you normally will face a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes. That penalty applies for each month or part of a month after the due date and starts accruing the day after the tax-filing due date.

5. If you timely requested an extension of time to file your individual income tax return and paid at least 90 percent of the taxes you owe with your request, you may not face a failure-to-pay penalty. However, you must pay any remaining balance by the extended due date.

6. If both the 5 percent failure-to-file penalty and the ½ percent failure-to-pay penalties apply in any month, the maximum penalty that you’ll pay for both is 5 percent.

7. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.

8. You will not have to pay a late-filing or late-payment penalty if you can show reasonable cause for not filing or paying on time.

Note: The IRS recently announced special penalty relief to many taxpayers who requested an extension of time to file their 2012 federal income tax returns and some victims of the recent severe storms in parts of the South and Midwest. For details about these relief provisions, see IRS news releases IR-2013-31 and IR-2013-42. The IRS has also provided individual tax filing and payment extensions to those affected by the Boston explosions tragedy. See IR-2013-43 for more information.

Issue Number: IRS Tax Tip 2013-56

Inside This Issue

IRS Offers Tips for Taxpayers Who Missed the Tax Deadline

The IRS has some advice for taxpayers who missed the tax filing
deadline.

File as soon as possible. If you owe federal income tax, you should file and    pay as soon as you can to minimize any penalty and interest charges. There is     no penalty for filing a late return if you are due a refund.

Penalties and interest may be due. If you missed the April 15 deadline, you may have to pay penalties and interest. The IRS may charge penalties for late filing     and for late payment. The law generally does not allow a waiver of     interest charges. However, the IRS will consider a reduction of these     penalties if you can show a reasonable cause for being late.

E-file is your best option. IRS e-file programs are available through Oct. 15.     E-file is the easiest, safest and most accurate way to file. With e-file,     you will receive confirmation that the IRS has received your tax return. If you e-file and are due a refund, the IRS will normally issue it within 21 days.

Free File is still available. Everyone can use IRS Free File. If your income is     $57,000 or less, you qualify to e-file your return using free brand-name     software. If you made more than $57,000 and are comfortable preparing your     own tax return, use Free File Fillable Forms to e-file. This program uses     the electronic versions of paper IRS forms. IRS Free File is available only through IRS.gov.

Pay as much as you can. If you owe tax but can’t pay it all at once, you should     pay as much as you can when you file your tax return. Pay the remaining balance due as soon as possible to minimize penalties and interest charges.

Installment Agreements are available. If you need more time to pay your federal income taxes, you can request a payment agreement with the IRS. Apply online using the IRS Online Payment Agreement Application tool or file Form 9465, Installment Agreement Request.

Refunds may be waiting. If you’re due a refund, you should file as soon as     possible to get it. Even if you are not required to file, you may be entitled to a refund. This could apply if you had taxes withheld from your wages, or you qualify for certain tax credits. If you don’t file your return within three years, you could
forfeit your right to the refund.For more information, visit IRS.gov.

Issue Number: IRS Tax Tip 2013-55

Inside This Issue

Ten Helpful Tips for Paying Your Taxes

Are you making a payment with your federal tax return this year? If so, here are 10 important things the IRS wants you to know about correctly paying your federal income taxes.

1. Never send cash.

2. If you file electronically, you can file and pay in a single step with an electronic funds withdrawal. If you e-file by yourself you can use your tax preparation software to make the withdrawal. If you use a tax preparer to e-file, you can ask the preparer to make your tax payment electronically.

3. Whether you file a paper return or e-file your return, you can pay by phone or online with a credit or debit card. The company that processes your payment will charge a processing fee.

4. If you file Schedule A, Itemized Deductions, you may be able to deduct the credit or debit card processing fee on next year’s return. This is a miscellaneous itemized deduction subject to the 2 percent limit.

5. Electronic payment options provide another way to pay taxes by check or money order. You can make payments 24 hours a day, seven days a week. Visit IRS.gov and click on the ‘Payments’ tab near the top left of the home page for more details.

6. If you pay by check or money order, make sure it is payable to the “United States Treasury.”

7. Be sure to write your name, address and daytime phone number on the front of your payment. Also, write the tax year, form number you are filing and the first Social Security number listed on your tax return.

8. Complete Form 1040-V, Payment Voucher, and include it with your tax return and payment when mailing it to the IRS. Double-check the IRS mailing address. This will help the IRS process your payment accurately and efficiently. Go to IRS.gov to download and print this form.

9. Remember to enclose your payment with your return but do not staple it to any tax form.

10. For more information, call 800-829-4477 and select TeleTax Topic 158, Ensuring Proper Credit of Payments. You can also find out more in the Form 1040-V instructions available at IRS.gov.

Issue Number: IRS Tax Tip 2013-52

Inside This Issue

Five Things to Know if You Need More Time to File

The April 15 tax-filing deadline is fast approaching. Some taxpayers may find that they need more time to file their tax returns. If you need extra time, you can get an automatic six-month extension from the IRS.

Here are five important things you need to know about filing an extension:

1. Extra time to file is not extra time to pay. You may request an extension of time to file your federal tax return to get an extra six months to file, until Oct. 15. Although an extension will give you an extra six months to get your tax return to the IRS, it does not extend the time you have to pay any tax you owe. You will owe interest on any amount not paid by the April 15 deadline. You may also owe a penalty for failing to pay on time.

2. File on time even if you can’t pay. If you complete your return but you can’t pay the full amount due, do not request an extension. File your return on time and pay as much as you can. You should pay the balance as soon as possible to minimize penalty and interest charges. If you need more time to pay, you can apply for a payment plan using the Online Payment Agreement tool on IRS.gov. You can also send Form 9465, Installment Agreement Request, with your return. If you are unable to make payments because of a financial hardship, the IRS will work with you. Call the IRS at 800-829-1040 to discuss your options.

3. Use Free File to request an extension. Everyone can use IRS Free File to e-file their extension request. Free File is available exclusively through the IRS.gov website. You must e-file the request by midnight on April 15. If you e-file your extension request, the IRS will acknowledge receipt of your request.

4. Use Form 4868 if you file a paper form. You can request an extension of time to file by submitting Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. You must submit this form to the IRS by April 15. Form 4868 is available on IRS.gov.

5. Electronic funds withdrawal. If you e-file an extension request, you can also pay any balance due by authorizing an electronic funds withdrawal from a checking or savings account. To do this you will need your bank routing and account numbers.

For information about filing an extension and the various methods of paying your taxes, visit the IRS website at IRS.gov.

Issue Number: IRS Tax Tip 2013-48

Inside This Issue

Get Credit for Making Your Home Energy-Efficient
If you made your home more energy efficient last year, you may qualify for a tax credit on your 2012 federal income tax return. Here is some basic information about home energy credits that you should know.

Non-Business Energy Property Credit
You may claim a credit of 10 percent of the cost of certain energy saving property that you added to your main home. This includes the cost of qualified insulation, windows, doors and roofs.

In some cases, you may be able to claim the actual cost of certain qualified energy-efficient property. Each type of property has a different dollar limit. Examples include the cost of qualified water heaters and qualified heating and air conditioning system.

This credit has a maximum lifetime limit of $500. You may only use $200 of this limit for windows.Your main home must be located in the U.S. to qualify for the credit.

Not all energy-efficient improvements qualify, so be sure you have the manufacturer’s credit certification statement. It is usually available on the manufacturer’s website or with the product’s packaging.

The credit was to expire at the end of 2011. A recent law extended it for two years through the end of 2013.

Residential Energy Efficient Property Credit

This tax credit is 30 percent of the cost of alternative energy equipment that you installed on or in your home.

Qualified equipment includes solar hot water heaters, solar electric equipment and wind turbines.

There is no limit on the amount of credit available for most types of property. If your credit is more than the tax you owe, you can carry forward the unused portion of this credit to next year’s tax return.

You must install qualifying equipment in connection with your home located in the United States. It does not have to be your main home.

The credit is available through 2016.

Use Form 5695, Residential Energy Credits, to claim these credits. You can get Form 5695 at IRS.gov or order it by calling 1-800-TAX-FORM1-800-TAX-FORM
FREE end_of_the_skype_highlighting (800-829-3676).