Figuring out when and how to apply for an ITIN isn’t always easy. Beginning in 2016, new rules mean that taxpayers’ ITINs will now have an expiration date. And if ITIN holders don’t renew their ITINs on schedule, the issue could snowball, delaying their refunds and preventing them from claiming certain tax credits until they renew their ITINs. The application/renewal process could take from 90 to 120 days to complete.
IRS Gives Tax Relief to Victims of Hurricane Matthew; Many Extension Filers in North Carolina Now Affected; Relief for Other States Expected Soon
IR-2016-131, Oct. 11, 2016
WASHINGTON –– North Carolina storm victims will have until March 15, 2017, to file certain individual and business tax returns and make certain tax payments, with similar relief expected soon for Hurricane Matthew victims in other states, the Internal Revenue Service announced today. All workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization also qualify for relief.
Following this week’s disaster declaration for individual assistance issued by the Federal Emergency Management Agency (FEMA), the IRS said that affected taxpayers in Beaufort, Bladen, Columbus, Cumberland, Edgecombe, Hoke, Lenoir, Nash, Pitt and Robeson counties will receive this and other special tax relief. Locations in other states are expected to be added in coming days, based on damage assessments by FEMA.
The tax relief postpones various tax filing and payment deadlines that occurred starting on Oct. 4, 2016. As a result, affected individuals and businesses will have until March 15, 2017, to file returns and pay any taxes that were originally due during this period. This includes the Jan. 17 deadline for making quarterly estimated tax payments. For individual tax filers, it also includes 2015 income tax returns that received a tax-filing extension until Oct. 17, 2016. The IRS noted, however, that because tax payments related to these 2015 returns were originally due on April 18, 2016, those are not eligible for this relief.
A variety of business tax deadlines are also affected including the Oct. 31 and Jan. 31 deadlines for quarterly payroll and excise tax returns. It also includes the special March 1 deadline that applies to farmers and fishermen who choose to forgo making quarterly estimated tax payments.
In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due on or after Oct. 4 and before Oct. 19 if the deposits are made by Oct. 19, 2016. Details on available relief can be found on the disaster relief page on IRS.gov.
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.
In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227.
Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2016 return normally filed next year), or the return for the prior year (2015). See Publication 547 for details.
The tax relief is part of a coordinated federal response to the damage caused by severe storms and flooding and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.
The IRS previously sent CE providers a message on September 1 advising that the old CE system would be shut down on September 14 and a new CE system was tentatively scheduled to go live on September 19. Unfortunately the transition will take longer than originally estimated. The IRS now expects the new system to be available in early October.
Please visit www.irs.gov/taxpros/ce for current information on the status. The IRS will also be sending CE providers an e-mail when the new system launches.
In addition, the IRS will be adding messaging inside the PTIN system under “View My Continuing Education Credits” that states there will be a delay for approximately a month while they transition to a new CE Provider reporting system and for PTIN holders to check back in mid-October for the latest regarding CE credits.
The ITIN Acceptance Agent Program includes the following changes in 2016:
• Certification Process Changes
For dependents, CAAs will now be allowed to authenticate the passport and birth certificate. CAAs will continue to certify identification documents for the primary and secondary applicants. Form W-7 (COA) Certificate of Accuracy for IRS Individual Identification Taxpayer Number must be attached to each Form W-7 application submitted verifying that the CAA reviewed the original documentation or a certified copy from the issuing agency of those documents. CAAs will have to attach, and send to the IRS, copies of all documentation reviewed with the Form W-7 COA. As a reminder, CAAs must generally conduct an interview with each applicant (primary, secondary and dependent) in order to complete the application. CAAs can conduct interviews with clients either through face-to-face or video conferencing (i.e. SKYPE), but the CAA must have the original identification documents in their possession during the interview in order to see the security features and authenticate the documents.
• ITIN Acceptance Agent Applications Accepted Year Round
We are expanding open season to allow applications year round. Forms 13551, Application to Participate in the IRS Acceptance Agent Program, will be accepted from January through December of each year. We are actively recruiting Certifying Acceptance Agents. The goal is to increase the availability of individual ITIN services throughout the nation, particularly in local communities with high ITIN usage.
We also wanted to make you aware that we will be making changes to the Form W-7 and instructions that will go into effect for filing season 2018. Specifically, we plan to add a check box to indicate whether the dependent applicant is a U.S. resident or non-resident. In addition, we will require documentation of U.S. residency for all dependent applicants who are U.S. residents. For this year, through the 2017 filing season, we will require documentation of U.S. residency only for dependents who are from countries other than Canada or Mexico.
We would be interested in your feedback on these changes or other aspects of the CAA program.
More information is available on https://www.irs.gov/individuals/new-itin-acceptance-agent-program-changes
IR-2016-119, Sept. 2, 2016
WASHINGTON – The Internal Revenue Service today warned tax professionals of a new wave of attacks that allow identity thieves to file fraudulent tax returns by remotely taking over practitioners’ computers.
As part of the Security Summit effort, the IRS urged tax professionals to review their tax preparation software settings and immediately enact all security measures, especially those settings that require usernames and passwords to access the products. The IRS is aware of approximately two dozen cases where tax professionals have been victimized in recent days.
The IRS, state tax agencies and the tax industry – working as partners in the Security Summit – recently launched the Protect Your Clients; Protect Yourself campaign to increase awareness that criminals increasingly are targeting tax professionals and the taxpayer data they possess.
"This latest incident reinforces the need for all tax professionals to review their computer settings as soon as possible," said IRS Commissioner John Koskinen. "Identity thieves continue to evolve and look for new areas to exploit, especially as our fraud filters become more effective. The prompt identification of these attacks is another example of the great benefits that result from the close working relationship the IRS now has with the tax industry and the states through the Security Summit initiative. Information is flowing more rapidly between our groups as we continue our efforts to protect taxpayers."
These attacks come as the Oct. 17 deadline approaches for extension filers. The IRS first warned of a similar remote take-over attack in the spring, just ahead of the April 15 deadline, another peak period for tax professionals.
Thieves are able to access tax professionals’ computers and use remote technology to take control, accessing client data and completing and e-filing tax returns but directing refunds to criminals’ own accounts.
Victims in the tax community learned of these thefts while reconciling e-file acknowledgements.
In addition to activating security measures for tax software products, IRS urges all tax preparers to take the following steps:
- Run a security “deep scan” to search for viruses and malware;
- Strengthen passwords for both computer access and software access; make sure your password is a minimum of eight digits (more is better) with a mix of numbers, letters and special characters and change them often;
- Be alert for phishing scams: do not click on links or open attachments from unknown senders;
- Educate all staff members about the dangers of phishing scams in the form of emails, texts and calls;
- Review any software that your employees use to remotely access your network and/or your IT support vendor uses to remotely troubleshoot technical problems and support your systems. Remote access software is a potential target for bad actors to gain entry and take control of a machine.
In addition, the IRS recently issued instructions to tax professionals on how to monitor their PTIN activity.
Tax professionals should review Publication 4557, Safeguarding Taxpayer Data, a Guide for Your Business, which provides a checklist to help safeguard taxpayer information and enhance office security. Also, practitioners should review Data Breach Information for Tax Professionals for information on what action they should take if they do become victims.