WASHINGTON – As part of a larger effort to ensure compliance and fairness, the Internal Revenue Service today announced that it will step up efforts to visit high-income taxpayers who in prior years have failed to timely file one or more of their tax returns.

Following the recent and ongoing hiring of additional enforcement personnel, IRS revenue officers across the country will increase face-to-face visits with high-income taxpayers who haven’t filed tax returns in 2018 or previous years. These visits are primarily aimed at informing these taxpayers of their tax filing and paying obligations and bringing these taxpayers into compliance.

“The IRS is committed to fairness in the tax system, and we want to remind people across all income categories that they need to file their taxes,” said Paul Mamo, Director of Collection Operations, Small Business/Self Employed Division. “These visits focusing on high-income taxpayers will be taking place across the country.  We want to ensure taxpayers know their options to get right with their taxes and avoid bigger issues later.”

For the current tax season, the IRS reminds taxpayers that everyone should file their 2019 tax return by the April 15 filing deadline regardless of whether they can pay in full. Six-month filing extensions are also available, although that does not extend the April deadline for paying any taxes owed.

“Taxpayers having delinquent filing or payment obligations should consult a competent tax advisor before waiting to be contacted by an IRS revenue officer, Mamo said. “It is always worthwhile to take advantage of various methods of getting back into filing or payment compliance before being personally contacted by the IRS.”

For the new visits taking place, high-income non-filers taxpayers are those who generally received income in excess of $100,000 during a tax year and did not file a tax return with the IRS. Taxpayers who exercise their best efforts in filing their tax returns and paying or entering into agreements to pay their taxes deserve to know that the IRS is aggressively pursuing others who have failed to satisfy their filing and payment obligations.

During the visits, IRS revenue officers will share information and work with the taxpayer to hopefully resolve the tax issue.

How to pay

There are many payment options for people having trouble paying their tax bill. Payment plans can be set up quickly online.

Once returns are filed or an assessment occurs, there are various online payment options available at IRS.gov, including direct pay through a bank account or using a debit or credit card. Other ways to pay include the Electronic Federal Tax Payment System (best option for businesses or large payments; enrollment required), Electronic Funds Withdrawal (using during e-filing), same-day wire (bank fees may apply), check or money order or cash (at a participating retail partner). Those who can’t pay immediately may be able to meet their tax obligation in monthly installments by applying for a payment plan (including installment agreements and those who owe less than $50,000), they can find out if they qualify for an offer in compromise  (a way to settle their tax debt for less than the full amount), or request that the IRS temporarily delay collection until their financial situation improves.

For those who refuse to pay, the IRS has a number of options available under the law, ranging from a series of civil enforcement actions and, when appropriate, pursuing criminal cases against taxpayers. IRS compliance personnel are also now working more closely with IRS criminal investigators on priority compliance issues, including high-income cases.

 “These compliance visits underscore the importance of people filing their taxes this April, even if they can’t pay the full amount of tax due,” said Hank Kea, Director of Field Collection Operations, Small Business/Self Employed Division. “Not filing because you don’t believe you can pay at the time of filing makes the problem worse, as interest and penalties mount over time. We have many payment options available on IRS.gov to help taxpayers. It’s better to work on these issues up front rather than ignoring it and ultimately getting to the point of the IRS taking more serious action. Our continued use of ever-changing technologies, coupled with additional enforcement personnel, would suggest that waiting is not a viable option for delinquent taxpayers.”

What’s a revenue officer’s job?
Revenue officers are trained IRS civil enforcement employees who work to resolve compliance issues, such as missing returns or taxes owed. Revenue officers conduct interviews to gather financial information and provide taxpayers with the necessary steps to become and remain compliant with the law. When necessary, they will take the appropriate enforcement actions to collect the amount owed, following the law while respecting taxpayer rights and following the law.

Don’t be confused: Visits are not a scam
For this new initiative, these high-income taxpayers have typically received numerous letters from the IRS over an extended period of time, so they generally realize they have a tax issue.

Revenue officer visits shouldn’t be confused with scams. Here’s what to look for:

WASHINGTON − Leaders from five international tax organizations came together in Sydney, Australia, this week to review the J5’s progress in their fight against transnational tax crime and set priorities for the year ahead.

The Joint Chiefs of Global Tax Enforcement (J5) was formed in 2018 after a call to arms from the OECD Taskforce on Tax Crime and has been working together to gather information, share intelligence and conduct coordinated operations, making significant progress in each country’s fight against transnational tax crime.

The J5 includes the Australian Taxation Office (ATO), Her Majesty’s Revenue and Customs (HMRC) from the UK, Internal Revenue Service (IRS) Criminal Investigations from the US, the Canadian Revenue Agency (CRA) and the Dutch Fiscal Information and Investigation Service (FIOD).

Together, each country is better equipped in the fight against those who commit, promote and enable international tax crimes and money laundering.

Last month, the group executed a globally coordinated day of action against an international financial institution suspected of facilitating money laundering and tax evasion. Evidence, intelligence and information collection activities such as search warrants, interviews and subpoenas were undertaken in each country and significant information was obtained and shared as a result.

Australian Taxation Office (ATO) Deputy Commissioner and Australia’s J5 Chief, Will Day said the investigation into this financial institution and its clients is just one example of the work the ATO has been doing with the J5 to investigate Australians who are using offshore arrangements to evade their tax obligations.

“Tackling the abuse of correspondent banking arrangements was at the heart of our day of action last month, and we are looking beyond just a single financial institution in Central America. We have fears there are many hundreds of Australians caught up in these arrangements and working with our J5 partner agencies we are continuing to tighten the net on those who are engaging in and enabling transnational tax crime.”

“The effectiveness and success of the J5 is underpinned by a strong understanding of the common risks and threats we face. By working together to identify and understand these issues, we are able to shape and strengthen our operational, tactical and strategic response to focus on those areas that cause the most impact. We’re tackling tax crime together,” Day said.

The group has shared expertise to identify the most common and impactful mechanisms, enablers and structures that are being exploited to commit transnational tax crime and will be focusing on those criminals who present the greatest threat to the J5 countries in 2020.

Simon York, Chief and Director of Her Majesty’s Revenue and Customs (HMRC)’s Fraud Investigation Service said that the introduction of automatic exchange of financial information between countries, registers of beneficial ownership, information from worldwide data leaks and improved tax enforcement had made hiding wealth offshore increasingly difficult.

“What this work shows is that tax evaders and organized criminals are resorting to ever more complex and obscure methods to hide their illicit gains and wealth. To stay one step ahead we have brought together world leading analysts to unpick their complex trails. Being a partner in the J5 means that we have five times the analytical capability, five times the data and five times the insight at our disposal. Harnessing this, we are now shining a light on evaders across the world, targeting our next wave of enforcement activity and ensuring no big-time tax criminal remains beyond our collective reach.”

“Seeing the transformation of the J5 from a group of countries with similar challenges and similar goals to a fully integrated organization that is seeing operational successes is very exciting and should be a model for international collaboration at all levels,” said Don Fort, Chief of IRS Criminal Investigation.

“The information shared, efficiencies gained, and investigations started based on the collaboration within this group have moved the needle by years in terms of results and successes. I expect 2020 will be a game changer for the J5 and criminals will not know what hit them.” Fort said.

Hans van der Vlist, Chief and General Director Fiscal Information and Investigation Service (FIOD), the Netherlands said “The J5 challenge in the United States at the end of 2019 was important in our fight against crypto criminality. The operational cooperation within the J5 is beginning to pay off and we see that the cooperation also has an impact on local investigations. For instance, last Monday the FIOD had action days in the Netherlands in two crypto investigations."

Canada Revenue Agency (CRA) Chief Eric Ferron said “To attack sophisticated criminal tax evasion, we need coordinated action and to be sharing best practices. This is why we value our partnership with the J5; it has allowed us to broaden our reach, better equipping all member countries to combat tax crimes. We look forward to continued collaboration and providing results as they become available.”

For more information about J5, please visit www.irs.gov/J5.

Revenue Ruling 2020-06 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by § 1274. 

The rates are published monthly for purposes of sections 42, 382, 412, 642, 1288, 1274, 7520, 7872, and various other sections of the Internal Revenue Code.

Revenue Ruling 2020-06 will be in IRB:  2020-11, dated March 9, 2020.

WASHINGTON — The IRS and its Security Summit partners today called on tax professionals and taxpayers to use the free, multi-factor authentication feature being offered on tax preparation software products. 

Already, nearly two dozen tax practitioner firms have reported data thefts to the IRS this year. Use of the multi-factor authentication feature is a free and easy way to protect clients and practitioners’ offices from data thefts. Tax software providers also offer free multi-factor authentication protections on their Do-It-Yourself products for taxpayers.

“The IRS, state tax agencies and the private-sector tax industry have worked together as the Security Summit to make sure the multi-factor authentication feature is available to practitioners and taxpayers alike,” said Kenneth Corbin, Commissioner of the IRS Wage and Investment division. “The multi-factor authentication feature is simple to set up and easy to use. Using it may just save you from the financial pain and frustration of identity theft.”

Multi-factor authentication means returning users must enter their username/password credentials plus another data point that only they know, such as a security code sent to their mobile phone. For example, thieves may steal passwords but will be unable to access the software accounts without the mobile phones to receive the security codes.

Multi-factor authentication protections are now commonly offered by financial institutions, email providers and social media platforms to protect online accounts. Users should always opt for multi-factor authentication when it is offered but especially with tax software products because of the sensitive data held in the software or online accounts.

The IRS reminded tax professionals to beware of phishing scams that are commonly used by thieves to gain control of their computers. Thieves may claim to be a potential client, a cloud storage provider, a tax software provider or even the IRS in their effort to trick tax professionals to download attachments or open links. These scams often have an urgent message, implying there are issues with the tax professionals’ accounts that need immediate attention.

The IRS also reminds tax professionals that they can track the number of returns filed with their Electronic Filing Identification Number (EFIN) on a weekly basis. This helps ensure EFINS are not being misused. Simply go to e-Services, access the EFIN application and select EFIN status to see a weekly total of returns filed using the EFIN. If there are excessive returns, contact the IRS immediately.

Taxpayers can learn more about identity theft and how to protect themselves at Identity Theft Central on IRS.gov.

Tax professionals can learn more about protecting data, signs of theft or reporting data thefts Identity Theft Information for Tax Professionals. Also, Publication 4557, Safeguarding Taxpayer Data, provides a comprehensive overview of steps to protect computer systems and client data.

WASHINGTON — Offering time-saving alternatives to a telephone call, the Internal Revenue Service reminds taxpayers they can get fast answers to their refund questions by using the “Where’s My Refund?” tool available on IRS.gov and through the IRS2Go app. 

The IRS issues nine out of 10 refunds in less than 21 days, and the fastest way to get a refund is to file electronically and choose direct deposit. The time around Presidents Day is a peak period for telephone calls to the IRS, resulting in longer than normal hold times for callers. 

The question most frequently asked this time of year is, “Where’s my refund?”. The IRS reminds taxpayers that IRS customer service representatives can only research a refund’s status if it has been 21 days or more since the taxpayer filed electronically or six weeks since they mailed a paper return. 

Taxpayers can avoid the Presidents Day rush and get a personalized answer by using the “Where’s My Refund?” tool. All that is needed is the taxpayer’s Social Security number, tax filing status (single, married, head of household) and exact amount of the tax refund claimed on the return. Alternatively, taxpayers may call 800-829-1954 for the automated phone line, which provides the same information. 

Within 24 hours of filing a return electronically, the tool can tell taxpayers that their returns have been received. That time extends to four weeks if a paper return is mailed to the IRS, which is another reason to file electronically and choose direct deposit. 

Once the tax return is processed, “Where’s My Refund?” will tell a taxpayer when their refund is approved and provide a date when they can expect to receive it. “Where’s My Refund?” is updated no more than once every 24 hours, usually overnight, so taxpayers don’t need to check the status more often. 

Refunds held for certain returns

As a reminder, by law, the IRS cannot release refunds for Earned Income Tax Credit or Additional Child Tax Credit tax returns before mid-February. “Where’s My Refund?” on IRS.gov and the IRS2Go app will be updated with projected deposit dates for most early Earned Income Tax Credit/Additional Child Tax Credit refund filers by Feb. 22.           

The IRS expects most EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards by the first week of March, if they chose direct deposit and there are no other issues with their tax return. Taxpayers should check the “Where’s My Refund?” tool for their personalized refund date.

Please note: Ordering a tax transcript will not speed delivery of tax refunds nor does the posting of a tax transcript to a taxpayer’s account determine the timing of refund delivery. Calls to request transcripts for this purpose are unnecessary. 

While the IRS still expects to issue more than nine out of 10 refunds in less than 21 days, it’s possible a particular tax return may require additional review and a refund could take longer. Many different factors can affect the timing of a refund. And, remember to take into consideration that many banks do not process payments on weekends or holidays and it can take time for a financial institution to post the refund to a taxpayer’s account or to receive it by mail.

WASHINGTON — With a surge of tax returns expected the two weeks following the Feb. 17 Presidents Day holiday, the Internal Revenue Service is offering taxpayers several tips and various time-saving resources to get them the help they need quickly and easily.

To help avoid this period of high telephone demand, the IRS encourages taxpayers and tax preparers to use online resources available at IRS.gov. And when it comes time to file, taxpayers are encouraged to file electronically and choose direct deposit for faster refunds. Filing electronically reduces tax return errors as the tax software does the calculations, flags common errors and prompts taxpayers for missing information.

Here are a few featured tips to avoid the rush.

WASHINGTON — The Internal Revenue Service is holding a free webinar designed to help gig workers, employers, contractors and other businesses understand their tax reporting responsibilities.

This free 60-minute webinar will take place on Thursday, Feb. 20 at 2 p.m. Eastern Time. It is open to gig workers, businesses, tax professionals and anyone else interested in the tax rules that affect the gig economy. Tax pros can earn one continuing education credit.

Topics to be covered include:

The webinar will feature a live question and answer session and will be closed captioned for viewers who are deaf or hearing impaired. Anyone interested in attending can register online.

For more information on the gig economy, visit Understanding the Gig Economy and the Gig Economy Tax Center on IRS.gov.

Archived versions of past IRS webinars are available at www.irsvideos.gov.

WASHINGTON — The U.S. Department of the Treasury and the Internal Revenue Service today issued proposed regulations updating the federal income tax withholding rules to reflect changes made by the Tax Cuts and Jobs Act (TCJA) and other legislation. 

In general, the proposed regulations, available now in the Federal Register, are designed to accommodate the redesigned Form W-4, Employee’s Withholding Certificate, to be used starting in 2020, and the related tables and computational procedures in Publication 15-T, Federal Income Tax Withholding Methods. The proposed regulations and related guidance do not require employees to furnish a new Form W-4 solely because of the redesign of the Form W-4. 

Employees who have a Form W-4 on file with their employer from years prior to 2020 generally will continue to have their withholding determined based on that form.

To assist with computation of income tax withholding, the redesigned Form W-4 no longer uses an employee’s marital status and withholding allowances, which were tied to the value of the personal exemption. Due to TCJA changes, employees can no longer claim personal exemptions. Instead, income tax withholding using the redesigned Form W-4 will generally be based on the employee’s expected filing status and standard deduction for the year.

The Form W-4 is also redesigned to make it easier for employees with more than one job at the same time or married employees who file jointly with their working spouses to withhold the proper amount of tax.

In addition, employees can choose to have itemized deductions, the child tax credit, and other tax benefits reflected in their withholding for the year. As in the past, employees can choose to have an employer withhold a flat-dollar extra amount each pay period to cover, for example, income they receive from other sources that is not subject to withholding. Under the proposed regulations, employees now also have the option to request that employers withhold additional tax by reporting income from other sources not subject to withholding on the Form W-4.

The proposed regulations permit employees to use the new IRS Tax Withholding Estimator to help them accurately fill out Form W-4. As in the past, taxpayers may use the worksheets in the instructions to Form W-4 and in Publication 505, Tax Withholding and Estimated Tax, to assist them in filling out this form correctly.

The proposed regulations also address a variety of other income tax withholding issues. For example, the proposed regulations provide flexibility in how employees who fail to furnish Forms W-4 should be treated. Starting in 2020, employers must treat new employees who fail to furnish a properly completed Form W-4 as single and withhold using the standard deduction and no other adjustments. Before 2020, employers in this situation were required to withhold as if the employee was single and claiming zero allowances.

In addition, the proposed regulations provide rules on when employees must furnish a new Form W-4 for changed circumstances, update the regulations for the lock-in letter program, and eliminate the combined income tax and FICA (Social Security and Medicare) tax withholding tables.

Treasury and IRS welcome public comment on these proposed regulations. See the proposed regulations for details.

Updates on TCJA implementation can be found on the Tax Reform page of IRS.gov.

Revenue Ruling 2020-05 modifies Rev. Rul. 2009-13 and Rev. Rul. 2009-14 to reflect  § 1016(a)(1)(B) of the Internal Revenue Code, which was added by section 13521 of the 2017 Tax Cuts and Jobs Act.  Under §1016(a)(1)(B), the adjusted basis of an insurance contract is not reduced by the cost of insurance.  Section 1016(a)(1)(B) reversed the position in Rev. Rul. 2009-13 and Rev. Rul. 2009-14 that the basis of an insurance contract is reduced by the cost of insurance.

Revenue Ruling 2020-05 will be in IRB:  2020-9, dated 2/24/2020.

WASHINGTON – The Internal Revenue Service today launched Identity Theft Central, designed to improve online access to information on identity theft and data security protection for taxpayers, tax professionals and businesses. 

Located on IRS.gov, Identity Theft Central is available 24/7 at irs.gov/identitytheft. It is a resource on how to report identity theft, how taxpayers can protect themselves against phishing, online scams and more. 

Improving awareness and outreach are hallmarks of initiatives to combat identity theft coordinated by the IRS, state tax agencies and the nation’s tax industry, all working in partnership under the Security Summit banner. 

Since 2015, the Security Summit partners have made substantial progress in the fight against tax-related identity theft. But 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. 

The partnership has taken a number of steps to help educate and improve protections for taxpayers, tax professionals and businesses. As part of this effort, the IRS has redesigned the information into a new, streamlined page − Identity Theft Central − to help people get information they need on ID theft, scams and schemes. 

From this special page, people can get specific information including:

The page also features videos on key topics that can be used by taxpayers or partner groups. The new page includes a video message from IRS Commissioner Chuck Rettig, warning signs for phishing email scams – a common tactic used for identity theft – and steps for people to protect their computer and phone. 

Tax professionals and others may want to bookmark Identity Theft Central and check their specific guidance periodically for updates. 

This is part of an ongoing effort by the IRS to share identity theft-related information with the public. The IRS continues to look for ways to raise awareness and improve education and products related to identity theft for taxpayers and the tax professional community.