The Internal Revenue Service (IRS) requires tax preparation professionals use a Preparer Tax Identification Number (PTIN). The number serves in a similar manner as a Social Security Number, providing a tax preparer with a unique identifier. The IRS states these numbers help tax preparers avoid using their own Social Security numbers when serving clients. Tax preparers take issue with these numbers as they are costly.
Whistleblowers who inform the IRS about noncompliant tax behavior by others are eligible for financial awards in certain circumstances.
One of the benefits of owning your own business is the ability to take advantage of certain tax savings. In some cases, space in your home used as an office could result in a deduction as well as computer expenses and the like. These more traditional expenses are well defined by the Internal Revenue Service (IRS). For example, a home office deduction requires the taxpayer uses the space regularly and exclusively for business and that the space is the principal place of business.
The Supreme Court of the United States (SCOTUS) has agreed to hear a case that questions whether the due process clause prohibits states from taxing trusts based on the trust beneficiaries’ in-state residency. It is important to note this case addresses the taxation of the trust income itself, not distributions. In most cases, it is legal for a state to require the payment of taxes on distributions made to a resident of the state.
The United States is currently entering the third week of a partial government shutdown. As the shutdown continues without an apparent end in sight, taxpayers are likely voicing concerns about how the shutdown will impact their taxes.
The United States Department of Justice (DOJ) is cracking down on the fraudulent operation of tax preparation businesses throughout the country. The agency has recently pursued prosecution of such businesses in Florida, North Carolina and Georgia. The agency reports it has obtained injunctions against hundreds of tax preparation professionals over the past ten years.
The Internal Revenue Service (IRS) took another step in its efforts to help tax practitioners avoid data theft. The agency recently released a publication noting tax practitioners could be unaware that they are victims of data theft. This is because the individuals behind these thefts often leave little behind. As a result, the client may become a victim before the tax practitioner is aware of the theft.
The IRS is now enforcing passport restrictions against people with substantial amounts of delinquent tax debt.
Earlier this year the Supreme Court of the United States (SCOTUS) ruled states can impose a tax on online transactions on out of state merchants. SCOTUS also noted in the case behind the ruling, South Dakota v. Wayfair, that states could not impose a tax in a manner that would result in an undue burden on interstate commerce.
If the Internal Revenue Service (IRS) is going to contact you, odds are high it will be in the form of a letter. The IRS may contact you for a number of reasons, but some of the more common include a tax balance that remains unpaid, a change to a refund amount, a question about a return or a change to a tax return.