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September 2, 2017

The Trust Fund Recovery Penalty and Non-Owner Employees

Filed under: Trust Fund Recovery Penalty — Administrator @ 12:28 pm

The Trust Fund Recovery Penalty and Non-Owner Employees:

Internal Revenue Manual RM 1.2.14.1.3, Policy Statement 5-14 (Formerly P-5-60), states individuals performing ministerial acts without exercising independent judgment will not be deemed responsible. In general, non-owner employees who act solely under the dominion and control of others, and who are not in a position to make independent decisions on behalf of the business entity, will not be assessed the Trust Fund Recovery Penalty. Non-owner employees are those who do not own any stock, interest, or other entrepreneurial stake in the company that employs them.

Ministerial acts are performed under the supervision of someone else and do not require independent judgment or decision-making ability.

The IRS gives the following Example:

The bookkeeper of a company is not an owner and is not related to an owner. She has check signing authority and pays all of the bills the treasurer gives her. She is not permitted to pay any other bills, and when there are not sufficient funds in the bank account to pay all of the bills, she must ask the treasurer which bills to pay. The bookkeeper is performing a ministerial act and should generally not be held responsible for the Trust Fund Recovery Penalty.

Read more about the Trust Fund Recovery Penalty and the interview form 4180 here

September 1, 2017

IRS Tests W-2 Verification Code for Filing Season 2017

Filed under: IRS Levy and Tax News — Administrator @ 10:20 am

For filing season 2017, the Internal Revenue Service will expand an initiative to verify the authenticity of Form W-2 data. This initiative is one in a series of steps to combat tax-related identity theft and refund fraud.

The objective is to verify Form W-2 data submitted by taxpayers on e-filed individual tax returns. The IRS has partnered with certain Payroll Service Providers (PSPs) to include a 16-digit code and a new Verification Code field on a limited number of Form W-2 copies provided to employees.

Verification codes will appear on approximately 50 million Forms W-2 in 2017, up from the 2 million forms in 2016. Tax professionals are urged to look for “Verification Code” on W-2s because location will vary.

The code will be displayed in four groups of four alphanumeric characters, separated by hyphens. Example: XXXX-XXXX-XXXX-XXXX.

The Verification Code will appear on some versions of payroll firms’ Form W-2 copies B and C, in a separate, labeled box (Copy B is “To be filed with employee’s federal tax return” and Copy C is “For employee’s records.”)

The form will include these instructions to taxpayer and tax preparers: (link to IRS page)

August 30, 2017

IRS has changed its WEB design

Filed under: IRS levy and wage garnishment — Administrator @ 9:24 am

IRS released their NEW landing page for www.irs.gov

August 28, 2017

IRS Issues Urgent Warning to Beware IRS/FBI-Themed Ransomware Scam

Filed under: IRS Levy and Tax News — Administrator @ 12:44 pm

IRS Issues Urgent Warning to Beware IRS/FBI-Themed Ransomware Scam

Issue Number: IR-2017-134 (August 28, 2017)

WASHINGTON – The Internal Revenue Service today warned people to avoid a new phishing scheme that impersonates the IRS and the FBI as part of a ransomware scam to take computer data hostage.

The scam email uses the emblems of both the IRS and the Federal Bureau of Investigation. It tries to entice users to select a “here” link to download a fake FBI questionnaire. Instead, the link downloads a certain type of malware called ransomware that prevents users from accessing data stored on their device unless they pay money to the scammers.

“This is a new twist on an old scheme,” said IRS Commissioner John Koskinen. “People should stay vigilant against email scams that try to impersonate the IRS and other agencies that try to lure you into clicking a link or opening an attachment. People with a tax issue won’t get their first contact from the IRS with a threatening email or phone call.” …

August 22, 2017

IRS Targeting of Groups …

Filed under: IRS Abuse, Misuse, and Taxpayer Rights Violations — Administrator @ 5:04 pm

Source: The Washington Times – Thursday, August 17, 2017

A federal judge on Thursday ordered the IRS to name the specific employees the agency blames for targeting tea party groups for intrusive scrutiny and said the government must prove it has ceased the targeting.

Judge Reggie B. Walton also said the IRS must explain the reasons for the delays for 38 groups that are part of a lawsuit in the District of Columbia, where they are still looking for a full accounting of their treatment.

Judge Walton approved another round of limited discovery in the case and laid out six questions that the IRS must answer, including the employees’ names, why the groups were targeted and how the IRS has tried to prevent a repeat.

At a hearing earlier this week, Judge Walton said it was time to get everything on the table.

“Lay it on the line. Put it out there,” he told attorneys for the IRS, who are continuing to fight some tea party groups’ demands for full disclosure.

The targeting scandal burst open in May 2013 when the IRS admitted it had been pulling conservative-leaning groups’ nonprofit status applications out of the usual processing queue and subjecting them to extra scrutiny and extraordinary delays because of perceived political activity. [read more here]

See Judicial Watch Press Release regarding filing suit here

Judicial Watch Obtains 695 Pages of Obama IRS Scandal Documents – Records Not Produced in Initial Congressional Investigation (here)

Here

August 21, 2017

August, 21, 2017 – IRS REHIRES BAD AND ROTTEN APPLES

Filed under: IRS Abuse, Misuse, and Taxpayer Rights Violations — Administrator @ 12:43 pm

The TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION has issued its July, 2017 report concerning The Internal Revenue Service Continuing to Rehire Former Employees With Conduct and Performance Issues. The report is dated July 24, 2017 (Reference Number: 2017-10-035).

The report advises: “Given the substantial threat of identity theft and the magnitude of sensitive information that the IRS holds, hiring employees of high integrity is essential to maintaining public trust in tax administration and safeguarding taxpayer information.”

The findings of the report were: “…While most employees who are rehired do not have prior conduct or performance issues, TIGTA found that more than 200 (approximately 10 percent) of the more than 2,000 former employees who were rehired between January 2015 and March 2016 were previously terminated from the IRS or separated while under investigation for a substantiated conduct or performance issue. More than 150 of these employees (approximately 75 percent) were seasonal. Four of the more than 200 employees had been terminated or resigned for willful failure to properly file their Federal tax returns; four separated while under investigation for unauthorized accesses to taxpayer information; and 86 separated while under investigation for absences and leave, workplace disruption, or failure to follow instructions. This includes positions with access to sensitive taxpayer information, such as contact representatives.”

It is clear that hiring employees of high integrity is essential to not only maintaining public trust in tax administration, but also safeguarding taxpayer information.

The Treasury Inspector General Report shows that the IRS is continuing to hire employees with a history of unauthorized access to taxpayer information, failure to follow instructions, and workplace disruptions. …. Such actions are in direct contravention of the Taxpayer Bill of Rights. For example, this is a threat to, inter-alia, a taxpayer’s Right to Privacy, and Right to Confidentiality (…”Taxpayers have the right to expect appropriate action will be taken against employees, … who wrongfully use or disclose taxpayer return information…”).

The TIGTA report also found that:

“27 former employees failed to disclose a prior termination or conviction on their application, as required, and were rehired by the IRS. … , TIGTA has serious concerns about the IRS’s decision to rehire certain employees, such as those who willfully failed to meet their Federal tax responsibilities.”

The TIGTA report states: “In reviewing prior IRS employment issues associated with rehired employees, we considered some of the issues to be significant. In addition, we noted that applicants with prior IRS conduct and performance issues sometimes repeated past behaviors within 19 months of returning to work at the IRS. … Given the substantial threat of identity theft and the magnitude of sensitive information that the IRS holds, hiring employees of high integrity is essential to maintaining public trust in tax administration and safeguarding taxpayer information.”

Citation is made to a previously issued TIGTA report which had likewise found that the IRS had been hiring prior employees with substantiated conduct or performance issues.

A Table of Examples of Significant Prior IRS Conduct Issues for Rehired Former Employees shows multiple categories, including the rehiring of former IRS employees who had Falsified Employment Forms, Official Documents, or Unofficial Documents. Two rehired employees had repetitively falsified employment forms by omitting prior convictions or terminations. One rehired employee had several misdemeanors for theft and a felony for possession of a forgery device, and another rehired employee had threatened his or her co-workers.

So, you are advised by the IRS that your information is secure, that you are to provide all of your information, and as far as personal security when at an IRS office – just trust the government. After all, you don’t know anything about the IRS employee, but the IRS does.

August 18, 2017

IRS Offer in Compromise Pre-Qualifer and Doubt as to liability update

Filed under: Offer In Compromise — Administrator @ 4:55 pm

August, 2017 – Offer In Compromise Pre-Qualifier.

The IRS has an Offer In Compromise Pre-Qualifier “tool”. It is at this link

https://irs.treasury.gov/oic_pre_qualifier/

While the IRS Offer Pre-Qualifier tool may be useful to some taxpayers, the problem is that it imposes the IRS standards from the IRS tables. Thus, the IRS pre-qualifier does not take into account a taxpayer’s particular facts and circumstances as required by law. This may result in taxpayers who would otherwise qualify for an Offer, deciding not to bother because the Pre-Qualifier sets forth an unrealistic Offer amount detached from the taxpayer’s real world situation.

With the continuing push towards more and more on line “solutions” and computerized “analysis”, you can expect that the Taxpayer Bill of Rights, including the “Right to Quality Service – Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS, to be spoken to in a way they can easily understand …”, and the “Right to a Fair and Just Tax System – Taxpayers have the right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay, …”) — will become mere symbolic platitudes, unless Americans demand meaningful “service” (and that doesn’t mean interface with a robot).

May 24, 2017

For those who are thinking of submitting a Doubt as to Liability Offer in Compromise, be sure to use the correct form. The IRS has issued a May, 2017 version of Form 656-L – OIC Doubt as to Liability.

See Form HERE

IRS Appeals – Pilot Virtual Service Conference

Filed under: IRS Appeals News — Administrator @ 4:49 pm

July 24, 2017 – IRS Office of Appeals Pilots Virtual Service

The IRS Office of Appeals plans to start a new web-based virtual conference option for taxpayers and their representative on August 1, 2017 (IR-2017-122). This is to be a virtual face-to-face option in addition to other existing options for taxpayer conferences (e.g., phone, in person, and virtually through video conference technology which has limited availability at only certain IRS office). The IRS expects this new pilot program to be especially useful for taxpayers located far from an Appeals Office. This is apparently in partial response to the Taxpayer Advocate Reports about the lack of Appeal Offices for certain geographical areas.

Trust Fund Penalty – IRS Investigation and Recommendation

Filed under: Trust Fund Recovery Penalty — Administrator @ 4:47 pm

June 29, 2017 – IRS issued Revised IRM provisions regarding: Trust Fund Compliance – Investigation and Recommendation of the Trust Fund Recovery Penalty (copy here)

IRS Streamlined Processing Criteria – to end Sept 30, 2017

Filed under: IRS Levy and Tax News — Administrator @ 4:43 pm

August, 2017 – Reminder the temporary increase of the Streamlined Processing Criteria that raises the limit to total tax liability of $100,000 is due to end Sept 30, 2017.

https://www.irs.gov/businesses/small-businesses-self-employed/streamlined-processing-of-installment-agreements

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