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Saturday
Mar232013

The Rules Of The IRS Gift Tax

 
Friday
Mar222013

Taxpayers filing delayed forms get late-payment penalty relief

 

 By Sally P. Schreiber, J.D.

March 20, 2013
 
 

On Wednesday, the IRS announced that it will waive the penalty normally assessed for late payment of income tax, for taxpayers who have requested an extension of time to file their return and who are filing one of the 31 forms that were delayed until March because of the last-minute tax law changes in the American Taxpayer Relief Act of 2012, P.L. 112-240 (Notice 2013-24, which also contains a list of the 31 forms). But the IRS also warns that such taxpayers may receive an automatic assessment notice and demand for payment.

The IRS believes the late issuance of those 31 forms may prevent some taxpayers from being able to timely estimate and pay their 2012 tax liability when requesting an extension to file. Under the relief, the IRS will assume the taxpayer has demonstrated reasonable cause and lack of willful neglect if he or she makes a good-faith effort to properly estimate the tax liability on the extension application, the estimated amount is paid by the original due date of the return, and any tax owed on the return is fully paid no later than the return’s extended due date. 

Because the IRS automatically assesses the Sec. 6651(a)(2) late-payment penalty, relief under this notice is obtained by responding to the penalty assessment notice in a letter, explaining the taxpayer’s eligibility for the relief, identifying which of the forms eligible for relief were included with the taxpayer’s return, and referring to Notice 2013-24 in the letter.

In February, Jeffrey Porter, chair of the AICPA’s Tax Executive Committee, requested in a letter on behalf of the AICPA that the IRS consider penalty relief for taxpayers due to the delay of the 31 forms, which included forms for education credits and depreciation. 

—Sally P. Schreiber (sschreiber@aicpa.org) is a JofA senior editor.

Saturday
Mar162013

$917M in unclaimed tax refunds to expire April 15

IRS has nearly $1 billion in unclaimed tax refunds about to expire; money owed to 1M taxpayers

The Internal Revenue Service says it has $917 million in unclaimed tax refunds from 2009, and time is running out to claim them.

The refunds are owed to nearly 1 million people who failed to file returns for 2009. Taxpayers must file their 2009 returns by April 15 to claim their refunds. If taxpayers don't file returns, the law says they have a three-year window to claim refunds. After that, the money becomes property of the U.S. Treasury.

The IRS says there is no penalty for filing a late return that qualifies for a refund. But the agency says refunds may be delayed if taxpayers also failed to file returns for 2010 and 2011.

The government can also withhold tax refunds to settle unpaid federal and state taxes, as well as unpaid child support and past due student loans.

People in every state and the District of Columbia are owed refunds, including 100,700 people in California and 86,000 people in Texas, the IRS said. Most of the refunds exceed $500.

Some people may not have filed tax returns because they made too little money and weren't required to file, the IRS said. However, if they had federal income taxes withheld from their pay, those people may be entitled to refunds.

Also, many low- and middle-income people who didn't file returns may be missing out on the Earned Income Tax Credit. In 2009, a married couple with three or more children could earn up to $48,279 and qualify for the credit. Income thresholds are lower for couples and single filers with fewer children.

 

Wednesday
Feb062013

IRS Launches the IRS2Go App

IRS Launches the IRS2Go App for iPhone, Android; Taxpayers Can Check Refunds, Get Tax Information

 

WASHINGTON — The Internal Revenue Service today unveiled IRS2Go, its first smartphone application that lets taxpayers check on their status of their tax refund and obtain helpful tax information.
“This new smart phone app reflects our commitment to modernizing the agency and engaging taxpayers where they want when they want it,” said IRS Commissioner Doug Shulman. “As technology evolves and younger taxpayers get their information in new ways, we will keep innovating to make it easy for all taxpayers to access helpful information.” 


The IRS2Go phone app gives people a convenient way of checking on their federal refund. It also gives people a quick way of obtaining easy-to-understand tax tips. Apple users can download the free IRS2Go application by visiting the Apple App Store. Android users can visit the Android Marketplace to download the free IRS2Go app.
“This phone app is a first step for us,” Shulman said. “We will look for additional ways to expand and refine our use of smartphones and other new technologies to help meet the needs of taxpayers.” 
The mobile app, among a handful in the federal government, offers a number of safe and secure ways to help taxpayers. Features of the first release of the IRS2Go app include:


Get Your Refund Status
Taxpayers can check the status of their federal refund through the new phone app with a few basic pieces of information. First, taxpayers enter a Social Security number, which is masked and encrypted for security purposes. Next, taxpayers pick the filing status they used on their tax return. Finally, taxpayers enter the amount of the refund they expect from their 2010 tax return.
For people who e-file, the refund function of the phone app will work within about 72 hours after taxpayers receive an e-mail acknowledgement saying the IRS received their tax return.
For people filing paper tax returns, longer processing times mean they will need to wait three to four weeks before they can check their refund status.
About 70 percent of the 142 million individual tax returns were filed electronically last year.


Get Tax Updates
Phone app users enter their e-mail address to automatically get daily tax tips. Tax Tips are simple, straightforward tips and reminders to help with tax planning and preparation. Tax Tips are issued daily during the tax filing season and periodically during the rest of the year. The plain English updates cover topics such as free tax help, child tax credits, the Earned Income Tax Credit, education credits and other topics.


Follow the IRS
Taxpayers can sign up to follow the IRS Twitter news feed, @IRSnews. IRSnews provides the latest federal tax news and information for taxpayers. The IRSnews tweets provide easy-to-use information, including tax law changes and important IRS programs.


IRS2Go is the latest IRS effort to provide information to taxpayers beyond traditional channels. The IRS also uses tools such as YouTube and Twitter to share the latest information on tax changes, initiatives, products and services through social media channels. For more information on IRS2Go and other new media products, visit www.IRS.gov.

Thursday
Jan312013

Education Credit Updates

Yesterday, the IRS released a statement that the processing of Form 8863 will be delayed until mid-February.
Form 8863 is used to claim two higher education credits — the American Opportunity Tax Credit and the Lifetime Learning Credit, but the delayed start will have NO impact on taxpayers claiming other education-related tax benefits, such as the tuition and fees deduction and the student loan interest deduction. People otherwise able to file and claiming these benefits can start filing Jan. 30.

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