e-News for Tax Professionals Issue 2018-2

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Issue Number:  2018-2

Inside This Issue

1. Updated 2018 Withholding Tables Now Available
2. Updates for Practitioner Priority Service and Form 2848
3. Security Summit Partners Warn Tax Pros of Heightened Fraud Activity as Filing Season Approaches
4. National Taxpayer Advocate Delivers Annual Report to Congress
5. IRS Selects New Advisory Council Members
6. Technical Guidance

The Internal Revenue Service this week released Notice 1036, which updates the income-tax withholding tables for 2018 reflecting changes made by the tax reform legislation enacted last month. This is the first in a series of steps the IRS will take to help improve the accuracy of withholding following major changes made by the new tax law.

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The IRS continues to review its procedures to better protect sensitive taxpayer data. As part of this effort, the IRS will request additional information from tax professionals who call the Practitioner Priority Service or any toll-free IRS telephone number.
 
This procedural change will require tax practitioners to provide personal information so that IRS customer service representatives may confirm their identities. This additional information may include data such as your Social Security number and your date of birth. This personal information, in addition to the Centralized Authorization File (CAF) number, is necessary to verify the identity of the person to whom the IRS releases taxpayer information.
 
The IRS has also made an update to Form 2848, Power of Attorney, and Form 8821, Tax Information Authorization, that will require you to inform your client if you are using an Intermediate Service Provider to access client transcripts via the Transcript Delivery System. A box must be checked if you are using a third party. The IRS defines Intermediate Service Providers as privately owned companies that offer subscriptions to their software and/or services that the taxpayer’s authorized representative can use to retrieve, store, and display tax return data (personal or business) instead of obtaining tax information directly from the IRS. The IRS must know who is using these tools, and taxpayers must know when a party other than their authorized representative is involved in accessing their sensitive data.
 
There have been a number of changes for tax professionals in recent weeks, and each is intended to enhance protections for you and your clients. Unfortunately, business as usual is no longer an option. Cybercriminals are well-funded, persistent and adept at stealing data from outside the IRS and using it to file fraudulent tax returns. As cybercriminals evolve, so must the IRS.
 
As part of these efforts, the IRS has also strengthened protections for IRS e-Services. If you are an e-Services account holder, the IRS urges you to immediately upgrade your account through the new two-factor identity verification process. Some tax professionals may need to complete this process by mail, which could add 10 days or more to the process. Please do not wait until the start of filing season or until you have an urgent need for one of the e-Services tools before updating your account.
 
In the future, the IRS will ask each e-Services user to sign a new user agreement intended to ensure that all tax professionals understand their security obligations. This information will be shared in advance.
 
Protecting you and your clients from identity theft is paramount to the IRS. But your help and your understanding are needed as we continue to review and enhance security procedures.

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The Internal Revenue Service, state tax agencies and the tax industry warn tax professionals of early signs that cybercriminals already are at work as the nation’s tax season approaches.

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National Taxpayer Advocate Nina E. Olson today released her 2017 Annual Report to Congress, describing challenges the IRS will face as it implements the recently enacted tax reform legislation and unveiling a new publication, “The Purple Book,” that presents 50 legislative recommendations intended to strengthen taxpayer rights and improve tax administration.

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The Internal Revenue Service announced the appointment of seven new members to the Internal Revenue Service Advisory Council (IRSAC).

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Revenue Ruling 2018-04 contains the covered compensation tables effective Jan. 1. These tables of covered compensation reflect a revision to the taxable wage base for 2018 that was announced by the Social Security Administration on Nov. 27, and apply in lieu of the tables that were provided in Revenue Ruling 2017-22, 2017-48 I.R.B. 536, 2017.

Revenue Ruling 2018-04 will be in IRB 2018-4, dated Jan. 22.

Notice 2018-11 provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under section 417(e)(3), and the 24-month average segment rates under section 430(h)(2) of the Internal Revenue Code.

Notice 2018-11 will be in IRB 2018-06, dated Feb. 5.

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