Issue Number: 2018-49
Inside This Issue
- Security Summit: Guard against Identity Theft, Set Strong Passwords
- Webinar: Tax Reform Due Diligence Requirements on Dec. 13
- Get Ethics Training with the Nationwide Tax Forums Online
- Options to Pay First-Time Balance Due Returns
- Changes to Publication 1220 and FIRE Systems
- Technical Guidance
1. Security Summit: Guard against Identity Theft, Set Strong Passwords
With the 2019 tax season approaching, ensure your small business clients are on-guard against a growing wave of identity theft and W-2 scams. The IRS and its Security Summit partners advise that small business identity theft is big business for identity thieves, who use stolen identities to open credit card accounts and file for fraudulent refunds.
In addition, tax professionals should adopt new, stronger standards to protect their passwords. The latest guidance suggests adopting a passphrase such as a favorite line from a movie or a series of associated words that can be easily remembered.
For tips on how to protect your data, visit Protect Your Clients; Protect Yourself.
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2. Webinar: Tax Reform Due Diligence Requirements on Dec. 13
The IRS is presenting the webinar Tax Reform Due Diligence Requirements at 2 p.m. Eastern Time on Dec. 13. The 60-minute program will provide an overview of the effects of the Tax Cuts and Jobs Act on refundable credits and how to avoid common errors in complying with due diligence requirements.
Visit the Webinars for Tax Professionals page for a complete list of upcoming webinars.
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3. Get Ethics Training with the Nationwide Tax Forums Online
Do you need continuing education credit? Get it before year-end with the IRS Nationwide Tax Forums Online (NFTO). The NTFO features two new ethics courses, Circular 230: Diligence in Tax Practice and What is your Authority for That? The seminars, recorded at the 2018 IRS Tax Forums, include interactive videos synchronized with downloadable slides and transcripts.
To review all available seminars, visit IRS Nationwide Tax Forums Online.
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4. Options to Pay First-Time Balance Due Returns
Do you have a client who is unable to pay his tax bill in full? Encourage him to pay whatever he can to minimize the penalties and interest on his balance due. Also, review the options to pay the IRS.
More information is available in the IRS video, Online Payment Agreement Overview.
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5. Changes to Publication 1220 and FIRE Systems
The IRS has updated Publication 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G. The update, effective Jan. 2, for tax year 2018, affects Form 1098, Mortgage Interest Statement, and Form 1099-R – Payee "B" Record Layouts. Tax professionals should review Part E of Publication 1220 during their software update process for a detailed list of changes.
Also effective in January, the Filing Information Returns Electronically (FIRE) Systems will not accept file sizes larger than one million records. Visit the Filing Information Returns Electronically (FIRE) website for the latest system status, updates, and alerts.
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6. Technical Guidance
Notice 2018-95 provides transition relief from the "once-in-always-in" (OIAI) condition for excluding part-time employees under section 1.403(b) 5(b)(4)(iii)(B) of the Treasury Regulations.
Notice 2018-97 provides guidance to taxpayers on (1) application of the requirement in section 83(i)(2)(C)(i)(II) that grants be made to 80% of the employer’s employees, (2) application of income tax withholding to the deferred income related to qualified stock, and (3) the manner in which an employer may opt out of permitting employees to elect the deferred tax treatment even if the requirements under section 83(I) are otherwise met.
Revenue Ruling 2018-32 provides the interest rates for underpayments and overpayments.
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