Issue Number: 2019-26
Inside This Issue
- Tax Security 2.0: Create a Written Data Security Plan
- IRS Nationwide Tax Forums: Qualified Business Income Education
- PTIN Required to Prepare Estate, Trust Returns
- IRS Letters to Virtual Currency Owners Regarding Back Taxes
- Aug. 1 Webinar: IRS Civil Enforcement: Field Collections Enforcement and Employment Tax Compliance
- Tax Relief for Texas Disaster Victims
- Department of Justice Tax Division Judgements
- Technical Guidance
1. Tax Security 2.0: Create a Written Data Security Plan
Federal law requires all professional tax preparers to create a written information security plan to protect their clients’ data. Tax professionals are encouraged to take time this summer to review their data security protections. The IRS and its Security Summit partners created a special “Taxes-Security-Together” Checklist as a starting point.
“Protecting taxpayer data is not only a good business practice, it’s the law for professional tax preparers,” said IRS Commissioner Chuck Rettig. “Creating and putting into action a written data security plan is critical to protecting your clients and protecting your business.”
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2. IRS Nationwide Tax Forums: Qualified Business Income Education
Need to learn more about the Qualified Business Income (QBI) provisions of the Tax Cuts and Jobs Act? The IRS Nationwide Tax Forums feature four different sessions that examine different aspects of QBI. Listen to experts from both the IRS and its association partners and learn how QBI impacts different businesses as well as the self-employed taxpayer.
The QBI related sessions include:
- Properly Substantiating the Section 199A Qualified Business Income.
- Tax Cuts and Jobs Act Update: QBI Deduction and Opportunity Zones.
- 199A Qualified Business Income: Review and Planning to Maximize the Benefits of QBI on the Form 1040.
- When Does a Rental Generate Qualified Business Income?
Visit the IRS Nationwide Tax Forum website to register.
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3. PTIN Required to Prepare Estate, Trust Returns
Tax professionals specializing in estate and trust returns must have a Preparer Tax Identification Number (PTIN) and renew it annually. A PTIN is required of paid professionals who prepare or assist in preparing certain federal tax returns, including Form 1041, U.S. Income Tax Return for Estates and Trusts. Failure to enter a valid PTIN can result in a $50 penalty per return and could cause processing delays for your clients.
The IRS urges the estate and trust community, especially financial institutions offering services to clients, to ensure that staff who prepare or assist in preparing Forms 1041 have PTINs. PTINs cannot be shared: Each paid professional must have his or her own. Obtaining or renewing a PTIN takes only a few minutes and can be done online. Preparers can obtain a PTIN for 2019 now and renew that PTIN between October and December for 2020. Visit www.irs.gov/ptin to start.
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4. IRS Letters to Virtual Currency Owners Regarding Back Taxes
The IRS has begun sending letters to taxpayers with virtual currency transactions who potentially failed to report income and pay the resulting tax from virtual currency transactions or did not report their transactions properly. "Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties," said IRS Commissioner Chuck Rettig. "The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations."
More information on virtual currencies can be found on IRS.gov.
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5. Aug. 1 Webinar: IRS Civil Enforcement: Field Collections Enforcement and Employment Tax Compliance
The IRS will present the webinar, IRS Civil Enforcement: Field Collections Enforcement and Employment Tax Compliance at 2 p.m. ET on Aug. 1. This 60-minute webinar will explain why some businesses accrue employment/payroll taxes, the risks of using a third party to handle employment/payroll taxes and identify tools employers can use to monitor their own compliance and limit risk.
To see a complete list of webinars, visit the Upcoming Webinars page on IRS.gov.
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6. Tax Relief for Texas Disaster Victims
Victims of the severe storms and flooding that took place on June 24-25 in parts of Texas may qualify for tax relief.
Visit the IRS disaster relief page for all updates on tax relief for disaster victims.
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7. Department of Justice Tax Division Judgements
The Justice Department Tax Division this week reported:
- A Dallas-area tax return preparer was sentenced to 63 months in prison for conspiring to defraud the United States and for aiding and assisting in the preparation of false tax returns. In addition, the preparer was ordered to serve two years of supervised release and pay $8.3 million to the IRS.
- A northern Virginia equipment rental business owner pleaded guilty to employment tax fraud totaling $5 million. At sentencing, the defendant faces a maximum of five years in prison for failing to pay payroll taxes.
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8. Technical Guidance
Rev. Proc. 2019-29 provides indexing adjustments required by statute for certain provisions under section 36B.
Revenue Procedure 2019-30 provides simplified procedures for an insurance company to obtain automatic consent of the Commissioner of Internal Revenue to change its methods of accounting for discounting unpaid losses and expenses unpaid, estimated salvage recoverable, and unearned premiums attributable to title insurance, as applicable, to comply with section 846.
Revenue Procedure 2019-31 prescribes revised discount factors for the 2018 accident year, as well as discount factors for the 2019 accident year.
Revenue Procedure 2019-32 grants an extension of time to eligible partnerships to file a superseding Form 1065, U.S. Return of Partnership Income, and furnish a corresponding Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc., to each of its partners.
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