Issue Number: 2019-43
Inside This Issue
- IRS Requests Feedback on the Taxpayer First Act
- Tax Security Awareness Week Is Dec. 2-6
- IRS Advisory Council Issues 2019 Annual Report
- Increased Section 6713 Penalties for Unauthorized Disclosure
- New FAQs on Qualified Business Income Deduction and Rental Real Estate
- Tax Relief for South Dakota Disaster Victims
- News from the Justice Department’s Tax Division
- Technical Guidance
1. IRS Requests Feedback on the Taxpayer First Act
The Taxpayer First Act of 2019 (TFA) aims to expand and strengthen taxpayer rights and to reform the IRS into a more taxpayer-friendly agency. The TFA requires the IRS to develop a comprehensive customer service strategy, modernize its technology and enhance its cyber security. In this effort, the IRS requests feedback from all stakeholders: taxpayers, tax professionals, tax software companies, advisory groups, financial industry stakeholders and other partners inside and outside tax administration.
TFA leaders have been meeting with a variety of organizations to receive feedback on these provisions. Stakeholders who are interested in providing feedback on reorganization or other components of TFA are encouraged to share written information with their regular IRS points of contact or send it to TFAO@irs.gov.
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2. Tax Security Awareness Week Is Dec. 2-6
The IRS, state tax agencies and the nation’s tax community announced the fourth Annual National Tax Security Awareness Week will take place from Dec. 2 to Dec. 6. The Security Summit partners will urge taxpayers, tax professionals and businesses to enhance online security as identity thieves step up their efforts to steal personal and financial data during the holiday shopping season.
“While people are shopping online, identity thieves are trying to shoplift their sensitive information. As the holiday season and tax season approach, everyone should remember to take basic steps to protect themselves,” IRS Commissioner Chuck Rettig said. “The Security Summit has made progress in fighting back against tax-related identity theft, but we need people to watch out for common scams that can put their financial and tax data at risk.”
Tax Security Awareness Week will feature a week-long series of educational materials to help protect tax pros against identity theft. The effort will include a special social media effort on Twitter and Instagram with @IRSnews and #TaxSecurity, including a Twitter chat on Dec. 5, and a series of more than 25 events across the country during Tax Security Awareness Week.
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3. IRS Advisory Council Issues 2019 Annual Report
The Internal Revenue Service Advisory Council (IRSAC) this week issued its annual report, including recommendations to the IRS on over 20 new and continuing issues in tax administration. The 2019 report is the first published by the reconstituted IRSAC, which now also addresses topics previously worked by the former Advisory Council on Tax Exempt and Government Entities (ACT) and the Information Reporting Program Advisory Committee (IRPAC). The IRSAC is administered under the Federal Advisory Committee Act by the Office of National Public Liaison, part of IRS Communications and Liaison, and draws its members from the taxpaying public, the tax professional community, small and large businesses, tax-exempt and government entities and the payroll industry.
Read the full 2019 IRSAC Public Report, available on IRS.gov.
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4. Increased Section 6713 Penalties for Unauthorized Disclosure
Return preparers are required to protect taxpayer information and ensure that use of such information is done in accordance with the law. Effective July 1, 2019, the Taxpayer First Act of 2019 increased penalties for unauthorized disclosure or use of return information under Internal Revenue Code section 6713. The penalty for a single instance of improper use or disclosure is now $1,000. The maximum penalty is $50,000 per person per calendar year.
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5. New FAQs on Qualified Business Income Deduction and Rental Real Estate
The Section 199A Qualified Business Income Deduction FAQs now include information on rental real estate. Revenue Procedure 2019-38, issued in September, provides a safe harbor that allows certain interests in rental real estate to be treated as a trade or business for purposes of the QBI deduction. The new FAQs are numbered 48-59.
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6. Tax Relief for South Dakota Disaster Victims
Victims of severe storms, tornadoes and flooding beginning Sept. 9, in South Dakota may qualify for tax relief from the Internal Revenue Service. Individuals and households who reside or have a business in Brookings, Charles Mix, Davison, Hanson, Hutchinson, Lake, Lincoln, McCook, Minnehaha, Moody and Yankton Counties and the Flandreau Santee Indian Reservation and the Yankton Indian Reservation 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. News from the Justice Department’s Tax Division
The U.S. Department of Justice Tax Division this week reported:
Michegel Butler and Brittany Patterson, residents of St. John the Baptist Parish, La., pleaded guilty to conspiracy to defraud the United States. Patterson also pleaded guilty to aiding and assisting in the filing of false tax returns. According to court documents, Butler owned Crown Tax Service LLC, located in Kenner, La., and Patterson worked there as a tax return preparer. From approximately January 2013 through April 2013, Butler, Patterson and others conspired to inflate their clients’ refunds by preparing returns falsely claiming Schedule C businesses, dependents and dependent care expenses. To substantiate the false expenses, the conspirators directed clients to fill out fraudulent receipts. They also encouraged some clients to buy or sell dependents that could be used on tax returns.
When sentenced, Butler and Patterson each face a maximum sentence of five years, three years of supervised release, restitution, and other monetary penalties. Patterson also faces an additional maximum sentence of three years imprisonment for each count of aiding and assisting in the preparation of a false tax return.
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8. Technical Guidance
Notice 2019-61 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.
Revenue Ruling 2019-26 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, the adjusted federal long-term tax-exempt rate.
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