Yearly Archives: 2021

In a blog post, the National Taxpayer Advocate (NTA) has discussed the IRS’s backlog of unprocessed amended returns and how that situation is negatively impacting the Taxpayer Advocate Service’s (TAS) ability to help taxpayers get refunds they are waiting for.

According to the NTA, on October 30, 2021, the IRS had a backlog of over 2.7 million unprocessed amended returns. The IRS claims the current processing time for these returns is about 20 weeks. The NTA, however, says that TAS cases indicate it is taking the IRS “considerably longer than 20 weeks” to process these returns. Updated information on IRS operations and backlogs, can be found here

Generally, TAS doesn’t accept cases in which it can’t meaningfully expedite or improve case resolution for taxpayers. And, TAS can’t expedite or improve case resolution for taxpayers whose amended returns haven’t been processed. Therefore: 

• TAS will no longer accept new cases where the only issue is the processing of an individual or business amended return.  

• TAS will accept new cases when the primary issue meets the case acceptance criteria in Internal Revenue Manual 13.1.7, TAS Case Criteria, even if the secondary issue includes processing an individual or business amended return.

The NTA recommends that taxpayers use Where’s My Amended Return to track the status of their amended return. According to the NTA, it takes about three weeks after an amended return is filed for it to appear in the tool.

Where’s My Amended Return can provide the status of amended returns for the current tax year and up to three prior tax years. One caveat, the tool cannot provide the status of amended returns with a foreign address, business tax amended returns, carryback applications, and amended returns processed by a specialized unit. 

Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Read more at: Tax Times blog

As of the end of September, 980 people had expatriated from the U.S. since July, just over one-third more than the number from the second quarter of the year, the Internal Revenue Service said in a notice released Friday. 

Expatriation Is The Term The IRS Employs For Loss Or Renunciation Of U.S. Citizenship Under Internal Revenue Code Section 877(A) And Section 877A, The Notice Said.

Expatriation has increased significantly in 2020. The latest U.S. Department of the Treasury Report reflects that a record 6,047 individuals expatriated during the first three quarters of 2020. In addition, 834,000 "green card" holders became U.S. citizens in FY 2019, which reflects an 11-year high.

Should I Stay or Should I Go?

Need Advise on Expatriation?

 

Contact the Tax Lawyers at 

Marini & Associates, P.A.   

for a FREE Tax Consultation contact us at:

www.TaxAid.com or www.OVDPLaw.com 
or Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog

The Internal Revenue Service today. You so much for lunch near Jacoby this Launched a new online tool designed to help U.S. withholding agents comply with their reporting and withholding responsibilities with respect to IRS Form 1042-S (Foreign Person’s U.S. Source Income Subject to Withholding).

The tool performs a quality review of data before submission to the IRS. Use of the tool does not change a withholding agent’s obligations to file Forms 1042-S with the IRS and furnish a copy of the Form 1042-S to the payee.

“U.S. withholding agents play an important role in helping the IRS administer the tax code so we are delighted to be able to provide this tool free of charge to assist agents in meeting their filing requirement,” said Nikole Flax, IRS Large Business and International division commissioner.

In general, withholding agents, such as banks, insurance companies, universities, entertainment venues and resorts, or other financial institutions must file an information return on Form 1042-S to report amounts paid from U.S. sources to foreign persons. The definition of a withholding agent includes any person, U.S. or foreign, that has control, receipt or custody of amounts that are subject to the rules under Internal Revenue Code Chapter 3 (Withholding of Tax on Nonresident Aliens and Foreign Corporations) or Chapter 4 (Taxes to Enforce Reporting on Certain Foreign Accounts, i.e. FATCA or the Foreign Account Tax Compliance Act). 

The tool is designed to accept Form 1042-S data in common file formats that can be generated by most withholding agents’ back office systems. After uploading the data, the user will receive a report indicating errors and potential errors. A tutorial on how to use the tool can be viewed online or downloaded.

Even though the tool identifies data errors, the withholding agent remains responsible for making changes to the data on the agent’s system of record before submission to the IRS.  The list of resources below will help agents understand and correct errors beforesubmitting the Forms 1042-S.

The tool can be used as many times as necessary on new or revised data. The IRS has no access to the users’ data. Use of the tool is voluntary, but the IRS will take into account a withholding agent’s use of the tool when making enforcement and penalty determinations. 

The IRS urges information reporting and withholding industry experts and withholding agents to share this critical information with any withholding agents that may benefit from using this tool.

Non-Resident Alien Withholding Resources

• Form 1042-S, Instructions in PDF or HTML and any recent updates
• Form 1042, Instructions in PDF or HTML and any recent updates
• Publication 1187 (.pdf),Specifications for Electronic Filing of Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding
• Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities

Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Read more at: Tax Times blog

In case you missed it: IRS Commissioner Chuck Rettig wrote a column that appeared in Thursday’s issue of The Washington Post. In the piece, Commissioner Rettig discusses the importance of providing the IRS with vital funding during the next decade and encouraged Congress to approve the $80 billion IRS funding proposal included in the Biden administration’s Build Back Better (BBB) plan.

The House Rules Committee on November 3 released the amended text of H.R. 5376, Build Back Better Act. As written, the IRS would receive approximately $80 billion in additional funding over the next decade. Specifically, the proposal would appropriate through September 30, 2031:

• $1,931,500,000 for filing, education, account, and other taxpayer services;

• $44,887,500,000 for enforcement, investigative, litigative, and digital asset monitoring and compliance activities;

• $27,376,300,000 for supporting internal operations and expenses;

• $4,750,700,000 for the agency's business systems modernization program designed to improve communications with customers; and

• $15,000,000 for the development of a free "direct efile" tax return system.

The allocated amounts are on top of the usual IRS funding.

As Rettig writes in the piece, the IRS's workforce "is the same size as in 1970" and has "fewer than 15,000 people to handle" taxpayer phone calls. The shortage of auditors has resulted in a 60% drop in audits of taxpayers with over $1 million in annual income over the past decade.

According to Rettig, the funding boost would increase taxpayers' access to answers surrounding refunds, economic relief, and account-related issues. "We want to be able to answer the phones and respond to questions," Rettig writes. "But to do all this, we need help. We desperately need sufficient resources to be able to appropriately serve and support you and our country."

The IRS Also Lacks The Means To Adequately Hold
Wealthy Individuals And Large Corporations Accountable.
An Estimated 15% Of Taxes "Are Uncollected Each Year," Largely Because Of Personnel And Technological Gaps.

"Every American should agree that it is unacceptable for our nation's tax administrator to be 'outgunned' when appropriately challenging aggressive moves by some of the most sophisticated taxpayers."

The prospect of a well-equipped IRS seeking to close the "tax gap" which is, the difference between taxes owed and collected, by raising revenue collections has drawn the ire of some conservative groups and members of the banking industry.

Earlier this year, a squad of Republican notables, including former Vice President Mike Pence's chief of staff, created the Coalition to Protect American Workers in direct opposition to President Biden's tax agenda. In May, the group - through Building America's Future - released an ad against the IRS funding proposal.

"Biden's massive tax increase plan includes a staggering $80 billion to help recruit an army of IRS agents, agents aggressively coming for every dime they can grab at your house and our small businesses," the ad's narrator says before instructing taxpayers to urge Rep. Matt Cartwright, R-Pa., to reject the president's plan.

More recently, a Twitter campaign using the #KeepMyBankingPrivate hashtag has gained steam on the platform as financial institutions and related groups rally against a Treasury proposal that would require banks to disclose additional data on accounts with total annual transactions over $600.

To many opponents, giving the IRS more money would result in invasions of privacy, government overreach, and lengthy audits.

Have an IRS Tax Problem?

     Contact the Tax Lawyers at

 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

 

Read more at: Tax Times blog