Yearly Archives: 2021

The IRS has issued an update to the instructions for Form 8879, IRS e-file Signature Authorization.

The update provides that an Individual Taxpayer Identification Number (ITIN) can be used on Form 8879 in place of a Social Security Number (SSN) when the taxpayer doesn’t have, or isn’t eligible for, an SSN. 

Taxpayers use a Personal Identification Number (PIN) to sign an e-filed individual tax return that is transmitted by an electronic return originator (ERO). (Instructions to Form 8879)

Taxpayers use Form 8879 to authorize the electronic filing (e-filing) of their original or amended return by an ERO. 

Form 8879 must be completed when the Practitioner PIN method is used to sign the taxpayer's e-filed individual income tax return or when the taxpayer authorizes the ERO to enter or generate the taxpayer’s PIN on their e-filed individual income tax return. 

Now the IRS has updated the instructions to Form 8879 to include the following:

“If a taxpayer doesn't have and isn't eligible to get a Social Security number (SSN), enter the taxpayer's IRS Individual Taxpayer Identification Number (ITIN) wherever an SSN is requested on Form 8879.”

Before this update, the instructions to Form 8879 provided only that an ERO must “enter the name(s) and social security number(s) of the taxpayer(s) at the top of the form.” 

 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

According to Law360, a D.C. federal court has dismissed the remaining claims in a man's suit challenging the federal government's denial of his passport application, finding that he failed to prove that the IRS improperly certified his tax debt as seriously delinquent.

The Internal Revenue Service correctly determined that Robert A. McNeil had seriously delinquent tax debts that caused the U.S. State Department to deny his passport application, and the agency wasn't required to notify McNeil before certifying his tax delinquency, according to the Thursday memorandum opinion.

"McNeil's argument concerning the notice requirement fails because even if notice was not effected here, it would not mean that the IRS' certification of his debt to the State Department was erroneous," the court said.

McNeil filed a public records request under the Freedom of Information Act  with the U.S. State Department in 2018 seeking records related to the government's rejection of his passport application based on the IRS' certification of his serious tax delinquency, according to court documents.

Following court proceedings that led to McNeil receiving a number of documents related to his FOIA request, McNeil amended his complaint against the State Department to include the IRS and add claims to his suit that the agency improperly determined and certified his tax debt.

The district court granted several motions for summary judgment in the government's favor that eliminated the FOIA claims made by McNeil, leaving the claims regarding the IRS' certification of his tax delinquency to be resolved, according to court documents.

McNeil argued that he was never made aware that the IRS had certified his tax debt and should have received notice from the agency, using two documents he received in his FOIA request as examples of records that could have provided that correspondence, according to court documents.

In its Thursday opinion, the court said that the IRS notice is only required under law to be sent contemporaneously, so it cannot be a prerequisite for the agency to certify a serious tax debt, the court said. And even if the notices were flawed, the law doesn't include a statute of limitations to challenge the certification of serious tax delinquency that would have prevented McNeil's suit, the opinion said.

McNeil also argued that the IRS assessed his tax debt unlawfully in his amended complaint, but that argument is impermissible under Internal Revenue Code Section 7345 , which only allows taxpayers to challenge the certification of serious tax delinquency, the court said in its opinion. Thus, McNeil failed to properly challenge aspects of the IRS' debt certification process, the court said.

"The court finds no support in § 7345 or anywhere else in the tax code for the notion that Congress wanted § 7345(e) to become a vehicle for challenging IRS procedures and tax assessments that cannot otherwise be challenged," the court said.

McNeil represented himself.

 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 the IRS executive column CL-2020-08, the IRS explains how it continues to focus on ensuring integrity and fairness in our nation’s voluntary tax system despite the challenges  of COVID-19. 

“Taxpayers who exercise their best efforts to file their tax returns and pay their taxes, or enter into agreements to pay their taxes, deserve to know that the IRS is pursuing others who have failed to satisfy their filing and payment obligations,” explains Eric Hylton, Commissioner, Small Business 

Even in a challenging year like this, when the IRS has provided assistance and help for those affected by COVID-19 through Economic Impact Payments and various tax relief efforts, people should understand we haven’t lost focus on identifying and pursuing high income non-filers who live here in the United States and abroad.

The IRS has always considered high income non-filers a priority, but earlier in 2020 we shifted a considerable amount of resources, especially in our collection activities, to address the problem more aggressively. We identified and contacted taxpayers who made more than $100,000 and had not filed a tax return before 2019 to ensure they understood their obligation to file and pay income taxes. Most of those taxpayers responded and have either filed or paid their tax obligations. Others are working with us by using the many resources available for those who can’t pay their bill entirely.

For those non-filers who didn’t respond, we have an ambitious strategy to bring them into compliance with our nation’s tax laws and help address the tax gap. Specifically, in my Small Business/Self Employed organization, we hired more revenue officers — our civil enforcement officers — and prioritized the most egregious non-filer cases so they can reach out to non-responsive taxpayers directly.

Initially, our expectation was to have compliance officers do more face-to-face visits with taxpayers who failed to respond to the IRS notices, but COVID-19 delayed these in-person visits. Despite this, we continued to focus on priority cases, identifying about 1,500 of the most serious ones, many with millions of dollars of suspected unclaimed incomes. The revenue officers worked hundreds of these cases within the first 60 days of the higher-income enforcement effort, starting in February 2020.

Some of the high income non-filer cases from this year’s focused effort — and others that taxpayers didn’t resolve — are being handled by our new Office of Fraud Enforcement. Created earlier this year, the office sits in our SBSE organization and acts a bit like a computer’s Central Processing Unit, or CPU. It connects the dots across all IRS divisions, and sometimes across federal agencies, to confront emerging threats and bring offenders to justice with both civil and criminal penalties. The office is also reviewing high income non-filer cases that will be referred to the IRS Criminal Investigation Division to potentially be pursued criminally for offenses, including failure to file, tax evasion and tax fraud.

Blatant tax offenders can face large penalties, including interest and back taxes, and even serve prison time, like this Alabama salesman sentenced for tax evasion last month. As court documents note, he stopped filing taxes, thinking he could hide his income overseas and used other tactics to avoid paying taxes. He’s now paying back more than $1 million owed and was sentenced to two years in prison.  

Here’s a common misperception among non-filers. Simply not filing won’t keep them from being on our radar. Even if they don’t file, we still have ways to know how much income they should be reporting. We have a robust system to collect information from many sources to identify possible tax issues, including multiple third-party sources, taxpayers’ previous filing histories and their addresses. We also have other legal avenues that provide potential information for cases including:

• Information provided to the IRS whistleblower program
• Information received from United States Attorney offices across the country
• Ongoing investigations by other law enforcement agencies
• Tips from colleagues, neighbors and friends
• Tax treaty and information exchange per case investigation requests

Examination  within our operating divisions is also on the frontlines of our increased focus on high income non-filers through audit efforts as well as ensuring audit rates significantly increase as income rises. Our IRS Deputy Commissioner for Services and Enforcement, Sunita Lough, wrote about this earlier.

So as the SBSE Commissioner, I have an important message for high income non-filers: It’s always better to work with us as soon as there’s an issue. These situations only get worse with time. And rest assured, we will continue to identify and contact non-compliant taxpayers, offer payment options and hold those who refuse to comply accountable.

 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

The Treasury Inspector General for Tax Administration (TIGTA) today released the Audit Report High-Income Taxpayers Who Owe Delinquent Taxes Could Be More Effectively Prioritized, which discusses that it identified 685,555 taxpayers who had a balance due as of May 14, 2019.

Because the IRS prioritizes high balance due cases for collection, many of these high-income taxpayers would be included in high-priority work. However, balance dues are not prioritized by incomes earned and some improvements could be made to prioritize high-income taxpayers more effectively. 

When selecting cases to assign to a private collection agency, the IRS randomly selects cases that meet the Private Debt Collection criteria without regard to taxpayers’ ability to pay. TIGTA identified 3,185 high-income taxpayers whose accounts were not sent to a private collection agency at any point since the program started in Fiscal Year 2017 and who owed $110 million on modules that were shelved in an inactive inventory as of May 14, 2019. 

TIGTA also found that revenue officer staffing does not always align with locations where the greatest number of high-income cases are located. While TIGTA recognizes that resources are limited, hiring or reallocating resources to work high-income cases in these areas could lead to higher collection potential and increased revenue. 

TIGTA made seven recommendations to help the IRS improve the collection of taxpayer delinquent accounts of high-income taxpayers. IRS management agreed with two of the seven recommendations. The IRS plans to evaluate the recovery predictive models to consider additional income factors to improve the ability to predict recovery and plans to consider conducting ROCS that focus on high-income taxpayer TDA cases in locations where high-income taxpayer cases far outweigh the number of revenue officers assigned to those areas.

 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