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The Taxpayer Advocate Service (TAS) might be able to help. And for some folks, that help will be in person. Generally, TAS can assist taxpayers — at no cost — if:
Note, TAS doesn't help with routine filing matters. If you're having issues here, contact the IRS help line or website. Or find a tax pro to help with your situation. If, however, your issues with the IRS continue to where they produce a financial threat to you or your business, contact TAS. The main office can be reached toll-fee at 877-777-4778, but sometimes face-to-face help is more reassuring. If you live near a local TAS branch, reach out to that office. Even if you don't live near a local office, TAS still might be able to help in a more personal way through its Problem Solving Day events. Problem Solving Days through 2017: These TAS events are scheduled in communities throughout the country throughout the rest of 2017. Some of these TAS help days are in cities where it has offices. Others, however, are in locations where there is not a handy TAS branch. At these events, TAS employees from a local office will be available to assist taxpayers and tax professionals who have power of attorney (Form 2848) on file for each case. The upcoming Problem Solving Days are:
The links above open to PDF documents with details on the Problem Solving Day at that location. Beyond Problem Solving Day: If you can't make the Problem Solving Day near you or there isn't one near you this year, don't let that dissuade you from getting TAS help. Reach out to your nearest local office. And about those local offices, some in places recently pummeled by hurricanes are experiencing some issues. The TAS branch in St. Petersburg, Florida, currently is closed because of the effects of Hurricane Irma. Houston TAS offices are open for business, but the folks there ask for your patience as they work to return fully to their offices. Remember, too, that the IRS has provided a variety of relief to those in Hurricane Harvey and Hurricane Irma major disaster zones. You also might find these items of interest:
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from http://www.dontmesswithtaxes.com/2017/09/taxpayer-advocate-service-schedules-in-person-help-days.html
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Online is the preferred purchasing method for millions. That's why states are looking at law changes, and court rulings, that let them get their sales tax share from shoppers. (Photo by Keith Williamson via Flickr Creative Commons)
I'm not a big shopper in real life. But drop a catalog in my lap and I can find a dozen things I'd love to buy. In fact, I'm checking my porch multiple times a day for a lamp I recently ordered. Many of those tempting catalogs still include an insert form you can use to order the very old-fashioned snail mail way. Most, however, tout the benefits of ordering their items by phone or online. Regardless of how the transaction is completed, there's the issue of added sales tax. While Amazon now collects sales taxes on items it ships to all 50 states, that's not the case with other remote sellers. But it could soon be. Looking to lose: On Sept. 14, the South Dakota Supreme Court ruled that the state cannot force out-of-state retailers to collect sales tax. It was a quick decision, coming just two weeks after oral arguments in the case involving internet retailers Wayfair Inc., Overstock and Newegg. And that was just what state officials wanted. In that state high court hearing, South Dakota's attorneys conceded that the state's 2016 law expanding nexus to allow for tax collection on remote sales is unconstitutional under the standard established by the Supreme Court of the U.S. (SCOTUS) in its 1992 Quill Corp. v. North Dakota ruling. The South Dakota justices affirmed that position:
Giving the U.S. Supreme Court the chance to revisit — and overturn — Quill is exactly what South Dakota and other supporters of broader nexus rules want. If the nation's highest court does take the case, the justices' decision will once again have national implications. The U.S. Supreme Court refused earlier this year to hear Colorado's tattle-tale sales tax. It took effect July 1. Since that decision other states have followed Colorado's sales tax reporting/collection model. Probable, but not assured, review: Most legal eagles think the U.S. Supreme Court will take the South Dakota case. At least once member of that esteemed group, Justice Anthony Kennedy, has expressed interest in taking a case to challenge Quill. In the Supreme Court's March 2015 decision in Direct Marketing Association v. Brohl, Kennedy wrote:
A handful of others, however, think that the Mount Rushmore State's rushed strategy has created a case that is not developed enough for review before the U.S. Supreme Court. And others in legal and public policy sectors argue that it's the legislative, not juridical, branch of our government that should be taking the lead here. They argue that it's Congress' job, not the Supreme Court's, to decide this (and other) tax matters. That, however, hasn't happened, although it's not for lack of trying. Congress has for years been fiddling with proposals to establish a nationwide system that allows states to collect sales taxes from remote sellers, but still hasn't been able to agree on an approach. If SCOTUS does take the Wayfair/South Dakota case and rules for the state, it could alleviate some pressure on Capitol Hill to get involved. If, however, the court decides to uphold Quill, either by a new ruling or implicitly by not taking the case, that will put more pressure on the House and Senate to act in this area. Are you resigned to paying state and local sales taxes on your internet or other remote purchases? Do you think states should be left to decide their sales tax rules? Or do you want a unified national approach, either via a Supreme Court ruling or Congressional action? You also might find these items of interest:
from http://www.dontmesswithtaxes.com/2017/09/remote-sales-tax-collection-looks-to-be-heading-to-scotus.html
The Trump Administration is still pushing for a 15 percent corporate tax rate, the White House's budget director, Mick Mulvaney, told CNBC last week. However, just the day before Treasury Secretary Steven Mnuchin conceded a 15 percent rate would be difficult to attain. Meanwhile, one Washington, D.C.-based tax policy group has looked at how much corporate taxes contribute per capita to state coffers. That analysis by The Tax Foundation earns this week's Shout Out Saturday honors. Not a major tax matter: "The corporate income tax is one of the smallest sources of state tax revenue," writes Morgan Scarboro, a policy analyst at The Tax Foundation. "According to Census data, in FY 2015, the corporate income tax only comprised 5.3 percent of state tax collections." The corporate income tax also often is mistakenly seen as the only taxes businesses face. Wrong, notes, Scarboro. Companies also pay sales tax, property tax, excise tax and payroll tax. In fact, the corporate income tax makes up only 9.5 percent of total business taxes. The Tax Foundation's map below shows how much state governments collect in corporate income taxes per capita. Where it does count: New Hampshire collects the most at $433 per capita, with Delaware shortly behind at $424 per capita. On the other end of the business tax spectrum, six states don't levy a corporate income tax at all. They are Nevada, Ohio, South Dakota, Texas, Washington and Wyoming. Just some more tax data to keep in mind as the 2017 Internal Revenue Code rewrite effort continues. You also might find these items of interest:
from http://www.dontmesswithtaxes.com/2017/09/corporate-tax-contributions-to-the-states-.html
Recent Hurricanes Harvey and Irma left many in distress. In addition to the need for resources to help in the recovery, tax considerations exist. For example, is aid taxable, what about insurance recovery, what if you pull money from your retirement account, what if employees give up leave so their employers can donate it to relief efforts? Tax returns and taxes are due, but most are extended to January 31, 2018. Some taxpayers might not be directly affected, but have records lost in the disaster.
The IRS has lots of information to help - here + Pub 547. COST and the AICPA have a list of information from state tax agencies about state relief. The AICPA has information for tax practitioners:
And here is information from Consumer Reports on how to help victims of the hurricanes.
from http://21stcenturytaxation.blogspot.com/2017/09/disaster-relief-tax-links.html I know it's peak Atlantic hurricane season, but this has to stop. If only my pleas were that powerful. Instead, all I can do is let you know that Jose, who's been meandering the Atlantic for weeks, has reformed and is back at hurricane force.
That's Hurricane Jose, due east of Florida and the Bahamas, but those spots are OK. He's heading northwest, meaning others on the eastern U.S. coast could face some weather issues in the coming days. (NOAA GOES radar image)
The National Weather Service's National Hurricane Center announced in its 5 p.m. ET tropical alert that Jose's sustained winds were 75 miles per hour, making it a Category 1 hurricane. Jose, which started on Aug. 31 as a tropical wave off the west coast of Africa, developed into the 10th named storm of the 2017 season, the fifth hurricane and the third major hurricane. It previously had reached Category 4 strength before losing momentum and becoming a tropical storm earlier this week. It's now about 640 miles southeast of North Carolina (or if you're a dedicated storm tracker the system is near latitude 27.1 North, longitude 70.3 West) and is slowly (10 mph) moving northwest. The National Hurricane Center (NHC) expects it to maintain that course today, then turn to the north-northwest by late Saturday, Sept. 16, and then go more northerly on Sunday, Sept. 17. In addition, the NHC says Hurricane Jose should strengthen through Saturday, with weakening possibly beginning late Sunday. Currently, hurricane-force winds extend about 35 miles from the center of Jose, with tropical-storm-force winds felt as far as 140 miles from its core. In addition to winds, Hurricane Jose is producing ocean swells off of Bermuda, the Bahamas, the northern coasts of Hispaniola and Puerto Rico, and the southeastern U.S. coast. The more turbulent seas are expected to spread northward along the Mid-Atlantic coast during the next few days. And the cone of uncertainty puts the upper East Coast of the U.S. in uncomfortable territory. Since we've all watched in recent weeks as Harvey and Irma shifted before making landfall in Texas and Florida, respectively, all we can do is, as the saying goes, stay tuned. Oh, and be/get prepared. While I appreciate the readership, I'm really getting tired of referring y'all to my Storm Warnings page. But it is where you can find links to previous blog posts about getting ready for a storm (or any other natural disaster), recovering afterwards and helping those who were in a storm's path. Finally, be careful. No piece of real estate or personal property is worth putting yourself in danger. // <![CDATA[ // <![CDATA[ // &lt;![CDATA[ // &amp;lt;![CDATA[ // &amp;amp;lt;![CDATA[ // &amp;amp;amp;lt;![CDATA[ // &amp;amp;amp;amp;lt;![CDATA[ // &amp;amp;amp;amp;amp;lt;![CDATA[ // &amp;amp;amp;amp;amp;amp;lt;![CDATA[ // &amp;amp;amp;amp;amp;amp;amp;lt;![CDATA[ (adsbygoogle = window.adsbygoogle || []).push({}); // ]]&amp;amp;amp;amp;amp;amp;amp;gt; // ]]&amp;amp;amp;amp;amp;amp;gt; // ]]&amp;amp;amp;amp;amp;gt; // ]]&amp;amp;amp;amp;gt; // ]]&amp;amp;amp;gt; // ]]&amp;amp;gt; // ]]&amp;gt; // ]]&gt; // ]]> // ]]>
from http://www.dontmesswithtaxes.com/2017/09/hurricane-jose-is-back-eastern-seaboard-could-be-affected.html
Bitcoin continues to confound financial and tax officials worldwide.
BTC China, the country's first and largest digital currency exchange, announced Thursday, Sept. 14, that would stop trading by the end of the month. One reason apparently is the Chinese government ban instituted days earlier of fund-raising for new digital currencies. Although China embraced Bitcoin trading, the virtual currency's growth has increasingly worried the nation's regulators. One of the concerns was tax evasion. "Because it is traded anonymously and peer to peer, Bitcoin makes it easy for money laundering and tax evasion," Sheng Songcheng, an adviser to the People's Bank of China, the country’s central bank, told The New York Times. Swiss say OK to Bitcoin: Meanwhile, around 5,000 miles to the west, a Swiss city is preparing to accept tax payments in Bitcoin. Chiasso, the southernmost of Switzerland's municipalities, has announced that it will accept tax payments in Bitcoin starting in January 2018. The virtual currency will be valid legal tender for payment of bills of up to 250 Swiss francs (CHF). Where China is backing away from Bitcoin, Switzerland, already (in)famous in financial and tax circles for its legendarily secretive bank accounts, is according to some reports looking to become a global leader in the Bitcoin and cryptocurrency industries. The Bitcoin tax payment move by Chiasso could help it challenge country rival Zug's Crypto Valley as a major global hub for virtual currency adoption and innovation, writes Samuel Haig at Bitcoin.com. Zug already accepts tax payments in Bitcoin, but in slightly smaller cap of 200 CHF. Since July, Zug received more than 40 payments in bitcoin. So where is the United States when it comes to virtual currency? First, it doesn't view it as currency. Bitcoin and its brethren, in the eyes of (and this statement from) the Internal Revenue Service, are not equivalent to "the coin and paper money of the United States." Virtual currency, per IRS Notice 2014-21 issued more than three years ago, is treated as property for U.S. federal tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency, says the IRS. Among other things, this means that:
U.S. tax compliance concerns: The IRS, however, is worried that some folks who deal in Bitcoin et al are not following its tax rules. Last November, the IRS sent a broad request, typically referred to as a John Doe summons, to Coinbase, the largest Bitcoin exchange in the United States, asking for the records of all customers who bought virtual currency from the company from 2013 to 2015. The justification for the summons, said the IRS, was that one of its agents had found three cases in which people were using Bitcoin to evade taxes. Two of those instances involved Coinbase customers. "The IRS not only has suspicion that the John Doe class includes U.S. taxpayers who are not complying with the law — it knows that the class in the past included such violators, and very likely includes others," according to the legal request. Legislation to simplify compliance: But knowing, or suspecting, is one thing. Getting actual filings is another. For tax year 2015, only 802 U.S. taxpayers reported their Bitcoin-related capital gains or losses to the IRS. Those few compliant filers earn the most recent (a few hours ahead of its regular weekend announcement) By the Numbers accolades. Some lawmakers say that the Cryptocurrency Fairness in Taxation Act (CFTA) could benefit both the IRS and taxpayers facing virtual currency tax issues. The House bill, introduced Sept. 7 by Rep. Jared Polis (D-Colorado) and Rep. David Schweikert (R-Arizona), would create an exemption for transactions of less than $600. The bills' sponsors, who are co-chairs of the Congressional Blockchain Caucus, say it would subject digital currency to the tax regime that currently exists for foreign currency. There's even talk of trying to roll the cryptocurrency bill into any tax reform measure. Bitcoin info effort drags on: The effort to get Coinbase customer information has continued into this year. In July, the IRS sought to narrow its investigation to records for Coinbase users who have conducted "at least the equivalent of $20,000 in any one transaction type (buy, sell, send, or receive) in any one year during the 2013-2015 period" Coinbase, however, thinks that the government is still asking for too much information, saying the IRS request is not a serious investigative effort, but rather little more than a "massive fishing expedition, hoping to find some evidence of tax avoidance so that the IRS may quiet its critics in Washington, D.C. and justify this misguided adventure." The D.C. critics referred to by Coinbase include the Treasury Inspector General for Tax Administration (TIGTA). Right before the IRS issued the info request last year to Coinbase, TIGTA released a report saying that the IRS needs to take additional steps to ensure full tax compliance when it comes to virtual currency transactions. "Although the IRS issued Notice 2014-21, Virtual Currency Guidance, and established the Virtual Currency Issue Team, there has been little evidence of coordination between the responsible functions to identify and address, on a program level, potential taxpayer noncompliance issues for transactions involving virtual currencies," said TIGTA in a statement issued in connection with the report. "None of the IRS operating divisions have developed any type of compliance initiatives or guidelines for conducting examinations or investigations specific to tax noncompliance related to virtual currencies." Money needed to police, accept virtual currency: The reality is that the IRS, like many other federal government agencies, tends to be a bit behind the curve. That's not a slam, just an observation. The reasons why Uncle Sam is often a trailing indicator of global trends of all sorts are many. Ironically, money — the coins and paper the agency referenced in its virtual currency position — is a major one. Until the IRS gets the funds to update its systems, expect its actions to be more along China's Bitcoin approach rather than that of the more accepting Swiss cities. You also might find these items of interest:
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from http://www.dontmesswithtaxes.com/2017/09/countries-takes-on-bitcoin-and-taxes-vary-widely.html Donald J. Trump is Tweeting about tax reform. He's also holding bipartisan dinners at the White House to talk taxes. West Virginia Democratic Sen. Joe Manchin was pleased steak was on the menu. The White House website has a video explaining how the tax code is broken. House Speaker Paul Ryan says Congressional Republican's tax reform plan outline will be released in a couple of weeks. Meanwhile, pundits have been honing their prognostication skills, attempting to tease out tax possibilities and their potential effects. But despite all this action, the bottom line is that it's still just a big tax guessing game. Boggling tax possibilities: My head is full of speculation from all I've been reading about an eventual Trump tax plan. Will it be large-scale tax reform a la the last such change in 1986 or just tax cuts? I'm leaning toward the latter. Will Democrats play any real part in the process? Or will the GOP's Big Six negotiators — Senate Republican leader Mitch McConnell, House Speaker Paul Ryan, Treasury Secretary Steven Mnuchin, White House economic adviser Gary Cohn, Senate Finance Committee Chairman Orrin Hatch and House Ways and Means Committee Chairman Kevin Brady — dictate the final look of a 2017 tax bill? I'm thinking some bipartisanship, but only at the edges. Will that tax plan show us the money? Or will promised/expected tax cuts be offset by elimination or at least reduction of some popular deductions? This is a tough one. Despite Mnuchin's continuing vows that any tax plan will be revenue neutral, there are committed forces in Congress and various business sectors (along with their lobbyists) ready to go to the mat for many existing individual and businesses Internal Revenue Code breaks. If they're successful and some deductions remain, the GOP then faces dissent from budget hawks within its own ranks who are concerned that Trump's touted "greatest tax reduction in the history of our country" would add, by the Tax Policy Center's estimates $3.4 trillion, to the country's deficit. Timing is everything: Then there's the matter of when any tax changes take might take effect. Congress could opt to have them apply beginning Jan. 1, 2018, for the coming tax year. Or lawmakers could make them retroactive to Jan. 1 of this year, meaning folks who would see tax benefits would get them when they file this year's returns next spring. That retroactive option is a politically popular one. From a tax planning standpoint, however, retroactive tax changes tend to be a royal pain in the ass. What if you already made tax moves this year, either by choice or necessity of timing, based on the current tax laws? Then they are changed. It's highly unlikely you can go back and undo your moves to reconcile them with a late-in-the-year tax change. Even if you're holding off on making tax moves, you're facing a literal time limit. What happens if Congress, as it has done so many times in the past, pushes tax action until the very last day of the year? Do you pull the trigger ahead of a law change and hope it all will work out fine? And if Congress does make late changes, will it provide a grace period going into 2018 to make 2017 moves to comply with new retroactive laws? It's done that in the past on a limited basis, notably back in 2013 for the required minimum distribution direct donation to a qualified charity. Or will Congress give taxpayers the option to file 2017 returns using the old laws that will have been in place for most of the year by the time any tax action is taken? Not likely, but you never know when it comes to those 535 folks in Washington, D.C. This, my friends, is the complete opposite of tax simplification, which is often espoused as a major goal of any tax code rewrite. Tax winners and losers: Yes, any time tax laws are changed, some people win and other lose. And much of that winning and losing is predicated on the timing of the laws. When that happens, we all just have to pull up our big boy/girl pants and soldier on regardless of how the law affects us. In the spirit of full disclosure, the retroactive possibility has caught my eye this time because it could cost me tax-wise. For the first time ever, medical issues this year will mean the hubby and I can claim some of our doctor and hospital costs this year on our Schedule A … if the current itemized tax rules remain. We've never ailed enough before (ah, aging) to run up sufficient medical expenses to clear the itemized deduction hurdle, which now is 10 percent of adjusted gross income. (For readers who are alarmed by this vague info, thanks for your concern and not to worry. We're fine now.) This year, however, we would. But a possible increased standard deduction and limits to or loss of itemized options could mean that we once again won't get any tax break for our medical costs. That definitely would be the case if tax changes do away with the write-offs for real estate taxes and/or state and local income or sales taxes. If we're not able to claim our ridiculously high Austin/Travis County property taxes, our itemized expenses will be less than the standard amount that's been floated, meaning we would claim that instead. I must admit that one consolation I've been taking from our larger than expected medical costs is that at least we'd be able to write them off on our 2017 return. Time will tell: So I'll be watching what happens on Capitol Hill for personal as well as professional tax reasons. Any action will determine whether, as I've done for decades, pay our property taxes in December so I can deduct the amount this tax year or wait to pay until nearer the levy's next February due date. If I wait, I'll have more to spend during the holidays. Yes, I realize that the standard deduction would be easier and the bump up of that amount would be good for many filers. But it likely would still be less than our total Schedule A amounts this year if all our expenses — property tax, mortgage interest, state/local sales tax, charitable gifts and now medical costs — are allowed as they are under the current tax code. Personally, I'm hoping for tax reform that takes effect in 2018. Of course, I don't have a personal lobbyist on retainer in D.C. so I'm at the mercy of Congress and the White House. That's never a good feeling, and it's especially discomfiting when it comes to taxes. You also might find these items of interest:
from http://www.dontmesswithtaxes.com/2017/09/timing-is-among-unanswered-tax-rewrite-questions.html As a tax practitioner, you have a legal obligation to protect your client’s information. That means taking all the necessary measures to make sure that the information you’re given is safe from cybercriminals. The IRS recently sent out information on how to do so through their Don’t Take the Bait campaign, a 1o part series that provides security tips to tax preparers. “More and more, we see the data held by tax professionals being targeted by national and international criminal syndicates that are highly sophisticated, well-funded and technologically adept. No tax practitioner today can afford to ignore cybersecurity threats or overlook putting in place strong safeguards.” – IRS Commissioner John Koskinen. Your Legal Obligations
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