IRS Updates Sep 13

Adjustments to Compliance Assurance Process (CAP) Announced

The IRS has proposed changes to the Compliance Assurance Process (CAP), a pre-filing program to assist some of the largest taxpayers with compliance. Changes and reinforced rules include an October 1, 2018 opening date for applications, and taxpayers must submit a list of material issues, which will help the IRS determine which issues will be addressed.  More information, including future anticipated changes, can be found here.

Voluntary Offshore Compliance Program Ends September 28

The IRS reminds taxpayers that they have until 28 September to apply for the Voluntary Offshore Disclosure Program (OVDP). Taxpayers with offshore monies who need to come into compliance with the tax code are encouraged to apply; improved technology, whistleblower leads, and third-party reporting suggest an end to the necessity of the OVDP. The IRS will continue to provide an avenue for taxpayers to come into compliance with the tax system and updated procedures will be forthcoming. While the separate Streamlined Filing Compliance Procedures will continue to assist taxpayers who were unaware of their filing obligations, it too will likely end at some point.

Clarification for Business Taxpayers Regarding State and Local Tax Credit Payments

In response to taxpayer inquiries, the IRS has clarified that businesses, whether operating as sole proprietorship, partnership, or corporation, may still deduct, as a business expense, payments made under state and local tax credit programs. This general deductibility rule is not affected by the recent proposal regarding charitable contribution deductions for contributions pursuant to such programs.

Security Summit Reminders Continue

The IRS lists several red flags for tax professionals and clients regarding possible cybercriminal activity, including having e-filed returns rejected due to returns having already been filed with their Social Security Numbers, taxpayers receiving refunds or taxpayer authentication letters when they haven’t yet filed, taxpayers receiving unrequested tax transcripts, and more. More red flags, details, and what to do if you suspect identity theft can be found at the link above. Additionally,  Security Summit Partners remind tax professionals of their obligation to have a data security plan in place, including tips, publications, and other helps.