New Form 1040-SR Option For Seniors
The Bipartisan Budget Act of 2018 required the IRS to create a new filing option for seniors. 1040-SR features larger print and a standard deduction chart, and is available to taxpayers age 65 or older who prefer a form with increased readability. The form may be used to file taxes this year, by April 15, and allows income reporting from sources such as investment income, Social Security and retirement plan distributions, annuities or similar deferred-payment arrangements. The form can be used whether selecting the standard deduction or itemizing deductions.
Tax-Exempt Application Form Revised
In an effort to streamline the process by which organizations can apply for tax-exempt status, the IRS has revised Form 1023. Additionally, charities applying for 501(c)(3) tax-exempt status can now file their form electronically. The IRS expects this new process to reduce errors and improve application processing time. The payment, which remains $600, can be made directly from a bank account or by credit or debit card.
Success Against Abusive Micro-Captive Transactions
The IRS has been litigating many abusive micro-captive insurance schemes, which have the potential to avoid or evade taxation of income. They have been doing it with some success, as evidenced by an almost 80% rate of acceptance among those who received a settlement offer. The IRS is also establishing an additional 12 teams of examiners to open audits on thousands of taxpayers in the near future. The IRS urges taxpayers involved in these abusive transactions to immediately consult with an independent, competent tax advisor “on the proper treatment for past and future tax years to consider best available options.”
Identity Theft Central
The IRS has launched Identity Theft Central, a resource designed to improve online access to information on identity theft and data security protection for taxpayers, tax professionals and businesses. This new, streamlined page is a single source for information regarding identity theft, phishing, and other scams and schemes. It includes information for businesses and tax professionals to keep data safe and understand their responsibilities, and information for individuals on how to avoid falling victim to identity theft (and steps to take if that has already happened).