IRS Updates August 1 by Paul Davis
Security Summit Commences
The IRS has begun its annual education effort regarding online security for tax professionals and taxpayers. This year includes a five-part “Protect Your Clients; Protect Yourself series to help tax pros, especially smaller practices, protect against tax-related identity theft and fraud.
- The Written Information Security Plan (WISP) is an easy-to-understand template designed to simplify a data protection plan. It walks users through getting started on a plan, understanding compliance requirements and responsibilities.
- The Identity Protection PIN Opt-In Program also helps protect people against tax-related identity theft. These “IP PINs” are now available to anyone who can verify their identity and provides an extra layer of security for taxpayers filing returns. There is an online tool for those who want to join the 8 million taxpayers who already use this top security tool.
- More to come.
New Employee Retention Credit Procedures
Having cleared the backlog of valid Employee Retention Credit (ERC) claims, the IRS has entered a new phase of “increasing scrutiny on dubious submissions” while continuing warnings against aggressive ERC marketing. The IRS has increased audit and criminal investigation work on the remaining ERC claims, both on the promoters as well as those filing questionable claims. The misleading marketing creates an array of problems for tax professionals and the IRS, and anyone improperly claiming the ERC must pay it back, possibly with substantial penalties and interest. Phone calls, text messages, direct mail, radio, tv, and online ads are luring businesses and tax-exempt groups into applying for the credit. They often leave out key details about the very limited scope of the credit. The best way to avoid these risks is to work with a trusted tax professional.
No More Unannounced Visits
The IRS has announced a major policy change that will end most unannounced visits to taxpayers by revenue officers. This aims to reduce public confusion and enhance safety measures for both taxpayers and IRS employees. This is a reversal of a decades-long practice by IRS officers and will be replaced in most cases by mailed letters to schedule meetings. The National Treasury Employees Union (NTEU) praises the change, as such jobs “have only grown more dangerous in recent years because of false, inflammatory rhetoric about the agency and its workforce.” Additionally, scammers have tried to impersonate revenue officers. There will still be very limited situations where unannounced visits will occur, but these will mostly be for serving summonses and subpoenas, or for sensitive enforcement activities.