Author Archives: Carol Coburn

Taxpayers Assistance Centers

Taxpayers Assistance Centers
Begin Reopening

Monday, 06-29-2020 Taxpayer Assistance Centers (TACS) began reopening to the public with a phased approach. To ensure the safety of the public and employees, those seeking in-person assistance at the TAC should call 1-844-545-5640 to make an appointment.
Appointments will be available if they need assistance for authentication of identity and documentation validation related to tax return filing or application for an Individual Taxpayer Identification Number; sailing clearances required for foreign travel by resident and non-resident aliens leaving the United States; assistant with Economic Impact Payment Issues; and cash payments.
It is critical to visit www.irs.gov/help/contact your local office to determine if the location you plan to visit is open and accepting appointments.

Keep Economic Impact Payment notice with other tax records

People who received an Economic Impact Payment this year should keep Notice 1444, Your Economic Impact Payment, with their tax records. This notice provides information about the amount of their payment, how the payment was made and how to report any payment that wasn’t received.
For security reasons, the IRS mails this notice to each recipient’s last known address within 15 days after the payment goes out. It’s especially important for people to keep this notice if they think their payment amount was wrong. When they file their 2020 tax return, they can refer to Notice 1444 and claim additional credits, if they are eligible for them.
The tax filing deadline has been postponed to Wednesday, July 15, 2020. The IRS is processing tax returns, issuing refunds and accepting payments. Taxpayers who mailed a tax return will experience a longer wait. There is no need to mail a second tax return or call the IRS.

An Extension to File your Taxes

An extension to file is not an extension to pay taxes. For most taxpayers the filing and payment deadline was postponed until July 15. Those who need more time to file beyond the postponed date, can request an extension to file. Taxpayers must request an extension to file by July 15. This gives them until October 15 to file their tax return. An extension to file is not an extension to pay. Taxes must be paid by July 15.

The IRS agency is back to processing paper tax returns sent by mail, issuing direct deposit refunds and accepting electronic payments. However, taxpayers who mailed a paper tax return will likely experience a longer wait time. Those who have already mailed a paper tax return should not file a second tax return electronically or write the IRS to check on the status of their mailed return or Economic Impact Payment.

IRS Warns against COVID -19 Fraud; other financial schemes

The IRS reminds taxpayers to continue to guard against tax fraud and other related financial scams related to COVID-19.

Criminals seize on every opportunity to exploit bad situations, and this pandemic is no exception.

Criminals are continuing to use the COVID-19 Economic Payments as cover for schemes to steal personal information and money. Scams related to COVID-19 are not limited to stealing EIP’s from taxpayers, however. Criminal Investigations has already seen scams related to the organized sale of fake at-home test kits, offer to sell fake cures, vaccines, pills and advice on unproven treatments for COVID-19. Other scams purport to sell large quantities of medical supplies through the creation of fake shops, websites, social media accounts and email addresses where the criminal fails to deliver promised supplies.

Other COVID-19 related scams involve setting up fake charities soliciting donations for individuals, groups and areas affected by the disease.

COVID-19 scams should be reported to the National Center for Disaster Fraud (NCDF) Hotline at
1-866-720-5721 or through the NCDF Web Complaint Form.

SiSix Secrets Professionals Use to Choose Financial Advisors

Choosing a financial advisor is a major decision that can determine your financial course for years to come.

1. Always hire an advisor who is a Fiduciary- a fiduciary is ethically bound to act in another person’s best interest. This obligation eliminates conflict of interest.
2. Don’t hire the first advisor you meet- take time to interview a few advisors before picking
the best match for you.
3. Don’t choose an advisor with the wrong specialty- some specialize in retirement planning, others best for business owners or maybe for young professionals starting a family.
4. Don’t pick an advisor with an incompatible strategy- Some advisors may suggest aggressive investments, while others are more conservative.
5. Always ask about credentials-To give financial advice, financial advisors are required to pass a test. Test include Series 7, Series 66, or Series 65. Some advisors go a step further and become a Certified Financial Planner.
6. Understand how they are paid- some advisors are “fee only” and charge a flat rate. Others
charge a percentage of the assets under management. Some are paid commissions by mutual funds (a serious conflict of interest).

Economic Impact Payment by Prepaid Debit Card

Nearly four million people are being sent their Economic Impact Payment by prepaid debit card, instead of paper check. The determination of which taxpayers receive a debit card was made by the Bureau of Fiscal Service, another part of the Treasury Department that works with the IRS to handle distribution of the payments.

These Economic Impact Payment Cards arrive in plain envelope from Money Network Cardholder Service. The Visa name will appear on the front of the card: the back of the card has the name of the issuing bank, MetaBank, N.A. Information included with the card will explain that the card is an Economic Impact Payment Card.

Those who receive Economic Impact Payment by prepaid debit card can do the following without any fees:
• Make purchases online and any retail where Visa is accepted
• Get cash from in network ATMs
• Transfer funds to their personal bank account
• Check their card balance online, by mobile app or by phone
This card will come with instructions on how to activate and use it.

IRS People First Initiative provides relief to taxpayers facing COVID-19 issues

Due to COVID-19, the IRS’ People First Initiative provides relief to taxpayers on a variety of issues.
• Existing Installment Agreements- Under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are delayed. Those unable to meet the terms of an Installment Payment Agreement or Direct Deposit Installment Agreement may cancel payments during this time with no default. By law interest will continue to accumulate on unpaid balances.
• New Installment Agreements- People who can’t pay all their federal taxes can establish a monthly payment agreement.
• Pending Offer in Compromise applications- Taxpayers have until July 15, 2020, to provide additional information for a pending OIC.
• OIC payments- Taxpayers can delay all payments on accepted OICs until July 15, 2020. Interest may accrue, and missed payments are due when the suspension period ends. Taxpayers can call the number on the letter to address their needs.
• Non-filers- The deadline to get refunds on 2016 tax returns is July 15, 2020. Those who owe taxes on delinquent returns may visit IRS.gov for payment options.
• Field collection activities- IRS stopped field revenue officer enforcement actions, such as liens and levies.
• Automated liens and levies- IRS delayed issuing new automated and systemic liens and levies. Taxpayers experiencing a hardship due to a levy should reach out to their assigned IRS contact or fax their information to (855) 796-4524
• Private debt collection- IRS will not forward new delinquent accounts to private collection agencies during this period.
• Certifications to the State Department- IRS has delayed new certifications of taxpayers who are considered seriously delinquent. This affects a person’s ability to receive a new or renewed passport. Existing certifications will remain in place unless their tax situation changes.

Higher Education Emergency Relief Fund and Emergency Financial Aid Grants under the Cares Act

Sections 3504, 18004, and 18008 of the Coronavirus Aid, Relief, and Economic Security Act (Cares Act) enacted on March 27, 2020, allow higher education institutions to use certain funds allocated by the Department of Education to support students and higher education institutions with expenses and financial needs related to the Coronavirus (COVID-19) pandemic.

Section 3504 of the Cares Act allows higher education institutions to use additional supplemental educational opportunity  grant funds they receive through the Higher Education Act to award emergency financial aid grants to support graduate and undergraduate students experiencing “unexpected expenses and unmet financial need” as the result of COVID-19 pandemic.

Emergency financial aid grants under the Cares Act for unexpected expenses, unmet financial need, or expenses related to the disruption of campus operations on account of the COVID-19 pandemic, such as unexpected expenses for food, housing course materials, technology, health care are qualified disaster relief payments under section 139 of the Internal Revenue Code.

This grant is not includible in your gross income.

Because the emergency financial aid grant is not includible in your gross income, you cannot claim any deduction or credit for expenses paid with the grant including the tuition and fees deduction, the American Opportunity Credit, or the Lifetime Learning Credit.

Returning an Economic Impact Payment

New information has come out concerning Economic Impact Payments made to a deceased taxpayer.

Does someone who died qualify for the Economic Impact Payment?
• No. A payment made to someone who died before receipt of the Payment should be return to the IRS.
• Return the entire payment unless the payment was made to joint filers and one spouse had not died before receipt of the Payment. In this case you only need to return the portion of the Payment made on account of the decedent.
How do you return an Economic Impact Payment?
1. Write “Void” in the endorsement section on the back of the check.
2. Mail the Voided Treasury check immediately (NC residents) return mailing address: Memphis Refund Inquiry Unit; 5333 Getwell Rd; Mail Stop 8422; Memphis, TN 38118
3. Include a note stating the reason for returning the check.
If you have cashed the check or payment was a direct deposit:
1. Submit a personal check, money order, etc., immediately to the IRS location
2. Write on the check/money order made payable to the U.S. Treasury and write 2020EIP, and the taxpayer SSN or ITIN of the recipient of the check.
3. Include a brief explanation of the reason for returning the EIP.

IRS retools Settlement Days program

Settlement Days program allows unrepresented taxpayers to settle their cases virtually and reach finality.
Virtual Settlement Days is a coordinated effort to resolve Tax Court cases by giving taxpayers not represented by counsel the opportunity to receive free tax advice and possible tax representation from Low Income Tax Clinics (LITCs) or other pro bono organizations. Taxpayers can discuss their Tax Court case and federal tax issues with members of the IRS Office of Chief Counsel, Appeals and Collections.
The program is geared to help unrepresented taxpayers receive free assistance in discussing potential fair settlement of their tax disputes in an informal setting without the need for further litigation or a trial in Tax Court.
The Tax Court canceled scheduled trial sessions in a series of orders issued on March 11, 13 and 23, 2020. The Tax Court Orders state that it is expected that parties continue to work together to exchange information and address pending issues.
Chief Counsel has scheduled Virtual Settlement Days events for May 2020 for cases docketed on the Detroit and Atlanta Tax Court trail sessions.
Other Virtual Settlement Day events will be scheduled in the future.
Appeals continues to work cases, including use of virtual conferences.