The Scoop Kristy Maitre Tax Specialist Center for Agricultural Law - PDF document

2/8/2016 The Scoop Kristy Maitre – Tax Specialist Center for Agricultural Law and Taxation February 10, 2015 Agenda Age matters – Good reminders • Ordering Publication 17 • Estate Closing letters • Refunds • ACS support sites • Scam Phone calls • Will be easier to get a replacement Social Security card in the future • Superseded Returns • Rejects • Using Form 8879 as a signature document • FAFSA date change to apply for financial aid • Deceased clients • Form 8948 review • Excise Tax information • Farmer extension • Abatement of certain penalties available for 2014 • E ‐ File • Tax Court • Fin Cen issue • When Age Matters • 0 ‐ Birth – Dependence exemption for newborn child • Age 13 – Child Care Credit no longer allowed • Age 17 – Child Tax Credit does not apply • Age 18 – Social Security taxes apply if employed by parent – No more contribution to a Coverdell Education Savings Account – No adoption credit 1

2/8/2016 When Age Matters • Age 19 – No more dependent exemption unless a full time student • Age 24 – Still a full time student – Cannot claim as a dependent any longer – Kiddy tax rules no longer apply • Age 25 – Age necessary to claim the Earned Income Tax credit • Age 27 – Child drops off parent’s health insurance plan When Age Matters Age 30 • – Coverdell Savings Accounts must be distributed or rollover to another qualifying family member – Balance of myRA must be rolled into a ROTH account Age 40 – May deduct long term care insurance • premiums as a medical expense Age 50 • – Additional “catch up” contributions can be made to retirement accounts – Qualified public safety employees are not subject to an early withdraw penalty of their employer’s retirement plan When Age Matters Age 55 – No early withdrawal penalty for if the • taxpayer separates from service Age 59 1/2 – No penalty for early withdrawal from • retirement plan Age 62 – Eligible for reduced social security benefits • Age 65 • – Higher standard deduction – The 7.5% adjustment still applies thru 2016 – 10% after 2016 – No more Earned Income Tax Credit without a qualified child – No Heath Savings Account contributions once eligible for Medicare 2

2/8/2016 When Age Matters Age 70 – No more deduction for long term care • insurance Age – 70 ½ • – Required minimum distributions must be made or penalty – Qualified charitable distribution applies – May roll retirement account into a Qualified Longevity Annuity Contract Age 85 – Must begin distributions from a • Qualified Longevity Annuity Contract Publication 17 • Publication 17 is not available in paper format from the IRS • However, you can buy a copy from the Government Printing Office for $10 this year • https://bookstore.gpo.gov/products/sku/048 ‐ 004 ‐ 02580 ‐ 9 Transcripts in Lieu of Estate Tax Closing Letters – using E ‐ Services or Form 4506 ‐ T https://www.irs.gov/irspup/Businesses/Small ‐ Businesses ‐ %26 ‐ • Self ‐ Employed/Transcripts ‐ in ‐ Lieu ‐ of ‐ Estate ‐ Tax ‐ Closing ‐ Letters Account transcripts, which reflect transactions including the • acceptance of Form 706 and the completion of an examination, may be an acceptable substitute for the estate tax closing letter – Transcript Delivery Service (TDS) – Form 4506 ‐ T For all estate tax returns filed on or after June 1, 2015, estate tax • closing letters will be issued only upon request by the taxpayer In lieu of an estate tax closing letter, account transcripts are • available online to tax professionals An account transcript from the Transcript Delivery System (TDS) • reflects transactions including the acceptance of Form 706 and/or the completion of an examination 3

2/8/2016 Refund Check Campus Location Identifier Requests on how to return a refund check, the • customer service representative (CSR) or tax examiner at the Campus RI Unit will advise taxpayer to write "void" in the endorsement area on the back of the check Advise taxpayer to mail the check with a letter of • explanation to the issuing campus Refund InquiryUnit The issuing campus location is on the front, at the • bottom of the check, and displays all or the first six letters of the campus Advise the taxpayer not to write on the front of the • check IRM 21.4.3.4.4 Returned Refund Checks The Receipt and Control (R&C) function within a • Campus receives the returned refund check and directs them to the Campus Refund Inquiry (RI) Unit Returned refund checks must be worked by • campuses in the appropriate BOD Individual Master File (IMF) returned checks will • be worked at IMF campuses BMF will be worked at BMF campuses • IRS will send misrouted cases to the appropriate • campus IRM 21.4.3.4.4 Returned Refund Checks Letter 4427C, Acknowledgement of Returned • Refund Check, should be sent to the taxpayer, unless a completed Form 3913, acknowledgement of Returned Refund Check, is received with the case from an IRS Taxpayer Assistance Center (TAC) In those cases, Form 3913 will serve as an • acknowledgement letter No interim letter is required, unless the 60 day • time frame indicated on Form 3913 cannot be met 4

2/8/2016 ACS Support Sites Five Easy Ways to Spot a Scam Phone Call 1. Call you to demand immediate payment. IRS will not call about taxes you owe without first mailing you a bill 2. Demand that you pay taxes without giving you the chance to question or appeal the amount they say you owe 3. Require you to use a certain payment method for your taxes, such as a prepaid debit card 4. Ask for credit or debit card numbers over the phone 5. Threaten to bring in local police or other law ‐ enforcement to have you arrested for not paying Lost Your Social Security Card? The new online version of the Application for a • Replacement Social Security Card allows people in some states to request a replacement card online through our secure my Social Security portal without traveling to a field office Currently available in the District of Columbia, • Michigan, Nebraska, Washington, and Wisconsin, it’s an easy, convenient, and secure way to request a replacement card online 5

2/8/2016 Lost Your Social Security Card? To take advantage of this new service option, • you must: – Have or create a my Social Security account – Have a valid driver’s license in a participating state or the District of Columbia (or a state ‐ issued identification card in some states) – Be age 18 or older and a United States citizen with a domestic U.S. mailing address (this includes APO, FPO, and DPO addresses) and – Not be requesting a name change or any other changes to your card my Social Security First, you’ll need to create a my Social Security • account The application process has built ‐ in features to • detect fraud and confirm your identity In certain cases, security experts at Social • Security will contact you to ensure it is a legitimate application SSA will only issue a replacement card if there’s • no suspicion of fraud and then they only mail it to a verified address my Social Security • Log into your personal my Social Security account and select “Request a Replacement Card” • Next, answer the screening questions to confirm eligibility, complete personal data, and you’re done • More states will be added in the future 6

2/8/2016 Superseding Returns A superseding return is a return filed subsequent to • the originally ‐ filed return and filed within the filing period (including extensions) The filer must indicate that the return supersedes the • original return by checking the appropriate box on the return or designating “Superseded Return” on the top of the first return page An amended return is a return filed subsequent to the • originally ‐ filed or superseding return and filed after the expiration of the filing period (including extensions) Superseding Returns If a taxpayer files two returns for the same • period on or before the due date, the IRS generally will consider the second return filed as the original return IRM 120.1.3.2.7 and Rev. Ruls. 78 ‐ 256 and 83 ‐ 36 • For example, if taxpayer files an income tax • return on February 1 and then files a second return on March 15, the March 15 return will supersede the February 1 return The IRS treats the last return filed on or before • March 15 as "the return" for all Code purposes Superseding Returns and the Statute of Limitations • In recent Chief Counsel Advice (CCA) 200645019, the IRS concluded that a taxpayer’s superseding tax return filed on the extended due date is the return that starts the assessment SOL 7