Thursday, May 28, 2015

Next Filing Season’s Deadline Will Be April 18, 2016

Taxpayers and preparers will have extra weekend to prepare and file returns

PROVIDENCE, R.I. – The Rhode Island Division of Taxation announced today that the filing deadline for the coming filing season will be Monday, April 18, 2016. “This will be a year in which the observation of Emancipation Day in Washington, D.C., will affect the filing deadline in Rhode Island,” said Rhode Island Tax Administrator David M. Sullivan. Because Emancipation Day falls on Saturday, April 16, in 2016, it will be observed in the District of Columbia on Friday, April 15, 2016. The Internal Revenue Service considers Emancipation Day a legal holiday for purposes of filing deadlines, so the federal income tax filing deadline will be pushed to the next business day -- Monday, April 18, 2016, the IRS said in Revenue Ruling 2015-13.

Under Rhode Island Division of Taxation Regulation PIT 98-7, Rhode Island typically follows federal rules on filing deadlines. Thus, Rhode Island’s deadline will also be Monday, April 18, 2016. “Next year’s filing season may seem a long way off now, but some taxpayers and tax preparers like to plan ahead, so we’re letting them know well in advance,” Sullivan said. “Because the deadline in 2016 will be April 18, taxpayers will have a few extra days to prepare and file their returns and pay what they owe,” he said.

April 18, 2016, will also be the deadline for the following:

  • calendar-year limited liability companies (LLCs) that are taxed as pass-through entities and that file their return on Form RI-1065;
  • calendar-year limited partnerships, limited liability partnerships, general partnerships, and single-member LLCs that file their return on Form RI-1065;
  • fiduciary returns, using a calendar year, on Form RI-1041;
  • calendar-year composite and pass-through filings;
  • property-tax relief claims on Form RI-1040H;
  • residential lead abatement credit claims on Form RI-6238; and
  • the first quarterly estimated payment for 2016 of Rhode Island personal income tax.

Wednesday, May 27, 2015

IRS Detects Massive Data Breach in 'Get Transcript' Application

WASHINGTON, D.C. - The Internal Revenue Service warned of a huge data breach of its online Get Transcript application that allowed the tax returns of approximately 104,000 taxpayers to be accessed by identity thieves.

The IRS said Tuesday that criminals used taxpayer-specific data acquired from non-IRS sources to gain unauthorized access to information on the tax accounts through the Get Transcript application. The data included Social Security information, birth dates and street addresses.

Third parties gained enough information from outside sources before trying to access the IRS site, allowing them to clear a multi-step authentication process, including several personal verification questions that typically are only known by taxpayers themselves.

The matter is under review by the Treasury Inspector General for Tax Administration, along with the IRS’s Criminal Investigation unit, and the Get Transcript application has been shut down temporarily. The IRS said it would provide free credit monitoring services for the approximately 104,000 taxpayers whose accounts were accessed. In total, the IRS has identified 200,000 total attempts to access data and will be notifying all of these taxpayers about the incident.

“What we have is the latest more sophisticated manifestation of a form of identity theft in the sense that we’ve detected and determined that there was unauthorized access to our Get Transcript application,” IRS Commissioner John Koskinen said during a conference call with reporters Tuesday. “That unauthorized access ran from February to May. The Get Transcript application gets you previous filings of tax returns. To try to get through to get that transcript, the criminals had to already have stolen Social Security numbers, names, addresses, and other personal identifiers available and then they had to have enough personal information for each taxpayer to be able to get through the personal-related questions, the so-called ‘out of wallet questions.’”

Koskinen noted that the IRS had about 23 million successful downloads of the Get Transcript application during the filing season, and has identified that there were attempts by identity thieves to get access to the prior tax returns of about 200,000 taxpayers.

“About 100,000 were unsuccessful,” he added. “They could not work through the barriers that we had established, but unfortunately about 104,000 did get through and were able to access earlier tax returns. Those tax returns have basic tax information on them and are mostly used to file a better fraudulent tax return for a refund.”

Tuesday, May 26, 2015

Registered Tax Return Preparer Test Fee Refunds

The IRS is refunding the fees that return preparers paid for the Registered Tax Return Preparer test. Letters will be mailed to refund recipients on May 28 and checks will be mailed on June 2. Return preparers took the test between November 2011 and January 2013 and paid a fee of $116. About 89,000 tests were paid for and taken, with some preparers taking the test more than once.

The refunds are being made because the federal courts determined in Loving v. IRS that the IRS lacked authority to mandate testing.

The IRS remains committed to the principle that all persons who prepare federal tax returns for compensation should be required to pass a test of minimal competency and take annual continuing education training. Taxpayers deserve top-quality and ethical service from all tax professionals. As part of this commitment, the IRS launched an interim Annual Filing Season Program in 2014 to promote voluntary continuing education by non-credentialed tax return preparers.

The Administration's 2016 budget proposal would provide the IRS with authority to regulate all paid tax return preparers. Oversight of all paid preparers, coupled with diligent enforcement, would promote high-quality services from all tax professionals, improve voluntary compliance and foster confidence in the fairness of the U.S. tax system.

Thursday, May 7, 2015

OPR Director Karen Hawkins' Farewell Message to Tax Professionals

Karen Hawkins
After 48 continuous years in various professional capacities, thirty-six in the practice of law, the last six as Director of the Office of Professional Responsibility, I have decided to take a little “holiday”. My retirement resignation has been tendered to, and accepted by, Commissioner Koskinen, and we have agreed that my last day as an IRS employee will be July 11, 2015.

When Commissioner Shulman asked me to assume the position of Director, OPR, we shared a vision and multiple goals. The vision was to bring reasonable but firm oversight to the unregulated return preparer industry to ensure tax return preparers were both competent and scrupulous in their dealings with the nation’s taxpayers and with the tax administration system. The goals were to enhance the credibility, visibility and stature of the Office of Professional Responsibility and Circular 230 at all levels of professional tax practice.

While the vision has yet to be achieved, I believe the goals have not only been reached, but surpassed. There can be no doubt that recognition of the Office and the Regulations Governing Practice before the IRS has increased exponentially in the past six years. Six years ago when I gave my first speeches (whether to tax professionals or to IRS personnel) few (outside the Enrolled Agent ranks) knew what the OPR was or did. Many tax professionals had no idea what Circular 230 was, or that they were subject to its jurisdiction. Even fewer had any idea how the disciplinary process worked: “black hole”, “star chamber”, “backwater” were the terms that were routinely floated when OPR/Cir 230 were mentioned.

For the past six years, I, and other members of the OPR staff, have averaged over 100 speeches/presentations a year to audiences ranging from unlicensed/unenrolled return preparers, to tax professionals in the largest law and accounting firms in the country, to IRS field personnel at all levels. These efforts touched about 60,000 people annually and resulted in tax professionals not only knowing about OPR and Circular 230, but actually considering the standards embodied in the regulations BEFORE giving advice, taking a position, preparing a return, engaging a client, making a submission. I am hopeful that the pylons have been sunk sufficiently to ensure a solid foundation for those who come after me.

I have had the pleasure to meet and talk with literally thousands of you at this juncture. I know you are solid ethical and professional people making every effort to serve your clients and tax administration in appropriate ways. It is important as you continue in your profession that you remain mindful of the overriding broad ethical principles contained in Circular 230 and resist the temptations to “get away with” the behavior less scrupulous individuals use to lure and keep clients. The recent litigation setbacks associated with tax return preparer regulation have been discouraging for all of us. Unfortunately, I have no crystal ball on the topic. I do know, however, that it is crucial for those of you who believe an ethical, fair, transparent and credible tax administration system is absolutely essential to this country to continue to practice your trade at the highest level and to press others for the same.

If our paths cross in other contexts, I hope you will stop to say “hello”.

Internal Revenue Service (IRS) sent this bulletin at 05/06/2015 03:43 PM EDT