CrossLink Professional Tax Solutions (CPTS) Announces Development of CrossLink Online Tax Software Solution for Professional Tax Preparers

Tracy, Calif. (Feb. 28, 2018)

CrossLink Professional Tax Solutions (CPTS), a leading provider of professional tax software solutions to tax preparers across the United States, today announced the development of CrossLink Online for professional tax preparers for the 2019 Tax Season (Tax Year 2018). CrossLink Online will have the strength and functionality of the CrossLink 1040 desktop product with the additional benefits and technology unique to online solutions.

"Today’s professional tax preparer is evolving. They are on the move more than ever before and as a result they are looking for an online product with desktop functionality that can move with them," stated Charles Robertson, Chief Technology Officer at CPTS. He continued, "This product will accomplish that and much more."

Rafael Alvarez, Founder, President and CEO for ATAX Accounting & Financial Services commented, "As a nationwide accounting and financial services company we require a robust, reliable, and complete tax software solution. A 100% online tax software solution from CrossLink meets these needs and is a game changer for our franchises. The industry is evolving and CrossLink continues to be at the forefront of innovation."

CPTS is committed to bringing the best technology to the professional tax preparation market and recognizes that in addition to office-based preparers, the industry will continue to see the growth of mobile preparers each and every year.

"CrossLink continues to grow at a rapid pace and we pride ourselves in doing so with the best development team in the industry," stated Robertson. "We are always adding top talent and are currently looking to grow our team by approximately 20% this year as we continue to lead the industry in innovation."

About CrossLink Professional Tax Solutions (CPTS)

CPTS, makers of the CrossLink Suite of products, is a leading provider of tax preparation solutions for the professional tax preparation market. Based in Tracy, California with operations in Orlando, Florida, CPTS is dedicated to enabling professional tax preparers to grow their taxbased businesses with the leading tax software solutions in the industry.

Additional information regarding CrossLink Professional Tax Solutions can be found on www.CrossLinkTax.com.

Available positions with CPTS can be found on the CrossLink Careers page at www.CrossLinkTax.com/about/careers.asp.

IRS PRESS RELEASE: "IRS: Many EITC, ACTC Refunds Arriving Soon"

IRS PRESS RELEASE:

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IR-2018-35 Feb. 27, 2018

WASHINGTON — As the Internal Revenue Service begins releasing refunds for taxpayers who claimed the Earned Income Tax Credit and the Additional Child Tax Credit, the agency reminds them that many of these refunds should arrive in bank accounts or on debit cards this week. That is if they chose direct deposit and there are no other issues with the tax return. 

Several factors, including weekends, Presidents Day and the time banks often need to process direct deposits can impact the time it takes taxpayers to receive their refunds. By law, the IRS could not issue refunds before mid-February for tax returns that claim the Earned Income Tax Credit or the Additional Child Tax Credit.

The most common question taxpayers have about the status of their refund can easily be answered by using the "Where’s My Refund?" tool on IRS.gov or the IRS2Go mobile app. “Where’s My Refund?” was updated Feb. 17 for the vast majority of early filers who claimed the Earned Income Tax Credit and the Additional Child Tax Credit. 

Many factors can affect the timing of a refund after the IRS receives a tax return. Even though the IRS issues most refunds in less than 21 days, it’s possible for refunds to take longer. Taxpayers should keep in mind that “Where’s My Refund?” is updated once daily, usually overnight, so checking more often will not produce different results.

Here are a few important things to know about tax refunds:

• The IRS issues nine out of 10 refunds in less than 21 days.
• IRS customer service representatives cannot provide refund information until 21 days have passed since the return was filed. “Where’s My Refund?” provides the most up-to-date information. 
• Taxpayers need their Social Security number, tax filing status (single, married, head of household) and exact amount of the tax refund claimed on the return to use the “Where’s My Refund?” tool. Or they can call 800-829-1954.
• Requesting a transcript will not reveal a tax refund status, despite the social media myth to the contrary. 
• Some tax returns take longer to process than others for many reasons. The IRS will contact taxpayers by mail if more information is needed.

Reminder – Federal Partnership and S Corp Returns Deadline is March 15

Remember, the federal filing deadline for federal calendar year partnership (1065) and S Corporation (1120S returns is Thursday, March 15, 2018.

For returns that are rejected on March 15, the return will be considered timely filed if it is retransmitted and accepted by March 25.

March 15 is also the deadline for filing an extension (Form 7004) for those partnerships or S Corporations that need more time to file their 2017 federal returns. 

Bipartisan Budget Act Extended the Expired Extender Provisions and Included Tax Relief for Victims of the California Wildfires

The Bipartisan Budget Act of 2018 that was signed into law on February 9 included an extension of the expired extender provisions and the same tax relief provisions for California wildfires that was given to victims of the hurricanes as follows:

Extender Provisions that Affect Individuals
The following expired federal provisions that affect individuals were extended for one year (2017):

• Tuition and Fees Deduction - Form 8917/Form 1040, line 34
• Exclusion of gain from income of foreclosed home mortgage debt (Form 982, line 1e)
• Ability to treated mortgage insurance premiums as qualified mortgage interest (Schedule A, line 13)
• Nonbusiness Energy Property Credit – Form 5695, Part II
• Credit for 2-Wheeled plug-in electric vehicles – Form 8936
• Credit for new qualified fuel cell motor vehicles – Form 8910

Extended for more than one year:

• Residential Energy Efficient Property Credit – Form 5695, Part I
  Harmonizes the expiration dates and phase out schedules for the following:

• 30 percent Investment Tax Credit solar energy, fiber optic solar energy, qualified fuel cell and qualified small wind energy property for property the construction which begins before 2020 and is then phased out for property the construction that begins before 2022.
• 10 percent ITC for qualified micro turbine, combined heat and power system and thermal energy property is available for property the construction that begins before 2022.

California Wildfire Tax Relief
The following tax provisions that provide relief for taxpayers affected by the California wildfires that occurred on or after October 8, 2017 for 2017 federal tax returns.

Deduction for Personal Casualty Losses
Uncompensated losses in the applicable California wildfire disaster area:

• Must exceed $500 in order to take a deduction
• Removes the requirement that the loss exceed 10% of AGI
• May be taken as an itemized deduction or as an increase in a taxpayer’s standard deduction.

Special Rule for Determining 2017 Earned Income for the Earned Income Tax Credit and Child Tax Credit
Qualified individuals may use their earned income from 2016 to determine their earned income tax credit and their child tax credit for their 2017 federal income tax return if their 2017 earned income is less than their 2016 earned income.

Qualified individuals are those whose principal place of abode was located in the California wildfire disaster zone or they lived in the California wildfire disaster area or they lived in applicable California wildfire disaster are and they were displaced from their home because of the wildfire.

Penalty-Free Access to Retirement Funds

• For qualified California wildfire distributions, an individual can withdrawal funds (up to $100,000) from a retirement account free of the 10 percent early withdrawal penalty and can spread the taxable portion on that distribution over a three year period.
• Allows that any qualified California wildfire relief withdrawal will not be taxable if it is recontributed within three years of the date of distribution.
• Increases the maximum loan amount for qualified California wildfire relief to $100,000.
• Allows for re-contribution of retirement plan withdrawals for cancelled home purchases or construction of a principal residence due to the California wildfire.

Charitable Contributions for Hurricane Relief
Suspends the limitation on charitable contributions associated with California wildfire relief that are made between October 8, 2017 and December 31, 2018.

More information can be found in the CrossLink Tax Resource Center.

Useful IRS Webpages for This Filing Season

The IRS provides a number of pages that tax preparers may find useful as they go through this filing season. These pages provide timely information to preparers on guidance for the current tax season, how to protect themselves from identity thieves, latest guidance as the IRS implements the new provisions for the Tax Cuts and Jobs Act, what the latest tax identity theft schemes are, and the tax challenges for taxpayers who are participating in the shared economy.

Here are a few of the IRS pages that you may find useful during this filing season:

• Fact Sheets
  Provides information on the latest information that the IRS believes is the most relevant for the current filing season.

• Resources for Tax Law Changes
  Check here for the latest guidance and information from the IRS as they implement the new provisions of the Tax Cuts and Jobs Act and the Extender provisions included in the budget bill passed in February.

• Tax Identity Theft and What Preparers Need to Watch for and How to Protect Themselves.

• Don’t Take The Bait
  This page is focused on raising the awareness in tax preparer community of the critical need for them to increase their security and be aware of increasing threat from phishing email scams that are designed to gain access of the preparer’s computer.
• Security Awareness Tax Tips
  Contains the latest helpful information on what tax preparers can do to protect their computer systems and their client’s tax information.
• Protect Your Clients; Protect Yourself
  Is the central webpage for tax preparers to raise their awareness about their legal obligations to protect their clients’ tax data and to highlight security risks posed by identity thieves to their business.

• Tax Scams/Consumer Alerts
  Check here for information on the latest email, phishing and malware scams targeting taxpayers and tax preparers.

• Shared Economy Tax Center
  Provides guidance for taxpayers who are part of the rapidly expanding shared economy on what they need to do in order to meet their tax obligations. Shared economy taxpayers are those who work for an auto ride sharing service such as UBER or rent out their home or apartment through Airbnb.

More information can be found in the CrossLink Tax Resource Center.

Avoid the Rush: Taxpayers Must Validate Identity When Calling the IRS

IRS PRESS RELEASE

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IR-2018-28, Feb. 14, 2018

WASHINGTON — The Internal Revenue Service today reminded taxpayers and tax professionals that they will be asked to verify their identities if they call the IRS. This is part of the agency’s efforts to keep taxpayer data secure from identity thieves.

Days before and after Presidents Day mark the peak period for taxpayer phone calls to the IRS. To avoid the rush, callers should be prepared to verify their identities if they need to call the agency.

IRS call center professionals take great care to make certain that they only discuss personal information with the taxpayer or someone the taxpayer authorizes to speak on their behalf. To ensure that taxpayers do not have to call back, the IRS reminds taxpayers to have the following documents ready:

• Social Security numbers and birth dates for those who were named on the tax return in question
• An Individual Taxpayer Identification Number (ITIN) letter if the taxpayer has one in lieu of a Social Security number (SSN)
• Filing status – Single, Head of Household, Married Filing Joint or Married Filing Separate
• The prior-year tax return. Telephone assistors may need to verify taxpayer identity with information from the return before answering certain questions
• A copy of the tax return in question
• Any IRS letters or notices received by the taxpayer

By law, IRS assistors will only speak with the taxpayer or to their legally designated representative.
If taxpayers or tax professionals are calling about a third party’s account, they should be prepared to verify their identities and provide information about the third party they are representing. Before calling about a third-party, be sure to have the following information available:

• Verbal or written authorization from the third-party to discuss the account
• The ability to verify the taxpayer’s name, SSN/ITIN, tax period, and tax form(s) filed
• Preparer Tax Identification Number (PTIN) or PIN if a third-party designee
• A current, completed and signed Form 8821, Tax Information Authorization or
• A completed and signed Form 2848, Power of Attorney and Declaration of Representative

Questions regarding a deceased taxpayer require different steps. Be prepared to fax:

• The deceased taxpayer’s death certificate, and
• Either copies of Letters Testamentary approved by the court, or IRS Form 56, Notice Concerning Fiduciary Relationship (for estate executors)

Answers to general tax questions may be found on IRS.gov. The quickest way to check the status of a tax refund is to go to "Where’s My Refund?" or call 800-829-1954 for automated phone service.

Scam Alert: IRS Urges Taxpayers to Watch Out for Erroneous Refunds; Beware of Fake Calls to Return Money to a Collection Agency

IRS PRESS RELEASE

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IR-2018-27, Feb. 13, 2018

WASHINGTON — The Internal Revenue Service today warned taxpayers of a quickly growing scam involving erroneous tax refunds being deposited into their bank accounts. The IRS also offered a step-by-step explanation for how to return the funds and avoid being scammed.

Following up on a Security Summit alert issued Feb. 2, the IRS issued this additional warning about the new scheme after discovering more tax practitioners’ computer files have been breached. In addition, the number of potential taxpayer victims jumped from a few hundred to several thousand in just days. The IRS Criminal Investigation division continues its investigation into the scope and breadth of this scheme.

These criminals have a new twist on an old scam. After stealing client data from tax professionals and filing fraudulent tax returns, these criminals use the taxpayers' real bank accounts for the deposit.

Thieves are then using various tactics to reclaim the refund from the taxpayers, and their versions of the scam may continue to evolve.

Different Versions of the Scam

In one version of the scam, criminals posing as debt collection agency officials acting on behalf of the IRS contacted the taxpayers to say a refund was deposited in error, and they asked the taxpayers to forward the money to their collection agency.

In another version, the taxpayer who received the erroneous refund gets an automated call with a recorded voice saying he is from the IRS and threatens the taxpayer with criminal fraud charges, an arrest warrant and a “blacklisting” of their Social Security Number. The recorded voice gives the taxpayer a case number and a telephone number to call to return the refund.

As it did last week, the IRS repeated its call for tax professionals to step up security of sensitive client tax and financial files files.

The IRS urged taxpayers to follow established procedures for returning an erroneous refund to the agency. The IRS also encouraged taxpayers to discuss the issue with their financial institutions because there may be a need to close bank accounts. Taxpayers receiving erroneous refunds also should contact their tax preparers immediately.

Because this is a peak season for filing tax returns, taxpayers who file electronically may find that their tax return will reject because a return bearing their Social Security number is already on file. If that’s the case, taxpayers should follow the steps outlined in the Taxpayer Guide to Identity Theft. Taxpayers unable to file electronically should mail a paper tax return along with Form 14039, Identity Theft Affidavit, stating they were victims of a tax preparer data breach.

Here are the official ways to return an erroneous refund to the IRS.

Taxpayers who receive the refunds should follow the steps outlined by Tax Topic Number 161 - Returning an Erroneous Refund. The tax topic contains full details, including mailing addresses should there be a need to return paper checks. By law, interest may accrue on erroneous refunds.

If the erroneous refund was a direct deposit:

1. Contact the Automated Clearing House (ACH) department of the bank/financial institution where the direct deposit was received and have them return the refund to the IRS.
2. Call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) to explain why the direct deposit is being returned.

If the erroneous refund was a paper check and hasn't been cashed:

1. Write "Void" in the endorsement section on the back of the check.
2. Submit the check immediately to the appropriate IRS location listed below. The location is based on the city (possibly abbreviated) on the bottom text line in front of the words TAX REFUND on your refund check.
3. Don't staple, bend, or paper clip the check.
4. Include a note stating, "Return of erroneous refund check because (and give a brief explanation of the reason for returning the refund check)."

The erroneous refund was a paper check and you have cashed it:

• Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.
• If you no longer have access to a copy of the check, call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) (see telephone and local assistance for hours of operation) and explain to the IRS assistor that you need information to repay a cashed refund check.
• Write on the check/money order: Payment of Erroneous Refund, the tax period for which the refund was issued, and your taxpayer identification number (social security number, employer identification number, or individual taxpayer identification number).
• Include a brief explanation of the reason for returning the refund.
• Repaying an erroneous refund in this manner may result in interest due the IRS.

IRS mailing addresses for returning paper checks

For your paper refund check, here are the IRS mailing addresses to use based on the city (possibly abbreviated). These cities are located on the check’s bottom text line in front of the words TAX REFUND:

• ANDOVER – Internal Revenue Service, 310 Lowell Street, Andover MA 01810
• ATLANTA – Internal Revenue Service, 4800 Buford Highway, Chamblee GA 30341
• AUSTIN – Internal Revenue Service, 3651 South Interregional Highway 35, Austin TX 78741
• BRKHAVN – Internal Revenue Service, 5000 Corporate Ct., Holtsville NY 11742
• CNCNATI – Internal Revenue Service, 201 West Rivercenter Blvd., Covington KY 41011
• FRESNO – Internal Revenue Service, 5045 East Butler Avenue, Fresno CA 93727
• KANS CY – Internal Revenue Service, 333 W. Pershing Road, Kansas City MO 64108-4302
• MEMPHIS – Internal Revenue Service, 5333 Getwell Road, Memphis TN 38118
• OGDEN – Internal Revenue Service, 1973 Rulon White Blvd., Ogden UT 84201
• PHILA – Internal Revenue Service, 2970 Market St., Philadelphia PA 19104

California Wildfire Tax Law Changes

The Bipartisan Budget Act of 2018 that was signed into law on February 9 included the following tax provisions that provide relief for taxpayers affected by the California wildfires that occurred on or after October 8, 2017 for 2017 federal tax returns.

Deduction for Personal Casualty Losses

Uncompensated losses in the applicable California wildfire disaster area:

• Must exceed $500 in order to take a deduction
• Removes the requirement that the loss exceed 10% of AGI
• May be taken as an itemized deduction or as an increase in a taxpayer’s standard deduction

Special Rule for Determining 2017 Earned Income for the Earned Income Tax Credit and Child Tax Credit

Qualified individuals may use their earned income from 2016 to determine their earned income tax credit and their child tax credit for their 2017 federal income tax return if their 2017 earned income is less than their 2016 earned income.

Qualified individuals are those whose principal place of abode was located in the California wildfire disaster zone or they lived in the California wildfire disaster area and the individual was displaced from their home because of the wildfire.

Penalty-Free Access to Retirement Funds

•  For qualified California wildfire distributions, an individual can withdrawal funds (up to $100,000) from a retirement account free of the 10 percent early withdrawal penalty and can spread the taxable portion on that distribution over a three year period.
• Allows that any qualified California wildfire relief withdrawal will not be taxable if it is recontributed within three years of the date of distribution.
• Increases the maximum loan amount for qualified California wildfire relief to $100,000.
• Allows for re-contribution of retirement plan withdrawals for cancelled home purchases or construction of a principal residence due to the California wildfire.

Charitable Contributions for Hurricane Relief

Suspends the limitation on charitable contributions associated with California wildfire relief that are made between October 8, 2017 and December 31, 2018.

Expired Federal Provisions Extended for 2017

The budget bill that was passed by Congress earlier today included a section that extended the federal provisions (extenders) that expired at the end of 2016 for one year. Therefore the following federal provisions will be allowed on 2017 individual federal returns in the near future:

·        Tuition and Fees Deduction - Form 8917/Form 1040, line 34

·        Exclusion of gain from income of foreclosed home mortgage debt (Form 982, line   1e)

·        Non-business Energy Property Credit – Form 5695, Part II

·        Ability to treated mortgage insurance premiums as qualified mortgage interest on   Schedule A

·        Credit for 2-Wheeled plug-in electric vehicles

·        Credit for new qualified fuel cell motor vehicles

It is mentioned that they will be allowed in the near future because the IRS needs to add back the applicable lines to Form 1040, Schedule A and Form 5695 as well as modify the instructions for these forms. Also, the IRS needs to release a 2018 version of Form 8917 (Tuition and Fees Deduction), Form 8936 (Qualified Plug-In Electric Drive Motor Vehicle Credit) and Form 8910 (Alternative Motor Vehicle Credit).

As soon as the IRS releases these forms and instructions and when the IRS will allow 2017 individual returns with these items included on them we will let you know. 

IRS Continues to Urge Tax Preparers to be Vigilant as IRS Continues to see Steep Declines in Tax Related Identity Theft

The IRS announced today that they continued to see a decline in tax-related identity theft in 2017, which they attribute to the Security Summit effort between IRS, states and the tax industry.

Key indicators of identity theft dropped for the second year in a row in 2017. This includes a 40 percent decline in taxpayers reporting they were victims of identity theft in 2017 as compared to 2016.

Even as the Security Summit partners have strengthened their defenses, the IRS continues to urge everyone (including tax preparers) to be vigilant and alert. In order to commit identity theft tax fraud the cyber-criminals need more detailed financial information that will allow them to prepare a more realistic fraudulent return to better impersonate legitimate taxpayers. They therefore are targeting places where large amounts of sensitive financial information reside such as tax preparers and human resource departments.

See IRS NewsRelease IR-2018-21 (Key IRS Identity Theft Indicators Continue DramaticDecline in 2017) for more information on the Security Summit efforts to combat tax identity theft and what preparers should continue to do to protect themselves from becoming a victim of a data breach.

2018 Individual Estimated Payments and the Tax Cuts and Jobs Act

Taxpayers who will have business income that they will report on Schedule C, E or F on their 2018 federal income tax return and therefore may need to make 2018 estimated tax payments will need to take into account the following changes that go into effect in 2018 due to the recently passed Tax Cuts and Jobs Act.

20% Deduction for Pass-Through Income
Sole proprietors that are filing Schedules C, E or F for 2018 will need to be sure that they take into account the new 20% deduction for pass-through income that was included in the Tax Cuts and Jobs Act.

Generally for individual’s that have income from a Schedule C, E or F and their taxable income is below $157,500 ($315,000 for joint filers), they may take a deduction of the lesser of (1)20% of the income from their business or (2) 20% of their taxable income excluding capital gains.

If their taxable income exceeds $157,500 ($315,000 for joint filers) then the deduction will be limited as follows:

• For “specified service businesses” the deduction begins to be phased out.
• For all other businesses the deduction is limited to:
• 50% of the W-2 wages paid by the business or
• 25% of the W-2 wages paid by the business plus 2.5% of the unadjusted basis of all qualified property

A specified service trade or business is a business in the fields of:

• Accounting, health, law, consulting, athletics, financial services, brokerage services or any business where the principal asset of the business is the reputation or skill of one or more of its employees.
• Or which involves the performance of services that consist of investing and investment management trading, or dealing in securities, partnership interest, or commodities.

The IRS will need to provide further guidance on this deduction so that taxpayers that may qualify for it can calculate it correctly in all situations which is the reason the 2018 Form 1040-ES has not been released yet.

Entertainment Expenses
A deduction for entertainment expenses is no longer allowed on Schedule C beginning in 2018.

Bonus Depreciation and Increased Section 179 Expense

• Qualifying assets new and used assets placed in service during 2018 will qualify for 100% bonus depreciation.
• The Section 179 expense deduction has been increased to $1,000,000 beginning for assets purchased in 2018.

Depreciation Limits for Luxury Automobiles and Personal Use Property (Listed Property)
The yearly limitations for passenger autos placed in service after December 31, 2017 have been increased as follows:

• $10,000 for year placed in service
• $16,000 for second year
• $9,600 for the third year
• $5,760 for fourth and later years

For other Tax Cuts and Jobs Act provisions that that may affect the calculation of an individual’s 2018 estimated tax payments see the New Federal Tax Law Changes Included in the Tax Cuts and Jobs Act page in the Tax Resource Center on www.CrossLinkTax.com.

IRS Encourages Taxpayers to Renew ITINs; Delays Expected for Those Who Missed Deadline

IRS Press Release

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IR-2018-18, Feb. 5, 2018

WASHINGTON — The Internal Revenue Service urges taxpayers with expired Individual Taxpayer Identification Numbers (ITINs) to renew them as soon as possible. Tax returns with expired ITINs will face processing delays and affected taxpayers may lose eligibility for key tax benefits until the ITIN is renewed.

An ITIN is used by anyone who has tax-filing or payment obligations under U.S. tax law but is not eligible for a Social Security number. Under a series of provisions established by the Protecting Americans from Tax Hikes (PATH) Act enacted by Congress in December 2015, ITINs not used on a tax return at least once in the past three years were set to expire.

Also, ITINs with certain middle digits expired, requiring the taxpayer to renew, in order to continue using the ITIN to file a federal tax return.

Those with middle digits of 70, 71, 72 or 80 (Example: 9NN-70-NNNN or 9NN-80-NNNN) expired on Dec. 31, 2017.  ITINs that have middle digits 78 or 79 expired Dec. 31, 2016, but taxpayers can still renew them.

Who Should Renew an ITIN?

Taxpayers with ITINs that expired at the end of 2017 and who need to file a tax return in 2018 must submit a renewal application. Others do not need to take any action.

• ITINs with middle digits 70, 71, 72, or 80 (For example: 9NN-70-NNNN) need to be renewed if the taxpayer will have a filing requirement in 2018.
• Taxpayers whose ITINs expired due to lack of use should only renew their ITIN if they will have a filing requirement in 2018.
• Taxpayers who are eligible for, or who have, an SSN should not renew their ITIN, but should notify IRS both of their SSN and previous ITIN, so that their accounts can be merged.
• Taxpayers whose ITINs have middle digits 78 or 79 that had already expired and were never renewed should renew their ITIN if they will have a filing requirement in 2018.

How to Renew an ITIN

To renew an ITIN, taxpayers must complete a Form W-7 and submit all required documentation. Although a Form W-7 is usually attached to the tax return, a taxpayer is not required to attach a federal tax return to their ITIN renewal application.

There are three ways to submit the W-7 application package:

1. Mail the Form W-7, along with original identification documents or copies certified by the issuing agency, to the IRS address listed on the Form W-7 instructions. The IRS will review the identification documents and return them within 60 days.
2. Taxpayers have the option to work with Certified Acceptance Agents (CAAs) authorized by the IRS to help them apply for an ITIN. CAAs can certify all identification documents for primary and secondary taxpayers and certify that an ITIN application is correct before submitting it to the IRS for processing. CAAs can also certify passports and birth certificates for dependents. This saves taxpayers from mailing original documents to the IRS.
3. In advance, taxpayers can call 844-545-5640 and make an appointment at a designated IRS Taxpayer Assistance Centerinstead of mailing original identification documents to the IRS. When making an appointment, be sure to indicate that this involves an ITIN renewal application.

An ITIN Renewal application can take up to 11 weeks for the IRS to complete during the tax season.

2018 Tax Cuts and Jobs Act Changes to be Aware of

As you are meeting with your clients this year you should make them aware of some of the 2018 changes that will or may affect their federal return for next year.

Here are some of the changes that go into effect in 2018 from the Tax Cuts and Jobs Act:

• Standard Deduction will be increased to $12,000 for single individuals and $24,000 for married filing joint filers.
• Exemptions are no longer applicable.
• Child tax credit was increased to $2,000 for eligible children under 17 of which $1,400 may be refundable.
• A $500 nonrefundable credit will be available for eligible children that are 17, 18 or full time students ages 19 -24 and other eligible dependents.
• Itemized deduction for taxes on Schedule A will be limited to $10,000.
• Job expenses and miscellaneous itemized deductions subject to 2% AGI floor will no longer be deductible on Schedule A. This includes employee business expenses that were reported on Form 2106 such as vehicle expenses, travel expenses, meals and entertainment, job education, etc.
• For 2018 only casualty losses that occur in a presidentially declared disaster zone will be deductible as an itemized deduction on Schedule A.
• An itemized deduction for mortgage interest will only be allowed for a taxpayer’s principal home.
• An itemized deduction will no longer be allowed for interest on a home equity loan.

See the New Federal Tax Law Changes Included in the Tax Cuts and Jobs Act page in the CrossLink Tax Resource Center on CrossLinkTax.com for a more complete listing of the tax provisions included in the Tax Cuts and Jobs Act.

Tax Pros Urged to Step Up Security as Filing Scheme Emerges, Reminded to Report Data Thefts

IRS PRESS RELEASE:


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IR-2018-17, Feb. 2, 2018

WASHINGTON – Seeing the emergence of a new filing season scam, the Internal Revenue Service today urged tax professionals to step up security and beware of phishing emails that can secretly download malicious software that can help cybercriminals steal client data.

Only a few days into the filing season, the IRS has already identified a new scam that began with cybercriminals stealing data from several tax practitioners’ computers and filing fraudulent tax returns.

In a new twist, the fraudulent returns in a few cases used the taxpayers' real bank accounts for the deposit. A woman posing as a debt collection agency official then contacted the taxpayers to say a refund was deposited in error and asked the taxpayers to forward the money to her.

This scheme is likely just the first of many that will be identified this year as the IRS, state tax agencies and tax industry continue to fight back against tax-related identity thieves. Because the Security Summit partners have made inroads against identity theft, cybercriminals have evolved their tactics to focus on tax professionals where they can steal client data.

Thieves know it is more difficult to identify and halt fraudulent tax returns when they are using real client data such as income, dependents, credits and deductions. Generally, criminals find alternative ways to get the fraudulent refunds delivered to themselves rather than the real taxpayers.

Tax professionals are reminded that there is a procedure for them to report data thefts to the IRS. They need only contact their state’s IRS Stakeholder Liaison, who will notify appropriate IRS officials and serve as a point of contact. All practitioners should review Data Theft Information for Tax Professionals for details about the process and the additional steps they should take.

When notified immediately IRS can take steps to help protect taxpayers from tax-related identity theft. 

IRS Criminal Investigation agents are still reviewing this latest data theft scam. However, the vast majority of data thefts occur because the tax preparer or someone in the office opened a phishing email and clicked on a link or attachment that contained malware. There are various forms of malware but some download secretly into computers and allow thieves to see each keystroke or give thieves remote access to computers. Both versions allow thieves to steal data stored on the computers.

Tax professionals should review the Security Summit’s Don’t Take the Bait campaign, which outlined the various scams used by criminals to trick practitioners.

Tax professionals are urged to seek cybersecurity experts to help better secure their data. Here’s a reminder of some basic steps tax professionals can take:

• Educate all employees about phishing in general and spear phishing in particular.
• Use strong, unique passwords. Better yet, use a phrase instead of a word. Use different passwords for each account. Use a mix of letters, numbers and special characters.
• Never take an email from a familiar source at face value; example: an email from “IRS e-Services.” If it asks you to open a link or attachment, or includes a threat to close your account, think twice. Visit the e-Services website for confirmation.
• If an email contains a link, hover your cursor over the link to see the web address (URL) destination. If it’s not a URL you recognize or if it’s an abbreviated URL, don’t open it.
• Consider a verbal confirmation by phone if you receive an email from a new client sending you tax information or a client requesting last-minute changes to their refund destination.
• Use security software to help defend against malware, viruses and known phishing sites and update the software automatically.
• Use the security options that come with your tax preparation software.
• Send suspicious tax-related phishing emails to phishing@irs.gov.

This newest scam also serves as a reminder to taxpayers that they should be alert to any unusual activity such as receiving a tax transcript or tax refund they did not request. Please review the Taxpayer Guide to Identity Theft for appropriate actions. 

Taxpayers who receive a direct deposit refund that they did not request should take the following steps:

1. Contact the Automated Clearing House (ACH) department of the bank/financial institution where the direct deposit was received and have them return the refund to the IRS.
2. Call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) to explain why the direct deposit is being returned.
3. Keep in mind interest may accrue on the erroneous refund.

There is more information at Topic Number: 161 - Returning an Erroneous Refund.

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The original release can be found in the IRS Newsroom.