Update on Change to Accessing E-Services

As a reminder, the IRS will be instituting changes to how e-services users will access their accounts. Originally the IRS said that all e-services users would need to re-register using the new Secure Access authentication process around October 24, 2016.

The IRS has announced that the IRS is delaying this requirement at this time.  The delay is to allow the IRS to discuss the proposed new Secure Access authentication process with key stakeholders and to ensure a smooth transition when they do implement the new process.

When a new date is set, the IRS will send out an announcement.

See the Important Update about Your e-Services Account page on the IRS website for more information on what the Secure Authentication Process is and for the official IRS announcement on this delay.

IRS Now Accepting ITIN Renewal Applications

This is a reminder that the IRS has begun accepting renewal applications for individuals whose ITINs will expire at the end of 2016.

Under the Protecting Americans from Tax Hikes (PATH) Act of 2015, the following ITIN holders must renew their ITIN before they file their 2016 federal tax return during the upcoming 2017 filing season:

• Have not used their ITIN on a tax return for the last three consecutive years; or
• Have an ITIN with the middle digits of 78 or 79.

The IRS recently sent letters to taxpayers with the affected middle digits informing them that they need to renew their ITINs.

To renew an ITIN, a taxpayer must complete Form W-7 and submit all required documentation to the IRS either by mail, through a Certified Acceptance Agent, or in person by making an appointment at an IRS Taxpayer Assistance Center. For renewals, a completed federal income tax return does not need to be attached to the Form W-7.

For more details on which taxpayers need to renew their ITIN as well as the process for renewing ITINs see the following on the IRS website:

• IRS news release of October 6 – IRS Now Accepting ITIN Renewal Applications
• IRS Form W-7 instructions

IRS Warns of Fake Tax Bill Emails

The IRS wants to make taxpayers and tax preparers aware that a new email scam has been reported around the country. This new scam involves fake emails that include an attached fraudulent version of IRS CP2000 notices for Tax Year 2015.

The fraudulent CP2000 notice includes a payment request that taxpayers mail a check made out to “I.R.S.” to the Austin Processing Center at a Post Office Box address. This is in addition to a payment link within the email itself.

The IRS wants to emphasize that the CP2000 is a notice commonly mailed to taxpayers through the US Postal Service. It is never sent as part of an email to taxpayers. The details of this scam are as follows:

• Notices are being sent electronically.
• The CP2000 notices appear to be issued from an Austin, Texas address.
• The notice is requesting information regarding Affordable Care Act insurance coverage for 2014.
• The payment voucher lists the letter number as 105C.

See the IRS and Security Summit Partners Warn of Fake Tax Bills news release of September 22, 2016 for more information.

Revised Form 8867 and the Expansion of Preparer Due Diligence Requirements

The IRS has released a draft of the newly revised and renamed Form 8867 (Paid Preparer’s Due Diligence Checklist). The changes are a result of the expansion of the paid preparer’s due diligence requirements (as included in the PATH Act) to cover the Child Tax Credit and the American Opportunity Education Credit as well as the Earned Income Tax Credit.

As a result of the expansion of the due diligence requirements, the Form 8867 has been revised as follows:

• Renamed to “Paid Preparers Due Diligence Checklist.” Was named the Paid Preparer’s Earned Income Credit Checklist.
• The questions related to qualifying children have been moved from the form to a related worksheet. These questions must still be asked, however, they will not be submitted to the IRS. The requirement to ask these questions are covered in question 2 of the revised 2016 Form 8867.
• Click here to read the full article on the CrossLink website.

Read the full article on the CrossLink website.

IRS Warns of New Wave of Cyber Attacks that Aim to Take Over Tax Preparers Computers

The IRS has posted a news release (IR-2016-119) to warn tax preparers of a new wave of attacks that allow identity thieves to file fraudulent tax returns by remotely taking over a tax preparer’s computer system.

These cyber-attacks are taking place using remote technology which allows the identity thieves to gain access to a tax preparer’s computer system, access client data, complete and e-file tax returns, then direct the refunds to the criminal’s own bank accounts. The IRS is aware of approximately two dozen cases where tax preparers have recently been victimized.

The victims learned of these thefts while they were reconciling their e-file acknowledgements.

See IRS News Release IR-2016-119 (dated September 2, 2016) for more details on these attacks and what measures tax preparers should take to protect their computer systems.

Also see the IRS Protect Your Clients; Protect Yourself webpage for more information how preparers can help fight identity theft and protect their customer tax return data and their computer systems.