As the summer winds down, the IRS is gearing up for fall tax deadlines, year-end matters, and continued tax reform courtesy of the Tax Cuts and Jobs Act. But before all of that, the agency released some significant updates in August. Here are 3 recent IRS news items that impact a broad swath of taxpayers.
1. Scammers continue to evolve their fraudulent tactics.
New IRS impersonation scams are like a game of whack-a-mole: as soon as one is uncovered and stopped, a new one pops up somewhere else. The latest scam involves an email reminding you about your tax return or refund and linking to a spoofed IRS website. By following the instructions in the email, victims download a malicious file that allows the hacker to steal sensitive information, such as passwords to financial accounts.
Remember, the IRS doesn’t request information from taxpayers via email, text, or social media accounts. Never use a password sent to you via an unsolicited email, even if it appears to be from the IRS. If you owe taxes, the IRS will send you a bill via U.S. mail and request payment made to the United States Treasury.
Generally, the following practices should alert you to a scammer:
- Requesting immediate payment over the phone using a specific payment method (e.g. prepaid debit card, gift card, or wire transfer)
- Demanding payment without giving you the opportunity to appeal the outstanding amount
- Threatening to send law enforcement to arrest you for failure to pay
- Revoking your driver’s license, business license, or immigration status
Report any scam contacts to the IRS at [email protected].
2. New tax withholding estimator helps taxpayers ensure their withholdings are accurate.
If your 2018 tax return resulted in a surprise—positive or negative—you owe it to yourself to check your paycheck withholdings to help you break even for the year. The same goes for those of you who’ll report a major change on your 2019 tax return: significant increase or decrease in income; marriage; birth of a child; or other major life changes. The IRS recently revamped its withholdings calculator to make it more user-friendly and suggests that all taxpayers do a quick check-up.
You’ll need a recent paystub and last year’s tax return to help with the data entry. If you find this whole process confusing and are concerned about your 2019 tax liability, we can help do a more thorough review of your situation. Contact us soon: if you need to make significant adjustments, it’s in your best interest to have as much time as possible to make up the difference.
3. An automatic waiver absolves some 2018 estimated tax penalties.
Because of the havoc wreaked on withholding tables by the TCJA, the IRS lowered its 90% penalty threshold to 80% for taxpayers who didn’t have enough withheld throughout the year. During the last tax season, the IRS was requiring affected taxpayers to formally request the waiver. Most recently, they made that waiver automatic. Anyone who paid the penalty and didn’t request a waiver will be notified by mail and receive a refund of the penalty.
If you filed an extension and haven’t yet completed your tax return, you can still use Form 2210 to claim the waiver and ensure you aren’t hit with the underpayment penalty.