News & Publications
IRS Acknowledges Identity Protection PIN Blunder
by Mike Godfrey, Tax-News.com, Washington 06 January 2016
The US Internal Revenue Service (IRS) has admitted that, due to an error, individual taxpayers are receiving Identity Protection Personal Identification Number (IP PIN) letters with an incorrect tax year listed. The CP 01A Notice dated January 4, 2016, being sent by the IRS incorrectly indicates that the IP PIN being issued is to be used for filing the 2014 tax return, when the number is actually to be used for the 2015 tax return. Taxpayers and tax professionals are being advised that the IP PIN is valid for use on all individual tax returns filed in 2016. The letters were mailed in late December, and taxpayers will be receiving them until mid-January. The IRS has apologized for the confusion and any inconvenience, and confirmed that it will begin accepting returns from taxpayers from January 19, 2016. The IP PIN is a unique, six-digit number that is assigned annually to victims of identity theft with resolved cases, for use when filing their federal tax return. The IP PIN allows these individuals to avoid delays in filing returns and receiving refunds. When a taxpayer has an IP PIN, it prevents someone else from filing a fraudulent tax return with his or her Social Security number (SSN). If a return is e-filed with the SSN and an incorrect or missing IP PIN, the agency's system will reject it until it is submitted with the correct IP PIN or a paper return is filed. If the same conditions occur on a paper-filed return, the IRS will delay its processing and withhold any refund until it is determined if it is due to the proper taxpayer.
Private company alternatives to become more accessible
By Ken Tysiac January 4, 2016
Private company financial reporting alternatives will become more accessible under a Private Company Council (PCC) decision endorsed by FASB in December. FASB endorsed the PCC’s consensus to remove the effective dates from four GAAP alternatives that were developed by the PCC. This paved the way for the drafting of an Accounting Standards Update (ASU) for vote by written ballot that would formally remove the effective dates. Removing the effective dates would allow private companies to forgo an initial preferability assessment that otherwise would have been required under Topic 250, Accounting Changes and Error Corrections, when the alternatives were initially elected. Effective dates will be removed from: ASU No. 2014-02, Intangibles—Goodwill and Other (Topic 350): Accounting for Goodwill. ASU No. 2014-03, Derivatives and Hedging (Topic 815): Accounting for Certain Receive-Variable, Pay-Fixed Interest Rate Swaps—Simplified Hedge Accounting Approach. ASU No. 2014-07, Consolidation (Topic 810): Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements. ASU No. 2014-18, Business Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a Business Combination. FASB also endorsed the PCC’s decisions to indefinitely extend the transition guidance of the four ASUs and to require private companies electing one or more of the alternatives to make the change using the original transition provisions included in those ASUs for the first year applied. Under this guidance, the accounting alternatives within ASU No. 2014-02, ASU No. 2014-03, and ASU No. 2014-07 must be applied as of the beginning of the first annual reporting period in which each alternative is elected. The accounting alternative within ASU No. 2014-08 must be applied as of the first in-scope transaction in the annual reporting period in which the alternative is elected. —Ken Tysiac (firstname.lastname@example.org) is a JofA editorial director.
2016 Tax Season Opens Jan. 19 for Nation’s Taxpayers
IR-2015-139, Dec. 21, 2015
WASHINGTON ― Following a review of the tax extenders legislation signed into law last week, the Internal Revenue Service announced today that the nation’s tax season will begin as scheduled on Tuesday, Jan. 19, 2016.
The IRS will begin accepting individual electronic returns that day. The IRS expects to receive more than 150 million individual returns in 2016, with more than four out of five being prepared using tax return preparation software and e-filed. The IRS will begin processing paper tax returns at the same time. There is no advantage to people filing tax returns on paper in early January instead of waiting for e-file to begin.
“We look forward to opening the 2016 tax season on time,” IRS Commissioner John Koskinen said. “Our employees have been working hard throughout this year to make this happen. We also appreciate the help from the nation’s tax professionals and the software community, who are critical to helping taxpayers during the filing season.”
As part of the Security Summit initiative, the IRS has been working closely with the tax industry and state revenue departments to provide stronger protections against identity theft for taxpayers during the coming filing season.
The filing deadline to submit 2015 tax returns is Monday, April 18, 2016, rather than the traditional April 15 date. Washington, D.C., will celebrate Emancipation Day on that Friday, which pushes the deadline to the following Monday for most of the nation. (Due to Patriots Day, the deadline will be Tuesday, April 19, in Maine and Massachusetts.)
Koskinen noted the new legislation makes permanent many provisions and extends many others for several years. "This provides certainty for planning purposes, which will help taxpayers and the tax community as well as the IRS," he said.
The IRS urges all taxpayers to make sure they have all their year-end statements in hand before filing, including Forms W-2 from employers, Forms 1099 from banks and other payers, and Form 1095-A from the Marketplace for those claiming the premium tax credit.
“We encourage taxpayers to take full advantage of the expanding array of tools and information on IRS.gov to make their tax preparation easier,” Koskinen said.
Although the IRS begins accepting returns on Jan. 19, many tax software companies will begin accepting tax returns earlier in January and submitting them to the IRS when processing systems open.
Choosing e-file and direct deposit for refunds remains the fastest and safest way to file an accurate income tax return and receive a refund. The IRS anticipates issuing more than nine out of 10 refunds in less than 21 days. Find free options to get tax help, and to prepare and file your return on IRS.gov or in your community if you qualify. Go to IRS.gov and click on the Filing tab to see your options.
Seventy percent of the nation’s taxpayers are eligible for IRS Free File. Commercial partners of the IRS offer free brand-name software to about 100 million individuals and families with incomes of $62,000 or less;
Online fillable forms provides electronic versions of IRS paper forms to all taxpayers regardless of income that can be prepared and filed by people comfortable with completing their own returns.
The Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) offer free tax help to people who qualify. Go to irs.gov and enter “free tax prep” in the search box to learn more and find a VITA or TCE site near you, or download the IRS2Go app on your smart phone and find a free tax prep provider.
The IRS also reminds taxpayers that a trusted tax professional can provide helpful information and advice about the ever-changing tax code.