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ACCOUNTING NEWS
IDENTITY THEFT
Identity theft places a burden on its victims and presents a challenge to businesses, organizations and government agencies, including the IRS. The IRS combats tax-related identity theft with an aggressive strategy of prevention, detection and victim assistance. We’re making progress against this crime, as it remains one of our highest priorities.
Tax-related identity theft occurs when someone uses your Social Security number to file a tax return claiming a fraudulent refund. If you become a victim, we’re committed to helping you resolve your case as quickly as possible.
Information and guidance
Individuals
Tax Professionals
Businesses
Form W-2/SSN Data Theft: Information for Businesses and Payroll Service Providers
Identity Theft Guide for Business, Partnerships and Estate and Trusts
Information for Businesses About Data Breaches and Identity Theft
Security Summit Partners Update Identity Theft Initiatives for 2017
Security Summit Initiative
The IRS, the states and the private-sector tax industry are working together to identify and apply safeguards to better protect taxpayers and fight identity theft. However, we need your help. Learn what you can do to help make your personal, financial and tax data safer at: Taxes. Security. Together.
Remember:
The IRS doesn't initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS does not call taxpayers with threats of lawsuits or arrests.
https://www.irs.gov/identity-theft-fraud-scams/identity-protection
HOW TECHNOLOGY CAN BE USED IN AUDITING
The IRS wants your QuickBooks Data File
Being audited by the IRS can be scary. If the IRS finds a mistake you made, they will assess penalty and interest on the late payment of taxes. QuickBooks makes it easy to run the reports required to quickly find errors and issues of tax avoidance. They can export your data to Excel and with a few clicks create tables of relationships analyzing your margins (the difference between costs and revenue). The more years of data you give them, the more questions they will have. Tthe more supporting documents you will need to dig up and the more likely you will have to pay more in taxes and penalties. No business has the time to devote to compiling the paperwork needed to satisfy an IRS auditor. However, you will have to find the time.
What are the chances you will be selected for an audit?
Very low, in fact, less than 2-4% of tax returns are audited. And some of those audits can be handled through correspondence.
However, if you are selected for an in-person audit, it is costly in terms of time and money. Starting with the year 2010, the Internal revenue service has purchased 1500 to 2000 licenses from Intuit and will have one agent trained and licensed per group to assist the other revenue agents with their audit. This type of audit will result in greater taxes which come with greater penalties and interest. Your best defense, now, against these types of future audits is to take the time to read this article and learn what the “hot” audit areas are for your business and employ best practices when you finish your year.
How far back can the auditor go?
Auditors can include returns filed within the last THREE years in an audit. Generally, if a substantial error is identified, the IRS will not go back more than the last SIX years.
Auditors are fully trained in your industry. In fact, there are HOW TO GUIDES, for the newbie auditor to learn all about where the mistakes can be found in your tax documents. Handing over the QuickBooks files means they can find many more mistakes in the same time allotted by their supervisor for the audit. The reporting capability in QuickBooks makes their job easy!
10 TIPS TO FILING TAX RETURNS
RS Tax Tip 2016-55, April 5, 2016
Don’t wait until the last minute. If you haven’t filed yet, the IRS has these 10 tax-time tips to help you.
Gather your records. Make sure you have all your tax records. This includes receipts, canceled checks and other records that support income, deductions or tax credits that you claim. If you purchased health insurance through the Marketplace, you will need the information in Form 1095-A to file.
Report all your income. You will need to report your income from all of your Forms W-2, Wage and Tax Statements, Forms 1099 and any other income – even if you don’t receive a statement – when you file your tax return.
Try IRS Free File. Free File is available only on IRS.gov. If you made $62,000 or less, you can use free name-brand tax software to file your federal tax return. If you earned more, you can use Free File Fillable Forms, an electronic version of IRS paper forms. If you need more time to file, you can also use IRS Free File to get an automatic six-month extension to file your taxes. Remember, an extension to file your tax return is not an extension to pay taxes you owe, which are due April 18.
Try IRS e-file. Electronic filing is the best way to file a tax return. It’s accurate, safe and easy. If you owe taxes, you have the option to e-file early and pay by April 18 to avoid penalties and interest.
Use Direct Deposit. The fastest and safest way to get your refund is to combine e-file with direct deposit. The IRS issues more than nine out of 10 refunds in less than 21 days.
Visit IRS.gov. IRS.gov is a great place to get what you need to file your tax return. Click on the "Filing" icon for links to filing tips, answers to frequently asked questions and IRS forms and publications. Get them all at any time. The IRS Services Guideoutlines the many ways to get help on IRS.gov.
Use IRS online tools. The IRS has many online tools on IRS.gov to help you file. For instance, the Interactive Tax Assistant tool provides answers to many of your tax questions. The tool gives the same answers that an IRS representative would give over the phone. If you want to find a tax preparer with the qualifications and credentials that you prefer, use the IRS Directory of Federal Tax Return Preparers. IRS tools are free and easy to use. They are also available 24/7.
Weigh your filing options. You have different options for filing your tax return. You can prepare it yourself or go to a tax preparer. You may be eligible for free help at a Volunteer Income Tax Assistance or Tax Counseling for the Elderly site.
Check out number 17. IRS Publication 17, Your Federal Income Tax, is a complete tax resource that you can read on IRS.gov. It’s also available as an eBook. It can help you with many tax questions, such as whether you need to file a tax return, or how to choose your filing status.
Review your return. Mistakes slow down your tax refund. If you file a paper return, be sure to check all Social Security numbers. That’s one of the most common errors. Remember that IRS e-file is the most accurate way to file.
Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.