Tax Industry and IRS “Team Up” to Fight Identity Theft Fraud
Under a new agreement called “a sweeping new collaborative effort”, tax software vendors and the IRS will team up to fight identity theft refund fraud. This agreement will have the IRS, tax preparation and software firms, payroll and tax financial product processors, and state tax administrators collaborate to identify new steps to validate taxpayer and tax return information at the time of filing. It was found that the ability to answer knowledge-based authentication questions about taxpayers financial dealings, such as car or mortgage payments, was the reason cyber-criminals successfully breached the “Get Transcript” application system. For more information please read the complete Journal of Accountancy article.
In a recent news release, the IRS announced the opening of a new International Data Exchange Service (IDES) for financial institutions and foreign countries to securely provide information on financial accounts held by U.S. persons. More than 145,000 financial institutions have registered and more than 110 countries have agreed to provide this information to the IRS.
The IRS has updated their list of private delivery services for the first time in over ten years. The update has added three FedEx and one UPS service to the list and removed five discontinued services that were previously acceptable for the timely mailing equals timely filing/paying rule (Sec. 7502).
In a recent Chief Counsel Advice memorandum (CCA 201504010), the IRS concluded that mortgage brokers are not engaged in a real property trade or business for the purpose of qualifying as real estate professionals. Real property trades or businesses are defined in the Internal Revenue Code to be “real property development, redevelopment, construction, reconstruction, acquisition, conversion, rental operation, management leasing, or brokerage trade or business.” (I.R.C. § 469(c)(7)(C))