News

Economic Stimulus Payments
<IRS Newswire, Washington, D.C., April 28, 2008> — The Internal Revenue Service has begun to transfer economic stimulus payments to millions of Americans, some of whom will see payments in their bank accounts as early as April 28.
To receive a payment, taxpayers must have a valid Social Security number, $3,000 of income and file a 2007 federal tax return. IRS will take care of the rest. Eligible people will receive up to $600 ($1,200 for married couples), and parents will receive an additional $300 for each eligible child younger than 17. Millions of retirees, disabled veterans and low-wage workers who usually are exempt from filing a tax return must do so this year in order to receive a stimulus payment.
The last two-digits of your Social Security number and whether you opted for direct deposit into your financial account or a paper check will determine when you receive your payment.
The IRS provides thorough information on the Stimulus Payments on its Web site:
[Detailed information]
[Stimulus Payments Calculator]
[Stimulus Payments FAQs]
[Rebate Scam Alert]


Tax Increase Prevention Act of 2007 Increases the AMT Exemption Amounts
<IRS Newswire, Washington, D.C., December 27, 2007> — The Tax Increase Prevention Act of 2007 increases the exemption amounts for AMT and allows certain credits to offset AMT.
The new exemption amounts for 2007 are $44,350 ($66,250 if married filing jointly or qualifying widow(er); $33,125 if married filing separately).
The IRS has to reprogram its system for 12 forms affected by this change. The tax agency has been able to reprogram its systems to begin processing seven AMT-related forms, including Form 6251, Alternative Minimum Tax - Individuals. Taxpayers filing these seven forms should not experience delays in filing. However, the following five forms require significant reprogramming to accept filing.

Form 8863, Education Credits
Form 5695, Residential Energy Credits
Form 1040A's Sch 2, Child & Dependent Care Expenses
Form 8396, Mortgage Interest Credit
Form 8859, DC First-time Homebuyer Credit

The IRS has targeted February 11, 2008, as the potential starting date for taxpayers to begin submitting those five AMT-related forms affected by the legislation.
[more on IRS web site]


IRS Wants Data on eBay and Amazon Sellers
<Computerworld, May 8, 2007> — The Center for Democracy and Technology (CDT) is sounding an early warning on a proposal in the president's 2008 budget that would require Internet businesses like eBay Inc. and Amazon.com Inc. to collect personal data on their customers and share it with the Internal Revenue Service.
The move is part of an effort by the U.S. Treasury Department to track down unreported small business income generated by the sale of personal property on such sites. Under the proposal, online "brokers" would be required to file income statements for all customers who use their sites to conduct 100 or more separate transactions that generate US$5,000 or more per year.
Among the information the brokers would be required to collect would be customers' names, addresses and taxpayer identification numbers or Social Security numbers. The proposal would be effective for sales of property on or after Jan 1, 2008. [more on CDT page]




Tax Relief and Health Care Act of 2006
<IRS Newswire, Washington, D.C., December 22, 2006> — On December 9, 2006, Congress passed the long-awaited legislation extending many popular but expired tax provisions. The legislation also includes some new tax provisions. President Bush signed the bill on December 20. The recent changes in the law mean that the IRS will not be able to process a small percentage of individual tax returns until early February, primarily involving three tax deductions — the state and local sales tax, higher education tuition and fees, and educator expenses. The IRS also announced details on how taxpayers can use existing lines on the current Form 1040 and other tax documents to claim these three major extenders provisions.[more on PDF]





New Restrictions on Charitable Contributions
<IRS Newswire, Washington, D.C.> — Beginning with contributions made after August 17, 2006, no deduction is allowed for most contributions of clothing and household items unless the donated property is in good used condition or better.
All cash contributions made in tax years beginning after August 17, 2006, to any qualified charity must be supported by a dated bank record or a dated receipt. The tax year for most individual taxpayers begins on January 1.




Tax Increase Prevention and Reconciliation Act of 2005
<Various Sources, May 17, 2006> — The Tax Increase Prevention and Reconciliation Act of 2005 became a new law on May 17 and the Act impacts many taxpayers.
The new law extends the tax-rate cuts on dividend and capital gains for two more years beyond 2008 (to 2010), gives taxpayers some immediate relief from the alternative minimum tax, extends small business expensing thresholds, and allows high-income taxpayers a Roth IRA conversion opportunity. [more details]





IRS Outlines Taxpayer Protections in Private Debt Collection Program
<IRS Newswire, Washington, D.C., August 23, 2006> — The Internal Revenue Service will assign delinquent federal tax accounts to three private collection agencies beginning Sept. 7. An initial 12,500 taxpayers who owe back taxes will be in this group, with the number reaching approximately 40,000 by year’s end.
To assist the IRS in its collection of delinquent taxes, the 2004 American Jobs Creation Act authorizes the IRS to hire private firms to collect federal tax debts. This provision was carefully crafted by Congress and includes several limitations to ensure the private firms will be subject to the same stringent taxpayer protection and privacy rules that IRS employees work under. In addition, private firms cannot subcontract the work.
Private firms are not authorized to take enforcement actions such as filing liens, or making levies or property seizures. In addition, private firms are not authorized to work on technical issues such as offers in compromise, bankruptcies, hardship issues or litigation. Rather, the IRS will assign to the private firms cases in which the taxpayer has not disputed the liability. The private firms will contact taxpayers to make payment arrangements.
[Link: Private Debt Collection Program]
[Link: What to Expect when your account is assigned]




Avoid Errors in Claiming Mortgage Interest Credit