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Individual Tax

Washington Alert

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

… IRS has issued a new warning to taxpayers regarding “a spring surge of evolving phishing emails and telephone scams.” (IR 2019-104) According to the agency, it “is seeing signs of two new variations of tax-related scams.” The first variation, which has been dubbed the SSN hustle,” involves scammers claiming to be able to suspend or cancel the victim’s Social Security number (SSN). “In this variation, the Social Security cancellation threat scam is similar to and often associated with the IRS impersonation scam,” the agency said. People should not be frightened into returning “robocall” voicemails, IRS stressed. The second variation involves the mailing of a letter threatening an IRS lien or levy. “The lien or levy is based on bogus delinquent taxes owed to a non-existent agency, “Bureau of Tax Enforcement,” IRS said.

… IRS on June 13 will conduct a 100-minute webinar titled “U.S. Taxation of Employees of Foreign Governments and International Organizations.” (e-News for Tax Professionals 2019-19) As described by the agency, the webinar will cover the following topics—listing the considerations in determining whether compensation from a foreign government or international organization is subject to U.S. tax; description of the effect of U.S. tax residency status and/or visa type on U.S. taxation; explanation of the exemption under Code Sec. 893; and the consequences of signing or not signing U.S. Citizenship and Immigration Service Form USCIS I-508. The webinar will include a question-and-answer period. “Tax professionals can earn two continuing education credits [for participating],” IRS said. To register for the event, go here.

… The Joint Committee on Taxation (JCT) has posted online a slide briefing titled “Overview of the Taxation of Global Intangible Low-Taxed Income and Foreign-Derived Intangible Income: Sections 250 and 951A.” As described by JCT, Public Law 115-97, also known as the Tax Cuts and Jobs Act (TCJA), added new Code Sec. 951A to the Code. This provision requires that U.S. shareholders of any controlled foreign corporation (CFC) include in gross income in the current taxable year their global intangible low-taxed income (GILTI). “The amount of a U.S. shareholder’s GILTI generally reflects the sum, across all of its CFCs, of certain CFC income, offset by the sum of certain CFC losses, in excess of a 10-percent return on tangible investment (with the return reduced by certain interest expense),” the briefing says. The TCJA also added new Code Sec. 250 to the Code. This section “generally allows U.S. corporate shareholders a 50-percent deduction on their GILTI, thereby subjecting GILTI to a 10.5-percent U.S. tax rate, with partial foreign tax credits available to offset some or all of the U.S. tax liability,” the briefing says. “For taxable years beginning after December 31, 2025, the deduction is reduced to 37.5 percent, resulting in a 13.125-percent U.S. tax rate,” it adds. The briefing can be accessed here.

… IRS has published a fact sheet explaining Notice CP2000 which is sent to taxpayers when their tax return does not match data reported to the agency by employers, banks and other third parties. (Fact Sheet 2019-10) The notice provides detailed information about issues IRS identified and provides steps that should be taken to resolve those issues. “This isn’t a formal audit notification, but a notice to see if the taxpayer agrees or disagrees with the proposed tax changes,” the fact sheet states. Taxpayers normally have 30 days to respond to the notice. Should a taxpayer fail to respond to the initial notice or if the agency cannot accept the additional information submitted, IRS will send follow-up correspondence called Notice CP3219A, Statutory Notice of Deficiency. “This notice gives detailed information about why the IRS proposes a tax change and how the agency determined the change,” according to the fact sheet, which adds that “the notice tells taxpayers about their right to challenge the decision in Tax Court.” Complete details regarding Notice CP2000 are available here. Information regarding Notice CP3219A is located here.

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