IRS practice & procedure

Some taxpayers who paid 2018 underpayment penalties will receive refund checks because the penalties will be automatically waived for those who qualify, the IRS announced.

The IRS issued updated procedures for third-party contacts to reflect changes enacted in the recent Taxpayer First Act, requiring the IRS to notify taxpayers at least 45 days before it contacts a third party to determine or collect a tax.

The IRS will permit taxpayers to change their bonus depreciation treatment for property acquired after Sept. 27, 2017, and placed in service during a tax year that includes Sept. 28, 2017.

The IRS has begun sending what it calls “educational letters” to taxpayers it has identified as not reporting virtual currency transactions or reporting them incorrectly.

As part of its effort to reduce identity theft, the IRS issued final rules permitting employers to provide truncated taxpayer identification numbers on Forms W-2, Wage and Tax Statement, they provide to employees.

The bill establishes an independent appeals office and requires the IRS to develop a customer service strategy. A controversial provision codifying the Free File program was dropped from the bill.

To fight identity theft, starting June 28 the IRS will no longer fax transcripts to taxpayers, tax professionals, and other third parties. And in July it will stop providing an option for mailing transcripts to third parties.

The new draft form, which has been extensively redesigned, is intended to simplify the calculation of income tax withholding after the changes made by the law known as the Tax Cuts and Jobs Act.

The IRS notified tax software companies that it had discovered an error in the Schedule D, Capital Gains and Losses, Tax Worksheet used to calculate the tax on certain capital gains that had new rates as a result of the law known as the Tax Cuts and Jobs Act.

The IRS announced that taxpayers affected by the recent Wolters Kluwer service outage who are facing May 15 filing deadlines can follow certain procedures to obtain reasonable cause waivers for failing to file on time.

The IRS will permit professional sports teams that trade player contracts to recognize zero gain if both parties to the exchange adopt the safe harbor and do not exchange cash.

The AICPA asked Treasury and the IRS to issue additional guidance on Sec. 199A beyond the recently finalized regulations and a proposed revenue procedure in the form of a notice on a safe harbor for rental real estate.

Beginning May 13, the IRS will accept employer identification number (EIN) applications only from individual taxpayers who have either a Social Security number or an individual taxpayer identification number as the responsible party on the EIN application.

The IRS issued final regulations under Sec. 6707A, which imposes a penalty on taxpayers who fail to disclose a reportable transaction on their tax returns.