IRS Updates Form W-9 for 2024

For the first time in five years, the IRS updates Form W-9 for 2024 Request for Taxpayer Identification Number and Certification, on its website. The previous version of the form was from 2018. Changes to Form W-9 include:

• Modification of Line 3a to clarify how the line is to be completed by a disregarded entity
• New Line 3b must be completed by a flow-through entity to indicate that it has direct or indirect foreign partners, owners or beneficiaries when it provides a Form W-9 to another flow-through entity in which it has an ownership interest

The addition of Line 3b was intended to provide flow-through entities with information regarding the status of their indirect foreign partners, owners or beneficiaries so they can satisfy any applicable reporting requirements.

With the federal income tax deadline just around the corner, the Internal Revenue Service wants to remind taxpayers that IRS.gov offers tips on finding a qualified tax professional.

Over 84 million tax returns were prepared by a paid return preparer last year. Though most tax professionals provide honest, high-quality service, taxpayers should keep in mind these basic tips when selecting a tax professional:

• Choose a trusted preparer. Taxpayers entrust vital personal data with the person preparing their tax return, including Social Security numbers and information on income and investments.
• Review the tax return carefully before signing. Taxpayers are legally responsible for what’s on their tax return, regardless of whether someone else prepared it. If something does not look right, don’t hesitate to ask questions.
• Make sure the preparer signs the return and includes their Preparer Tax Identification Number (PTIN).
• Never sign a blank tax return. Consider it a red flag when a taxpayer is asked to sign a blank tax return.
• Ask about service fees. Avoid preparers who base fees on a percentage of their client’s refund or boast bigger refunds than their competition.

Taxpayers can use several options to help find a tax preparer. One resource is Choosing a Tax Professional, which includes a wealth of consumer guidance for selecting a tax professional. There are various types of tax return preparers, including enrolled agents, certified public accountants, attorneys and some who don’t have a professional credential.

The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications is a free searchable and sortable database. It includes the name, city, state and zip code of credentialed return preparers who are CPAs, enrolled agents or attorneys, as well as those who have completed the requirements for the IRS Annual Filing Season Program. A search of the database can help taxpayers verify credentials and qualifications of tax professionals or locate a tax professional in their geographic area.

The IRS requires anyone who prepares any federal tax return for compensation to have a PTIN. For 2020, the IRS has issued more than 773,000 PTINs.

If you need a qualified tax professional, contact us today and let our Enrolled Agent assist you!

WASHINGTON — The Internal Revenue Service today reminded taxpayers to guard against tax fraud and other related financial scams related to COVID-19.

In the last few months, the IRS Criminal Investigation division (CI) has seen a variety of Economic Impact Payment (EIP) scams and other financial schemes looking to take advantage of unsuspecting taxpayers. CI continues to work with law enforcement agencies domestically and abroad to educate taxpayers about these scams and investigate the criminals perpetrating them during this challenging time.

“Criminals seize on every opportunity to exploit bad situations, and this pandemic is no exception,” said IRS Commissioner Chuck Rettig. “The IRS is fully focused on protecting Americans while delivering Economic Impact Payments in record time. The pursuit of those who participate in COVID-19 related scams, intentionally abusing the programs intended to help millions of Americans during these uncertain times, will long remain a significant priority of both the IRS and IRS-CI.”

Criminals are continuing to use the COVID-19 Economic Impact Payments as cover for schemes to steal personal information and money. Scams related to COVID-19 are not limited to stealing EIPs from taxpayers, however. CI has already seen scams related to the organized selling of fake at-home test kits, offers to sell fake cures, vaccines, pills and advice on unproven treatments for COVID-19. Other scams purport to sell large quantities of medical supplies through the creation of fake shops, websites, social media accounts and email addresses where the criminal fails to deliver promised supplies after receiving funds.

“Criminals try to take advantage of our most vulnerable times and our most vulnerable populations. But because we have seen many of these criminals and schemes before, we know how to find them and we know how to expose them,” said Don Fort, Chief of IRS Criminal Investigation. “And because COVID-19 is a global problem, it requires a global solution. Not only are we leveraging our financial investigative expertise domestically, we are working hand-in-hand with our J5 partners on those COVID-19 cases that cross borders. There truly is no place for criminals to hide.”

Other COVID-19 related scams involve setting up fake charities soliciting donations for individuals, groups and areas affected by the disease. Some criminals are offering opportunities to invest early in companies working on a vaccine for the disease promising that the “company” will dramatically increase in value as a result. These promotions are often styled as “research reports,” make predictions of a specific “target price,” and relate to microcap stocks, or low-priced stocks issued by the smallest of companies with limited publicly available information.

Finally, CI has also seen a tremendous increase in phishing schemes utilizing emails, letters, texts and links. These phishing schemes are using keywords such as “Corona Virus,” “COVID-19,” and “Stimulus” in varying ways. These schemes are blasted to large numbers of people known by the bad actors in an effort to get personally identifying information or financial account information to include account numbers and passwords. Most of these new schemes are actively playing on the fear and unknown of the virus and the stimulus payments.

Coronavirus-related (COVID-19) scams should be reported to the National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or submitted through the NCDF web Complaint Form. The NCDF is a national coordinating agency within the Department of Justice’s Criminal Division dedicated to improving the detection, prevention, investigation and prosecution of criminal conduct related to natural and man-made disasters and other emergencies, such as the coronavirus (COVID-19). Hotline staff will obtain information regarding your complaint, which will then be reviewed by law enforcement officials.

Taxpayers can also report fraud or theft of their Economic Impact Payments to the Treasury Inspector General for Tax Administration (TIGTA). Reports can be made online. TIGTA investigates external attempts to corruptly interfere with federal tax administration, including IRS-related coronavirus scams.

Also, taxpayers can always report phishing attempts to the IRS. Those who receive unsolicited emails or social media attempts to gather information that appear to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), should forward it to phishing@irs.gov. Taxpayers are encouraged not to engage potential scammers online or on the phone.

Learn more by going to the Report Phishing and Online Scams page on IRS.gov. Official IRS information about the COVID-19 pandemic and economic impact payments can be found on the Coronavirus Tax Relief page on IRS.gov, which is updated frequently.

WASHINGTON — Today, the Internal Revenue Service is starting to add 3,500 telephone representatives to answer some of the most common questions about Economic Impact Payments.

IRS telephone assistance and other services will remain limited, and answers for most of the common questions related to Economic Impact Payments are available on IRS.gov. The IRS anticipates bringing back additional assistors as state and local advisories permit.

Answers for most Economic Impact Payment questions are available on the automated message for people who call the phone number provided in the letter (Notice 1444). Those who need additional assistance at the conclusion of the message will have the option of talking to a telephone representative.

WASHINGTON — The Internal Revenue Service today announced that the application period for Low Income Taxpayer Clinic grants for the calendar year 2021 will run from April 30, 2020, to June 16, 2020.

The LITC Program is a federal grant program administered by the Office of the Taxpayer Advocate at the IRS, which is led by National Taxpayer Advocate Erin M. Collins. Under Internal Revenue Code Section 7526, the IRS awards matching grants of up to $100,000 per year to qualifying organizations to develop, expand or maintain a LITC. A LITC must provide services for free or for no more than a nominal fee.

The IRS welcomes all applications and will ensure that each application receives due consideration. The IRS is committed to achieving maximum access to representation for low-income taxpayers under the terms of the LITC Program.

In awarding LITC grants for the calendar year 2021, the IRS will continue to work toward the following program goals:

• Obtaining coverage for the states of Hawaii, Montana, Nevada, North Dakota, West Virginia, Wyoming, and the territory of Puerto Rico to ensure that every state (plus the District of Columbia and Puerto Rico) has at least one clinic;
• Expanding coverage to counties in the following high-need areas that are currently not being served by an LITC: central Arizona, Kern County, California, mid-Florida and the eastern coast, southeast New York, and northeast Pennsylvania. For a complete list of counties see the 2021 Grant Application Package and Guidelines, Publication 3319 (PDF); and
• Ensuring that grant recipients demonstrate they are serving geographic areas that have sizable populations eligible for and requiring LITC services.

The mission of LITCs is to ensure the fairness and integrity of the tax system for taxpayers who are low income or speak English as a second language by:

• Providing pro bono representation on their behalf in tax disputes with the IRS;
• Educating them about their rights and responsibilities as taxpayers; and
• Identifying and advocating on issues that impact them.

LITC grants are funded by federal appropriations. The clinics, their employees, and their volunteers operate independently from the IRS. Examples of qualifying organizations include:

• Clinical programs at accredited law, business or accounting schools whose students represent low-income taxpayers in tax disputes with the IRS; and
• Organizations exempt from tax under IRC Section 501(a) whose employees and volunteers represent or refer for representation low-income taxpayers in tax disputes with the IRS.

The IRS is authorized to award a multi-year grant not to exceed three years. For an organization not currently receiving a grant for 2020, an organization that received a single-year grant for 2020, or an organization whose multi-year grant ends in 2020, the organization must submit a full grant application electronically. For an organization currently receiving a grant for 2020 that is requesting funding for the second or third year of a multi-year grant, the organization must submit a request for continued funding electronically. All organizations must use the funding number of TREAS-GRANTS-052021-001. Applications and requests for continued funding must be submitted by 11:59 p.m. Eastern time on June 16, 2020.

The complete program requirements and application instructions can be found in Publication 3319 (PDF). The LITC Program Office will conduct a teleconference training session on the 2021 full grant application process and requirements on May 12, 2020, from 1 – 2:30 p.m. Eastern time. Teleconference dial-in information and presentation materials will be posted on May 11, 2020. No registration is necessary.

Questions about the LITC Program or grant application process can be sent by email to LITCProgramOffice@irs.gov.

WASHINGTON — The Internal Revenue Service today reminds taxpayers and tax professionals to use electronic options to support social distancing and speed the processing of tax returns, refunds and payments.

To protect the public and employees, and in compliance with orders of local health authorities around the country, certain IRS services such as live assistance on telephones, processing paper tax returns and responding to correspondence are extremely limited or suspended until further notice. All Taxpayer Assistance Centers remain temporarily closed as are many volunteer tax preparation sites until further notice. This will not affect the IRS’s ability to deliver Economic Impact Payments, which taxpayers will begin receiving next week.

Although the tax filing deadline has been extended to July 15, 2020, from April 15, the IRS continues to process electronic tax returns, issue direct deposit refunds and accept electronic payments. As of April 3, the IRS received over 97.4 million tax returns and issued over $213 billion in refunds.

IRS operational status and alternatives

Paper Tax Returns: All taxpayers should file electronically through their tax preparer, tax software provider or IRS Free File if possible. The IRS is not currently able to process individual paper tax returns. If you already have filed via paper but it has not yet been processed, do not file a second tax return or write to the IRS to inquire about the status of your return or your economic impact payment. Paper returns will be processed  once processing centers are able to reopen. This year, more than 90% of taxpayers have filed electronically.

Ordering Forms: The IRS’s National Distribution Center is closed until further notice. We are not able to take any orders for forms or publications to be mailed during this time. Most forms and publications are available for download electronically at IRS.gov/forms.

Web Options: IRS.gov remains the best source for tax law questions, checks on refund status and tax payments. All IRS updates on the Economic Impact Payments and other Covid-19 related issues also will be posted immediately on IRS.gov/coronavirus. Taxpayers can check their refund status at Where’s My Refund? or obtain a tax transcript at Get Transcript Online. Tax transcripts are only available online at this time.

Taxpayers also can make tax payments through Direct Pay. Taxes due must be paid by July 15. The Interactive Tax Assistant can help answer tax law questions. There currently are no email options that will generate answers to questions posed by taxpayers. Publication 5136, IRS Services Guide, is a good source of information.

Telephone Options: Automated phone lines: which handle most taxpayer calls – also will remain available during this period. Some tax compliance lines also remain available. IRS phone lines supported by customer service representatives for both taxpayers and tax professionals are not staffed at this time. To check on regular tax refund status via automated phone, call 800-829-1954. (This line has no information on Economic Impact Payments.)

Practitioner Priority Service (PPS): Due to staff limitations the Practitioner Priority Service line is temporarily closed until further notice. The IRS is unable to process Centralized Authorization File (CAF) requests at this time.

IRS.gov remains the first option for answers to questions. Practitioners with e-Services accounts and with client authorization can access the Transcript Delivery System to obtain prior-year transcripts. Taxpayers should use Where’s My Refund? and Get Transcript, both common requests. However, the Get Transcript by Mail option should not be used since the offices that print and mail the transcripts are closed.

Taxpayer correspondence: While the IRS is receiving and storing mail, our mail processing functions have been scaled back to comply with social distancing recommendations. Currently, we have reduced responses to paper correspondence. Our primary concern is serving taxpayers as indicated in the People First Initiative, which includes numerous actions to alleviate taxpayer burden during this time.

Taxpayers who mail correspondence to the IRS during this period should expect to wait longer than usual for a response. Once normal operations resume it will take the IRS time to work through any correspondence backlog. Correspondence sent to IRS offices may be returned to the taxpayer if that office is closed and no one is available to accept them.

U.S. Residency Certification: The Philadelphia Accounts Management Campus is currently closed. Processing of the US Residency Certification Program is temporarily suspended. Normal operations will resume as soon as possible.

Taxpayer Protection Program: If you received correspondence from the IRS asking if you filed a suspicious tax return, you may use the online Identity Verification Service to validate your identity. Because the IRS cannot take calls or appointments right now, this is the only present option and is only for taxpayers who receive IRS letters asking them to authenticate their identity via online, telephone or in-person and confirm whether they filed the tax return in question.

WASHINGTON — The Internal Revenue Service and its Security Summit partners today urged tax professionals to take additional security steps immediately to protect taxpayer data as more practitioners telework and security risks increase.

The IRS, state tax agencies and the nation’s tax industry continue to see an upswing in data thefts from tax professionals as cybercriminals try to take advantage of COVID-19 and Economic Impact Payments to create new scams.

“Identity thieves view the pandemic as a chance to exploit tax professionals as well as taxpayers,” said IRS Commissioner Chuck Rettig. “They are using every trick of their criminal trade to con people as well as steal valuable personal and financial information to help enable tax-related identity theft. In many ways, tax pros are one of the first lines of defense. We urge the entire tax community to take additional steps and protect their sensitive data.”

The partners in the Security Summit – including the IRS, state tax agencies and private-sector tax industry – continue working closely together to watch for new threats during the coronavirus.

In addition, IRS Criminal Investigation is actively working to combat scam artists trying to exploit Economic Impact Payments and other provisions related to coronavirus. So far, the scams CI has already seen look to prey on vulnerable taxpayers who are unaware of how the payments will reach them. IRS CI is prioritizing these types of investigations to help protect taxpayers and the tax system.

Tax Pros: Use a Virtual Private Network for extra security

All tax professionals who are teleworking should be using an encrypted Virtual Private Network or VPN. A VPN provides a secure, encrypted tunnel to transmit data between a remote user via the internet and the company network.

Cybercriminals can exploit various weaknesses, whether by using a phishing email or an unsecured network, to gain control of a tax professional’s computer. Once they have remote control, they can either steal data or complete and file client tax returns but change the bank account information for refunds.

The government cannot recommend a VPN provider, but tax professionals can ask trusted colleagues or search for “Best VPNs” to find a legitimate vendor. Major technology sites often provide lists of top services. Never fall for “pop-ups” on websites for VPN or any kind of security software. Those generally are all scams.

Multi-Factor Authentication helps protect data

This year, most tax software providers for tax professionals and for taxpayers are offering the option of multi-factor authentication. Security Summit partners urge the use of this option. Multi-factor authentication means a returning user to the software product must enter not only their credentials (username/password) but also a security code, generally sent as a text to a mobile phone. The idea is the thieves may compromise log-in credentials, but it is unlikely they will have stolen the mobile phone as well.

Multi-factor authentication protects the software account from being breached and from client data being stolen. Tax professionals should activate this feature immediately.

Avoid phishing scams

Identity thieves have stepped up phishing scam efforts to capitalize on COVID-19 and Economic Impact Payments. Crooks are targeting tax professionals as well as taxpayers.

Tax professionals should beware of emails from criminals posing as potential clients. As people practice social distancing these days, criminals may exploit this process to try to trick tax practitioners into opening links or attachments. For example, crooks may present themselves as a new client and ask the practitioner to view the wage and income information they have in an attachment.

The Security Summit reminds tax professionals of simple steps to remember: Know your customers. Use the phone to confirm identities. And, don’t take the bait.

Thieves also seek to impersonate tax software providers, cloud storage providers banks and others. Remember, phishing emails generally have an urgent message, i.e. your account password expired, and direct you to a link or attachment.

Taxpayers can report suspicious emails posing as the IRS to our *PHISHING mailbox at phishing@irs.gov.

Watch out for IRS impersonation scams

The IRS will not call, email or text anyone about Economic Impact Payments. These are impersonation scams by thieves seeking to steal bank account or other sensitive data. Do not fall for these scams.

Don’t forget security software

Everyone, especially all tax professionals, should be using broad-based security software that protects not just their computers but mobile phones as well. Security features will help identify and stop potentially dangerous malware that can infect digital networks.