IRS Data Breach

  1. IRS Data Breach

    Hackers breached the IRS’s Get Transcript Online service and obtained the past tax return data of more than 104,000 taxpayers while attempting to access data of more than 200,000 taxpayers. The hackers had previously gained sufficient information from an outside source before trying to access the IRS site, allowing them to clear a multi-step authentication process. According to IRS Commissioner Koskinen, the data obtained will help criminals file more credible appearing false returns that are more likely to evade the IRS’s antifraud filters. The 200,000 taxpayers will receive an IRS letter indicating that criminals have their tax data, and the IRS will offer credit monitoring services to the 104,000 who had their data stolen. After learning of the breach, the IRS shut down the Get Transcript Online service that is used by taxpayers to obtain past tax data for mortgage and college applications. There is currently no date for it to reopen, but transcripts are still available by mail. For more information on obtaining a transcript, go to www.irs.gov/Individuals/Get-Transcript

  2. IRS Reminds Businesses of Cash Transaction Reporting Requirement

    Businesses, including sole proprietors, in any U.S. possession or territory must report a cash transaction exceeding $10,000. The transactions are reported on Form 8300, which must be filed within 15 days of the transaction. A transaction can include two or more related transactions if the recipient knows, or has reason to know, that each transaction is one of a series of connected transactions. Transactions conducted between a payer (or its agent) and the recipient within a 24-hour period are considered related. Cash includes coins and currency (domestic and foreign), cashier’s checks, bank drafts, traveler’s checks, and money orders. U.S. possessions and territories include American Samoa, the Commonwealth of Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands. Businesses required to file Form 8300 can include pawnbrokers, attorneys, real estate brokers, insurance companies, and travel agents, as well as those that sell jewelry, furniture, boats, aircraft, or automobiles. IRS News Release IR-2015-81.

  3. Individuals Have Extra Time to File in 2016

    Under IRC Sec. 7503, filing and payment deadlines that fall on a Saturday, Sunday, or legal holiday are timely satisfied if met on the next business day. Although 4/15/16 is on a Friday, the Emancipation Day holiday observed in the District of Columbia will be on that day. Therefore, most taxpayers will have until the next business day (Monday, 4/18/16) to file their Form 1040s. However, taxpayers in Maine and Massachusetts will have until 4/19/16 to file their tax returns so they can observe Patriot’s Day on Monday, 4/18/16. The IRS also provided a detailed explanation of the effect of Emancipation Day and Patriot’s Day on the filing deadlines that are normally due on April 15 when April 15 falls on a weekend. Rev. Rul. 2015-13, IRB 2015-22.

  4. Charter School Not Exempt from FICA Tax Liability

    In a recent Chief Counsel Advice, the factors under Revenue Ruling 57-128 were considered to determine whether the school was an instrumentality of a government. The laws in State A regulate education including public, private, and charter schools. The charter schools are funded by tax revenue, governed by boards that are independent from the local school districts, and exempt from many statutory provisions that apply to district schools. Although the charter school is publicly funded and performs a government function (providing public education), it does not do so on behalf of the State because the State exercises no meaning control over the schools day-to-day operations, and it is operated independently from the local school district. Consequently, the school does not qualify as a wholly-owned instrumentality of the state and is not eligible for the exemption from FICA tax liability under IRC Sec. 3121(b)(7)(F). CCA201519027.