News & Updates
2 million ITINs set to expire in 2019; to avoid refund delays apply soon
IR-2019-168, October 10, 2019
WASHINGTON —Taxpayers with expiring Individual Taxpayer Identification Numbers (ITINs) can get their ITINs renewed more quickly and avoid refund delays next year by submitting their renewal application soon, the Internal Revenue Service said today.
An ITIN is a tax ID number used by taxpayers who don't qualify to get a Social Security number. Any ITIN with middle digits 83, 84, 85, 86 or 87 will expire at the end of this year. In addition, any ITIN not used on a tax return in the past three years will expire. As a reminder, ITINs with middle digits 70 through 82 that expired in 2016, 2017 or 2018 can also be renewed.
Americans Worldwide Receive Economic Stimulus Payment (Individual Stimulus Payment/Recovery Rebate Check): What you need to know...
IR-2020-61, March 30, 2020
WASHINGTON — The Treasury Department and the Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact payment. To read more, click here.
President Trump signs the Coronavirus Aid, Relief and Economic Security Act (the CARES Act)
Washington, March 27, 2020
The CARES Act provides for immediate cash relief for individual citizens, broad lending for small business and targeted relief for hard-hit industries. The Government will shortly be sending out checks directly to individual taxpayers, giving most adult Americans extra cash in hand to help cope during a period of reduced or lost income. This will be implemented under IRC Section 6428, enabling the Internal Revenue Service (IRS) to disburse checks after determining eligibility and the number of qualifying persons reported on the last filed federal tax return after tax year 2017. If you have not yet filed your 2019 federal tax return, the IRS will refer to your 2018 federal tax return to calculate your stimulus payment. Those who should have filed a 2018 federal return but have not yet done so, are urged to file as soon as possible in order to receive a stimulus payment. To read more, click here.
Nonfilers - IRS launches campaign aimed at bringing into compliance high-income individuals who have not filed their tax returns.
U.S. citizens and resident aliens are subject to tax in the United States on their worldwide income, no matter what form that income takes. Taxpayers are often under the misconception that they are taxed in the United States only on income generated or earned in the United States. Using examinations, the LB&I department will concentrate in this campaign on bringing into compliance high-income taxpayers who have not filed tax returns. To read more on this, click here.
With the increased collection of data by the IRS and the Department of Justice, and the prioritization of data analytics, taxpayers should expect an increase in the number of high-income individuals who are flagged for examination. It is also important to note that the US Senate recently ratified a number of long-stalled international tax treaties, including treaties with Switzerland and Luxembourg, which allow the IRS to obtain even more information from these other countries on high income, non-compliant US taxpayers.
The IRS steps up efforts to increase compliance for Virtual Currency reporting.
Updated December 2019
The IRS has indicated that it will be paying more attention to the tax treatment of transactions involving virtual currencies, highlighting the need for taxpayers to ensure that they report any virtual currency transactions appropriately. U.S. persons are subject to tax on worldwide income from all sources including transactions involving virtual currency. IRS Notice 2014-21 states that virtual currency is property for federal tax purposes and provides information on the U.S. federal tax implications of convertible virtual currency transactions. The Virtual Currency Compliance campaign will address noncompliance related to the use of virtual currency through multiple treatment streams including outreach and examinations. The compliance activities will follow the general tax principles applicable to all transactions in property, as outlined in Notice 2014-21. Click here to read FAQs published by the IRS on this.
Relief Procedures for Expatriating or Former U.S. Citizens
Updated November 22, 2019
The IRS announced procedures for certain persons who have relinquished, or intend to relinquish, their United States (U.S.) citizenship and who wish to come into compliance with their U.S. income tax and reporting obligations and avoid being taxed as a “covered expatriate” under section 877A of the U.S. Internal Revenue Code (IRC). Please read all information for these procedures including the Frequently Asked Questions and Answers (FAQs) to determine eligibility. Relinquishing U.S. citizenship and the tax impacts of relinquishing U.S. citizenship are serious matters that involve irrevocable decisions. Consider consulting legal counsel before making any decisions about relinquishing U.S. citizenship.
The Department of the Treasury, the Department of State, the Internal Revenue Service, and the Social Security Administration have prepared a brief “frequently asked questions” document on obtaining social security numbers, expatriation, and tax implications of expatriation. To read further, click here...
IRS reminds those with foreign assets of annual April 15 FBAR deadline
IR-2019-63, April 4, 2019
WASHINGTON — The Internal Revenue Service today reminded U.S. citizens and resident aliens, including those with dual citizenship, that if they have a foreign bank or financial account, April 15, 2019, is the deadline to file their annual Report of Foreign Bank and Financial Accounts (FBAR). They should also check to see if they have a U.S. tax liability and a federal tax return filing requirement. To read further, click here...
Understand how to report foreign bank and financial accounts
FS-2019-7, April 2019
In a global economy, many people in the United States have foreign financial accounts. The law requires U.S. persons with foreign financial accounts to report their accounts to the U.S. Treasury Department, even if the accounts don’t generate any taxable income. They need to report by April 15 of the following calendar year.
The U.S. government requires reporting of foreign financial accounts because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions. To read further, click here...
Individuals who need passports for imminent travel should contact IRS promptly to resolve tax debt
IR-2019-23, February 27, 2019
WASHINGTON ― The Internal Revenue Service today reiterated its warning that taxpayers may not be able to renew a current passport or obtain a new passport if they owe federal taxes. To avoid delays in travel plans, taxpayers need to take prompt action to resolve their tax issues. To read further, click here.
The Tax Cuts & Jobs Act (TCJA) - Understanding tax reform changes affecting individuals and families.
FS-2019-2, February 2019
The Tax Cuts and Jobs Act (TCJA), enacted in late 2017, produced the most sweeping tax law change in more than 30 years. The TCJA, often referred to as tax reform, affects nearly every taxpayer — and the 2018 federal return they’ll file in 2019.
For taxpayers preparing to file their 2018 tax return or getting ready to meet with their tax professional, understanding the changes from the Tax Cuts and Jobs Act can help them “Be Tax Ready.” More information is available in IRS Publication 5307, Tax Reform Basics for Individuals and Families. To read further, click here.
The filing obligations of U.S. Citizens and Long-term Residents living and working outside the United States.
Updated December 13, 2019
If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.
Most People Abroad Need to File... A filing requirement generally applies even if the taxpayer qualifies for tax benefits, such as the foreign earned income exclusion or the foreign tax credit, that substantially reduce or eliminate their U.S. tax liability. These tax benefits are not automatic and are only available if an eligible taxpayer files a U.S. income tax return. To read further, click here.
IRS to end offshore voluntary disclosure program; Taxpayers with undisclosed foreign assets urged to come forward now
IR-2018-52, March 13, 2018
WASHINGTON – The Internal Revenue Service today announced it will begin to ramp down the 2014 Offshore Voluntary Disclosure Program (OVDP) and close the program on Sept. 28, 2018. By alerting taxpayers now, the IRS intends that any U.S. taxpayers with undisclosed foreign financial assets have time to use the OVDP before the program closes.
“Taxpayers have had several years to come into compliance with U.S. tax laws under this program,” said Acting IRS Commissioner David Kautter. “All along, we have been clear that we would close the program at the appropriate time, and we have reached that point. Those who still wish to come forward have time to do so.” To read further, click here.
Compliance Options for Non-Filers
Options Available For U.S. Taxpayers with Undisclosed Foreign Financial Assets
The implementation of FATCA and the ongoing efforts of the IRS and the Department of Justice to ensure compliance by those with U.S. tax obligations have raised awareness of U.S. tax and information reporting obligations with respect to non-U.S. investments. Because the circumstances of taxpayers with non-U.S. investments vary widely, the IRS offers the following options for addressing previous failures to comply with U.S. tax and information return obligations with respect to those investments:
Each of these options is explained on the linked pages. The IRS encourages taxpayers to consult with professional tax or legal advisers in determining which option is the most appropriate for them.
IRS Upgrades, Enhances FATCA Registration System
WASHINGTON — The Internal Revenue Service has upgraded the Foreign Account Tax Compliance Act (FATCA) Online Registration System, enabling sponsoring entities to register their sponsored entities to obtain a global intermediary identification number. The upgraded system also will allow users to update their information, download registration tables and change their financial institution type. The upgrade also includes an updated jurisdiction list.
The Foreign Account Tax Compliance Act Online Registration System is a secure, web-based system that financial institutions and other entities can use to register for FATCA purposes. Launched in 2013, the system allows the IRS to identify foreign financial institutions and certain other entities with FATCA obligations. These entities generally report on foreign financial accounts held by U.S. taxpayers under the terms of FATCA or pursuant to the provisions of specific intergovernmental agreements (IGAs).
“The registration system is the backbone of FATCA,” said IRS Commissioner John Koskinen. “These upgrades improve the FATCA process, enabling the registration of sponsored entities and making it easier for registrants to use. Working with financial institutions and through intergovernmental agreements, our progress against undisclosed foreign accounts continues.”
More than 170,000 financial institutions worldwide have registered with the IRS. These financial institutions are located in more than 200 jurisdictions. In most cases, those foreign financial institutions that do not comply with FATCA or participate through an IGA are subject to 30 percent withholding on certain U.S. source payments.
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