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State Postpones Tax Deadlines Until July 15 Due to the COVID-19 Pandemic

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03/18/2020

Sacramento – The Franchise Tax Board (FTB) today announced updated special tax relief for all California taxpayers due to the COVID-19 pandemic.

FTB is postponing until July 15 the filing and payment deadlines for all individuals and business entities for:

  • 2019 tax returns
  • 2019 tax return payments
  • 2020 1st and 2nd quarter estimate payments
  • 2020 LLC taxes and fees
  • 2020 Non-wage withholding payments

“The COVID-19 pandemic is disrupting life for people and businesses statewide,” said State Controller Betty T. Yee, who serves as chair of FTB. “We are further extending tax filing deadlines for all Californians to July 15. Hopefully, this small measure of relief will help allow people to focus on their health and safety during these challenging times.”

To give taxpayers a deadline consistent with that of the Internal Revenue Service (IRS) without the federal dollar limitations, FTB is following the federal relief described in Notice 2020-17. Since California conforms to the underlying code sections that grant tax postponements for emergencies, FTB is extending the relief to all California taxpayers. Taxpayers do not need to claim any special treatment or call FTB to qualify for this relief.

In line with Governor Newsom’s March 12 Executive Order, FTB previously extended the due dates for filing and payment last week for affected taxpayers until June 15, with the qualification that the deadlines may be extended further if the IRS grants a longer relief period, as it did yesterday. This announcement supersedes last week’s announcement.

For more details regarding FTB COVID-19 tax relief, please see our website at ftb.ca.gov and search COVID-19.

If possible, taxpayers should continue to file tax returns on time to get their refunds timely, including claiming the Earned Income Tax Credit and Young Child Tax Credit. During this public health emergency, FTB continues to process tax returns, issue refunds, and provide phone and live chat service to taxpayers needing assistance.

IRS extends more tax deadlines to cover individuals, trusts, estates corporations and others

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IR-2020-66, April 9, 2020

WASHINGTON — To help taxpayers, the Department of Treasury and the Internal Revenue Service announced today that Notice 2020-23 (PDF) extends additional key tax deadlines for individuals and businesses.

Last month, the IRS announced that taxpayers generally have until July 15, 2020, to file and pay federal income taxes originally due on April 15. No late-filing penalty, late-payment penalty or interest will be due.

Today’s notice expands this relief to additional returns, tax payments and other actions. As a result, the extensions generally now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. Individuals, trusts, estates, corporations and other non-corporate tax filers qualify for the extra time. This means that anyone, including Americans who live and work abroad, can now wait until July 15 to file their 2019 federal income tax return and pay any tax due.

Extension of time to file beyond July 15

Individual taxpayers who need additional time to file beyond the July 15 deadline can request an extension to Oct. 15, 2020, by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004. An extension to file is not an extension to pay any taxes owed. Taxpayers requesting additional time to file should estimate their tax liability and pay any taxes owed by the July 15, 2020, deadline to avoid additional interest and penalties.

Estimated Tax Payments

Besides the April 15 estimated tax payment previously extended, today’s notice also extends relief to estimated tax payments due June 15, 2020. This means that any individual or corporation that has a quarterly estimated tax payment due on or after April 1, 2020, and before July 15, 2020, can wait until July 15 to make that payment, without penalty.  

2016 unclaimed refunds – deadline extended to July 15

For 2016 tax returns, the normal April 15 deadline to claim a refund has also been extended to July 15, 2020. The law provides a three-year window of opportunity to claim a refund.  If taxpayers do not file a return within three years, the money becomes property of the U.S. Treasury. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by the July 15, 2020, date.

IRS.gov assistance 24/7

IRS live telephone assistance is currently unavailable due to COVID-19. Normal operations will resume when possible. Tax help is available 24 hours a day on IRS.gov.  The IRS website offers a variety of online tools to help taxpayers answer common tax questions. For example, taxpayers can search the Interactive Tax Assistant, Tax Topics, Frequently Asked Questions, and Tax Trails to get answers to common questions. Those who have already filed can check their refund status by visiting IRS.gov/Refunds.

Using strong password is a strong defense against identity thieves

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Two things taxpayers can do to prevent themselves from identity theft is to use strong passwords and keep those passwords secure.

While many people use fingerprint or facial recognition technology to protect their devices, sometimes it’s still necessary to use a password. In recent years, cybersecurity experts’ recommendations on what constitutes a strong password has changed. With that in mind, here are four tips for building a better password:

  • Use word phrases that are easy to remember rather than random letters, characters and numbers that cannot be easily recalled.
  • Use a minimum of eight characters; longer is better.
  • Use a combination of letters, numbers and symbols, i.e., XYZ, 567, !@#.
  • Avoid personal information or common passwords.

Writing strong passwords isn’t the only way to keep data secure. Here are a few more tips for folks to remember. People should:

  • Change default and temporary passwords that come with accounts or devices.
  • Not reuse passwords. Rather use a completely different password for every account and device.
  • Give a password a total makeover when changing it. For example, simply changing Bgood!17 to Bgood!18 is not good enough.
  • Not use email addresses as usernames, if that’s an option.
  • Store any password list in a secure location, such as a safe or locked file cabinet.
  • Not disclose passwords to anyone for any reason.
  • Use a password manager program to track passwords if you have numerous accounts.

Whenever it is an option for a password-protected account, users also should opt for a multi-factor authentication process. Many email providers, financial institutions and social media sites now offer customers two-factor authentication protections.

Two-factor authentication helps by adding an extra layer of protection. Often two-factor authentication means the returning user must first enter credentials like a username and password. Then they must do another step, such as entering a security code texted to a mobile phone.

More information:

Prepaid Real Property Taxes May Be Deductible in 2017 if Assessed and Paid in 2017

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Prepaid Real Property Taxes May Be Deductible in 2017 if Assessed and Paid in 2017

The Internal Revenue Service advised tax professionals and taxpayers today that pre-paying 2018 state and local real property taxes in 2017 may be tax deductible under certain circumstances.

The IRS has received a number of questions from the tax community concerning the deductibility of prepaid real property taxes. In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed.

The following examples illustrate these points.

Example 1: Assume County A assesses property tax on July 1, 2017 for the period July 1, 2017 – June 30, 2018. On July 31, 2017, County A sends notices to residents notifying them of the assessment and billing the property tax in two installments with the first installment due Sept. 30, 2017 and the second installment due Jan. 31, 2018. Assuming taxpayer has paid the first installment in 2017, the taxpayer may choose to pay the second installment on Dec. 31, 2017, and may claim a deduction for this prepayment on the taxpayer’s 2017 return.

Example 2: County B also assesses and bills its residents for property taxes on July 1, 2017, for the period July 1, 2017 – June 30, 2018. County B intends to make the usual assessment in July 2018 for the period July 1, 2018 – June 30, 2019. However, because county residents wish to prepay their 2018-2019 property taxes in 2017, County B has revised its computer systems to accept prepayment of property taxes for the 2018-2019 property tax year. Taxpayers who prepay their 2018-2019 property taxes in 2017 will not be allowed to deduct the prepayment on their federal tax returns because the county will not assess the property tax for the 2018-2019 tax year until July 1, 2018.

The IRS reminds taxpayers that a number of provisions remain available this week that could affect 2017 tax bills. Time remains to make charitable donations. See IR-17-191 for more information. The deadline to make contributions for individual retirement accounts – which can be used by some taxpayers on 2017 tax returns – is the April 2018 tax deadline.

IRS.gov has more information on these and other provisions to help taxpayers prepare for the upcoming filing season.

IRS Criminal Investigation Releases Fiscal Year 2015 Annual Report

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IRS Criminal Investigation Releases Fiscal Year 2015 Annual Report

IR-2015-135, Dec. 3, 2015

WASHINGTON — The Internal Revenue Service today announced the release of its IRS Criminal Investigation (CI) annual report, reflecting significant accomplishments and enforcement actions taken in fiscal year 2015.

Focusing on tax-related identity theft, money laundering, public corruption, cybercrime and terrorist financing, IRS CI initiated 3,853 cases in FY 2015.

“Our criminal investigators continue to bring complex and meaningful cases that have a significant impact on tax administration,” said John Koskinen, IRS Commissioner. “This work also plays an important deterrent effect on would-be criminals, helping ensure fairness for taxpayers and protecting voluntary compliance in our tax system. The report is a tribute to the important work done by IRS Criminal Investigation.”

“This report reflects the extremely high level of commitment that CI agents bring to the job and the great case work accomplished in the past year,” said Richard Weber, Chief, IRS Criminal Investigation. “But the story that the report tells this year is that fewer agents do mean fewer cases. I’m extremely proud of all that we accomplished in spite of our budget challenges, but the inability to hire is really taking a toll.”

The annual report is released each year for the purpose of highlighting the agency’s successes while providing a historical snapshot of the make-up and priorities of the organization. The very first Chief of IRS CI, Elmer Lincoln Irey, served from 1919 to 1946 and envisioned releasing such a document each year to showcase the agency’s work.

CI is the only federal law enforcement agency with jurisdiction over federal tax crimes. This year, CI again boasted the highest conviction rate in all of federal law enforcement — 93.2%. CI is routinely called upon by prosecutors across the country to be the lead financial investigative agency on a wide variety of financial crimes including international tax evasion, identity theft and transnational organized crime.

“While our highest priority is to enforce the nation’s tax laws, we cannot underestimate the deterrent effect we are having on would-be criminals and the impact we are having on tax administration,” said Weber. “I’m certain that a majority of Americans who follow the law would tell you that they want consequences for those who do not.”

CI investigates potential criminal violations of the Internal Revenue Code and related financial crimes in a manner to foster confidence in the tax system and compliance with the law. The 50-page report summarizes a wide variety of IRS CI activity throughout the fiscal year and includes case summaries on a range of tax crimes, money laundering, public corruption, terrorist financing and narcotics trafficking financial crimes.

The cases in this year’s report represent the diversity and complexity of CI investigations. They touch almost every part of the world and were again some of the most successful in the history of CI. In May, indictments were unsealed in the FIFA investigation, a case that continues to this day. At the time, the investigation involved coordination with police agencies and governments in 33 countries and was one of the most complicated international white-collar cases in recent memory. Ross Ulbricht, the creator and owner of the “Silk Road” website, was sentenced to life in prison and ordered to forfeit more than $183 million. A Michigan man, Dr. Farid Fata, was sentenced to 540 months in prison and ordered to forfeit $17 million for his role in a health care fraud scheme. Fata purposefully misdiagnosed people with cancer, pumping their bodies with chemotherapy that they did not need, in order to get rich.

“I’m proud of IRS CI and the reputation that this agency has as the best financial investigators in the world. We have a long and storied history and we continue to write new chapters to that history each year,” said Weber. “Regardless of our budget situation, I am proud that we have not lost sight of our impact or mission and that the quality of our cases remains high.”

Security Awareness

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Seven Steps for Making Identity Protection Part of Your Routine

The theft of your identity, especially personal information such as your name, Social Security number, address and children’s names, can be traumatic and frustrating. In this online era, it’s important to always be on guard.

The IRS has teamed up with state revenue departments and the tax industry to make sure you understand the dangers to your personal and financial data. Taxes. Security. Together. Working in partnership with you, we can make a difference.

Here are seven steps you can make part of your routine to protect your tax and financial information:

Read your credit card and banking statements carefully and often – watch for even the smallest charge that appears suspicious. (Neither your credit card nor bank – or the IRS – will send you emails asking for sensitive personal and financial information such as asking you to update your account.)

Review and respond to all notices and correspondence from the Internal Revenue Service. Warning signs of tax-related identity theft can include IRS notices about tax returns you did not file, income you did not receive or employers you’ve never heard of or where you’ve never worked.

Review each of your three credit reports at least once a year. Visit annualcreditreport.com to get your free reports.

Review your annual Social Security income statement for excessive income reported. You can sign up for an electronic account at www.SSA.gov.

Read your health insurance statements; look for claims you never filed or care you never received.

Shred any documents with personal and financial information. Never toss documents with your personally identifiable information, especially your social security number, in the trash.

If you receive any routine federal deposit such as Social Security Administrator or Department of Veterans Affairs benefits, you probably receive those deposits electronically. You can use the same direct deposit process for your federal and state tax refund. IRS direct deposit is safe and secure and places your tax refund directly into the financial account of your choice.

This from the Federal Trade Commission – “Unlocking the Code”

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Identity thieves may already have a lot of information about you – like your credit card number, the card’s expiration date, and your name, address, and phone number. With all that information in his hands, why would he call you? He’s after one vital piece of information – the security code on your credit card.

Here’s how the scam works. The scammer says he’s calling from your credit card’s security or fraud department. They’ve flagged some suspicious activity on your card, he says. He makes up a bogus transaction and asks if you authorized it. Of course, you didn’t. So he says he’ll open a fraud investigation, gives you a case reference number, and tells you to call the phone number on your credit card if you have any questions. It all seems fine so far, right?

But, he says, there’s just one more thing. He needs to verify that you are in possession of the card – so he asks you to tell him the security code. And it’s the final piece of the puzzle he’s after.

If you get a call like this:

Don’t give the caller any information about your account – even if he already knows some of the details.
Hang up the phone. Call the customer service number on the back of your credit card. Talk to the fraud or security department and ask about the unauthorized charges the caller told you about.
Report the suspicious call to the FTC at ftc.gov/complaint or 1-877-FTC-HELP.
Tell your friends, family, neighbors, and others about it. By spreading the word, you can help someone you care about avoid falling for a scam.

Identity thieves will try a lot of different tricks to get your personal information. No matter the story they tell you, don’t give anyone your personal information if you didn’t initiate the contact using contact information you know is trustworthy. And find out what else you can do to protect your personal information from ending up in the wrong hands.

http://www.consumer.ftc.gov/blog/unlocking-code

Scam Phone Calls Continue; IRS Identifies Five Easy Ways to Spot Suspicious Calls

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I just had a client receive one of these threatening scam voice mails. Be careful out there.

IR-2014-84, Aug. 28, 2014

WASHINGTON — The Internal Revenue Service issued a consumer alert today providing taxpayers with additional tips to protect themselves from telephone scam artists calling and pretending to be with the IRS.

These callers may demand money or may say you have a refund due and try to trick you into sharing private information. These con artists can sound convincing when they call. They may know a lot about you, and they usually alter the caller ID to make it look like the IRS is calling. They use fake names and bogus IRS identification badge numbers. If you don’t answer, they often leave an “urgent” callback request.

“These telephone scams are being seen in every part of the country, and we urge people not to be deceived by these threatening phone calls,” IRS Commissioner John Koskinen said. “We have formal processes in place for people with tax issues. The IRS respects taxpayer rights, and these angry, shake-down calls are not how we do business.”

The IRS reminds people that they can know pretty easily when a supposed IRS caller is a fake. Here are five things the scammers often do but the IRS will not do. Any one of these five things is a tell-tale sign of a scam. The IRS will never:

Call to demand immediate payment, nor will we call about taxes owed without first having mailed you a bill..

Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.

Require you to use a specific payment method for your taxes, such as a prepaid debit card.

Ask for credit or debit card numbers over the phone.

Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:

If you know you owe taxes or think you might owe, call the IRS at 1.800.829.1040. The IRS workers can help you with a payment issue.

If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484 or at www.tigta.gov.

You can file a complaint using the FTC Complaint Assistant; choose “Other” and then “Imposter Scams.” If the complaint involves someone impersonating the IRS, include the words “IRS Telephone Scam” in the notes.

Remember, too, the IRS does not use unsolicited email, text messages or any social media to discuss your personal tax issue. For more information on reporting tax scams, go to www.irs.gov and type “scam” in the search box.

Additional information about tax scams are available on IRS social media sites, including YouTube and Tumblr where people can search “scam” to find all the scam-related posts.

Identity Theft a Major Concern on the IRS Annual “Dirty Dozen” List of Tax Scams to Avoid

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IRS YouTube Videos
ID Theft: IRS Efforts on Identity Theft: English | Spanish | ASL
IRS Identity Theft FAQ: First Steps for Victims: English | ASL

IR-2015-07, Jan. 26, 2015

The Internal Revenue Service today issued a filing season alert warning taxpayers to watch out for identity theft at tax time, one of the year’s “Dirty Dozen” tax scams. The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else’s Social Security number.

“We remain dedicated to stopping tax-related identity theft and protecting taxpayers, and we are making important progress on that front. Taxpayers still need to be extremely careful and do everything they can to avoid becoming a victim,” said IRS Commissioner John Koskinen.

The Dirty Dozen is compiled annually by the IRS and lists a variety of common scams taxpayers may encounter any time during the year. Many of these con games peak during filing season as people prepare their tax returns or hire someone to do so. This year for the first time, the IRS will issue the individual Dirty Dozen scams the next 12 business days to raise consumer awareness.

“Scams can be sophisticated and take many forms. We urge people to protect themselves and use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues,” Koskinen said. “Keep your personal information safe and secure. Taxpayers should protect their computers and only give out their Social Security numbers when absolutely necessary.”

Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. While the IRS has made significant strides over the past several years to address this issue, it remains a top concern for the IRS, which is why identity theft remains on the Dirty Dozen again list this year as the IRS works to protect taxpayers and help victims.

As a result of these aggressive efforts to combat identity theft from 2011 through October 2014, the IRS has stopped 19 million suspicious returns and protected over $63 billion in fraudulent refunds.

For 2015, the IRS will continue to increase both the number and efficiency of the identity theft data models and filters that are used to identify potentially fraudulent returns. These pre-refund filters stop the vast majority of fraudulent returns. Additionally, the IRS continues to expand its partnerships with financial institutions to identity and stop fraudulent refunds.

IRS Criminal Investigation continues its robust efforts, and in Fiscal Year 2014, the IRS initiated 1,063 identity theft-related investigations. Criminal Investigation enforcement efforts resulted in 748 sentencings as compared to 438 in FY 2013, an increase of 75 percent. Our incarceration rate rose to 87.7 percent as compared to 80.6 percent in FY 2013. The courts imposed significant jail time with the average months to serve in FY 2014 at 43 months as compared to 38 months in FY 2013 with the longest sentencing being 27 years.

Fighting identity theft is an ongoing battle as identity thieves continue to create new ways of stealing personal information and using it for their gain. Identity theft cases are among the most complex handled by the IRS. The IRS is continually reviewing processes and policies to minimize the incidence of identity theft and to help those who find themselves victimized. The IRS is working hard to streamline its internal process, but more work remains.

In an effort to help victims, the IRS has issued approximately 1.5 million Identity Protection PINs (IP PINs.) The IP PIN is a unique, six-digit number that is assigned annually to victims of identity theft with resolved cases for use when filing their federal tax return. The IP PIN will allow these individuals to avoid delays in filing returns and receiving refunds.

This year, the IRS will continue its IP PIN pilot program that allows taxpayers who filed tax returns last year from Florida, Georgia or the District of Columbia to opt into the IP PIN program. Additionally, the IRS is offering approximately 1.7 million taxpayers the opportunity to opt in to the IP PIN program in instances where the IRS has identified indications of identity theft on their accounts.

The IRS understands that identity theft is a frustrating, complex process for victims. While identity thieves steal information from sources outside the tax system, the IRS is often the first to inform a victim that identity theft has occurred. The IRS is working hard to resolve identity theft cases as quickly as possible.

The IRS offers the following tips as ways to protect you from becoming a victim of identity theft:

Don’t carry your Social Security card or any documents that include your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
Don’t give a business your SSN or ITIN just because they ask. Give it only when required.
Protect your financial information.
Check your credit report every 12 months.
Review your Social Security Administration earnings statement annually.
Secure personal information in your home.
Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for Internet accounts.
Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.

For more information, see the special identity theft section on IRS.gov, as well as IRS Fact Sheet 2015-1, IRS Combats Identity Theft and Refund Fraud on Many Fronts, and IRS Fact Sheet 2015-2, Identity Theft Information for Taxpayers and Victims.

Interest Rates Remain the Same for the First Quarter of 2015

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The Internal Revenue Service has announced that interest rates will remain the same for the calendar quarter beginning Jan. 1, 2015. The rates will be:

three (3) percent for overpayments (two (2) percent in the case of a corporation);
three (3) percent for underpayments;
five (5) percent for large corporate underpayments; and
one-half (0.5) percent for the portion of a corporate overpayment exceeding $10,000.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced today are computed from the federal short-term rate determined during October 2014 to take effect Nov. 1, 2014, based on daily compounding.

Revenue Ruling 2014-29 announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2014-52, dated Dec. 22, 2014.

IRS Circular 230 Disclosure

31 CFR Part 10, section 10.35, requires me to notify you that any tax advice in this electronic forum (including any attachments, postings, pages or links) was not intended or written by me to be used, and cannot be used by you (or any other taxpayer), for the purpose of (i) avoiding penalties under the Internal Revenue Code of 1986, as amended, or (ii) promoting, marketing or recommending to another party any tax-related matter addressed herein.
The California Board of Accountancy has a "Consumer Assistance Booklet" describing such topics as "How Do I Select a CPA" and "What Services are Provided by CPAs?" It's available here in pdf format.

The firm of Alan F. Kingsley, CPA is licensed by the California State Board of Public Accountancy.

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