Do you need to file?

Six Tips on Whether to File a 2015 Tax Return

Most people file a tax return because they have to, but even if you don’t, there are times when you should. You may be eligible for a tax refund and not know it. Here are six tips to help you find out if you should file a tax return:

1. General Filing Rules. Whether you need to file a tax return depends on a few factors. In most cases, the amount of your income, your filing status and your age determine if you must file a tax return. For example, if you’re single and under age 65 you must file if your income was at least $10,300. Other rules may apply if you’re self-employed or if you’re a dependent of another person. There are also other cases when you must file. Go to IRS.gov/filing to find out if you need to file.
2. Premium Tax Credit.  If you enrolled in health insurance through the Health Insurance Marketplace in 2015, you may be eligible for the premium tax credit. You will need to file a return to claim the credit. If you chose to have advance payments of the premium tax credit sent directly to your insurer during 2015 you must file a federal tax return. You will reconcile any advance payments with the allowable premium tax credit. You should receive Form 1095-A, Health Insurance Marketplace Statement, by early February. The form will have information that will help you file your tax return
3. Tax Withheld or Paid. Did your employer withhold federal income tax from your pay? Did you make estimated tax payments? Did you overpay last year and have it applied to this year’s tax? If you answered “yes” to any of these questions, you could be due a refund. But you have to file a tax return to get it.
4. Earned Income Tax Credit. Did you work and earn less than $53,267 last year? You could receive EITC as a tax refund, if you qualify, with or without a qualifying child. You may be eligible for up to $6,242. Use the 2015 EITC Assistant tool on IRS.gov to find out if you qualify. If you do, file a tax return to claim it.
5. Additional Child Tax Credit. Do you have at least one child that qualifies for the Child Tax Credit? If you don’t get the full credit amount, you may qualify for the Additional Child Tax Credit.
6. American Opportunity Tax Credit. The AOTC is available for four years of post secondary education and can be up to $2,500 per eligible student. You, your spouse or your dependent must have been a student enrolled at least half time for at least one academic period. Even if you don’t owe any taxes, you still may qualify. You must complete Form 8863, EducationCredits, and file it with your return to claim the credit. Use the Interactive Tax Assistant tool on IRS.gov to see if you can claim the credit. Learn more by visiting the IRS’ Education Credits Web page.

The instructions for Forms 1040, 1040A or 1040EZ list income tax filing requirements. You can also use the Interactive Tax Assistant tool on IRS.gov. Look for “Do I need to file a return?” under general topics to see if you need to file. The tool is available 24/7 to answer many tax questions. Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

Additional IRS Resources:

• The Premium Tax Credit
• Form 8962, Premium Tax Credit (PTC)
• Schedule 8812 (Form 1040A or 1040), Child Tax Credit
• Publication 972, Child Tax Credit

Summer Weddings Mean Tax Changes

       

        Taxes may not be high on your summer wedding plan checklist. But you should be aware of the tax issues         that come along with marriage. Here are some basic tips that can help keep those issues to a minimum:

Name change. The names and Social Security numbers on your tax return must match your Social Security Administration records. If you change your name, report it to the SSA. To do that, file Form SS-5, Application for a Social Security Card. You can get the form on SSA.gov, by calling 800-772-1213 or from your local SSA office.

Change tax withholding.  A change in your marital status means you must give your employer a new Form W-4, Employee's Withholding Allowance Certificate. If you and your spouse both work, your combined incomes may move you into a higher tax bracket. Use the IRS Withholding Calculator tool at IRS.gov to help you complete a new Form W-4. See Publication 505, Tax Withholding and Estimated Tax, for more information.

Changes in circumstances.  If you receive advance payment of thepremium tax credit in 2014, it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace. You should also notify the Marketplace when you move out of the area covered by your current Marketplace plan. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.

Address change.  Let the IRS know if your address changes. To do that, file Form 8822, Change of Address, with the IRS. You should also notify the U.S. Postal Service. You can ask them online at USPS.com to forward your mail. You may also report the change at your local post office.

Change in filing status.  If you’re married as of Dec. 31, that’s your marital status for the whole year for tax purposes. You and your spouse can choose to file your federal income tax return either jointly or separately each year. You may want to figure the tax both ways to find out which status results in the lowest tax.

Note for same-sex married couples: If you are legally married in a state or country that recognizes same-sex marriage, you generally must file as married on your federal tax return. This is true even if you and your spouse later live in a state or country that does not recognize same-sex marriage. See irs.gov for more information on this topic.

TAX FILING DEADLINE AND PARTY

Greetings!

Busy, Busy?

  

ComproTax Talks!

Don't  Miss the tax filing deadline (tomorrow night, 11:59 PM), and if you can't get it together, we'll file an extension 

Thanks to all our new clients this year and our returning 
patrons.  We know 2013 was an extra tough year for so many of us, so we really appreciate you. 

Look out for announcements of workshops for individuals and small businesses alike. 

We will begin working now to have you ready for a successful tax outcome in January, 2015. 

TAX FILING DEADLINE TOMORROW!

We can file a request for an automatic extension for you.  Click here to provide us the info needed. 

Tax Calendar

April 15th   LAST CHANCE FILING Statute of Limitations for Refunds for 2010 Returns.  File Today   Our Tax  Service: A Slam Dunk ComproTax, Inc., the largest Black-owned income tax firm that is growing vigorously in the ATLis prepared to bring you the best expertise in a fast, accurate and courteous manner.   ComproTaxhas specialized in individual and small business taxes and accounting since 1984.   Get your biggest tax refund legally allowed ComproTax Decatur provides computerized income tax preparation, electronic filing, refund loans, and online filing.   PARTY OVER HERE! LATE NIGHT TAX FILING  Join us on Tuesday night, April 15th as we celebrate the first phase of the 2014 tax season. We will be available through 12 PM midnight. Have a good laugh and dance with us. Call for ADDRESS:  404-532-9958. PUT US TO THE CHALLENGE If we can't complete your simple return in 15 minutes, we will prepare it for FREE  Afiya Madzimoyo, Office Manager/ Instructor ComproTax, Inc./Decatur

Down to the Tax Filing Deadline Wire

With Less Than a Week Until the Tax Filing Deadline, Taxpayers can get Extra Time to File

WASHINGTON — The IRS has received almost 100 million tax returns so far this year and expects to receive about 35 million more by the April 15 filing deadline. However, about 12 million taxpayers will have requested extensions by the filing deadline, giving them an extra 6 months to file.

The fastest and easiest way to get the extra time is through the Free File link on IRS.gov. In a matter of minutes, anyone, regardless of income, can use this free service to electronically request an automatic tax-filing extension on Form 4868.

Filing this form gives taxpayers until Oct. 15 to file a return. To get the extension, taxpayers must estimate their tax liability on this form and should also pay any amount due.

By properly filing this form, a taxpayer will avoid the late-filing penalty, normally five percent per month based on the unpaid balance, that applies to returns filed after the deadline. In addition, any payment made with an extension request will reduce or eliminate interest and late-payment penalties that apply to payments made after April 15. The interest rate is currently three percent per year, compounded daily, and the late-payment penalty is normally 0.5 percent per month.

Choosing the Right Filing Status

The issue of filing status is a very important one when it comes to a tax return.  It is important to choose the correct (per the rules) filing status because it affects how much you pay in taxes.  It may even affect whether you need to file a tax return or not.

I have seen client situations that involves the choosing of incorrect (per the rules) filing statuses for years, and -- most often -- the client believes he / she has chosen correctly, or actually they were not aware of the rules which dictate their choice/s.  I have seen client situation in which the client did not realize that his marital status on December 31st was his status for the whole year.

Here is a list of the five filing statuses to help you choose:

1. Single.  This status normally applies if you aren’t married or are divorced or legally separated under state law.

2. Married Filing Jointly.  A married couple can file one tax return together. If your spouse died in 2013, you usually can still file a joint return for that year.

3. Married Filing Separately.  A married couple can choose to file two separate tax returns instead of one joint return. This status may be to your benefit if it results in less tax. You can also use it if you want to be responsible only for your own tax.

4. Head of Household.  This status normally applies if you are not married. You also must have paid more than half the cost of keeping up a home for yourself and a qualifying person. Some people choose this status by mistake. Be sure to check all the rules before you file.

5. Qualifying Widow(er) with Dependent Child.  If your spouse died during 2011 or 2012 and you have a dependent child, this status may apply. Certain other conditions also apply.

REFUNDS ARE FLOWING; IRS IS ON TRACK; TAXABLE (NON)TAXABLE INCOME

ComproATL is running smoothly, processing refunds; IRS is on track. First deposits have been made into bank accounts.  We are here to serve you.  

See below for answers on whether your income is taxable or not.

IRS Tips about Taxable and Nontaxable Income

Are you looking for a hard and fast rule about what income is taxable and what income is not taxable? The fact is that all income is taxable unless the law specifically excludes it.
Taxable income includes money you receive, such as wages and tips. It can also include noncash income from property or services. For example, both parties in a barter exchange must include the fair market value of goods or services received as income on their tax return.
Some types of income are not taxable except under certain conditions, including:

• Life insurance proceeds paid to you are usually not taxable. But if you redeem a life insurance policy for cash, any amount that is more than the cost of the policy is taxable.
• Income from a qualified scholarship is normally not taxable. This means that amounts you use for certain costs, such as tuition and required books, are not taxable. However, amounts you use for room and board are taxable.
• If you got a state or local income tax refund, the amount may be taxable. You should have received a 2013 Form 1099-G from the agency that made the payment to you. If you didn’t get it by mail, the agency may have provided the form electronically. Contact them to find out how to get the form. Report any taxable refund you got even if you did not receive Form 1099-G.

Here are some types of income that are usually not taxable:

• Gifts and inheritances
• Child support payments
• Welfare benefits
• Damage awards for physical injury or sickness
• Cash rebates from a dealer or manufacturer for an item you buy
• Reimbursements for qualified adoption expenses

Find me on Thumbtack.com.  Thumbtack is an internet marketplace for local services, launched in December 2009.^[2] Thumbtack allows service providers and consumers to find each other and negotiate jobs online.

Click here.

2014 E-File Tax Season Opens Tomorrow Jan. 31st

It's that time again, ComproTax ATL is ready to serve you.  Did the cold weather slow you down with your tax sorting and organizing?  We can help you make up the time.

Need a visit from our mobile tax preparer or need to work online electronically?  Got computer or smart phone?  We got you. 

Click here for INSTANT SERVICE.

Your return can still be transmitted on the first possible day.

Call 404-284-9967 for COMPRO-ATL

www.comproatlanta.com

It's Tax Time (Well Almost)

2014 Tax Season to Open 

 January 30, 2013 is the first date the IRS will accept and process tax returns for the 2013 tax season.  April 15, 2013 is the due date for most taxpayers to file their 2012 income tax returns.

At ComproATL, we are ready to prepare your tax returns and have them in the que to be submitted on January 30th.

Call us today!  404-532-9958. www.comproatlanta.com

IRS Offers New Penalty Relief and Expanded Installment Agreements to Taxpayers under Expanded Fresh Start Initiative

To support more who have experienced consistent unemployment and down turns in business, the IRS has made some changes.  Call today to learn more.  404-532-9958.  www.comproatlanta.com

IRS Has Nearly $1 Billion in Unclaimed Refunds That Expire April 15

IR-2013-29, IRS Has $917 Million for People Who Have Not Filed a 2009 Income Tax Return:

Refunds totaling just over $917 million may be waiting for an estimated 984,400 taxpayers who did not file a federal income tax return for 2009, the IRS announced today. However, to collect the money, a return for 2009 must be filed with the IRS no later than Monday, April 15, 2013.

The IRS estimates that half the potential refunds for 2009 are more than $500.

Some people may not have filed because they had too little income to require filing a tax return even though they had taxes withheld from their wages or made quarterly estimated payments. In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim a refund within three years, the money becomes property of the U.S. Treasury.

For 2009 returns, the window closes on April 15, 2013. The law requires that the return be properly addressed, mailed and postmarked by that date. There is no penalty for filing a late return qualifying for a refund.

IRS Extends Deadline for Hurricane Sandy Tax Break

The Internal Revenue Service has postponed until Oct. 15, 2013, the deadline to make an election to deduct losses for the preceding taxable year from Hurricane Sandy.

Notice 2013-21 postpones until Oct. 15, 2013, the deadline to make an election under Section 165(i) of the Tax Code to deduct in the preceding taxable year losses attributable to Hurricane Sandy that were sustained in federally declared disaster areas in Connecticut, Delaware, District of Columbia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, and West Virginia.

Last October, Hurricane Sandy struck the East Coast, causing severe damage in a number of states, the IRS noted. President Obama issued major disaster and emergency declarations under the authority of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, for certain areas. The Federal Emergency Management Agency determined certain areas within those states and the District of Columbia to be eligible for Public Assistance or Public Assistance and Individual Assistance under the Stafford Act.

Section 165(i) provides that if a taxpayer sustains a loss attributable to a federally declared disaster occurring in a disaster area, the taxpayer may elect to deduct that loss on their tax return for the taxable year immediately preceding the taxable year in which the disaster occurred.

Section 1.165-11(e) of the Income Tax Regulations requires a taxpayer to make the election by filing a return, an amended return or a refund claim on or before the later of: (1) the due date of the taxpayer’s income tax return (determined without regard to any extension of time for filing the return) for the taxable year in which the disaster actually occurred; or (2) the due date of the taxpayer’s income tax return (determined with regard to any extension of time for filing the return) for the immediately preceding taxable year.

Section 1.165-11(e) provides that the return or claim should specify the date or dates of the disaster that gave rise to the loss, and the city, town, county and state in which the property that was damaged or destroyed was located at the time of the disaster. The election is irrevocable 90 days after the taxpayer makes it.

Section 7508A gives the Treasury Secretary the authority to postpone the time for performing certain acts under the tax laws for up to one year for a taxpayer affected by a federally declared disaster. Under that authority, the IRS is granting affected taxpayers a postponement until Oct. 15, 2013, to make an election under Section 165(i) for losses attributable to Hurricane Sandy.

To help the IRS identify affected taxpayers to ensure that they receive this postponement of the deadline to make the Section 165(i) election, they should include a reference to this notice, Notice 2013-21, with their return, amended return or refund claim on which they are making a postponed Section 165(i) election.

The return or claim should also include the other information requested in Section 1.165-11(e).

IRS Now Accepting All 2012 Returns

WASHINGTON — The Internal Revenue Service announced today that it has finished updating its tax-processing systems allowing all remaining individual and business taxpayers to file their 2012 federal income tax returns.

Over the weekend, the IRS completed reprogramming and testing of its systems for tax-year 2012 including all remaining updates required by the American Taxpayer Relief Act (ATRA) enacted by Congress in January. This final step clears the way for those claiming residential energy credits on Form 5695 and various business tax credits and deductions to file their returns.

The IRS began accepting 2012 returns in phases as it worked quickly to update various forms and instructions and made critical adjustments to its processing systems to reflect the current law. As a result, the agency began accepting most returns filed by individual taxpayers on Jan. 30. Additional returns could be accepted in February. All remaining returns, affecting in relative terms the smallest group of taxpayers, can now be filed. 

With just six weeks to go before this year’s April 15 deadline, the IRS reminds taxpayers that the best way to file an accurate return is to e-file, choose direct deposit if expecting a refund and take advantage of the wide variety of tax-filing and tax-help resources available on IRS.gov.

IRS to Enable Remaining Tax Forms by Early March

The Internal Revenue Service plans to allow more of the remaining tax forms that have not been available for electronic filing yet this tax season to go through during the first week of March. In an email to software developers and transmitters on Wednesday, the IRS noted that due to late legislation, the IRS delayed startup for the tax forms listed below until the first week in March. To ensure there are no issues with accepting the forms for downstream processing, the IRS is asking software developers and transmitters to adhere to the following plan: The schemas and business rules will be deployed in the Production environment during the March 3, 2013 Sunday maintenance window. When the Production environment becomes operational at 7:00 am Eastern Time, transmitters should only send their stockpiled inventory of tax returns they have held back, evenly spread throughout the day on Sunday, This will allow the IRS’s Modernized e-File system team to quickly review the reject trends for the returns to ensure the schemas and business rules work as intended. “Please do not enable online filing for the forms until the IRS officially announces the processing of these forms targeted for the first week of March,” the IRS asked. Barring any problems, the IRS will then send out a QuickAlert email early in the week announcing the official opening. At that time, it will ask companies to enable online filing for these forms.

IRS says there are problems with Education Credit Filings

The Internal Revenue Service said Wednesday that it has observed problems with the filings for education tax credits that could be delaying processing of the tax returns.

“We have observed instances in which the Form 8863, Education Credits, attached to the Form 1040 and 1040A is not completed correctly,” the IRS said in an email Wednesday. “These instances are causing downstream processing delays.”

The IRS noted that it has experienced the following two conditions: (1) Form 8863 Part III Line 25 Yes or No checkboxes are not completed when required, and (2) Form 8863 Part III Line 26 Yes or No checkboxes are not completed when required.

The IRS pointed out that the Form 8863 instructions specify that if taxpayers have checked “Yes” on Line 24, they should go to line 25. On line 25, taxpayers should check “Yes” if the student completed the first four years of postsecondary education before 2012. Otherwise, they should check “No.”

If the taxpayer has checked “No,” they should go to line 26. If they have checked “Yes,” the student is not eligible for the American Opportunity Credit, and should therefore skip lines 26 through 30 and go to line 31.

On line 26, the taxpayer should check “Yes” if the student was convicted, before the end of 2012, of a federal or state felony for possession or distribution of a controlled substance. If the taxpayer has checked “No,” they should complete either lines 27 through 30 or line 31 for this student. If they checked “Yes,” the student is not eligible for the American Opportunity Credit and should skip those lines.

The IRS noted that it is working to implement business rules to reject the incorrectly completed returns, but has not determined the date for the new business rules.

IRS is requesting that software packages be modified to require completion of the correct boxes on lines 25 and 26 when appropriate. Also, the appropriate checkboxes should be completed for lines 23 and 24. The IRS also wants to get this information out to the the tax practitioner community.

IRS Intensifies National Crackdown on Identity Theft; Part of Wider Effort to Protect Taxpayers, Prevent Refund Fraud

WASHINGTON – Continuing a year-long enforcement push against refund fraud and identity theft, the Internal Revenue Service today announced the results of a massive national sweep in recent weeks targeting identity theft suspects in 32 states and Puerto Rico, which involved 215 cities and surrounding areas.

The coast-to-coast effort against 389 identity theft suspects led to 734 enforcement actions in January, including indictments, informations, complaints and arrests. The effort comes on top of a growing identity theft effort that led to 2,400 other enforcement actions against identity thieves during fiscal year 2012.

The January crackdown, a joint effort with the Department of Justice and local U.S. Attorneys offices, unfolded as the IRS opened the 2013 tax season. IRS Criminal Investigation expanded its efforts during January, pushing the total number of identity theft investigations to more than 1,460 since the start of the federal 2012 fiscal year on Oct. 1, 2011.

“As tax season begins this year, we want to be clear that there is a heavy price to pay for perpetrators of refund fraud and identity theft,” said IRS Acting Commissioner Steven T. Miller. “We have aggressively stepped up our efforts to pursue and prevent refund fraud and identity theft, and we will continue to intensely focus on this area. This is part of a much wider effort underway for the 2013 tax season to stop fraud.”

The national effort with the Justice Department and other federal, state and local agencies is part of a larger, comprehensive identity theft strategy the IRS has embarked on that is focused on preventing, detecting and resolving identity theft cases as soon as possible.

The identity theft effort – which intensified in January as the 2013 filing season opened – involved 734 enforcement actions related to identity theft and refund fraud. The effort led to actions taking place throughout the country involving 389 individuals. The effort included 109 arrests, 189 indictments, informations and complaints, as well as 47 search warrants.

In addition to the criminal actions, IRS auditors and criminal investigators conducted a special compliance effort starting on Jan. 28 to visit 197 money service businesses to help make sure these businesses are not assisting identity theft or refund fraud when they cash checks.  The compliance visits occurred in 17 high-risk places identified by the IRS covering areas in and surrounding New York, Philadelphia, Atlanta, Tampa, Miami, Chicago, Houston, Phoenix, Los Angeles, San Diego, El Paso, Tucson, Birmingham, Detroit, San Francisco, Oakland and San Jose.

A map of the locations and additional details on the January enforcement actions and compliance visits are available on IRS.gov. The latest updates on the identity theft enforcement efforts and individual cases are available on a special Identity Theft Schemes page on IRS.gov. More information on enforcement actions can be found on a DOJ Tax Division page.

The identity theft push over the last several weeks reflects a wider effort underway at the IRS. Among the highlights:

• The number of IRS criminal investigations into identity theft issues more than tripled in fiscal year 2012. The IRS started 276 investigations in fiscal year 2011, a number that jumped to 898 in fiscal year 2012. So far in fiscal year 2013, there have been more than 560 criminal identity theft investigations opened.
• Total enforcement actions continue to rapidly increase against identity thieves. This category covers actions ranging from indictments and arrests to search warrants. In fiscal year 2012, enforcement actions totaled 2,400 against 1,310 suspects. After just four months in fiscal 2013, enforcement actions totaled 1,703 against 907 suspects.
• Sentencings of convicted identity thieves continue to increase. There were 80 sentencings in fiscal year 2011, which increased to 223 in fiscal year 2012.
• Jail time is increasing for identity thieves. The average sentence in fiscal year 2012 was four years or 48 months – a four-month increase from the average in fiscal year 2011. So far this fiscal year, sentences have ranged from 4 to 300 months.

More information on IRS Criminal Investigation efforts is available on IRS fact sheet FS-2013-12.

In addition to the national “sweeps” effort announced today, IRS work on identity theft and refund fraud continues to grow. For the 2013 filing season, the IRS has expanded these efforts to better protect taxpayers and help victims.

To stop identity thieves up front, the IRS has made a significant increase for the 2013 tax season in the number and quality of identity theft screening filters that spot fraudulent tax returns before refunds are issued. The IRS has dozens of identity theft screens now in place to protect tax refunds.

These efforts helped the IRS in 2012 protect $20 billion of fraudulent refunds, including those related to identity theft, compared with $14 billion in 2011.

By late 2012, the IRS assigned more than 3,000 IRS employees — over double from 2011 — to work on identity theft-related issues. IRS employees are working to prevent refund fraud, investigate identity theft-related crimes and help taxpayers who have been victimized by identity thieves. In addition, the IRS has trained 35,000 employees who work with taxpayers to recognize identity theft indicators and help people victimized by identity theft.

“We are strengthening our processing systems to watch for identity theft and detect refund fraud before it occurs,” Miller said. “And we continue to put more resources on helping people who are victims of identity theft and resolve these complex cases as quickly as possible.”

Taxpayers can encounter identity theft involving their tax returns in several ways. One instance is where identity thieves try filing fraudulent refund claims using another person’s identifying information, which has been stolen. Innocent taxpayers are victimized because their refunds are delayed.

To help taxpayers, the IRS has a special section on IRS.gov dedicated to identity theft issues, including YouTube videos, tips for taxpayers and a special guide to assistance. For victims, the information includes how to contact the IRS Identity Protection Specialized Unit. For other taxpayers, there are tips on how taxpayers can protect themselves against identity theft.

If a taxpayer receives a notice from the IRS indicating identity theft, they should follow the instructions in that notice. A taxpayer who believes they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. The taxpayer should contact the IRS Identity Protection Specialized Unit at 800-908-4490.  The taxpayer will be asked to complete the IRS Identity Theft Affidavit, Form 14039, and follow the instructions on the back of the form based on their situation.

Taxpayers looking for additional information can consult the special identity protection page on IRS.gov.

Relatives as Dependents more Relevant than Ever

More and more, we are teaming up in families to support each other.  As we care for elderly parents, sometimes because we have lost jobs or pensions, as adult children move back in with parents as a result of loss of jobs or homes, we find ourselves living multi-generationally.  

IRS gives some guidance: “Your mother received $2,400 in Social Security benefits and $300 in interest. She paid $2,000 for lodging and $400 for recreation. If you spend more than $2,400 to support her, supplementing what she spends, and if her annual income is less than $3,800, you can claim her as a dependent and take the full value of the exemption.”

If you are taking care of someone and that person’s care meets the IRS guidelines for age, income, residency tests and support, you might be able to claim the exemption. A qualifying relative does not need to live with you, but you must provide at least one half of his or her support. Furthermore, that person’s income cannot exceed the personal exemption of $3,800 in 2012.

For more information as you find out if you qualify to claim a relative as a dependent, call Afiya @ 404-532-9958.

IRS Intensifies National Crackdown on Identity Theft; Part of Wider Effort to Protect Taxpayers, Prevent Refund Fraud

WASHINGTON – Continuing a year-long enforcement push against refund fraud and identity theft, the Internal Revenue Service today announced the results of a massive national sweep in recent weeks targeting identity theft suspects in 32 states and Puerto Rico, which involved 215 cities and surrounding areas.

The coast-to-coast effort against 389 identity theft suspects led to 734 enforcement actions in January, including indictments, informations, complaints and arrests. The effort comes on top of a growing identity theft effort that led to 2,400 other enforcement actions against identity thieves during fiscal year 2012.

The January crackdown, a joint effort with the Department of Justice and local U.S. Attorneys offices, unfolded as the IRS opened the 2013 tax season. IRS Criminal Investigation expanded its efforts during January, pushing the total number of identity theft investigations to more than 1,460 since the start of the federal 2012 fiscal year on Oct. 1, 2011.

“As tax season begins this year, we want to be clear that there is a heavy price to pay for perpetrators of refund fraud and identity theft,” said IRS Acting Commissioner Steven T. Miller. “We have aggressively stepped up our efforts to pursue and prevent refund fraud and identity theft, and we will continue to intensely focus on this area. This is part of a much wider effort underway for the 2013 tax season to stop fraud.”

The national effort with the Justice Department and other federal, state and local agencies is part of a larger, comprehensive identity theft strategy the IRS has embarked on that is focused on preventing, detecting and resolving identity theft cases as soon as possible.

The identity theft effort – which intensified in January as the 2013 filing season opened – involved 734 enforcement actions related to identity theft and refund fraud. The effort led to actions taking place throughout the country involving 389 individuals. The effort included 109 arrests, 189 indictments, informations and complaints, as well as 47 search warrants.

In addition to the criminal actions, IRS auditors and criminal investigators conducted a special compliance effort starting on Jan. 28 to visit 197 money service businesses to help make sure these businesses are not assisting identity theft or refund fraud when they cash checks.  The compliance visits occurred in 17 high-risk places identified by the IRS covering areas in and surrounding New York, Philadelphia, Atlanta, Tampa, Miami, Chicago, Houston, Phoenix, Los Angeles, San Diego, El Paso, Tucson, Birmingham, Detroit, San Francisco, Oakland and San Jose.

A map of the locations and additional details on the January enforcement actions and compliance visits are available on IRS.gov. The latest updates on the identity theft enforcement efforts and individual cases are available on a special Identity Theft Schemes page on IRS.gov. More information on enforcement actions can be found on a DOJ Tax Division page.

The identity theft push over the last several weeks reflects a wider effort underway at the IRS. Among the highlights:

• The number of IRS criminal investigations into identity theft issues more than tripled in fiscal year 2012. The IRS started 276 investigations in fiscal year 2011, a number that jumped to 898 in fiscal year 2012. So far in fiscal year 2013, there have been more than 560 criminal identity theft investigations opened.
• Total enforcement actions continue to rapidly increase against identity thieves. This category covers actions ranging from indictments and arrests to search warrants. In fiscal year 2012, enforcement actions totaled 2,400 against 1,310 suspects. After just four months in fiscal 2013, enforcement actions totaled 1,703 against 907 suspects.
• Sentencings of convicted identity thieves continue to increase. There were 80 sentencings in fiscal year 2011, which increased to 223 in fiscal year 2012.
• Jail time is increasing for identity thieves. The average sentence in fiscal year 2012 was four years or 48 months – a four-month increase from the average in fiscal year 2011. So far this fiscal year, sentences have ranged from 4 to 300 months.

More information on IRS Criminal Investigation efforts is available on IRS fact sheet FS-2013-12.

In addition to the national “sweeps” effort announced today, IRS work on identity theft and refund fraud continues to grow. For the 2013 filing season, the IRS has expanded these efforts to better protect taxpayers and help victims.

To stop identity thieves up front, the IRS has made a significant increase for the 2013 tax season in the number and quality of identity theft screening filters that spot fraudulent tax returns before refunds are issued. The IRS has dozens of identity theft screens now in place to protect tax refunds.

These efforts helped the IRS in 2012 protect $20 billion of fraudulent refunds, including those related to identity theft, compared with $14 billion in 2011.

By late 2012, the IRS assigned more than 3,000 IRS employees — over double from 2011 — to work on identity theft-related issues. IRS employees are working to prevent refund fraud, investigate identity theft-related crimes and help taxpayers who have been victimized by identity thieves. In addition, the IRS has trained 35,000 employees who work with taxpayers to recognize identity theft indicators and help people victimized by identity theft.

“We are strengthening our processing systems to watch for identity theft and detect refund fraud before it occurs,” Miller said. “And we continue to put more resources on helping people who are victims of identity theft and resolve these complex cases as quickly as possible.”

Taxpayers can encounter identity theft involving their tax returns in several ways. One instance is where identity thieves try filing fraudulent refund claims using another person’s identifying information, which has been stolen. Innocent taxpayers are victimized because their refunds are delayed.

To help taxpayers, the IRS has a special section on IRS.gov dedicated to identity theft issues, including YouTube videos, tips for taxpayers and a special guide to assistance. For victims, the information includes how to contact the IRS Identity Protection Specialized Unit. For other taxpayers, there are tips on how taxpayers can protect themselves against identity theft.

If a taxpayer receives a notice from the IRS indicating identity theft, they should follow the instructions in that notice. A taxpayer who believes they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. The taxpayer should contact the IRS Identity Protection Specialized Unit at 800-908-4490.  The taxpayer will be asked to complete the IRS Identity Theft Affidavit, Form 14039, and follow the instructions on the back of the form based on their situation.

Taxpayers looking for additional information can consult the special identity protection page on IRS.gov.

Can I claim my boyfriend (or girlfriend) on my tax return?

I get this question a whole lot.  AND, you can in some cases.  To claim a non-relative as a dependent, he or she had to live in your home for the full tax year and make less than $3,800 in gross income during that time. You also generally must provide more than half of the person's financial support, and he or she can't be claimed as a dependent by anyone else.

Call Afiya @ ComproATL for more information:  404-532-9958.

Court Modifies Ruling Invalidating Tax Preparer Regulations

WASHINGTON, D.C. (FEBRUARY 2, 2013)

BY MICHAEL COHN

A federal judge has denied the Internal Revenue Service’s request to suspend his January 18 ruling that struck down the IRS’s tax-preparer scheme as unlawful, but made some important clarifications to his original ruling. 

U.S. District Court Judge James E. Boasberg ruled Friday that no tax return preparer may be required to pay testing or continuing education fees or to complete any testing or continuing education while the injunction is in place, backing up his earlier ruling (see Court Rules Tax IRS Doesn’t Have Authority to Regulate Tax Preparers). The IRS had asked the judge to suspend his injunction on the tax preparer regulatory regime, arguing that it would disrupt tax season (see IRS to Appeal Ruling Barring Licensing of Tax Preparers).

The Institute for Justice, which had won the case on behalf of three independent tax preparers who sued to stop the IRS’s Registered Tax Return Preparer mandatory testing and continuing education regulatory regime, filed alegal brief countering the IRS’s arguments (see Tax Preparers Contest IRS Legal Ruling). In Boasberg’s latest ruling in the case Friday, he denied the IRS's motion for a stay, asking, “[W]hy should tax-return preparers continue to pay into a system the Court has found unlawful?”

However, Judge Boasberg clarified that his injunction did not affect a separate set of regulations requiring tax preparers to have a Preparer Tax Identification Number, or PTIN, or prevent the IRS from operating its testing or continuing education centers on a strictly voluntary basis.  

The court wrote today, “[S]ome preparers may wish to take the exam or continuing education even if not required to.  Such voluntarily obtained credentials might distinguish them from other preparers.”

“This is a great outcome for tax preparers nationwide,” said Dan Alban, lead attorney on the case at the Arlington, Va.-based Institute for Justice, who represented the three independent tax preparers who had challenged the IRS. “It allows them to continue preparing tax returns this tax season without having to get permission from the IRS. This is the best of both worlds—preparers who value the certification can still obtain it, but no tax preparer is forced to get a government permission slip to earn a living.”