Mail thief gets roaches instead of tax refund, filing data

Madagascar hissing cockroaches_Totodu74 via Wikipedia Commons

You open the package expecting, well you don’t know what, but probably not 500 cockroaches.

That, however, is what happened to a mail thief.

Crooks will steal just about anything. And criminals who focus on U.S. Post Office boxes tend to increase their activity around this time every year.

The reason? Tax refunds.

Tax-related mail theft: Every February, people are either getting refund checks from the U.S. Treasury or they’re receiving tax documents they can use to file their annual federal and state returns.

Either option is a crook’s dream.

The checks can be cashed. The tax statements‘ info can be used to file a fake tax return in an effort to claim a fraudulent refund.

But all the criminal who broke into Rosalinda Vizina’s mailbox got was a creepy, crawly surprise.

Unexpectedly buggy mail: The Marina, California, entomologist is studying cockroaches and ordered 500 live ones for her latest research project.

Rosalinda Vizina explains to television station KSBW what crooks stole from her mailbox.

You can watch Vizina’s story, and more on mail thefts, by clicking on the screenshot above of TV station KSBW’s report, which gets this weekend’s Saturday Shout Out.

“I feel bad for the roaches if they got smushed or tossed or something like that. For the thieves, I hope they went everywhere,” Vizina said.

Mail tax safety tips: While it’s fun to think about the roach thief being freaked out by the package’s buggy contents, it’s no fun for Vizina or others who get their mail stolen.

And it’s particularly vexing when the mail theft affects a tax refund.

That’s one of the reasons the IRS recommends e-filing and direct deposit of any tax refund. This method also usually means you’ll get your refund sooner.

As for the tax documents, many companies nowadays send their employees’ W-2 forms electronically. If that’s an option where you work, consider that route next filing season.

The same is true for other tax statements, such as 1099 forms from bank and investment accounts or your mortgage lender’s Form 1098 with your tax deductible loan interest and property taxes paid.

I’ve gotten our tax data online for years now.

Yes, it’s a bit more of hassle than just pulling the printed statement out of the mailbox. But I tend to wait until I’ve been notified by all issuers that the documents are available online and then spend a couple of hours logging on to the accounts and downloading the docs.

In many cases, if you use tax software you can let that program access the info and enter it directly into your electronic return.

I know hackers are out there and they find ways to steal electronic data, too. But I also like knowing that no one can easily lift anything with personal info from my curbside mailbox.

That’s one less thing I have to worry about this taxing time of year.

It is, however, still a concern for Vizina. 

“I’ve been checking my mail quite frequently with all the tax forms coming out, all that private information. I really don’t want that to get taken in the meantime,” she told KSBW.

The U.S. Postal Inspection Service also has more on how to prevent mail theft or what to do if crooks do get your letters, tax data, refund check or roaches.

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Where’s your refund? Still in the works for ACTC, EITC filers

Princess Bride impatience via Giphy.comPrincess Bride impatience via

Mid-February is finally here, the time when the Internal Revenue Service can finally issue refunds to taxpayers who had claimed the Additional Child Tax Credit (ACTC) and/or the Earned Income Tax Credit (EITC).

Does that mean these refunds will show up today? No, that’s a refund myth, even if you filed your Form 1040 on Jan. 29, the first day that the IRS began processing returns.

Neither is your refund likely to be directly deposited into your bank account, loaded onto a debit card or as a paper check stuffed in your snail mail box next week.

In fact, the IRS is warning affected ACTC and EITC filers that they probably won’t have their tax cash before Feb. 27. And that’s in the best-case scenario; that is, when the refund is directly deposited and there are no other issues with the filing.

Reasons for delays: It’s no secret why refunds due taxpayers who claim the two refundable, meaning you get money back even if you don’t owe any tax for it to offset, credits are slow.

Congress, concerned that ineligible folks were getting EITC and ACTC cash, mandated the mid-February hold starting last filing season. That gave the IRS extra time to make sure the claims were legit.

Other returns are delayed because of the inevitable errors many filers make.

Then there are the increased number of filters and checks that the IRS puts all returns through to ensure that they are being filed by lawful taxpayers and not identity stealing criminals. It’s working.

Since 2015, the number of tax-related identity theft victims has fallen by almost two-thirds, according to an IRS announcement earlier this month.

In 2017, the IRS received 242,000 reports from taxpayers compared to 401,000 in 2016, a 40 percent decline. That marked the second year in a row this number fell, thanks in large part, to the IRS’ work with its Security Summit partners in the tax industry and state tax departments.

No firm delivery dates: Still, for taxpayers anxiously awaiting tax refunds, the delays can be frustrating.

The IRS used to issue an annual chart, officially known as IRS Publication 2043, of when you could expect your tax refund. Too many folks, however, started taking those delivery dates as strict promises.

So in 2012, the last year of the printed refund timetable, the IRS decided to focus instead online refund tracking. That year, filers started getting more personalized refund status info via the IRS’ Where’s My Refund? search tool.

Last refund delivery date chart by IRS

Now millions of taxpayers each year use Where’s My Refund? to find out, well, where exactly in the IRS processing system their refund is. Once a return is processed, the tracking tool lets the inquiring taxpayer know an expected delivery date for his or her refund money.

The refund data is updated once a day, usually overnight, so checking it more often won’t get you any additional info or spur a quicker arrival of your refund.

You can check out Where’s My Refund from your PC or laptop, as well as your digital devices with the IRS2Go app. Or you can use your cell phone to call 1 (800) 829-1954 for refund information.

Recreating refund tables: Some folks have recreated the old refund cycle chart to project when refunds filed on a certain date might be available.

These unofficial tables generally use the IRS’ oft-repeated statement that it issues nine out of 10 refunds in less than 21 days to project when refunds filed on a certain date might be available.

I get it. I’m a big fan of tables and charts myself. And I know folks like some certainty, particularly when it involves their money.

But I’m going to have to go with the IRS and its decision to no longer provide even quasi-specific refund delivery dates. Taxes, like life, can get complicated and mess up plans.

That’s also why I’m reiterating the caution that the IRS makes in its current, revised Publication 2043, now known as Refund Information Guidelines for the Tax Preparation Community. It says there:

IRS caution re making refund delivery date promises_IRS Pub 2043

Urge taxpayers not to count on getting the refund by a certain date to make major purchases or pay bills. Even though the IRS issues most refunds in less than 21 days, it’s possible their tax return may require additional review and take longer.

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Getting IRS tax help gets a bit more complicated

Beavis phone help_giphyBeavis (sans Butt-head) offers callers, uh, help? (Image via

Looking for tax filing help from the Internal Revenue Service? Prepare beforehand.

Tax identity theft concerns mean you’ll have to prove to the IRS that you are you if you call the agency’s tax hotline.

And if you want face-to-face help at your local Taxpayer Assistance Center (TAC), you’ll have to make an appointment.

Telephone tax ID issues: I know. You’re already unhappy with the IRS phone hotline. The IRS knows, too.

Every filing season answering taxpayers’ questions telephonically is on the agency’s to-improve list. Last year, it even opened its phone lines on the Saturday (they usually take weekday-only calls) before the April filing deadline.

But…well, you know. The agency is strapped. It typically gets the same, or slightly less, funding year-after-year and staff attrition makes this taxpayer service goal harder to achieve.

And now, potential tax identity theft is making things worse.

To ensure that IRS phone reps can be confident they are talking with legitimate taxpayers, the IRS now is asking both individual filers and the tax professionals who represent then to verify their identities when they call the IRS.

Taxpayer proof required: As we head into the heart of filing season, the IRS phones will be jammed.

That’s particularly true, notes the IRS, as we near the Presidents Day holiday. The days before and after the third Monday of February are the peak period for taxpayer phone calls to Uncle Sam’s tax collector.

So be prepared to be on hold for a bit.

And once an IRS rep gets on the line, be prepared to prove you are who you say you are.

To do that, the IRS says have the following documents on hand before you dial 1 (800) 829-1040:

  • Social Security numbers and birth dates for those who were named on the tax return in question,
  • An Individual Taxpayer Identification Number (ITIN) letter if the taxpayer has one in lieu of a Social Security number (SSN),
  • Filing status (single, head of household, married filing jointly or married filing separately),
  • Your prior-year tax return in case telephone assistors need to verify taxpayer identity with information from that document before answering certain questions,
  • A copy of the tax return in question and
  • Any IRS letters or notices received by the taxpayer.

Taxpayer reps, too: Similar proof also must be provided by taxpayers’ legally designated representatives when they ho call the IRS about their clients’ issues.

Before calling about another person’s tax case, be sure to have the following information available:

And because tax identity thieves sometimes steal info used by individuals who’ve passed away, be prepared to answer IRS question about a deceased taxpayer but via fax, not phone. In these cases, you’ll need to fax the IRS:

  • The deceased taxpayer’s death certificate and
  • Either copies of Letters Testamentary approved by the court, or IRS Form 56, Notice Concerning Fiduciary Relationship (for estate executors).

Personal help procedures: Some folks aren’t content with a call for tax help. They want to talk in person with an IRS representative when they’re trying to decipher a confusing filing situation.

That’s possible if you live near one of the agency’s Taxpayer Assistance Centers, or TACs. You can find the TAC nearest you by using the’s online Contact Your Local Office search tool.

In addition to providing your TAC’s address, the search engine shows the office’s days and hours of operation and lists the services provided. Services are limited and vary at each TAC.

Note that TACs — like the IRS telephone centers — experience peak demand in the days around Presidents Day.

To counter that crunch, as well as facilitate visits to the IRS branch offices throughout the rest of the filing season, TAC staffers now provide taxpayer help by appointment only. Walk-ins are not accepted.

Once you know which TAC you’ll go to, you can schedule an appointment by calling the toll-free appointment line at 1 (844) 545-5640.

And when you go to your TAC appointment, you’ll be asked to provide valid photo identification and a Social Security number or ITIN.

Try online first: To avoid the hassle of a long telephone hold or an appointment several days or weeks down the road, the IRS for years has been encouraging us to try its online help services first.

The IRS says its studies show most taxpayers visit a TAC to make payments, ask about a notice or letter they received, check on refunds, get a transcript or obtain a tax form. Many of those issues, however, can be resolved online without traveling to an IRS office.

Taxpayers who head to TACs to make in-person monthly or quarterly tax payments, for example, should consider electronic options, says the IRS. These tax payments can be made from your own home by going online to IRS Direct Pay or the agency’s Electronic Federal Tax Payment System (EFTPS).

As for filing help, the IRS recommends Free File. The tax software provides who offer their programs at no cost to more than 70 percent of taxpayers generally guide filers through the Form 1040 (or 1040A or 1040EZ) form completion and subsequent e-filing of the finished returns.

Taxpayers seeking free in-person tax preparation assistance should explore the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs.

And if you’re simply wanting to know when you’ll get your federal tax refund, may be found on The quickest way to check the status of a tax refund is to go to “Where’s My Refund?” or call 800-829-1954 for automated phone service.

As for answers to most general tax questions, the IRS suggests taxpayers check its website. There you can find info on such things as paymentsnoticesrefundstranscripts and tax forms.

Solving tax matters using online services means TAC appointments and help phone lines are available for taxpayers who find that the only way to solve their tax problems is to visit or call the IRS.

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Who Is Your Ideal Tax Client?

Tax business owners who are just starting out often get fatigued when it comes to acquiring new clients. When asked who their ideal client is, the answer tends to be “everyone!” While it’s true that everyone has to pay taxes, casting that wide of a net is not the best practice. Here are some guidelines to follow that I’ve learned from my 30+ years as a tax business owner.

Reach out to Family and Friends

If you’ve just opened your business, start with people you know. Announce it on Facebook and LinkedIn, and reach out to family and friends who may need your services and feel comfortable going to someone they know. From there, ask for referrals. This is always the first place we suggest you start.

Target Businesses Ideal-Tax-Client

While it’s great to offer tax services to the general public, it may be more profitable to gain business clients with more complicated returns. Target small business that are profitable (so they will be able to pay you), but not large enough to employ their own bookkeeper.  The type of business doesn’t matter much, but a sole practitioner (with no employees) might not have enough complexities to justify hiring you.  However, almost all small businesses will need tax preparation services even if they don’t need bookkeeping help.   

Look Our for These Industries

If you want to get more specific, the following industries generally have 1 to 10 employees and do not have a in-house professional bookkeeper.

  • Restaurants
  • Contractors
  • Professionals
  • Fully funded startups

Offer More Than Tax Preparation

Providing accounting services (bookkeeping and payroll) is also a great way to provide value and gain year-round income. You should be Proficient in Quickbooks since it is the standard used by most small businesses, and, ideally, you should become a Quickbooks Certified ProAdvisor. Being a one-stop shop for tax preparation, bookkeeping and payroll services, will ensure that your clients stick with you – and not leave you for a competitor that offers a service that you do not.

Consider Specializing 

As you learn and develop your skills, consider specializing in a specific area of tax law. Finding a niche market like retiree taxes, hospitality, military, C-Corp, returns for low-income taxpayers, or returns for resident aliens and then focusing your marketing efforts there, can help growth tremendously. Rather than marketing to a wide audience, focus on one specific niche and push for referrals. Learn more about that here.

Learning tax preparation is one thing. Navigating the ins and outs of being a business owner is another. If you’re looking for more guidance on building your tax practice, check out my new book, Guide to Start and Grow Your Successful Tax Business. It was recently named a 2018 Top New Product by Accounting Today.



Marriage penalties & bonuses remain under new tax laws

Marriage proposal_Matt via Flickr CC

I hope she said yes! (Photo by Matt via Flickr)

Valentine’s Day has become one of the most popular days of the year to propose.

If you’re anticipating popping or answering the big question at an intimate romantic dinner tonight, taxes likely won’t be on your mind. But perhaps they should be.

Love and money: I’m a big fan of marriage. I’ve been in a mostly happy one with the hubby for a looong time. (Yes, I was a child bride!)

But even back then, I was a tax geek. That’s why our choice of wedding date — the year at any rate — was based partially on a tax break. It created a tax deduction for a married couple when both spouses had jobs.

That tax break is long gone, but our union has endured, even though in some cases we encountered a marriage penalty.

Marriage penalty or bonus matches: A marriage penalty occurs when a pair combines all their income on one Form 1040 and it produces a bigger tax bill than if the duo had filed as two single taxpayers and then totaled those individual tax obligations.

On the other hand, some couples get a marriage bonus. As the name indicates, these married folks find that their joint filing saves them tax dollars.  A marriage bonus typically shows up when there’s a large difference in spousal income.

Or at least that’s how it works through 2017 tax filings.

But what will happen under the new tax laws in the Tax Cuts and Jobs Act (TCJA) that apply to 2018 through 2025 returns?

The Tax Foundation has some answers.

New law, old penalties and bonuses: Both marriage penalties and bonuses could be completely eliminated, but it would require a significant overhaul of the tax code that drastically changes the current distribution of income taxes paid, writes Tax Foundation Analyst Amir El-Sibaie.

Since Congress didn’t really reform the tax code under the TCJA, that means marriage penalties and bonuses are still around. 

But the Washington, D.C.-based nonprofit’s recent numbers crunching found that found that the marriage penalty under the new law will now mostly affect higher income earners.

The reason is the restructuring of the tax brackets so that the ones for married filers are exactly double those for single filers except at the now top 37 percent rate. Previously, even medium-income married earners felt the marriage penalty.

Lower-earners hit, too: Still, because tax situations are so varied, even low-income couples can face a marriage penalty, especially when the pair claims the Earned Income Tax Credit (EITC).

“Adding one partner’s income to the other partner’s income can easily push the combined income of the couple into the phaseout range, or further into the phase-in of the EITC, resulting in a reduction or increase of the couple’s combined after-tax income,” writes El-Sibaie.

The number of children also are a factor.

In one example in the Tax Foundation analysis, a lower-earning couple with one kid faces a more than $600 marriage penalty. There are a couple of reasons why.

First, if the pair had not tied the knot, one unmarried individual could have filed as head of household, which provides a larger standard deduction and wider tax brackets. Once they married, however, the couple lost the benefit of head of household status and faced higher combined taxable income.

That higher income is reason two for the marriage penalty. It pushed them into the EITC’s phaseout range and substantially reduced the credit they could claim.

Personal matters matter to taxes: The bottom line is that marriage penalties and bonuses are like all other parts of the tax code, both the old one still in effect for 2017 tax year filings and the new laws we started dealing with when 2018 rolled around.

And like all those tax situations, your personal variables affect your tax bill and marriage penalty or bonus.

The Tax Foundation modeled the effects of marriage on a couple’s tax bill based on the pair’s level of income and the equality of the couple’s income, ranging from couples with one earner to spouses with equal incomes.

They then calculated the marriage penalty or bonus under the TCJA for households with no children, one child and two children. The result is some colorful graphics, like the one shown below for a couple with two kids.

Tax Foundation analysis marriage penalty or bonus under TCJA Feb2018

Blue indicates a marriage bonus. Red is the alert for a marriage penalty. The depth of the colors represents the size of the marriage penalty or bonus as a percent of a couple’s total income.

I do, taxes included: Check out the full report. It could give you something to think about in addition to the standard wedding planning issues.

And about those upcoming nuptials, will a change in your post-wedding tax bills change your decision to propose tonight or your answer if you’re the one asked?

Probably not, and it shouldn’t. After all, the vows do say for richer and poorer.

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Latest tax scam twist: crooks deposit fraudulent refunds into real taxpayers’ bank accounts

Tax refund 1040 IRS check

Your tax refund showed up in your bank account! Party time, right?

Wrong. It’s possible that the money isn’t really connected to your filing. It could be part of a new tax scam that’s appeared this filing season.

And crooks are using even more chicanery to get the money that’s in your account, from posing (once again) as Internal Revenue Service agents to pretending to be debt collectors (you knew this would eventually happen).

But before this latest effort to steal your tax refund got to this point, it started with stealing your tax identity.

Here’s the tax tale in four acts steps.

Step 1: Tax preparers targeted
Earlier in February, the IRS alerted tax preparers of a new scam that begins with cybercriminals stealing data from practitioners’ computers and filing fraudulent tax returns.

Generally, criminals use alternative ways to get the fraudulent refunds delivered to themselves rather than the real taxpayers.

However, in this latest scam variation, some of the criminals have the money sent to the real bank accounts using the info stolen from the tax preparers’ data bases.

I know. Criminally speaking, it sounds counterproductive. And in the past when this happened, it was a screw-up by the crooks.

But in the years that they’ve been refining their tax identity theft techniques, thieves have learned that it’s more difficult for the IRS to identify and halt fraudulent tax returns when the filings use real taxpayer data, such as income, dependents, credits and deductions.

And following through on that approach, instead of sending the refund to an unrelated account or address that could prompt the IRS to take a closer look, they let the money go to the real bank destination.

Step 2: Crooks reclaiming refunds
That’s where the next twist of the tax scam, the impersonation portion, comes into play.

So far, the IRS has learned of two ways the crooks go about recovering the fake refunds they generated and sent to real taxpayers.

In some cases, criminals pose as debt collection agency officials who are acting on behalf of the IRS. Again, not to gloat, but we knew this was going to happen.

In that guise, they contact taxpayers to say a refund was deposited in error. The criminal caller then instructs the taxpayer to forward the money to the fake collection agency.

In another version, the taxpayer who received the erroneous refund gets an automated call with a recorded voice identifies him/herself as an IRS agent. As in the previous iteration of this pervasive (and costly) tax call scheme, the fake IRS agent threatens the taxpayer with criminal fraud charges, an arrest warrant and/or a blacklisting of the person’s Social Security number. The recorded voice gives the taxpayer a case number and a telephone number to call to return the refund.

Step 3: Cleaning up after the erroneous refund scam
If a tax refund amount shows up in your bank account and you haven’t yet filed your tax return, don’t panic.

Yes, it looks like your tax identity has been stolen. So immediately contact the IRS about the steps you need to take to get your taxpaying life back on track.

First, contact the IRS Identity Protection Specialized Unit (IPSU) toll-free at (800) 908-4490. You’ll also need to fill out the IRS Identity Theft Affidavit, Form 14039.

Credit bureau phone contactsYou also need to talk with your financial institution. Since crooks have you account number, you probably should close those accounts or take other protective steps recommended by your bank.

And you’ll definitely want to talk to your tax preparer since that might be the place from where the crooks got your data.

The Federal Trade Commission (FTC) also has an ID theft recovery plan to help you dig out of this mess.

The first step is to place a free, 90-day fraud alert on your accounts by contacting one of the three credit bureaus. That company must tell the other two.

The fraud alert will make it harder for someone to open new accounts in your name. As for your existing accounts, you also need to request a credit report to see what other possible fraudulent activity might have taken place there.

Step 4: Returning the wrong refund
Now about that fake tax refund money that you received. You use the same steps to take care of a fraudulent tax refund as you do with a real one that’s wrong, which just happens to be today’s Daily Tax Tip.

If the erroneous refund showed up as a direct deposit, you should:

  1. Contact the Automated Clearing House (ACH) department of the bank/financial institution where the direct deposit was received and have them return the refund to the IRS.
  2. Call the IRS toll-free at (800) 829-1040 (individual) or (800) 829-4933 (business) to explain why the direct deposit is being returned.

If the erroneous refund was a paper check and you haven’t cashed it:

  1. Write “Void” in the endorsement section on the back of the check.
  2. Submit the check immediately to the appropriate IRS location based on the city (possibly abbreviated) on the bottom text line in front of the words TAX REFUND on your refund check. They are:

ANDOVER – Internal Revenue Service, 310 Lowell Street, Andover, MA 01810

ATLANTA – Internal Revenue Service, 4800 Buford Highway, Chamblee, GA 30341

AUSTIN – Internal Revenue Service, 3651 South Interregional Highway 35, Austin, TX 78741

BRKHAVN (Brookhaven) – Internal Revenue Service, 5000 Corporate Ct., Holtsville, NY 11742

CNCNATI (Cincinnati) – Internal Revenue Service, 201 West Rivercenter Blvd., Covington, KY 41011

FRESNO – Internal Revenue Service, 5045 East Butler Avenue, Fresno, CA 93727

KANS CY (Kansas City) – Internal Revenue Service, 333 W. Pershing Road, Kansas City, MO 64108-4302

MEMPHIS – Internal Revenue Service, 5333 Getwell Road, Memphis, TN 38118

OGDEN – Internal Revenue Service, 1973 Rulon White Blvd., Ogden, UT 84201

PHILA (Philadelphia) – Internal Revenue Service, 2970 Market St., Philadelphia, PA 19104

When you mail the erroneous refund back to Uncle Sam, don’t staple, bend or paper clip it to anything. That includes not attaching it to the note you should include that tells the IRS “Return of erroneous refund check because …” and give a brief explanation of why you’re giving back the tax cash check.

If the erroneous refund was a paper check and you have cashed it, then:

  1. Submit a personal check, money order, etc., immediately to the appropriate IRS location listed above.
  2. If you no longer have access to a copy of the check, call the IRS toll-free at (800) 829-1040 (individual) or 800-829-4933 (business) and explain to the IRS assistor that you need information to repay a cashed refund check.
  3. On the check/money order write “Payment of Erroneous Refund,” the tax period for which the refund was issued and your taxpayer identification number (Social Security number, employer identification number or individual taxpayer identification number).
  4. Include a brief explanation of the reason for returning the refund.

Note that if you have to repay an erroneous refund that you cashed and/or spent, you may owe the IRS interest on the money.

That’s another reason not to dally if you get a wrong refund, either due to a tax scam perpetuated in your name, or just because of a mistake.

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IRS fiscal 2019 budget proposal substantially the same, both in dollars and recommended tax priorities

Same old, same old. That’s the message the Internal Revenue Service got today when the Trump Administration released its fiscal year 2019 budget. The IRS’ base budget amount is about the same as prior years and some old tax enforcement ideas are proposed again.

OMB Mick Mulvaney 2018 budget_C-SPAN

Office of Management and Budget Director Mick Mulvaney discussing the Trump Administration budget last year. For release of the 2019 fiscal year budget, Mulvaney decided to stay off camera “because it’s really boring.” You can decide if he was right by listening to his remarks yourself via C-SPAN.

It’s no secret that the Internal Revenue Service has for years been asking for more money to do its job. Was Donald J. Trump listening when he and White House staff put together their new federal budget?

Sort of.

In the fiscal year 2019 budget released today, Trump proposes the IRS get a base budget of $11.1 billion. That’s a cut from its previous $12 billion fiscal year allotment.

But the Trump Administration also proposes the IRS get an additional $15 billion over the coming decade so that it can “expand and strengthen the enforcement of tax law to ensure that all Americans are paying the taxes they owe.” The initial portion of this funding would be $320 million in FY19.

The White House request is based on the assumption that you have to spend some tax money to get more tax money.

Specifically, the budget document says, “These additional investments proposed over the next 10 years are estimated to generate approximately $44 billion in additional revenue at a cost of $15 billion, yielding a net savings of $29 billion over 10 years.”

OK. It sounds like at least some folks at 1600 Pennsylvania Avenue were listening to John Koskinen, who retired from the IRS commissioner post last November, when he said during a 2016 speech that it costs the IRS 35 cents to collect $100 in federal revenue.

IT emphasized: Increasing the IRS’ efficiency is a key component of upping that return on investment even more. That’s why Trump and his budget writers designated $110 million for information technology (IT) modernization efforts.

While taxpayers are increasingly turning to online IRS options, the budget document says that the agency itself “relies on antiquated tax processing systems (many of which date back to the 1960s) and handles most of its interactions with taxpayers, other than tax filing, through the mail.”

Upgrades to the tax agency’s systems, it says, would allow IRS staff to have up-to-date, accurate information about taxpayer accounts when they work with taxpayers.

Focus on enforcement: On the enforcement side, the budget would like to see the IRS spend its money next fiscal year on efforts that ensure that taxpayers comply with their obligations, that tax refunds are paid only paid to eligible taxpayers and that taxpayers are protected from criminals seeking to commit fraud.

To achieve those goals, the budget wants to:

  • Require a valid Social Security number (SSN) for workers before they can claim the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC). Currently, a taxpayer can claim the CTC if he or she files using an Individual Tax Identification Number (ITIN), which is used in cases where individuals cannot obtain the standard nine-digit identifier from the Social Security Administration.

    In many cases, ITIN users are undocumented U.S. workers paying taxes on their earnings. A similar CTC requirement was part of the House version of tax reform, but did not make it into the final Tax Cuts and Jobs Act.

  • Give the IRS the authority to correct more errors on tax returns before refunds are issued. This would keep refunds from being issued to taxpayers who are not eligible, argues the budget document. It also would let the IRS resolve simple issues quickly without having to direct enforcement resources away from more difficult cases.

    The IRS already is authorized, in specific instances, to use its math error authority to summarily assess tax based on other third-party documentation it receives or when errors are apparent on a return, such as a transposed entry. In addition, the use of math error authority has increased significantly since 2008, when Congress granted the IRS math error authority to disallow refundable credits in an effort to prevent inappropriate payments. The IRS’ authority here now covers 16 categories of mistakes or omissions.

    Many, however, including the National Taxpayer Advocate, are leery of expanding IRS authority further. As far back as her 2011 annual report to Congress, National Taxpayer Advocate Nina Olson argued that the expansion of IRS math error authority already “far exceeds Congress’ original purpose and relies too heavily on IRS discretion.” Added expansion, Olson said then, will further jeopardize taxpayer rights. These are arguments she’s continued to make through the years.

  • Increase oversight of paid tax preparers. Yep, tax pros, the Trump Administration wants to revive this effort. The reason is the same one that the IRS has made in its earlier, unsuccessful attempts to regulate tax preparers: Since taxpayers are increasingly turning to paid tax return preparers to assist them in meeting their tax filing obligations, regulations would ensure that these preparers understand the tax code and thereby would provide taxpayers with higher quality service. Plus, it would prevent unscrupulous tax preparers from exploiting the system and vulnerable taxpayers, according to the budget.

    The arguments from many in the tax community are well documented, literally in court cases that went against the IRS. Look for those legal filings to be dusted off if this proposal proceeds.

From wants to reality: Not surprisingly, Treasury Secretary Steven Mnuchin likes his boss’ budget.

“President Trump’s discretionary budget plan released today highlights Treasury’s role in critical Administration policy initiatives. Treasury provides support for the President’s policies promoting economic growth, protecting the national security of the United States, and imposing fiscal discipline in Washington,” Mnuchin said in statement following the budget’s release.

Of course, Trump’s latest budget proposal, like all those delivered by presidents before him, is basically a wish list.

Congress, even one controlled by his own Republican party, will pick and choose from today’s document to determine which components will appear in future legislation.

But it’s always a good idea to have an idea of just what might happen and how much it will cost.

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