As a tax preparer it’s good to know how the Internal Revenue Service came into being. Here’s a brief history of the IRS.

Bureau of Internal Revenue

The IRS has a long history, starting in 1862 when President Lincoln joined Congress to create the office of Commissioner of Internal Revenue. This was accomplished to enact an income tax that would fund the Civil War. While there were other organizations designed to collect duties and tariffs, the Internal Revenue Service, then called the Bureau of Internal Revenue, was instituted to collect income tax. Ten years after its creation, the income tax was deemed unconstitutional and the bureau was disbanded.

The Significance of the 16th Amendment

In 1894 Congress tried to reinstitute income tax, but the following year it was again deemed unconstitutional in the Pollock v. Farmers’ Loan & Trust Co. ruling because the direct taxes had not been allocated according to population among the states.

In order to remedy this problem Congress created the 16th amendment and in 1913 Wyoming ratified the amendment, providing the three-quarter majority of states required to amend the Constitution. That same year the first Form 1040 was released.

War Efforts Funded by Income Tax

To fund World War I, income tax rose to 77%. Following the war and preceding the Great Depression, income tax dropped to 24%. However, during World War II Congress introduced payroll withholdings and quarterly payment of income tax.

Renaming and Reorganizing

In the 1950s the organization’s name changed to the Internal Revenue Service. Career and professional employees were hired in place of the patronage system which had appointed individuals to select positions. Even today, only the IRS commissioner and chief counsel are appointed by the president and approved by the Senate.

Other Key Dates

1972 - The Bureau of Alcohol, Firearms and Tobacco separated from the IRS and became an independent bureau.

1974 - Congress passed the Employee Retirement and Income Security Act, which made the IRS responsible for regulating employee benefit plans.

1986 - Electronic filing, in a limited capacity, began.

1986 - The Tax Reform Act was signed by President Reagan and became the most significant piece of tax legislation in 30 years and took three years to implement. It also marked the third of the federal laws codified in the history of the IRS.

1992 - Taxpayers owing delinquent payments were allowed to file electronically.

1998 - The IRS Restructuring and Reform Act of 1998 encouraged the most extensive reorganization of the IRS since the 1950s. As a result, the IRS developed four major divisions including the Wage and Investment Division, the Small Business/Self-Employment Division, the Large and Mid-Size Business Division, and the Tax-Exempt and Government Entities Division. They also instituted the Taxpayer Advocate Service to represent the needs and concerns of the taxpayer.

While that’s a condensed history of the IRS, it should give you a better idea of the organization’s evolution and overall purpose.

References
“Brief History of IRS.” Internal Revenue Service
“Historical Highlights of the IRS.” 20 September 2007. Public Accounting, Tax & Financial Services since 1957.
“Internal Revenue Service.” Wikipedia.

On June 29^th the IRS announced that their headquarters building (located at 1111 Constitution Ave. NW.) will be closed for at least 30 days. “The building will be closed for an extended period of time, and we will reoccupy it only when it is safe to do so,” said IRS Commissioner Mark W. Everson. “We’re working closely with GSA to make all necessary repairs.”

The announcement followed considerable flooding caused by heavy rains to the D.C. area. The building’s subbasement was completely submerged and the basement was under 5-feet of water. The basement houses the building’s electronic equipment, over 90% of which has been damaged. While final assessment is pending, costs are expected to run in the tens of millions of dollars.

Regardless of considerable damage, business has resumed; the 2,400 headquarters employees have been relocated or will telecommute.

The IRS Headquarters Building is just one of a dozen buildings located in the area and houses top IRS officials. Don’t worry – tax claims are processed in another, water-free, building, and the closure of headquarters will not result in any tax administration or enforcement delay. But if you need to send mail to IRS headquarters, the temporary address is:

950 L’Enfant Plaza
5th Floor
Washington , DC 20024

The following types of documents should be sent to this new address: rulings; requests for determination letters; applications for a change in accounting method (Form 3115); complaints; subpoenas; service of process; and public comments on published guidance. Documents previously hand-delivered to IRS headquarters will be handled in the typical manner.

The damage occurred on June 25^th, as water surged through basement windows, following heavy rains to the D.C. area. Headquarters initially closed on June 26^th and 27^th; no tax documents were released on those dates. The IRS anticipated reopening headquarters on June 28^th. Obviously, damage was more extensive than first thought. The National Archives and the National Museum of Natural History as well sustained considerable damage.

Learn what you need to know about the IRS for your own tax preparation business.

IRA Contributions Can Be Made Until Tax Filing Deadline

Tax Tip 2005-62, March 29, 2005

If you haven’t contributed funds to an Individual Retirement Arrangement (IRA) for tax year 2004, or if you’ve put in less than the maximum allowed, you still have time to do so. You can contribute to either a traditional or Roth IRA until the April 15, 2005, due date for filing your tax return for 2004, not including extensions.

Be sure to tell the IRA trustee that the contribution is for 2004. Otherwise, the trustee may report the contribution as being for 2005, when they get your funds.

Generally, you can contribute up to $3,000 of your earnings for 2004 or up to $3,500 if you are age 50 or older in 2004. You can fund a traditional IRA, a Roth IRA (if you qualify), or both, but your total contributions cannot be more than these amounts.

You may be able to take a tax deduction for the contributions to a traditional IRA, depending on whether you — or your spouse, if filing jointly — are covered by an employer’s pension plan and how much total income you have. You cannot deduct Roth IRA contributions, but the earnings on a Roth IRA may be tax-free if you meet the conditions for a qualified distribution.

You can file your tax return claiming a traditional IRA deduction before the contribution is actually made. However, the contribution must be made by the due date of your return, not including extensions. If you report a contribution to a traditional IRA on your return, but fail to contribute by the deadline, you must file an amended tax return by using Form 1040X, Amended U.S. Individual Income Tax Return. You must add the amount you deducted to your income on the amended return and pay the additional tax accordingly.

Publication 590, Individual Retirement Arrangements (IRAs), has more information. Download Publication 590 or order it by calling toll free 1-800-TAX-FORM (1-800-829-3676). Taxpayers needing this or any other IRS publication should act soon to be sure they have the item in time to meet the April deadline.

Links:

• Publication 590, Individual Retirement Arrangements (PDF 449K)
• Form 1040X, Amended U.S. Individual Income Tax Return (PDF 123K)
• Form 1040X Instructions (PDF 45K)

IRS News: Split Refund Available for Comment & Direct Mail to IRS Counsel

Split Refund Available for Comment

On August 25th, the IRS announced that they have released a new tax form, 8888, Direct Deposit of Refund, enabling taxpayers to split their refunds into different accounts. The form is currently available for public comment until September 25th.

Form 8888 is inteneded to give taxpayers more flexibility in managing their refunds; it enables individuals to deposit their 2006 federal tax refunds in up to three separate saving or checking accounts with three different financial institutions. Taxpayers can submit Form 8888 either on paper or electronically.

Tax professionals, accountants, and other interested parties are encouraged to read through the draft and provide feedback.

To view the draft of Form 8888, visit http://www.irs.gov/pub/irs-pdf/f8888.pdf

To give feedback on the draft, visit http://www.irs.gov/formspubs/page/0,,id=10179,00.html

Direct Mail to IRS Counsel

Due to extensive flooding of the main IRS Headquarters Building, tax professional and the general public have been given temporary addresses to use when submitting certain tax documents and request to IRS Counsel. In order to ensure proper delivery of various items, the IRS has updated temporary addresses.

Previously, all direct mail to IRS Counsel was sent to Crystal Mall in Arlington, Virginia. If you need to send documents to displaced IRS Counsel employees, the following general address still applies:

(Name), (Title), Internal Revenue Service, Office of Chief Counsel (Office Symbols), 1111 Constitution Ave., NW (Room Number), Washington, D.C., 200224

An IRS mail contractor will receive, sort, and deliver all mail sent to the above address.

All other temporary addresses issued before August 14th should be disregarded. The following addresses and their corresponding function are most current:

• Requests for changes of method of accounting under the jurisdiction of Income Tax and Accounting should be sent to:

P.O. Box 14095, Ben Franklin Station, Washington, D.C., 20044

• Requests described in Revenue Procedure 2006-1, excluding changes in a method of accounting under the jurisdiction of Income Tax and Accounting (#1) should be sent to:
  

  P.O. Box 7604, Ben Franklin Station, Washington, D.C., 20044

• User fee items, services of processes, and complaints, subpoenas, comments on proposed regulations, and anything else intended for the Office of Chief Counsel should be sent to”
  

  Courier’s desk, Room 108, First Floor, Crystal Mall #4, 1941 Jeff Davis Hwy, Arlington, VA 22202 OR 1901 S. Bell Street, Arlington, VA 22202

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NATP Press Release: Mid-Year Tax Planning is a Great Way to Decrease Taxes

On July 18^th, the NATP (National Association of Tax Professionals) issued a press release reminding tax preparers that mid-year tax planning can decrease taxes later. This is a great example of how tax professionals can help clients year-round and not just during tax season. Once you convince your clients that the money you save them in taxes more than pays your bill, they’ll recognize the true value of tax planning. The NATP suggests using the following ten points to illustrate how you can cut a client’s taxes just by planning early.

1) Overpayment or underpayment of taxes. If your client received a big refund last year that’s an indication that they continually overpay the government and could adjust their withholdings in order to get that money back into their income to invest, if they choose, and earn interest year-round. The opposite could also be true; you client may not be paying enough in taxes now and will be required to pay a penalty later. Reviewing their current tax situation will allow them to make the necessary adjustments to save money in the end.

2) Saving for retirement – IRAs, 401(k)s, profit-sharing, pensions, employer-sponsored plans, etc. Many choose retirement plans when they first get a job and forget about them until it comes time to retire. In recent years there have been many changes to retirement savings plans, and it’s always helpful to review those with your clients in order to determine whether or not a different plan may be more beneficial to their needs. This would also be a good time to plug Individual Retirement Accounts (IRA’s) that allow clients to save money in a tax-sheltered environment for their retirement.

3) Medical savings accounts and health savings accounts. Not all health plans are created equal. Review your client’s current health plan and compare it with all their options. Explain the pros and cons of high premium medical insurance plan verses a high-deductible plan combined with an Archer medical savings account (MSA) or health savings account (HSA). They may be surprised at how they could save money by switching plans while experiencing tax benefits. This is also a good time to explain how they can use flexible spending accounts through their employer to reduce their taxable income.

4) Estimated tax payments. It’s always good to review estimated tax payments in order to make necessary adjustments mid-year in order to avoid overpayment or underpayment penalties at year-end. “This is especially important for taxpayers who have self-employment income on the side,” says NATP member Nick Popolo, EA, of Birch Tax Service in Staten Island , NY . “When they receive 1099s at the end of the year, they often lose their entire refund or wind up owing money. A mid-year review would avoid an unpleasant surprise for the taxpayer.”

5) Take advantage of deduction bunching. Making your client aware of the thresholds required to claim itemized deductions can help them take advantage of this tax benefit. Most clients are focused on saving money and may be spreading out their expenditures over time in order to cut initial costs; you can explain how certain expenditures should be limited to one year in order to save in taxes. This will enable your client to better manage their spending in order to experience the tax savings. This applies to several expenditures, especially to medical expenses, property tax payments, and charitable donations.

6) Getting married? Or divorced? Not that your client should call you before making any of these life-changing decisions, but it’s important that they realize how these significant events have equally significant tax implications. Couples with dual incomes can save money by getting married in January, while couples sharing one income may experience more tax benefits if they get married at year’s end. And clients planning to divorce should be encouraged to do estate planning before the divorce is final. This is the time when financial advice is crucial to a client and can result is significant tax savings.

7) Beneficiary designations, Powers of Attorney, wills, estate planning. Encourage clients to have comprehensive estate planning performed by a competent and knowledgeable individual. This often determines whether or not an estate plan can be carried out as intended by the estate owner.

Buying or selling stocks, bonds, real estate, or other investments. Remind your client that tax rules apply to all these transactions, and when they consult with you on their intentions mid-year, you can help them make financial decisions that will save them in taxes and make them more money in the end.

9) Financial planning is important when you have children and teens. Clients should begin planning for their children’s savings as early as possible. Coverdell Education Savings Accounts (ESAs) and Section 529 plans are two ways to begin tax-deferred savings for a child’s education. Explain all a client’s options so they can make the decisions that will save them the most money while decreasing taxable income.

10) Self-employed taxpayers and those with small businesses have many ways to plan for tax savings. This is where you prove yourself invaluable to a client. Recent changes allow for more flexibility with carrybacks, carryforwards, employee benefit plans, expense deductions, etc. As with most tax-related expenditures, it’s important that your client know what documents to save in order to enjoy various tax benefits.

Tax planning is a year-round process that requires a fine-tuning of all financial decisions to benefit a client. Once clients recognize how much you can save them in the end, they won’t be as concerned about your final bill. Encourage your clients to plan with you now and save later. For more information or to print the official release for your clients, visit www.natptax.com.

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IRS News:

Things You Need To Know For Tax Season

As April 15^th approaches, the IRS releases more information to help tax payers submit accurate and timely returns. In order to help your clients maximize their returns while avoiding penalty, we have summarized 4 noteworthy items the IRS has recently reported.

Severe Penalties in Store for Individuals and Businesses Who Submit Fraudulent Excise Phone Tax Returns
The IRS has already exposed fraudulent requests for excise phone tax returns made by tax preparation businesses. IRS criminal investigators have requested search warrants for businesses in the following cities: Atlanta , Ga. ; Dallas , Tyler and Athens , Texas ; Riverside , Calif. ; Miami , Fla. ; and New Orleans , La. . Businesses allegedly accused of filing faulty claims have been temporarily closed, equipment and paperwork having been seized pending further investigation.

“We want everyone who is eligible for the telephone tax refund to claim it but not to inflate the amount requested,” said IRS Commissioner Mark W. Everson. “We have seen limited but serious instances of abuse, and we’ve sent in criminal investigators to pursue the matter accordingly.”

Regardless of these reported abuses, the IRS continues to urge tax payers not to overlook their excise phone tax returns. To request a refund, business owners and non-profit organizations should complete Form 8913, Credit for Telephone Excise Tax Paid and attach it to their regular return. In order to calculate their refund, they must use the new IRS formula. First compare two telephone service statements: April, 2006 and September, 2006. Calculate the tax percentage of each bill (April contains a tax on local and long-distance service while September only includes a tax on local telephone service). The difference between these two percentages must then be applied to the quarterly or annual phone charges to determine their refund. You can find more information on the federal telephone excise tax refund in your 2006 tax return materials, or visit the IRS.gov.

A Reminder that Foreign Sources of Income Must be Reported
All US citizens are required to report income earned through foreign sources, regardless of their current place of residence. The IRS reminds taxpayers that the foreign income rule applies whether or not an individual received a Form W-2, Wage and Tax Statement, or a Form 1099. Foreign sources of income include both earned and unearned income. The IRS notes examples of such income, including wages and tips, interest, dividends, capital gains, pensions, rents, and royalties. Qualifying US citizens who do not reside in the United States may be able to exclude up to $82,400 of their 2006 foreign source income. For more information visit the IRS website at www.IRS.gov or call 1-800-TAX-FORM (800-829-3676).

Reporting Gambling Income and Losses
Gambling winnings, including the market value of noncash prizes, must be reported to the IRS. This includes but is not limited to the following sources: lotteries, raffles, horse and dog races and casinos, and non-cash prizes such as cars, houses, trips, etc. The payer of your winnings may be able to provide you with a W-2G; your payment may also have already included federal income tax withholdings. The IRS reminds tax payers that the full amount of their gambling income must be reported on line 21, Form 1040. Form 1040A or 1040EZ cannot be used. Losses, when they do not exceed gains, can be deducted on line 27, Schedule A (Form 1040). Do not report losses unless you can document them with receipts, statements, tickets, or other viable records.

Alimony: Some Tax Payers May Be Eligible to Claim Deductions While Others Report This Additional Income
While child support is never deductible, alimony, depending on the circumstances, may be. If you are making alimony payments per a divorce decree or agreement, chances are they are deductible on your tax return. If you are receiving alimony payments, they must be reported as income. The IRS suggests tax payers receiving alimony either increase their withholdings in order to account for the alimony, or anticipate tax payments on this income. You are also required to provide your social security number to the individual paying the alimony to avoid a $50 penalty. Tax payers who paid or received alimony must use Form 1040. For more information, read Publication 504, Divorced or Separated Individuals, available on the IRS Web site at www.IRS.gov or call 800-TAX-FORM (800-829-3676).

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IRS News

Keeping You On Top of Your Game

As we get more involved in tax season, the IRS releases more and more information about their services. In order to be aware of IRS happenings, we’ve compiled 5 noteworthy news items that the IRS has released in the past two weeks. Hopefully you and your clients will find the information helpful.

The IRS’s E-File System Opened on January 12
The IRS’s electronic filing system is officially open for business. Whether taxpayers use tax preparers, preparation software, or file themselves, on January 12^th they could begin submitting their returns electronically.

“E-file is fastest, safest and most accurate way to file a tax return,” said IRS Commissioner Mark W. Everson. “People will get their refunds faster through e-file. E-file greatly reduces the chances for making an error compared to filing a paper 1040.”

Other e-filing benefits include acknowledgement of IRS receipt within 48 hours, encryption of private tax information, and the ability to file both federal and state taxes in the same sitting.

E-filing is gaining in popularity. Just last year over 50% of the 73 million returns submitted where filed electronically. Compare that to 1996 when the IRS ran their first e-filing pilot program, receiving just 25,000 forms electronically.

IRS Expands its Free File Initiative
On January 16^th the IRS announced the expansion of their Free File Program which they have been running for 5 years now. In partnership with members of the private sector, the IRS allows free filing for tax payers with less than a $52,000 adjusted gross income. While the IRS does not charge tax payers for filing their forms electronically, many tax preparers and software manufacturers do. This partnership allows 70 percent of taxpayers, about 95 million, to enjoy free filing.

“This level of public satisfaction with Free File is just astounding,” IRS Commissioner Mark W. Everson said. “This innovative program provides real value to the taxpayers. Taxpayers will find we’ve made a great program even better this year.”

Publication 17: Filing for Dummies? Not Quite, but it Can Help
The IRS, in attempts to help taxpayers answer tax questions, has created Publication 17, Your Federal Income Tax. The 300 page guide is a compilation of common tax issues facing many taxpayers today. Publication 17 is free and can be accessed at the IRS website.

Go to 1040 Central with Your Filing Questions
The IRS is abounding in tax helps this year. Along with Publication 17, the IRS has also created the website, 1040 Central, which has links to information you might need this year when filing taxes. Regardless of the form people use, they can find help on a number of issues, including the telephone excise tax, tax law changes, refund tracking, current IRS news, access to forms and publications, tax fraud alerts, Frequently Asked Questions, and more.

IRS’s Professor-in-Residence Program Revamped
To revitalize its once dormant Professor-In-Residence Program, Chief Counsel Donald L. Korb recently appointed Calvin H. Johnson, the Andrews & Kurth Centennial Professor of Law at the University of Texas Law School, as his 2007 Professor-In-Residence. This program enables tax academicians the opportunity to contribute their expertise to the development of tax law, policy, and administration. Korb begins his term with the IRS this month.

Another way to keep yourself up to speed is to join the Universal Accounting Forum where you can discuss and chat with others just like you in other parts of the country! Click Here to see what’s happening at the lively and always jumping UAC Forum!

On September 7^th of this year, three private collection agencies (PCA’s) will begin collecting federal income tax debt from 12,500 taxpayers who currently owe back taxes. That number will grow to 40,000 by the end of this year.

The 2004 American Jobs Creation Act authorized the IRS to use PCA’s to help them collect uncontested claims. This will enable the IRS to focus more of their resources on more complicated cases.

IRS Commissioner Mark W. Everson said, “Redirecting relatively simple cases to private firms will permit the IRS to continue to focus its existing collection and enforcement personnel on more complex tax issues.”

The IRS is taking precautions to ensure that no taxpayer is unwittingly scammed by fraudulent collection claims. Tax professionals should be aware of IRS collection policies in order to protect their clients.

The IRS requires these PCA’s to follow strict collection polices, and the IRS will personally train and monitor the three agencies. The agencies are not allowed to subcontract their work and must abide by the same taxpayer privacy and protection laws currently upheld by IRS employees.

“Don’t be fooled by scam artists claiming to be from the IRS,” said Kevin M. Brown, IRS Commissioner of the Small Business / Self-Employed Division. “People selected for the private collection program will be notified in advance from the IRS. There are clear processes in place for this program, so don’t fall victim to fraudsters who are constantly looking for new ways to trick people.”

So what should clients expect when being contacted by IRS-authorized PCA’s? If any of your clients are part of this program they should expect the following:

1. Taxpayer notification: All taxpayers involved in this debt collection program will be notified before hearing from the private collection agency. Clients should be weary of agencies contacts them in behalf of the IRS if they have not received notification previously.
2. IRS letter: All taxpayers will receive an official letter from the IRS notifying them of their involvement in the program. The letter will also tell them the name of the private collection agency handling their case.
3. Collection letter: Following the IRS letter, taxpayers will receive a letter from the collection agency. This letter will simply inform individuals that they will be contacted by the agency shortly.
4. Money collected: Taxpayers will be asked to make all payments to the U.S. Treasury. The agency will not ask that they make payments to individuals or firms, and the agency will provide proper payment coupons and mailing addresses.
5. Verify payment credit: Call the IRS (800-829-1040) or go to IRS.gov to verify that a payment has been received and credited to an account.

The IRS is aware that taxpayers are vulnerable to fraudulent claims and scams. Education is crucial in alerting taxpayers in what to expect when involved in this program. Keep in mind that the IRS will never ask for pin numbers, access codes or passwords to their private accounts. Tax professionals should be aware of IRS collection policy and ready to consult clients involved in this process.

Find Out More On What It Takes To Be A Professional Tax Preparer.

IRS Tax News

Law Amendment Extends Penalties to Preparers of All Tax Returns

On June 11, 2007 the IRS released Notice 2007-54, providing guidance and transitional relieve for the return preparer provisions the Small Business and Work Opportunity Act of 2007 amended. Section 6694 of the Internal Revenue Code previously reserved penalties for income tax return preparers. Those penalties have been extended to preparers of all returns, including excise tax returns, employment tax returns, and estate and gift tax returns. Other amendments include an increase in penalty amounts and a change to the standards of conduct required by return preparers in order to avoid penalties.

These changes are effective for all returns prepared after May 25th of this year. These amendments apply to all returns, including amended returns and refund claims due on or before the last day of this year.

The Government Takes Action to Punish Perpetrators of Telephone Tax Fraud

The IRS previously reported criminal investigations involving several tax preparers suspected of telephone tax fraud. Businesses in six locations were temporarily closed while equipment and paperwork were seized pending further investigation. In an effort to punish perpetrators of this crime, the IRS and the Justice Department have recently obtained several indictments involving tax preparers accused of filing thousands of dollars in fraudulent excise refund claims.

IRS Acting Commissioner Kevin M. Brown said, “We saw limited but serious instances of abuse. We used our enforcement resources to move swiftly and decisively to protect this valuable refund for the vast majority of taxpayers and tax preparers who are requesting it properly. We want everyone who is eligible for the telephone tax refund to get it but not to inflate the amount requested.”

Recognizing the potential for fraudulent returns, the IRS has scrutinized excise tax refund claims for inflated amounts since early January when tax season opened. The IRS has continually warned tax payers to avoid dodgy preparers promising inordinate amounts for their excise tax returns.

Regardless of reported abuses, the IRS continued to urge tax payers not to overlook their excise phone tax returns. To request a refund, business owners and non-profit organizations were asked to complete Form 8913, Credit for Telephone Excise Tax Paid and attach it to their regular return. To calculate a refund, tax preparers were to use the new IRS formula: First compare two telephone service statements: April, 2006 and September, 2006. Calculate the tax percentage of each bill (April contains a tax on local and long-distance service while September only includes a tax on local telephone service). The difference between these two percentages must then be applied to the quarterly or annual phone charges to determine a refund. To make calculations easier, the IRS provided standard refund amounts ranging from $30 to $60. You can find more information on the federal telephone excise tax refund at IRS.gov.

Application for Reduced Installment User Fee is Now Available

On June 5th, the IRS announced that the application used to request a reduced fee for entering an installment agreement in order to pay federal taxes is now available. The Application for Reduced User Fee, Form 13844, can be accessed on the IRS website (IRS.gov) in the Forms and Publications section or can be ordered by calling a toll-free number: 1-800-TAX-FORM (1-800-829-3676). Eventually the IRS plans to eliminate this Form by having all requests placed electronically.

Beginning January of this year, user fees climbed respectively to $105, $52, and $45 for non-direct debit, direct debit, and reinstatement agreements. Those qualifying with incomes at or below poverty levels will pay a reduced fee of $43 for new agreements.

Those hoping to qualify for a reduced fee must submit the application within 30 days of receiving their installment agreement acceptance letter.

The IRS Warns: Protect Tax and Financial Records for Hurricane Season

Anticipating hurricane season the IRS warns taxpayers to place their tax and financial records in a safe place.

IRS Acting Commissioner Kevin M. Brown said, “With forecasts calling for an active Atlantic hurricane season, the IRS encourages taxpayers to protect tax and financial documents that can be hard to replace. A little planning can help safeguard valuable information in case a hurricane or other disaster strikes.”

The IRS recommends several actions. Moving hardcopies to electronic format is encouraged. You can scan paper tax records onto your computer, back them up on a USB drive and send them to a friend or relative in another city for safekeeping. Other suggestions include documenting valuables, checking on Fiduciary Bonds, and updating emergency plans (including the safeguarding of important documents).

The IRS is always willing to help individuals affected by a hurricane. Taxpayers can request copies of any returns and all their attachments by using Form 4506, Request for Copy of Tax Return.