Be Prepared Come the Filing Deadline
You have approximately three and a half weeks until the filing deadline. As you begin submitting returns it’s important to be aware of key IRS updates released in the past few months. Here are four for you to consider:
When Missing Form 1099
Depending on the types of income your clients receive, some may require 1099 forms when filing their taxes. Those responsible for paying that income are required to send 1099 forms by January 31, 2008. If your clients have yet to receive their 1099 forms they must contact the IRS at 800-829-1040.There are many forms in the 1099 series, including:
- Form 1099-B, Proceeds From Broker and Barter Exchange Transaction.
- Form 1099-DIV, Dividends and Distribution.
- Form 1099-INT, Interest Incom.
- Form 1099-MISC, Miscellaneous Incom.
- Form 1099-OID, Original Issue Discoun.
- Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
- Form SSA-1099, Social Security Benefit Statemen.
While all 1099 forms are important to keep with your tax records, only those indicating income tax withheld are to be included with a return. For more information go to www.IRS.gov.If missing a W-2, ask your client to contact the employer to see if a “reissued statement” can be quickly processed. Otherwise, have the client contact the IRS at the number listed above. Notify your client that they are still obligated to file by the deadline even if they do not have the W-2. In such cases, you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement.
Inform Clients of Possible Email and Telephone Scams Using the IRS Name
At the beginning of the year the IRS released statements warning taxpayers to be aware of possible email and telephone scams claiming to offer advance payment checks from the IRS. Scams claiming to offer proposed government tax rebates have also begun to surface. The objective of such scams is to secure private financial information from taxpayers in attempts to commit identify theft. The following scams have already been brought to the IRS’s attention:
- Rebate Phone Cal.
- Refund e-Mai.
- Audit e-Mai.
- Changes to Tax Law e-Mai.
- Paper Check Phone Call
Warn your clients not to click on any email links claiming to take them to the IRS’s homepage. Have them check with you before moving on any such claims for rebates or advance payment checks. Also ensure they are using the IRS’s proper URL. Any website claiming to be affiliated with the IRS ending in .com or .org is not an official IRS site. Advise your clients to visit www.IRS.gov.
Recently Married and Recently Divorced Clients
If any of your clients married or divorced in the 2007 tax year it is important to ensure they avoid name complications. The name on their tax return must match the name registered with the Social Security Administration (SSA). A tax refund may be delayed if those names do not match.Before filing for a refund you must ensure these two records match. Inform clients that they cannot legally change their names unless the SSA has been properly notified, and this includes recently divorced individuals assuming on a previous name.The SSA records can easily be changed by filing Form SS-5 at the local Social Security office. Generally it takes two weeks for the name-change to be verified. For more information have your clients visit www.socialsecurity.gov or call 800-772-1213.
When Clients Move
Advise your clients to notify the IRS when they move to a new home or business address to ensure refunds or other IRS correspondence will follow them. They can do this in one of the following ways:
- Tax Return. Update the address on the client’s tax return.
- Form 8822. You can use this Change of Address form to submit a name or address change at any time through the year.
- Written Notification. Submit written notification to the IRS to inform them of the address change. To do so, the IRS requires a full name as well as the old and new addresses, the SSN or employer identification number, and the client’s signature.
- Verbal Notification. If you client is contacted by an IRS agent they may be allowed to change their address verbally.
To download Form 8822, Change of Address, visit the IRS Web site, www.IRS.gov, or call 800-TAX-FORM (800-829-3676).