1. June 19, 2019 CPA Continuing Education Society of PA
IRS Updates
Richard G. Furlong, Jr. Senior Stakeholder Liaison Communications & Liaison Division
June 19, 2019
CPA Continuing Education Society of PA

2. Draft 2020 Form W-4 www.irs.gov/draftforms
You can now view the IRS’ early draft of the 2020 Form W-4.
Comments about the draft are welcome and must be submitted by July 1, The agency can’t respond individually to all comments due to the large volume expected, but we do appreciate the feedback and will consider all comments received.
A near-final draft is expected to be released mid-to-late July. The summer release will give employers and payroll processors what they need to make system updates before the final form is released in November. The W-4 Instructions for employees are a part of this release and a separate set of instructions for employers will be available soon.
The new W-4 form will better incorporate the changes ushered in by Tax Cuts and Jobs Act. The goals of the new design are to provide simplicity, accuracy and privacy for employees while minimizing burden for employers and payroll processors.
This draft Form W-4 is not for current use, but is a draft of the form to be used starting in Employees who have submitted a Form W-4 in any year before 2020 will not be required to submit a new form merely because of the redesign. Employers can continue to compute withholding based on the information from the employee’s most recently submitted Form W-4.
The IRS encourages all payroll professionals to take advantage of this opportunity and send your comments on the draft.

3. Software systems for new W-4s
Two software systems for old and new W-4 is not necessary
Same set of withholding tables used for both forms
Apply these tables separately to systems for new and old forms
Additional guidance will be provided on the payroll calculations needed based on data fields on the new and old forms

4. Use of new W-4
New employees who fail to submit a Form W-4 after 2019 treated as single filer with no other adjustments
Beginning in 2020, all new employees must used the redesigned form

5. No requirement to request new W-4s
Employees hired before 2020 are not required to submit a new Form W-4
Withholding will continue based on a valid form previously submitted
Do not treat employees as failing to furnish Forms W-4 if they don’t provide a new Form W-4

6. Adjustment for nonresident aliens
Pub 15-T will provide instructions on the additional amounts to add to wages to determine withholding for nonresident aliens
Nonresident alien employees should continue to follow special instruction in Notice 1392 when completing their Forms W-4

7. 2020 Publication 15-T
Draft of Publication 15-T, Federal Income Tax Withholding Methods, for use in 2020 issued June 7
Comments must be submitted by July 8, 2019 to be timely
IRS will post a new draft this summer to show final computation of withholding
Can’t provide updated withholding tables for 2020 until the final Pub 15-T is released in December

8. Why a Paycheck Checkup?
Some law changes in the Tax Cuts and Jobs Act may affect your withholding
Protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year
Avoid too much withholding; you can receive more in your paychecks

9. IRS.gov/withholding

10. What do I need?
Most recent pay stubs
Most recent income tax return

11. Results

12. Your recap

13. What If I Have Too Much Withheld?
File a new Form W-4 to:
Avoid having too much withheld
Put more in your regular paycheck

14. Resources: www.irs.gov/withholding
Publication 505, Tax Withholding and Estimated Tax
Form W-4, Employee’s Withholding Allowance Certificate
Form 1040-ES, Estimated Tax for Individuals

15. W-2 scam
Poses as company executive, asks payroll employee for list of all employees W-2s
Targets: businesses, public schools, universities, tribes
Employer/victims should and provide POC
Victims/non-victims should forward any suspicious W-2 s (including full headers) to and use subject line: W2 Scam

16. W-2 spoof

17. Emerging employment tax issue
Wellness Benefits
Many employers, health insurers and unions provide employees with wellness plans or programs that are designed to promote the health of the employees
Employer wellness programs often provide employees with rewards for taking certain actions intended to promote health

18. Emerging employment tax issue
If the rewards are limited to section medical expenses then usually they would not be wages subject to employment taxes
An example is where the employer places a limitation on a gift card such that it may only be used for a section 213 medical expense, e.g., prescription medications

19. Emerging employment tax issue
Some employers offer a wellness arrangement where they require the employee to pay a pre-tax premium (similar to a health plan premium through a cafeteria plan) and then, within the same pay period, reimburse the employee for almost the entire pre-tax premium
Under existing law in IRC § 105 and 106, the amount of the reimbursement in this arrangement is wages subject to employment taxes

20. E-News for Payroll Professionals
Subscribe to monthly editions of e-News for Payroll Professionals
Get information specifically affecting federal payroll tax returns and the payroll community
and search: e-News

21. Employer Identification Number (EIN) Application Changes
Richard G. Furlong, Jr. Senior Stakeholder Liaison Communications & Liaison Division
June 19, 2019
CPA Continuing Education Society of PA

22. EIN Application Lines 7a and 7b
Bullet (28 pt.)

23. Responsible Party with SSN
Bullet (28 pt.)

24. Definition of Responsible Party
The “responsible party” is the individual who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. The individual identified as the responsible party should have a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the individual, directly or indirectly, to control, manage, or direct the entity and the disposition of its funds and assets.

25. Foreign Entity Responsible Party
Bullet (28 pt.)

26. Entities Commonly Using EINs
Single Member Limited Liability Companies (SMLLC)
Estates and trusts
Parent companies forming subsidiaries
Employer retirement plans
Tax Lien participants – some states have tax lien auctions where an EIN is used as part of a lottery process.

27. Updating the Responsible Party

28. Identity Theft Presentation for Tax Professionals
Richard G. Furlong, Jr. Senior Stakeholder Liaison Communications & Liaison Division
June 19, 2019
CPA Continuing Education Society of PA

29. Today’s Presentation IDT progress snapshot
Data security requirements for tax pros
Protect your business
Data theft signs for tax pros
What to do in case of a data loss
How to help client/victims
What’s new for 2019 and beyond

30. Security Summit Progress Report
Between 2015 and 2018:
Number of taxpayers reporting they were IDT victims (Form 14039) fell 71 percent;
Number of confirmed IDT returns stopped by IRS fell by 54 percent;
The IRS protected a combined $24 billion in fraudulent refunds;
Financial industry partners recovered an additional $1.4 billion in fraudulent refunds.

31. Cyberthieves Target Tax Pros
Five to seven data theft reports weekly in 2018
Hundreds of tax pros
Tens of thousands of clients
Spear phishing s – posing as potential customers, tax software, cloud storage providers or IRS
Unprotected accounts, computer systems, wireless access

32. Protect Your Business See Publication 4557, Safeguarding Taxpayer Data
Review your security measures
Anti-virus software and firewall
Two-factor authentication (coupled with strong passwords)
Backup software/services and drive encryption
Secure Virtual Private Networks
Create a data security plan
Federal law requires all “professional tax preparers” to create and maintain an information security plan for client data
Follow “Safeguards Rule”
Designate a responsible person

33. Protect Your Business Create Data Security Plan (continued)
Identify/assess risks
Design and implement safeguards
Use providers who maintain security
Evaluate and adjust as needed
Protect your EFIN, PTIN and CAF number
Contact IRS Stakeholder Liaisons; states at
Sign up for e-News for Tax Professionals, Quick Alerts and/or IRS Social Media
Identify and assess your risks

34. Data Theft Signs
Clients that haven’t filed get refunds, authentication letters, tax transcripts
Client returns reject – returns already filed
Number of returns filed exceeds your number of clients
Computers impacted:
Running slow
Cursor moving on its own
Network computers locking up

35. Responding to a Data Theft
Create a data theft response plan
Contact IRS Stakeholder Liaisons
Contact states at
Contact cybersecurity expert/insurance carrier
Review FTC site: IdentityTheft.gov
Review IRS Publication 5293, Data Security Resource Guide for Tax Professionals

36. Victim Assistance Taxpayer Protection Program letters
4883C – requests taxpayers call the IRS within days to confirm filing the return
5071C – requests taxpayers use an online identity verification tool to confirm filing the return
5747C – requests taxpayers make an appointment at IRS office; for data breach victims
5447C – requests taxpayers with foreign addresses call the IRS
6042C – requests more information from suspected business victims

37. Victim Assistance Identity Theft Victim Assistance Program
Form – Identity Theft Affidavit
File only if unable to e-file; instructed to do so by IRS
Do not file if client receives a TPP letter
Complete Box 1, mail with paper tax return
Identity Protect PIN issued after case is resolved

38. Identity Protection PIN
6-digit number helps prevent thief from filing fraudulent return in your client’s name
Issued automatically to confirmed identity theft victims
Online opt-in program – California, Delaware, D.C., Florida, Georgia, Illinois, Maryland, Michigan, Nevada and Rhode Island
Expansion – roll out to other states in the future; must use online tool

39. The Future – 2019/2020
Faxing of individual and business transcripts to end - TBD
Third-party mailings from Forms 4506, 4506-T and T-EZ to end - TBD
Unmasked wage transcripts are available
EIN applicants must be individuals
Data security awareness efforts continue; Tax Security 2.0: Taxes-Security-Together Checklist

40. Monitor Your EFIN, PTIN and CAF Numbers
Richard G. Furlong, Jr. Senior Stakeholder Liaison Communications & Liaison Division
June 19, 2019
CPA Continuing Education Society of PA

41. Stolen EFINs, PTINs and CAFs
Thieves impersonate tax pros to:
File fraudulent returns
Submit Power of Attorney forms
Call Practitioner Priority Service line
Attempt to access client accounts
Attempt to access e-Services
IRS responses include:
2-factor authentication for e-Services accounts
Authorization requirements for PPS callers
Redacted tax transcripts

42. Maintain Your EFIN Application
Only the IRS can issue EFINs
Review periodically for accuracy and updates
Update change in business operations within 30 days
Changes in address, phone numbers or personnel
Add or remove authorized users (responsible officials, principal consent, delegated users, etc.)
Know when a new EFIN is needed
New ownership of a firm (EFIN not transferable)
New location that transmits e-File returns

43. Monitor Your EFIN For EFIN weekly totals: Go to e-Services
Access e-File Application
Search by name
Select “EFIN Status”

44. Report Suspected EFIN Abuse
Bullet (28 pt.)
Too many returns filed with your EFIN? Contact e-Help Desk (866)

45. Monitor Your PTIN Monitor “Returns Filed per PTIN”
Information available via online PTIN system for tax preparers who meet both of the following criteria:
Have a professional credential or are an Annual Filing Season Program participant, and
Have at least 50 Form 1040 series tax returns processed in the current year

46. How to Access PTIN Information
To access “Returns Filed Per PTIN” information, follow these steps:
Log into your PTIN account
From the Main Menu, find “Additional Activities”
Under Additional Activities, select “Summary of Returns Fied.”

47. Summary of Returns Filed Chart
Bullet (28 pt.)

48. Report Misuse of your PTIN

49. Maintain Your POA Files
A CAF number is assigned the first time you file a third-party authorization with IRS. 
Review your Power of Attorney submissions annually
Withdraw your POA for clients you no longer represent by mailing or faxing the existing POA to the IRS using the “Where to File” chart. Write “Withdraw” at the top.

50. Monitor Your CAF Number
Using stolen CAF numbers to try to obtain tax transcripts is the latest ID theft trend.
Receiving unexpected tax transcripts is a sign of identity theft.
Contact the IRS if there is suspected abuse of your CAF number.
Review Publication 4557, Safeguarding Taxpayer Data, for additional security steps

51. Practitioner Priority Service (PPS)
Richard G. Furlong, Jr. Senior Stakeholder Liaison Communications & Liaison Division
June 19, 2019
CPA Continuing Education Society of PA

52. Practitioner Priority Service (PPS)
Practitioner Priority Service is a nationwide toll-free, account related service available to tax practitioners.
PPS Account Service is available to tax practitioners (individuals and businesses) who provide tax advice, prepare income taxes or act on the taxpayer’s behalf and are calling in regards to an account related issue before the IRS.

53. Practitioner Priority Service (PPS)
PPS serves tax practitioners as the first point of contact for assistance regarding their clients' account related issues.
Improves overall consistency and quality of taxpayer service.
Available to tax practitioners with valid Form 2848, Form 8821, Form 8655 or other third party designee authorizations.

54. Practitioner Priority Service (PPS)
Hours of Service:
7:00 a.m. to 7:00 p.m. local time
Alaska & Hawaii follow Pacific Time
Puerto Rico practitioners- 8:00 a.m. to 8:00 p.m. local time.

55. Practitioner Priority Service (PPS)
PPS Toll-Free Line is staffed in 7 locations that handle Individual Accounts issues.
Individual Accounts
Brookhaven
Buffalo
Memphis
Nashville
Philadelphia
Pittsburgh

56. Practitioner Priority Service (PPS)
PPS Toll-Free Line is staffed in 3 that specialize in Business Account issues
Business Accounts
Cincinnati
Oakland
Ogden

57. Practitioner Priority Service (PPS)
The following account related services are offered in all Accounts Management locations.
Resolving taxpayer account problems by:
Locating and applying payments
Explaining IRS communications (i.e., notices and letters)
Providing general procedural guidance and timeframes

58. Practitioner Priority Service (PPS)
Continued from previous slide:
Resolving taxpayer account problems by:
Making account adjustments
Securing taxpayer income verification
Providing transcripts of taxpayer accounts

59. Practitioner Priority Service (PPS)
Services that are Out of Scope for Accounts Management PPS Assistors
Tax Law questions
Accounts assigned to:
Automated Collection Services (ACS) cases,
Automated Under Reporter (AUR) cases,
Correspondence Examination cases, or
Cases assigned to Revenue Officer
Calls for specific employees

60. Practitioner Priority Service (PPS)
PPS voice options:
Option 1 - Tax Law questions
Option 2 - Individual Accounts not in collection or examination status
Option 3 - Business Accounts not in collection or examination status
Option 4 - Automated Collection System (ACS) status
Option 5 - Automated Under Reporter (AUR) status
Option 6 - Correspondence Examination

61. Contact Information
Richard G. Furlong, Jr.
Senior Stakeholder Liaison
Communications & Liaison