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NYA Stakeholder Liaison Field IMRS Monthly Discussion Call Summary August 16, 2017

Topics Discussed
Don’t Take the Bait, Step 5: Prevent Remote Access Takeover Attacks

IR-2017-127, Aug. 8, 2017

WASHINGTON – The Internal Revenue Service, state tax agencies and
the tax industry today reminded tax professionals that their entire digital
network could be at risk for remote takeover by cybercriminals. Such a
takeover could lead to fraudulent tax filings and damage to their clients.
Multiple incidents have been reported to the IRS in the past year as tax
professionals’ systems have been secretly infiltrated. The criminals
accessed client tax returns, completed those returns, e-filed them and
secretly directed refunds to their own accounts.

Increasing awareness about remote takeovers is part of the “Don’t Take the
Bait” campaign, a 10-part series aimed at tax professionals. The IRS, state
tax agencies and the tax industry, working together as the Security Summit,
urge practitioners to learn to protect themselves from remote takeovers.
This is part of the ongoing Protect Your Clients; Protect Yourself effort.
“This is another emerging threat to tax professionals that the IRS has seen
on the rise,” IRS Commissioner John Koskinen said. “A remote takeover
can be devastating to practitioners’ business as well as to the taxpayers
they serve. It’s critical for people to take steps to understand and prevent
these security threats before it’s too late.”

A remote attack targets an individual computer or network as the
cybercriminal exploits weaknesses in security settings to access the
devices. Another line of attack uses malware to download malicious code
that gives the criminals access to the network. Especially vulnerable are
wireless networks, including mobile phones, modems and router devices,
printers, fax machines and televisions that retain their factory-issued
password settings. Sometimes, these devices have no protection at all.
There are multiple ways that cybercriminals can gain control of computers
and other devices. Phishing emails with attachments can easily download
malware that, when opened, give the criminal remote control of a computer.
Cybercriminals also can deploy certain tools that allow them to identify the
location of and get access to unprotected wireless devices. For example, a
printer with a factory-issued password can easily be accessed, and the
criminals can see tax return information stored in its memory.

The IRS urges tax professionals to take the following steps to help protect
themselves from remote takeovers:

• Educate staff members about the dangers of phishing scams,
which can be in the form of emails, texts and calls, as well as
the threat posed by remote access attacks;

• Use strong security software, set it to update automatically and
run a periodic security “deep scan” to search for viruses and
malware;

• Identify and assess wireless devices connected to the network,
including mobile phones, computers, printers, fax machines,
routers, modems and televisions. Replace factory password
settings with strong passwords.

• Strengthen passwords for devices and for software access.
Make sure passwords are a minimum of eight digits (more is
better) with a mix of numbers, letters and special characters;

• Be alert for phishing scams: do not click on links or open
attachments from unknown, unsolicited or suspicious senders;

• Review any software that employees use to remotely access
the network as well as those used by IT support vendors to
remotely troubleshoot technical problems. Remote access
software is a potential target for bad actors to gain entry and
take control of a machine. Disable remote access software until
it is needed.

Additional IRS Resources:

• Security Summit Alert: Tax Pros Warned of New Scam to Steal Their
Passwords
IRS Begins Issuing Notices to Taxpayers whose ITINs Expire
by End of 2017

IRS YouTube Videos:

Individual Taxpayer Identification Number – English | Spanish

IR-2017-128, Aug. 8, 2017

WASHINGTON – The Internal Revenue Service began mailing letters this
month to more than 1 million taxpayers with expiring Individual
Taxpayer Identification Numbers and urges recipients to renew them as
quickly as possible to avoid tax refund and processing delays.
ITINs with middle digits 70, 71, 72 or 80 are set to expire at the end of
2017. The notice being mailed — CP-48 Notices, You must renew your
Individual Taxpayer Identification Number (ITIN) to file your U.S. tax return
— explains the steps taxpayers need to take to renew the ITIN if it will be
included on a U.S. tax return filed in 2018.

The notices will be issued over a five-week period beginning in early
August. Taxpayers who receive the notice but have acted to renew their
ITIN do not need to take further steps unless another family member is
affected.

“We urge people who receive this letter to renew their ITIN as quickly as
possible to avoid tax refund and processing delays next year,” said IRS
Commissioner John Koskinen. “Taking steps now and renewing early will
make things go much more smoothly for ITIN holders when it comes time
to file their taxes.”

Under the Protecting Americans from Tax Hikes (PATH) Act, ITINs that
have not been used on a federal tax return at least once in the last three
consecutive years will expire Dec. 31, 2017, and as mentioned above,
ITINs with middle digits 70, 71, 72 or 80 will also expire at the end of the
year. Affected taxpayers who expect to file a tax return in 2018 must submit
a renewal application.

As a reminder, ITINs with middle digits 78 and 79 that expired at the end of
last year can be renewed at any time.

Who Needs an ITIN?

ITINs are used by people who have tax filing or income reporting
obligations under U.S. law but are not eligible for a Social Security number
(SSN). ITIN holders should visit the ITIN information page on IRS.gov and
take a few minutes to understand the guidelines.
Who Should Renew an ITIN?

Taxpayers with ITINs set to expire and who need to file a tax return in 2018
must submit a renewal application. Others do not need to take any action.
• ITINs with middle digits 70, 71, 72, or 80 (For example: 9NN-70-
NNNN) need to be renewed if the taxpayer will have a filing
requirement in 2018.

• Taxpayers whose ITINs expired due to lack of use should only renew
their ITIN if they will have a filing requirement in 2018.

• Taxpayers who are eligible for, or who have, an SSN should not
renew their ITIN, but should notify IRS both of their SSN and previous
ITIN, so that their accounts can be merged.

• Taxpayers whose ITINs have middle digits 78 or 79 that have expired
should renew their ITIN if they will have a filing requirement in 2018.
Family Option Remains Available

Taxpayers with an ITIN with middle digits 70, 71, 72, 78, 79 or 80 have the
option to renew ITINs for their entire family at the same time. Those who
have received a renewal letter from the IRS can choose to renew the
family’s ITINs together even if family members have an ITIN with middle
digits other than 70, 71, 72, 78, 79 or 80. Family members include the tax
filer, spouse and any dependents claimed on the tax return.

How to Renew an ITIN

To renew an ITIN, taxpayers must complete a Form W-7 and submit all
required documentation; taxpayers are not required to attach a federal tax
return.

The IRS is currently accepting ITIN renewals. There are three ways to
submit the W-7 application package:

• Mail the Form W-7, along with original identification documents or
copies certified by the issuing agency, to the IRS address listed on
the Form W-7 instructions. The IRS will review the identification
documents and return them within 60 days.|

• Taxpayers have the option to work with Certified Acceptance Agents
(CAAs)

authorized by the IRS to help them apply for an ITIN. CAAs can
certify all identification documents for primary and secondary
taxpayers and certify that an ITIN application is correct before
submitting it to the IRS for processing. A CAA can also certify
passports and birth certificates for dependents. This saves taxpayers
from mailing original documents to the IRS.

• In advance, taxpayers can call and make an appointment at a
designated IRS Taxpayer Assistance Center instead of mailing
original identification documents to the IRS.

Avoid Common Errors Now; Prevent Delays Next Year

Several common errors can delay some ITIN renewal applications. The
mistakes generally center on missing information and/or insufficient
supporting documentation. Here are a few examples of mistakes taxpayers
should avoid:

• Filing with an expired ITIN. Federal returns that are submitted in
2018 with an expired ITIN will be processed. However, exemptions
and/or certain tax credits will be disallowed. Taxpayers will receive a
notice in the mail advising them of the change to their tax return and
their need to renew their ITIN. Once the ITIN is renewed, any
applicable exemptions and credits will be restored and any refunds
will be issued.

• Missing a reason for applying. A reason for needing the ITIN must
be selected on the Form W-7.

• Missing a complete foreign address. When renewing an ITIN, if
Reason B (non-resident alien) is marked, the taxpayer must include a
complete foreign address on their Form W-7.

• Mailing incorrect identification documents. Taxpayers mailing
their ITIN renewal applications must include original identification
documents or certified copies by the issuing agency and any other
required attachments. They must also include the ITIN assigned to
them and the name under which it was issued in 6e-f.

Taxpayers should review the Form W-7 instructions for detailed information
and carefully check their package before submitting it.

As a reminder, the IRS no longer accepts passports that do not have a date
of entry into the U.S. as a stand-alone identification document for
dependents from a country other than Canada or Mexico, or dependents of
U.S. military personnel overseas. The dependent’s passport must have a
date of entry stamp, otherwise the following additional documents to prove
U.S. residency are required:

• U.S. medical records for dependents under age 6,
• U.S. school records for dependents under age 18, and
• U.S. school records (if a student), rental statements, bank statements
or utility bills listing the applicant’s name and U.S. address, if over
age 18

IRS Encourages More Applicants for the Acceptance Agent Program to
Expand ITIN Services

To increase the availability of ITIN services nationwide, particularly in
communities with high ITIN usage, the IRS is actively recruiting Certified
Acceptance Agents. Applications are now accepted year-round. Interested
individuals, community outreach partners and volunteers at tax preparation
sites are encouraged to review program changes and requirements.
The IRS continues to work with partner groups and others in the ITIN
community to share information about these important changes. To assist
taxpayers, the IRS has a variety of informational materials, including flyers
and fact sheets available in several languages on the ITIN information page
on IRS.gov.

Planned Outage for all e-Services Users

The IRS is in the final stages of a technology upgrade for e-Services.
Please plan ahead as there will be some temporary use issues that will
occur as we make this transition:

1. There will be a complete outage of all e-Services tools, including
Registration, Transcript Delivery System (TDS), and TIN Matching, from 6
p.m. EDT, Thursday, Aug. 17, until 6 a.m. EDT, Monday, Aug. 21.
Applications also will be offline and resume Aug. 22, except for state users.
E-Services must be taken offline to complete the platform transition and to
perform testing. This outage will affect all users, including bulk users such
as IVES and TIN Matching.

2. All State tax agency users will be unable to submit new e-file and TDS
applications for state coordinators or change existing e-file and TDS
applications for state coordinators from Aug. 17 until late October. This
temporary issue will not affect state access to transcripts. If there is a
critical need to add or remove an individual from a state application, states
may contact their IRS government liaison representative who will notify
appropriate IRS personnel.

3. Affordable Care Act Information Return (AIR) filers may resume
submission of applications for Transmitter Control Codes starting on Aug. 22.
The application process for AIR users has been offline since July
because of the e-Services platform transition.

4. A redesigned e-Services landing page will launch Aug. 21.
Sr. Stakeholder Liaison Mary Hanson is back from her 1 year detail
and has resumed her duties as the Practitioner Lead for Massachusetts
and New Hampshire. Mary’s contact info:

Mary Hanson
Senior Stakeholder Liaison
Communications & Liaison
Internal Revenue Service
Andover, Massachusetts
phone 978 783-8459
e-fax 1-877-477-8178
Mary.S.Hanson@irs.gov

New Issues:

Processing Delays of Delinquent 1040 Returns

Due to the fact that the Statute of Limitations is about to expire (October
15, 2017) the Taxpayer files his 2013 Return (IRS Form 1040), First; the
Return is sent by Priority Mail to IRS in Kansas City; the Taxpayer’s 2013
Return was under Extension.

After the 2013 Return is sent; a week or two later; the Taxpayer sends to
IRS Kansas his 2010, 2011 and 2012 Returns (IRS Form 1040).
In checking the Account Transcripts today; it shows that the IRS has
processed the 2010 Return; the 2011 Return and the 2012 Return; IT HAS
NOT processed the 2013 Return; the 2013 Return was delivered by
USPS to the IRS Kansas prior to the delivery of the 2010, 2011 and 2012
Returns.

This is becoming a major concern to me; reason being, the 2013 Return
(Form 1040) should be processed immediately by the IRS due to a possible
Statute of Limitation Refund problem.

Late Filing Penalties on Full Paid Delinquent Returns
The second new issue considered involves a Late Filing Penalty assessed
against a taxpayer whose tax was fully paid when the delinquent return was
filed. The practitioner stated that the Taxpayer Advocate is also working
this issue for multiple taxpayers.

Supplemental Information

The Office of Professional Responsibility is pleased to announce
that their latest webinar titled: “Office of Professional Responsibility: What
You Need to Know about Practicing before the IRS” is now archived on the
IRS video portal for viewing any time.

Aug. 30 webinar: Reporting Foreign Bank and Financial
Accounts on the Electronic FBAR

Just in time for those who need to file the FBAR by the Oct. 15 extended
due date, the IRS offers this webinar on Aug. 30 at 2 p.m. ET.

Topics include:

• Identifying who must file the FBAR
• Determining what accounts must be reported on the FBAR
• Knowing when to file the FBAR
• Explaining how to file the FBAR
• Sharing answers to frequently asked questions

The webinar will feature a live question and answer session at the end of
the presentation

YouTube: Why Every Tax Professional Needs a Security Plan
This YouTube video explains the importance for all tax professionals of
having and adhering to a data security plan.

IRS Office of Appeals Pilots Virtual Service
Beginning August 1st, the Internal Revenue Service Office of Appeals will
pilot a new web-based virtual conference option for taxpayers and their
representatives. This virtual face-to-face option will provide an additional
option for taxpayer conferences. The IRS expects it to be especially useful
for taxpayers located far from an IRS Appeals office.