June 2016 Tax Snacks
Tax Snacks: Bite-size tax news and information on the fly
July 31: Forms 5500 must be filed with the Department of Labor by calendar-year entities
About a year ago, we shared news with our readers that the IRS computer systems had been hacked, and that their “Transcript of Account” service was being taken offline to address the security breach. We understood at that time that the breach involved 100,000 taxpayer records (Social Security Numbers, names, addresses, etc.) that were accessed, and around 200,000 hacks attempted. Last summer, we provided an update from the IRS clarifying that it now believed 220,000 records were compromised, and 390,000 total attempts were made.
A few weeks ago, a report was released by the Treasury Inspector General for Tax Administration, which is a branch of government that provides independent oversight of the IRS, and reports directly to Congress and the Treasury Department. Their report noted great concern with the IRS identification of and response to the breach. Specifically, the Inspector found that the actual number of potential accounts accessed was more than 943,000, and they identified an additional 351,000 successful accesses that were not discovered by the IRS.
The Inspector also chided the IRS for failing to notify over half a million potential victims, or place “markers” on their accounts that help prevent more suspicious activity.
In early June we sent a Tax Advisory describing New Hampshire’s Senate Bill 239, addressing Business Profits Tax and Section 179 deductions; and Senate Bill 342, addressing a basis “step-up” rule. We noted in the Advisory that the Governor was widely expected to sign those bills, but had not done so at time of publication. She did so on June 22, and those bills are now law.
The most recent IRS-reported hack involves people receiving calls from supposed IRS or Treasury Department employees, demanding payment of tardy taxes using iTunes Gift Cards. The report includes no indication of how successful the scam has been, but it is not likely that many people care to admit falling for it. (I’ll bet if analyzed, it could be shown that the frequency of this particular scam increased during schools’ spring break and summer vacation. It sure seems like a plot hatched up in homeroom.)
Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.