Coronavirus Relief – CARES Act Approved for Individual and Business Help

In efforts to provide Coronavirus relief, Congress has come to an agreement on the CARES act stimulus bill. Learn the latest about what that means for you.

In efforts to provide Coronavirus relief, the Senate has passed a stimulus bill from Congress that is known as the CARES Act. The White House indicated it is acceptable to the president as well. The exact details are not clear yet, but the major provisions have been revealed.

The New York Times reports that there are five key provisions, noted below, although there still may be some uncertainty about the exact numbers.

Direct Payments to Taxpayers for Coronavirus Relief

Coronavirus relief

The NYT reports $1,200 in direct payments to each taxpayer, with phaseouts for those earning between from $75,000 to $99,000, plus an additional $500 per child. The Wall Street Journal has the same numbers, without specifying the phaseouts.(Those with little or know tax liability might receive only $600.)

For the purpose of calculating the amount, the government will use 2019 returns, if they’ve been already filed. Otherwise they will use 2018 returns.The money will be directly deposited into taxpayers’ accounts, if the IRS has account information. Otherwise, it will mail paper checks. This could happen in the next few weeks.

Unemployment Benefits Increased and Radically Changed

The NYT says the bill extends jobless insurance by 13 weeks and includes a four-month enhancement of benefits. Insiders, according to the NYT and WSJ, say that gig workers such as freelancers and Uber drivers will also be covered, a major change in how unemployment insurance works.

According to the New York Times, eligible workers will get an extra $600 per week on top of their state benefit.

READ MORE: Coronavirus Relief Package Signed Into Law – More to Come

Coronavirus Relief Gives Small Businesses Aid With Conditions

A major sticking point in the negotiations was whether aid should go to businesses or to individuals. A novel provisions does both: The government will guarantee loans to small businesses and forgive those loans if the companies keep their employees. This gives these businesses a strong financial incentive to avoid layoffs.

Federal Reserve Loans — With Heavy Oversight

Coronavirus relief

This was another controversial provision — billions of dollars in a fund controlled by the Federal Reserve. Opponents characterized this as a slush fund that benefits companies at the expense of their workers.

However, additional conditions helped ensure its passage; the government will immediately reveal any recipients, and an inspector general and a congressionally appointed board will monitor it, according to the NYT. The WSJ noted companies receiving these loans cannot do stock buybacks now or in the near future. The total amount of the loan fund is estimated to be about $500 billion.

READ MORE: Tax Filing Deadline Extended to July 15 Due to COVID-19

Coronavirus Relief Health Assistance

The bill includes upward of $100 billion in aid to hospitals.

Again, none of these numbers are final, and the bill has not yet been signed, although there is wide agreement it will go through as is. We’ll have more updates as they become available, including information on the mechanism for distributing the aid checks.

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COVID-19 Alert: The Silver Linings This Tax Season

Learn about the COVID-19 precautions we’re taking and some of the latest news and tips for enduring the pandemic and saving you money on your taxes.

Right now, times are uncertain with the spread of COVID-19.  

Unpredictable emotions are running high, with massive changes forced on your everyday routines due to the Coronavirus. 

But the human race is resilient and we are in this together as a global community.  

In times like this, when things seem rather bleak, there is always a silver lining to be found.  

We look forward to doing our part at Donnelly Tax Law to help you see those good things this tax season.

We know this year will be like no other and the last thing we want to add to your worry is interruptions to completing your taxes.  

So, while we all learn to deal with this new COVID-19 pandemic together, we want to let you know you can continue to count on your tax family here at Donnelly Tax Law to get you through this trying time.

Practices That Make Us Strong During COVID-19

COVID-19 world map

We are putting your safety above all else in the upcoming weeks.

As the COVID-19 pandemic forces changes in our everyday routines, our priority at Donnelly Tax Law is to ensure the safety of our staff and to solve the tax concerns of our customers.

Donnelly Tax Law was built intentionally for a robust operation that is resilient to virus threats, both medical and electronic.

Our work will not be slowed down by the pandemic. Even in normal times, we automatically file extensions for our clients so that the April 15th deadline is extended until October 15th. Read further for more information about the filing and payment deadlines being extended by the IRS. 

Donnelly Tax Law is a team of remote workers and therefore we are not exposed to the health risks of a typical shared physical office. We will continue to work on your behalf, even with regional lockdowns.

Precautions We Are Taking During COVID-19

COVID-19 face masks

We are implementing quarantine procedures for deliveries we receive. This safety measure will add a couple of days to the paper return filing procedure, but it will keep us working happily and healthily on your returns.

  • All of our systems and data are cloud-based on highly-secure systems. 
  • All data is encrypted. 
  • All of our systems require two-factor authentication for extra security. 

We are in communication with our vendors to make sure all critical systems remain available. We do not expect any unplanned outages.

COVID-19 Resources and How to Save A Lot Of Money With Your Tax Returns

We are still working hard for you! Donnelly Tax Law has a staff of eight people. We have always worked remotely, so the pandemic has not disturbed our business processes.

We also have a staff backup strategy, so that if any team member, including myself, needs to take sick leave, we have a backup so the work can continue.

Save 20% By Paying Your Invoice With Bitcoin

Bitcoin

From now until April 15th, we are offering a 20% discount to current and future clients for any portion of your invoice that you pay or prepay with Bitcoin. 

Our team is standing by to get you more details on how to take advantage of that special pricing.  

Don’t have any Bitcoin? Start an account at Coinbase or Kraken.

Due To COVID-19, IRS Delay Filing And Paying By Three Months

anti-money laundering

To help cope with the COVID-19 Coronavirus, the IRS has delayed payments and filing by three months. July 15th is now the new due date for filing individual tax returns and making the final payment on 2019 taxes. There is no penalty for extra interest because of the three-month delay. We already automatically extend the filing deadline to October 15th for all of our customers. 

The good news is that now there is extra time to pay!

If you are a client and your tax payment is scheduled already for auto-debit and you want to delay it, you will need to cancel the debit following the instructions in this link.

READ MORE: Tax Filing Deadline Extended To July 15th Due To COVID-19

Making The Most Of The COVID-19 Isolation

don't give up sign

If you are part of our tax community, you can take advantage of the extra free time to finish gathering all your tax documents and crypto records. 

Once completed, upload them to your secure ShareFile folders and let our client manager know so we can proceed with preparing your taxes.  

You can also use this time to learn more about US expat taxes and cryptocurrency taxes with the various ebooks I’ve written about each topic. Visit our online ebook store and discover additional crypto tax tools at our site CryptoTaxAudit.com.  

Learn about other important COVID-19 news from our blog. If you haven’t already, you can subscribe to our newsletter so you get notified of our latest posts.

READ MORE: Coronavirus Relief Package Signed Into Law – More To Come

Clinton Donnelly In The News

One last note, we are excited to report that I’ve been staying at the top of crypto news this tax season. I’ve taken part in multiple interviews with several national and international crypto podcasters, such as crypto pioneer Charlie Shrem, Brad Kimes, Ivan on Tech and more.

WATCH NOW: Crypto Tax Amnesty? CPA Clinton Donnelly Shares Critical Insights on How to Talk to the IRS and File

Coronavirus Relief Package Signed Into Law – More to Come

The Families First Coronavirus Response Act (H.R. 6201) has been signed into law to provide Coronavirus relief to many. Read more to learn the latest.

The Families First Coronavirus Response Act (H.R. 6201) is now law, and attorneys, accountants, and other professionals are poring over it. What are its main provisions, and how might this coronavirus relief affect you?

The Society for Human Resource Management and other outlets have highlighted the following provisions:

Paid Family Leave From Coronavirus Relief

The law provides 12 weeks of qualifying family and medical leave at two-thirds of their salary when employees can’t work because their minor child’s school or child care service is closed due to a public health emergency.

Those on the payroll for at least 30 calendar days are eligible. Benefits are capped at $200 a day (or $10,000 total) and expire at the end of the year.

Paid Sick Leave From Coronavirus Relief

sick leave

Employers have to provide 80 hours of paid-sick-leave benefits in various scenarios, including a situation in which an employee has been ordered by the government to quarantine or isolate or has been advised by a health care provider to self-quarantine. The payment is capped at $511 a day and expires at year-end.

Covered employers that are required to offer emergency FMLA or paid sick leave are eligible for refundable tax credits. Employers with fewer than 50 workers can apply for an exemption from providing paid family and medical leave and paid sick leave if it “would jeopardize the viability of the business.” According to the SHRM, “Gig-workers and other self-employed workers will be eligible for a tax credit to cover the benefits.”

A notable exemption is companies with more than 500 employees. The thinking on Capitol Hill was that such companies are capable of providing benefits without direct government help.

Part-Time Workers

Uber driver

They are also covered. According to the New York Times, such employees will receive the amount they typically earn in a two-week period. The self-employed — from freelance writers to Uber drivers — “should calculate their average daily self-employment income for the year, then claim the amount they take as a tax credit (they can reduce their estimated quarterly tax payments in the meantime).

LEARN MORE: The Families First Coronavirus Response Act (H.R. 6201)

Is everyone getting a check?

tax evading

There are a lot of rumors floating around about everyone getting a relief check. The government is still working on who gets a check and how much — and how to get the money to everyone who is eligible. As these proposals take a more solid form, we’ll have more details.

For now, keep in mind that the legal situation can change as quickly as the health situation, and ruling and reinterpretations of laws can change suddenly, modifying the advice in this article. We’ll be keeping an eye on authoritative sources in the coming days.

© 2020

READ MORE: Tax Filing Deadline Extended to July 15 Due to COVID-19

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Tax Filing Deadline Extended to July 15 Due to COVID-19

The tax filing deadline and payment deadline have been extended in response to COVID-19. Read more about how the IRS taxpayer relief efforts apply to you.

In response to COVID-19, the tax filing deadline has been extended by the IRS in efforts to help a great many individuals and businesses. They now have until July 15th to pay any federal income taxes they owe. The delay is available to individuals who owe $1 million or less and corporations that owe $10 million or less. The IRS will not charge interest or penalties for this delay.

Payment and Filing Deadlines Extended

payments

Previously the IRS had only postponed payment, not filing, but on March 20th the Treasury announced filing would be postponed as well.

This could be an enormous boon to those who owe money. It’s never easy finding the cash to write the government a check, but it’s especially difficult now, as the coronavirus has curtailed so many activities: Many businesses and employees are seeing a drastic drop in income, and decimated stock portfolios may force some investors to sell at a loss to cover tax bills. Hopefully, in three months, taxpayers will be in a better position to pay.

Refunds, Federal & State Returns

IRS letter

For those who have already filed and are expecting a refund, nothing has changed; this does not mean they will have to wait any additional time for their refunds. Those expecting a refund have no reason to take advantage of the delay–it’s to their advantage to file as soon as possible.

This delays in filing and payment only affect federal returns, not state. However, some states are offering similar relief. The American Institute of CPAs has created a list of what each state is doing.

Note that this is a fast-moving story, so even if your state has nothing planned as of today, that may change by tomorrow.

Details of the Tax Filing Deadline Extended

tax time

This tax postponement plan began as an oral promise, but the IRS has started to issue more details and guidance in its e-newsletter:

  • The individual taxpayer relief includes all individual returns, includes self-employed individuals, and all entities other than C-corporations, such as trusts or estates.
  • The IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.
  • For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million.
  • This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020.
  • The relief only applies to federal income tax, not to any other kind of federal tax.

Since this is a very new program, we will be closely monitoring the situation for additional official guidance.

How We Handle Tax Filing Extensions

Donnelly Tax Law Logo Banner

Here at Donnelly Tax Law, we automatically, and in normal circumstances, file extensions for all our clients. This gives our clients until October 15th to file. However, please note that it does not extend the payment deadline of estimated taxes, which are usually April 15th and now extended to July 15th. 

If you’re already a client of our’s and have questions, please contact our client manager or use our contact page to be in touch. 

If you’re not a client of our’s but are interested in having us help you with your taxes, please schedule a consultation

© 2020

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Telecommuting, Coronavirus and You

We provide some helpful tips regarding telecommuting, coronavirus, and your business. If you have employees or are now working from home, learn these tips.

Usually, when companies begin moving from an office-based to a virtual model, they do it gradually, with plenty of planning and training. However, because of the COVID-19, many businesses are seeing the need to quickly empty out offices and send everyone home to keep the virus from spreading. No one knows how long the emergency will last, but you want to make sure the telecommuting system you hurried to implement keeps your business running until the coronavirus pandemic passes.

To make telecommuting work, even temporarily, you must keep in mind the needs of both your customers and your employees, all of whom have to get used to the new system on short notice. Every company will have different needs, but here are some general guidelines.

Make Sure Everyone Has The Technology

telecommuting

You may assume that today everyone has a late-model computer at home, with a high-speed connection. But not everyone does, or if they do, they have to share their resources with other family members. So be prepared to rent or purchase laptops for your staff and help them set up an internet connection.

Take Charge of Security

telecommuting

This will vary widely from business to business, and from employee to employee. In the office, you may have a highly secure intranet that encompasses your files, customer accounts, financial records and more. It will have to be extended so everyone has access from remote locations. You can simplify the task by giving employees access to only the information they need.

Your HR director needs access to employee files but probably not to sales figures, for example. Each remote computer needs its own security software to ensure no single machine becomes the weak link in the chain.

Rethink Your Meetings

telecommuting

You won’t be able to casually meet with staff the way you did in the office. Even formal meetings will be different. You’ll need to rethink the way you interact with your staff, and the way they interact with each other. Skype and other messaging software can be used for quick notes or video calls. Zoom is good for conferences. Evernote allows employees to share and collaborate on various projects — it’s easy to use and inexpensive. There are other choices as well, depending on your needs.

Some companies like visual conferences, and there are economical choices. But keep in mind that each employee’s background may be a messy living room rather than a well-ordered office.

Also, no matter how sophisticated your software, you cannot perfectly replicate the in-office experience. Each employee will have to work more independently. Of course, you can — and should — ask for progress reports and encourage regular communication.

Be Flexible and Understanding

telecommuting

Finally, be flexible and understanding. Many employees may not have a dedicated home office, so the voices of spouses — also working from home — and children may become part of any meeting, despite everyone’s best efforts. You will need to be understanding. But if everyone remains open to experimenting with ways to make telecommuting work, there’s a very good chance your company can weather this enforced situation.

Indeed, you may find that many, even most, of your employees adapt so well that this can become a permanent arrangement for them. This will not only improve employee morale and give you a recruiting edge, but reduce your real estate costs. Good luck with the transition!

© 2020

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How are Cryptos Reported on Anti-Money Laundering Forms?

Here I share exclusive excerpts of my book, ‘Basics of Crypto Taxes’ to show you how cryptos are reported on anti-money laundering forms.

I’ve been getting so many questions lately related to the reporting of cryptos on  anti-money laundering forms. There’s a lot out there about the anti-money laundering forms, but when it comes to reporting your cryptos on them… Well, that’s new territory for most traders and tax professionals.

I wrote the book Basics of Crypto Taxes, to address this exact topic. It comes from the years of experience I have in filing anti-money laundering forms and crypto taxes. Here’s a sneak peek into it so that you can better understand how cryptos are reported on anti-money laundering forms.

The following was extracted from the book “Basics of Crypto Taxes” by Clinton Donnelly. Some additional comments have been added.

What are the two anti-money laundering forms required of individuals?

International financial regulations require each country to take significant steps to prevent the laundering of the proceeds of crime and terrorism funding also called money laundering. A large part of the US anti-money laundering (AML) enforcement is the requiring of forms to be filed related to foreign transactions. These forms are used after-the-fact to scare people who have misreported or not reported when they should have.

For the individual, two forms must be filed to comply with AML regulations. The first form is called the Report of Foreign Bank Accounts and Financial Accounts. The second form is the Statement of Specified Foreign Assets.

What is the FBAR form?

crypto audit defense

The FBAR form is the short name for the Report of Foreign Bank Accounts and Financial Accounts. This form is also called FinCEN Form 114.

The FBAR form has been a requirement for individuals to complete since 2004. On this form, the taxpayer lists the maximum balances of his foreign financial accounts during the year. Foreign crypto exchanges are considered foreign financial accounts by FinCEN.

Does everyone have to file an FBAR form?

No. Filing this form is not required if the sum of the maximum balances of all foreign financial accounts added together is less than $10,000. If the sum of all balances is more than $10,000, then all foreign financial accounts regardless of the balance must be reported. Many people mistakenly think that they have to report only specific accounts with a balance of over $10,000. This is wrong. It is the sum that is compared to $10,000.

If you are required to filed an FBAR, then you must report all foreign accounts regardless of the account balance. This means if you had a foreign exchange account that you never formally closed, then you must report that account even if the maximum balance all year was zero.

What is the penalty for not filing the FBAR form on time?

If the IRS decides that you should have filed an FBAR when you hadn’t, then there is an immediate $10,000 assessed the moment the IRS issues you the notification letter. This penalty increase to $50,000 if you don’t file an FBAR within six months.

Once you give an FBAR to the IRS after receiving the notification letter, an additional penalty is assessed. This penalty depends on whether the IRS decides that you were willful in your negligence or not.

The non-willful penalty for not filing this form is $10,000 per account that should have been reported. For example, if you traded on five foreign exchanges and the sum of your maximum balances on these exchanges was $150,000, and you’d never filed the FBAR form, the penalty that could be assessed would be $50,000 or $10,000 times the number of accounts not reported.

The willful penalty is 50% of the account balance of each account. This penalty used to have a maximum of $100,000, but this limit has been removed.

Are you serious? A $10,000 penalty?

tax trouble

Dead serious. Congress has chosen to use a harsh penalty to motivate honest people to be diligent to complete this form. Several times this penalty has been challenged in the courts as a violation of the eighth amendment protection against “excessive fines imposed.” The Supreme Court has sided with the government because of the AML argument. The presumption is that the funds in the account are only the tip of the iceberg of the amount of dirty money that was being laundered.

When is the FBAR form due?

This form is filed at the same time as your individual income tax return or April 15. If you file for an extension on filing your income tax return, you automatically get an extension on your FBAR filing.

Filing the FBAR form after the deadline is an automatic $10,000 penalty. This is Congress’s way of getting your attention to comply with the regulations. Criminals and money launderers, of course, do not want to file these forms because it is incriminating to them. So, don’t behave like a criminal. File your FBAR on time.

How to file the FBAR form?

If you use a professional tax preparer, their tax software might enable them to file your FBAR form for you. However, self-filers are not as fortunate. TaxACT, TurboTax and all the other tax software packages have chosen to not offer electronic filing of the FBAR form for you. (There must be a fear of legal liability.)

As a result, the self-filer must use the government website to file his FBAR. It is easy to do. I recommend preparing an FBAR form 114 using the PDF form method rather than the online method. The form is uploaded onto this website https://bsaefiling1.fincen.treas.gov. By using the PDF version, you can re-use the PDF form in subsequent years by just updating the maximum balances. Considering it is a government website, it is reasonably easy to use.

Should you file an FBAR form if the due date has passed?

paying taxes

Yes, however, you need to claim tax amnesty on any late-filed FBAR form. Failure to do so will result in an automatic $10,000 penalty (footnote 1). To request this amnesty, when filing the FBAR there is an opportunity to select an explanation code for late filing. I recommend selecting option ”Z” other. A box will open to allow entering a custom explanation like, “I did not know I had to file. This form is submitted under the Delinquent FBAR procedure”.

What is Form 8938 - the other anti-money laundering form?

In 2010, Congress passed a sweeping law called the Foreign Account Tax Compliance Act (FATCA) which significantly increased the reporting requirements of Americans with foreign financial accounts including crypto exchanges. This law obliges taxpayers to report their foreign financial accounts and financial assets each year with their tax return. To be clear, this is an IRS form that is considered part of your tax return.

In addition to reporting your foreign accounts similar to the FBAR form, you must report all “all financial transactions and contracts for investment purposes where the counterparty is other than US person” (footnote 2). By this definition, the sum of all purchases and sales of all crypto assets during a tax year must be reported. Since the other party of an exchange is anonymous, you must assume they are not a US person, even using a US exchange. Depending upon the volume of trades you make, this number could be orders of magnitude higher than the value of your assets. This calculation of all purchases and sales would include even those on US exchanges (footnote 3).

The FATCA law and Form 8938 were written with very broad terms such that assets may be counted multiple times. The penalties for underreporting are so high, $10,000, that there is no incentive to underreport or under-characterize these foreign assets (footnote 4). Basically, the bigger a number you report, the safer you are.

Are there penalties for not reporting or reporting after the due date?

Yes. The penalty for not filing Form 8938 with your tax return is $10,000.

Consequently, if you need to fix past tax returns because you didn’t include an accurate Form 8938, you must do it under a tax amnesty program (footnote 5).

How to file Form 8938?

tax planning

Form 8938 is filed with your 1040 tax return. If you e-file your tax return, then the 8938 gets e-filed with it.

See My Book: 10 Steps to a Great Crypto Tax Return

Does everyone have to file a Form 8938?

My answer is Yes and No.

Yes. Form 8938 is one of those rare times where it is safer to over-report than under-report. The bigger the amount reported, the safer you are. Some people get fixated about not filing if under the threshold. I believe not filing actually draws more attention to you by the IRS data mining computers, than if you file.

No. Form 8938 is not required if the sum of the balances of your foreign accounts plus the sum of the buy and sell transactions is under $50,000 if single or $100,000 if married (footnote 6). Minimum filing thresholds are increased if you live overseas (footnote 7). Because of the broad description of foreign assets under the FATCA law, it is easy for a trader with no more than $10,000 invested in the crypto marketplace to exceed the minimum filing thresholds by doing frequent trades. There is nothing to gain by not reporting.

That being said, I recommend that all crypto traders file both forms regardless of the minimum filing thresholds. Why? The IRS is using data mining computers to catch crypto traders not reporting correctly. Data mining looks for logical relationships and flags taxpayers when the relationships are missing. So given that they know you traded on foreign exchanges, you should have filed an FBAR and a Form 8938. They can’t tell if you are excepted by being under the filing threshold. By filing, you satisfy the logical condition and avoid putting yourself on the list of taxpayers to be examined.

Footnotes:

1) For FBAR self-filers, see our Crypto Tax Fixer Package, which includes my book Tax Amnesty Made Easy (not sold separately).

2) 26 USC 6038D(c)(2)(B)

3) Even if you do crypto to crypto trades on the US exchange like Coinbase Pro, the other party to your trade is not the exchange, but the other person they have found to take your trade. Since you can not assume that an anonymous person is an American, you must assume that the other persons to all your exchanges are foreigners.

4) GAO ‘Foreign Asset Reporting: Actions Needed to Enhance Compliance Efforts, Eliminate Overlapping Requirements, and Mitigate Burdens on U.S. Persons Abroad’ <2019> GAO-19-180 https://www.gao.gov/products/GAO-19-180, p17.

5) When you file for tax amnesty, you have one chance to do it right. I recommend using a professional to prepare your amnesty paperwork. The stakes are very high not to consider this. Still, if that is not an option, tax amnesty self-filers can use our do-it-yourself Crypto Tax Fixer Package, which includes my book Tax Amnesty Made Easy (not sold separately).

6) There are actually several tests for determining the minimum filing threshold on Form 8938, which makes it confusing to determine. The numbers listed here are the most conservative threshold levels.

7) See the instructions for Form 8938 about a complete description of the minimum threshold amounts.

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IRS Offers Identity Protection PIN

The IRS is gradually rolling out a new identity protection program that prevents anyone who has stolen your Social Security from misusing it. Learn more.

Identity protection is of even more concern these days when it comes to taxes. The IRS can now give eligible taxpayers an “IP PIN,” a six-digit code to help prevent the misuse of Social Security numbers on fraudulent federal income tax returns. As the IRS explains, this PIN helps the agency verify a taxpayer’s identity and accept his or her electronic or paper tax return.

Who's Eligible For The Identity Protection PIN

telecommuting

Photo by Icons8 Team on Unsplash

Not everyone can get one yet. If you are a confirmed victim of identity theft and the IRS has resolved your tax account issues, the agency will mail you a CP01A Notice with your IP PIN.

Also, to be eligible for 2020, you must have filed a federal return last year as a resident of Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Illinois, Maryland, Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, Texas or Washington. This is as of February; the list will grow in the future.

Taxpayers eligible for the IP PIN Opt-In Program must use the online Get an IP PIN tool, explains the IRS. If you do not already have an account on irs.gov, you must register to validate your identity. Before attempting to register, read about the secure access identity authentication process. Taxpayers cannot obtain an IP PIN by calling the IRS.

How Do You Use An IP PIN?

identity protection

Photo by Kaitlyn Baker on Unsplash

Enter the six-digit IP PIN when prompted by your tax software product or provide it to your trusted tax professional preparing your tax return. An incorrect or missing IP PIN will result in the rejection of your e-filed return or a delay of your paper return until it can be verified.

Do not reveal your IP PIN to anyone. It should be disclosed only to your tax professional and only when you are ready to sign and submit your return. The IRS will never ask for your IP PIN. Avoid phone, email or text scams trying to trick you into revealing your IP PIN.

For more details on using the IP PIN and the latest updates, go to the IRS IP PIN page. It also contains a FAQ that answers the most common questions.

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