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IRS waives penalty for many whose tax withholding and estimated tax payments fell short in 2018

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the staff of the Ridgewood blog

Washington DC,  The Internal Revenue Service announced today that it is waiving the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.

Continue reading IRS waives penalty for many whose tax withholding and estimated tax payments fell short in 2018
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Shutdown or Not It’s Still Tax Time

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the staff of the Ridgewood blog

Ridgewood NJ, Many New Jersey residents are familiar the SALT deduction limitation and its negative effect on over taxes New Jersey Residents .There are many other changes in 2018 tax reform that will affect almost everyone. Always consult a CPA to address your particular tax situation .

According to Wealth management expert George Mentz ,the biggest changes for this years filings include:

  1. Larger standard deductions for married couples of $24,000.
  2. Personal exemptions are eliminated and there is no need to file for these.
  3. A new 37% top tax bracket for high earners. The Obama taxes will remain including the 3.8% Net Investment Income Tax and the 0.9% medical surtax on high earners.
  4. Estate tax exemption is boosted to $11.2 million for an individual and $22.4 million for a married couple.
  5. Child tax credit is increased to $2,000 per qualifying child.
  6. State and local tax deduction or SALT tax deduction limited to $10,000.
  7. Mortgage interest deductions can only be taken on mortgage debt up to $750,000, down from $1 million. This applies to mortgages taken out after Dec. 15, 2017. Interest on home equity debt can no longer be deducted.
  8. For charitable deductions, taxpayers can deduct donations of as much as 60% of their income, up from a 50% cap.
  9. For rules on retirement contributions, deductions, and deduction phase-outs, please consultant a professional or use updated software.
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IRS Confirms Tax Filing Season to Begin January 28

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the staff of the Ridgewood blog

WASHINGTON DC, Despite the government shutdown, the Internal Revenue Service today confirmed that it will process tax returns beginning January 28, 2019 and provide refunds to taxpayers as scheduled.
 
“We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown. I appreciate the hard work of the employees and their commitment to the taxpayers during this period,” said IRS Commissioner Chuck Rettig.
 
Congress directed the payment of all tax refunds through a permanent, indefinite appropriation (31 U.S.C. 1324), and the IRS has consistently been of the view that it has authority to pay refunds despite a lapse in annual appropriations. Although in 2011 the Office of Management and Budget (OMB) directed the IRS not to pay refunds during a lapse, OMB has reviewed the relevant law at Treasury’s request and concluded that IRS may pay tax refunds during a lapse.

The IRS will be recalling a significant portion of its workforce, currently furloughed as part of the government shutdown, to work. Additional details for the IRS filing season will be included in an updated FY2019 Lapsed Appropriations Contingency Plan to be released publicly in the coming days.
 
“IRS employees have been hard at work over the past year to implement the biggest tax law changes the nation has seen in more than 30 years,” said Rettig.
 
As in past years, the IRS will begin accepting and processing individual tax returns once the filing season begins. For taxpayers who usually file early in the year and have all of the needed documentation, there is no need to wait to file. They should file when they are ready to submit a complete and accurate tax return.
 
The filing deadline to submit 2018 tax returns is Monday, April 15, 2019 for most taxpayers. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17, 2019 to file their returns.
 
Software companies and tax professionals will be accepting and preparing tax returns before Jan. 28 and then will submit the returns when the IRS systems open later this month. The IRS strongly encourages people to file their tax returns electronically to minimize errors and for faster refunds.

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Morgan Stanley Forecasts that Tax Refunds in 2019 will be about 26% Greater than 2018

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the staff of the Ridgewood blog  says

Ridgewood NJ, Taxes will be lower for most people this year because of the GOP’s tax bill passed last December. According to Morgan Stanley, Americans have been overwithholding significantly, and the investment bank forecasts that refunds in 2019 will be about 26% greater than 2018. In raw dollars, this is $62 billion more than last year’s $235 billion in refunds that were issued this year, as of April.

According to Morgan Stanley Americans have not adjusted their tax withholdings and still withhold too much on their payroll taxes.All the extra money in Americans’ pockets will likely boost savings accounts and the sales of big-ticket items next February and March, Morgan Stanley says.In 2018, according to survey numbers cited by Morgan Stanley, 65% of consumers planned to save their refunds, 35% said they’d pay down debt, and just 5% said they’d make a major purchase .

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Jersey Shore Star Michael “The Situation” Sorrentino was sentenced today to eight months in prison for Tax Evasion

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the staff of the Ridgewood blog

Newark NJ,  Television personality Michael “The Situation” Sorrentino was sentenced today to eight months in prison and his brother, Marc Sorrentino, to 24 months in prison for violating federal tax laws, U.S. Attorney Craig Carpenito, District of New Jersey; Principal Deputy Assistant Attorney General Richard E. Zuckerman of the U.S. Department of Justice’s Tax Division; and IRS Special Agent in Charge John R. Tafur announced.

Continue reading Jersey Shore Star Michael “The Situation” Sorrentino was sentenced today to eight months in prison for Tax Evasion

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NJ State Senator Steven Oroho : IRS regulation highlights the need to advance major reforms to lower the cost of government in New Jersey

the staff of the Ridgewood blog

Allamuchy NJ , Senator Steven Oroho said that a regulation proposed by the Internal Revenue Service that would derail an attempt to sidestep the recently enacted $10,000 cap on the federal deduction for state and local taxes highlights the need to advance major reforms to lower the cost of government in New Jersey.

Continue reading NJ State Senator Steven Oroho : IRS regulation highlights the need to advance major reforms to lower the cost of government in New Jersey

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NJGOP Chairman Calls On Murphy To End Frivolous Lawsuits Against Trump Admin and Focus on New Jersey

the staff of the Ridgewood blog

Trenton NJ,  Yesterday after the Trump administration moved to block state efforts to work around a new limit on state and local tax deductions, Governor Murphy has said he is weighing legal actions.. New Jersey’s top Republican NJGOP Chairman Doug Steinhardt released the following statement:

Continue reading NJGOP Chairman Calls On Murphy To End Frivolous Lawsuits Against Trump Admin and Focus on New Jersey

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Bergen County Man Admits Using Personal Information Stolen From U.S. Service Members To File Phony Tax Returns

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July 20,2018

the staff of the Ridgewood blog

Fort Lee NJ,  A Fort Lee, New Jersey, man today admitted generating phony tax refunds using personal identifying information stolen from current and former members of the U.S. army, U.S. Attorney Craig Carpenito announced.
Shope Oluwo, 33, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an indictment charging him with one count each of conspiracy to commit wire fraud, access device fraud, and aggravated identity theft.

According to documents filed in this case and statements made in court:
From January through February 2016, Oluwo conspired with others, including Dermot Sutherland, 29, of Philadelphia, to obtain personal identifying information that was stolen from current or former members of the U.S. Army. Oluwo used that stolen information to create fake military identification cards and fraudulent W-2 forms bearing the victims’ names.
Oluwo provided the phony cards and W-2 forms to Sutherland, who posed as the victims and filed phony returns with a tax preparation company. Afterwards, Sutherland received debit cards from the tax preparation company that contained the ill-gotten refunds.

The conspiracy to commit wire fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The access device fraud charge carries a maximum potential penalty of 10 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. The aggravated identity theft charge carries a term of imprisonment of two years which must run consecutively to any other prison term. Sentencing is scheduled for Oct. 26, 2018.

Sutherland previously pleaded guilty to his role in the scheme and awaits sentencing.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey; postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Judy Ramos; and special agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson in Newark, with the investigation leading to today’s guilty plea.

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Many taxpayers have encountered individuals impersonating IRS officials

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July 7,2018

the staff of the Ridgewood blog

Washington DC, Many taxpayers have encountered individuals impersonating IRS officials – in person, over the telephone and via email. Don’t get scammed. We want you to understand how and when the IRS contacts taxpayers and help you determine whether a contact you may have received is truly from an IRS employee.
The IRS initiates most contacts through regular mail delivered by the United States Postal Service.

However, there are special circumstances in which the IRS will call or come to a home or business, such as when a taxpayer has an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment, or to tour a business as part of an audit or during criminal investigations.

Even then, taxpayers will generally first receive several letters (called “notices”) from the IRS in the mail.
Note that the IRS does not:
Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe. You should also be advised of your rights as a taxpayer.
Threaten to bring in local police, immigration officers or other law-enforcement to have you arrested for not paying. The IRS also cannot revoke your driver’s license, business licenses, or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.

If you owe taxes:
The IRS instructs taxpayers to make payments to the “United States Treasury.” The IRS provides specific guidelines on how you can make a tax payment at irs.gov/payments.
Here is what the IRS will do:
If an IRS representative visits you, he or she will always provide two forms of official credentials called a pocket commission and a HSPD-12 card. HSPD-12 is a government-wide standard for secure and reliable forms of identification for federal employees and contractors. You have the right to see these credentials. And if you would like to verify information on the representative’s HSPD-12 card, the representative will provide you with a dedicated IRS telephone number for verifying the information and confirming their identity.

Collection
IRS collection employees may call or come to a home or business unannounced to collect a tax debt. They will not demand that you make an immediate payment to a source other than the U.S. Treasury.
Learn more about the IRS revenue officers’ collection work.
The IRS can assign certain cases to private debt collectors but only after giving the taxpayer and his or her representative, if one is appointed, written notice. Private collection agencies will not ask for payment on a prepaid debit card or gift card. Taxpayers can learn about the IRS payment options on IRS.gov/payments. Payment by check should be payable to the U.S. Treasury and sent directly to the IRS, not the private collection agency.
Learn more about how to know if it’s really an IRS Private Debt Collector.

Audits
IRS employees conducting audits may call taxpayers to set up appointments or to discuss items with the taxpayers, but not without having first attempted to notify them by mail. After mailing an official notification of an audit, an auditor/tax examiner may call to discuss items pertaining to the audit.
Learn more about the IRS audit process.

Criminal Investigations
IRS criminal investigators may visit a taxpayer’s home or business unannounced while conducting an investigation. However, these are federal law enforcement agents and they will not demand any sort of payment.
Learn more about the What Criminal Investigation Does and How Criminal Investigations are Initiated.

Beware of Impersonations
Scams take many shapes and forms, such as phone calls, letters and emails. Many IRS impersonators use threats to intimidate and bully people into paying a fabricated tax bill. They may even threaten to arrest or deport their would-be victim if the victim doesn’t comply.

For a comprehensive listing of recent tax scams and consumer alerts, visit Tax Scams/Consumer Alerts.

Know Who to Contact
Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
Report phone scams to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.
Report an unsolicited email claiming to be from the IRS, or an IRS-related component like the Electronic Federal Tax Payment System, to the IRS at [email protected]

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Bergen County, New Jersey, Man Admits Conspiring To Defraud The IRS By Filing False Corporate Tax Returns

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July 7,2018

the staff of the Ridgewood blog

Elmwood Park NJ, A Bergen County, New Jersey, man today admitted conspiring with his father to file false federal tax returns for shell companies, resulting in $191,953 in fraudulent refunds, U.S. Attorney Craig Carpenito announced.
Jason Crespo, 35, of Elmwood Park, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of conspiring with Jose Crespo, his father, to defraud the IRS by filing false corporate tax returns and cashing the resulting fraudulent refund checks.

According to the documents filed in this case and statements made in court:
Between 2010 and 2012, Jason and Jose Crespo filed numerous false federal corporate tax returns – IRS Forms 1120 – for fake businesses, knowing that the businesses were not real and that the credits claimed on the tax returns were false. The Crespos took advantage of fuel excise tax credits offered under federal tax law. The federal government taxes gasoline, diesel fuel, and certain other types of fuel, but certain commercial uses of these fuels are nontaxable. Businesses that purchase fuel for a nontaxable use can claim a tax credit by filing a “Credit for Federal Tax Paid on Fuels” – IRS Form 4136.
In one instance Jason and Jose Crespo filed a federal corporate tax return for 2008 for Jason Cleaning Service Corp. that falsely claimed a fuel excise tax credit of $14,556 and a resulting refund of $10,592. In fact, Jason Cleaning Service Corporation was a shell company and the fuel excise tax credit and other tax return numbers were false. Jason Crespo received and cashed the $10,592 refund check at a check-cashing facility in Guttenberg, New Jersey. He cashed many other refund checks for similar false tax returns at this same facility.

Jose Crespo pleaded guilty on Sept. 11, 2017, before Judge Linares to engaging in the fuel excise tax credit scheme and another tax fraud scheme, both of which claimed fraudulent refunds from the IRS of approximately $1.5 million. Jose Crespo was sentenced on Dec. 20, 2017, to three years in prison.

Marilyn Crespo, Jose Crespo’s wife, pleaded guilty on March 1, 2018, before Judge Linares to engaging in the same fuel excise tax credit scheme and causing a loss to the IRS of $286,742. She was sentenced June 27, 2018, to one year and one day in prison.

The filing a false tax return count carries a maximum potential penalty of three years in prison, and a potential $250,000 fine, or twice the gross gain or loss from the offense. Jason Crespo’s sentencing is set for Oct. 4, 2018.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson, with the investigation leading to today’s guilty plea.