By Bill
IRS, States and Tax Industry Deploy New Safeguards for 2016
Because of improved protections in recent years, the Internal Revenue Service stops the vast majority of fraudulent tax returns using stolen identities. But identity thieves and criminal syndicates continue to persist and evolve.
As the threat has changed, so has the IRS. In a new era of cooperation, the IRS, the states and the entire tax industry came together to identify what additional steps could be taken to better fight identity theft and better protect the taxpayers.
Starting in January 2016, this renewed effort will make for a safer, more secure filing season for taxpayers.
Many changes will be invisible, but they are critical to making sure the IRS can verify the taxpayer and the legitimacy of the tax return before it ever enters into the tax processing system. More than 20 shared data elements will help the software industry and the IRS stop fraudulent returns at the door.
For example, the IRS will receive information from software providers about the duration of time it took to create the return. This will help identify the computer-generated tax returns that are fraudulent and filed in bulk.
The IRS, states and tax industry will share details of any fraudulent schemes they see on a frequent basis so everyone will have the same information and adjust accordingly to provide increased protection to taxpayers.
The most publicly visible aspect of these partnership efforts will be for those taxpayers who prepare their own tax returns using tax software or online products. There will be new procedures that will help prevent fraudsters from taking over the accounts of taxpayers. These include:
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New password standards to access tax software will require a minimum of 8 characters with upper case, lower case, alpha, numerical and special characters.
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A new timed lockout feature and limited unsuccessful log-in attempts.
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The addition of three security questions.
Out-of-band verification for email addresses, which is sending an email or text to the customer with a PIN – a common practice used throughout the financial sector.
The IRS also has teamed up with state revenue departments and the tax industry to make sure you understand the dangers to your personal and financial data. Taxes. Security. Together. Working in partnership with you, we can make a difference.
It’s important that everyone take steps to protect their personal and financial data online and at home. Computer users should always use security software that includes firewall and anti-virus protections. Sensitive information such as tax records should be encrypted if stored on your computer or secured by lock and key if on paper.
By Bill
The Individual Shared Responsibility Provision – The Basics
The individual shared responsibility provision requires that you and each member of your family have qualifying health insurance, a health coverage exemption, or make a payment for any months without coverage or an exemption when you file. If you, your spouse and dependents had health insurance coverage all year, you will indicate this by simply checking a box on your tax return.
Here are some basic facts about the individual shared responsibility provision.
What is the individual shared responsibility provision?
The individual shared responsibility provision calls for each individual to have qualifying health care coverage – known as minimum essential coverage – for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return.
Who is subject to the individual shared responsibility provision?
The provision applies to individuals of all ages, including children. The adult or married couple who can claim a child or another individual as a dependent for federal income tax purposes is responsible for making the shared responsibility payment if the dependent does not have coverage or an exemption.
How do I get a health coverage exemption?
You can claim most exemptions when you file your tax return. There are certain exemptions that you can obtain only from the Marketplace in advance. You can obtain some exemptions from the Marketplace or by claiming them on your tax return. You will claim or report coverage exemptions on Form 8965, Health Coverage Exemptions, and attach it to Form 1040, Form 1040A, or Form 1040EZ. You can file any of these forms electronically. For more information on Form 8965, see the instructions. For any month that you or your dependents do not have coverage or qualify for an exemption, you will have to make a shared responsibility payment
What do I need to do if I am required to make a payment with my tax return?
If you have to make an individual shared responsibility payment, you will use the worksheets found in the instructions to Form 8965, Health Coverage Exemptions, to figure the shared responsibility payment amount due. You only make a payment for the months you did not have coverage or qualify for a coverage exemption.
To learn more, visit the Reporting and Calculating the Payment page on IRS.gov/aca, or use our interactive tool, Am I Eligible for a Coverage Exemption or Required to Make an Individual Shared Responsibility Payment?
What happens if I owe an individual shared responsibility payment, but I cannot afford to make the payment when filing my tax return?
The IRS routinely works with taxpayers who owe amounts they cannot afford to pay. The law prohibits the IRS from using liens or levies to collect any individual shared responsibility payment. However, if you owe a shared responsibility payment, the IRS may offset that liability against any tax refund that may be due to you.
For more information about the Affordable Care Act and your income tax return, visit IRS.gov/aca.