Expect Some Challenges for the 2015 Tax Filing Season including IRS Budget Cuts, ACA Compliance & Identity Theft Issues says Warady & Davis LLP, Chicago CPAs

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The 2015 filing season is well underway and the IRS, taxpayers and tax professionals are expecting some challenges, according to Warady & Davis LLP, Chicago CPAS & Consultants. In addition to the huge number of returns the IRS must process, the agency also must ensure that individuals are in compliance with new requirements under the Affordable Care Act and prevent the growing problem of refund fraud.

The 2015 Tax Filing Season is well under way

"Tax refund fraud is on the rise," said Barry Edelstein, CPA, Partner with Warady & Davis LLP

The 2015 filing season is well underway and the IRS, taxpayers and tax professionals are expecting some challenges, according to Warady & Davis LLP, Chicago CPAS & Consultants. In addition to the huge number of returns the IRS must process, the agency also must ensure that individuals are in compliance with new requirements under the Affordable Care Act and prevent the growing problem of refund fraud. The IRS has cautioned that its resources this filing season are stretched thin because of budget cuts.

Filing season

As 2014 drew to a close, there was concern that the filing season would be delayed because of late tax legislation. "In past years, the IRS had delayed the start of the filing season in order to reprogram its return processing systems for new tax laws," said Barry Edelstein, CPA, Partner with Warady & Davis LLP, a top 20 Chicago area CPA and consulting firm.

Congress passed, and President Obama signed, the Tax Increase Prevention Act of 2014 in mid-December. Despite the late date of the new law, the IRS successfully reprogrammed its return processing systems in time for the filing season to open on January 20, 2015.

Identity theft

"One important concern as the filing season unfolds is refund fraud, which unfortunately is on the rise," said Edelstein. Typically, identity thieves file fraudulent returns early in the filing season. Taxpayers often discover they are victims of identity theft when they attempt to file their legitimate return and learn that a fraudulent return had already been filed. The IRS has upgraded its refund fraud filters and has enhanced its outreach to victims of identity theft. Nonetheless, refund fraud is a growing problem.

Starting this year, the IRS will limit the number of direct deposit refunds to a single financial account or pre-paid debit card to three. Fourth and subsequent valid refunds will convert to paper checks and be mailed to the taxpayer. These measures are intended to help curb refund fraud.

Another area Warady & Davis LLP is educating its clients about is telephone scams. Since October 2013, nearly 3,000 individuals have been victims of criminals making unsolicited calls to taxpayers fraudulently claiming to be IRS officials and demanding that they make a cash or credit card payment. "The IRS never asks for payment by pre-paid debit card or wire transfer," said Edelstein.

Affordable Care Act

The Affordable Care Act requires individuals to have minimum essential health coverage – unless exempt – or make a shared responsibility payment. "According to the IRS, individuals with employer-provided coverage, or who obtain coverage through Medicare, Medicaid, TRICARE, the ACA Marketplace, and other government programs, generally will only have to check a box on their return indicating they had minimum essential coverage in 2014," Edelstein said.

Individuals without minimum essential coverage in 2014 will need to calculate their payment. "Before making that calculation, individuals should explore if they are eligible for an exemption. The Affordable Care Act provides for a number of exemptions, some based on economic hardship and others on personal situations," adds Edelstein.

To stay updated on developments this filing season, contact Warady & Davis LLP at (847) 267-9600 or visit http://www.waradydavis.com.

About Warady & Davis LLP, Chicago CPAs & Consultants. Warady & Davis LLP is a top 20 Chicago area CPA & consulting firm headquartered in Deerfield, Illinois, providing a full range of audit, accounting, tax and consulting services and solutions to privately-held businesses, owners, high net-worth individuals and their families. W&D serves clients in a wide variety of industries located in the state of Illinois, throughout the United States and their interests abroad. Client revenues may range from start-up enterprises to $500,000,000+ in annual revenue.

This publication is distributed with the understanding that the author, publisher and distributor are not rendering legal, accounting or other professional advice or opinions on specific facts or matters, and accordingly assume no liability whatsoever in connection with its use. ©2015

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