The Internal Revenue Service today announced important changes to help taxpayers comply with revisions to the Individual Taxpayer Identification Number (ITIN) program made under a new law. The changes require some taxpayers to renew their ITINs beginning in October.
The new law will mean ITINs that have not been used on a federal tax return at least once in the last three years will no longer be valid for use on a tax return unless renewed by the taxpayer. In addition, ITINs issued prior to 2013 that have been used on a federal tax return in the last three years will need to be renewed starting this fall, and the IRS is putting in place a rolling renewal schedule, described below, to assist taxpayers.
The roughly 8 million Americans who live abroad automatically get a couple additional months each year to file their taxes. Don’t expect them to be grateful.
Filing to the Internal Revenue Service from overseas is more confusing, complicated, and expensive than it is for Americans at home (and that’s saying something). Unlike almost every other country in the world, the U.S. demands its citizens pay taxes on all foreign income. They must file even if they have lived and worked abroad for decades, and even if they’re already paying hefty taxes to the countries where they reside.
The sigh of relief a business owner heaves after filing an income tax return may be quickly followed by an unsettling thought: What if I’m audited?
Owners dread an audit not just because they might get a big bill for unpaid taxes, interest and penalties. Audits can also be time-consuming and expensive, in some cases lasting months or even years, distracting owners from running their companies and requiring them to pay accountants or lawyers to deal with the government. But companies that keep good financial records can make the process easier.
The IRS audited less than 1 percent, or nearly 1.4 million, of the nearly 192 million tax returns filed in 2014. That included business and personal returns and audits conducted either by letter or in person, according to the most recent available IRS figures. The audits resulted in an additional $25 billion in taxes recommended by IRS agents, and more than $7 billion in refunds, the IRS says.
Looking for your refund? The Internal Revenue Service (IRS) says that it’s issuing 90% of taxpayer refunds in less than 21 days. That’s good news for most taxpayers.
If you’re wondering about the status of your refund, check out the “Where’s my Refund?” tool at IRS.gov or (use the IRS2Go phone app, free for Android devices from the Google Play Store or from the Apple App Store for Apple devices). You can check the status within 24 hours after the IRS has acknowledged receipt of your e-filed tax return or 4 weeks after you mail a paper tax return. There’s no advantage to checking all day long: the IRS only updates the site once per day (usually overnight).
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