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September 2016

August 2016

Important ITIN Changes and October Renewal Opens

The IRS is implementing changes to the Individual Tax Identification Numbers (ITINs) program required in last year’s Protecting Americans from Tax Hikes (PATH) Act. ITINs not used on a federal tax return in the most-recent three years will be deactivated as of Jan. 1, 2017, unless renewed. All other ITINs issued before 2013 will begin expiring on a multi-year basis. ITIN holders with the first set of expiring numbers (middle digits 78 and 79) may have already received a Letter 5821 with renewal instructions that should be completed with or before their next return. The renewal period for both unused and expiring ITINs begins Oct. 1, 2016. Procedures are available for single-family submissions if at least one family member has received a Letter 5821. Some tax credits such as the Child Tax Credit and the American Opportunity Credit may not be allowed if the ITIN is not renewed. ITIN renewal is not required to receive an information return such as a Form 1099. Be sure to always use the latest Form W-7.

There are also new requirements effective Oct. 1, 2016, for dependents whose passports do not have a U.S. entry date from countries other than Canada or Mexico or dependents of military stationed abroad. (IR-2016-100; Notice 2016-48)

TSCPA Invited to Speak at National Taxpayer Advocate’s Public Forum in San Antonio

National Taxpayer Advocate Nina Olson and U.S. Congressman Lloyd Doggett (D-TX) will hold a public forum in San Antonio on Tuesday, August 30, to discuss what taxpayers want and need from the IRS to comply with their tax obligations.


The forum will be held at 8:30 a.m. at the Maestro Entrepreneur Center, 1811 South Laredo Street. Members of the public are invited to attend.


Jim Smith, CPA-Dallas, will provide testimony on behalf of the TSCPA and its Federal Tax Policy Committee. TSCPA chairman-elect Jim Oliver, CPA-San Antonio, will represent the San Antonio Chapter/TSCPA.


In the National Taxpayer Advocate’s 2015 Annual Report to Congress, Olson expressed concerns about whether the IRS’s “future state” plan adequately addresses taxpayer needs. She recommended the IRS solicit comments from taxpayers and tax professionals regarding the plan, including their thoughts on the extent to which taxpayers will continue to need telephone and in-person assistance. TSCPA’s Federal Tax Policy Committee conveyed similar concerns in a letter this past March to the Secretary of the Treasury Jacob Lew and IRS Commissioner John Koskinen.

Proposed Rules on Family Business Valuations Released

After months of anticipation and speculation, the Treasury Department and the IRS have issued proposed regulations under IRC Section 2704 concerning restrictions on valuation discounts pertaining to transfers of family-owned entity interests. TSCPA’s Federal Tax Policy Committee will review the proposed rules and consider commenting.