Issue Number: 2016-28
Inside This Issue
1. Protect Your Clients, Protect Yourself: IRS Has Resources to Help
2. Ensure Your Clients Avoid Too Much or Too Little Advance Premium Tax Credit
3. Tax Breaks for the Military
4. Technical Guidance
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1. Protect Your Clients, Protect Yourself: IRS Has Resources to Help
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Increasingly, tax professionals are being targeted by identity thieves. These criminals – many of them sophisticated, organized syndicates - are redoubling their efforts to gather personal data to file fraudulent federal and state income tax returns.
The IRS and its Security Summit partners have started a series of fact sheets and tips on security, scams and identity theft prevention measures for tax professionals, outlining steps they can take to protect client data.
Bookmark this page to keep up with the latest information.
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2. Ensure Your Clients Avoid Too Much or Too Little Advance Premium Tax Credit
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If your client purchased 2016 health care coverage through the Health Insurance Marketplace, he or she may have chosen to have advance payments of the premium tax credit paid to the insurance company to lower the monthly premiums. If this is the case, it’s important to let the Marketplace know about significant life events, known as changes in circumstances.
These changes – such as those to income or family size – may affect the premium tax credit. Reporting the changes will help avoid getting too much or too little advance payment of the premium tax credit.
Changes in circumstances that should be reported to the Marketplace include:
- an increase or decrease in income
- marriage or divorce
- the birth or adoption of a child
- starting a job with health insurance
- gaining or losing eligibility for other health care coverage
- change of residence
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3. Tax Breaks for the Military
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If you have clients in the U. S. Armed Forces, there are special tax breaks available for them. Here are some tips to keep in mind.
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4. Technical Guidance
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Revenue procedure 2016-40 provides two safe harbors in which the Service will not assert that a corporation lacks the requisite ‘control’ for purposes of section 355(a), when a corporation (D) acquires putative control of another corporation (C) through C’s issuance of stock, and C subsequently engages in a transaction that actually or effectively reverses the effect of the stock issuance. The Revenue Procedure also removes the prohibition against issuing letter rulings on transactions involving such an acquisition of “control.”
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