The state of Colorado’s number of reports received from out of state sellers under its tattletale use tax law were “disappointing” in the words of Phil Horwitz, director of tax policy analysis for the Colorado Department of Revenue. Mr. Horwitz’s comments to the Multistate Tax Commission’s Uniformity Committee on April 25 were reported on by Tax Notes Today in an April 26 story.

The law took effect on July 1, 2017, with the first reports due by March 1, 2018.

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The Oklahoma legislature, fresh from passing a bill that requires marketplace vendors (such as Amazon, eBay, etc.) to either collect and remit sales taxes or send notices, has sent a new bill (Oklahoma SB 337) to the Governor’s desk that expands a “tattletale” disclosure rule that would apply to all out of state sellers who do not collect Oklahoma use tax.

“Tattletale” laws have sprung up in a number of states following Colorado’s victory in federal court for its statute (see Colorado Law Requiring Out of State Sellers to Report on Colorado Customers Who May Owe Use Tax Upheld by Tenth Circuit describing a Tenth Circuit ruling which the US Supreme Court refused to review).  In the oral arguments presented to the Supreme Court in South Dakota v. Wayfair (see Supreme Court Hears Oral Argument in Sales Tax Collection Case for more details) it was clear that the Colorado statute was the “alternative” if the Court decides to continue to require physical presence for a state to be able to force a vendor to collect sales tax.

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The AICPA in a letter issued on April 19, 2018 has asked the IRS to reconsider its view, expressed in a change added to the questions and answers on the §965 transition tax, that any overpayments for taxpayers who elect to pay the tax in installments will not be refunded unless the entire balance of the tax is paid.

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You probably finished off your final returns, went home, relaxed and breathed a sigh of relief that one more tax season is over.

Except, it turns out, it isn't.  Due to the IRS's major computer system meltdown during most of deadline day, the IRS has announced we now have one more day to file returns and pay taxes, per News Release IR-2018-100, released about 7:00 pm EDT on April 17.

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Two more states have passed "tattletale" statutes for out of state sellers, both of which have been sent on for signatures by each state's governor. Both are based roughly on the Colorado law that the Tenth Circuit panel which included Neil Gorsuch found acceptable under federal law and which SCOTUS refused to hear an appeal related to.

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The Federal Trade Commission and IRS have provided a method for taxpayers to file Form 14039 electronically at IdentityTheft.gov, per an FTC news release.  But at the same time the IRS posted a fact sheet (FS-2018-6) that outlines when taxpayers need to file the Form 14039.  The IRS fact sheet notes that most taxpayers who are victims of tax-related identity theft don’t need to file it since the IRS today most often makes the taxpayer aware of the theft.

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This time of year, those of us in tax often dream of doing something else.  For one accountant (though, it appears, not a tax accountant) that dream came true in an unexpected manner.  Scott Foster, a 36-year-old accountant, was pressed into service as the goaltender for the Chicago Blackhawks on March 29.

Foster’s way into the hockey and accounting lore can be taken in at, among other places, this story on the NPR website:

36-Year-Old Accountant Called In As Emergency NHL Goalie — And He Crushed It

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The IRS released 2017 IRS Data Book, an 86 page compendium of various statistics related to the IRS’s operations.

One of the key facts that has created a lot of discussion in the tax press is the fact that the audit rate in 2017 dropped to its lowest level since 2003.  Less than 1,000,000 examinations took place in 2017. 

The report also noted that collection activities were also down in 2017.  Levies were down by 32% and liens dropped by 5% over the prior year levels.

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The new tax law has made some significant changes in the expected tax liabilities for many taxpayers.  While the standard IRS withholding calculator works in simple cases, the IRS has issued a News Release (IR-2018-73) that suggests certain taxpayers need to perform a “Paycheck Checkup” on their withholdings.

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In News Release IR-2018-71 the IRS reminded taxpayers that transactions in crypto-currency are taxable transactions and have to be reported on their income tax returns for the years involved.

In Notice 2014-21 the IRS had issued specific guidance on the taxation of crypto-currency.  However, the crypto-currency environment experienced a boom in the latter half of 2017 that likely created a significant number of taxable gains as taxpayers got into the market as it was hot.  A key holding of that notice was that virtual currencies are treated as property and not currency.

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In News Release IR-2018-68 the IRS warned tax professionals that this year a larger number than in the past have had their systems compromised.  The guidance warns professionals about the need to take steps to avoid having their own systems compromised.

The IRS describes a scam that I and many other CPAs I know have seen—the “New Client” scam, which appears to be ramping up once again as we hit the end of tax season.  As most of us are aware, these emails come with attachments purporting to be tax documents, but which are loaded up in various forms to deliver malware to the CPA’s systems if they are opened.

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Under IRC §7212(a) it is a felony for an individual to “corruptly or by force” to “endeavo[r] to obstruct or imped[e] the due administration of this title.”   The United States Supreme Court in the case of Marinello v. United States, Docket No. 16-1144 was to rule on how broadly the “due administration” of the IRC applied—did such administration cover all acts of the government, or was it only applicable to a more limited set of acts.

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