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Friday July 20, 2018

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IRS Summertime Tax Tips

In IR 2018-149, the Service highlighted tax tips for the summer season. While most taxpayers are understandably thinking about barbeques and summer vacations, the IRS offered seven summertime suggestions that may affect taxpayers.
  1. Summer Jobs - Many students and younger individuals work during the summer. They may not have earned enough to owe income tax, but their employers will withhold Social Security and Medicare taxes from their pay. If the individual is self-employed, he or she must pay Social Security and Medicare taxes even if there is no income tax obligation. These taxes will also count toward future Social Security benefits. The employer should send a Form W-2, Wage and Tax Statement, by January 31, 2019. It will show the withholding amount for state and federal taxes, Social Security and Medicare. Taxpayers will need this form in order to file their annual tax returns.
  2. Withholding - Seasonal or part-time workers should check their withholdings to be sure that the correct amount of tax is withheld. The Withholding Calculator on IRS.gov will help with that process. Taxpayers can estimate their income, credit adjustments and deductions in order to determine the correct withholding amount.
  3. July Weddings - Newlywed taxpayers may want to recheck some items after the honeymoon. A name change should be reported to the Social Security Administration and an address change should be reported to the United States Postal Service. This will ensure that any tax forms or items needed to file taxes are sent to the correct address. Once again, the Withholding Calculator at IRS.gov will be helpful, particularly if there are two wage earners.
  4. Summer House Clean Up - Summertime presents a good opportunity to conduct a home cleanup and clear-out effort. Many taxpayers will find that some household goods are no longer needed. If a taxpayer makes a donation of household goods that are in "good used condition or better" to a qualified charity, the taxpayer may receive a charitable deduction. The charity should provide a receipt that includes the date of the gift and description of the items. If the value of the gift is over $5,000, the taxpayer will need to obtain a qualified appraisal to substantiate the deduction.
  5. Volunteer and Drive - Many taxpayers with good hearts will volunteer for charitable organizations. Driving activities while on organization-sponsored trips qualify for a deduction of $0.14 per mile for charitable travel. Volunteers will need to record the date of the trip date and the mileage in order to itemize their deductions.
  6. Day Camp Credit - Working parents with children under 13 years of age may qualify for the Child and Dependent Care Credit. This is not permitted for overnight camps, but a day camp may count for the credit. IRS Publication 503, Child and Dependent Care Expenses, will be helpful for taxpayers who desire to claim this credit.
  7. Remember to File for Tax Refund - Even if the amount of income earned is not enough to require filing of an income tax return, there is still a good reason to file. If the taxpayer's employer has withheld funds for federal income tax, the taxpayer will qualify for a refund if he or she files a tax return. Taxpayers can file any time within three years and receive the refund without penalty.

Security Awareness for Tax Professionals

In IR-2018-147, the Service launched a summertime security campaign for tax professionals. The campaign is a response to growing efforts by tax scammers to steal data from CPAs, attorneys, enrolled agents and other tax preparers.

Acting IRS Commissioner David Kautter noted, "The IRS and the Security Summit partners urge all tax professionals to take stronger security steps to protect themselves and their clients. With the help of the Summit partnership, the IRS has made major progress protecting taxpayers in the battle against tax-related identity theft. But the threat remains, and we need the help of tax professionals to take basic steps to safeguard their tax systems and taxpayer data."

The campaign is titled, "Protect Your Clients; Protect Yourself: Tax Security 101."

The IRS Security Summit continues to make progress, but there are still many data thefts and claims for fraudulent refunds. The Service recently updated IRS Pub. 4557, Safeguarding Taxpayer Data. Professional tax preparers should also check IRS Publication 5293, Data Security Resource Guide for Tax Professionals.

Under The Gramm-Leach-Bliley Act, professional tax preparers must create a security plan to protect client data. The Federal Trade Commission is tasked with administration of this requirement for data safety.

The IRS outlined basic protection steps that all professional advisors should take.
  1. Phishing Emails - Do not click on links if you do not know the sender of the email. Tax scammers will make the email appear as though it is coming from the IRS, a tax software provider, a cloud storage provider or a state tax agency. Educate staff to be on guard for emails claiming to be sent from any of these entities.
  2. Data Security Plans - You should use IRS Pub. 4557 to create a written security plan.
  3. Anti-Virus Software - Install your security software on your desktop computers, laptops, routers, tables and phone. Be sure the software is on an automatic update plan.
  4. Passwords - Passwords should be at least eight characters. The passwords can use uppercase and lowercase characters, numbers and special keys. A password software manager is a good way to help protect your passwords. The password manager program will normally use a 256-bit encryption method.
  5. Backup - Each day, you should backup all of your client data. The backup should be on a secure external source and not continuously connected to your network.
  6. Retired Computers or Drives - It is essential to clear the data on old drives. Deleting files does not actually remove the data. The retired computers or drives must either be physically destroyed or wiped by a software program that clears all sensitive data.
The Service also continues to offer the 2018 IRS Nationwide Tax Forums over the next seven weeks. The three-day programs will be offered in Washington, D.C. on July 17-19, San Diego on August 7-9, Chicago on August 21-23 and Orlando on September 11-13. Check www.IRS.gov for further information on the Tax Forums.

IRS Commissioner Nominee Rettig Answers Questions

In preparation for his Senate hearings, IRS Commissioner Nominee Charles Rettig answered written questions from Sen. Ron Wyden (D-OR). The questions covered both general topics and specifically focused on syndicated conservation easement tax shelters.

Wyden noted that Rettig had represented many high net-worth individuals. He asked if Rettig could identify with the "everyday guy."

"Through decades of experience working across the table from the IRS, I have seen the difficulties faced by taxpayers of all kinds - from large taxpayers, to small businesses, to low income taxpayers who need help," responded Rettig. He continued, "I've also devoted a significant amount of time assisting taxpayers who can't afford professional help on a pro bono basis."

Wyden wondered what actions Rettig would take if an Administration Official urged enforcement against an individual.

Rettig responded, "It is unlawful for the President, Vice President or any employee of the Executive Office of the President or Vice President to request directly or indirectly any officer or employee to conduct or terminate an audit or other investigation of any particular taxpayer. If confirmed, I will work to ensure that the law is upheld and appropriate steps are taken if it is violated."

Finally, Wyden discussed Notice 2017-10 and the IRS effort to limit the use of syndicated conservation easement tax shelters. Wyden noted, "Please describe what actions you will take as Commissioner, if confirmed, against the promoters of these abusive shelters identified in Notice 2017-10."

Rettig responded, "If confirmed, I will work with IRS officials to ensure an appropriate enforcement strategy is in place to uphold the law as Congress intended."

Editor's Note: Nominee Rettig was discreet, but did not directly answer Sen. Wyden's question on conservation easement tax shelters. In 2017, the IRS reviewed 104 conservation easements. About 40% appeared to be syndicated easements. These syndicated easements claimed a deduction to cost ratio of 9 to 1. The IRS considers a deduction to cost ratio of 2.5 to 1 to be an indicator of a possible tax shelter. The syndicated conservation easement tax shelter question will arise again at the Senate Finance Committee Hearing for Nominee Rettig.

Published July 13, 2018
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Shelby Harder, 2018
Dr. Irving Auld and Dorothy
Roher Auld Scholarship

"Many students take for granted what a university has to offer. However, I am thankful every single day for the opportunity to attend this prestigious school. At Lawrence, you have the ability to engage in Socratic debates about the world we live in at dinner, play recreational or NCAA sports, and talk one on one with brilliant professors. At Lawrence, you don't just 'learn' a subject, you are immersed in it. You dive into the liberal arts and these professors show you the beauty in it all, and how everything is tied together. I am a Biochemistry major with a soft spot for rocket science, philosophy, and evolution. Lawrence is my dream school, and it would have never been possible without the Dr. Irving Auld and Dorothy Roher Auld Scholarship. I am forever grateful for their generosity."

Juliana E. Olsen-Valdez, 2018
Carroll Family Scholarship

"Lawrence University is a great place for students looking to embrace their multi-interested approach to learning. As a Geology major, I have spent many long hours in laboratories. But, I have also had the opportunity to organize and lead students on outdoor backpacking trips, help build a stronger community for International students, participate in dialogues on campus initiatives, attend dozens of musical events, and study abroad in a field-based geology program, all while taking classes in a variety of academic spheres on campus. Lawrence, as an institution and student body, creates a collective of learners, listeners, and leaders who are continuously evolving their understanding of the world around them. I am fortunate to have the support of the Carroll Family Scholarship, so that I can say I am a part of this exceptional community too!"

Weiqi "Vicky" Liang, 2019
Marian H. Cuff Endowed Scholarship

"Lawrence is a special institution with nice people around the campus. I better myself by trying out different things and using new ways to think critically. Even though I am a Philosophy major, I have successfully taken classes in Anthropology, Biology, Economics, and Government. In addition, I still find many great extracurricular opportunities to explore, such as singing with Viking Chorale, even though I am not a music major. While having the great experience of volunteering at the elderly center last year, I became an elder advocacy coordinator at the Volunteer Community Service Center. At Lawrence, I've learned to handle difficult academic problems while looking forward to exploring possible opportunities. I am very grateful to be awarded the Marian H. Cuff Endowed Scholarship for every year I have been here, and appreciate that the scholarship has provided this wonderful Lawrence experience to me."

Anthony Cardella, 2018
Ansorge Family Scholarship

"I am so excited that I am able to attend Lawrence University. I know that I will make great progress studying piano with Dr. Michael Mizrahi. Since being at Lawrence I've already made a lot of progress and I really love it here. I am so grateful for the Ansorge Family Scholarship that made it possible for me to come to Lawrence because without it, I might not have been able to afford the cost of attending a school that is a great fit for me and a place where I will learn so much and go so far."

Milwaukee-Downer Scholarships and Professorships

Some of the many recipients of Milwaukee-Downer scholarships gather for a photo with Carolyn King Stephens M-D'62 and Marlene Crupi-Widen M-D'55 in January 2014 at the annual scholarship luncheon.

Rosamund Victoria Bille Adler Scholarship
Dr. Charles E. Albright Scholarship
Helen Daniels Bader Scholarship
James G. and Ethel M. Barber Scholarship
Catharine Beecher Endowed Fund for Downer Women
Bessie A. Bell Scholarship
Berk Scholarship
Frederick C. Best Scholarship
Beta Study Club Scholarship
Lynde Bradley Scholarship
Lucia R. Briggs-Alumnae Scholarship
Edith Lange Brooks Scholarship
Anne Barman Caldwell Scholarship
Alice Miller Chester Scholarship
City of Milwaukee Student Funds Scholarship
Milwaukee-Downer Class of 1940 Fund
Milwaukee-Downer Class of 1942 Fund
College Endowment Association Scholarship
Janet Cope Crawford Scholarship
Jessie Mabbott Daniels Scholarship
F. T. Day Scholarship
Rufus Dodge Scholarship
Julia P. Ely and Hannah R. Vedder Memorial Scholarship
General Endowed Scholarship - M-D College
Dr. Alfred W. and Mrs. Ada F. Gray Scholarship
Berenice E. Hess Scholarship Endowment
Lucille Ray Hibbard Scholarship
Belle Austin Jacobs Scholarship
Helen McDermott Jurack and Ronald J. Mason Scholarship
Marjorie S. Logan Scholarship
Nellie Maxwell Scholarship
S. Annabelle & Paul McGuire Scholarship
Memorial Scholarship Fund - Milwaukee-Downer
Milwaukee-Downer Class of 1953 Scholarship
Milwaukee-Downer Class of 1955 Scholarship
Milwaukee-Downer Class of 1956 Scholarship
Milwaukee-Downer Class of 1957 Scholarship
Milwaukee-Downer Class of 1958 and 1959 50th Reunion Scholarship
Milwaukee-Downer Club Scholarship
Milwaukee-Downer/Lawrence College Consolidation 50th Anniversary Scholarship
Francis Evelyn Kelley Morgan Memorial Scholarship
O'Neill-Anderson Family Scholarship Endowment
Elizabeth A. Olson Scholarship
Gilbert Haven Peirce, Sr. and Emma Elizabeth Manor Peirce Milwaukee-Downer Scholarship
Aleida J. Pieters Scholarship
Matilda Siefert Puelicher Scholarship
Elizabeth Ann Richardson Scholarship
William M. Ross Memorial Scholarship
Elizabeth Rossberg Scholarship
Charles Frederic Sammond Scholarship
Mildred L. Schroeder Scholarship
Sivyer Educational Fund for Women
Marion Merrill Smith Scholarship
Dr. Elizabeth A. Steffen Scholarship
W. Mead and Elizabeth McKone Stillman Scholarship
Strzelczyk Family Scholarship
Clare Scherf Sweetman Scholarship
Raymond H. and Jane K. Taylor Scholarship
Jerline E. Walfoort Memorial Scholarship
Barbara E. Wehr Fund
Harmony Weissbach Scholarship
Martha and Frances Wheelock Scholarship
James G. and Ethel M. Barber Professorship of Theatre and Drama
T. A. Chapman Professorship in Music
Alice G. Chapman Professorship in Physics
Alice G. Chapman Librarianship
Milwaukee-Downer College and College Endowment Association Professorship

Angela Small Fry Intia, 2019
Maurine Campbell Scholarship

"Thanks to the Maurine Campbell scholarship, I have been able to attend the amazing school that is Lawrence University. With the help from this scholarship, I have been able to pursue my dream career in chemistry working with the outstanding and extremely helpful faculty here. Even outside of chemistry I take the time for exploration into my interests and want to give back through my work as a resident life advisor, stock room assistant, and student supervisor at Bon Appetit. Everything I have learned here, academically or not has forever molded the person I am today."

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