For roughly 50 years, the Johnson amendment has prohibited nonprofit organizations in Georgia and throughout the country from engaging in political campaigns. However, the House of Representatives voted to prevent the IRS from taking away the tax-exempt status of any church that supports a political candidate. The head of the National Council of Nonprofits was critical of the rule and said that it could erode the trust people have in nonprofit entities.
Some tax-exempt organizations in Georgia and across the country may no longer need to comply with some reporting requirements under guidance released by the IRS and the Treasury Department in July. Every year, charitable organizations that have a tax exemption under section 501(c)(3) must give the IRS the names and addresses of their large donors. Other types of organizations, like 501(c)(4) membership groups, also have to provide this information to the tax agency. While the information is expected to remain private, it has been exposed to the public on previous occasions.
The demand for unpaid taxes understandably strikes fear into some Georgia residents. Unfortunately, scammers use this emotional response to trick people into handing over their money. Although people need to take legitimate notices from the Internal Revenue Service seriously, the agency routinely issues warnings about scammers who try to pressure people into paying fake taxes. In general, the IRS informs people about real tax issues through the U.S. Postal Service. The agency issues paper bills for amounts owed, and people have a right to appeal tax bills. People also have the option to pay their taxes by check, debit or credit card. Checks would be mailed to a U.S. Department of Treasury address, and credit or debit payments would be made with select processors at the agency's website.
The IRS has told people to be on alert for tax scams during the summer months. While the IRS does contact taxpayers in Georgia and around the country after the April federal tax filing deadline, they will do so by mail. Conversely, a scammer may leave a message on a person's phone demanding that the individual call or face being taken into custody. In some cases, scammers may ask that a person make a payment by wire transfer or debit card.
In the weeks and months following the April deadline to file a federal tax return, the IRS verifies the data it receives and issues notices if needed. Georgia residents and others who receive a notice from the IRS should read it carefully and respond in a timely manner. Among the most common types of notices a person can get is a CP2000. It tells a taxpayer that the government has proposed a change to their tax return.
Georgia residents who have a side activity in which they earn money may want to deduct related losses on their individual federal tax returns. If the Internal Revenue Service classifies the activity as a hobby, however, losses from the activity cannot be claimed as a deduction. In order to receive tax savings, taxpayers have to be able to verify that the intent of their business is to make a profit.
For most people in Georgia and throughout the country, tax day is the only day in which they give much thought to their state and federal returns. However, those who receive a notice from the government may have to think about them for a little longer. The good news is that fewer than seven people per every 1,000 will receive an audit letter. Furthermore, receiving a letter from the IRS doesn't always indicate bad news.
Georgia residents who are involved in the cryptocurrency market may find their tax filings more complex as the IRS has made efforts to tax crypto income. In Novemeber 2017, the IRS was victorious in a case against Coinbase, a cryptocurrency exchange. As a result of the case, the exchange was required to provide information on more than 14,000 people who traded cryptocurrency between 2013 and 2015. During that period, only 800 to 900 people each year reported capital gains from cryptocurrency investments.
Employers in Georgia have a responsibility to pay payroll taxes for their employees. Tip boxes set up for volunteers, however, have created confusion about employee classification and employer tax obligations. The Internal Revenue Service has addressed this issue in an IRS Chief Counsel Memorandum.
Georgia residents who receive a letter from the IRS should respond to it as quickly as possible. This is generally true whether a person has received an audit notice or a request for more information. In some cases, the IRS is writing to let a person know that he or she used the wrong Social Security number or otherwise provided incorrect information on a return.