On Monday, Wolters Kluwer/CCH saw technical anomalies in a number of their platforms and applications and discovered the installation of malware. As a precaution, CCH took a broader range of platforms and applications offline to mitigate the impact the malware could have. Using assistance from third-party forensics consultants, CCH investigated the issue and began the process of bringing their systems back online.

As of today, Wolters Kluwer Tax & Accounting products have been restored. According to their statement, Wolters Kluwer Tax & Accounting has seen no evidence that customer data was taken or that there was a breach of confidentiality of that data.

This is a good reminder that, even outside of tax season, scammers are trying to compromise your clients’ data. The IRS reports various types of scams, including malware, phone scams, phishing and more. Be vigilant.

If the unfortunate happens and you are compromised, follow the steps that the IRS has outlined.

Before anything happens, make sure you have read through the Safeguarding Taxpayer Data publication. Also, consider what your data backup plan consists of. Our upcoming webinar, Disaster Tax Planning, focuses on data loss and protection resulting from disasters, but the concepts can be applied to losses from a compromised system.

As we reported last week, recent media reports state that some tax software companies participating in the IRS Free File Alliance hid the free tax filing options from internet searches. The Free File Alliance is not only a partnership between the IRS and tax software providers, but also some states.

In a statement issued to the press, the IRS is reviewing the concerns raised about the Free File program. The IRS assembled a senior leadership team to review the current program as it takes matters like this very seriously. As part of the process, the IRS reached out to the software companies and others. The IRS continues to believe it’s critical to provide wide access to free electronic filing of tax returns, particularly for lower-income households.

Millions of taxpayers filed a 2018 return in the last few weeks. Now is a great time to check your clients tax withholding. If their particular tax situation didn’t come out as expected, you can use their recently completed 2018 return and the IRS Withholding Calculator to do a paycheck checkup and advise them to adjust their withholding if necessary. This is a great opportunity as a value-added service.

The IRS has released Form 14815, Supporting Documents to Prove the Child Tax Credit (CTC) and Credit for Other Dependents (ODC) for 2018-2025. This form is used to help taxpayers identify what supporting documents are needed to properly claim the child tax credit and credit for other dependents under tax code Section 24.

Notice 2019-34 sets the maximum vehicle value at $50,400 for 2019. Taxpayers can use these numbers to determine the personal use value of employer-provided vehicles using the special valuation rules. The notice also provides flexibility for 2018 and 2019 in the consistency requirements under the existing regulations relating to use of the fleet-average and vehicle cents-per-mile rules.

This week’s question is brought to you by Sheri Fronsee, CPA, from our Tax Knowledge Center.

Question: The taxpayer purchased a cemetery plot in 1999 for $2,000. In 2019, he discovered the cemetery had used the plot for someone else. As restitution, the cemetery paid the taxpayer $10,000 and the taxpayer acquired a new plot for $8,000. Is any of the involuntary conversion payment taxable?

Answer to this week’s question >