February 1, 2012

New Hours of Operation for IRS Toll-Free Telephone Customer Service

Beginning Jan. 3, hours of service for most IRS toll-free telephone lines will be 7:00 a.m. to 7:00 p.m. local time. This includes telephone assistance for individuals, businesses, and the Practitioner Priority Service. Hours of service for telephone assistance for exempt organizations, retirement plan administrators and government entities are not changing.

Workers on H-2A Visas Are Exempt from U.S. Social Security and Medicare Taxes (IMRS Issue 11-0001482)

Foreign agricultural workers temporarily admitted into the United States on H-2A visas are exempt from U.S. Social Security and Medicare taxes on compensation paid to them for services performed in connection with the H-2A visa. In addition, compensation paid to H-2A agricultural workers for services performed in connection with the H-2A visa is not considered to be "wages" for purposes of federal income tax withholding, and thus is not subject to mandatory withholding of U.S. federal income tax unless Backup Withholding applies.

To avoid issuance of math error notices, the tax return for an H2-A visa worker who received a 1099-misc should be filed in the following manner: exclude Schedule SE; enter "exempt, see attached statement" on the Self-Employment Tax line of Form 1040; and attach a statement of explanation.

Beginning in calendar year 2011, an employer must report compensation of $600 or more paid to an H-2A agricultural worker on Form W-2, Wage and Tax Statement, and NOT on Form 1099-MISC, Miscellaneous Income, as required in previous years. Search “ foreign agricultural workers” on IRS.gov for further information.

Filing Season Reminders

The Internal Revenue Service opened the 2012 tax filing season by announcing that taxpayers have until April 17 to file their tax returns. Authorized IRS e-file providers are prohibited from submitting electronic returns to the IRS prior to the receipt of all Forms W-2, W-2G, and 1099-R from the taxpayer. If the taxpayer is unable to secure and provide a correct Form W-2, W-2G, or 1099-R, the return may be electronically filed after Form 4852 is completed in accordance with the use of that form. This is the only time information from pay stubs or Leave and Earning Statements is allowed. For further information, see Publication 1345 (PDF), Chapter 3, "Submitting the Electronic Return to the IRS."

Offshore Voluntary Disclosure Program Reopens

The IRS reopened the Offshore Voluntary Disclosure Program following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. This program will be open for an indefinite period until otherwise announced. However, the terms of the program could change at any time going forward. For example, the IRS may increase penalties in the program for all or some taxpayers or defined classes of taxpayers – or decide to end the program entirely at any point. See IR-2012-5 for further information.