Revenue Offers Assistance to Corporate Tax Filers

The implementation of last year’s Tax Cuts and Jobs Act (TCJA) continues to affect many corporate taxpayers, particularly those that have filed extensions for the 2018 tax year. In Delaware, corporate income tax returns that are under extension are due on the same date as extended federal corporate income tax returns. Many taxpayer-related organizations have requested that Delaware offer relief from late-filing penalties for those corporate taxpayers who file their 2018 Delaware income tax return after the deadline, but on or before November 15. Because the Division of Revenue recognizes that some taxpayers may have trouble meeting Delaware’s extended filing deadline because the return due date coincides with the extended due date for federal returns, Delaware will be implementing a grace period for corporate taxpayers who file on or before November 15.

While the grace period should automatically eliminate the late-filing penalty for any Forms 1100 and 1100-S that are submitted on or before November 15, 2019, taxpayers should be aware that if they do receive a notice of assessment, a protest may be filed with the Tax Conferee. This should be sent via email to taxconferee@delaware.gov, or by mail, in writing, to:

Campbell Hay, Esquire
Tax Conferee
Delaware Division of Revenue
P. O. Box 8714
Wilmington, DE 19801

If you have any questions, please contact the Delaware Division of Revenue at (302) 577-8205.


Scam Alert: Revenue Warns Taxpayers of Fraudulent Letters

 

Example Scam Letter April 2019

The Delaware Division of Revenue wants to alert citizens to a new taxpayer scam that is happening in Delaware. Victims may receive a letter from “The Bureau of Tax Enforcement” that threatens property seizure and wage garnishment unless they call a toll-free number to “avoid enforcement.”

“These scam mailings are designed to trick taxpayers into thinking they have received an official communication from the Division of Revenue,” warns Director Jennifer R. Hudson. The notices threaten the seizure of the taxpayer’s property if the recipient fails to make immediate payment. The scammers are accessing public records in order to include taxpayer-specific information on the notices to make them appear legitimate, and then using pressure tactics and fear to motivate the recipient into taking immediate action.

Taxpayers who think they may have received such a letter should contact the Division of Revenue at (302) 577-8200, option 3, with any questions. Taxpayers should also file a Consumer Complaint with the Delaware Department of Justice’s Consumer Protection Unit. Information about the complaint process is available at https://attorneygeneral.delaware.gov/fraud/cpu/ and the complaint form is available online – Consumer Complaint Form.


Tax Reform and Your Delaware Itemized Deductions

Prior to the Tax Cuts and Jobs Act (TCJA), individuals were permitted to claim an unlimited amount of state and local real property and income taxes paid as itemized deductions. Starting with tax years 2018, those deductions will be limited.

Delaware follows federal law regarding itemized deductions, and taxpayers will be entitled to an itemized deduction for state and local taxes equal to the total real property taxes and local income taxes paid – up to the maximum $10,000 (or $5,000 for married individuals filing a separate or combined separate return).

Taxpayers will continue to be allowed to claim itemized deductions on a Delaware return, even if the taxpayer has claimed the standard deduction on a federal return.

For more information, and detailed examples, the Delaware Division of Revenue has published a Technical Information Memorandum, available here: https://de.gov/tim201901.


Overstated Withholding May Delay Your Tax Refund

With tax season well underway, Division of Revenue officials are noting an uptick in Delaware returns reporting overstated Delaware income tax withholding. The appropriate amount to report is limited to the total in Box 17 of the W-2 form provided by your employer (or the sum of those amounts if you have multiple employers), plus any state income tax withholding reported on a Form 1099-R.

Division of Revenue Director, Jennifer R. Hudson, Esq. noted “We are reviewing all returns that have overstated withholding, and they may be treated as fraudulent returns.”

Overstated withholding can be a sign of fraud, and returns with higher amounts than usual are being treated as suspicious. That means these returns will be pulled for review, extending the length of time required to process your return – and potentially delaying your refund.

If you have questions about the appropriate amounts to report, please contact the Division of Revenue Public Service area at 302-577-8200, or 1-800-292-7826.


Avoid Getting Reeled In by Phishing Scams This Holiday Season

Data thieves don’t take a break during the holidays, and the Delaware Division of Revenue wants to warn taxpayers that the IRS is seeing a large increase in bogus email schemes that seek to steal money or tax data.

The most common way for cybercriminals to steal money, bank account information, passwords, credit cards and Social Security numbers is to simply ask for them. Every day, people fall victim to phishing scams or phone scams that cost them their time and their cash.

Here are a few steps taxpayers can take to protect against phishing and other email scams. When reading emails, people should:

  • Be vigilant and skeptical. Never open a link or attachment from an unknown or suspicious source. Even if the email is from a known source, the recipient should approach with caution. Cybercrooks are good at acting like trusted businesses, friends and family. This even includes the IRS and others in the tax business.
  • Double check the email address. Thieves may have compromised a friend’s email address. They might also be spoofing the address with a slight change in text. For example, using narne@example.com instead of name@example.com. Merely changing the “m” to an “r” and “n” can trick people.
  • Remember that neither the Division of Revenue nor the IRS initiates spontaneous contact with taxpayers by email to ask for personal or financial information. This includes asking for information via text messages and social media channels. The IRS does not call taxpayers with aggressive threats of lawsuits or arrests.
  • Not click on hyperlinks in suspicious emails. When in doubt, users should not use hyperlinks and go directly to the source’s main web page. They should also remember that no legitimate business or organization will ask for sensitive financial information by email.
  • Use security software to protect against malware and viruses found in phishing emails. Some security software can help identity suspicious websites that are used by cybercriminals.
  • Use strong passwords to protect online accounts. Experts recommend the use of a passphrase, instead of a password, use a minimum of 10 digits, including letters, numbers and special characters.
  • Use multi-factor authentication when offered. Two-factor authentication means that in addition to entering a username and password, the user must enter a security code This code is usually sent as a text to the user’s mobile phone. Even if a thief manages to steal usernames and passwords, it’s unlikely the crook would also have a victim’s phone.
  • Report phishing scams. Taxpayers can forward suspicious emails to phishing@irs.gov.

If you have questions, or suspect someone is trying to commit tax fraud, you can also fight back by contacting the Division of Revenue’s Tax Fraud Hotline at (302) 577-8958.