2019 Income Tax Best Practices Guide - A guide for preparing 2019 Colorado Income Tax Returns - Colorado.gov
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2019 Income Tax Best Practices Guide A guide for preparing 2019 Colorado Income Tax Returns
Always Help
Best Practices: A guide for CPAs
T
he Colorado Department of Revenue is dedicated to
providing quality service in fulfillment of our fiduciary and
statutory responsibilities, while instilling public confidence
through professional employees. Our efforts focus on
being proactive and responsive to taxpayers and tax professionals by
providing outstanding customer service, education and information. The
information in this guide is for use in preparing 2019 Colorado income tax
returns, with the tips organized in the general order of the filing process.
State of Colorado Photo
A resident herd of elk wade All forms, guidance publications and webpages can be found at
through a creek at Rocky Colorado.gov/Tax, the official Taxation Division website.
Mountain National Park. Elk
populations in the park have
rebounded since the early 1900s.
TAXATION
TABLE OF CONTENTS LEADERSHIP
3. What are Best Practices?
4. New Credits and Subtractions
5. New Tax Legislation GET IN TOUCH Brendon Reese,
Senior Director, Taxation
6. Consumer Use Tax Updates for 2018
7. Filing Relief for Natural Disasters Customer Service Representatives are available Matthew Samuelson
8 a.m. to 4:30 p.m., Monday through Friday at Deputy Director, Taxation
8. Revenue Online
10. Mailing Instructions 303-238-SERV (7378).
Eric Myers,
11. After you File OTHER CONTACT PHONE NUMBERS Director, Taxpayer Services
12. Fraud Detection and Prevention • EFT/Electronic Payment appropriate number above.
Division
14. Checkoff Colorado Help: 303-205-8333 Give the agent the number Christopher Muntean
15. Tax Professional Resources • Collections: 303-205-8291 that you would like to call. Director, Tax Auditing &
16. Important Due Dates • Discovery: 303-205-8292 The agent will stay on the Compliance
• Field Audit: 303-355-0400 line to relay the information/
• Report Tax Evasion, Fraud conversation to you. Josh Pens
or Scams: 303-205-8262 TTY Telephone Users: 1-800- Director, Tax Policy Analysis
• Hearing or Speech 659-2656
Impaired: Relay Colorado Voice Telephone Users: Debbie Van Wyke
2 • Best Practices Guide To use this service, dial the 1-800-659-3656 Director, Tax Conferee
MOST FREQUENT FILING
ERRORS AND TIPS TO
AVOID THEM
BUSINESS PERSONAL
PROPERTY CREDIT FOR
INDIVIDUAL BUSINESS OWNERS
This credit is only available if business personal intention to change your
property tax was paid to a Colorado county in 2019 state of legal residence
and the business had business personal property val- In order to reacquire residency in 5. Preparation of a new
ued at $18,000 or less. Submit a copy of the asses- last will and testament
Colorado, you need not be physi-
sor’s statement with your return. See the Business
reflecting your state of
cally present in Colorado, but you legal residence
personal property credit calculation worksheet in must intend to both make Colora- SPECIAL INSTRUCTIONS
the DR 0104 booklet. do your permanent home and to If you qualify for this subtraction, FOR BANKRUPTCY ESTATES
abandon your previous state of legal enter the amount of compensation
REACQUISITION OF COLORADO residence. received for active duty military For bankruptcy estates with a
RESIDENCY DURING ACTIVE DUTY In order to claim this subtrac- service on line 16 and submit all Colorado filing requirement, com-
tion, a service member must in- required evidence of residency with plete the DR 0105 and provide
MILITARY SERVICE SUBTRACTION
clude with his or her return: your return. supporting documentation for the
This subtraction is only allowed to active duty estate only. DO NOT complete,
• A completed DR 0104AD
military service members. In order to qualify for the • A military form showing OTHER SUBTRACTIONS FROM submit, or attach the Colorado form
subtraction the service member must meet all of the Colorado as his or her FEDERAL TAXABLE INCOME DR 0104 for individuals as part of
following criteria: home of record the Colorado filing for a bankruptcy
• Evidence of acquiring resi- Don’t include amounts earned estate. For Colorado returns, the
• Have Colorado as his or her home of record dency in another state outside Colorado, net operating DR 0105 is NOT used as a transmit-
• After enlisting in the military, have ac- • Evidence of reacquiring tal for the debtor’s form DR 0104.
residency in Colorado losses, K-1 adjustments, military
quired legal residency in a state other than income, wage adjustments or The filing of the bankruptcy estate’s
Colorado during the tax year
donations made to the Military tax return does not relieve debtors
• On or after Jan. 1, 2016, have reacquired
Evidence of acquiring Family Relief Fund on this line. from the requirement to file indi-
Colorado residency
residency in another state Include a clear explanation of vidual income tax return for Colora-
and reacquiring residency in the subtraction being claimed on do income on the form DR 0104.
A military service member who meets these re- Colorado must come in one of
quirements can claim a subtraction for any compen- your return. For information, see
the following forms:
sation included in his or her federal taxable income Colorado.gov/Tax/Income-Tax-
that he or she received for active duty service after 1. Voter registration Subtractions.
reacquiring Colorado residency. 2. Records reflecting the
In order to have acquired residency in another purchase of residential VOLUNTARY CONTRIBUTIONS
state, you must have: property or an
unimproved residential
lot Be sure to include a Volun-
• Been physically present in that state 3. Motor vehicle titling and tary Contributions Schedule, DR
• Intended to make that state your perma- registration 0104CH with your return. The
nent home 4. Notification to your
• Intended to abandon your previous state of voluntary contributions cannot be
prior state of legal amended.
legal residence residence of your
4 • Best Practices Guide Best Practices Guide • 5
CREDITS & EDITS
CLARIFYING & MODIFYING CREDITS
MODIFIED OR CLARIFIED CREDITS • Requires the owner of property who is granting
a conservation easement to execute a disclo-
The Health Care Preceptors credit was modi- sure form
fied with the following changes: • Modifies provisions governing when a conserva-
• Clarifies the definition of “preceptorship” tion easement may be extinguished
to specify that the period of time for which • Prohibits a conservation easement for which a
the period of personalized instruction, state income tax credit has been allowed from
training, and supervision must be provided being released, terminated, extinguished, or
to be eligible to claim the tax credit is not abandoned by merger, which occurs when the
less than 4 working weeks or 20 business same entity holds both the easement and the
days per calendar year land subject to the easement
• Extends the existing sunset date under • Increases the total amount that may be
which the tax credit would expire to tax claimed as an income tax credit for an indi-
years commencing prior to January 1, 2023 vidual donation of a conservation easement,
but limits the amount that may be claimed per
The credit for Retrofitting a Home (HB19- year
1135) clarifies that the income tax credit for • Makes a $250,000 appropriation to the Colo-
retrofitting a residence is available for changes rado ownership, management, and protection
made to a residence that benefit a qualified (COMaP) service which maintains a database
individual or the qualified individual’s dependent. and corresponding map of conservation ease-
The credit is available for tax years 2019 through ments and other protected lands in Colorado.
2023 and the amount is equal to the cost of the
retrofit or $5,000, whichever is less. The Division
of Housing in the Department of Local Affairs is
responsible for certifying that the taxpayer meets NEW LEGISLATION
the requirements for the income tax credit.
Here is a list of the bills that passed during the CONSUMER USE TAX 2019 UPDATES
2019 legislative session. Visit Leg.Colorado.gov/
The Conservation Easement Tax Credit also
was extended until July 1, 2026 with the follow- Bills to learn more. WHO MUST PAY CONSUMER USE TAX?
ing modifications:
• Eliminates a requirement that the board of INCOME TAX Taxpayers owe use tax when they store, use
real estate appraisers establish education or consume a taxable item in Colorado for which
and experience requirements for conserva- HB19-1013: Child Care Expenses Tax they did not pay sales tax. This most commonly HOW TO CALCULATE
tion easement appraisers Credit Low-Income Families occurs when a purchase is made from an out- CONSUMER USE TAX
• Relocates and modifies certain provisions HB19-1088: Modify Income Tax Credit of-state seller either over the internet, through
governing the creation and valuation of Health Care Preceptors catalog sales, or by a Colorado resident travel- Colorado use tax is calculated at 2.9%. Some
conservation easements HB19-1135: Clarify Income Tax Credit for ing in another state. cities, counties and special districts in Colorado
• Allows the division of conservation to use also impose a use tax. The Department collects
Retrofitting a Home
an alternative method to value a conserva- If the taxable property is stored, used or use tax for certain special districts, but does
tion easement HB19-1228: Increase Tax Credit consumed by someone other than the buyer, the
Modifications not collect use tax for any city or county. Please
• Modifies provisions governing a conserva- individual or business that stores, uses or con- contact them directly concerning their tax
tion easement working group convened to HB19-1264: Conservation Easement Tax sumes the taxable item will owe the tax. rates, exemptions, fees and procedures.
address specified issues relating to claiming Credit Modifications
a state income tax credit for the donation SB19-029: Income Tax Residency
of a conservation easement Presumption for Military
6 • Best Practices Guide Best Practices Guide • 7
HOW TO REPORT “Consumer Use Tax” under Se-
AND PAY CONSUMER USE TAX lect a Return Type to File. When
FOR INDIVIDUALS filing in Revenue Online, the
system will calculate the state
use tax due. In some cases, the
Consumer use tax for individ-
system may be able to calculate
uals is due by the April income
Department-collected city and
tax return deadline. Individuals
county rates. Taxpayers can dou-
can report and pay consumer
use tax in one of two ways, ble check the applicable rates in
either of which can be filed the DR 1002 publication.
electronically at Colorado.gov/
RevenueOnline: SALES & USE TAX CHANGES
• With the Consumer Use June 1, 2019, HB19-1240 went
Tax Reporting Schedule into effect and the collection
(DR 0104US) as an attach- of sales and use tax was signifi-
ment to their Colorado in- cantly altered in the state of
dividual income tax return Colorado. Out-of-state retailers
(DR 0104), or
that sell more than $100,000
• With the Consumer Use
Tax Return (DR 0252) worth of taxable goods or ser-
vices into the state of Colorado
The schedule or return must are now required to collect and
include tax for any tangible remit sales tax to the state of
property the individual stored, Colorado.
used or consumed during the
income tax year and for which This means use tax will be
sales or use tax was not previ- less common and will usually
ously paid. only apply when dealing with
small businesses that fall under
If an individual files his or her the $100,000 threshold. Further-
income tax return under exten- more, effective October 1, 2019
sion, penalty and interest will Marketplace Facilitators are
be due for any consumer use tax required to collect and remit
not paid prior to the April in- sales tax for all the sellers who
come tax deadline. utilize their platforms. Further
reducing the likliehood of need-
Taxpayers may use the De- ing to pay consumer use tax for
partment’s free e-file service, the individual filer. For more
Revenue Online, to file and pay information, visit Colorado.gov/
their consumer use tax. They tax/marketplaces.
do not need to log in to file a
return. Choose “File a Return”
under Quick Links. Then click
8 • Best Practices Guide Best Practices Guide • 9
REVENUE ONLINE
SERVICES YOU CAN
COMPLETE WITHOUT LOGGING
INTO YOUR CLIENT’S ACCOUNT
• File an Individual Income Tax Return
(2009 to present)
• File a Consumer Use Tax Return
• File Special Event Sales Tax Returns
• File a Property Tax Rent/Heat
Rebate (PTC) application
• Check refund or Property Tax/Rent/
Heat (PTC) Rebate Status
• Make a payment for 21 tax
types immediately (by credit card
or e-check) for Cigarette, Consumer
Use, Corporate Income Tax, County
Lodging, Fiduciary Income Tax, IFTA,
Individual Income Tax, Liquor Excise,
7 Things About Revenue Online Local Marketing, Partnership Income
Tax, Prepaid Wireless, PTC, Public
Utilities Commission, Retail Marijuana
Excise and Sales, Retailer’s Use, Sales,
1. You will need to set up an account in Revenue Online, Special Event (Sales Tax), Special Event
even if you have already filed a return in the past. THIRD-PARTY ACCESS single account.
(License), Tobacco Products, Winery
2. When making a payment, you need to choose the filing Shipper Excise The Department encourages e-filed returns
period end date for the payment, not the date you are You may access your client’s tax information
• Respond to an inquiry letter because the Third Party Access designation
making the payment. The filing period date is the last on Revenue Online by utilizing the “Grant Third
• Provide a validation key is included in the electronic return and
day of the filing period, such as 12/31/2019 for a 2019 Party Access” feature. For security reasons,
• File a protest Department staff can see the name and phone
tax return. individuals are limited to one Revenue Online
• Request a letter ID number of the Third Party Designee on the
3. You must put in the correct tax type for the payment account, because of this, tax professionals
• Submit an e-filer attachment (DR e-filed returns.
you are making. If you do not, it will show the Depart- should not create an account for themselves
1778) under a client’s Social Security number (SSN)
ment you are making a payment for another tax type. • Submit Wage Withholding Annual On paper returns, staff do not data enter
4. To protect taxpayer security, sessions are timed out or Colorado Account Number (CAN). Doing
Reconciliation any of the Third Party Designee information as
due to inactivity. Taxpayers should have all necessary this prevents the taxpayer from being able to
• Submit a power of attorney (POA) they do the return lines. Designee information
documents for filing their return prepared prior to fil- create his/her own Revenue Online account in
(DR 0145) from a paper return is not available to see
ing in Revenue Online. the future. It
• View local Sales Tax rates (View In order to get third until the paper return is imaged and attached
5. New Colorado Residents who have not filed an individ- also creates
sales tax rates by specific city or county.) party access from your to the taxpayer account, which could take a
ual tax return with the Department of Revenue will not extra work
• View business location rates [View client, you and your client minimum of two weeks, depending on the time
be eligible to use Revenue Online for individual income for the tax
sales tax rates applicable to your specific must have a Revenue of the year. During that time, it is possible the
services. professional
business location(s).] Online account. Your client taxpayer may receive correspondence from
6. Many of our online services exist at the account-level. because you
• View Sales Tax rate charts (View will need to know your the Department. If the Third Party Designee
If you click on the hyperlink for one of your accounts in would have
amount of tax calculated by purchase Revenue Online Login ID. contacts the Department about the letter,
Revenue Online, you will be brought to a similar screen to create
amounts from $.01 through $100.) Department staff may not yet have access
with details on that account and a broader list of ser- a separate
• Find Local Taxes by address (Search to the paper return image. In the case of a
vices available. Revenue Online account for all of your clients.
local sales tax rates by a specific paper return, customer service representatives
7. Changes are coming. We have heard your suggestions If your clients grant you third party access, you
address.) may ask for a fax copy of the return with
and we are making improvements in 2020. will be able to access their accounts from your
• Verify if a sales tax license or the designee information before providing
own,
exempt certificate is valid information to the tax professional.
10 • Best Practices Guide Best Practices Guide • 11
3rd PARTY ACCESS ACCEPTED TAX SOFTWARE
Instructions for clients to grant third party access of their Revenue Online account to The Department maintains a list of Accepted Software for individual income tax. The list shows
their tax professional: supported tax credits and limitations by software name. As software is approved, through the third
1. Log in to your account at Colorado.gov/RevenueOnline and click on “View My week of January, the list will be updated. See the Income Tax, Individual File webpage.
2. Profile” in upper right corner of the screen. Click on “Grant Third Party Access” in the “I
Want To” section. Taxpayers and tax practitioners are strongly encouraged to file all tax returns either through your
3. Click on “Next” on the bottom right of your screen. tax software or Revenue Online, Colorado.gov/RevenueOnline. If you need to file a paper return,
4. Complete Step 1 and click the “Submit” button. you must list the name and the Social Security number (SSN) of the primary taxpayer on the top of
5. Verify third party access was granted: every page of the return where indicated. Some software products allow the submission of Colorado
a) Account Owner/Taxpayer: The third party account will populate on the “Additional individual estimated payments using form DR 0104EP and extension payments using form DR 0158-I.
Logons” page, which you can see by clicking on “View My Profile” on the Home page. Then click For estimated payments, up to four payments can be scheduled at once, but the last payment must
on “Manage additional logons.”
b) Third Party/Tax Professional: All the accounts are listed on the homepage of your be scheduled by the January estimated payment due date. Your software provider can tell you if they
account. The owner’s account will populate in this account list. support estimated payments and extension payments for Colorado.
12 • Best Practices Guide Best Practices Guide • 13
TABOR YEAR MAILING INSTRUCTIONS
The FY 2018-2019 TABOR
refund will be distributed
Please note all income tax forms and supporting schedules for each client must be submitted and
in two parts. The first
part of the refund will go mailed together. Failure to return all applicable schedules and supporting documentation results in
toward reimbursing local processing delays or denied credits and refunds.
governments for their
senior and disabled veteran
property tax exemptions. For IF YOU ARE SUBMITTING THE FORM WITH PAYMENT:
more information on the local Colorado Department of Revenue
property tax exemptions for
seniors and disabled veterans
Denver, CO 80261-0006
visit the Colorado General
Assembly website, Leg. IF YOU ARE SUBMITTING THE FORM WITHOUT PAYMENT:
Colorado.gov. Colorado Department of Revenue
Denver, CO 80261-0005
The second part is a
temporary income tax rate
reduction of 0.13% for the
2019 tax year. The temporary
income tax rate reduction
will lower the state income
tax rate from 4.63% to 4.50%.
There are no special steps
required to get this income
tax rate reduction. Taxpayers
will automatically receive
this reduction when they
file their 2019 income tax
returns. For more information
got to colorado.gov/tax/
TABOR.
The 2019 TABOR refund
will be different from 2015,
when there was a sales tax
refund. This year, the TABOR
income tax rate reduction
will result in either a larger
refund, if the taxpayer
over withheld in 2019, or a
smaller bill, if the taxpayer
did not withhold enough/
make enough estimated
tax payments. The refund
amount will be different for
each taxpayer, based on their
unique income tax situation.
14 • Best Practices Guide Best Practices Guide • 15
paper form DR 0104X. business days because the data back often to verify where your
is transmitted directly into the client’s return/refund may be in
When changing the Department’s tax accounting our process.
Colorado return because system, which makes processing
the IRS made changes to the go much faster than with pa- The Department routinely
federal return, you must file per returns. Paper filers have a takes precautionary measures to
form DR 0104X within 30 days longer wait depending on when ensure taxpayer refunds are not
of being notified by the IRS. they file. diverted to identity thieves. As
When the IRS makes changes tax refund fraud persists as a na-
to federal taxable income, REFUND STATUS tional issue, the Department will
the Colorado return MUST be continue to look at tax returns
amended, even if there is no for signs of refund fraud.
You or your client can view
net change to the Colorado their status of a refund by using
tax liability. The Department conducts
Revenue Online. The informa-
reviews of income tax refunds be-
tion in Revenue Online is the
cause it is operating in the public
WHAT TO EXPECT BASED same information that is avail-
trust with revenue dollars collect-
ON WHEN A RETURN IS FILED able to our Call Center Repre-
ed and refunded. Our objective
sentatives.
is to protect taxpayer informa-
Filing state tax returns elec-
tion, as well as state revenue,
tronically or earlier in the year • Visit Colorado.gov/Reve-
and ensure taxpayers receive the
may result in receiving refunds nueOnline and choose the
option “Where is my Re- Colorado state income tax refund
faster as long as the return is to which they are entitled.
fund/Rebate” under Quick
correct and complete. “Correct
Links.
and complete” means the re- • Enter the Social Securi- This review may result in
turn does not have any missing ty number (SSN) and the correspondence from the De-
AFTER YOU FILE information or documentation, refund amount claimed on partment, a refund requested as
and it does not fall into the risk the income tax return. If direct deposit being converted
AMENDED RETURNS specific (for example, use a profile for a fraudulent filing. If you do not know the re-
to a paper check, or other ac-
2014 form DR 0104X for an the return falls into that profile, fund amount claimed, you
NEW: Amended individual tions. The Department’s goal is
income tax returns (DR amended 2014 return). may use either a Letter ID
Amended returns replace it may take up to two months to issue refunds as quickly and
0104X) for tax years 2018 number from a recent in-
the original tax return. Send to review and verify informa- efficiently as possible; howev-
and forward may be filed Individual income tax come tax correspondence
all supporting documents with tion and then communicate
using MeF through any returns from 2009 and from the Department or er, there is the possibility that
the amended return and ALL
software providers who forward may be amended and exchange information with you may request a Letter delays will occur.
the schedules, even if it has
already been sent. begin supporting it. The electronically through taxpayers who are expecting a ID to be sent to the mail-
Department recommends Revenue Online. You may refund. ing address on file. The Department continues
The DR 0104X and schedules filing returns electronically in amend online even if the to ask for your patience and
must be completed and order to reduce the likelihood original return was filed on How soon can taxpayers After a taxpayer’s return is understanding as it takes steps
submitted together, whether of errors or processing delays. paper. Revenue Online has receive their refund depends processed, the Department will to safeguard taxpayers’ refunds
this is done in Revenue Online all the information from the
processing. on how and when they file their provide them with an updated and the integrity of Colorado’s
or on paper. If a paper DR original return; there is no
Make sure you use the need to re-enter everything. return. Electronic filers whose status as their refund moves finances. For more informa-
0104X is filed, do not re-
submit the original Colorado appropriate DR 0104X version If you do not have access returns are “correct and com- through our system. It may tion, visit Colorado.gov/tax/
Form 104. This will only for the year you are amending to the internet and cannot plete” can expect their refunds take a few days for an updated tax-fraud-prevention.
complicate and delay return because the DR 0104X is year amend online, you may file a in about seven to fourteen status to appear. Please check
16 • Best Practices Guide Best Practices Guide • 17
Voluntary Contributions
You can donate to a qualified 4. If you cannot find the the beginning of any entry
organization with your Colorado charity you are looking in the fields. Your search
income tax return by entering for, the Advanced Search may not produce any
their ID on the Voluntary Contri- may help. Click Advanced results.
butions Schedule (DR 0104CH) of Search under the “Search” • Search results are listed
your Colorado Individual Income button. Enter specified in- up to 10 registration IDs
Tax Return. There are two ways formation to narrow down for on each page.
to look up the information you the search results. • Using the page numbers at
will need to enter on your DR 5. Once you find the charity the bottom of the page, STOPPING FRAUD
0104CH form: the Charity Look- you wish to donate to, navigate to a different
up Tool and the List of Qualified enter their 11-digit Regis- page.
Non-Profits/Charities. tration Number on the DR • Download Records button
Thousands of taxpayers have lost personal TARGETING TAX PROS
information and millions of dollars to tax scams.
0104CH. If using a printed located at the top of the
Criminals use the regular mail, telephone or email The IRS and Security Summit partners warn tax
HOW TO USE THE TOOL form, enter the 11-digit screen on the right side is to set up individuals, businesses, payroll and tax practitioners to beware of phishing emails posing
1. Go to Colorado.gov/Tax/ Registration Number and able to export your search professionals. The Colorado Department of Revenue as state accounting and professional associations
CO-Non-Profit-Number the charity’s name as it criteria results. shares the following messages on behalf of the IRS. that are trying to trick them into disclosing their
2. Enter the full or part of appears in the Charity • In Advanced Search, The Colorado Department of Revenue partners with email usernames and passwords.
the charity’s name in the Lookup Tool in the boxes Name, Activity, City, Coun- the IRS, other state revenue departments and tax Only a few days into last year’s filing season,
Search Box. It is not case- under line 19. ty, State and Zip code can professionals to combat refund fraud. the IRS has identified a new scam that began with
sensitive. be searched alone or to- cybercriminals stealing data from several tax
3. Enter the Tax Year you are TIPS FOR SEARCHING gether in any combination practitioners’ computers and filing fraudulent tax
filing for. • Do not leave a space at returns.
18 • Best Practices Guide Best Practices Guide • 19the software automatical- a ransom to restore access. It or network. Be wary of granting
ly. can be included in a software or unknown callers access to your
• Use the security options document download. But it can computer. Additionally, ensure
that come with your tax
preparation software. also be embedded in videos and your real tech support team
• Send suspicious tax-re- images. members end their sessions
lated phishing emails to when they remote into your
phishing@irs.gov.
computer, so that access point is
WHAT ARE REMOTE not left open to hackers.
WHAT IS SPEAR PHISHING?
ACCESS TAKEOVERS?
WHAT ARE
Spear Phishing is a common A remote access takeover is ACCOUNT TAKEOVERS?
email scam. Criminals, posing as when a hacker uses a network or
a trusted source, send an offi- computer vulnerability to ac- A hacker gains access to
cial looking email that asks the cess devices on the network. It your account and then takes it
receiver to open an attachment differs from ransomware in that over. These can originate from
or disclose personally identifi- you may still be able to use your phishing attempts. But they can
able information. computer while the hacker has also stem from vulnerabilities
access. in your computer, your network
WHAT IS RANSOMWARE? or the account itself. Be sure
Recently, this has been cou- to keep your network security
Ransomware is a computer vi- pled with a phone scam where settings up-to-date, regularly
rus, worm or other malware that the caller claims to be from tech update your software, and log
locks the user out of their com- support and asks you to allow out of accounts when not in
puter or network, then demands them access to your computer use.
In a new twist, the fraudu- steal client data. a pasword phrase. Use
lent returns in a few cases used Thieves know it is more diffi- different passwords for
the taxpayers’ real bank ac- cult to identify and halt fraud- each account. Use a mix
of letters, numbers and
counts for the deposit. A per- ulent tax returns when they special characters.
son posing as a debt collection are using real client data such • Never assume that a
agency official then contacted as income, dependents, cred- seemingly familiar email
address is a valid send-
the taxpayers to say a refund its and deductions. Generally, er. Ensure that the email
was deposited in error and criminals find alternative ways address exactly matches
asked the taxpayers to forward to get the fraudulent refunds prior correspondence.
the money to the fake collec- delivered to themselves rather • If an email contains a link,
hover your cursor over
tion agency. than the real taxpayers. the link to see the web
address (URL) destination.
This scheme is likely just the CYBER SECURITY TIPS If it’s not a URL you recog-
first of many that will be iden- nize or if it’s an abbrevi-
ated URL, don’t open it.
tified this year as the IRS, state Tax professionals are urged • Consider a verbal
tax agencies and tax industry to seek cybersecurity experts to confirmation by phone
continue to fight back against if you receive an email
help better secure their data. from a new client sending
tax-related identity thieves.
you tax information or
Because the federal, state and Here are some basic steps: a client requesting last-
local authorities have made in- • Educate all employees minute changes to their
roads combating identity theft, about phishing in gener- refund destination.
cybercriminals have evolved al and spear phishing in • Use security software to
particular. help defend against mal-
their tactics to focus on tax • Use strong, unique pass- ware, viruses and known
professionals where they can words. Better yet, use phishing sites and update
20 • Best Practices Guide Best Practices Guide • 21WHAT IS THE W-2 SCAM? HOW CAN I PROTECT
MY E-SERVICES ACCOUNTS
W-2 scams are sent commonly AND EFINS?
via email to payroll, financial or
human resource employees by Cybercriminals send spear
cybercriminals. They impersonate phishing emails to trick tax
an executive email address claim- preparers into releasing user-
ing to be from the company. The name and password credentials
email will request W-2 informa- for e-Services accounts. Once
tion. thieves have this information,
they can log into these accounts
How the scam works: and steal the Electronic Filing
Identification Number (EFIN) to
• These emails appear to be file fraudulent tax returns.
from an executive or orga-
nization leader to a payroll
or human resources em- • Keep accounts up-to-
ployee. date.
• The message usually starts • Check on the EFIN’s
with a simple greeting, status to ensure it is not
like: “Hey, you in today?” being used by others.
• By the end of the email • Compare your records
exchange, all of an organi- with the number of re-
zation’s Forms W-2 for their turns the IRS received
employees may be in the through your e-Services
hands of cybercriminals. account.
• Because payroll officials be- • Recognize and avoid
lieve they are correspond- phishing scams that claim
ing with an executive, it to be from the IRS or
may take weeks for some- e-Services.
one to realize a data theft
has occurred.
• Generally, the criminals
are trying to quickly take
advantage of their theft,
sometimes filing fraudulent
tax returns within a day or
two.
22 • Best Practices Guide Best Practices Guide • 23WALK-IN ASSISTANCE
Forms, information and in-person assistance are available
8 a.m. to 4:30 p.m., Monday through Friday. Visit Colorado.
gov/Tax/locations-service-centers for updates on dates of
operation before planning a visit.
Colorado Springs — 2447 North Union Blvd.
Denver — 1375 Sherman St.
Fort Collins — 3030 S. College Ave.
Grand Junction — 222 S. 6th St., Room 208
Pueblo — 827 W. 4th St., Suite A
Note: All payments must be paid by
check or money order. If a taxpayer
wishes to pay by cash, they may
do so at 1881 Pierce St. in Lake-
wood. However, taxpayer
assistance is not available
at the Pierce location.
TAX PRO
RESOURCES
TAX PRACTITIONERS’
HELPLINE
The Department has a Tax
Practitioners’ Helpline, which
is reserved for tax professionals.
This line receives priority attention.
Tax Examiners are available 8 a.m. to
4:30 p.m., Monday through Friday, except
state holidays. After hours, tax professionals
may leave a message. Calls are returned the
next business day.
Email DOR_TaxInfoEmail@state.co.us to request
the phone number. Please do not provide this tele-
phone number to your clients. This line is a service for tax
professionals only.
ONLINE
• Website: Colorado.gov/Tax
• Revenue Online: Colorado.gov/RevenueOnline
• Revenue Online Assistance Videos: Youtube.com/corevenueonline
• Guidance Publications: Colorado.gov/Tax/fyi-publication-categories
• Training & Education: Colorado.gov/Tax/Education
• Email Subscription Sign Up: Colorado.gov/Tax/EmailSignUp
24 • Best Practices Guide Best Practices Guide • 25BUSINESS TAX CLASSES
SCHEDULING
This free class is for Colorado businesses and business tax
professionals. It covers information on sales tax, special tax,
special events, consumer use tax, wage withholding, licens-
DIRECT DEBIT
ing and filing tax returns. Registration must be completed
prior to the scheduled class date. Visit Colorado.gov/Tax/ PAYMENTS TIPS
business-tax-class to enroll online.
IMPORTANT DUE DATES This class is offered monthly at the following service cen-
ters:
Do not close or change the bank
account until the payment is
If a due date falls on a weekend or holiday, INCOME TAX • Colorado Springs — 2447 N. Union Blvd. withdrawn from the account
• Denver — 1375 Sherman St. requested on the Direct Debit.
the due date is the next business day. EXTENSION DUE DATE
• Fort Collins — 3030 S. College Ave.
• Grand Junction — 222 S. 6th St., Room 208 Keep enough funds in the bank
ESTIMATED PAYMENTS Oct. 15 account to cover the authorized
• Pueblo — 827 W. 4th St., Suite A amount until the payment is
April 15 (1st Quarter) ANNUAL RECONCILIATION withdrawn.
June 15 (2nd Quarter)
Verify the amount and the dates the
Sept. 15 (3rd Quarter) Jan. 31 payments will be debited directly.
Jan. 15 (4th Quarter)
CREDITS Do not make duplicate payments in
INCOME TAX RETURN place of the direct debit payments
AND RETURN OR EXTENSION PAYMENT -- extra payments will not cancel or
For credits in which the availability is depen- alter the scheduled transaction.
dent upon statutory thresholds, please visit the
April 15 reports and notifications section at Colorado.gov/ The authorized amount will be
tax/income-tax-credits for additional information. withdrawn regardless of the actual
amount due on the tax account.
The payment will not be withdrawn
26 • Best Practices Guide until the return Best
posts with the
Practices Guide • 27
state.Always
Help.
28 • Best Practices Guide
2 0 1 9 B e s t P r a c t i c e s G u i d e • D e p a r t m e n t o f R e v e n u e Ta x a t i o nYou can also read
