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Main Street Practitioner Blog Community Blog

The IRS recently released a Memo regarding a Change in Policy on Initial Taxpayer Contact in Examination Cases. Effective immediately, all initial contacts must be made my mail , instead of telephone, using the appropriate initial contact letters. In the memo, the IRS recognized that although making initial contact by phone to schedule an appointment during examination operations has been a long-standing policy, they are ultimately changing their practice in response to the continuing threat of phone scams, phishing and identity theft. Employees will use the appropriate contact letters listed in the Internal Revenue Manual to notify a taxpayer when a return is selected for examination, and will not make initial contact by telephone. When a valid form 2848, Power of Attorney and Declaration of Representative , or Form 8821, Tax Information Authorization , is on file, an appropriate initial contact letter will be mailed to the taxpayer, with a copy mailed...
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The IRS will conduct its annual Memorial Day systems maintenance outage beginning Saturday, May 28, 2016 at 11:59 a.m. EDT and ending on Tuesday, May 31, 2016 at 6:00 a.m. EDT. E-Services’ Transcript Delivery System, TIN Matching and e-file Application will not be available during this period.
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The National Society of Accountants (NSA) is offering a two-day Gear Up 1040 Individual Tax Seminar November 10-11, 2016 at the Mohegan Sun Casino and Resort in Uncasville, CT. This industry-leading course attracts thousands of tax preparers each year who receive a comprehensive manual that alone is worth the price of registration. Gear Up's speakers are experts in their fields as hands-on practitioners and recognized authorities. This comprehensive course covers key tax issues for completing complicated individual returns. All topics include coverage of new legislation and extenders, revenue rulings and procedures, as well as case law to help the busy practitioner keep current. Speakers are all practicing preparers who will share practical tips and insights to help tax and accounting professionals get ready for tax season. Topics include: Health care coverage and additional guidance expected in 2016 Coverage of the Mortgage Relief Act of 2015 Full...
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The IRS has issued a series of automatic changes in accounting methods and accounting periods affecting a broad number of industries. In Revenue Procedure 2016-29, released on May 5, the IRS provided an updated, consolidated list of the types of changes in methods of accounting for which taxpayers can get automatic consent. Under the list of automatic changes, the agency addressed a number of areas including gross income under tax code Section 61, trade or business expenses under Section 162 and research and development expenditures under Section 174. In the area of depreciation or amortization, the list included accounting for: Sale, lease, or financing transactions Tenant construction allowances; Depreciation of leasehold improvements; and Dispositions of tangible depreciable assets. The revenue procedure is scheduled to be published May 23 in Internal Revenue Bulletin 2016-21 and is also available here .
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The National Society of Accountants (NSA) today called on the Internal Revenue Service (IRS) to make sweeping improvements to its outdated technology and use this new technology to facilitate more efficient and productive personal contact with taxpayers. The comments were delivered by NSA Executive Vice President John Ams, at a Public Forum on Taxpayer and Stakeholder Needs and Preferences held by the IRS National Taxpayer Advocate. Ams and other panelists offered testimony in response to the Taxpayer Advocate’s 2015 Annual Report, which identified future needs such as making its operations more agile and efficient, strengthening cyber defense to prevent identity theft and refund fraud, using data analytics, and developing approaches to deter non-compliant taxpayer behavior. IRS Commissioner John Koskinen has proposed technology that would create taxpayer accounts at the IRS “where they, or their preparers, could log in securely, get all the information about their account,...
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Let’s start with what doesn’t work: clients late for meetings, phone tag, and e-mail hell. If your primary communications methods are: meetings, phone calls, and e-mail, you’re losing out on a lot of money and a saner life. 21st century clients want all the same things 20th century clients wanted, just in new ways. They still want great service at reasonable prices with insightful financial and business advice. They just want all of that provided differently. Communications preferences of 20th century clients Having an accountant was viewed as a sign of affluence. Meetings are at least an annual event. “When you have something to say to a man, look him in the eyes. The telephone is for cowards.” 1960’s and 1970’s Which evolved into “Pick up the phone when you have something to say. E-mail is for cowards.” 1980’s and 1990’s Our services revolved around meetings and we even prescheduled tax season meetings. Clients got their advice from neighbors....
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Registration deadline is June 1, 2016 Registration for the Accreditation Council for Accountancy and Taxation® (ACAT) exam to obtain ACAT Accredited Business Accountant/Advisor, Accredited Tax Preparer and Accredited Tax Advisor credentials is now open and the Spring/Summer exam testing window is June 10-July 30, 2016. The registration deadline is June 1, 2016. Accredited Tax Preparers (ATP) and Accredited Business Accountant/Advisors (ABA) are exempt from taking the Annual Federal Tax Refresher (AFTR) course and exam that is part of the new Internal Revenue Service (IRS) voluntary Annual Filing Season Program (AFSP) and automatically qualify for the IRS Annual Filing Season Program Record of Completion. ATPs and ABAs who are Annual Filing Season Program (AFSP) Record of Completion Holders are included in the IRS public directory of tax return preparers and have limited representation rights, meaning they can represent clients whose returns they prepared and signed, but...
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Now that the enrollment renewal cycle has finished, the IRS will begin their annual clean-up for the following starting next week: Those who have SSNs ending in 0, 1, 2, or 3 and did not renew. Those who did not renew during the 2016 cycle will be moved to inactive status. (5,000+) Those who did not renew during the 2013 and 2016 cycles will be moved to terminated status. (2,000+) Letters will be sent to all advising them of this action. Anyone in inactive status can still submit a late renewal for approval. Anyone in terminated status must re-take the SEE to apply for re-enrollment. If an EA disagrees and has a record of previously renewing their EA status, they should contact the number on the letter for the Office of Enrollment : 855-472-5540.
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National Taxpayer Advocate Nina E. Olson will hold a public forum on taxpayer service on Tuesday, May 17, at 10:00 AM at the IRS Headquarters Building in Washington, DC. Building on initiatives already implemented, the IRS for the past two years has been developing a “Future State” plan that envisions how it will operate in five years and beyond. It is continuing to develop a path for how it gets from its “Current State” to the “Future State,” including refinements to the vision along the way. A central component of the plan is the creation of online taxpayer accounts as a convenient but non-exclusive channel through which taxpayers will be able to obtain information from and interact with the IRS. Ms. Olson expressed concerns about whether the IRS’s “Future State” plan adequately addresses taxpayer needs. She recommended the IRS solicit comments from taxpayers and tax professionals regarding the “Future State” plan, including their thoughts on the extent to which taxpayers...
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The Final Tangible Property Repair Regulations are in full effect, yet many taxpayers are not in compliance or are missing opportunities to take full advantage of these new rules. The Tangible Property Regulations allow several new elections that reduce tax and simplify compliance. Knowing when an expenditure can be immediately deducted as a repair and maintenance expense versus capitalized and depreciated can greatly accelerate the timing of deductions. Also several new planning opportunities under the recently enacted PATH Act allow for significant tax savings including: Opportunities under the PATH Act: Bonus Deprecation and 179 Expensing Protecting Americans from Tax Hikes (PATH) Act of 2015 retroactively reinstates for 2015 tax extenders that expired at the end of 2014, many provisions permanently renewed. 50% Bonus Depreciation provisions would be extended through the end of 2017 and phases down to 40% in 2018 and 30% in 2019. ...
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National Taxpayer Advocate Nina E. Olson will hold a public forum on taxpayer service on Tuesday, May 17, at 10:00 AM at the IRS Headquarters Building in Washington, DC. Members of the public and the media may attend by following the procedures described below. Building on initiatives already implemented, the IRS for the past two years has been developing a “Future State” plan that envisions how it will operate in five years and beyond. It is continuing to develop a path for how it gets from its “Current State” to the “Future State,” including refinements to the vision along the way. A central component of the plan is the creation of online taxpayer accounts as a convenient but non-exclusive channel through which taxpayers will be able to obtain information from and interact with the IRS. In the National Taxpayer Advocate’s 2015 Annual Report to Congress , Ms. Olson expressed concerns about whether the IRS’s “Future State” plan adequately addresses taxpayer needs. She recommended...
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The National Society of Accountants' (NSA) series of four webinars to help accounting and tax professionals prepare for and pass the Enrolled Agent (EA) exam begins this month. One of the speakers for this NSA webinar series, John O. Everett, CPA, Ph.D., Professor Emeritus of Accounting at Virginia Commonwealth University, also teaches NSA’s intensive three-day live EA Exam Review Course (in Tampa this August) and is the author of NSA’s acclaimed EA Review Self-Study Course. Each of these webinars cover 10 of the most-tested topics in each part of the EA exam: EA Part 1: Individuals on May 18, 2016 from 2:00-4:00 p.m. EDT EA Part 2: Businesses on May 25 from 1:00-4:00 p.m. EDT and June 15 from 1:00-4:00 p.m. (two different webinars cover the content in Part 2) EA Part 3: Representation, Practice and Procedures on June 22 from 2:00-4:00 p.m. Sample questions for each topic are interspersed within each webinar and will be worked on and explained. Test-taking...
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Tax and accounting professionals are always looking for ways to grow their firms. So the National Society of Accountants (NSA) has launched a series of three free webinars designed to do just that. The webinars will show how to focus on key “levers” in accounting practices that will provide a strong payoff in revenue compared to the amount of effort needed to make them happen. The lineup of webinars includes: The Key to Generating Post Tax Season Revenue Tuesday, June 14, 2016; 2:00-3:00 p.m. EDT Double Your Fees Thursday, July 7, 2016; 2:00-3:00 p.m. EDT Client Obedience Training Tuesday, July 19, 2016; 2:00-3:00 p.m. EDT Some of the specific benefits provided by these webinars include: How to successfully transition out of “tax season" so you can have the “post-season" workload you really want. Step-by-step plans and tools for how to generate significant revenue during the post-season months. How to effectively raise...
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The National Society of Accountants (NSA) 71st Annual Convention and Expo will be held August 17-20, 2016 at the Grand Hyatt Tampa Bay in Tampa, FL. The meeting theme is “AMP IT UP,” and it will draw accountants and tax professionals from across North America. Courses at the convention offer continuing professional education (CPE) and networking opportunities that will help attendees ramp up their marketing, customer service, and growth strategies; reduce risk; save time and money; and amp up profits and the value of their businesses. Two full days of top-notch CPE featuring the industry's best thought leaders and influencers include SSARS 21, accounting, innovative marketing strategies, positioning your practice for growth, social media, retirement, ethics, due diligence, estate planning and more. Speakers and courses include: Karen Hawkins, the former director of the IRS Office of Professional Responsibility, speaking on “Ethics in the Eye of the Beholder: What Conduct...
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The National Society of Accountants (NSA) is offering an intensive NSA Enrolled Agent (EA) Exam Review Course & Accredited Tax Preparer (ATP) Review Course/Exam August 15-17, 2016, at the Grand Hyatt Tampa Bay in Tampa, FL, immediately before the NSA Annual Convention and Expo at that same location. This live review course is designed to give tax professionals the best opportunity to pass the EA exam on the first try, the 3-day course provides in-depth review of all the key components of the exam. Enrolled Agents are authorized to represent taxpayers before the IRS and tax professionals who hold the EA credential can command higher fees. They must pass a three-part IRS exam covering individual and business tax returns, adhere to ethical standards, and complete 72 hours of continuing education courses every three years. The ATP, offered by the Accreditation Council for Accountancy and Taxation (ACAT), is also a leading national credential for tax practitioners who have a...
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The Senate Finance Committee on Wednesday, April 20, approved two bills that would require the IRS to increase security measures and enforce new policies, but rejected a provision to regulate tax return preparers. The so-called Prevent Identity Theft and Tax Refund Fraud Act would reinstate the Internal Revenue Service's streamlined critical pay authority, which allows the agency to hire cybersecurity employees at a higher pay grade and on expedited timetables. IRS Commissioner John Koskinen has said this is one of his top requests of lawmakers. Among other things, the Act would also: Expand the identity protection personal identification number (IP-PIN) system to all taxpayers. Make it a felony for a person to use a stolen identity to file a return or other document. Increase reporting from the IRS to oversight groups about ID theft. Require the IRS to notify a taxpayer when someone else has filed a return using his or...
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The percentage of callers with a tax issue who will receive live assistance is expected to increase to 47 percent for fiscal year 2016, from 38 percent in FY 2015, the Government Accountability Office said in a new report. Furthermore, during the current tax filing season, the IRS predicts the level of service will be 65 percent for those calling with questions. The GAO Report, "Internal Revenue Service: Preliminary Observations on the Fiscal Year 2017 Budget Request and 2016 Filing Season Performance," was released April 7. Unsurprisingly, the report states that the service-level improvements are due, in part, to additional funding. The agency's FY 2016 appropriation was $11.2 billion, an increase of $290 million from the FY 2015 level, but still $900 million lower than in FY 2011. The GAO noted in the report that the IRS directed the additional funding to taxpayer services, enforcement and operations support. Text of GAO's report is here .
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IRS Scam Alert

In advance of the tax deadline, the Internal Revenue Service today warned tax professionals of a new emerging scam in which cybercriminals obtain remote control of preparers’ computer systems, complete and file client tax returns and redirect refunds to thieves’ accounts. Although the IRS knows of a handful of cases to date, this scam has potential to impact the filing of fraudulent returns in advance of the April tax deadline and is yet another example of tax professionals being targeted by identity theft criminals. The IRS urges all tax preparers to take the following steps: Run a security “deep scan” to search for viruses and malware; Strengthen passwords for both computer access and software access; make sure your password is a minimum of 8 digits (more is better) with a mix of numbers, letters and special characters; Be alert for phishing scams: do not click on links or open attachments from unknown senders; Educate all staff members about the...
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All agreed at the Senate Finance Committee’s (SFC’s) cybersecurity hearing on April 12 that taxpayers are becoming more vulnerable to increasingly sophisticated criminal tactics designed to steal personal identity information. "Taxpayers have been failed by the agencies, the companies, and the policymakers here in Congress they rely on to protect them," ranking member Ron Wyden, D-Ore., stated in his remarks aimed at sharing blame among all stakeholders. Nevertheless, the majority of testimony focused on IRS shortcomings. IRS Commissioner John Koskinen's testimony revealed that securing taxpayer data is a top priority at the IRS, but that the Service faces challenges in dealing with a type of criminal activity that is consistently evolving. Koskinen pointed to the efforts made by the IRS in increasing cybersecurity, singling out the formation of the Security Summit group. That group has been operating as a partnership with the IRS, state tax officials and the electronic tax and...
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The Internal Revenue Service released the 2015 IRS Data Book today, a snapshot of agency activities for the fiscal year. The 2015 Data Book describes activities conducted by the IRS from Oct. 1, 2014, to Sept. 30, 2015 and includes information about returns filed, taxes collected, enforcement, taxpayer assistance and the IRS budget and workforce, among others. This edition also contains charts that show trends, such as the decline in the number of audits and the reduction in telephone and in-person tax assistance, but increases in the use of online resources and volunteer tax assistance. During fiscal year 2015, the IRS collected more than $3.3 trillion, processed more than 243 million tax returns and other forms, and issued more than $403 billion in tax refunds. The agency’s website continued to get heavy use with more than 493 million visits to IRS.gov in FY 2015, and one of its most popular online tools, Where’s My Refund, handled a record-breaking 234 million inquiries, a...
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