Public Announcements

 

NEW INFORMATION ON DIRECT PAY AND EFTPS

As you know, the IRS provides a number of electronic payment options to help taxpayers meet their tax obligations. A new enhancement allows taxpayers to sign up for email notifications when using IRS Direct Pay or EFTPS to pay their taxes. This new email feature allows taxpayers to receive notifications about their payments in their personal email accounts.

The IRS made this feature available in response to taxpayer survey feedback. Before adding this option, the only way taxpayers could keep a record of their confirmation was to write it down or print their screen.

Once taxpayers sign up, they'll receive notification messages that show:

·  payment scheduled,

·  payment cancellation,

·  return of a payment,

·  reminder for a scheduled payment,

·  payment modified and

·  address change confirmation.

EFTPS users can opt-in to receive email notifications when they enroll or update their enrollment. Direct Pay users can opt to receive email notifications each time they make a payment. To better protect taxpayers, there are no web links within the email notifications.

The IRS continues to remind taxpayers to watch out for email schemes. Taxpayers will only receive an email from IRS Direct Pay or EFTPS if they've requested the service. Taxpayers should report all unsolicited email claiming to be from the IRS or an IRS-related function to phishing@irs.gov.

For more information about tax payments visit IRS.gov/payments.


 

The IRS has issued final regulations which increase the IRS user fee to $81 for taking the Special Enrollment Examination to become an Enrolled Agent; copy attached. 

Here is a summary of the total fee amounts: 

·         Current fee (effective for tests taken beginning 5/1/17) for taking each part of SEE is $111.94.

Comprised of $11 for IRS and $100.94 for vendor. 

·         Effective for tests taken beginning 5/1/18 the total fee will be $181.94.

Comprised of $81 for IRS and $100.94 for vendor. 

·         Effective for tests taken beginning 5/1/19 the total fee will be $184.97.

Comprised of $81 for IRS and $103.97 for vendor. 

Note: Encouraging non-credentialed tax return preparers to take the SEE and become Enrolled Agents is a key message for RPO. RPO recently created a new brochure for this promotion. Pub. 5279, Your Pathway to Becoming an Enrolled Agent Starts Here, is available on IRS.gov. 

Plus, we still have Pub. 4693-A, Guide to the Enrolled Agent Program. 

If anyone has questions, feel free to contact me. 

Thanks!

Marc J. Zine

Senior Stakehold Liaison - IRS 

Tax Professional & Industry Organizations 
Phone 916-974-5281
Fax 877-477-8639
Marczine@irs.gov

 

 

 

IRS Recaps

IRS Recaps “Dirty Dozen” List of Tax Scams for 2017

Each year, the Internal Revenue Service issues a list of the top 12 tax-related scams it sees throughout the year. The IRS “Dirty Dozen” highlights various schemes that taxpayers may encounter anytime, many of which peak during tax-filing season.

Taxpayers need to guard against ploys that steal their personal information, scam them out of money or talk them into engaging in questionable behavior with their taxes.

Here is a recap of this year's "Dirty Dozen" scams:

Phishing: Taxpayers need to be on guard against fake emails or websites looking to steal personal information. The IRS will never initiate contact with taxpayers via email about a tax bill or refund. Don’t click on emails or fake websites claiming to be from the IRS. They may be nothing more than scams to steal personal information. (IR-2017-15)

Phone Scams: Phone calls from criminals impersonating IRS agents remain an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent years as con artists threaten taxpayers with police arrest, deportation and license revocation, among other things. (IR-2017-19)

Identity Theft: Taxpayers need to watch out for identity theft, especially around tax time. The IRS aggressively pursues criminals that file fraudulent returns using someone else’s Social Security number Though the agency is making progress on this front, taxpayers still need to be extremely cautious and do everything they can to avoid becoming victimized. (IR-2017-22)

Return Preparer Fraud: Be on the lookout for unscrupulous return preparers. The vast majority of tax professionals provide honest high-quality service. There are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers. (IR-2017-23)

Fake Charities: Be on guard against groups masquerading as charitable organizations to attract donations from unsuspecting contributors. Look out for charities with names similar to familiar or nationally-known organizations. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate and currently eligible charities. IRS.gov has the tools taxpayers need to check out the status of charitable organizations. (IR-2017-25)

Inflated Refund Claims: Taxpayers should be cautious of anyone promising inflated refunds. Avoid preparers who ask taxpayers to sign a blank return, promise a big refund before looking at any records or charge fees based on a percentage of the refund. Fraudsters use flyers, advertisements, phony storefronts and word of mouth via community groups where trust is high to find their victims. (IR-2017-26)

Excessive Claims for Business Credits: Avoid improperly claiming the fuel tax credit. This tax benefit is generally not available to most taxpayers. The credit is usually limited to off-highway business use, including use in farming. Taxpayers should also avoid misuse of the research credit. Improper claims often involve failures to participate in or substantiate qualified research activities and satisfy the requirements related to qualified research expenses. (IR-2017-27)

Falsely Padding Deductions on Returns: Taxpayers should avoid the temptation to falsify deductions or expenses on their tax returns in order to pay less than they owe or  receive larger refunds. Think twice before overstating deductions such as charitable contributions and business expenses or improperly claiming credits such as the Earned Income Tax Credit or Child Tax Credit. (IR-2017-28)

Falsifying Income to Claim Credits: Don’t invent income to erroneously qualify for tax credits, such as the Earned Income Tax Credit. Taxpayers should file the most accurate return possible because they are legally responsible for what is on their return. Claiming false income can lead to taxpayers facing large bills to pay back taxes, interest and penalties. In some cases, they may even face criminal prosecution. (IR-2017-29)

Abusive Tax Shelters: Don’t use abusive tax structures to avoid paying taxes. The IRS is committed to stopping complex tax avoidance schemes and the people who create and sell them. The vast majority of taxpayers pay their fair share, and everyone should be on the lookout for people peddling tax shelters that sound too good to be true. When in doubt, seek an independent opinion if offered complex products. (IR-2017-31)

Frivolous Tax Arguments: Don’t use frivolous tax arguments to avoid paying tax. Promoters of such schemes encourage taxpayers to make unreasonable and outlandish claims, even though they have been repeatedly thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or disregard their responsibility to pay taxes. The penalty for filing a frivolous tax return is $5,000. (IR-2017-33)

Offshore Tax Avoidance: The recent string of successful enforcement actions against offshore tax cheats -- and the financial organizations that help them -- show that it’s a bad bet to hide money and income offshore. Taxpayers are best served by coming in voluntarily and taking care of their tax-filing responsibilities. The IRS offers the Offshore Voluntary Disclosure Program to enable people to catch up on their filing and tax obligations. (IR-2017-35)

 

IRS Protect Your Clients, Protect Yourself Tax Tip Number 2 Safeguarding Taxpayer Data

How serious is this threat? Here are a few examples of criminal scams and schemes intent on stealing your information from just the past few months:

  • In April and August of 2016, the IRS sent emergency alerts to tax professionals about criminals using remote access technology to gain control of preparers’ computers. The criminals used the preparers’ systems to complete client tax returns, file them with the IRS and then direct the refunds to their personal bank accounts. How the criminals gained control of preparers’ computers is under investigation. However, the incident shows the value of strong passwords, not only to access computers and each client file but also to password-protected wireless systems.

  • One successful scheme aimed at payroll professionals could easily have migrated to tax preparers. A criminal created a “spoofing” email to appear as though it came from a company executive. The email requested Form W-2 information for each employee. Because of this scam, tens of thousands of Forms W-2 were sent to identity thieves.

  • One ruse tries to make tax preparers think a client is emailing with follow-up information from a previous discussion. The included attachment doesn’t contain tax information; it contains malware designed to infect computers. The conversational tone of the phishing email tries to trick the preparer into thinking he had an earlier conversation with this client and now the ‘client’ is following up with requested tax information.

  • Cybercriminals often pose as the IRS and request information that the IRS would never ask for via email or text. One popular scam tries to trick preparers into providing their password information for IRS e-Services accounts. The email to tax preparers asks them to update their e-Services accounts. It either infects the preparers’ computers with malware that tracks keystrokes or it sends preparers to a fake e-Services page where they enter password information. If you are in doubt about an e-services or IRS Quick Alert communication, go directly to the application through IRS.gov. Do not click on any link or attachment from a suspicious email.

Scams aimed at tax preparers evolve each year. Tax professionals must be aware that any email can be a possible ploy from a clever criminal. This is just a sampling of scams. See Publication 4557, Safeguarding Taxpayer Data, for steps to protect your client and protect your business.

This is one in a series of special security awareness tax tips for tax professionals. The IRS and its Security Summit partners launched the “Protect Your Clients; Protect Yourself” campaign to raise awareness among tax professionals about the threats posed by cybercriminals.

The Security Summit is a joint project by the IRS, state tax agencies and the tax community to combat identity theft. Also see, “Taxes.Security.Together.” for information directed to taxpayers.

 

e-Services Users

 

Important Update for e-Services Users

The IRS is committed to protecting taxpayer and tax preparer information and maintaining the security of its systems.  As part of that effort, the IRS is strengthening the identity validating process used to access certain self-help tools on IRS.gov.

Starting late October – October 24 is the target date – e-services users will be required to re-register using the Secure Access authentication process. Users must validate their identities through this process before they can access their accounts.

All e-services users will be affected by this change. Those who use e-services for TIN Matching only also must re-register. However, because there is no exchange of sensitive data, TIN Matching will use a more streamlined process. 

For details, please see: Important Update for Your e-services Account.

Secure Access is a two-factor authentication process that meets government standards and adds greater protections against attacks by cybercriminals.  This is a more rigorous process, and part of a wider effort to protect taxpayers and the tax community. For first-time users, it requires identity proofing, financial verification and an activation code text.  Returning users must submit their username/password credentials AND a security code text.

Starting October 24, the IRS also will provide additional staff for the e-Help Desk and provide assistance to those users who are having difficulty passing Secure Access. This assistance may include identity authentication by phone and an activation code by mail which will take five to 10 calendar days for delivery.

The same Secure Access authentication process currently supports Get Transcript Online. E-services users who created a Get Transcript account after June 2016 will have their Secure Access registration automatically migrate to e-services, but they will need to change their passwords on October 24.

It helps to be prepared. Please review Secure Access: How to Register for Certain Online Self-Help Tools to learn what you need to register successfully.

Users should ensure all credentials and certificates are up-to-date prior to October 24. Those with upcoming filing requirements should consider filing early.

 

 

New IRS Revenue Procedure 2016-47

IRS just released Revenue Procedure 2016-47, Waiver of 60-Day Rollover Requirement.  This provides for possible waiver of taxes and penalties for taxpayers who miss the 60-day time limit for rolling over their retirement plan distributions into another qualified account, assuming that certain eligibility criteria are met as specified in the procedure.  In some cases, this will allow taxpayers to avoid the expensive and time consuming process of obtaining a waiver by requesting a private letter ruling, as specified in  Rev. Proc. 2016-8.

 Here’s a link to the new Rev Proc:  https://www.irs.gov/pub/irs-drop/rp-16-47.pdf.

 

 

IRS TAX TIP - HERE'S WHAT YOU NEED TO DO WITH YOUR FORM 1095-A

Here’s What You Need to Do with Your Form 1095-A

This year, you may receive one or more forms that provide information about your 2015 health coverage.  These forms are 1095-A, 1095-B and 1095-C. This tip is part of a series that answers your questions about these forms.

Form 1095-A, Health Insurance Marketplace Statement, provides you with information about your health care coverage if you or someone in your family enrolled in coverage through the Health Insurance Marketplace.

Here are the answers to questions you’re asking about Form 1095-A:

Will I get a Form 1095-A?

  • The Marketplace will send you a Form 1095-A if you, your spouse or a dependent enrolled in coverage for 2015. Most individuals did not enroll in Marketplace coverage and will not receive this form.
  • The Marketplace may send you more than one Form 1095-A if any of these apply:
    • Members of your household were not all enrolled in the same health plan
    • You updated your family information during the year
    • You switched plans during the year
    • You had family members enrolled in different states
  • The Form 1095-A is not new, but some people may receive it for the first time this year.

How do I use the information on my Form 1095-A?

  • This form provides information about your Marketplace coverage, including the names of covered individuals and which months they were covered last year.  
  • Use the information from Form 1095-A to complete Form 8962, Premium Tax Credit, and reconcile advance payments of the premium tax credit or – if you are eligible – to claim the premium tax credit on your tax return.
  • If you received advance payments, which are shown on lines 21-33 of Form 1095-A, you must file a tax return, and include Form 8962, even if you are not otherwise required to file a return.  Filing your return without reconciling your advance payments will delay your refund and may affect future advance credit payments.
  • If Form 1095-A, Part II shows coverage for you and everyone in your family for the entire year, you can simply check the full-year coverage box on your tax return to satisfy the individual shared responsibility provision.
  • If there were months that you did not have coverage, you should determine if you qualify for an exemption from the requirement to have coverage. If not, you must make an individual shared responsibility payment.
  • Do not attach Form 1095-A to your tax return - keep it with your tax records.

What if I don’t get my Form 1095-A?

  • If you are expecting to receive a Form 1095-A, you should wait to file your 2015 income tax return until you receive this form.  Filing before you receive this form may delay your refund.
  • The IRS does not issue and cannot provide you with your Form 1095-A. If you are expecting a form and do not get one, you should contact your Marketplace. Visit your Marketplace’s website to find out the steps you need to follow to get a copy of your Form 1095-A online.
  • You can find more information about your Form 1095-A from the Health Insurance Marketplace.

Depending upon your circumstances, you might also receive Forms 1095-B and 1095-C. For information on these forms, see our Questions and Answers about Health Care Information Forms for Individuals. 

 

REPORTING HEALTH COVERAGE ON IRS TAX FORMS

While most taxpayers will simply need to check a box on their tax return to indicate they had health coverage for all of 2015, there are a few forms and specific lines on Forms 1040, 1040A, and 1040EZ that relate to the health care law.

To help navigate health coverage reporting, you should consider filing your return electronically.Using tax preparation software is the best and simplest way to file a complete and accurate tax return as it guides you through the process and does all the math. There are a variety of electronic filing options, including free volunteer assistance, IRS Free File for taxpayers who qualify, commercial software, and professional assistance.

Here is information about reporting health coverage:

Form 8965, Health Coverage Exemptions

  •         Complete this form if you need to claim a coverage exemption on your return or report a Marketplace-granted coverage exemption.
  • Use the worksheet in the Form 8965 Instructions if you need to calculate the shared responsibility payment.

Form 8962, Premium Tax Credit

  • Complete this form to claim this credit on your tax return, and to reconcile advance payments of the premium tax credit.

 

Form 1095, Health Care information Forms

  •         If you enrolled in coverage through the Health Insurance Marketplace, you should receive Form 1095-A, Health Insurance Marketplace Statement, which will help complete Form 8962. Wait to file until you receive this form.
  •         Your health coverage provider or your employer may furnish you with a Form 1095-B, Health Coverage, or Form 1095-C, Employer-Provided Health Insurance Offer and Coverage. You do not have to wait to receive these forms before your file your tax return.
  •         See our questions and answers for more information about how these forms affect your tax return.

Form 1040

  •         Line 46: Enter advance payments of the premium tax credit that must be repaid
  •         Line 61: Report health coverage or enter individual shared responsibility payment
  • Line 69: Report net premium tax credit if the allowed premium tax credit is more than advance credit payments paid on your behalf

Form 1040-A

  •         Line 29: Enter advance payments of the premium tax credit that must be repaid
  •         Line 38: Report health coverage or enter individual shared responsibility payment
  •         Line 45: Report net premium tax credit if the allowed premium tax credit is more than advance credit payments paid on your behalf

Form 1040-EZ

  •         Line 11: Report health coverage or enter individual shared responsibility payment
  • Form 1040EZ cannot be used to report advance payments or to claim the premium tax credit

For more information about the Affordable Care Act and filing your 2015 income tax return visit IRS.gov/aca. Visit IRS.gov for more information on this topic if you file Form 1040-NRor 1040-NR-EZ.

Subscribe to IRS Tax Tips to get easy-to-read tips via e-mail from the IRS

 

New Early Interaction Initiative Will Help Employers Stay Current with Their Payroll Taxes

WASHINGTON – The Internal Revenue Service has launched a new initiativedesigned to more quickly identify employers who are falling behind
on  their payroll or employment taxes and then help them get caught up ontheir payment and reporting responsibilities. The effort is called the Early Interaction Initiative.

The initiative is designed to help employers stay in compliance and avoid needless interest and penalty charges. The initiative will seek to identify employers who appear to be falling behind on their tax payments even before an employment tax return is filed. The IRS will offer helpful information and guidance through letters, automated phone messages, other communications and in some instances, a visit from an IRS revenue officer.

In the past, the first attempt by the IRS to contact an employer having payment difficulties often did not occur until much later in the process, after the employment return was filed and the employer’s unpaid tax obligation had already begun to spiral out of control.

“Employers play a key role in our tax system, and we want to offer them the information and assistance they need to carry out that responsibilities,” said IRS Commissioner John Koskinen. “With early interaction, we will be able to offer help weeks or even months sooner, when it can often do the most good.”

Two-thirds of federal taxes are collected through the payroll tax system. By law, employers must withhold federal income, Social Security and Medicare taxes from employees’ wages.

Shortly after employees are paid, employers typically must turn over withheld amounts, along with employer-matching contributions, to the federal government. Though payment schedules vary, these payments, known as federal tax deposits (FTDs), are made electronically through the Electronic Federal Tax Payment System EFTPS. These FTDs are later reported on a return , usually filed quarterly, with the IRS.

Employers, especially those facing liquidity difficulties, sometimes inappropriately divert funds withheld from employees’ pay for working capital or other purposes. Even when well-intentioned, such diversions can quickly result in mounting tax liabilities for the employer, along with interest and penalties, potentially threatening the employer’s financial viability.

Also, employers may have a payroll processor or others handling their payroll, withholding, matching, remittance, and/or reporting responsibilities, which sometimes leads to miscommunication between the parties and may result in tax deposits and reporting not being made as required. Such miscommunication may also quickly result in mounting tax liabilities, interest and penalties that are costly and risky to the business.

To help employers avoid these problems, the new IRS initiative will monitor deposit patterns and identify employers whose payments decline or are late. Employers identified under this initiative may receive a letter reminding them of their payroll tax responsibilities and asking that they contact the IRS to discuss the situation. In addition, some employers may receive automated phone messages from the IRS providing information and assistance. Where appropriate, an IRS revenue officer will also contact some of these employers at their place of business.

A variety of useful information is available to employers on the IRS Web site. Visit IRS.gov and type “Employment taxes” in the search box. Helpful links include:

What Are FTDs and Why are they Important?
Employment Taxes
Understanding Employment Taxes
Depositing and Reporting Employment Taxes
Employment Tax Publications
Small Business Taxes – The Virtual Workshop (video

 

Eight Things ALEs Should Know about Information Reporting and Health Coverage Offers

The Affordable Care Act requires applicable large employers to file information reporting returns with the IRS and employees. ALEs are generally those employers with 50 or more full-time employees, including full-time equivalent employees in the preceding calendar year.

The vast majority of employers are not ALEs and are not subject to this health care tax provision.  However, those who are must use Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, to report the information about offers of health coverage  and enrollment in health coverage for their employees.

Here are eight things ALEs should know about the information returns they must file at the beginning of 2016.

1. Form 1095-C is used to report information about each employee who was a full-time employee of the ALE member for any month of the calendar year.

2. Form 1094-C must be used to report to the IRS summary information for each employer, and to transmit Forms 1095-C to the IRS. 

3. ALEs file a separate Form 1095-C for each of its full-time employees, and a transmittal on Form 1094-C for all of the returns filed for a given calendar year.

4. Employers that offer employer-sponsored self-insured coverage use Form 1095-C to report information to the IRS and to employees about individuals who have minimum essential coverage under the employer plan.

5. The information reported on Form 1094-C and Form 1095-C is used in determining whether an employer owes a payment under the employer shared responsibility provisions.

6. Form 1095-C is used by the IRS and the employee in determining the eligibility of the employee for the premium tax credit.

7. An ALE may satisfy this requirement by filing a substitute form, but the substitute form must include all of the information required on Form 1094-C and Form 1095-C and satisfy all form and content requirements as specified by the IRS.

8. Forms 1094-C and 1095-C, or a substitute form must be filed regardless of whether the ALE member offers coverage, or the employee enrolls in any coverage offered.

For more information, see the instructions for Forms 1094-C and 1095-C or the Employer Information Reporting FAQs for Forms 1094-C and 1095-C on IRS.gov/aca

 

IRS Reminds Tax Return Preparers of Limited Practice Changes and Announces Revised PTIN Fee

 IR-2015-123, Oct. 29, 2015

 WASHINGTON— The Internal Revenue Service today reminded non-credentialed tax return preparers of major upcoming changes regarding which tax return preparers can represent clients in matters before the IRS beginning in 2016, and take action by Dec. 31, 2015, to avoid being affected.

 The IRS also announced that federal tax return preparers will soon pay less for a preparer tax identification number (PTIN).

 Last year the IRS announced pending changes to limited practice authorities for non-credentialed tax return preparers. (Rev. Proc. 2014-42)

 Effective for tax returns and claims for refunds prepared and signed after Dec. 31, 2015, the limited right to represent clients before the IRS held by non-credentialed preparers will be accorded to only those preparers participating in the IRS Annual Filing Season Program, a voluntary continuing education (CE) program.   The changes in the limited representation rules have no impact on returns prepared and signed by non-credentialed preparers on or before Dec. 31, 2015. 

 Non-credentialed tax return preparers who participate in the Annual Filing Season Program will continue to have limited rights to represent clients. This enables them to represent taxpayers whose returns they prepared and signed, but only before revenue agents, customer service representatives, and similar IRS employees, including the Taxpayer Advocate Service. The tax return preparer must participate in the Annual Filing Season Program for both the year of return preparation and the year of representation to represent their client.

 There are no changes to representation rules for enrolled agents, certified public accountants, and attorneys. These tax professionals continue to have unlimited practice rights and can represent any taxpayer before any IRS office, including collection and appeals, regardless of whether they prepared the tax return in question.   

 To participate in the Annual Filing Season Program, non-credentialed tax return preparers must complete either 15 or 18 hours of continuing education from IRS-approved CE providers. The CE must be completed by Dec. 31, 2015, in order to receive a 2016 Annual Filing Season Program Record of Completion.

 More information about Annual Filing Season Program requirements is available on IRS.gov.

 PTIN Fee Revised

Effective Nov. 1, 2015, the annual fee for 2016 PTINs will be $50 for both new applications and renewals. The IRS will collect $33 as a user fee to support program costs and a third-party vendor will receive $17 to operate the online system and provide customer support.

In preparation for the fee change, PTIN open season, which normally begins in mid-October, will begin in early November. PTIN open season is when the IRS begins accepting renewals and new registrations for the upcoming year.

Federal agencies are required to review user fees every other year and make adjustments as appropriate. The current PTIN fee is $64.25 for a new registration and $63 for renewal.

More information about the updated user fee is available in TD 9742 and REG-121496-15.

 

IN 2016, SOME TAX BENEFITS INCREASE SLIGHTLY

Due to Inflation Adjustments, Others Are Unchanged

WASHINGTON — For tax year 2016, the Internal Revenue Service today announced  annual inflation adjustments for more than 50 tax provisions, including the tax rate schedules, and other tax changes. Revenue Procedure 2015-53 provides details about these annual adjustments.   The tax items for tax year 2016 of greatest interest to most taxpayers include the following dollar amounts:

  • For tax year 2016, the 39.6 percent tax rate affects single taxpayers whose income exceeds $415,050 ($466,950 for married taxpayers filing jointly), up from $413,200 and $464,850, respectively. The other marginal rates – 10, 15, 25, 28, 33 and 35 percent – and the related income tax thresholds for tax year 2016 are described in the revenue procedure.
  • The standard deduction for heads of household rises to $9,300 for tax year 2016, up from $9,250, for tax year 2015.The other standard deduction amounts for 2016 remain as they were for 2015:   $6,300 for singles and married persons filing separate returns and $12,600 for married couples filing jointly
  • The limitation for itemized deductions to be claimed on tax year 2016 returns of individuals begins with incomes of $259,400 or more ($311,300 for married couples filing jointly).
  • The personal exemption for tax year 2016 rises $50 to $4,050, up from the 2015 exemption of $4,000. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $259,400 ($311,300 for married couples filing jointly). It phases out completely at $381,900 ($433,800 for married couples filing jointly.)
  • The Alternative Minimum Tax exemption amount for tax year 2016 is $53,900 and begins to phase out at $119,700 ($83,800, for married couples filing jointly for whom the exemption begins to phase out at $159,700). The 2015 exemption amount was $53,600 ($83,400 for married couples filing jointly).  For tax year 2016, the 28 percent tax rate applies to taxpayers with taxable incomes above $186,300 ($93,150 for married individuals filing separately).
  • The tax year 2016 maximum Earned Income Credit amount is $6,269 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,242 for tax year 2015. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds and phase-outs.
  • For tax year 2016, the monthly limitation for the qualified transportation fringe benefit remains at $130 for transportation, but rises to $255 for qualified parking, up from $250 for tax year 2015.
  • For tax year 2016 participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,250, up from $2,200 for tax year 2015; but not more than $3,350, up from $3,300 for tax year 2015. For self-only coverage the maximum out of pocket expense amount remains at $4,450. For tax year 2016 participants with family coverage, the floor for the annual deductible remains as it was in 2015 -- $4,450, however the deductible cannot be more than $6,700, up $50 from the limit for tax year 2015. For family coverage, the out of pocket expense limit remains at $8,150 for tax year 2016 as it was for tax year 2015.
  • For tax year 2016, the adjusted gross income amount used by joint filers to determine the reduction in the Lifetime Learning Credit is $111,000, up from $110,000 for tax year 2015.
  • For tax year 2016, the foreign earned income exclusion is $101,300, up from $100,800 for tax year 2015.
  • Estates of decedents who die during 2016 have a basic exclusion amount of $5,450,000, up from a total of $5,430,000 for estates of decedents who died in 2015. 

 

FTB TAX NEWS

FTB Tax News

 _________________________

California law remains out of conformity with the federal statutory exclusion for certain discharges of qualified principal residence indebtedness for discharges of indebtedness occurring on or after January 1, 2014.
 
However, as explained in detail in FTB’s February 2014 Tax News article, California law conforms and incorporates by reference the general rules of the federal tax law governing the forgiveness of nonrecourse and recourse indebtedness.  California will follow federal law as it relates to the determination of whether cancellation of debt income (“CODI”) exists as a result of the sale of a principal residence.   See also, https://www.ftb.ca.gov/aboutFTB/newsroom/Mortgage_Debt_Relief_Law.shtml
 
To the extent that taxable CODI is determined to exist, California Revenue and Taxation Code (“RTC”) section 17144.5 allows a taxpayer to exclude a portion of their CODI for discharges of a qualified principal residence that occurred on or after January 1, 2013 and before January 1, 2014.   Although, for federal purposes, this exclusion was extended to include CODI for discharges of a qualified principal residence that occurred on or after January 1, 2014 and before January 1, 2015, California has not conformed to that extension.  Legislation was introduced in the California State Assembly, Assembly Bill 99, which would have extended the CODI exclusion to apply to discharges occurring on or after January 1, 2014 and before January 1, 2015.  However, the bill was vetoed by Governor Brown on October 10, 2015.   Therefore, for California tax purposes, taxable CODI for discharges of a qualified principal residence that occurred on or after January 1, 2014 remains includable in the computation of California taxable income.
 
Unfortunately, some taxpayers with CODI who expected AB 99 to be enacted may have failed to make sufficient payments before the original due date of the return, and so may incur penalties when the 2014 return is filed which includes the appropriate CODI.  As a general rule, taxpayers are obligated to follow the law in effect and applicable to the tax year at issue.  The law does not provide a reasonable cause exception for reliance on pending legislation.  However, where other factors are present, the Franchise Tax Board will continue to consider reasonable cause requests for penalty abatement for taxpayers in this situation on a case by case basis.

 

Check out NEW IRS resource for Applicable Large Employers

 

To help you access important information about the Affordable Care Act quickly and efficiently, the IRS created the ACA Information Center for Applicable Large Employerson IRS.gov/aca at this URL: http://www.irs.gov/Affordable-Care-Act/Employers/ACA-Information-Center-for-Applicable-Large-Employers-ALEs.

There are several provisions of the health care law that apply only to applicable large employers. The new ALE information Center on the IRS website is your first stop to find resources that will help you determine if these regulations apply to you and how to follow the new law.

For the first time, applicable large employers have requirements for reporting information to their employees and the IRS about the health care coverage that they offer. We know there is a lot of information available to employers about the health care law and these new reporting requirements. The new ACA Information Center for Applicable Large Employersis where you can go to get official guidance straight from the IRS.  We encourage you to check out this new resource and to return frequently for the latest news and updates.

While the first reporting deadlines are not until next year, employers that are affected by these information reporting requirements should be actively planning and putting processes in place. Acting now will help you meet the requirements fully and completely by the deadlines.

 

 

Determine If You Are Subject to the Individual Shared Responsibility Provision

The Affordable Care Act includes the individual shared responsibility provision that requires you, your spouse, and your dependents to have qualifying health insurance for the entire year, report a health coverage exemption, or make a payment when you file. 

Who is subject to this provision?

All U.S. citizens living in the United States are subject to the individual shared responsibility provision.

Children are subject to the individual shared responsibility provision.

  • Each child must have minimum essential coverage or qualify for an exemption for each month in the calendar year. Otherwise, the adult or married couple who can claim the child as a dependent for federal income tax purposes will generally owe a shared responsibility payment for the child.

Senior citizens are subject to the individual shared responsibility provision.

  • Both Medicare Part A and Medicare Part C – also known as Medicare Advantage – qualify as minimum essential coverage. 

All permanent residents and all foreign nationals who are in the United States long enough during a calendar year to qualify as resident aliens for tax purposes are subject to the individual shared responsibility provision.

  • Foreign nationals who live in the United States for a short enough period that they do not become resident aliens for federal income tax purposes are not subject to the individual shared responsibility payment even though they may have to file a U.S. income tax return.
  • Individuals who are not U.S. citizens or nationals and are not lawfully present in the United States are exempt from the individual shared responsibility provision. For this purpose, an immigrant with Deferred Action for Childhood Arrivals status is considered not lawfully present, and therefore is eligible for this exemption even if he or she has a social security number. Claim coverage exemptions on Form 8965, Health Coverage Exemptions.
  • U.S. citizens living abroad are subject to the individual shared responsibility provision.
  • However, U.S. citizens who are not physically present in the United States for at least 330 full days within a 12-month period are treated as having minimum essential coverage for that 12-month period. In addition, U.S. citizens who are bona fide residents of a foreign country or countries for an entire taxable year are treated as having minimum essential coverage for that year.
  • All bona fide residents of the United States territories are treated by law as having minimum essential coverage.

 

How the Health Care Law Affects Aggregated Companies

The Affordable Care Act applies an approach to common ownership that also applies for other tax and employee benefit purposes.  This longstanding rule generally treats companies that have a common owner or similar relationship as a single employer. These are aggregated companies. The law combines these companies to determine whether they employ at least 50 full-time employees including full-time equivalents.

If the combined employee total meets the threshold, then each separate company is an applicable large employer.  Each company – even those that do not individually meet the threshold – is subject to the employer shared responsibility provisions.

These rules for combining related employers do not determine whether a particular company owes an employer shared responsibility payment or the amount of any payment. The IRS will determine payments separately for each company.

For more information about how the employer shared responsibility provisions may affect your company, see our Questions and Answers on IRS.gov/aca. For details about how to determine if you are an applicable large employer, including the aggregation rules, see Determining If You Are an Applicable Large Employer.

 

IRS Reminds Truckers: For Most, Highway Use Tax Return is due Aug. 31

WASHINGTON — The Internal Revenue Service today reminded truckers and other owners of heavy highway vehicles that in most cases their next federal highway use tax return is due Monday, Aug. 31, 2015.

The deadline generally applies to Form 2290 and the accompanying tax payment for the tax year that begins July 1, 2015, and ends June 30, 2016. Returns must be filed and tax payments made by Aug. 31 for vehicles used on the road during July. For vehicles first used after July, the deadline is the last day of the month following the month of first use.

Though some taxpayers have the option of filing Form 2290 on paper, the IRS encourages all taxpayers to take advantage of the speed and convenience of filing this form electronically and paying any tax due electronically. Taxpayers reporting 25 or more vehicles must e-file. A list of IRS-approved e-file providers can be found on IRS.gov.

The highway use tax applies to highway motor vehicles with a taxable gross weight of 55,000 pounds or more. This generally includes trucks, truck tractors and buses. Ordinarily, vans, pick-ups and panel trucks are not taxable because they fall below the 55,000-pound threshold. The tax of up to $550 per vehicle is based on weight, and a variety of special rules apply, explained in the instructions to Form 2290.

For more information, visit the Trucking Tax Center.  

 

IRS OFFERS EASY-To-USE ONLINE TOOLS

When you need tax help, the IRS has many online tools that are easy to use. You can e-file your tax return free, check your refund’s status or get your tax questions answered.  Use our tools on IRS.gov any time of day or night. Here’s a list of popular self-help tools that millions have used to get free tax help:

  • IRS Free File.  You can use IRS Free File to prepare and e-file your federal tax return for free. Free File will do much of the work for you with brand-name tax software or Fillable Forms. If you still need to file your 2014 tax return, Free File is available through Oct. 15. The only way to use IRS Free File is through the IRS website.
  • Where’s My Refund?  Checking the status of your tax refund is easy when you use Where's My Refund? You can also use this tool with the IRS2Go mobile app.
  • Direct Pay.  Use IRS Direct Pay to pay your tax bill or pay your estimated tax directly from your checking or savings account. Direct Pay is safe, easy and free. The tool walks you through five simple steps to pay your tax in one online session. You can also use Direct Pay with the IRS2Go mobile app.
  • Online Payment Agreement.  If you can’t pay your taxes in full, apply for an Online Payment Agreement. The Direct Debit payment plan option is a lower-cost hassle-free way to pay your tax each month.
  • Withholding Calculator.  Did you get a larger refund or owe more tax than you expected the last time you filed your tax return? If so, you may want to change the amount of tax withheld from your paycheck. The Withholding Calculator tool can help you determine if you need to give your employer a new Form W-4, Employee's Withholding Allowance Certificate. The tool can also help you fill out the form. Give the new form to your employer to make the change.
  • Interactive Tax Assistant.  If you need to know about 2014 taxes, you should try the Interactive Tax Assistant tool to get what you need. If you do not have qualifying health insurance coverage, the tool can help. For instance, you can find out if you must make an individual shared responsibility payment or if you are eligible for an exemption, when you file your income tax return. You can also use the tool to find out if you are eligible for the premium tax credit.
  • IRS Select Check.  If you want to deduct your gift to charity, the organization you give to must be qualified. Use the IRS Select Check tool to see if a group is qualified.
  • Tax Map.  The IRS Tax Map gives you a single point to get tax law information by subject. It integrates your topic with related tax forms, instructions and publications into one research tool.

IRS YouTube Videos:

IRS Podcasts:

 

IRS LIMITED PRACTICE RULES

For all returns prepared and signed after December 31, 2015, Annual Filing Season Program participants will be the only return preparers with limited representation rights (meaning they can represent clients during an initial audit, regarding a customer service matter, or before the Taxpayer Advocate Service, as long as they prepared and signed the return). The return preparer must be an AFSP participant in both the year of return preparation and the year of representation.   

For returns prepared and signed before December 31, 2015, non-credentialed return preparers who do not participate in the Annual Filing Season Program will continue to have limited practice rights.

But for returns prepared and signed after January 1, 2016, non-credentialed return preparers who do not participate in the Annual Filing Season Program will not have practice rights. (Though they will still be able to submit a Form 8821 for disclosure authorization to obtain a copy of a taxpayer’s return or return information. And they may still be a ‘third party designee’ to discuss return processing issues for a year.)

There are no changes to practice rights for enrolled agents, CPAs, and attorneys. They continue to have unlimited practice rights.

Katie Williams 

Sr. Stakeholder LiaisonIRS Small Business Self Employed

 

DON'T MISS FILING DEADLINES RELATED TO FOREIGN INCOME AND ASSETS

All U.S. citizens and residents must report worldwide income on their federal income tax return. If you lived outside the U.S. on the regular due date of your tax return, the extended filing deadline for your 2014 tax return is Monday, June 15, 2015. Similarly, the deadline to report interests in certain foreign financial accounts is the end of June. Here are some important tips to know if these reporting rules apply to you:

• FATCA Requirements.  FATCA refers to the Foreign Account Tax Compliance Act. In general, federal law requires U.S. citizens and resident aliens to report any worldwide income. You must report the existence of and income from foreign accounts. This includes foreign trusts, banks and securities accounts. In most cases you must report the country where each account is located. To do this file Schedule B, Interest and Ordinary Dividends with your tax return.

You may also have to file Form 8938, Statement of Special Foreign Financial Assets with your tax return. Use the form to report specified foreign financial assets if the aggregate value of those assets exceeds certain thresholds. See the form instructions for details.

• FBAR Requirements.  FBAR refers to Form 114, Report of Foreign Bank and Financial Accounts. If you must file this form you file it with the Financial Crimes Enforcement Network, or FinCEN. FinCEN is a bureau of the Treasury Department. You generally must file the form if you had an interest in foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2014. This also applies if you had signature or other authority over those accounts. You must file Form 114 electronically. It is available online through the BSA E-Filing System website. The FBAR filing requirement is not part of filing a tax return. The deadline to file Form 114 is June 30.

• View the IRS Webinar.  You can get help and learn about FBAR rules by watching the IRS webinar on this topic. The title is “Reporting of Foreign Financial Accounts on the Electronic FBAR.” The presentation is one hour long. You can find it by entering “FBAR” in the search box of the IRS Video Portal home page. Topics include:

o FBAR legal authorities
o FBAR mandatory e-filing overview
o Using FinCEN Form 114; and Form 114a
o FBAR filing requirements
o FBAR filing exceptions
o Special filing rules
o Recordkeeping
o Administrative guidance
You can access IRS forms, videos and tools on IRS.gov at any time.
Additional IRS resources:

IRS YouTube Videos – International Taxpayers:

 

Taxpayers with Foreign Assets May Have FBAR and FATCA Filing Requirements in June

WASHINGTON—The Internal Revenue Service today reminded all taxpayers with an FBAR filing requirement to report their foreign assets by the June 30 deadline. FBAR filings have risen dramatically in recent years as FATCA phases in and other international compliance efforts have raised awareness among taxpayers with offshore assets.

The IRS encourages taxpayers with foreign assets, even relatively small amounts, to check if they have a filing requirement. Separately, certain taxpayers living abroad may also have to file the FATCA-related Form 8938 with their tax returns by the June 15 deadline. (Domestic filers may also be required to file Form 8938, which would have been due by April 15 with their tax returns.)

"The vast majority of taxpayers pay their fair share. The FBAR and FATCA filing requirements make it tougher for that relatively small number of taxpayers trying to hide assets and income offshore," said IRS Commissioner John Koskinen. "Taxpayers are encouraged to review the rules and disclose their offshore assets."

FBAR Requirements
FBAR refers to Form 114, Report of Foreign Bank and Financial Accounts, that must be filed with the Financial Crimes Enforcement Network (FinCEN), which is a bureau of the Treasury Department. The form must be filed electronically and is only available online through the BSA E-Filing System website. 

Who needs to file an FBAR? Taxpayers with an interest in, or signature or other authority over, foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2014 generally must file. For more on filing requirements, see Current FBAR Guidance on IRS.gov. Also see the one-hour webinar explaining the FBAR requirement.

The FBAR filing requirement is not part of filing a tax return. The FBAR Form 114 is filed separately and directly with FinCEN.

FBAR filings have surged in recent years, according to data from FinCEN. FBAR filings exceeded 1 million for the first time in calendar year 2014 and rose nine of the last 10 years from about 280,000 back in 2005.

FATCA Requirements
FATCA refers to the Foreign Account Tax Compliance Act. The law addresses tax non-compliance by U.S. taxpayers with foreign accounts by focusing on reporting by U.S. taxpayers and foreign financial institutions.

In general, federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to complete and attach Schedule B to their tax returns. Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and generally requires U.S. citizens to report the country in which each account is located.

In addition, certain taxpayers may also have to complete and attach to their return Form 8938 Statement of Special Foreign Financial Assets.  Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on this form if the aggregate value of those assets exceeds certain thresholds. See theinstructions of this form for details.

The FATCA Form 8938 requirement does not replace or otherwise affect a taxpayer’s obligation to file an FBAR Form 114.  A brief comparison of the two filing requirements is available on IRS.gov.

U.S. Income Tax Obligations
U.S. citizens and resident aliens, including those with dual citizenship who have lived or worked abroad during all or part of 2014, may have a U.S. tax liability and a filing requirement in 2015.

A filing requirement generally applies even if a taxpayer qualifies for tax benefits, such as the foreign earned income exclusion or the foreign tax credit, that substantially reduce or eliminate their U.S. tax liability. These tax benefits are not automatic and are only available if an eligible taxpayer files a U.S. income tax return.

The filing deadline is Monday, June 15, 2015, for U.S. citizens and resident aliens whose tax home and abode are outside the United States and Puerto Rico, and for those serving in the military outside the U.S. and Puerto Rico, on the regular due date of their tax return. To use this automatic two-month extension, taxpayers must attach a statement to their returns explaining which of these two situations applies. See U.S. Citizens and Resident Aliens Abroad for details.

Nonresident aliens who received income from U.S. sources in 2014 also must determine whether they have a U.S. tax obligation. The filing deadline for nonresident aliens can be April 15 or June 15 depending on sources of income. See Taxation of Nonresident Aliens on IRS.gov.

More Information Available

Any U.S. taxpayer here or abroad with tax questions can refer to theInternational Taxpayers landing page and use the online IRS Tax Mapand the International Tax Topic Index to get answers. These online tools assemble or group IRS forms, publications and web pages by subject and provide users with a single entry point to find tax information.

Taxpayers who are looking for return preparers abroad should visit theDirectory of Federal Tax Return Preparers with Credentials and Select Qualifications.

To help avoid delays with tax refunds, taxpayers living abroad should visit the Helpful Tips for Effectively Receiving a Tax Refund for Taxpayers Living Abroad page.

More information on the tax rules that apply to U.S. citizens and resident aliens living abroad can be found in, Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, available on IRS.gov.

The IRS has launched new online videos and has expanded other online resources to help taxpayers, especially those living abroad, meet their U.S. tax obligations. For details see IR-2015-85 issued on June 4, 2015.

 

 

IRS Issues New Information on Health Care Exemptions, Shared Responsibility Payment

The IRS has issued a new fact sheet on exemptions from the healthcare law, including who qualifies for them and how to claim them. The Fact Sheet, FS 2015-14 is available here
  
In addition, the IRS has issued a new publication outlining the requirements of the individual shared responsibility payment. The document, Publication 5209 - Preparing your 2014 Return - the shared responsibility payment, is available here.

 

Understanding Who You Pay to Prepare Your Tax Return

 Understanding Who You Pay to Prepare Your Tax Return

 Tax professionals have varying levels of skills, education and expertise. Furthermore, not all tax professionals have the right to represent taxpayers before the IRS, such as during an audit. Taxpayers should be aware of the credentials, qualifications and extent of service each prospective professional provides before obtaining their service.

 Enrolled agents, certified public accountants and attorneys have unlimited representation rights before the IRS and may represent their clients on any matters including audits, payment issues, and appeals – regardless of whether they prepared the return in question.

 Uncredentialed preparers currently have limited practice rights. They may only represent clients whose returns they prepared and signed, but only before IRS revenue agents, customer service representatives and similar IRS employees, including employees in the Taxpayer Advocate Service.

 The IRS has launched a public directory on IRS.gov for the 2015 Filing Season to help taxpayers determine return preparer qualifications. The searchable, sortable database contains: the name, city, state, and zip code of attorneys, CPAs, enrolled agents, enrolled retirement plan agents, enrolled actuaries and Annual Filing Season Program (AFSP) participants with valid PTINs for 2015. The listings do not serve as endorsement by the IRS.

Credentialed tax return preparers with unlimited representation rights:

          Attorneys – People with this credential are licensed by state courts, the District of Columbia or their designees, such as the state bar. Generally, they have earned a degree in law and passed a bar exam. Attorneys generally have on-going continuing education requirements and professional character standards. Attorneys may offer a range of services; some attorneys specialize in tax preparation and planning.

          Certified Public Accountants (CPA) – Individuals with this credential are licensed by state boards of accountancy, the District of Columbia, and U.S. territories, and have passed the Uniform CPA Examination. They have completed a study in accounting at a college or university and have also met experience and good character requirements established by their boards of accountancy. In addition, CPAs must comply with ethical requirements and complete specified levels of continuing education to maintain an active CPA license. CPAs may offer a range of services. Some CPAs specialize in tax preparation and planning.

          Enrolled Agents – People with this credential are licensed by the IRS. They are subject to a suitability check and must pass a three-part Special Enrollment Examination, which is a comprehensive exam that requires them to demonstrate proficiency in federal tax planning, individual and business tax return preparation and representation. They complete 72 hours of continuing education every three years.

          Enrolled Retirement Plan Agents (ERPA) – People with this credential are licensed by the IRS and specifically trained in retirement plan matters. They can practice before the IRS on matters such as employee plan determination letters, the employee plans compliance resolution system, the employee plans master and prototype program and volume submitter program, and Form 5300 and Form 5500 tax returns. 

          Enrolled Actuary – People with this credential have satisfied the standards and qualifications as set forth by the Joint Board for the Enrollment of Actuaries and have been approved by the Joint Board to perform actuarial services required under the Employee Retirement Income Security Act of 1974 (ERISA).

 Additionally, there are two types of uncredentialed tax return preparers, each with limited representation rights:

          Annual Filing Season Program Participants – This new voluntary program recognizes the efforts of return preparers who are generally not attorneys, certified public accountants, or enrolled agents. The IRS issues an Annual Filing Season Program Record of Completion to return preparers who obtain a certain number of continuing education hours in preparation for a specific tax year.

 Annual filing season program participants do not have unlimited practice rights (unless they are also an attorney, certified public accountant, or enrolled agent). Their representation rights are limited to clients whose returns they prepared and signed, but only before revenue agents, customer service representatives, and similar IRS employees, including the Taxpayer Advocate Service. They cannot represent clients whose returns they did not prepare, nor can they represent clients regarding collection or appeals matters.

          Other tax return preparers – Any tax return preparer not in one of the previously mentioned categories also has limited representation rights, but only until Dec. 31, 2015. Effective Jan. 1, 2016, other tax return preparers will have no representation rights. Only return preparers who participate in the Annual Filing Season Program will have limited representation rights. Other tax return preparers may provide quality return preparation services, but choose them wisely. Inquire about their education and training.

 IRS.gov has additional resources to support your research about tax professionals:

          General IRS Guidance on Choosing a Tax Professional

 

DIRECTORY OF FEDERAL TAX RETURN PREPARERS

IRS Launches Directory of Federal Tax Return Preparers; Online Tool Offers New Option to Help Taxpayers

IR-2015-22, Feb. 5, 2015

WASHINGTON—The Internal Revenue Service today announced the launch of a new, online public directory of tax return preparers. This searchable directory on IRS.gov will help taxpayers find a tax professional with credentials and select qualifications to help them prepare their tax returns.

“This new directory will be a practical tool for the millions of Americans who rely on the services of a paid return preparer,” said IRS Commissioner John Koskinen. “Taxpayers can also look to these tax professionals for help if they have questions about the new health care provisions on this year’s tax forms.”

The directory is a searchable, sortable listing featuring:  the name, city, state and zip code of attorneys, CPAs, enrolled agents and those who have completed the requirements for the voluntary IRS Annual Filing Season Program (AFSP). All preparers listed also have valid 2015 Preparer Tax Identification Numbers (PTIN).

Taxpayers may search the directory using the preferred credentials or qualifications they seek in a preparer, or by a preparer’s location, including professionals who practice abroad. Tax return preparers with PTINs who are not attorneys, CPAs, enrolled agents or AFSP participants are not included in the directory, nor are volunteer tax return preparers who offer free services.

The directory can also be a resource for taxpayers who may want to get help from tax professionals on the Affordable Care Act tax provisions that affect returns filed this year.

The vast majority of people will only have to check a box on their federal income tax returns to indicate they had health coverage. Others may have Marketplace coverage with tax credits, have exemptions or need them, or may have to make a payment because they could afford to buy health insurance but chose not to.

The IRS provides extensive information on IRS.gov/aca to help taxpayers better understand the details of the new health care law. Many tax professionals, including those listed on the new directory, will be able to help taxpayers understand these changes. 

More than 140 million individual tax returns were filed last year, and more than half of them were prepared with the help of a paid return preparer. To help taxpayers navigate the different types of professional tax help available, last December, the IRS unveiled IRS.gov/chooseataxpro, a page that explains the different categories of professionals. Taxpayers can also use a new partner page available on IRS.gov that provides links to the web sites of national non-profit tax professional groups, which can help provide additional information for taxpayers seeking the right type of qualified help.

The IRS also offers free tax return preparation for eligible taxpayers. But whether using a paid tax professional, relying on the help of a volunteer or preparing their own returns, taxpayers should consider preparing and filing their returns electronically. Electronic filing is the easiest way to file a complete and accurate tax return. There are a variety of electronic filing options, including IRS Free File for qualified taxpayers, commercial software and professional assistance.

In 2010, the IRS launched the Tax Return Preparer Initiative that generally requires anyone who prepares federal tax returns for compensation to obtain a PTIN from the IRS. As of the start of the filing season, more than 666,000 tax return preparers have active PTINs for 2015. Currently, anyone with a valid PTIN can prepare federal tax returns for compensation. At a minimum, taxpayers should make sure their tax preparer has a valid PTIN and includes it on the tax return.

 

TAX SEASON OPENS AS PLANNED FOLLOWING EXTENDERS LEGISLATION

Following the passage of the extenders legislation, the Internal Revenue Service announced today it anticipates opening the 2015 filing season as scheduled in January.

The IRS will begin accepting tax returns electronically on Jan. 20. Paper tax returns will begin processing at the same time.

The decision follows Congress renewing a number of "extender" provisions of the tax law that expired at the end of 2013. These provisions were renewed by Congress through the end of 2014. The final legislation was signed into law Dec 19, 2014.

"We have reviewed the late tax law changes and determined there was nothing preventing us from continuing our updating and testing of our systems," IRS Commissioner John Koskinen. "Our employees will continue an aggressive schedule of testing and preparation of our systems during the next month to complete the final stages needed for the 2015 tax season."

The IRS reminds taxpayers that filing electronically is the most accurate way to file a tax return and the fastest way to get a refund. There is no advantage to people filing tax returns on paper in early January instead of waiting for e-file to begin.

More information about IRS Free File and other information about the 2015 filing season will be available in January.

 

 

IRS NEWS RELEASE

IRS, National Tax Groups Offer Help Selecting a Tax Preparer; Tips, New Web Page Unveiled

IR-2014-116, Dec. 18, 2014

WASHINGTON — With the filing season approaching, the Internal Revenue Service joined with national tax organizations to provide people with new options to get information and tips on selecting tax professionals and avoiding unscrupulous preparers. 

The effort includes new information available at IRS.gov/chooseataxpro, including a list of consumer tips for selecting a tax professional. There will also be a new gateway page with links to national non-profit tax professional groups, which can help provide additional information for taxpayers seeking the right type of qualified help. 

“The tax return represents one of the biggest financial transactions of the year for many Americans, whether they are getting a refund or paying a tax bill,” IRS Commissioner John Koskinen said. “Filling out tax returns accurately is critically important. Between tax law changes and tax scams circulating, it’s more important than ever for people who need professional assistance to select wisely and carefully.” 

Koskinen was joined at a Washington press conference Thursday with members of several national tax professional organizations that represent hundreds of thousands of tax professionals across the nation. 

More than 140 million tax returnswere filed last year, and more than half of with them were prepared with the help of a paid return preparer. 

For the upcoming filing season, some taxpayers may want to get help with the new provisions of the Affordable Care Act, and tax professionals provide one of several options available. The vast majority of people will only have to check a box on their federal income tax return to indicate they had health coverage, but others have Marketplace coverage with tax credits, have exemptions or need them, or may have to make a payment because they could afford to buy health insurance but chose not to. Tax professionals will be able to help guide taxpayers through what they need to do in these circumstances. Commercial software programs will be able to help, too. 

There are some basic tips taxpayers can keep in mind when selecting a tax professional. These include: 

  •          Select an ethical preparer. Taxpayers entrust some of their most vital personal data with the person preparing their tax return, including income, investments and Social Security numbers.
  •          Make sure the preparer signs the return and includes their Preparer Tax Identification Number (PTIN). All paid prepares are required to have a valid PTIN.
  •          Review your tax return and ask questions before signing. The taxpayer is ultimately legally responsible for what’s on their tax return, regardless of whether someone else prepared it.
  •          Never sign a blank tax return. This is a clear red flag when a taxpayer is asked to sign a blank tax return. The preparer can put anything they want on the return – even their own bank account for the tax refund. 

To help taxpayers navigate the different types of professional tax help available, the IRS updated IRS.gov/chooseataxpro, a page that explains the different categories of professionals. Taxpayers will also find a new partner page that provides links to the web sites of national organizations of tax professionals, with additional details about the groups, including state and local organizations or representatives. 

Organizations in the listing or attending the press briefing include:

  •          National Association of Enrolled Agents;
  •          National Society of Tax Professionals;
  •          National Association of Tax Professionals;
  •          National Society of Accountants;
  •          National Conference of CPA Practitioners;
  •          The American Institute of Certified Public Accountants;
  •          The American Association of Attorney-Certified Public Accountants; and
  •          The Council for Electronic Revenue Communication Advancement
     

“Tax professionals are a vital link with American taxpayers, and without them we could not run the nation’s tax system,” Koskinen said. “Taxpayers have many options for their taxes, ranging from using software to selecting a tax professional. If someone needs professional assistance, I urge people to take a few minutes to review the tips at IRS.gov/chooseataxpro. We want taxpayers to understand the different types and categories of tax return preparers available to help them with their tax issues.” 

In January, the IRS also plans to launch a new Directory of Federal Tax Return Preparers with Credentials and Select Qualifications on the IRS website to help taxpayers verify credentials and qualifications of tax professionals. The Directory will be a searchable, sortable database with the name, city, state and zip code of credentialed return preparers as well as those who have completed the requirements for the new IRS Annual Filing Season Program (AFSP) which includes having a valid 2015 Preparer Tax Identification Number (PTIN). 

In 2010, the IRS launched the Tax Return Preparer Initiative that requires anyone who prepares any federal tax return for compensation to obtain a PTIN from the IRS. In 2014 the IRS issued about 677,000 PTINs. Currently, anyone with a valid PTIN can prepare and sign federal tax returns they prepare.
For more information, see:

When, and how, do I file a complaint about a tax preparer?

 

IRS NEWS RELEASE

Scam Phone Calls Continue; IRS Unvteils New Video to Warn Taxpayers
IRS YouTube Video:

IR-2014-105, Oct. 31, 2014 

WASHINGTON — As incidents of an aggressive telephone scam continue across the country, the Internal Revenue Service unveiled a new YouTube video with a renewed warning to taxpayers not to be fooled by imposters posing as tax agency representatives.  

The new Tax Scams video describes some basic tips to help protect taxpayers from tax scams. 

These callers may demand money or may say you have a refund due and try to trick you into sharing private information. These con artists can sound convincing when they call. They may know a lot about you, and they usually alter the caller ID to make it look like the IRS is calling. They use fake names and bogus IRS identification badge numbers. If you don’t answer, they often leave an “urgent” callback request. 

“In recent weeks, we continue to see these telephone scams in every part of the country,” IRS Commissioner John Koskinen said. “We have formal processes in place for people with tax issues. The IRS respects taxpayer rights, and these angry, shake-down calls are clear warning signs of fraud. This is not how we do business. We urge people to be careful when they get these threatening phone calls.” 

The IRS reminds people that they can know pretty easily when a supposed IRS caller is a fake. Here are five things the scammers often do but the IRS will not do. Any one of these five things is a tell-tale sign of a scam. The IRS will never:    

      1.    Call to demand immediate payment, nor will the agency call about taxes owed                  without first having mailed you a bill. 

  1.   Demand that you pay taxes without giving you the opportunity to         question or appeal the amount they say you owe. 
  1.  Require you to use a specific payment method for your taxes, such as  a prepaid debit card. 
  1.  Ask for credit or debit card numbers over the phone. 
  1.  Threaten to bring in local police or other law-enforcement groups to      have you arrested for not paying. 

If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do: 

  •          If you know you owe taxes or think you might owe, call the IRS at 1.800.829.1040. The IRS workers can help you with a payment issue.
  •          If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484 or at www.tigta.gov.
  •  
  •          If you’ve been targeted by this scam, also contact the Federal Trade Commission and use their “FTC Complaint Assistant” at FTC.gov.
  • Please add "IRS Telephone Scam" to the comments of your complaint. 

 

Remember, too, the IRS does not use email, text messages or any social media to discuss your personal tax issue. For more information on reporting tax scams, go to www.irs.gov and type “scam” in the search box. 

Additional information about tax scams is available on IRS social media sites, including YouTube http://www.youtube.com/user/irsvideos and Tumblr http://internalrevenueservice.tumblr.com, where people can search “scam” to find all the scam-related posts.

 

New! Annual Filing Season Program

What is the Annual Filing season Program for return preparers?

The Annual Filing Season Program is a voluntary program designed to encourage tax return preparers to participate in continuing education (CE) courses.

Unenrolled return preparers can elect to voluntarily take continuing education each year in preparation for filing season and receive an Annual Filing Season Program – Record of Completion.

The program is important for a number of reasons. It encourages unregulated return preparers who don’t have to meet continuing professional education requirements to stay up to date on tax laws
and changes. It helps lessen the risk to taxpayers from preparers who have no education in federal tax law or filing requirements. And it allows preparers without professional credentials to stand out from the competition by giving them a recognizable record of completion that they can show to
their clients.

Preparers who complete the AFSP will also be included in a new public directory that will be added to IRS.gov by January 2015 for taxpayers to use in searching for qualified tax return preparers.
The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications will only include attorneys, certified public accountants (CPAs), enrolled agents, enrolled retirement plan agents (ERPAs), enrolled actuaries and individuals who have received an Annual Filing Season
Program – Record of Completion.

For more information to go:  http://www.irs.gov/Tax-Professionals/Annual-Filing-Season-Program.

 

 

 

Taking Issue with the IRS

If you have an issue with an Internal Revenue Service system or process, or you simply can’t find an answer, we can help.  The IRS Communications and Stakeholder Outreach function has established the Issue Management Resolution System, a streamlined and structured process that facilitates stakeholder issue identification, resolution and feedback. 

 IMRS captures, develops and responds to significant national and local stakeholder issues. When stakeholder organizations notify the IRS of concerns about IRS policies, practices and procedures, analysts research and respond to the issues.  IMRS is intended to capture and resolve:

  • Unique or burdensome issues that affect your federal taxes 
  • General questions about issues such as e-filing or paying your taxes electronically
  • Further clarification on existing information

 IMRS also identifies nationwide trends in the reporting, filing and paying requirements that may necessitate changes to IRS processes and procedures. Progress on stakeholder issues is closely monitored to assure proper response and communication to the initiating stakeholder and all impacted stakeholders.

 IMRS provides three reports to let you know about issues across the country. Hot Issues contains IMRS issues and other current items of interest. The IMRS Industry Issues Quarterly Report provides a quarterly summary of IMRS issues of particular interest to small businesses. The IMRS Monthly Overview contains an update of issues opened and closed each month.  You can find examples of other issues identified, hot issues and monthly overviews at IRS.gov by entering key word “IMRS” in the search box.

Our partnership with the IRS Stakeholder Liaison organization gives our members an avenue for input into IMRS.  IRS Stakeholder Liaison has assigned relationship managers to all CSTC chapters in California.  Click here  http://cstcsociety.org/images/downloads/2014_irs_contacts_for_cstc.pdf to find out who your local Stakeholder Liaison is, and contact him/her to discuss potential issues.  IMRS does not forward legislative recommendations or assist with issues related to specific taxpayers, so please don’t provide any personally identifiable information for clients until requested. 

 Stakeholder Liaison contact information for other states can be found on IRS.gov here:  http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Stakeholder-Liaison-Local-Contacts-1

 

 

Impact of IRS Budget Cuts

 

Provided by the National Society of Accountants

Impact of IRS Budget Cuts

 

 

Latest Development on IRS Regulation of RTRP's

Special NSAlert
February 11, 2014

As NSAlert readers are aware, three tax return preparers filed suit in 2012 challenging the IRS regulations that would have required them to become “Registered Tax Return Preparers.” Specifically, they argued that the IRS did not have statutory authority to (1) require testing for RTRPs or (2) require RTRPs to take a minimum of 15 hours of continuing education annually or (3) to pay an annual registration fee. The preparers won their case at the U.S. District Court in January 2013. The IRS appealed the decision to the U.S. Court of Appeals for the D.C. Circuit. A copy of the Appeals Court opinion is available here. References below are to the designated pages in the Opinion.

Today, the Court of Appeals issued a unanimous opinion agreeing with the District Court’s view that the IRS lacks the statutory authority to regulate tax return preparers. The Appeals Court opinion states that: "In our view, at least six considerations foreclose the IRS’s interpretation of the statute" (Op. 6.) They are:

  • The IRS is incorrect in asserting that tax preparers are "representatives" or agents of taxpayers. They have no legal authority to act on a taxpayer's behalf. The court cites IRS regulations indicating so. "The tax-return preparer certainly assists the taxpayer, but the tax-return preparer does not represent the taxpayer." (Op. 8.)
     
  • Preparing tax returns is not the same as practicing before the Treasury Department or Tax Court, which refers to adversarial proceedings where the taxpayer has secured representation.

  • The statute where the IRS claims its authority to regulate tax preparers was in fact enacted with the stated intent of codifying existing practices without changing them.

  • Congress has enacted specific regulations of tax preparers, such as requiring preparers to sign returns and penalizing deliberate understating of liability. If the IRS had separate authority to do such things, Congress's action would have been unnecessary. "[W]e find at least some significance in the fact that multiple Congresses have acted as if Section 330 did not extend so broadly as to cover tax-return preparers." (Op. 14.)
     
  • The IRS is asserting a major expansion of authority but "nothing in the statute's text or the legislative record contemplates that vast expansion of the IRS's authority." (Op. 15.)
     
  • The IRS frequently interpreted the statute narrowly until 2011, when it decided to assert this new authority. "[I]n the circumstances of this case, we find it rather telling that the IRS had never before maintained that it possessed this authority." (Op. 16).

The Court concludes: "It might be that allowing the IRS to regulate tax return preparers more stringently would be wise as a policy matter. But that is a decision for Congress and the President to make if they wish by enacting new legislation.... The IRS may not unilaterally expand its authority through such an expansive, atextual, and ahistorical reading of Section 330." (Op. 17.)

NSA fully expects Congress to address the statutory authority of tax return preparers at some point in the near future. We expect to work with Congress to craft statutory language that addresses concerns we have had with the IRS regulatory approach, including the recognition of various tax preparer exams already offered or recognized for regulatory purposes at the state level.
 
For a review of the RTRP timeline of events, visit the NSA RTRP website here.
 

© 2014 National Society of Accountants

 

Expired PTIN Numbers for 2014

Hello everyone, 
 

We will be sending expiration letters next week to people who have not renewed their PTIN for 2014. The notification will go to 100,000+ people (which is not unusual and approximately the same number as the past couple of years).

The letters will be placed in the PTIN holder's online secure mailbox within their PTIN account. They will receive an email telling them their PTIN has expired and to check their mailbox for more info. An example of the letter is attached. (The letter will be mailed to those people who file by paper and do not have an online account, which is less than 5% of PTIN holders.)

Even after a person's PTIN has expired, they can still renew online (or by paper). We continue processing renewals throughout the year.  

To date, 554,000 people have renewed 2013 PTINs for 2014. And 56,000 people have registered for new PTINs for 2014.

Please share this information with your organizations' members.   

Marc  
Marc J. Zine , CPA
Stakeholder Liaison
IRS-SBSE Stakeholder Liaison Field Operations

 

Delayed Start for PTIN Renewal Season

Q: What is the status of renewing Preparer Tax Identification Numbers (PTIN) for 2014?
 
A: Due to the lapse in government funding, the 2014 PTIN renewal season is delayed. An email or letter will be sent to all current PTIN holders notifying you when the 2014 renewal season opens.  The online PTIN system is still available for users to log in and view or change information or to secure a PTIN for 2013.  Additional information will be provided on this site as it becomes available.

 

2014 Tax Season to Start Later Following Government Closure; IRS Sees Heavy Demand As Operations Resume

IR-2013-82, Oct. 22, 2013  

 WASHINGTON–The Internal Revenue Service today announced a delay of approximately one to two weeks to the start of the 2014 filing season to allow adequate time to program and test tax processing systems following the 16-day federal government closure. 

The IRS is exploring options to shorten the expected delay and will announce a final decision on the start of the 2014 filing season in December, Acting IRS Commissioner Danny Werfel said. The original start date of the 2014 filing season was Jan. 21, and with a one- to two-week delay, the IRS would start accepting and processing 2013 individual tax returns no earlier than Jan. 28 and no later than Feb. 4. 

 The government closure came during the peak period for preparing IRS systems for the 2014 filing season. Programming, testing and deployment of more than 50 IRS systems is needed to handle processing of nearly 150 million tax returns. Updating these core systems is a complex, year-round process with the majority of the work beginning in the fall of each year. 

About 90 percent of IRS operations were closed during the shutdown, with some major workstreams closed entirely during this period, putting the IRS nearly three weeks behind its tight timetable for being ready to start the 2014 filing season. There are additional training, programming and testing demands on IRS systems this year in order to provide additional refund fraud and identity theft detection and prevention.

 “Readying our systems to handle the tax season is an intricate, detailed process, and we must take the time to get it right,” Werfel said. “The adjustment to the start of the filing season provides us the necessary time to program, test and validate our systems so that we can provide a smooth filing and refund process for the nation’s taxpayers. We want the public and tax professionals to know about the delay well in advance so they can prepare for a later start of the filing season.”

 The IRS will not process paper tax returns before the start date, which will be announced in December. There is no advantage to filing on paper before the opening date, and taxpayers will receive their tax refunds much faster by using e-file with direct deposit. The April 15 tax deadline is set by statute and will remain in place. However, the IRS reminds taxpayers that anyone can request an automatic six-month extension to file their tax return. The request is easily done with Form 4868, which can be filed electronically or on paper.

IRS processes, applications and databases must be updated annually to reflect tax law updates, business process changes, and programming updates in time for the start of the filing season. 

 The IRS continues resuming and assessing operations following the 16-day closure. The IRS is seeing heavy demand on its toll-free telephone lines, walk-in sites and other services from taxpayers and tax practitioners.

During the closure, the IRS received 400,000 pieces of correspondence, on top of the 1 million items already being processed before the shutdown. 

The IRS encourages taxpayers to wait to call or visit if their issue is not urgent, and to continue to use automated applications on IRS.gov whenever possible.

 “In the days ahead, we will continue assessing the impact of the shutdown on IRS operations, and we will do everything we can to work through the backlog and pent-up demand,” Werfel said. “We greatly appreciate the patience of taxpayers and the tax professional community during this period.”

 

 

Disclosure Authorization and Electronic Account Resolution Retire This August

IRS is retiring the Disclosure Authorization and Electronic Account Resolution options on e-Services on Aug. 11.

Due largely to low usage of e-Service’s Disclosure Authorization (DA) and Electronic Account Resolution, the IRS has decided to retire and remove the two applications effective Aug. 11.

Last year, users submitted less than 10 percent of all disclosure authorizations through the DA application. Similarly, only three percent of all account-related issues came in through the EAR application.

In anticipation of this change, the IRS increased the number of employees who process authorizations and has improved internal work processes to decrease the average processing time significantly from the current 10-day processing period.

The IRS will continue to explore better ways to reduce processing time and improve overall service to the users. However, current budget cuts will impact their dedicated resources to this program and they are working to determine the impact on processing time.

Once IRS removes the two applications, former DA users will need to complete Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorizations, and mail or fax it to the appropriate IRS location listed on the form’s instructions. Please allow at least 4 days for the authorization to post to the IRS database before requesting a transcript through the Transcript Delivery System. Former EAR users should call the Practitioner Priority Service at 1-866-860-4259 for help resolving account-related issues.

The IRS continues to look for ways to improve its current processes and is exploring an improved electronic solution for DA and EAR in the future.

 

e-services - Online Tools for Tax Professionals

e-services is a suite of web-based products that will allow tax professionals and payers to conduct business with the IRS electronically. These services are only available to approved IRS business partners and not available to the general public. e-services is available via the Internet 24 hours a day, 7 days a week. Authorized Business partners needing assistance after using the on-line resources, can contact the e-help Desk at 1-866-255-0654 (512-416-7750 for international calls).

Applications to be Retired

The IRS will retire the Disclosure Authorization (DA) and Electronic Account Resolution
(EAR) products August 11, primarily due to low usage. Fewer than 10 percent of all
authorizations were processed through the application, even fewer for EAR users at 3 percent.
If you normally use these applications, you will need to submit Forms 2848 and 8821 by mail or fax when the applications are retired. For tax account issues, you should call the Practitioner Priority Service at 1-866-860-4259 for assistance. The IRS continues to look for ways to improve its current processes and for an electronic replacement for DA and EAR. Please feel free to continue using these applications until they are retired August 11.

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Registration

All tax professionals who wish to use e-services products must register online to create an individual electronic account. The registration process is a one-time automated process where the user selects a username, password and PIN. When the registration information has been validated, the registrant will receive an on-screen acknowledgement. For security purposes, a confirmation code is sent via postal mail to the tax professional to complete the registration process.

Like Share Print e-services - Online Tools for Tax Professionals
 

e-services is a suite of web-based products that will allow tax professionals and payers to conduct business with the IRS electronically. These services are only available to approved IRS business partners and not available to the general public. e-services is available via the Internet 24 hours a day, 7 days a week. Authorized Business partners needing assistance after using the on-line resources, can contact the e-help Desk at 1-866-255-0654 (512-416-7750 for international calls).

Review the e-Services Terms and Conditions.


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Applications to be Retired

The IRS will retire the Disclosure Authorization (DA) and Electronic Account Resolution
(EAR) products August 11, primarily due to low usage. Fewer than 10 percent of all
authorizations were processed through the application, even fewer for EAR users at 3 percent.
If you normally use these applications, you will need to submit Forms 2848 and 8821 by mail or fax when the applications are retired. For tax account issues, you should call the Practitioner Priority Service at 1-866-860-4259 for assistance. The IRS continues to look for ways to improve its current processes and for an electronic replacement for DA and EAR. Please feel free to continue using these applications until they are retired August 11.


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Registration

All tax professionals who wish to use e-services products must register online to create an individual electronic account. The registration process is a one-time automated process where the user selects a username, password and PIN. When the registration information has been validated, the registrant will receive an on-screen acknowledgement. For security purposes, a confirmation code is sent via postal mail to the tax professional to complete the registration process.

Learn how to Become an Authorized efile Provider.

 

Already Registered? Login

Not Yet Registered or Confirmed? Registration Services


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e-file Application
The IRS e-file Application can be completed using the Internet. Applications can be started and saved in progress, and modifications to a firm's application can be made quickly and easily without restarting the process. You can also check the status of the application as the IRS makes updates to the suitability check.

The IRS e-file Application enables you to easily adapt your application to the changes in your business. You may want to add a new Principal to your firm's e-file application or you may want to delegate the management of the IRS e-file Application to someone in your organization. You can manage all your Authorized IRS e-file Provider information in one place and more easily update the information when changes occur.


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Disclosure Authorization (DA)
Eligible tax professionals may complete authorization forms, view and modify existing forms, and receive acknowledgement of accepted submissions immediately--all online. Disclosure Authorization allows tax professionals to electronically submit Form 2848, Power of Attorney and Declaration of Representative, and Form 8821, Tax Information Authorization. This e-service expedites processing and issues a real-time acknowledgment of accepted submissions.


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Electronic Account Resolution (EAR)
Electronic Account Resolution allows tax professionals to expedite closure on clients’ account problems by electronically sending/receiving account related inquiries. Tax professionals may inquire about individual or business account problems, refunds, installment agreements, missing payments or notices. Tax professionals must have a power of attorney on file before accessing a client’s account. The IRS response is delivered to an electronic secure mailbox within three business days.


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  Transcript Delivery System (TDS)
Eligible tax professionals may use TDS to request and receive account transcripts, wage and income documents, tax return transcripts, and verification of non-filing letters. A new product (the Record of Account) combines both the Return Transcript and Account Transcript in one product. Tax Professionals can request the products for both individual and business taxpayers. Use the TDS application to resolve your clients' need for return and account information quickly, in a secure, online session. Tax professionals must have a Power of Attorney authorization on file with the IRS before accessing a client's account.


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Taxpayer Identification Number (TIN) Matching
TIN Matching is a pre-filing service offered to payers and/or authorized agents who submit any of six information returns subject to backup withholding (Forms 1099-B, INT, DIV, OID, PATR, and MISC). With Interactive TIN Matching authorized payers can match up to 25 payee TIN and name combinations against IRS records prior to submitting an information return. Bulk TIN Matching allows payers and/or authorized agents filing any of the six information returns to match up to 100,000 TIN and name combinations. In order to participate in TIN Matching, payers must be listed in the IRS Payer Account File (PAF) database. If your firm has not filed information returns with the IRS in one of the past two tax years, the application will not be available to you at this time.