Part III – Administrative, Procedural, and Miscellaneous Restrictions on Use of the Term Registered Tax Return Preparer Notice 2011-45 The Department of the Treasury and the IRS are implementing the recommendations contained in Publication 4832, “Return Preparer Review.” As part of this implementation, the Department of the Treasury and the IRS have issued final regulations
IRS Issues Proposed Regulations That Would Require Tax Preparers to File Due Diligence Checklist with All EITC Claims Submitted in 2012 IR-2011-98, Oct. 6, 2011 WASHINGTON —The Internal Revenue Service announced today that it is issuing proposed regulations that would require paid tax return preparers, beginning in 2012, to file a due diligence checklist, Form
Recent IRS News View recent, tax-related IRS news releases below. Resources for Tax Preparers: IRS Releases Specifications for Registered Tax Return Preparer Test IR-2011-89, Sept. 6, 2011 WASHINGTON — The Internal Revenue Service today released the specifications for the competency test individuals must pass to become a Registered Tax Return Preparer. The test is part of an ongoing
Tax preparation software for tax preparers and PTIN hassle. WASHINGTON, D.C. (NOVEMBER 23, 2011) The Internal Revenue Service said it plans to add a new option to its Preparer Tax Identification Number system in December for users who need to change the email address associated with their online PTIN accounts. The new option
In 2012, Many Tax Benefits Increase Due to Inflation Adjustments IR-2011-104, Oct. 20, 2011 WASHINGTON — For tax year 2012, personal exemptions and standard deductions will rise and tax brackets will widen due to inflation, the Internal Revenue Service announced today. By law, the dollar amounts for a variety of tax provisions, affecting virtually every
The Internal Revenue Service is temporarily shelving its controversial plan to fingerprint tax preparers, IRS Commissioner Doug Shulman said Tuesday. Speaking at the American Institute of CPAs’ National Tax Conference, Shulman described some of the IRS’s latest moves, including ones influenced by the AICPA. The AICPA wrote to Shulman last month asking the agency
In the wake of studies that found that tax returns filed by paid preparers can be riddled with mistakes, the Internal Revenue Service is clamping down on the industry. Up to now, paid tax preparers in the vast majority of states were free to hold themselves out as experts without any training whatsoever. Nor did they
IR-2011-103, Oct. 20, 2011
WASHINGTON — The Internal Revenue Service today announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for Tax Year 2012. In general, many of the pension plan limitations will change for 2012 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged. Highlights include:
IR-2011-100, Oct. 12, 2011
WASHINGTON — The Internal Revenue Service today advised tax professionals and tax firms that do not have Electronic Filing Identification Numbers (EFINs) to start the process to obtain EFINs now so they can meet new e-file requirements for 2012.
Starting in January 2012, any paid preparer or firm that reasonably anticipates preparing and filing 11 or more Form 1040 series returns, Form 1041 returns, or a combination of Form 1040 series returns and Form 1041 returns generally must use IRS e-file. Their clients who file these forms, however, may independently choose to file by paper. » Read more..
IR-2011-101, Oct. 12, 2011
WASHINGTON — The Internal Revenue Service today urged taxpayers whose tax-filing extensions run out soon to double check their returns for expanded individual and business tax benefits, and then file their returns electronically using IRS e-file or the Free File system.
Many of the nearly 10.1 million taxpayers who requested an automatic six-month extension this year have yet to file. IRS e-file is fast, accurate and secure, making it an ideal option for those rushing to meet the Oct. 17 deadline that applies to » Read more..
Tax services provider H&R Block said it will not offer refund anticipation loans during the 2012 tax season, but will continue to provide other low-cost financial products.
A refund anticipation loan (RAL) is a short-term loan based on a taxpayer’s anticipated federal tax refund and is a highly profitable business for tax preparers. The loans usually last 7-14 days until taxpayers receive their refunds from the U.S. Internal Revenue Service.
“Knowing we had a strong 2011 tax season without RALs, our analysis did not present a compelling reason to bring back the product in 2012,” Chief Executive Bill Cobb said in a statement.
H&R Block was unable to offer RALs in 2011 after regulators directed its third-party lending bank to stop funding the product.
The Kansas city, Missouri-based company said it will continue to offer other low-cost financial services such as refund anticipation checks (RACs).
RACs allow taxpayers to deduct the cost of tax preparation from their tax refund.
Source (Reuters)
Tax preparers are chewing their pencils as the U.S. Internal Revenue Service gets ready to impose the first comprehensive program of fees and rules on the industry’s 730,000 practitioners.
Some fear the IRS campaign against tax fraud could squeeze out small, independent businesses and allow large competitors such as H&R Block Inc and Jackson Hewitt Tax Service Inc to capture market share.
The IRS, which plans to finalize the new fees in coming months, recently said it was open to ways to mitigate costs.
To get certified, preparers will need to register » Read more..
IR-2011-98, Oct. 6, 2011
WASHINGTON —The Internal Revenue Service announced today that it is issuing proposed regulations that would require paid tax return preparers, beginning in 2012, to file a due diligence checklist, Form 8867, with any federal return claiming the Earned Income Tax Credit (EITC). It is the same form that is currently required to be completed and retained in a preparer’s records.
The due diligence requirement, enacted by Congress over a decade ago, was designed to reduce errors on returns claiming the EITC, most of which are prepared by tax professionals. » Read more..
EITC Preparer Compliance – Targeted, Tailored and Tiered
According to the latest IRS release, because of the multiple system abuse by taxpayers and tax preparers not doing their due diligence when it comes to EITC the following steps will be necessary to stop system wide abuse.
This is what they will do for 2012 tax season:
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Targeted |
Our approach is to look at returns with a high likelihood of EITC error completed by the same preparer. |
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Tailored |
We look for the cause of the errors. Is it not knowing the tax law; not applying it correctly, or, is it an intentional disregard of the tax law? |
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Tiered |
Our goal is to reduce preparer errors by matching our response to the risk level of the same preparer continuing to have a high level of EITC error. Our responses range from reducing errors through education to barring return preparation through injunction. |
Why Have a Preparer Compliance Program?
We estimate 24 to 29 percent of all EITC claims have some type of mistake which costs the government $13 billion to $16 billion each year. » Read more..
Part III - Administrative, Procedural, and Miscellaneous
Restrictions on Use of the Term Registered Tax Return Preparer
Notice 2011-45
The Department of the Treasury and the IRS are implementing the recommendations contained in Publication 4832, “Return Preparer Review.” As part of this implementation, the Department of the Treasury and the IRS have issued final regulations (TD 9527) that include registered tax return preparers as practitioners under 31 CFR Part 10 (reprinted as Treasury Department Circular 230). The Department of the Treasury and the IRS have also published final regulations under I.R.C. § 6109 (75 FR 60309) providing that attorneys, certified public accountants, » Read more..
In the wake of studies that found that tax returns filed by paid preparers can be riddled with mistakes, the Internal Revenue Service is clamping down on the industry. Up to now, paid tax preparers in the vast majority of states were free to hold themselves out as experts without any training whatsoever. Nor did they have to prove any minimum level of competency.
First up, beginning next month, the IRS is rolling out competency tests for hundreds of thousands of tax preparers nationwide. Next year, continuing education requirements – 15 hours worth per year – kick in. » Read more..
Document requests from examiners when audits are initiated will often seem rather intimidating. When representing substantial clients, we often attempt to actually give them everything they ask for in a neatly cross-referenced book. Knock on wood, that has resulted in quite a few no-changes in the last several years. Exams is the paper tiger of the IRS. They can drive a taxpayer who wants to be compliant insane, but they can’t really do anything to you other than ultimately send you a bill in the form of a statutory notice of deficiency. You have ninety days to appeal that determination in Tax Court. » Read more..
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