TSCPA Federal Tax Policy Blog

IRS REMINDS TAX PREPARERS TO RENEW PTINs

The IRS is mailing information letters to tax practitioners who haven't renewed PTINs for the upcoming filing season. The letters were sent out last week and will continue until January 30.

http://www.journalofaccountancy.com/Web/20125034.htm

TEXAS CPAS COMMENT ON PROPOSED REGS ON ESTATE COSTS SUBJECT TO 2 PERCENT FLOOR

Carol Cantrell of Texas Society of Certified Public Accountants (TSCPA), in comments on the reproposed regulations explaining which costs incurred by estates or non-grantor trusts are subject to the 2 percent floor for miscellaneous itemized deductions, has suggested that the final regulations adopt a Hubert approach and a percentage safe harbor for bundled fees.

Comments Letter

Download TSCPA comments ltr to IRS REG-128224-06 new proposed regs IRC Sec 67(e) 1-6-11

PAYROLL TAX CUT TEMPORARILY EXTENDED INTO FEBRUARY 2012

The Temporary Payroll Tax Cut Continuation Act of 2011 temporarily extends the two percentage point payroll tax cut for employees, continuing the reduction of their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through Feb. 29, 2012. The IRS will issue additional guidance as needed to implement the provisions of this new two-month extension.

Learn More

http://www.irs.gov/newsroom/article/0,,id=251650,00.html?portlet=108

 

IRS WEBSITE UNAVAILABLE FOR NEW PTIN APPLICANTS UNTIL JAN. 9

For registered preparers filing for a new Preparer Tax Identification Number (PTIN), you will be unable to do so until Jan. 9, due to previously scheduled maintenance on the Internal Revenue Service’s (IRS) systems. However, for those who need to renew a PTIN, those services are still available.

Learn More

http://www.irs.gov/taxpros/article/0,,id=210909,00.html?portlet=104

HOUSE PASSES REPEAL OF 3% WITHHOLDING RULE

The U.S. House of Representatives overwhelmingly passed H.R. 674 on Oct. 26, 2011, that would repeal the 3% withholding requirement on government contractors and vendors and recipients of Medicare and certain agricultural payments beginning in 2013. 

The 2005 legislation, with implementation delayed twice due to growing concern, mandates that federal, state and local governments withhold 3% on payments for property or services as a guard against possible business tax evasion. H.R. 674 now goes to the Senate for consideration. 

http://www.journalofaccountancy.com/NR/exeres/967DCF76-5B50-4A5A-BDED-281BEB66FAC3.htm?WBCMODE=PresentationUnpublished

TAX PREPARERS WHO PREPARE MORE THAN 10 RETURNS MUST NOW E-FILE

Starting in January 2012, any paid preparer or firm that reasonably anticipates preparing and filing more than 10 Form 1040 series returns, Form 1041 returns, or a combination of Form 1040 series returns and Form 1041 returns, will be required to e-file those returns. The 2012 requirement will mark the second and final phase of implementing a law that was intended to boost the electronic filing rate of income tax returns for individuals, trusts, and estates. In 2011, the e-file mandate pertained to any paid preparer or firm that anticipated preparing and filing 100 or more returns.

If the requirement will cause undue hardship, preparers may seek a one-year waiver by submitting Form 8944, Preparer e-file Hardship Waiver Request. If a client wants to file a paper return, the preparer should include Form 8948, Preparer Explanation for Not Filing Electronically, with the client's tax return. A taxpayer choice statement should be obtained and kept with the preparer’s records. Form 8948 does not have to be submitted with returns that are not currently accepted electronically by the IRS or the IRS has instructed taxpayers not to file them electronically. These returns are exempt from the federal e-file requirement. See the IRS link to e-file mandate FAQ: http://www.irs.gov/taxpros/article/0,,id=231871,00.html.  

TAX FORM 4768 DUE TODAY TO RECIEVE EXTENSION

Form 4768 must be filed by September 19, 2011 to obtain automatic six-month extension to file an estate tax return and pay estate taxes for decedents who died after December 31, 2009 and before December 17, 2010.

States did not necessarily extend their estate tax returns to coincide with the federal deadlines. Consult each state law to avoid or minimize penalties for late filing of state estate and inheritance tax returns.

For more information:

http://www.journalofaccountancy.com/Web/20114581.htm

PATENT REFORM BILL HEADS TO PRESIDENT FOR SIGNATURE

Yesterday, 9/8, the U.S. Senate passed the House’s version of H.R. 1249 the American Invest Act, a comprehensive patent reform bill that includes language to stop the U.S. Patent and Trademark Office from issuing patents for tax strategy methods.

AICPA, TSCPA and other state CPA societies celebrate more than five years of collaborative effort to help educate Members of Congress on the need to avoid a monopoly on tax compliance methods for anyone. Texas especially appreciates House Judiciary Committee Chairman Lamar Smith (R-21) for crafting the pro-taxpayer provision, and for considering it a priority in the legislation.

 

PTIN FINGERPRINTING OF NON-SIGNING PREPARERS

Currently IRS plans to initiate a fingerprinting process as a part of its background and suitability checks under the PTIN program.  As presently planned, this program would impact the non-CPA staff of CPA firms who are considered non-signing preparers and are required to obtain a preparer tax identification number (PTIN). 

Notice 2011-6 exempts these non-signers from the continuing education and testing aspects of the registration program but does not exempt them from the background and suitability checks under the Treasury Regulations. The IRS has now indicated that fingerprinting, a one-time practice, is considered part of its suitability check process.

The formal procedures, timing and costs for fingerprinting have not yet been announced. The TSCPA Federal Tax Policy Committee plans to comment on this issue in an effort to exempt non-CPA staff from this fingerprinting as we did successfully with the respect to the testing requirements.  

http://www.irs.gov/taxpros/article/0,,id=238830,00.html

                                                                                                                                                                                     

FTP COMMITTEE RESPONDS TO IRS ON EX PARTE COMMUNICATIONS AND CONTINUING EDUCATION PROVIDER PROCESS

The Federal Tax Policy Committee issued comments letters this week to the IRS on two recent notices, Notice 2011-61, regarding IRS’s continuing education provider standards and process for registered tax return preparers, and Notice 2011-62, proposed revenue procedures that update existing rules on permissible communications between the Office of Appeals and other parts of the agency.

Comments on Notice 2011-61

http://www.tscpa.org/Content/Files/pdf/Resource%20Center/Tax%20Issues%20Community/Letters/2011/tscpaLTRirs201161cpe.pdf

Comments on Notice 2011-62

http://tscpa.org/Content/Files/pdf/Resource%20Center/Tax%20Issues%20Community/Letters/2011/tscpaLTRirsNotice1162ExParteComm.pdf