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May 2016

IRS to Correct Erroneous Failure-to-Deposit Penalties

The IRS has acknowledged that it was in error in assessing penalties for deposits of payroll taxes that were not deposited until April 18. Apparently, its computers were programmed to automatically assess the penalty if the taxes were not deposited by the “normal” due date of April 15. However, that date was a legal holiday in Washington D.C. and all federal tax payments, including payroll tax deposits, normally due on that date received an automatic extension until the following Monday, April 18. In acknowledging the error, the IRS says it will retract the penalties with no further action required on the part of  taxpayers.

TSCPA Committee Raises Concerns about In-Person IRS Appeals Conferences

TSCPA’s Federal Tax Policy Committee recently issued a letter to IRS Commissioner Koskinen raising concerns about the direction the Office of Appeals is taking on face-to-face conferences. The committee recognizes the IRS must prioritize the use of its scarce workforce resources and funding. However, the strong need for human interaction with the IRS is critical in cases within Appeals jurisdiction where significant taxpayer rights are at stake. The IRS should encourage rather than discourage in-person conferences to achieve Appeals’ mission of resolving tax controversies in a fair and impartial manner for both the government and the taxpayers.

TSCPA Committee Issues Letter to IRS on EIN Program Deficiencies

TSCPA’s Federal Tax Policy Committee issued a letter to IRS Commissioner John Koskinen raising concerns about deficiencies in the employer identification number (EIN) program. The committee strongly feels that while recent identity theft and tax fraud schemes require IRS diligence in issuing EINs, the process for obtaining EINs for legitimate business, investment and tax purposes has become unnecessarily burdensome in many cases. It cited concerns with the limit imposed in 2012 of one EIN per day per responsible party, slow and ineffective paper and fax application procedures, the need for clarification of existing procedures, and lack of access to IRS contacts for EIN submission inquiries. These problems negatively impact the economy, hindering and in some cases perhaps even preventing such necessary and often routine transactions.