Renew Your Enrolled Agent Status

NSTPInternal Revenue Service (IRS)

The IRS sent renewal reminder messages on November 7th to enrolled agents with social security numbers that end in 7, 8 or 9, and those who do not have an SSN that they must renew their status by January 31, 2015 in order to remain eligible to practice before the IRS.  The renewal cycle is every three years, depending on the last digit in your social security number, and you must obtain 72 hours of continuing education every three years of which you must obtain a minimum of 16 hours of continuing education per year (2 of which must be on ethics). • Renew your license using Form 8554, Application for Renewal of Enrollment to Practice     Before the IRS, at www.pay.gov between November 1, 2014 and January 31, 2015. • Go to www.pay.gov and enter “8554” in the Search Public Forms box on the left-hand side. • Complete the online form and pay the $30 renewal fee. • Renewals may take up to 90 days to process. All enrolled agents must also have a Preparer Tax Identification Number (PTIN) which is entered on Form 8554. If your contact information has changed since the time of your last renewal, notify the IRS by fax or … Read More

Rules on IRS Rollovers

NSTPInternal Revenue Service (IRS)

A provision in the tax law allows you to roll over funds from one IRA to another within 60 days without being liable for any current tax. This effectively gives someone the interest-free use of funds for 60 days. However, the tax law also limits you to only one such rollover within a 12-month period. The once-a-year rule doesn’t apply to trustee-to-trustee transfers from one IRA to another where the money never touches the taxpayer’s hands. Taxpayers can continue to use trustee-to-trustee rollovers as often as they like – no matter when. Initially, this once-a-year rule was interpreted by most tax experts to apply separately to each IRA owned by a taxpayer. The IRS even agreed with this view in its own Publication 590 (Individual Retirement Accounts). But then along came the Bobrow case (TC Memo 2014-21). Essentially, Bobrow rolled over assets between IRAs within 60 days early in the year and then rolled over IRAs within the 60 days later in the year. He did not use the same IRA for a rollover more than once within the 12-month period, so it looked like he was in the clear. Bobrow paid no tax on his IRA distributions for the … Read More

New Social Security Statements to be Mailed

NSTPInternal Revenue Service (IRS)

For the first time since 2011 the Social Security Administration will be mailing annual statements. The Social Security Administration had encouraged Americans to access their annual report online by setting up an account through my Social Security. However, only about 14 million wage earners have logged onto the website to create an account. The new paper statements will be sent out every five years to recipients who are 25 years old or older and have not registered for my Social Security online accounts. Email reminders are sent out on an annual basis to those with an online account to review their statement for accuracy. It is important to review the statement on a regular basis to confirm that all earned income has been reported to the SSA and posted to your account. Since the retirement benefit is based on the worker’s annual earned income and number of years worked, the absence of income can have a significant impact on their retirement benefit. The annual statement also provides projected benefits you will receive on retirement based on the age of retirement and current earned income. With the information provided on the annual statement, additional calculations can be performed to determine the … Read More

2015 Tax Filing Season Promises to be Challenging for the IRS, Tax Practitioners and Taxpayers:

NSTPInternal Revenue Service (IRS), Tax Professionals

Internal Revenue Service Commissioner John Koskinen warned that close to half the people trying to reach the IRS by phone might not get through during the upcoming 2015 tax filing season. “Phone service could plummet to 53%,” he told an audience of tax practitioners at the AICPA National Tax Conference in Washington, D.C.  That would be down from an already dismal 72% response rate during the 2014 filing season. Budget cuts to the Internal Revenue Service will affect all areas of customer service. “All we can do is to try to maximize our services as well as we can; as well as we can is still going to be miserable. You really do get what you pay for,” he said. At the same meeting Nina Olson, National Taxpayer Advocate, was even more dispirited.  “ since I’ve been the National Taxpayer Advocate {in 2001}; I’d love to be proved wrong, but I think it will rival the 1985 filing season when returns disappeared.” Several factors are contributing to the challenges facing the IRS this upcoming tax filing season:  a reduced budget; implementation of the Affordable Care Act and the Foreign Account Tax Compliance Act (“FATCA”); possible delay of the tax filing season … Read More

IRPAC Issues Annual Report

NSTPAnnual Report for 2014, Information Reporting Program Advisory Committee (IRPAC)

The Information Reporting Program Advisory Committee (IRPAC) issued its annual report for 2014, including numerous recommendations to the Internal Revenue Service on new and continuing tax administration issues. “The IRS values the insight and perspective IRPAC provides,” IRS Commissioner John Koskinen said. “The committee members have experience working with an incredibly diverse range of individual taxpayers and organizations both large and small. Their feedback helps us improve tax administration for the nation, and we will study their recommendations closely.” The report includes a discussion of the IRS Taxpayer Identification Number Matching Program and a recommendation that IRS expand the program, permitting financial and other firms to use it to verify taxpayer names and identification numbers on a greater variety of information returns. During 2014, the committee continued its dialogue with IRS officials regarding reporting requirements under the Foreign Account Tax Compliance Act (FATCA) and the Affordable Care Act (ACA). The report also includes recommendations involving procedures for business taxpayer address changes, third-party sick pay reporting, Form 1099-K, Payment Card and Third Party Network Transactions, and Form1099-B, Proceeds from Broker and Barter Exchange Transactions, among other recommendations. The full 2014 IRPAC Public Report is available online. IRPAC is a federal advisory committee … Read More

Federal Judge Dismisses AICPA Lawsuit Against The IRS

NSTPAmerican Institute of Certified Public Accountants (AICPA), Internal Revenue Service (IRS), Voluntary Program

The AICPA had filed a lawsuit in July 2014 alleging that the new Annual Filing Season Program (AFSP) harmed their members because they hired individuals who would be injured by the additional burden of the AFSP, it would create an additional burden for the firms as they would need to take additional steps to be sure their employees complied with Circular 230, and that their members would be harmed because the program would confuse the American taxpayer. The District Court determined that the AICPA did not have the standing to challenge the voluntary program as none of their members had suffered any harm due to the AFSP.  The court dismissed the AICPA lawsuit against the IRS. For a party to have standing to bring an action: (1) the party must have suffered an injury in fact; (2) there must be a causal connection between the injury and the conduct complained of; and (3) it must be likely that the injury will be redressed by a favorable decision. If any of these three prongs is deficient, the plaintiff will not have standing to sue. The AICPA claimed injury, not to itself, but to its members. Therefore, it was required to establish … Read More