Status of Enrolled Agents This year’s enrolled agent renewal cycle has finished, and the IRS is now beginning the annual clean-up of those who have Social Security Numbers ending in 0, 1, 2, or 3 and did not timely renew. Those who did not renew during the 2016 and 2019 cycles will be moved to terminated status (2,700+). Those who did not renew during the 2019 cycle will be moved to inactive status (4,900+). Letters will be sent to all affected Enrolled Agents beginning this week advising them of the IRS planned action. See letter samples here and here. Anyone in inactive status can still submit a late renewal for approval; with proof of continuing education. Anyone in terminated status must re-take the Special Enrollment Exam (IRS SEE) to apply for re-enrollment. If an EA disagrees and has a record of previously renewing their EA status, they should contact the number on the letter they receive.
Taxes-Security-Together Checklist – Step 2: Written Data Security Plan The IRS, state tax agencies and the nation’s tax industry today reminded all “professional tax preparers” that federal law requires them to create a written information security plan to protect their clients’ data. The reminder came as the IRS and its Security Summit partners urged tax professionals to take time this summer to review their data security protections. To help them in this complex area, the Summit created a special “Taxes-Security-Together” Checklist as a starting point. “Protecting taxpayer data is not only a good business practice, it’s the law for professional tax preparers,” said IRS Commissioner Chuck Rettig. “Creating and putting into action a written data security plan is critical to protecting your clients and protecting your business.” Creating a data security plan is the second item on the “Taxes-Security-Together” Checklist. The first step for tax professionals involved deploying the “Security Six” basic steps to protect computers and email. Although the Security Summit — a partnership between the IRS, states and the private-sector tax community — is making major progress against tax-related identity theft, cybercriminals continue to evolve, and data thefts at tax professionals’ offices remain a major threat. Thieves use … Read More
IRS Issues Draft 2019 Form 1040 and Schedules Draft 2019 Form 1040 Draft 2019 Form 1040, Schedule 1 Draft 2019 Form 1040, Schedule 2 Draft 2019 Form 1040, Schedule 3 The IRS has issued draft versions of 2019 Form 1040 and the schedules that accompany that form. Notably, the six schedules that existed in 2018 are now just three schedules in the 2019 drafts. Here are some of the notable changes from 2018 that are reflected on the 2019 drafts: The filing status line at the top of Form 1040 asks for additional information for taxpayers whose filing status is Married, filing separately (the name of the spouse) and Head of household and Qualifying widow(er) (name of child who isn't a dependent). The detailed listing of types of gross income, which had been on schedules last year, is now on page 1 of Form 1040. For example, the line for capital gains or losses, that was on the 2018 Schedule 1 is now on Form 1040, Line 6. The checkbox for health care coverage has been removed; health care coverage is not required in 2019 in order to avoid a tax penalty. Several of the most-used credits, e.g., the earned … Read More
Nina Olson’s Final Report: National Taxpayer Advocate Nina Olson Delivers her Final Report to Congress National Taxpayer Advocate Nina E. Olson released her 37th and final report to Congress in advance of her previously announced retirement on July 31. In the preface, Olson reflects on her 18 years in the job and provides her assessment of the key challenges facing the IRS and the Taxpayer Advocate Service (TAS) in the coming years. The report also presents a review of the 2019 filling season. “I am enormously grateful for the opportunity I have had to advocate on behalf of our nation’s taxpayers,” Olson wrote. “Amazingly, despite the challenges of complying with our multi-million-word tax code, more than 150 million individual taxpayers and more than 10 million business entities do their civic duty every year by filing income tax returns with the IRS. That is an extraordinary achievement and one we should not take for granted.” Olson continued: “But even as the system works for most taxpayers most of the time, it doesn’t work for millions of others. Taxpayer service is woefully inadequate. . . . IRS audit notices are often unclear, leading some taxpayers to ‘agree’ to assessments by default – … Read More
IRS tax payment options The Internal Revenue Service today advised those now receiving tax bills because they filed on time but didn’t pay in full that there are many easy options for IRS tax payments owed. IRS tax payment options include paying online, by phone or using their mobile device. Taxpayers who can’t pay in full may consider payment plans and compromise options; the IRS wants anyone facing a tax bill to know that they have many choices available to them. If a tax return was filed but the amounts owed are unpaid, the taxpayer will receive a letter or notice in the mail from the IRS, usually within a few weeks. These notices, including CP14 and CP501, which notify taxpayers that they have a balance due, are frequently mailed during June and July. Recent major tax law changes affect most taxpayers, and while the vast majority are receiving refunds, others discovered that they owe tax this year. Many of them may qualify for a waiver of the estimated tax penalty that normally applies. See IRS Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts, and its instructions for details. Taxpayers are reminded to pay as much as … Read More
ASAP: Taxpayers should check withholding All taxpayers should check their withholding – also known as doing a Paycheck Checkup – as soon as possible. They should do a checkup even if they did one last year. By checking their withholding, taxpayers can make sure enough is being taken out of their paychecks or other income to cover the tax owed. Here are some things taxpayers should know about withholding and why checking it is important: Taxpayers should check their withholding as early in the year as possible. If someone still has not done a Paycheck Checkup, there’s still time to get their withholding on track. They should do a checkup ASAP. Taxpayers should also check their withholding when life changes occur. These changes include things like: Marriage or divorce Birth or adoption of a child Purchase of a home Retirement Chapter 11 bankruptcy New job or loss of job Some taxable income is not subject to withholding. People with this income who also have income from a job may want to adjust the amount of tax their employer withholds from their paycheck. This includes income from things like: Interest Dividends Capital gains Self-employment and gig economy income IRA distributions, including … Read More