April 2012 Newsletter
President's Message
The saying regarding the month of March goes something like this: “In like a lion out like a lamb”. I can tell you a tax accountant did not write that! March for us here in our office came in like a lamb and went out like, like, (I don’t think ‘lion’ accurately describes the ferociousness I am looking for) Godzilla! Busy busy busy!
I am going to add one more item to your plate! I hope each one of you can find ten minutes to write your Representative and let them know whether or not you support amending Senate Bill 98 (House Bill 233). What is SB98 you ask?
Here is an executive summary:
SB98 (HB233) is “An Act relating to biometric information”, a privacy act. It goes on to limit obtaining and the use of the biometric information on individuals. Not an entirely unwarranted thought process. Where that impacts us as CPAs is the CPA exam. In order to sit for the exam, candidates must provide a two finger digital scan to be taken, stored and referred to for identification purposes. The passing rate of the CPA exam during 2011 was well under a 50% passing rate. There is a high desire for people to pass this exam and a number of them willing to cheat to have the appearance of passing. The joint venture of NASBA, AICPA and Prometrics, (These three groups together oversee and administer the exam.) have found that this two finger scan is highly effective for identifying that the person applying to take the exam is the same person actually taking the exam.
As an industry we are in favor of protecting an individual’s right to privacy. However, in the interest of securing the Public’s (the ‘P’ in CPA) interest and trust in CPA’s, we feel it is necessary to protect the means by which someone can earn the title of CPA. Keep in mind we are a self regulated industry and it is our duty for this oversight. We are asking the House of Representatives to add an exemption to the bill as it is now, allowing the exam to collect this data. If the bill is not amended and it passes as it stands, the NASBA, AICPA and Prometrics have stated they will pull the exam sites from the State of Alaska. I have no reason to doubt this. Candidates will have to leave the state and take the exam elsewhere.
The Board of Accountancy and the Alaska Society of CPA’s, who represent hundreds of CPA’s in Alaska, both believe it is very important to get an amendment included in SB 98.
If you have an interest in responding to your Representative regarding this bill you can follow this link: http://www.legis.state.ak.us/basis/get_bill.asp?bill=SB 98&session=27 or simpler yet, email Linda and she will forward to you links, email addresses, and copies of other letters already written so you may simply cut and paste and customize for yourself. We are happy to assist.
Myself? I have written over 10 letters and my staff even more.
To close I would like to give a big shout out for our Legislative Committee who is working diligently writing letters and attending hours of testimony on this issue, right in the middle of tax season! Lisa Rogers, Max Mertz, Chris Swalling, Don Rulien, Mike Cook, Mark Schnieter & Jason Bontrager, plus many others taking the time to address this matter.
Time is critical. Please do this today!
Alaska IRS Stakeholder Liaison
Did you know a group of tax professionals meet twice a year to discuss problems they might be having with the IRS. That statement alone might trigger sarcastic remarks from the audience, however with this group, the IRS is present and they are listening.
The Alaska IRS Stakeholder Liaison meeting occurs twice a year with local tax professionals and certain key IRS individuals, topics include identifying IRS problems, answering questions and speaking about other current IRS issues. The local tax professionals attending consist of tax attorneys, CPAs, and enrolled agents.
Although as tax professionals we are frequently on the other side of the table representing our clients, it is refreshing to meet with IRS employees. These people are concerned for our problems and go out of their way to get us the answers we need.
Should you or someone you know have a particular IRS problem which is not tax code related or legislative but more procedural, we are asking you to inform us so we can bring it to their attention. Many refer these problems as “systemic “which can include a IRS notice stating incorrect requirements, processing problems or something that has fallen out of normal IRS procedure and can't seem to get resolved. The IRS is very interested in these types of problems as they continue to upgrade their antiquated computer systems.
Two particular individuals who have contributed many hours to this committee and need to be mentioned are, Therese Sharp of Walsh, Kelliher & Sharp, CPA’s and IRS Stakeholder Liaison, Mike Cvitkovic. Therese has been the committee chair for many years and has worked tirelessly keeping the dates, agendas, and meetings flowing smoothly. Although the meetings are held in Anchorage, Therese travels from Fairbanks, all volunteer. Mike gets to hear all our complaints, investigate the problem, find a solution, and perhaps find someone to meet with us to present it. Both of these individuals need your "kudos" and other words of appreciation for their dedicated service to our Alaska tax community.
If you have an IRS procedural or “systemic” problem, or want to get involved, please contact myself or Therese Sharp.
Happy Tax Season!
John Rodgers, CPA
AKCPA Past President
IRS Updates and News Releases
Fresh Start Initiative: IRS Expands Penalty Relief and Installment Agreements
The Internal Revenue Service this week announced a major expansion of its “Fresh Start” initiative. The Service is providing new penalty relief for the unemployed and raising the dollar threshold for streamlined Installment Agreements. Find out how the IRS is helping your clients get back on track with their taxes. Watch this and other videos on the IRS YouTube Channel.
Failure to Pay Penalty Relief
- Applies to individual income tax for 2011 only
- Must apply by April 17, 2012 (Form 1127-A)
- Must full pay by October 15, 2012, or failure to pay penalty applies in full
- For MFJ returns, total 2011 AGI must be under $200,000. For all other filing statuses, 2011 AGI must be under $100,000
IRS Sends Test Results to Preparers
The Internal Revenue Service has begun providing test results to tax return preparers who have taken the new return preparer competency test. Those who pass the test and a tax compliance check will be given a new designation: Registered Tax Return Preparer.
Short Delay for Some Enrolled Agents Awaiting Renewal Cards
Last year's seven month moratorium on enrolled agent application processing while we completed the process of reducing the fee from $125 to $30 is unfortunately still affecting our ability to timely process the renewal applications for SSNs ending in 7, 8, 9, and null. While we have timely processed 3,500 renewals, we still have approximately 7,100 to complete. We are processing these remaining forms as quickly as possible and anticipate all will be completed by May 31, 2012. For those individuals who timely filed their renewal application and have an enrollment card with an expiration date of March 31, 2012, the card is valid for another 60 days or until receipt of a new card. Enrollment will not expire due to this IRS delay. We sincerely apologize for this inconvenience.
IRS Extends Deadline for Estates to File Estate Tax Return to Make Portability Election Benefiting Surviving Spouses
The Internal Revenue Service issued guidance that allows certain estates of married individuals who died during the first six months of 2011 an extension of the deadline to make the portability election.
March IMRS Report
The March Hot Issues report from the Issue Management Resolution System contains ways to connect with the IRS.
Updated information on Small Business Health Care Tax Credit
Revamped information on the Small Business Health Care Tax Credit includes simplified language and additional Q&As in a restructured format.
Taxpayer Service Center TAC Changes for the 2012 Filing Season
Beginning this year, IRS Taxpayer Assistance Centers generally will not accept bulk returns for processing and mailing, particularly when it affects taxpayer services. The IRS hopes to eliminate the practice of taxpayer representatives dropping off completed returns for processing, especially during peak operating periods. See article for details and examples of the types of returns TACs will accept.
2012 Refund FAQs Posted to IRS.gov
2012 Tax Season Refund Frequently Asked Questions
Nationwide Tax Forum Registration
The IRS Nationwide Tax Forums are now open for registration. Join tax professionals from across the country for three days of the latest tax law information, hands-on workshops and exhibits of the newest products and services. Take advantage of this opportunity to receive up to 18 CPE credits, network with your peers, learn from IRS and national association experts and receive assistance on your most difficult cases.
For more information or to register, visit the IRS Nationwide Tax Forum website atwww.irstaxforum.com.
Tax Year 2011 990 Series Returns Now Available
Forms 990 and 990-EZ, schedules, and instructions are now available on IRS.gov, as well as a list of significant changes for tax year 2011.
Commissioner Speaks before the Tax Council Policy Institute
Read the prepared remarks of IRS Commissioner Doug Shulman before the Tax Council Policy Institute.
Winter 2012 Statistics of Income Bulletin
The Internal Revenue Service today announced availability of the winter 2012 issue of the Statistics of Income Bulletin, which features preliminary data for 143 million individual income tax returns filed for tax year 2010.
IRS Creates Online Search Tool for Easier Check on Information About Exempt Organizations
The Internal Revenue Service has launched a new online search tool, Exempt Organizations Select Check, to help users more easily find key information about tax-exempt organizations, such as federal tax status and filings.
Users can now go to one location on IRS.gov, select a tax-exempt organization, and check if the organization:
- Is eligible to receive tax-deductible charitable contributions (Publication 78 data, which is incorporated here). Users may rely on this list in determining deductibility of contributions (just as they did when Publication 78 was a separate electronic publication rather than part of Select Check).
- Has had its federal tax exemption automatically revoked under the law for not filing a Form 990-series return or notice for three consecutive years (known as the Auto-Revocation List).
- Has filed a Form 990-N (e-Postcard) annual electronic notice. (Most small organizations whose annual gross receipts are normally $50,000 or less are required to electronically submit Form 990-N, unless they choose instead to file a completed Form 990 or Form 990-EZ.)
EO Select Check also offers improved search functions. For example, users can now look for organizations eligible to receive deductible contributions by Employer Identification Number (EIN), which was previously not a searchable or sortable field in the electronic Publication 78. And data about organizations eligible to receive deductible contributions are now updated monthly, rather than quarterly.
In addition, organizations that have automatically lost their tax exemptions may now be searched by EIN, name, city, state, ZIP Code, country, exemption type, and revocation posting date, rather than only by state. EO Select Check also provides new pop-up help text to assist users in understanding the significance of auto-revocation search results, including the meaning of, and distinctions between, revocation dates and revocation posting dates.
Employee Plans News
To read the March 20, 2012 Edition, please visit the Employee Plans News page in the Retirement Plans Community section of the IRS.gov Web site.
Technical Guidance
Notice 2012-22 modifies Notice 2006-52, 2006-1 C.B. 1175, and Notice 2008-40, 2008-1 C.B. 725, by providing an additional set of energy savings percentages that taxpayers may use to qualify for a partial section 179D deduction under the permanent rule for property placed in service on or after the effective date of the notice. Specifically, the applicable energy savings percentages provided under this notice are 25 percent for the interior lighting system, 15 percent for the HVAC and hot water systems, and 10 percent for the building envelope
Revenue Procedure 2012-23 contains tables showing the limits of depreciation deductions under section 280F for automobiles placed in service in 2012.
Revenue Procedure 2012-19 addresses the repair & maintenance, materials & supplies, and related method changes resulting from the tangible property temporary regulations. Specifically, it provides the procedures by which a taxpayer may obtain the automatic consent of the Commissioner of Internal Revenue to change to the methods of accounting provided in §§ 1.162-3T, 1.162-4T, 1.263(a)-1T, 1.263(a)-2T, and 1.263(a)-3T of the temporary Income Tax Regulations (T.D. 9564) for taxable years beginning on or after January 1, 2012.
Revenue Procedure 2012-20 addresses the depreciation, disposition, and related method changes resulting from the tangible property temporary regulations. Specifically, it provides the procedures by which a taxpayer may obtain the automatic consent of the Commissioner of Internal Revenue to change to the methods of accounting provided in §§ 1.167(a)-4T, 1.168(i)-1T, 1.168(i)-7T, and 1.168(i)-8T of the temporary Income Tax Regulations (T.D. 9564) for taxable years beginning on or after January 1, 2012.
Notice 2012-25 invites the public to submit recommendations for items that should be included on the 2012-2013 Guidance Priority List.
Revenue Ruling 2012-11 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by § 1274.
