IRS Offers New Tax Guide to Help Prepare 2013 Taxes

 

The Internal Revenue Service has published a newly revised comprehensive tax guide on IRS.gov to help taxpayers get the most out of various tax benefits. However, the IRS is discontinuing its printed wall calendar listing various tax due dates.

Publication 17, Your Federal Income Tax, features details on taking advantage of a wide range of tax-saving opportunities, such as the American Opportunity Tax Credit for parents and college students, and the Child Tax Credit and Earned Income Tax Credit for low- and moderate-income workers. It also includes a rundown on tax changes for 2013 including information on revised tax rates and new limits on various tax benefits for some taxpayers.  This useful 292-page guide also provides thousands of interactive links to help taxpayers quickly get answers to their questions

Publication 17 has been published annually by the IRS since the 1940s and has been available on the IRS web site since 1996. As in prior years, this publication is packed with basic tax-filing information and tips on what income to report and how to report it, figuring capital gains and losses, claiming dependents, choosing the standard deduction versus itemizing deductions, and using IRAs to save for retirement.

 

Besides Publication 17, IRS.gov offers many other resources for those doing year-end tax planning. Many 2013 forms are already posted, and updated versions of other forms, instructions and publications are being posted almost every day. Forms already available include Form 1040 and short Forms 1040A and1040EZ.

For tax professionals, the IRS also recently released the latest edition of its tax calendars in Publication 509, listing the due dates for various individual and business tax forms. However, according to a reader of Accounting Today, the IRS has discontinued the printed wall calendar that used to list the due dates on the pages of each month.

The IRS noted on the cover of Publication 509 that Publication 1518, IRS Tax Calendar for Small 
Businesses and Self-Employed, has been discontinued after 2013. However, the IRS said that an IRS Tax Calendar and most of the information previously contained in Publication 1518 can be found atwww.irs.gov/taxcalendar. The calendar dates can be imported into a user's own calendar sofware through the IRS CalendarConnector, and users can also subscribe to the IRS's Small Businesses Calendar through Outlook 2007 or 2010, or Mac iCal.

http://www.accountingtoday.com/news/IRS-Offers-New-Tax-Guide-Help-Prepare-2013-Taxes-69135-1.html?ET=webcpa:e9776:2885964a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=tpt_123013&taxpro

You may have violated tax law

You may have violated tax law

by submitting inaccurate returns

Our review of the Earned Income Tax Credit (EITC) returns you prepared for tax year 2012 indicates you may

have submitted inaccurate returns on behalf of your clients. Intentionally disregarding EITC tax law could

result in penalties and other consequences for you as the paid preparer and your clients. The primary issue we

identified on your TY 2012 returns is questionable income and expenses reported on Schedule Cs.

Letter 5025-C (Rev. 10-2013)

Catalog Number 59927S

Department of the Treasury

Internal Revenue Service

Date:

Tax year:

Contact telephone number:

If you file inaccurate EITC returns:

Your client may face:

• A ban for 2 or 10 years from claiming the EITC, depending on the reason we disallowed the EITC

• Accuracy-related or fraud penalties

• Interest charges on the amount he or she must repay

You may face:

• A $500 penalty for each failure to comply with EITC due diligence requirements (section 6695(g) of the

Internal Revenue Code)

• A penalty of at least $1,000 for each disallowed EITC claim if any part of the tax liability is understated

due to an unreasonable position (section 6694(a) of the Internal Revenue Code)

• A penalty of at least $5,000 for each disallowed EITC claim if any part of the tax liability is understated

due to willful or reckless conduct (section 6694(b) of the Internal Revenue Code)

If we assess return-related penalties against you, we might also:

• Revoke your status as a registered return preparer

• Bar you from preparing tax returns

• Refer you for criminal investigation

• Suspend or remove you or your firm from IRS e-file

• Conduct a due diligence audit

Last year, over 90% of due diligence audits resulted in a preparer penalty.

Requirements for paid preparer due diligence

As a paid preparer, you must take extra steps to ensure your EITC returns are complete and correct (section

6695(g) of the Internal Revenue Code and section 1.6695-2 of the Treasury Regulations). You must use your

knowledge of the tax laws to ask your clients the right questions and document your questions and their

responses to meet the following four due diligence requirements:

Letter 5025-C (Rev. 10-2013)

Catalog Number 59927S

DUE DILIGENCE REQUIREMENTS

STEP 1 Complete Form 8867, Paid Preparer's Earned Income Credit Checklist, and submit it with

every EITC return you prepare.

STEP 2 Complete an EITC worksheet, or its equivalent, that shows how you computed the EITC.

STEP 3

• Analyze the information your client provides and ask appropriate questions in response

• Evaluate whether the information is incomplete and gather any missing facts

• Determine if the information is inconsistent or incorrect (recognize contradictions or

statements you know could not be true)

• Document your inquiries and your client's responses

STEP 4

Keep copies of:

• The completed Form 8867

• Your EITC worksheet

• Records of who provided you with EITC eligibility information and when they provided it

• Documents your clients provided that you relied on to determine eligibility for the EITC or

to compute the amount of the EITC

You must keep these records for 3 years from the later of:

• The due date of the return

• The date the return was e-filed

• The date the taxpayer signed the return

• The date you gave the part you prepared to the signing return preparer

Sincerely,

The most common reason we assess due diligence penalties is for failure to meet the knowledge requirement

(step 3 of the due diligence requirements). You should:

- Conduct an in-depth interview with every client, every year

- Apply a common sense standard to the information your client provides

- Ask additional probing and relevant questions if a reasonable and well-informed tax return preparer

knowledgeable in the law would conclude that any information appears to be incorrect, inconsistent, or

incomplete.

Tax software is a tool, not a substitute for your tax law knowledge and common sense. I am enclosing

Publication 4687, EITC Due Diligence Brochure.

For more information on EITC requirements or EITC due diligence

Visit our website at www.eitc.irs.gov/rptoolkit/main/. If you have further questions, you must call us within

30 days at the number at the top of this letter.

We will monitor your future returns to ensure that your accuracy improves.

Enclosure:

Publication 4687

Letter 5025-C (Rev. 10-2013)

Click to read actual PDF
http://www.eitc.irs.gov/EITCCentral/5025C.pdf

Catalog Number 59927S

2014 PTIN

2014 PTIN Renewal Period Underway for Tax Professionals

IR-2013-85, Oct. 31, 2013

WASHINGTON — The Internal Revenue Service today reminded the nation’s almost 690,000 federal tax return preparers that they must renew their Preparer Tax Identification Numbers (PTINs) for 2014. All current PTINs will expire on Dec. 31, 2013.

Anyone who, for compensation, prepares or helps prepare any federal return or claim for refund must have a valid PTIN from the IRS. The PTIN must be used as the identifying number on returns prepared.

“We ask that you renew your PTIN as soon as possible to avoid a last-minute rush. It’s easy to let this slip as the holiday season approaches,” said Carol A. Campbell, Director, IRS Return Preparer Office.

The PTIN system is ready to accept applications for 2014.

For those who already have a 2013 PTIN, the renewal process can be completed online and only takes a few moments. The renewal fee is $63. If you can’t remember your user ID and password, there are online tools to assist you. Preparers can get started at www.irs.gov/ptin.

If you are registering for the first time, the PTIN application fee is $64.25 and the process may also be completed online.

Form W-12, IRS Paid Preparer Tax Identification Number Application and Renewal, is available for paper applications and renewals, but takes four to six weeks to process. Failure to have and use a valid PTIN may result in penalties. All enrolled agents, regardless of whether they prepare returns, must have a PTIN in order to maintain their status.

There have been a number of enhancements to the online PTIN system since last year. They include:

• The fully functional "Manage My Account" tool allowing preparers to self-correct almost any field at any time (including professional credentials). Previously, most changes had to be made during renewal. A phone call was required for users to make changes during the rest of the year. However, for security reasons, name changes still require written documentation.
• Preparers can now view completed continuing education programs reported by IRS-approved providers beginning with 2013 courses. Providers report completed CE programs to the IRS based on your PTIN number. Enrolled agents must have a minimum of 16 CE hours annually and a total of 72 hours every  three years. Others can also view voluntary programs completed. If something is missing, contact your provider directly as we only display what providers send to us.
• Planning to take a year off for any reason? A new function allows certain preparers to inactivate their PTINs voluntarily and then reactivate the same number when they return to work. This is only for those preparers who plan to take a full year off. If you are paid to prepare tax returns during any part of a year, you must have a valid PTIN. Note: Enrolled agents must maintain a valid PTIN each year in order to maintain their EA credential and therefore are not eligible to inactivate their PTIN.

For more information about requirements for federal tax professionals and access to the online PTIN system, go to www.irs.gov/for-Tax-Pros. 

IRS Warns of Phone Scam

IRS Tax Tips November 7, 2013

 

Useful Links: IRS.gov Home 1040 Central Help For Hurricane Victims News Essentials What's Hot News Releases IRS - The Basics IRS Guidance Media Contacts Facts & Figures Problem Alerts Around The Nation e-News Subscriptions The Newsroom Topics Tax Tips 2013 Radio PSAs Fact Sheets Armed Forces Disaster Relief Scams / Consumer Alerts Tax Shelters IRS Resources Compliance & Enforcement News Contact My Local Office Filing Options Forms & Pubs Frequently Asked Questions News Taxpayer Advocate Where to File

Issue Number:    IRS Special Edition Tax Tip 2013-13 Inside This Issue IRS Warns of Phone Scam The IRS is warning the public about a phone scam that targets people across the nation, including recent immigrants. Callers claiming to be from the IRS tell intended victims they owe taxes and must pay using a pre-paid debit card or wire transfer. The scammers threaten those who refuse to pay with arrest, deportation or loss of a business or driver’s license. The callers who commit this fraud often: Use common names and fake IRS badge numbers. Know the last four digits of the victim’s Social Security number. Make caller ID appear as if the IRS is calling. Send bogus IRS emails to support their scam. Call a second time claiming to be the police or DMV, and caller ID again supports their claim. The truth is the IRS usually first contacts people by mail – not by phone – about unpaid taxes. And the IRS won’t ask for payment using a pre-paid debit card or wire transfer. The agency also won’t ask for a credit card number over the phone. If you get a call from someone claiming to be with the IRS asking for a payment, here’s what to do: If you owe federal taxes, or think you might owe taxes, hang up and call the IRS at 800-829-1040. IRS workers can help you with your payment questions. If you don’t owe taxes, call and report the incident to the Treasury Inspector General for Tax Administration at 800-366-4484. You can also file a complaint with the Federal Trade Commission at FTC.gov. Add "IRS Telephone Scam" to the comments in your complaint. Be alert for phone and email scams that use the IRS name. The IRS will never request personal or financial information by email, texting or any social media. You should forward scam emails to phishing@irs.gov. Don’t open any attachments or click on any links in those emails. Read more about tax scams on the genuine IRS website, IRS.gov. Additional IRS Resources: Treasury Inspector General for Tax Administration FTC Complaint Assistant Report Phishing Protect Yourself from the Dirty Dozen Tax Scams IRS YouTube Video: Tax Scams – English | Spanish | ASL



 

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2014 PTIN Renewal OPENED

1.  2014 PTIN Renewal Period Underway for Tax Professionals

---

The Internal Revenue Service reminded the nation’s almost 690,000 federal tax return preparers that they must renew their Preparer Tax Identification Numbers (PTINs) for 2014. All current PTINs will expire on Dec. 31, 2013.

IR-2013-85, Oct. 31, 2013

WASHINGTON — The Internal Revenue Service today reminded the nation’s almost 690,000 federal tax return preparers that they must renew their Preparer Tax Identification Numbers (PTINs) for 2014. All current PTINs will expire on Dec. 31, 2013.

Anyone who, for compensation, prepares or helps prepare any federal return or claim for refund must have a valid PTIN from the IRS. The PTIN must be used as the identifying number on returns prepared.

“We ask that you renew your PTIN as soon as possible to avoid a last-minute rush. It’s easy to let this slip as the holiday season approaches,” said Carol A. Campbell, Director, IRS Return Preparer Office.

The PTIN system is ready to accept applications for 2014.

For those who already have a 2013 PTIN, the renewal process can be completed online and only takes a few moments. The renewal fee is $63. If you can’t remember your user ID and password, there are online tools to assist you. Preparers can get started at www.irs.gov/ptin.

If you are registering for the first time, the PTIN application fee is $64.25 and the process may also be completed online.

Form W-12, IRS Paid Preparer Tax Identification Number Application and Renewal, is available for paper applications and renewals, but takes four to six weeks to process. Failure to have and use a valid PTIN may result in penalties. All enrolled agents, regardless of whether they prepare returns, must have a PTIN in order to maintain their status.

There have been a number of enhancements to the online PTIN system since last year. They include:

• The fully functional "Manage My Account" tool allowing preparers to self-correct almost any field at any time (including professional credentials). Previously, most changes had to be made during renewal. A phone call was required for users to make changes during the rest of the year. However, for security reasons, name changes still require written documentation.
• Preparers can now view completed continuing education programs reported by IRS-approved providers beginning with 2013 courses. Providers report completed CE programs to the IRS based on your PTIN number. Enrolled agents must have a minimum of 16 CE hours annually and a total of 72 hours every  three years. Others can also view voluntary programs completed. If something is missing, contact your provider directly as we only display what providers send to us.
• Planning to take a year off for any reason? A new function allows certain preparers to inactivate their PTINs voluntarily and then reactivate the same number when they return to work. This is only for those preparers who plan to take a full year off. If you are paid to prepare tax returns during any part of a year, you must have a valid PTIN. Note: Enrolled agents must maintain a valid PTIN each year in order to maintain their EA credential and therefore are not eligible to inactivate their PTIN.

For more information about requirements for federal tax professionals and access to the online PTIN system, go to www.irs.gov/for-Tax-Pros.
http://www.irs.gov/uac/Newsroom/2014-PTIN-Renewal-Period-Underway-for-Tax-Professionals