TAXPRO BUZZ

 The tax filing season – my 50^th – is over, so I’m baaaaaaack!

+ Speaking of my milestone, I reminisce about my “50 Years of Preparing 1040s” in a series of posts at THE WANDERING TAX PRO.  Check out -

“My First 1040”

“How It All Began”

“The Great Unwashed”

+ My post on “The Great Unwashed” deals with clients.  Kelly Phillips Erb discusses clients in a blast from the past“ from her TAXGIRL blog – “Don't Be That Client: 8 Clients That Drive Tax Pros Crazy”. 

+ Getting back to THE WANDERING TAX PRO – have you seen my annual “That Was The Tax Season That Was 2021” review of the tax filing season yet?  Why not? 

+ And before we leave TWTP – I discuss the benefits of filing separate returns in “Joint Vs Separate – That Is The Question.” 

+ This legislation certainly makes sense to me.  The Tax Deadline Simplification Act would amend the Internal Revenue Code of 1986 to have estimated income tax installments paid on a truly quarterly basis.

+ The NATP BLOG provides us with a “Summary of the American Families Plan and other recent proposals”.

+ Kay Bell, the yellow rose of taxes, explained “Biden's first federal budget covers campaign & tax promises” at DON’T MESS WITH TAXES.

TAFN

TAXPRO BUZZ

 

I am waiting to receive more responses to my interview questionnaire – so no “Meet and Greet” today.

 

Instead, here is some Taxpro BUZZ of note -

 

+ The IRS and the SSA have recently released new COLA and inflation-adjusted numbers for 2018 under current tax law.  Click here to see my compilation of these new numbers.  Keep in mind possible tax reform legislation will change, and could even eliminate, some of the numbers in the compilation.

 

+ MY TAX COURSES ONLINE BLOG provides “a checklist of things you should take care of prior to tax season so that everything runs smoothly” in “Now is the time - Pre-Tax Season Checklist”.

 

While the post suggests participating in the AFSP under “Get your education and training”, I do not find this IRS program valuable.  But now is a great time to sign up for the NATP year-end update classes “The Essential 1040” and “Beyond the 1040”.  Click here for more information.

 

And also check with the appropriate state chapter of NATP or other tax preparer membership organizations for year-end state tax seminars and workshops.

 

The bottom line -

 

“Tax season can be stressful but it's easy to mitigate this stress if you have a solid plan in place and follow this checklist. By preparing for tax season early, you can avoid technical and administrative snags and make January-April run as smoothly as possible.”

 

+ It appears that silence won’t be golden on 2017 tax returns.  Michael Cohn explains “IRS won’t accept returns next year without health coverage” at ACCOUNTING TODAY –

 

“In an update Friday to the web page of its ACA Information Center for Tax Professionals, the IRS said will not accept the electronic tax return until the taxpayer indicates whether they had coverage, had an exemption or will make a shared responsibility payment. On top of that, the IRS said tax returns filed on paper that don’t address the health coverage requirements may be suspended pending the receipt of additional information and any refunds may be delayed.”

 

+ The TAX FOUNDATION has released its annual State Business Tax Climate Index, which “enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare”.

 

No surprise that my former home state of New Jersey is #50 in overall ranking – like Oliver Twist last on the list!  My relatively new home state of Pennsylvania ranks #26.

 

The 10 best states in this year’s Index are:

 

1. Wyoming

2. South Dakota

3. Alaska

4. Florida

5. Nevada

6. Montana

7. New Hampshire

8. Utah

9. Indiana

10. Oregon

 

The 10 lowest ranked, or worst, states in this year’s Index are:

 

41. Rhode Island

42. Louisiana

43. Maryland

44. Connecticut

45. Ohio

46. Minnesota

47. Vermont

48. California

49. New York

50. New Jersey

 

Where does your state rank?

 

+ My fellow tax blogger Russ Fox lists “The Five ‘Strangest’ Things Clients Told Us This Tax Season” at TAXABLE TALK.

 

During my 45 years in “the business” I have heard a lot of strange things from clients – about taxes and other topics.  And I expect you have, too.  I am sure you have all heard the same strange stuff told to Russ – and stuff even stranger. 

 

What are the strangest things you have heard from your clients over the y ears?

 

+ Whatever you may think of the IRS, its website if chock-a-block with helpful information.  I recently learned of this page – “Taxpayers Who are Victims of Domestic Abuse Should Know Their Rights”.

 

Guys (and dolls) – please tell your co-workers and colleagues about this blog.  Thanks!

 

TAFN

 

I have been preparing 1040s since 1972. Over the years I have developed a collection of forms, schedules and worksheets that have proven very helpful in my practice. 

 

Some of my forms are given to clients to help them provide me with the information I need to properly prepare their returns. Some are used as “memos” to the client’s copy and my office file copy to back-up items reported on the returns. Others are used as attachments to the returns.

 

I offer this compilation to you for only $7.95!

 

Click below for more information-

http://robertdflach.blogspot.com/p/blog-page.html

 

ANOTHER PRACTICE TIP AND SOME TAXPRO BUZZ

Here is a practice tip to cover your arse when it comes to agita-producing clients who want to blame you for their omissions when caught by the IRS.

 

Place a personalized stamp or mark on all original documents you have viewed in the course of preparing an income tax return and will return to the client.  This way a client can’t say he gave you information that you failed to include on the return if he is audited and tries to claim “I told my tax preparer, but he forgot to report it”.

 

For example - enter your initials followed by a sequential number and an arbitrarily chosen non-sequential capital letter - RDF1C, RDF2T, RDF3W, RDF4M, RDF5F - with a colored pen on each item.  The letter “F”, or whatever other letter you chose, indicates the last document viewed in the sequence.  So even the most devious client cannot sneak in a 6th item.

 

When I first provided this idea in another venue I received the following comment -

 

“I read the part of your post about marking the documents presented for tax prep.  I started doing that a few years ago after a client did exactly what you described.  I use a specific rubber stamp for each preparer in the office. I also staple the paperwork into the client folder.  So when a client told me I missed a 1099-B this year we asked for the original file I gave him.  Funny how the paper I missed didn’t have my stamp on it nor did it show staple marks.”    

 

Do you have an idea that has worked in your practice?  You can email me at rdftaxpro@yahoo.com with TAX PRACTICE TIP in the “subject line”.  I will post a compilation of submitted tips here in a future post.

 

TAXPRO BUZZ

 

+ Have you heard yet?  Kay Bell, the yellow rose of taxes, tells us “IRS to seek stay in PTIN fee collection court ruling while it pondersits additional legal options” at DON’T MESS WITH TAXES.

 

While Kay says the IRS and Department of Justice have not officially decided to appeal the decision that shut down the collection of a fee to apply for or renew a tax preparer’s “PTIN” (Preparer Tax Identification Number), IRS Commissioner Koskinen “said his agency is likely to appeal the PTIN ruling”.

 

So, fellow tax pros, don’t expect a PTIN fee refund check in the mail any time soon.

 

+ I came across this article via Twitter – “Which Superheroes Would Make the Best CPAs?".

 

Of course, coming from an AICPA source, it has the arrogance of limiting its reference to CPAs when it applies to all accountants and tax pros as well.

 

+ My editor at the NJ TAXING TIMES told me, and other NJ tax preparers, about a great resource for tax pros and taxpayers – a “Glossary of Tax Terms” from the NJ Division of Taxation.  It is indeed comprehensive and the individual definitions include links to appropriate pages on the NJDOT website.

 

+ Here is a reminder for tax pros with clients receiving a Form 1099-C for cancellation of debt from fellow tax blogger Jason Dinesen - “Insolvency Calculation: What Does “Interest in a Retirement Account” Mean?”

 

TAFN

 

 

I have been preparing 1040s since 1972. Over the years I have developed a collection of forms, schedules and worksheets that have proven very helpful in my practice. 

 

Some of my forms are given to clients to help them provide me with the information I need to properly prepare their returns. Some are used as “memos” to the client’s copy and my office file copy to back-up items reported on the returns. Others are used as attachments to the returns.

 

I offer this compilation to you for only $7.95!

 

Click below for more information-

http://robertdflach.blogspot.com/p/blog-page.html

 

TAXPRO BUZZ

+ The madness continues.  Jamaal Solomon talks about: “Receiving CPE Offers” in “Confessions of a Mad Tax Accountant #4”.

I, too, have noticed that many new CPE providers have sprung up, and have solicited me via email, since the IRS initiated its now hopefully defunct required RTRP regime.  And new RTRP-related membership organizations, most really thinly-veiled profit-making CPE providers also appeared.

While I have attended CPE from various providers and organizations over the years, lately I have limited my CPE to NATP and the NJ chapter, but I also recommend the IRS Nationwide Tax Forum.  Unlike JS, I do not complain about CPE emails, as I am always looking for new legitimate providers either nearby or at locations I would like to visit.

I look forward to the next installment in the Mad Tax Accountant series – “Arrogance of Some (Not All) Old Accountants (30+ years)”.

+ The always on the ball ACCOUNTING TODAY gives us the word that “IRS Postpones Shutdown of Online e-Services Apps” -

“The Internal Revenue Service said Friday that it is delaying the planned retirement of its Disclosure Authorization and Electronic Account Resolution online applications for three weeks.”

+ The IRS has issued draft copies of a lot of 2013 forms and instructions recently.  Click here to check them out.

+ Diane Gilabert explores “The Section 199 Deduction – 9 True/False Questions” at her TAX MAVEN BLOG –

“The section 199 deduction is one of the most overlooked tax breaks for businesses. The alphabet soup of acronyms is intimidating. But a potential tax deduction of 9% of qualifying taxable income is too compelling to pass up.”  

+ And DG also provides a detailed “Purchase Price Allocation Example” for reporting the sale of a business.

RDF

TAXPRO BUZZ

+ “Psychopathic CPAs? Not Likely”.  I don’t know about that.

Bill Sheridan of the MARYLAND ASSOCIATION OF CPAS suggests that, according to the Great British Psychopath Survey, “If you're a CPA, here's a bit of good news: You're probably not a psychopath.”

It is no surprise that #2 on the list of the most psychopathic professions is Lawyer.  With some exceptions, I have always thought of lawyers as #2.

+ TAX MAVEN Diane Gilabert lists “5 Things Bill Belichick can Teach us About Winning an IRS Audit”, the third installment in her series on IRS audits.

To be honest, until I read the post I had no idea who Bill Belichick was.  The only sport I follow is bowling. 

+ A “tweet” led me to “David Letterman Top Ten Things I've Learned From Being An Accountant”

+ TAX PROFESSIONALS RESOURCE has a great inventory of “Tax Articles”.

+ FYI, the “other NSA” is offering an online seminar on “Financially Distressed Taxpayers: Cancellation of Debt, Foreclosures and Repossessions” on August 27th at 2:00 PM EDT, 1:00 PM CDT, 12:00 PM MDT, 11:00 AM PDT.

RDF

TAXPRO BUZZ

Finally a “meaty” Taxpro BUZZ!

+ Jamaal Solomon has posted #2 of his series of “Confessions of a Mad Tax Accountant” - “Dealing With Bum Clients”. 

I agree when JS says -

“There is nothing wrong with firing bum clients. Life is too and complex to deal with them! Firing bum clients will give you more time to concentrate on your valuable clients.” 

As tax pros we get enough agita dealing with the IRS, the states, and good clients.  More agita we don’t need.

JS is more lenient than I am – he gives these cafones “two chances to prove that I should keep them as clients”.  At this point in my career, especially as I am trying to “thin the herd”, one strike and you are out.

+ In “Spousal IRAs Retitled” JK LASSER tells us that “In honor of a former U.S. senator, the spousal IRA has been renamed the Kay Bailey Hutchison Spousal IRA.”  Like the Keogh Plan, the Roth IRA, the Coverdell Education Savings Account, and the Pease in PEP and Pease.

I am not familiar with KBH, so I cannot properly comment on the appropriateness of the naming – but considering today’s Congress it seems the members deserve contempt more than they do “honor”.

Back in the late 80s (I believe) someone suggested that the government “sell” naming rights to bills and items created therein, like what is done with stadiums and concert venues.  For example the “Citibank Spousal IRA”.  At least that would generate some cash to reduce the deficit. 

+ Once again Jason Dinesen asks “What’s the Upside of Preparer Regulation for Enrolled Agents?” in light of “recent NAEA talking points were regarding tax preparer regulation at a legislative day NAEA held in Washington, D.C. in May.”

As usual, Jason makes good points.  And he again correctly points out that most of the taxpayer public has no idea, or the wrong idea, what an EA is. 

I believe my proposal for incorporating the RTRP designation, with a more difficult competency test (and a grandfathering exemption from the test for proven experienced tax pros), into a 2-part voluntary certification program with the Enrolled Agent credential would appropriately deal with his issues.  See my TAXPRO TODAY editorial “What the IRS Should Do About the RTRP”.

+ I have not attended an IRS Nationwide Tax Forum since the east coast location was changed from New York City to National Harbor (near Wash DC).  They are a good source of CPE, although the individual seminars are limited (at least when I attended) to 50 minutes, which also limits the coverage of a topic or ability for Q+A.  The seminar rooms were always crowded, and it was often difficult to take notes as there were no tables at which to sit. 

The main benefit of the Forum is the IRS speakers – hearing the Service’s point of view on tax topics.  It also has a good Exhibition Hall.

Kay Bell attended the recent Forum in the Dallas/Fort Worth area and blogged about it in “Documentation is the Word of the Day at the IRS Tax Forum”, “Werfel Makes IRS Budget Case at Texas Tax Preparers Meeting”, and “Entrepreneurs, Taxes and Tunes, aka Fun at the IRS Tax Forum”.

I asked Kay, via “tweet”, “Did Werfel address the RTRP issue?”  Her response was “no he didn't ...”.  Odd, considering he was addressing tax professionals.  Kay told me the RTRP program was not discussed anywhere at the Forum.

+ Speaking of the IRS - in case you haven’t heard, the WASHINGTON POST announced “Obama Nominating Restructuring Expert to Lead IRS Amid Political Controversy” -

“President Barack Obama has chosen a retired corporate and government official with experience managing numerous organizations in crisis to take over an Internal Revenue Service under fire for targeting political groups.

Obama said his nominee for commissioner of the tax agency, John Koskinen, ‘is an expert at turning around institutions in need of reform’.”

+ The JOURNAL OF ACCOUNTANCY reports that “Final Regs. Clarify Who is Subject to 50% Limit on Meal and Entertainment Expenses”.

+ The NATP’s weekly email newsletter advised members that the IRS has released the 2013 draft Form 4684, Casualties and Thefts, and the accompanying instructions. The draft form includes a new Section C, Theft Loss Deduction for Ponzi-Type Investment Scheme Using the Procedures in Revenue Procedure 2009-20. This revenue procedure provides an optional safe harbor treatment for taxpayers who experienced losses in certain investment arrangements discovered to be criminally fraudulent. It also describes how the IRS will treat a deduction for such a loss if the safe harbor treatment is not elected.

I have had one client who was a victim of a non-Madoff Ponzi-like scheme a few years back.

+ FYI, NFIB (National Federation of Independent Business) has an online “Healthcare Resource Center” with lots of information on the Patient Protection and Affordable Care Act (PPACA).

+ And another FYI – I was recently emailed for review “7 Career Options for the Aspiring Accountant”, an “infographic” you might find interesting “on career possibilities for the aspiring accountant. It highlights the various job opportunities that are available for those entering the accounting workforce. Additionally, it provides a closer look into average salaries, qualifications, job growth and other key facts and figures.”

RDF

TAXPRO BUZZ

Sorry to be late in getting this post “up”.  I was hoping for more “stuff” to include.  If you have come across any BUZZ you want to share with fellow tax pros let me know.

+ Click here to learn how to “Register your opinion on the IRS decision to retiretwo e-Services products”.

+ William Perez provides “IRS Update for July 26, 2013”, which lists “pages or files residing on IRS.gov that are new or updated from July 19 to July 25, 2013”.

William will be posting such an update every Friday.

+ The IRS’s mandatory RTRP program may be dead (hopefully for good), but the PTIN program continues.  ACCOUNTING TODAY reports “IRS Sends Warning Letters to Preparers With Old PTINs”.

 

The following statement still applies -

“As of Jan. 1, 2011, anyone who, for compensation, prepares or helps prepare all or substantially all of any federal return or claim for refund must have a valid PTIN and use that PTIN as the identifying number on returns, the IRS noted. All PTINs must be renewed annually.”

And -

“The IRS also said it is continuing efforts to identify paid preparers entering no identifying number on returns that they prepared.”

+ An email from NATP introduced me to the product described below.  Perhaps it is something you should consider purchasing.  I have not ordered or seen this book but am considering a purchase to supplement the many forms, schedules and worksheets I have developed for external and internal use in my 1040 practice (click here). 

FYI - there is a special discounted price of $75.00 for NATP members.  If you are not already a member, email me at rdftaxpro@yahoo.com (with “NATP Membership” in the subject line) to receive membership information. 

“NATP Tax Store - Audit Proof the Tax Office - #3298

It’s becoming harder and harder to protect ourselves from ourselves. Tax professionals are under the IRS microscope and are being audited. Thousands of offices are being targeted each year.

In this manual, you will find the forms and instructions you need to audit proof your office. In addition to the paper forms, you will also receive a flash drive with over 35 forms including many PDF fill-in forms.

Price - $89. To place your order go to the Tax Store or give us a call at 800.558.3402.”

RDF

TAXPRO BUZZ

+ Kathryn M. Morgan, EA offers a “Step-by-Step Guide to Preparing a Return for a Disabled Veteran” at PARKER PUBLISHING.

+ CPA Robert Gard covers “Nine Factors That Determine Whether an Activity Is a Hobby” at the AICPA’s THE TAX ADVISOR.

+ “Tax Pros: Still Trying to Figure Out Which Social Network is Right for You?”  INTAXICATION (Tax Buzz with a Twist) provides an “infographic” that “provides some great metrics on each of the social networking sites along with some thoughts on best use and drawbacks of each”.

I am a “twit”, but you will never catch me on Spacebook or My Face.  If I want to share pictures with friends and family I will send them an email.  And if I want to provide information on my business to solicit clients I will create a website for my practice.

I would be interested in hearing from tax pros about what you can do on Spacebook or My Face that you cannot do just as well on your business website.

+ EAs Jason Dinesen (DINESEN TAX TIMES) and Russ Fox (TAXABLE TALK) both discuss the “Patient-Centered Outcomes Trust Fund Fee” nonsense – and explain why it is truly the most ridiculous tax ever (and there have been a lot of ridiculous taxes over the years) and an exercise in bureaucratic futility.

+ Here is a webinar you may be interested in “attending” – “What the New Healthcare Law Means for Your Small Business”.  I learned of it via a “tweet” from @ManasaSogNadig.

RDF

TAXPRO BUZZ

You are welcome to submit posts and other online resources for inclusion in future installments.  Email me at rdftaxpro@yahoo.com with “TAXPRO BUZZ” in the “subject line”.

+ PARKER PUBLISHING gives us a primer on “Tax Research Methodology”.   

+ Wonder “Where RTRPs Stand After Loving”?  ACCOUNTING TODAY addresses the question.  It does a good job of outlining the story so far – and where the fakawi.

+ TAXPRO TODAY deals with the issue of “Charging for Off-Season Work”.

+ TAX MAVEN Diane Gilabert lists “10 Section 1031 Exchange Facts You Need to Know”.

It’s been decades since I did a return with a Section 1031 exchange.  Hopefully I will never have to do one again before I retire.

+ And Diana also discusses “Material Participation: Are You Talking to Your Clients?” –

“Taxpayers are losing material participation cases at an astonishing pace. The IRS is emboldened by these wins, and is aggressively auditing material participation claims.”

Diana’s blog is apparently written for tax professionals.  You may want to “subscribe”.  When you do you will receive a free “white paper” on “10 Common Errors Tax Practitioners Can Avoid”.

+ Jason Dinesen reminds us “Have an HRA? Make Sure to Pay Your “Patient-Centered Outcomes Trust Fund Fee”.    

If you, like me, reacted to the title with a “WTF?” check out the post.  FYI – it has to do with “Obamacare”.

+ And speaking of “Obamacare”, TAX MAMA Eva Rosenberg provides “A Tax Guide to Obamacare: What taxpayers and tax professionals need to know about the health law”.

RDF

TAXPRO BUZZ RETURNS!

I will attempt to bring back TAXPRO BUZZ on a weekly basis.  Let’s see how long I can keep it up.

You are welcome to submit posts and other online resources for inclusion in future installments.  Email me at rdftaxpro@yahoo.com with “TAXPRO BUZZ” in the “subject line”.

+ NJ tax preparers should read my post “The DFBs!” at THE WANDERING TAX PRO.  This post concerns late refunds for manually, but timely, filed NJ-1040s.

The post ends with the question -

“Have any of the NJ tax pros reading this also experienced excessive delays in the issuance of client paper refund checks?”

+ CCH has published a new Tax Briefing titled “Supreme Court Strikes Down DOMA” that examines the impact of the DOMA ruling.

+ And PARKER PUBLISHING provides tax pros with a “Complimentary Client Letter: The Tax Implications of DOMA”.

+ BLOOMBERG.COM reports that “Health-Law Employer Mandate Delayed by U.S. Until 2015”.

 

+ speaking OF "Obamacare", The firm of Drucker and Scacetti, author of the TAX WARRIER CHRONICLES blog, has created two “quick reference charts” for the provisions of the Patient Protection and Affordable Care Act.  One for businesses and one for individuals.

+ CPA Jim Buttonow gives us a good primer on “Using the First-Time Penalty Abatement Waiver” at AICPA’s THE TAX ADVISOR.

+ TAX MAVEN Diane Gilabert answers the question “I Found An Error – What is My Professional Responsbility?”  

RDF

TAXPRO BUZZ

+ NJ tax pros might want to check out my “review” of the annual NJ-NATP “Famous State Tax Seminar” here and here.

+ Professor Annette Nellen gives us some “Due Diligence Reminders for the 2012 Filing Season” in a piece at the AICPA STORE.

+ Joe Kristan tells us “IRS Issues Cents-Per-Mile Maximum Value for Employee Cars” at the ROTH AND COMPANY TAX UPDATE BLOG.

“The IRS has ruled (Rev. Proc. 2012-13) that you can't use cents-per-mile for cars costing more than $15,900, or trucks and vans costing more than $16,700.”

+ California tax pros might be interested in attending a conference on “Tax Reform: Status, Needs & Realities” sponsored by San Jose State University at Techmart in Santa Clara.  Click here for info.

+ TAX PREPARER CONNECTIONS has an “Early Tax Season 1040 Client Letter” for use by tax pros.

“Here is a sample of a letter you can send out to clients early in tax season. It is specific to tax changes for the tax year 2011, so you want to it out soon.

This is a great way to remind people of their tax appointment with you.”

+ David Williams, the IRS tax preparer regulation czar, sends words of greetings and update in “Happy New Year, Everyone”.

+ Veteran tax pro Eva Rosenberg, aka TAX MAMA (is there a TAX PAPA?), writes about her experiences in “Running a Tax Practice – Easy or Hard” at ACCOUNTING WEB.COM.

Pay special attention to Lessons 4 and 5 (I, too, speak from experience) -

“Lesson 4: People who haggle over your initial fee will never value you. Turn them away as clients. This is reported to me often by other tax professionals. Those who start out trying to push down your fees are the same ones who insist on calling you daily, with just a 'quick question' and never want to pay for the time you’ve tracked. Either dump them, or quote a high fee, requiring a retainer, that is always replenished BEFORE you take their calls or do their work.

Lesson 5: Get everything from your clients in writing. Do not accept information verbally. They will deny they ever said 'it', if 'it' turns out to be inconvenient for them. This only happened to me once. A doctor’s wife gave me some numbers on the phone. I prepared the tax return. The balance due shocked her. She decided to reduce their income amount, saying that she never told me their income was that high – that I made up the number. I kicked the client out – and never accepted anything verbally since. Your clients can provide information via letter, fax, or email. Save the document.”

+ The 2012 IRS Publication 15 (aka Circular E) – “Employer’s Tax Guide” is now available.  Click here to download.

RDF