THE TAX PROFESSIONAL
I guess I will never file federal returns electronically –
“The Internal Revenue Service has agreed it will not provide its own direct tax return filing. That is one of the provisions of a five-year agreement
between the Free File Alliance and the IRS.”
I am certainly never going to use flawed and expensive tax preparation software.
I am just curious –
1. How many of youse guys received a “Record of Completion” from the IRS AFSP?.
2. Did anyone get a new client this tax filing season from the new IRS database of "Qualified Tax Preparers" (obviously not a true description of the database - but
the one the IRS is using)?
3. If you did get a ROC – why? What value did you feel you received by participating in this program?
I posed this question to the members of the NJ-NATP Facebook Group – while several members did receive an ROC none of them got any new clients via the database.
One member had this to say about the database –
“First, on the IRS homepage there is no clearly defined wording to find a tax professional. A user would have to look in a sub category called ‘tax preparation
resources’ which takes you to another page and then you will find a line for finding a tax professional. However, I tried the search and from what I found is that
you can do a search by putting in your zip code, miles away, and selecting type of preparer. What comes up in the search is nothing. There is another box which
says you may enter the first 3 letters of the last name of the prep person and then the search comes up with results. So it appears to me that the only way the
database works is that you have to have the name of the prep person you are looking for? Makes no sense.”
I went to the IRS home page and found the category “Tax Preparation Resources” under Hot Topics and not Tools. I entered my old zip code in NJ and got
1000 results – based on distance and not alphabetical. I entered my current zip code and got 5 results.
Regarding the why question I received two answers –
“I thought it would make me more visible in a search.”
“However, there is another benefit which is more important and an obvious benefit for those who have the ROC. This is in regards to whether or not you
can have the limited rights to represent a client whose return you have prepared. I believe in 2016 without the credential you cannot represent a client.”
My response to the question of representation –
“Regarding representation - it is my understanding that the ability to talk with the IRS regarding a return under the ‘check the box’ procedure will not be affected.
If a preparer wants to actively represent taxpayers he/she should become an EA.”
I would really like to hear from other tax pros on these questions. Email me at [email protected] with ‘THE TAX PROFESSIONAL COMMENT”
in the subject line.
+ Good news from the IRS for those of you who wasted your money on the RTRP test. I am glad I was waiting till the last minute - and did not rush out to
take the test.
The IRS website tells us -
“The IRS is refunding the fees that return preparers paid for the Registered Tax Return Preparer test. Letters will be mailed to refund recipients on May 28
and checks will be mailed on June 2. Return preparers took the test between November 2011 and January 2013 and paid a fee of $116. About 89,000 tests
were paid for and taken, with some preparers taking the test more than once.
The refunds are being made because the federal courts determined in Loving v. IRS that the IRS lacked authority to mandate testing.”
A FAQ page provides the following information -
“If you took the test more than once, you will receive one refund for the total test fees paid ($116 per test attempt). You will not receive a refund for any fees
that were previously refunded by Prometric.
Refunds must be issued to the person who took the test. Third parties who paid test fees will need to resolve any reimbursement issues directly with the
person who took the test.”
If you passed the test you can keep your RTRP certificate. “However the RTRP Certificate is no longer valid and serves no purpose when dealing
with the IRS.”
+ You did hear, didn’t you – “Tax Calendar Alert: 2015 Returns are Due Monday, 4-18-2016”.
And “Maine, Massachusetts taxpayers get even more time thanks to Patriots Day”.
+ KBKG has a "Repair vs Capitalization: Improvement Decision Tree – Final Regulations” that you may find helpful in your practice.
+ In “From the Archives: New Preparer Requirements on Earned Income Credit = Higher Fees for Clients” Enrolled Agent Jason Dinesen looks
back at his predictions for how the then new excessive due diligence rules would affect his practice –
“What I’ve found in my practice is, the EIC documentation requirements have indeed resulted in higher fees for returns claiming the EIC, but I didn’t raise
fees as much as I had thought I would.
I also have found that the paperwork burden is not nearly as bad as I had thought it would be. I don’t deal with a lot of EIC claims, but for those that
I have dealt with, getting the needed paperwork and filling out the Form 8867 isn’t that onerous.”
I file only a small handful of EIC claims each year for long-time continuing clients (as you probably know I do not accept any new clients). I have not required
any additional paperwork to support the claims – I am well aware of the clients’ situation based on years of preparing their returns. The only affect the new
requirements have had on me is to waste time filling out the Form 8867 – really nothing more than an inconvenience.
However I still feel that this additional due diligence is uncalled for – and still would like to see a lobbying organization for all tax professionals that would
fight thrusting this type of additional work on preparers.
More questions – How has the new due diligence requirements affected your practice? Has it been as much extra work as originally anticipated?
Have you materially raised fees for returns with an EIC claim?