TaxMamas TaxQuips

Problem Resolution and Focus Groups

Problem Resolution had a facility at the Tax Forum. One of my friends brought a case file with her (and power of attorney forms, etc.). When picking up her registration packet on Monday, she was given a form to fill out with the specifics of her case (and a copy of the power of attorney – Form 2848). By the time she arrived at her appointment on Tuesday or Wednesday, the staff had pulled up relevant information about her case and researched the stumbling blocks. She sat down with them and resolved all the problems in no time at all. This is a case that has been a source of frustration for many, many months. Her clients have a refund coming soon.

Those folks who are smart enough to take advantage of the Problem Resolution services at these Tax Forums and other IRS events generally walk away really happy. This is one of the essential services I would hate to see go away, if IRS stops operating these forums and turns continuing education over to the associations and private vendors like myself.

Focus Groups are another special benefit at these Tax Forums. You get to meet with IRS and Taxpayers Advocate (TAS) staff (and perhaps other groups within IRS) to discuss issues of concern about taxpayers’ and tax professionals’ needs and how the system addresses them. Topics I attended two sessions with TAS – IRS Structure and Small Business Issues.

We ran into a little glitch on the Small Business session. Nine of the ten panelists showed up early, so they wanted to convene the session 15 minutes early. My friend Kris was booked to attend, too. She wasn’t there yet, so I called her cell phone, telling her we were starting early. She never managed to get in – and one of the coordinators was giving me nasty looks. She complained that she had been turning people away, waiting for my friend to show up. We finally started at 9:00 am without Kris. Well…it turned out that one of the people they turned away WAS Kris. Despite her telling them she had RSVPd and was expected. Oh well, it was the last day. Staff was tired.

Humor and irony aside, what did we discuss, or learn?

IRS Structure

The biggest complaint from tax professionals about the current structure of IRS is lack of consistency.
Consistency within the database, consistency of information, consistency in administering tax policy.

Now that IRS has moved away from regional operations to more centralized campuses, we would have expected that all information about a taxpayer can be consisently accessed from anywhere in the system. That’s not the case. When a taxpayer talks to the IRS customer service line, or to any of the collections or examination staff, they are meant to make notations about the contact in the client’s master file. Yet you call back a few days later, and the system doesn’t show the details of the last contact. The taxpayer or Rep has to start all over again, providing information and back-up. It’s time-consuming, frustrating and leads to frayed tempers.

Another problem is that the central exam campus loses paperwork. One person talked about a 9-inch stack of documents they sent in that never got associated with their client’s file. Another about submitting documents that take forever to get linked to the file, in the meantime, the next cycle of notices is being issued.

At present, some notices provide a fax number allowing you to submit documents. However, no one ever acknowledges receipt of those faxes. So you don’t know if your pages arrived, or something didn’t get through, or…

I suggested that IRS take advantage of the current e-services system IRS already has in place. Presently, we can look up client data. But how about allow practitioners to upload their documents related to audits and colletions directly into the client’s file? There would be a date/time stamp on the submissions – and we would know if any pages didn’t arrive.

Small Business Issues

The big surprise here was that the Taxpayers Advocate Service offers services to small businesses. Frankly, except for problems with payroll tax issues, none of us could really think of business instances of contacting TAS.

So the first recommendation was to have TAS put together a guide on what services businesses can count on from TAS.

The question came up about what one thing businesses do not use to their advantage or know enough about? Tax Credits available to small businesses. We recommended that IRS produce a publication putting all small business tax credits into one place.

Other recommendations where information is needed:

..How to properly dissolve a business – especially how to close out the books.
..Clear and usable cancellation of debt formulas, with their effect on tax attributes.

Recommendation on rules to change, clarify or make more fair?

BIG SCARY ISSUE – bookkeepers, staff and anyone dealing with payoll even remotely, can be held personally liable when the owner or officers don’t pay payroll taxes. In fact, even whistleblowers, trying to correct the situation have suddenly found themselves being financially responsible when they tried to get their boss to do the right thing and the boss used the money frivolously instead. Totally unfair and unreasonable. More payroll defaults are expected as the economy gets worse. These rules must change.

Pension rules for small businesses and the administration of the pensions – too complicated. Too easy to run afoul of.

Medical benefits for small businesses. Come on, is it REALLY necessary to jump through the hoops, to hire your spouse, etc. to get medical benefits in your business? Puhlleeeze. Please, make the medical benefits for small businesses easier to claim and to administer.

Gifts – limited to $25 per person per year? This number hasn’t changed since the Revolution. You can barely even cover postage for this amount. Time to update deductible gifts, don’t you think?

The new 1099 reporting requirements. CRAZY! Need I say more?

For more about the classes at the Tax Forum stay tuned. This will continue on Page 3 next week.

Ask TaxMama

Where taxes are fun and answers are free

www.TaxQuips.com

The number ONE free tax podcast online

The New TaxMama site

Where you can comment on this

Last week, all my tax staff and I took our annual trip to the IRS Tax Forum.

When these forums first started out many years ago, the fee was $25 for three days of education provided by IRS staff and a variety of tax professionals from sponsor associations. It was an amazing value – especially since you could fulfill your entire annual continuing education requirement in one shot – for $25. Wow! OK, so the material was a little basic, with IRS devoting time to propagandize about their service…but still, the contacts you made were excellent. And you did get some insight into the way IRS operates.

A decade or so later, the fee has risen to $206 ($335 if registering late). Still a pretty decent value for three days of classes. Yet Walter J Matisewski, CPA from Rhode Island tells me these fees are not high enough. At a recent NATP conference, Walter heard Karen Hawkins, the Director of IRS’ Office of Profesional Responsibility indicat (or hint) that the IRS is going to be looking at the tax forums in the next couple of years to determine if they should be continued due to the excess cost and time it takes.

Hawkins is right. It’s time to re-evaluate the events. They have become bloated, out of all proportion. This year, there were over 6,000 people at the Las Vegas venue. Picture this. About 1,00 people sitting in a room, on those metal frame banquet room chairs, linked to each other in batches of 20 or 30. All these people squashed together, no room for their books or materials. Struggling to take notes, elbow poked into someone’s ribs. Nary a writing surface in sight.

Thank goodness for the two tall screens, one on either side of the podium, that show you the slides being presented. Unfortunately (since notes are so hard to take), the information on the slides is often not the same as the copies of the slides published in the conference syllabus. Some of the changes are significant – and it would be really good to be able to make note – but the presentations move pretty quickly and people miss some crucial details.

Moving between classes is like facing a stampede. Neither the conference administrators, nor the hotel (who surely must do this regularly, since they have these facilities for thousands of attendees) have worked out a way to get people smoothly into and out of the rooms. In fact, even if you get wise and stay in the same room for two or three classes, you have to fight against the tide of the stampede to get your registration card scanned so you can get continuing education credit for being present. (Has anyone thought of putting scanners in the front of the room, near the stage, instead of just at the entrance, in the back of the room?)

And the distance to conference facility! Whoowee! More people than ever rented those senior-mobiles to get around. One woman told me that she was stuck in the elevator for nearly half an hour trying to back her senior-mobile out before the doors closed. And just wait until you try to use the only two elevators in the facility – filled with two senior-mobiles side-by-side. Anyway, they solved that problem. They won’t be using the Mandalay Bay Hotel next year. They are moving to Cesear’s Palace, where the distances are not nearly as bad.

OK, enough about logistics. What about the services?

Ask TaxMama

Where taxes are fun and answers are free

www.TaxQuips.com

The number ONE free tax podcast online

IRS News at TaxMama.com

Where you can comment on this

When: July 14, 2010

10:00 am – Noon PT

Where: Online in TaxMama’s Conference Room

Cost: $50.00

Discounts: $20 discount to members of writers groups – Check with your association for discount code

CPE Credits: 2 hours for Enrolled Agents

How to Register – Include the name of your writers association:

Paypal – Send payment to affiliate@taxmama.com Be sure to include your name, phone number, email address You will receive an email invitation to the Webinar. Who should attend: Professional Writers making a living as writers Who are not taking full advantage of tax benefits Hobby Writers dabbling –

Who are causing major potential tax problems

What you will learn:

Who is a Writer?

Special Considerations for Writers

Avoiding IRS Red Flags for Writers

Business Considerations for Writers

General Tax Deduction for Writers

High Cost Deductions – Computers, Travel, Research

Useful Tax Tools for Writers

Useful articles, books and references

Get YOUR specific Questions answered

Ask TaxMama

Where taxes are fun and answers are free

www.TaxQuips.com

The number ONE free tax podcast online

Get your latest Federal & State Update in preparation for 2009 Tax Season!

We are offering up to 3 CPE credits plus dinner while you network with tax experts in your own backyard.

Register now for only $ 35.00 (member) or $ 45.00 (non-member).

Date: January 14, 2010, 6:00 pm -9:00 pm
Locations: Los Angeles Area, Northern CA, San Diego Area
See registration form in Resource Box below for address.

Contacts:

Los Angeles – Carol Thomas – 323-977-4524
Northern CA – Sarah Halog – 510-938-6102
San Diego – Jackie Marazzi – 760-480-0155

Ask TaxMama

Where taxes are fun and answers are free

www.TaxQuips.com

The number ONE free tax podcast online

CA NATP - Registration Form

CA-NATP Regional Dinner Meeting

Note from Commissioner Shulman:

Today, we are recommending some important changes to our oversight of the tax return preparer community, including:
—Requiring registration for all paid tax return preparers.
—Establishing mandatory testing and continuing education for paid tax return preparers who do not already have this kind of requirement (i.e. exempting attorneys, certified public accountants and enrolled agents).
—Developing a public database so that the public can ensure that their tax return preparer is registered with the IRS.
—Making all return preparers subject to the ethical standards of Treasury Circular 230 and subject to discipline by the IRS.
—Increasing our enforcement presence in the tax return preparer community.

The IRS has engaged the public and stakeholders since last summer in a wide-ranging review of issues involving tax preparation, and we have received more than 500 thoughtful recommendations from employees throughout the Service. With the findings and recommendations outlined in the Return Preparer Review final report, the IRS is taking a big step toward meeting our strategic plan goals of increasing taxpayer compliance and ensuring uniform and high ethical standards of conduct for tax return preparers.

Clearly, it’s going to take some time to put these important changes in place, and they do not affect the current filing season that starts today. However, we are taking immediate steps to help taxpayers during the 2010 filing season.

We want to make sure return preparers are doing the right thing and filing returns accurately. Starting today, the IRS is sending letters to approximately 10,000 paid preparers who have large volumes of specific types of tax returns where the IRS typically sees frequent errors. In the coming weeks, thousands of preparers will be visited by revenue agents.

Throughout the filing season, we’ll be working to provide taxpayers basic tips to help them select a reliable preparer.

Ask TaxMama

Where taxes are fun and answers are free

www.TaxQuips.com

The number ONE free tax podcast online

IRS Report

Return Preparer Review final report

IR-2010-1

IRS Proposes New Registration, Testing and Continuing Education Requirements for Tax Return Preparers Not Already Subject to Oversight